AdQuick Madvertising Podcast Episode #1: Matthew O'Connor
We're excited to share the official launch of the AdQuick Madvertising podcast we recently soft-launched at the start of the year, and is now ready for prime time.
For new listeners, our AdQuick brand podcast discusses everything advertising, tech, startups marketing trends and much in between and is designed to inform, educate and even entertain to help marketers stay at the edge of our sector and make informed decisions.
In episode 1, AdQuick marketing team members Chris Gadek and Adam Singer (your hosts) interview AdQuick CEO Matt O'Connor to discuss ad tech sector trends, macro economic conditions, the future of tech, GPT-3 and more hot topics including the story of AdQuick.
Watch on YouTube here (also embedded below) or listen on Spotify here.
Transcription follows (auto-generated) below if you prefer text, for accessibility or if you'd like to grab any quotes for re-use via blogging or social.
Chris Gadek (00:00:00):
Alrighty, we're here. Welcome to the first episode of the AdQuick Madvertising Podcast. I am one of your hosts, Chris Gadek, I'm VP of Growth here at AdQuick, and I'm joined by my co-host, Adam Singer, who just joined us as VP of Marketing.
Adam Singer (00:00:14):
Chris Gadek (00:00:15):
And for our first podcast episode, we figured we'd bring somebody close to home and we'd invite our CEO and founder Matt O'Connor.
Matthew O'Connor (00:00:24):
Chris Gadek (00:00:26):
We chose Matt, Matt has a very interesting story. He's led expansion teams, he's been in the marketing space, and he has a unique perspective on advertising and marketing that very few have given that. We decided to build a company around traditional channels, but I was hoping maybe you could share a little bit about your story and how you got here and what inspired you to create AdQuick.
Matthew O'Connor (00:00:51):
Yeah, absolutely. So the medium length version is, when I had a bootstrap startup that eventually failed, I looked into getting outdoor advertising for the first time. I wasn't in the city where I was looking to buy the ads, and so it was a bunch of internet research. Ultimately, I submitted a bunch of contact us forms and simply wanted to see what was available. Took a couple of weeks, I didn't hear back from some, got some PDFs back from others, and ultimately actually bribed some friends with pizza and beer to put a balcony banner right above where the street furniture would've been. So I was like, "Wow, that's interesting. Maybe there's something around, well, A, it's hard and unnecessarily shitty to buy an outdoor advertising. Second, maybe there's something about creating new inventory."
The latter turned out to be a pretty big gray area, and so there's plenty of permitted and legal outdoor advertising that exists that's still hard to find. So that started planting the seed. Fast forward a few years later, I joined Instacart when it was pretty young and we were in a couple cities. I did a lot of the expansion, and so as we grew, raised funding, our marketing started to get more robust. And of course, like many companies, we start with digital acquisition. But eventually we wanted to really get louder in the real world with the cities we were launching, and so we went to look at what billboards were available in Indianapolis. Again, we weren't from there, finding it took weeks. The formats were all different. It was just really hard to find the answer to pretty simple question, what's the best billboard or set of billboards for our company?
Five years later, the buying process hadn't changed. When we did get the outdoor advertising live with Instacart, we heard so many anecdotes make their way back to our small team, from customers to shoppers to retail partners like, "Oh, we saw the billboard." So it was like, "Okay, great. That's fuzzy. That feels great. Great anecdotes." We also saw directionally a much stronger performance in the user acquisition in that market. So between those two things, we were like, "Hey, yeah, this is working, this is great, but it's kind of a pain in the to buy, and we only have directional metrics on whether it's working." To really truly understand that, we would've needed more data science or engineering resources. We were a growing startup, we didn't have extra bandwidth to stop the train and figure out whether these billboards work, so we ended up not doing it or only throwing a couple dollars at it occasionally.
I knew there was a pain point on the buying side, that's pretty clear. The NPS of out- of-home buying is very, very low because it's all manual, slow, et cetera. So talking to the media owner side, as I was thinking about starting the company, I realized they don't have software that makes it easy for them to propose in a modern fashion. So that was a pain point. They also have pretty high vacancy. It's not like they're French Laundry and you can't get a reservation for months, which I thought, "Oh, they can afford to have a crummy buying experience because they don't have any excess capacity, so what's the point?"
And then the final linchpin is that as everybody in this room and most people listening, digital performance marketing has changed marketing forever in a one-way direction. There's only going to be more and more quantification, accountability, performance, analytics, attribution. And so, out-of-home was severely lacking in that capacity. And so, at the end of the day, the simple thing that AdQuick is solving is making it easy to buy and find outdoor advertising and easy to measure. And so it's simple to describe, very difficult to execute because there's so many different media owner players, customer types, actions a user can take after being exposed. But as we've seen and as we're progressing towards, once you have that, there's a great amount of momentum and excitement. It's really cool to be able to inject new life into the oldest advertising medium that exists.
Chris Gadek (00:05:12):
Great. So it's fair to say that out-of-home has been fairly siloed in terms of the marketing mix. It's been very difficult to measure and include into a integrated marketing plan. Can you shed some light on when you were at Instacart perhaps, how did y'all think about how out-of-home fit into this space? Were there any impacts on your digital channels? Were there any favorable things that you discovered that you can share? I think that'd be a great segue into going into what we've seen in the last year and how that's going to affect us in the coming years.
Matthew O'Connor (00:05:47):
Yeah, so candidly, we were a pretty immature marketing org. A lot of the first level threshold to whether we were going to do a channel is how easy and fast it was to execute. As I mentioned, we didn't have a lot of mixed media modeling or any mixed media modeling, so it was a combination of ease and confidence in effectiveness, neither of which existed although we had pretty strong hints at the effectiveness from the anecdotes and directional movement in our performance. And so, I think there's millions of businesses in the US and I think it's really underrated what the ease of execution can do. Really, I don't think that's exclusive to advertising. Look at e-commerce, you make it easier to do something, people are going to do more of it. We weren't as sophisticated as maybe some of the now performance teams that exist, but ease of execution and confidence were some of the biggest things that we were looking for.
Chris Gadek (00:06:51):
Right on. Excellent. One of the things that we've seen in the last year is the playbooks of yester year are either being exhausted or they require significant, significant modification. Adam, you've been... I don't know, how long have you been a marketer? A long time. You're not calling yourself, "I'm an old," right?
Adam Singer (00:07:14):
Yeah, I've been marketing websites or content since 2000, 2001.
Chris Gadek (00:07:20):
Let's go back to that one piece where we're talking about basically all the budgets and all the channel mix and all the strategies that a lot of brands have employed and/or their agencies on their behalf have employed or some are getting to a point where their efficacy is plateauing. What are you seeing in terms of how marketers are spending their advertising and what led to that in the previous years, would you say?
Adam Singer (00:07:52):
I think historically online marketing has always been influx, and we've been lulled into this false sense of security in a fang world for the past decade. That's not normal. It's actually historically been... Think of it like a stock portfolio. You needed this big diversified amount of bets, whether a mix of affiliate marketing and email marketing and doing PR and doing SEM, and all these different tactics would come together and you would experiment and get them better over time, treat them as ongoing processes and figure out what converts best for you. I think marketers have gotten a little bit lulled into this easy world where they think, "I'm just going to run Facebook Ads and just going to run Google Ads. Probably if I'm a startup, I'm not even going to do anything with TV because that's too expensive and too hard." Now there's CTV, by the way, which is a cool channel.
But I think now we're getting a little bit back to what the internet used to be because people don't know what's going to happen next. We don't know where social's going. We don't know how measurable things will be in a post-GDPR world, in a post Apple new privacy regime world. And so this is the essence of being a really great marketer is not to say, "Well, it used to be easy. I'm just going to throw my hands in the air." It's, "What tools can I use now?"
And so, one of the reasons I was actually excited to join AdQuick is I had a very similar experience as Matt in the past wherein when I wanted to buy out-of-home ads, say, surrounding an event, I was having to fill out forms and call up these kind of interesting mix on the tech adoption spectrum of companies to say, "How do I get this?" And they would send me back PDFs. Ultimately, I would run the ad and I would get a report that I would stick in the back of a QBR and no one would ever look at it, right? There were no analytics dashboards, so that's why I Adquick is school. But the point notwithstanding is I think it's on marketers to understand what is important for their business today and on a go forward, as well as understand what won't matter, right?
Chris Gadek (00:10:04):
Adam Singer (00:10:05):
We'll talk about some of the bets companies have made with metaverse experiences and other things in a little bit. But I think in the past few years we've seen a return to form with things like email, for example. Email has always been a great highly effective tactic that if you stayed focused on building an email list, you're not concerned with whatever chaos is happening at Twitter or Facebook because you have this list that's your own asset. That's just one example of you getting too attached to these shiny objects instead of figuring out channels that work, whether it's email, whether it's out-of-home, whether it's even TV, and doing a better job with them over time versus chasing your tail.
But to your point, this is an interesting time because there is so much change. As a marketer, you can look at it one of two ways. You can be like, "Well, they moved my cheese," or you could be like, "Well, I could be the first to do something super cool here. I could stay focused. There's probably some alpha to be had in trying out channels that other people are ignoring." I think it's a great time to be a marketer. I think this is going to start to get really fun again.
Chris Gadek (00:11:10):
I mean, we were really spoiled, in the last decade we've basically had the most accurate targeting possible. We had people's behaviors on how they were interacting on other websites, so on and so forth. The need to diversify away from these channels that have, I guess, less of an impact or the targeting becomes a little bit more challenging due to the... I mean, I'm not going to go into the iOS 14, IDFA stuff.
Adam Singer (00:11:39):
You can do a whole podcast.
Chris Gadek (00:11:41):
We could definitely do a whole podcast on that. But one thing that I have started seeing, especially from our clients in the last year, was you're taking these audiences and basically getting them to play nicely with traditional channels. Matt, I'd love for you to chime in on how you're seeing some brands and their agencies leverage audiences to basically use traditional media as a performance or a performance branding channel, if you will.
Matthew O'Connor (00:12:14):
Yeah, exactly. I mean, I don't think this is provocative or controversial or super insightful, but first party data is becoming more and more and more valuable when you can't rely on the platforms to lead you to your customers. One of the cool things that out-of-home provides and that we're seeing our clients do is take that first party data, overlay it to the world, specifically with us more the US, and look where the opportunities are. So because out-of-home is national, highly variable from a CPM and reach perspective, we can show the advertiser's pockets of arbitrage that they didn't have.
Another amazing trend for marketers that opens up the options for them is that their customers are everywhere now. Paramount doesn't have to focus on the top 15 DMAs because that's where 90% of their moviegoers are. They're now with Paramount Plus, and everybody with a TV is their potential customers, so it opens up the geographic boundaries that they're no longer encumbered by. So that first party data, being able to inject, optimize and arbitrage in traditional media is what's happening. CTV is taking advantage of that. And so, it's pretty exciting. It may be intimidating at first for a lot of marketers, but really in the end, it's going to get easier and should be more exciting than anything.
Chris Gadek (00:13:44):
Historically, marketers have always advertised in their backyard, whether it be for vanity purposes or what have you. But I think the interesting thing is the ability to now take these old-fashioned marketing channels, marketing tactics and apply these audiences, and then you unlock all these potential new customers in secondary and tertiary markets. Adam, do you have any experience that you'd like to chime in on when it comes to finding a little nuggets of gold?
Adam Singer (00:14:13):
Well, you said something really interesting, and I think digital marketers in particular are guilty of this. You said marketers are biased to advertising in their own backyard. And so I think that applies with digital channels as well. I think marketers have become overly bullish and exciting on if they're a Redditor and they're like, "We really need to advertise on there." And Reddit might be a great channel, but that bias is present online too. Think about how to disseminate your message big, have these larger-than-life ads that are super bold, super audacious, and then you can drill down as you remarket to people, as you build segments. But I think whether it's a Super Bowl ad or whether it's a really fun creative out-of-home ad, or whether it's a CTV ad that's going to a lot of people, I think starting there for the highest level, if you wanted to build the next Coke, you have to do that, you have to do mass too.
The way that we do math now is so different. We're talking about finding undervalued places. I think out-of-home is cool because if you are a startup, you could find all these markets that no one else is really targeting, and you could have the whole town talking about it. You can do something like that from your desk with just a few clicks now. I think thinking about all of these traditional channels where you couldn't do digital things and now you can, I still think thinking big to start and then getting smaller as you go on is probably a good way to think about it.
Chris Gadek (00:15:44):
Matt, do you have anything you'd like to add to that?
Matthew O'Connor (00:15:47):
I just think we should all know or hear, "If you're down with OPP." Naughty by Nature.
Chris Gadek (00:15:56):
Love it, love it, love it. Okay, so well, given that we've unlocked this new opportunity as marketers, I love using the term performance branding, like I said earlier, a lot of people's mixes are influx, are currently changing, and as advertisers move their dollars around, that leads to obviously some inflationary pressures on the cost of the media. Maybe Matt, maybe you could chime in on stuff that you're seeing in terms of the pricing. I know Criteo just put out an advertiser's emerging channels. Maybe you could touch upon that a little bit.
Matthew O'Connor (00:16:37):
Yeah, it'll be interesting to see now that the long tail is having some revival what that does to prices on Google and Facebook in particular. But yeah, with the combination of ad blocking, ATT, these inflationary because it's limiting the supply and targeting in a lot of ways. I think one of the canaries in the coal mine or kind of foreshadowing pieces will be following what Twitter's able to do with non-ad supported revenue. If they show that they're able to... And I'm not really weighing in on, I just know they're trying this, is how much of a revelation would that be if social media becomes supported by even half non-ad revenue? That's a really big deal.
I know people who are hardcore Reddit and any social media user, some large portion, that would pay 10 bucks a month to have an ad-free network. The platforms have never wanted to rock their own ship, that's the hand that feeds them, and so throwing a curveball into their own mix doesn't make sense. But Elon coming out of left field and basically desperately trying a bunch of different things will be interesting to see. And so, the reason I bring that up with respect to cost and inflation is that if a large portion of Twitter users over the next 12 to 24 months convert and do the Twitter Blue that's partially non-ad supported or predominantly non-ad supported, then maybe Facebook says, "Okay, yeah, we want to try that too. What are the perks we can offer?" Same thing with Reddit and so on.
So yeah, right now there's a combination of the Yogi Berra, so crowded, nobody ever goes there, and social media, obviously billions of people are using it and the engagement is still very high, but advertisers starting to look elsewhere. If the social media companies can monetize elsewhere, it's going to continue to accelerate that CPM inflation.
Adam Singer (00:18:42):
I also continue to be bullish on... I mentioned email. I think companies building their own lists are creating their own leverage outside of ad networks, outside of what a TV channel might do or a social network might do. And so, however you can do that and have that direct line to your customer, I think that's always been powerful, a lot of brands have stayed heads down on this. One of my very first consulting clients, International Dairy Queen, built the first million-member email list via their Blizzard Fan Club. They would frequently send things like BOGOs to customers, you know, buy one get one free for Blizzards.
And so, that list is still really powerful for them. What they did with that when social launch brand accounts is, "We also built the first million-member Facebook group. We are the first QSR that did that." And so, they were only able to do that because they have their own sovereignty online. And so, that notion, I think, in addition to advertisers always have to chase where the ball is going, where they can reach eyeballs. But I think the really smart companies build their own leverage in addition to the rented channels.
Chris Gadek (00:19:53):
Cool. So let's talk about, I guess, where the puck is going. Do we want to go ChatGPT, or do we want to go TikTok? Obviously, those are the big two big names in the space right now, and a lot of people are-
Adam Singer (00:20:06):
Did we not ban TikTok in America?
Chris Gadek (00:20:09):
I think the politicians in Congress have done so, but I don't have any more intel on that.
Adam Singer (00:20:17):
I'm so torn because I don't love TikTok, I don't like the notion of my brain being hacked on video to watch the next thing, so I don't have it on my phone. So I just let the rest of the internet surface the interesting ones. Remember when Twitter had Vine? It's where all the creative short form creators go, but in terms of overall it's a channel, it's scary a lot of what they're doing just from hooking people into that treadmill of video and the amount of time spent there by young people. It's like vaping. It's like digital vaping almost.
Matthew O'Connor (00:20:55):
Yeah, I think it's interesting to me that the virtue signaling of what marketers support, they're famous for that, unfortunately. The Kendall Jenner Pepsi ad is the worst example of that. But not only is it bad for teens, society, digital vaping is pretty amazing, it's also obviously run by country that is having really bad human rights issues. So it's interesting that the community hasn't risen up against that in general. Is it even going to be around in three years either from a legislative perspective or the fact that it's virality is easy come, easy go? If something can skyrocket that quickly, what's the next TikTok going to be? I don't know, I'm definitely bearish on TikTok for all those reasons.
Adam Singer (00:21:55):
One of my, it's not a spicy take, but just a take, is that a lot of advertisers, some of them are mercenaries. They're just going to go anywhere there's eyeballs. I've softened up and I'm nicer about a lot of things lately. I think a lot of advertisers are just trying to do their job post pandemic. They have a platform that they can put dollars into and get some dollars out. They're so busy, they're trying to service all of their clients and stakeholders and keep their business going, and so I don't think they have the time or the bandwidth to ask some of the ethical questions. That might not be something our industry ever gets to, just to be completely frank. And so, as an advertiser you can't outright ignore it, but if I were a major consumer brand, I would empower my users to share whatever I'm doing by creating an awesome in-store experience.
A great example of that is Home Depot. They actually encourage their staff can post quirky videos of people. You can bring your dog in Home Depot, and their team members post videos of people's dogs with permission. And so they're actually empowering it at the frontline as opposed to having this big corporate presence. I think that's a great way around a [inaudible 00:23:15] brand, because if you're a big consumer brand, you have to have some way to show up there because you don't want to cede that space to anyone else. But with that said, I would be careful with how much of a bet I put into building a community there because who knows what's going to happen.
The other thing about TikTok is it's the goldfish audience of the web. It's the people who move from Friendster to MySpace to Facebook to Twitter for a little bit, to Instagram. They flirt from community to community. I think it's like the pop music culture mentality of, "What's the hot thing?" They're not looking at what the CCP is doing or anything like that, or data collection. They're not paying attention to that. They're not the people who block ads.
So it is what it is. I think it's interesting, not to get into politics, but Facebook's banned in China, and we have TikTok here, so it's interesting. We're obviously running a different show here where we're not going to limit our products somewhere else. It will be interesting to see how it shakes out. For brands though, I think that with any new channel, try it out, but understand your risks, understand what you're doing. We'll see how that shakes out with the user behavior standpoint. I still think there will eventually be a user backlash. People start to wake up and realize when you're hijacking their dopamine pathways and circuits for more attention, and you're just going to burn people out. Versus I think we all Reddit because we're all nerds a little bit, and niche communities are more nerds. It's more of a sustainable web community where you don't feel like if you don't log in for a day now you're existentially behind.
I remain permabullish on online communities that are at a same pace and aren't just mobile slot machines. The ones that bias us to being a slot machine, I think the problem is you ultimately even burn the pop culture people out because what are they going to do? They're going to go to the next thing. But if I had to pick video, I would still put all of my chips on YouTube over TikTok. We'll see what happens with YouTube Shorts, I think the format's great. Their power creators are embracing it. I think that content is cool. I still like the longer form YouTube best personally.
Chris Gadek (00:25:35):
Okay, let's do a thought experiment. So if TikTok gets 86, that whole coveted audience of teens, let's call them 16 to 25, I guess the most promising set of consumers right now for everybody. So what happens if TikTok does get 86? What are the opportunities in outside of TikTok?
Adam Singer (00:26:01):
They're going to use Nikita's Gas product, obviously.
Matthew O'Connor (00:26:04):
Yeah, that's blowing up, huh?
Adam Singer (00:26:06):
Are we all friends with Nikita here?
Matthew O'Connor (00:26:07):
Chris Gadek (00:26:08):
No, but shout-out Nikita. Anyway, well, I guess do we see any other opportunities of capturing this segment?
Matthew O'Connor (00:26:18):
Well, I think that's an example of the up and coming new next TikTok. I think that one, I'm not on it, but seems to have a lot more stickiness and you invest in the product a little bit more than you do in TikTok as a lurker and a dopamine consumer. So that's there. Obviously, audiences are moving to CTV. Have to plug out-of-home here, unmissable and highly responded to by that segment. And so I don't have any really informed takes on where the next generation is going to be, but those are some of the obvious ones.
Adam Singer (00:26:56):
I still think the most defensible strategy is always to do things where your company is remarkable and interesting enough to get shared in all of the social channels without you having to be there. And so that manifests with great out-of-home, with great TV ads, with great whatever else that you're creating is interesting enough that people will remix it, will share it, will meme it. And of course, you can't force memes, maybe you can. Anyway, I think that's the way to be remarkable and be sustainable. I've seen that with great brands. To use Dairy Queen again as an example, before they were on Facebook, there were about 5,000 Facebook fan pages for the brand before the brand was ever on there, showing that their users were already organizing around the love of soft-serve. And so, I think if you're startup right now and your aspiration is to be a major consumer brand, focus on that experience first. Because at the end of the day, that experience is what's going to be shared. At the end of the day, when you're marketing, if the check that you're writing for that experience doesn't meet it, then at the end of the day you're going to be not returning any ROI for your marketing, you're not going to get repeat customers and you're just going to flame out. I would focus there.
I know you like Seth Godin, Chris. He talks about that a lot where the product is the marketing, and I think that's become even more true as everything gets more commoditized. The good news is if you focus there, then when it comes time to write a check for marketing, your marketing is just that much more effective.
Chris Gadek (00:28:38):
We're starting to see more experiential activations. By the way, we're in midtown New York right now. But we were walking down Broadway and saw a Cometeer coffee cart out in the wild, and I thought that was pretty compelling. I think we're start to see more and more of that and ultimately we'll be able to share through our communities and through our distribution list.
Adam Singer (00:29:03):
Yeah, I think post pandemic people are coming out of their shells, they're returning to cities, they're taking more vacations. I know we're going to talk about trends in just a bit. They're returning to office even if not every day. They're going in a few days a week to see their team. I think we evolved for social interaction. A reason everyone's depressed and anxious lately is I think the fact that they've been a little bit alone. And so, getting people together is important. That's bullish for everything from out-of-home ads to small businesses and downtowns, and so it's a good thing.
Chris Gadek (00:29:37):
Let's talk about the biggest thing in the news right now, which is OpenAI valued at $29 billion getting a $10 billion investment from Microsoft. How does this change the game?
Matthew O'Connor (00:29:49):
Okay, I've got two angles. One is from the user's perspective, I'll start there. I think it's pretty incredible. What we're seeing is basically the MVP, so imagine where it's going to go. GPT-3 gets a lot of hype. I think that's the simplest user first step. You ask a question or make a request, and you get a shocking response. That's one of the early models, and this is happening across design creation, movie creation, video creation. I don't see anything other than it being amazing and accelerating what people are able to do. Obviously there's some concern about if you're a copywriter or designer, et cetera, but I think these things are always ultimately amplifiers of our creativity, and it just will be some learning for us to figure out how to use the technology.
On the user side, 100% excited. It's going to give so much leverage to individual creators, smaller teams to be able to compete against larger companies who have a specific individual who's an expert at what now many of these AI models can crank out. Specifically on the Microsoft angle, what a chess move, it seems. I think two years ago I thought Facebook and Google were basically untouchable. Now I'm not so sure. Apple pulled the rug out from Facebook to a large extent. Microsoft seems to be at least chipping away at what Google search results can provide. And to throw back to one of the earlier questions on internet CPMs and cost of digital advertising, there can very well be a pretty quick race to the bottom here on either cost or user experience with ad load. I mean, everybody has seen that you can't search Google without having to scroll down the whole page to get a non-sponsored result. So if Microsoft has a competing potentially better product, that is a massive amount of pressure almost overnight that they can provide against Google. The technology's obviously incredible, really excited to see where that goes. And then the business advertising implications are pretty massive as well.
Chris Gadek (00:32:23):
Well, I mean they have some of the best distribution in the game. Adam, you're an ex-Googler, let's hear what-
Adam Singer (00:32:29):
Yeah, I mean, Google would make the argument that whether it's an organic search result or an ad, is it the best experience for a user? I'm moving this week. Still in Austin, just different place. If I were to type in a query of moving company and I got a search extension that was an ad that just put in address from A to B and then one click I can get a quote, that's a pretty good experience. And they have a search ad extension that does that. In that case, the ad might be better and Google's able to productize a query that gets a user to that response faster. A lot of people don't like that because they're used to the 10 blue links world, which we know as SEOs has been dead for a long time. It's not like Google owes a business anything or accompany anything. But in the minds of a lot of people, they're breaking the unwritten contract of the internet where if one company is going to have such a monopoly on search, which is obviously high intent and powerful, then they shouldn't be using that to bias ads.
And again, Google would say, "Well, there's a lot of different companies bidding for auction." There's another case to be made. We're talking about social networks having subscription fees. Maybe the internet being free is an anomaly, that whether it's on the actual supplier demand side, and that was just rev one and now internet 2.0 is everything is pay for play. And so that still might not mean as a user you have to pay, but someone's paying at some point. We'll see how that manifests.
One could also make the argument that that's an opportunity for a DuckDuckGo and for them to say, "Look, we are biasing organic links. We are going to let whatever their algorithm uses, links, other signals, quality brand to sort out the best results." They're going to heavily market that, and if that's something users want, then maybe they can take more market share. So there could be some balancing function if they go too hard on ads. I've seen lots of people write blog posts and Twitter threads about... What Matt said is the whole page is ads.
When I was at Google, we did user studies, and the user satisfaction rate was always off-the-charts positive. In my mind, whenever I see people complaining, I have to look at it and really thoughtfully go, "Is this a company complaining like a Yelp that they're mad they're not getting so much free search traffic, or is this a genuinely a bad user experience for someone who doesn't even in their head consider if it's an ad or an editorial link? Did they get the service that they wanted?" I guess those are two different questions. I think the informational queries are a slightly different animal and we can get into that, but the service and the intent queries to pay for services of a moving company, I think those just are going to keep getting productized, travel as well, because there's too much money in it. As a public company, they have to continue to increase profits and beat Wall Street.
So here we are, capitalization of the internet versus the dorm room dream of everything being free. I still think, though, that at some point it becomes an opportunity for a startup to do something that's more user-centric and less beholden to a Wall Street, right?
Matthew O'Connor (00:36:04):
Yeah, there's a couple interesting startup search engines, nearu.com. It'll be interesting to see what they can do if they're powered by this engine of OpenAI and have that headstart of knowledge on the informational side. Quick question on the Google front, were those surveys around whether they liked Google as a product or specifically around the sponsored experience and promotional? Because I'm a huge Google fan, I think it's been a blessing to humanity, and that's not really that much of an overstatement. So I have a lot of goodwill towards Google, and if I were asked it'd be like, "Yeah, I love Google, but I hate feeling like I'm getting pimped out by six sponsored results before I get to what I'm really looking for."
Adam Singer (00:36:54):
Yeah, I mean, I would say us as advertisers are acutely aware of when we're being sold to online. I think even Google labeling things ad or sponsored... They changed it to sponsor pretty recently... I think people are in a hurry, they're busy, they're just trying to get information. I think that that's one of the other things we've seen online in social with misinformation, with things that if you're a thinking human, you could go and do a little bit of research and be like, "Well, is this true?" if a certain political side is saying something or a certain lobbying arm is saying something or accompany. But people don't ask those probing questions. And so, it is something where I think that if Google breaches the trust of users, even as a trusted company, I think they're pretty aware of trying really hard not to do that.
And so, on the ad side, there's quite a few barriers to actually ship an ad. They're manually approving things like new video ads on YouTube for pre-rolls. I think they're trying their best. I think they do a better job than, say, a Facebook or a Twitter with the campaign quality, their ads quality team is pretty good. But to your point though, other startups certainly have a David versus Goliath in to lean on that because I think as users become aware of things, then that can be a real selling point to get them to not use the product. We've seen it true with Big CPG moving to a lot of these quirky DTC startups. You always see a company on Shark Tank that's doing something more environmentally friendly, that's doing something more cause related you, that's doing something more pro-family than this monolithic structure of this giant institution. And so, that's always the opportunity of a startup. I think it's healthy for the world. So let Google do the monetization thing to the extent that they want, and they'll be push back, and it's always opportunity.
Chris Gadek (00:39:07):
We'd like to cover more than just, obviously, advertising technology. Let's talk about the marketing technology implications and how marketers are going to be using this in their day-to-day. I mean, we're B2B. Do we want to start with B2B, B2C? What do we think?
Matthew O'Connor (00:39:22):
We don't need to draw a line necessarily.
Chris Gadek (00:39:26):
Obviously... Or not obviously, but at AdQuick, we are using AI to power some of the functions on our marketing and growth teams. Matt, what are some of the opportunities that you see at least for not necessarily the AI piece in the context of ads, but how do you think that the ChatGPT will basically assist or will assist marketers with their campaigns and execution and so on and so forth?
Matthew O'Connor (00:39:55):
Yeah, so it might be a shoehorn response to the question, but where my mind immediately jumps is, if you view customer support as a marketing adjacent function, a lot of times it's the interface between your customer and you. I can't imagine a more powerful, unique, customized engine to allow companies to do good customer support and potentially a little bit of marketing there as well, so everything from product education to FAQs to tutorials. Imagine, and I don't think you need to imagine so hard anymore, that every user has their own personal feeling like an individual onboarder. So I think that's important for B2B. A lot of it is very niche and there's a learning curve often in many B2B products. B2C more on the order issues, returns-
Chris Gadek (00:40:51):
Where's my stuff?
Matthew O'Connor (00:40:52):
Where's my stuff? All those kinds of questions can be really answered in a high touch way that makes every customer feel like, "Oh my gosh, this company really loves me." And so that's where my mind goes, and I think it's going to be the biggest improvement. And again, like arming the rebels, a local business can have the same level of support as Amazon, powered by a lot of this. I think it'll get really interesting. I haven't seen a lot of this yet. It almost feels inevitable that some of the successes from Chat GPT will be how quickly can the algorithm and engine adapt to our company voice, our company problems. From the Instacart example, you upload your Zendesk instance, and it automatically learns common questions, common answers, company tone, specific policies, et cetera. How quickly can it be customized to that super niche response set and inputs?
Adam Singer (00:41:57):
From a customer service perspective, I think it's really interesting, right? Because in my head when you were talking about a better FAQ, that's actually super cool because sometimes you're looking through... If it's a really complex piece of software and there's a specific question, it would be cool to get that answer instantly. But I think for general customer support questions, I think it gets most interesting when the GPT can solve a problem for me. Maybe it's a medical expense I've already paid that they keep pestering me for, if the chatbot can actually close that out on the system and solve my issue, that gets super interesting versus me just asking questions. Because I know that if I call a company for support right now and I get one of those automated menus, I'm frustrated.
I think people are smarter than we give them credit for. I'm even frustrated if I'm given a human chatbot-type person where they're unable to help me pretty quickly. It becomes magical when you can get me to solutions on at least consumer facing side. Because, otherwise, what if you run the risk of just basically putting people through the same type of customer service hell they get when they're trying to dial a bank right now and you press one for this, press three for this and eventually get to a person. Hopefully not just replacing that experience with something else.
Chris Gadek (00:43:22):
And then you realize that they don't have the requisite privileges or permissions. To actually exit or to solve your problem, they got to go upstream to a manager or two managers.
Adam Singer (00:43:32):
There's any number of books on this because it's an obvious one, but customer service is marketing as well. Your great customer service experience, you're going to tweet about, you're going to tell your friends at a dinner party. And then the reverse is true. If you have an awful customer service experience, it's like universally known that your insurance provider is really bad. In a lot of cases, it feels like they're trying to deny you coverage and fight you there. That may be true, that may not be true, but it's just universally felt as a bad thing. So if companies can use technology to improve the customer service experience in a meaningful way, what a great marketing tool for them as well.
We're also talking about marketing and ChatGPT, a lot of this is around I think things that wouldn't make a marketer's hair stand up and get upset. I think where we start to see marketers getting upset will be if you say things like, "ChatGPT is going to remove the need for you to have copywriters, and they're going to write better taglines for your business than a marketing team." I would say that of course they can't. They don't understand the nuance of a business. They're not going to be able to draft creative headlines for you. But maybe what they could do is get you to... I think Google does this already, if you have one tagline, they can recommend 10 back that you can go run a test for. And performance marketers would like that. You're making their jobs more efficient. But I don't see a world where a brand marketer is going to give that away to the machines because I think there's still something that machines can't really capture to give you a tagline that stands the test of time that people 100 years from now are still going to say about your company and your brand. It's not going to come up with think different for Apple.
The creative highest level part of marketing should be done by humans, and then the actual execution to whatever extent you can make that easier, if that can be done with AI or other software, of course you'd use that. But the discussions, at least with my marketing hat on that grind my gears a little bit, and these are typically by engineers who think, "Okay, I'm going to build the perfect nurture campaign for you with GPT." Well maybe you could do that, but it requires actually having to set up a nurture in the first place. So that's where I start to ask questions when people are talking about taking away a tactical mix from marketers, which engineers love doing on the web, and that can end in some bad places.
I've seen, for example, Uber, who's a great company, I have many friends who worked there, early on, they were running campaigns where they were targeting cohorts that they shouldn't have been explicitly targeting. And they shouldn't have done it the way they did with messaging. There was quite a bit of backlash. You can imagine where this is going, and rightfully so. But if you're an engineer, you're not thinking about broader context of politics when you're creating a campaign and you're targeting. And so, the machines probably will never get there. I don't think these are all machine problems. I think a lot of them are human problems as well, not to go off on too much of a tangent.
Chris Gadek (00:46:56):
So what you're saying is we're not going to be hiring prompt marketers anytime soon. Or maybe we will. I mean, well, there's a handful of AI solutions that are built on top of AI. Ones that come to mind are Poly, Ecopia, Copy AI, the other being Jasper is a big one that we see in the news. I mean, is this a fad or is this going to stick around?
Adam Singer (00:47:18):
If I'm a business owner and I can type in a box, "Bring me 1,000 customers to my restaurant this weekend," and that will bring me 1,000 customers, great, I don't need a marketing team anymore. I guess as marketers we can all go do something else because that will have been solved. But I don't think we're at that point. There's no Star Trek computer to do things like that. When I worked on Google Analytics, I told my users repeatedly, "There is no easy button in Google Analytics," because they always wanted an easy button. You have to ask the right questions of your data. You have to have the metacog text of your business and what you're trying to do.
If I were anyone from a startup to an S&P company, just be really wary of companies offering easy button solutions with, "Oh, sprinkle AI or sprinkle blockchain on it." When they lead with buzzwords, there's a reason they're doing that, because they are trying to either get evaluation at a certain point or create FOMO that your company has to use them. And maybe you do, but my spider sense tingles when we have new technology and new buzzwords that people are selling as solutions to all of our problems.
Matthew O'Connor (00:48:28):
Yeah, I'm curious what they... they being the...
Chris Gadek (00:48:33):
The applications built on top of.
Matthew O'Connor (00:48:35):
Those startups, I'm curious what their angles will become, because when the underlying engine is as good as it already is, what's their incremental secret sauce? I don't know. I mean, I used both and I was dramatically more impressed with actually the core OpenAI, Chat GPT-3.,So it'll be interesting to see what they create as their angles.
Adam Singer (00:48:58):
I mean, it's super interesting because even before ChatGPT, there was the DALL-E image generation. You can generate pretty much whatever image you want. And so, what is the use of a stock photo or what do people use to get stock photos right now? iStock, Shutterstock-
Chris Gadek (00:49:16):
Adam Singer (00:49:16):
Getty. And if you query a teacher with an apple, those marketplaces are fairly mature and saturated with any number of really well-done and also scrappy ideas and content that you then pay a creator for. I really think the only thing that that's solving is if you're getting into really abstract layers of creative that don't exist, which I would be shocked if there's something that anyone is querying for a normal piece of business stock footage that you couldn't also buy on Shutterstock, I think their real value is the fact that you would maybe only pay 10 cents for something you previously had to pay $100 to a creator for.
Now, a dark timeline [inaudible 00:50:02] is you're basically not incentivizing any new creative, whether it's stock photo creative or any other type of creative. And then we're just going to say, "Well, the corpus-
Chris Gadek (00:50:11):
Adam Singer (00:50:13):
"We created the corpus of everything," which we know isn't true or ever can be true with creative. Now you're just is it good to incentivize everyone to just be a prompt engineer and not an end creator? Are we saying, "This is enough, we solved it." So there's broader big philosophical questions here I feel no one asks because we're moving fast and breaking things. We don't care if we put any number of photographers or copywriters out of business, we're trying to make money here. There also could be a backlash, especially in the ad industry, as engineers take more and more of the platforms and the direction of advertising, is there at some point some sort of rebellion from the grizzled creatives and pro-humans among us who the fact that we're also enabling these great creators to do better creative? Is it all just about margin for us? Do we want to be run ever and ever leaner? I think yes, to an extent, and then you get to a point where there's probably diminishing returns.
I think for me, the optimistic case is AI and any sort of software lets us be more efficient with the parts of work that just take time and aren't fun for anyone and let us focus our time more on the really creative stuff and the conceptual things and moving towards ever better creative work and ever higher conversion work. Just my only existential concern there is, what if that industry only needs to employ half the people that are here now? What if it's only one-tenth? Who knows? I don't know the answers to these questions, but there's a lot of things here that we're just figuring out.
Another case here is the ad sector needs fewer people managing accounts and platforms. Certainly we're guilty of this AdQuick. We're making it more efficient to run out of home ads. There's a huge group of people who require to run out-of-home ads now. I would argue for that, those moving papers, pile beats type things and securing its calendars. No one wants to do those jobs, you want to be doing the creative work. So I guess it's going to be up to us when we ask questions of what to automate, how to automate it. I think the most important one is why are we automating it? And so, once we think through that, we can hopefully get to better software, better work, and people can be happier doing ad work because I think ad work done is something everyone enjoys.
Chris Gadek (00:52:54):
Yeah, some of the initial use cases have been creative in nature and this will without a doubt have some sort of impact on the larger creative agency space. Do you think this will lead to more in-housing? Because I mean, if you get inspired by an AI bot, that's half the battle, right?
Matthew O'Connor (00:53:14):
Yeah, I think in and of itself this is a factor towards in housing, when you can take a lot of the brainstorming and getting the initial list of, "Okay, what do we want our tagline for this campaign to be?" and put that in a software platform, yes, that definitely encourages some in-housing. I think separate from AI and Chat GPT-3 is something that I was surprised that's happening, that's a countervailing force, I think in my opinion, is the growing long tail of retail networks and niches. That's actually where there's complexity and dynamic components to ad mediums. I think that actually benefits agencies because they create maybe "expertise" but at least serviceable expertise across 60 digital platforms within CTV and all the other channels and are able to take that delegation from brands. This is bringing certainly some more capabilities in-house for creatives. So some interesting forces at play there.
Chris Gadek (00:54:23):
I mean, if I were to look at it from the other angle, one can argue that the agencies can continue to do their services and offer these services, but there might not be an account or an industry or a service level specification. So maybe you don't have an individual working on only airlines or only this because that's what their domain expertise is. But if you have the right tools, you can in effect become an expert at other verticals that historically perhaps you haven't worked on.
Adam Singer (00:54:51):
The one thing about all of the AI stuff that actually does make me excited is imagine it creates the opportunity for a shit-hot design agency to have its own style. And you see this design agency style and you know what you're getting with them. What's that company? The death water company?
Chris Gadek (00:54:51):
Matthew O'Connor (00:55:13):
Adam Singer (00:55:13):
Liquid Death. They have blown up huge because they have a style. It's bottled water, it's this boring commodity thing, but the packaging and the-
Chris Gadek (00:55:22):
Tagline is murder your service.
Adam Singer (00:55:23):
... the taglines. I think that's not something an AI could create. But you can imagine a boutique design shop in on Madison Avenue or somewhere in a quirky neighborhood in Detroit that they have this edgy punk style that certain brands are attracted to and the AI can't copy it and they're using tools internally. But I think that future is interesting because now ad shops aren't these boring commodify type things. You go to them when you want something the AI can't do. They're probably the people that are going to make the coolest creative and AdQuick in YouTube and anywhere else because they're going to do the things the robots can't do. The blue sky scenario is AI lets creative people have more time to be creative.
Matthew O'Connor (00:56:11):
You're not excited about the fact that children across the country won't have to write bullshit essays for their homework anymore?
Adam Singer (00:56:19):
I mean that's such an interesting one because we had the internet when we were writing essays. There's always been technology, there's Copyscape where you can basically tell if something's plagiarized. I'm actually less concerned about that threat the more I think about it, because if you're a teacher, you can read something and tell... The AI has a certain style to it. It has a lot of weird intro phrases, "We might assume that," or "Some are saying that." There's-
Chris Gadek (00:56:49):
It reads like a college essay, perfect grammar, which most people don't use.
Adam Singer (00:56:55):
I'm actually less concerned. That actually gets us away-
Matthew O'Connor (00:56:58):
I Think that's a good thing, by the way. Just embrace it. I can't remember how many times I spent an hour formatting to get to the page limit and it's like, "Is that really paper measuring?"
Chris Gadek (00:57:09):
You know what the secret was?
Matthew O'Connor (00:57:10):
Chris Gadek (00:57:12):
You copy all the periods and then you change the font size of the periods, and that gives you extra length on the paper.
Adam Singer (00:57:17):
Matthew O'Connor (00:57:18):
There you go.
Adam Singer (00:57:19):
You're really struggling to get to that two page.
Chris Gadek (00:57:22):
Think so. Yeah, so we think that this'll be a net positive for agencies. What are some of the other exciting things AI can help marketers with, at least initially? What do you think, Adam? I mean, everybody's coming to us with, "Oh, replace your outbound team. I think it's a good compliment, not a pure replacement. We're still in the early stages."
Adam Singer (00:57:51):
Can I be really annoying?
Chris Gadek (00:57:53):
Yeah, of course.
Adam Singer (00:57:54):
I'm going to give a non-answer.
Chris Gadek (00:57:55):
Oh, I love it.
Adam Singer (00:57:55):
I think companies are still not doing things using analytics properly. I don't think companies are doing things like even A/B testing their website or having really great nurture campaigns. I don't think that we have nailed the basics of what digital marketing can do right now. Oh, we want to play with the shiny toy over here. So some brands that are super sophisticated might be ready, but in my experience as a consultant and working with any number of startups and large companies alike, I think the most value is to do better at what is right in front of you before you're playing at the edge. I know we're going to talk about crypto in just a second, but all of these brands, for instance, that were excited to create metaverse experiences, I went to their websites and I looked at some basic things like they had duplicate title tags on their site. They're not even doing SEO correctly. They probably have parts of their site no indexed that they want indexed that they don't even think to look at. And we're off playing with shiny objects? I mean, there's a level of sophistication.
Even small businesses, a lot of small businesses, their sites are just a PDF menu. It's not that hard to have the real menu. They can be find you so much easier in search, and that experience can be made better. Get your house in order before you start to use these shiny new tools. If you are ready, great. I also do think that startups AdQuick and maybe it's CRM platforms and marketing automation tools are probably going to bring in a lot of the right APIs to use AI for us. I think that that's probably as likely a scenario as some magic new startup builds something no one else is using. And so, probably a lot of the power of AI ends up in your marketing stack, whether you're building connectors yourself or whether it's some startup.
Also, a lot of the young people building these startups, they're focused on a lot of consumer problems, as young startups typically are. I remember in the last cycle, everyone wanted to build their own travel app. There was the thousandth travel app. There were only a few people building a sales optimization app or a B2B marketing app. These are different problems. I think the sexy engineering stuff to be done with AI is probably not going to be... There's a few people working on marketing tools, but they're not that good. They're not ready to do those things. It's probably a feature or an integration in something existing. The short of it is if I were a brand, as I said with crypto and web3, I hate that term, you don't need to do anything here. There's not anything for you. You need to kick butt with your current marketing. We can get into the crypto discussion if you want again. I was on the Crypto Critics' podcast. We had a two-hour rant, so I don't know that we need to go through this too much, we can a little bit.
But I think the opportunity is right in front of you as a marketer right now, whether you're a small company or a large company, to go out and get users, especially now where we're coming out of a time where I think it was a hard time for everyone. When I talk to my friends, they're actually super excited to try new services. They're excited to try a new food delivery company. They're excited to go to a new restaurant. They're excited to try a new messaging platform. That hasn't been the case for a while. We talked about people being lulled into their habits. I think now is a good time to market new things.
Chris Gadek (01:01:45):
Well, maybe I give you that chance to condense your two-hour rant to something a little bit smaller. I mean, might as well, right?
Matthew O'Connor (01:01:54):
Adam Singer (01:01:54):
I mean, I think that it's the tail wagging the dog. All of these companies are trying to shoehorn blockchain into things that have no business using blockchain. I think the killer app with blockchain is probably Bitcoin. That's going to be the project that survives. I think it's mostly used as digital gold and hedge against inflation. Okay. That narrative aside it, there's a core amount of really passionate people and then the rest of it has just become...
Chris Gadek (01:02:29):
Adam Singer (01:02:30):
... Griff City and financial speculation. I don't know how brands have become tied up in this, but it is blowing my mind because I thought we were through this already. For all of the young marketers, there was a time when companies were really excited about advergames. Advergames were these really expensive customer experiences that were built by digital agencies who were more than excited to charge big companies seven figures to build this brand experience that they weren't accountable to anyone actually using. I thought that was over, and we're seeing literally the same thing with brands creating metaverse experiences where 30 people show up. They're doing it to get press from industry media, which by the way, as a consumer brand, your users don't care, and then win an award and go to Cannes Lions and be able to use that on their resume for the next company, and is very careerist, and it's clearly by people who... They make that their personal brand of doing something new and bold.
There's the notion of experimenting and trying new technologies, which is good, but I think if you're a big company, you do that quietly in a sandbox, you figure out what works, and you don't take a 100-year-old brand and write, "We're all going to make it, friend," responding to people on Twitter, and then get dragged for the next three years. There's no reason for it. What are you doing? You're cheapening your brands. It feels thirsty like the hello, fellow kids meme.
Matthew O'Connor (01:04:04):
Chris Gadek (01:04:05):
That's the beast.
Adam Singer (01:04:07):
And so, I think if you're a major brand, there is going to be a sea change. It's not like you need to be early to Facebook stock or early to Bitcoin. You're a brand, you get to sit back and see what works, what doesn't, and when it makes sense to participate, participate. Don't jump into a fight for no reason if you're just sitting on the sidelines. There's a great quote, it's either by Warren Buffet or Charlie Munger where they said, "Investing is the greatest game of all time because you don't have to swing at every pitch, you can wait for the one that comes at the exact place across the plate that you want to swing at it." That's true in marketing if you're a big brand as well.
Now, for a startup, that's different. You might want to push on the gas a little bit and be really provocative and say, well, stupid things. But you could say things like, "Oh, fiat currency is BS." We all know it's not. But they're being provocative, they get attention. Maybe you can walk that back later if you bring in users, maybe not, but they're playing a different game than you're a large brand building a metaverse experience 20 people show up to. I just think it's embarrassing.
Chris Gadek (01:05:18):
I mean, I thought it was rather interesting that the luxury brands and large consumer product goods conglomerates jumped into this space given that there are points of friction, which is owning a set of goggles or a headset. The audience size isn't there, but yet they jumped into this.
Adam Singer (01:05:41):
The notion of FOMO is real. Not just the investor level, but also people working brand side also get FOMO and they think they have to do what's new. I think for a long time there was only upside to being early to everything. Again, I was talking about marketers lulled into this sense of security. I think you have to ask questions, you have to keep asking why. It's your job to make bets, which also means it's your job to not make bets. So you have to know where you're going to place your chips on the table. You have to be smart about it. Again, I think the companies that stay really focused and have this nice long-term strategy are the ones that succeed really well. Even for startups, I think the startups that mostly win, if you talk to the early marketers, we have marketers who were at Airbnb fairly early, they figured out one or two channels that worked really well for them, and that's all they did. That's all they did.
And so, do a few things really well while you're resource-constrained, and as you get more resources, you can do more. We were talking about AI and not just doing it to do it. I think to me, all of the web3 stuff is the rebranding of blockchain because venture capitalists had to create another hype cycle in order to raise more funds, in order to sell their tokens, in order to get their NFT marketplaces up. Look, I guess hands off to them to try to create the hype to bootstrap these from zero to one, but I think that experiment has kind of failed. The notion of digital value is real. I just don't think it's real in the way that they think it is.
There was this dream of, you hear the A16 guys, "Oh, you can own a part of a superhero franchise." Why would they let you do that? That's not the model of Hollywood. They're not going to let you own a piece of that. So the thought that, oh, it's going to emerge bottom up and it's going to be this groundswell, well, that can work for ideas, but for a superhero franchise, it's just not how that gets funded. I don't understand where they ever thought that that would emerge. But it's a lot of ideas and a lot of think influencing. At the end of the day, I own a Bitcoin because I wanted to kick the tires and experiment with it, but I don't own anything else in the space. I issued an NFT SMR to go through the process, I'm not a believer. I think it was a fun-
Matthew O'Connor (01:07:23):
Did anyone buy your NFT?
Adam Singer (01:08:14):
Yes, actually we raised-
Chris Gadek (01:08:15):
What was it?
Adam Singer (01:08:16):
One of my songs. I issued a video NFT. We raised $7,000 in Ethereum in two hours, but this was at the peak of the NFT craze. I have friends, they have very concentrated Ethereum positions who were happy to just put money on it. So that was part of a bubble. I didn't want to do the whole... Who's that guy that sold the 69-
Matthew O'Connor (01:08:16):
Adam Singer (01:08:39):
Yeah, Beeple thing. I didn't want to raise money like that, but I'm like, "Yeah, if you guys want a bid on this, I'll just donate it to St. Jude." I took some of the fluff for markets and helped kids with cancer. Thought that was cool.
Matthew O'Connor (01:08:52):
At least something good came out of that hype cycle. Yeah, I think the punchline is it's a technology sleeking a solution, and it's trying to be shoehorned into way too much. I think it is beautiful from a technologist perspective, decentralized mathematical software. I think if you started society from scratch today, a lot more things might have blockchain components, but you're not going to burn everything down to just build it back up, and the switching costs can be super high.
Adam Singer (01:09:27):
Outside of the marketing and the technology stuff, on the finance side, specifically the exchange side, without fin reg, it's too juicy to basically do things that you can't do at a traditional TradFi exchange. And no one would ever know until they do. The one meme from that whole thing was not your keys, not your coins, like having your crypto stored offline in cold storage was ultimately a safer play. Now we're sort of going backwards because it's like a little bit of the gold bug mentality of having the gold under your bed. Now we're not even online anymore, so it's like Satoshi's Vision of a peer-to-peer electronic cash. I think for that part, it makes sense to use a little bit at a time, but have most of it offline. But it's this interesting thing because at the beginning of this podcast, we were talking about, well, brands shouldn't do things that don't have a great user experience. In my head I thought, "But they never thought through that with crypto. Even with Bitcoin, the user experience is terrible."
Chris Gadek (01:10:43):
You mean losing a pile of money is not a great experience?
Adam Singer (01:10:46):
Right. There's some guy in the UK who's tried to search a dump for the last-
Chris Gadek (01:10:51):
Oh yeah, I heard about this.
Adam Singer (01:10:52):
.... seven years to get his Bitcoin. He even raised some venture funding to get machines to go in there, and the dump people refused to let them. They're like-
Chris Gadek (01:11:01):
The dumb people are going after it now.
Adam Singer (01:11:02):
Well, they're like, "It's an environmental disaster, guys, we can't just dig this stuff up." Even though they raised the money. But it's not good that this is what people are focused on. You took all these technologists and you gave them a chart that they stare at all day instead of building. I mean, that's not healthy.
Chris Gadek (01:11:18):
Well, we were promised fractional ownership and we ended up getting-
Adam Singer (01:11:21):
You can buy fractional ownership of companies.
Chris Gadek (01:11:23):
... collectibles and trading cards, effectively.
Adam Singer (01:11:25):
Well, I like alts. I like alt investments. Owning a piece of art is a cool thing. Masterworks is a cool startup. It's totally separate.
Chris Gadek (01:11:32):
I mean, you could think of all the new stuff that's coming out right now as alternative channels for marketers, right?
Adam Singer (01:11:38):
Chris Gadek (01:11:39):
That's one way to slice it. Do you put all your eggs in that basket? Probably not. When you're thinking about investing, are you taking all your money and putting it into the safest store of value or the least safest store of value?
Adam Singer (01:11:52):
The alts are interesting though because they're non-correlated. So if we were looking at it from a marketing standpoint, if you're going to try a channel that's a non-Facebook or FANG channel, then they're not correlated to what happens with those big companies. They might just keep going up on their own.
Chris Gadek (01:12:10):
Maybe we'll see more and more retail media outlets come up as a result of this.
Adam Singer (01:12:14):
Yeah. Everything's an ad network, right?
Chris Gadek (01:12:18):
Exactly. Everything in the physical world will be monetized. Every experience will be monetized.
Adam Singer (01:12:24):
I like the back of your laptop has a Don Draper meme where it says, "Cars. Cars with ads on them."
Chris Gadek (01:12:31):
Yeah, we got that sticker from our friends at Carvetise. It was so good, I had to put it on.
Adam Singer (01:12:36):
Chris Gadek (01:12:37):
Mr. Powell at the Federal Reserve is making people's lives a little challenging. I'd love to hear your take on how macro's going to influence marketers in 2023?
Matthew O'Connor (01:12:49):
Yeah. Well, obviously it's been a crazy ride in the macro environment from the pandemic when the fiscal response was massive stimulus, and that was on the back of a decade of zero interest rates from the Fed, and that's how you get crypto bubbles, et cetera. And so, when the supply side shock of COVID had factory shut down cargo rates skyrocketing, the kind of excess wealth that was flowing through the economies going into the housing market, in my estimation, everything has so showed signs of significant cooling very quickly. Again, kind of easy come, easy go. The inflation came really quickly with the really large supply side shock that made everything more expensive combined with the stimulus that made people feel pretty wealthy or relatively too wealthy. So he's been vocal and consistent over the past year, probably late. I think the transitory thing is now laughable. It'd be a harder laugh if it wasn't seriously affecting certain groups.
But yeah, I think stability is what the economy wants. There's so many green shoots, everything's opening back up. Employment is still really high, and Powell's used the blunt instrument of tamping down the demand side, which is the only thing the Fed can do. Now that the supply side is coming back online, people are moving back into the workforce. There's some culling in the white collar market. I heard it called a white collar recession. I think that's probably an all-in reference. But yeah, I think that's accurate, is a lot of the high-flying tech companies, but Main Street is doing extremely well. Small businesses and local businesses are doing well. And so, over the next three to six months, I think we get to more of a pause, less aggressive rates rising, and then business as usual for a couple outdoor years.
Chris Gadek (01:14:47):
What do you think about the new normal that's coming?
Adam Singer (01:14:50):
Come on, Jerome, drop it back to 0%. Let's take this rollercoaster around again.
Matthew O'Connor (01:14:54):
Adam Singer (01:14:57):
Yeah, I mean, the Fed is certainly going not full vol curve, but-
Chris Gadek (01:15:02):
Adam Singer (01:15:04):
... they're pulling the sticks back up on this bad boy. So yeah, I'm not a macro economist. I am of the mindset we cannot change the winds, we can only adjust the sails. But I'm still somewhat hopeful that we've been through enough of the burning off the excess of the dry forest. The idea that the economy, if you let it go too long, it becomes this overgrown forest, you need a controlled burn. There's obviously, as we exit, hopefully the golden age of grifting where there was too much easy money, because obviously that wasn't healthy for anything. Hopefully we get to a more balanced level of sanity. We obviously couldn't have [inaudible 01:15:48] forever.
But I think probably companies will be more conservative until they get their hands forced by competitors because it's a little bit of an arms race once people decide in a sector to go more aggressively. But hopefully this next cycle is not as wild on both ends. The idea of a soft landing, well, maybe we could have a more... not having to raise rates immediately. I think obviously a pandemic caused this and other things. Again, I'm not a macro-economist.
Matthew O'Connor (01:16:25):
Yeah, just riffing on that a little bit, it's a really interesting time to be a teenage incumbent. Why I mentioned that is that I think a lot of the big brands are concerned about their stock price, they're very cautious, and behavior change must be at its highest because of first '23 is the first year out of the pandemic. I can't believe we're actually saying that, but it's the first time when we're not really thinking it's going to matter at all. Even last year was like, "Is it going to come back?" And so feeling good there. If I were a brand in that space, what a time to be at that stage when you can grab market share, take advantage of things that other companies aren't doing, and zig when they zag. I think that's pretty exciting if you're in that stage.
Adam Singer (01:17:15):
I've even seen people excited about taking cruises again this year, and that was some-
Chris Gadek (01:17:20):
Cruises are killing it.
Adam Singer (01:17:21):
Yes. I've seen really great cruise marketing. I think the cruise industry, like what a fun industry to do marketing in. When I'm seeing things like that and travel ads, it makes me feel pretty good about the year. Putting the Fed aside, just from a consumer sentiment perspective, it seemed like, as you noted, the pandemic overhang didn't give us the Roaring '20s straight away. You walk around New York right now, and I've been here two or three times since the pandemic, this is the most normal New York it's felt. And so that's something to be excited about. I think people are probably tired of hearing about the Fed and interest rates and all this. I think people want to live their lives now and are going to do that regardless of what a number on a chart sits.
Matthew O'Connor (01:18:08):
Chris Gadek (01:18:09):
Cool. Well, I think that's a great place to wrap this up. Thank you for joining us on the Madvertising podcast.