Why Everyone Obsesses Over ROAS

Mark 0:00

It's going to be the topic of everybody for the next year. I'm already sick of talking about it, honestly. It's like my profits like look the same. And at that point, a lot of people turn around and scale down. It doesn't always have to be this dramatic downfall, but you're always going to see robots go down as you scale.

Trevor 0:14

Don't just know your numbers, but know the why behind it too.

Mark 0:17

I don't want to work with robots. And most people want to work with other people. No one has a job anymore. Everyone's out of work.

Trevor 0:25

There's no such thing as a marketer. Go find a new job. You guys are sitting on the edge of your seat. You have no idea.

Mark 0:30

We're still going to talk about it to you guys, so I'm sorry. You're probably sick of it by now, too.

Trevor 0:34

Yo, what's going on, everybody? Welcome to the Unstoppable Marketer Podcast. Uh with me as always, sitting to my left is Mark Goldhart, my lovely co-host. How are you, sir? Good. Your hair is just you got a mane right now.

Mark 0:52

Do I? I know. I need to cut it. If you're not if you're not watching this. I had some people ask me last week about my hair, like what the reason was. And I was like, just laziness.

SPEAKER_00 1:05

Laziness is the reason.

Mark 1:07

Um just laziness. I I look at it and I think.

SPEAKER_00 1:13

Oh, I'd have to call someone, set an appointment, go there. We there's a barber shop in our office here. Yeah, there is.

Trevor 1:26

Make friends with them.

Mark 1:28

Whole hour.

Trevor 1:29

Have you used the barber hair?

Mark 1:31

They're good. No, they're good though.

Trevor 1:34

Really?

Mark 1:34

I have used them before.

Trevor 1:36

Oh, you have?

Mark 1:36

Yes.

Trevor 1:37

I shave uh I cut my hair once a week.

Mark 1:42

I cut my hair twice a year, maybe. Maybe.

Trevor 1:49

I just buzz it. I gotta make it short again. Or Saturday. Just depends on what I got going on. Saturday, Sunday.

SPEAKER_00 1:58

I just let my hair, you know, it's has its own seasons. It's got a mind of its own.

Mark 2:03

Just helps connect me to the earth.

Financial Modeling Beats Magic Numbers

Trevor 2:09

Alright. Um what's happening in e-commerce? No, let's not let's actually not start there. Let's start with a good client win. Um and then because what's happening in e-commerce is going to be the topic of the podcast today.

Mark 2:26

So client. It's gonna be the topic of everybody for the next year. Yes. So client win. I'm already sick of talking about it, honestly.

Trevor 2:35

But I am too, and I'm sick of reading about it.

Mark 2:40

I'm sick of it.

SPEAKER_00 2:41

Yeah.

Trevor 2:42

You guys are sitting on the edge of your seat. You have no idea.

Mark 2:45

We're still gonna talk about it to you guys, so I'm sorry. You're probably sick of it by now, too.

Trevor 2:51

Um client win is financial modeling.

Mark 2:58

Financial models.

Trevor 2:59

Let's talk about financial models. Let's first talk about a very common misconception to how we set our goals. Do you like that? Yes. So what a common thing that happens when we work with clients is that they will oftentimes come to us and say, I can only I can't win unless I have a three row as or a four or two point five or whatever. And they just throw that number out. And a lot of times there's not a lot of thought behind it. Maybe they put a little bit of data behind it, like, oh well, if I'm spending at my normal ad spends, this is what I this is all I can do. But the problem with that is we have discovered that when brands do that, they're oftentimes just like what's the saying? Cutting your legs out from under you.

Mark 4:08

Yeah or putting the trees in front of the forest.

Trevor 4:13

Can't see the forest through the trees? They're cut they're selling themselves short. They're hindering their own growth by setting a um, stealing from Peter to PayPal. Should we keep going with those? Yeah, they're they're setting themselves up for failure, essentially, when when doing that. Failure of growth, growth failure, I should say. Because they can still be profitable at that number in a way that works really good for them. So talk about financial modeling and and how this has been successful for some of our clients as of lately.

Mark 4:51

Well, I think we have to go back to the beginning. Okay. The beginning being what is meta? And different channels play different roles in your marketing stack. But I think Meta is often confused as a an efficiency platform and not a scaling platform. Meta is set up, especially the more algorithmic it gets, it's set up as a scaling platform. Yeah. Meaning optimal reach to the optimal people, but not necessarily hyper focused targeting.

SPEAKER_02 5:35

Sure.

Mark 5:36

Okay, and then that's because meta is also evolving its entire user experience from a consumer perspective in how people consume content. So it the way people used to consume was chronological, and it's moving ever so more into an algorithmic content feed, meaning they're trying to get people to stay. They want people to be on the actual platforms for as long as possible and come back to those platforms.

SPEAKER_02 6:02

Yep.

Mark 6:02

So the kind of content you serve has to really help them reach that goal as well. It's not just reaching your goal. Yes. But nonetheless, what happens is people often try to get into meta and say, I want a five ROAS. I'm just making a number up here, but let's just say five ROAS. I want a five, and that's how I'm gonna get to X profit and whatever, and I'm only willing to spend two grand. But you're selling yourself short because you could spend if you're spending a thousand dollars a day at 30 grand at a five ROAS, it's like, okay, well, that's great. You know, you spent 30 grand at a five, that's$150,000 of revenue and whatever the profit margin is.

SPEAKER_02 6:51

Yep.

Outscaling Efficiency With Guardrails

Mark 6:52

That could be great. But then what happens is as they start scaling, they they're gonna often see that ROAS go down. And that ROAS goes down for a few reasons. One is you're just reaching more mass market, so you're gonna start reaching more people up the funnel than than just people who are ready to buy now. Um, it could also mean that you had some organic presence that you weren't accounting for that was also contributing to this blended ROAS that was making your ads look better than they were. So there's a few factors, but let's just say generally you're gonna see a ROAS dip as you start scaling. Yep. Um and that's where a lot of people freak out is hey, I just went from 30 grand at a five to now I'm spending a hundred thousand dollars a month at a three. Yeah. And it's like my profits like look the same.

SPEAKER_02 7:47

Yes.

Mark 7:48

And at that point, a lot of people turn around and scale down. When in reality, most people should just scale up, depending on your TAM. Like if you're hyperniche and there's arguments to not do it. But if you have a big TAM, the argument is like you should actually just scale, outscale your efficiency problem. You can't really do that unless you have a financial model that tells you what your break-even is, what your variable profits are, and what your true profits are every single day.

Trevor 8:21

Yeah. That accounts for your cost of goods, that accounts for your shipping fees, that accounts for your OpEx, that accounts for your Shopify fees, returns, sp ad spend, everything.

Mark 8:34

Everything.

Trevor 8:35

Yes.

Mark 8:36

Because what you'll often see is although you see like kind of a rapid diminished effect of ROAS, the long tail smooths out. Yeah. So the higher you go, the more smooth and predictable it will become. Yep. But it's never, it's not going to go back up to that five that you originally might have thought. But the sweet spot is how do I get the most profit dollars, not necessarily the most profit dollar per purchase? Yeah.

Trevor 9:07

Or profit margin.

Mark 9:08

And sometimes there's a little bit of a painful process to get there. Um, and again, we're not taking into consideration in this discussion about yes, there's things that you can improve. Yes, there's better creative, yes, there's strategies, yes, there's allocation between certain mediums. We're just talking holistically here. So it doesn't always have to be this dramatic downfall, but you're always gonna see ROAS go down as you scale. Like that's pretty much a rule.

SPEAKER_02 9:38

Yeah.

Mark 9:39

Um, but then you're gonna see it kind of stabilize. And then the question is how do you maximize that? Because there's a big difference in these financial models between, let's just call it like a 2.4 and a 2.8 and how much profit dollar you'll get.

SPEAKER_02 9:56

Yeah.

Sponsor Break And The AI Panic

Mark 9:57

You're gonna find based off of your margins and your break-even points that if you can get up to a 2.678 instead of a 2.3, that's not a five, but all of a sudden your profit dollars at$200,000,$300,000 spend go from whatever X to Y, which is gonna be often like an 80% difference.

SPEAKER_02 10:20

Yeah.

Mark 10:21

So your profits grow 80% just by incre increasing your ROAS by 10, 15%. Not 200%, not 300%. But the bigger you are, it's more about these little razors of margins and efficiencies. And if you can just tilt those, which takes a lot of work, by the way. It's not easier said than than done. But the big problem is people don't even get to that point because they see the ROAS go down, they get scared, and then they just scale back. Yeah. And instead of outpacing the efficiency problem. Because you're gonna play two games in e-commerce based on your financial model when you if and when you build this, which everyone should, um, you're gonna know on those sweet spots what's worth it for you. Because you're either playing an efficiency game or you're trying to outscale your efficiency problem, which doesn't mean that efficiency doesn't exist. Like you still have to make profit. Yeah, and you're still working on things like conversion rate optimization and but too many people get stuck in the the no man's land.

Trevor 11:25

Yeah, so for example, like we just implemented this model uh with with a brand who was a little bit hesitant, right? They to to go with because this was almost new age thinking, right?

Mark 11:39

Well, hesitant because we understand as marketers and as brands, it's hard. It makes sense. Like you can see the equation and it makes sense, but you kind of need to visualize what it will actually look like. Yeah. Like, oh, hey, this is how many profit dollars you could make. Yeah. Even if we push ROAS down and you scale two, three X. Yeah. You're gonna double your profits, even though your efficiency goes down because we're we're scaling, we're outpacing that efficiency problem. Yes. And this these are the measures we have in place to ensure you're not gonna go off the rails, right? We're gonna have guardrails in place to make sure that we're we're doing this in a proven methodology method. How do you say that? Methodolic. Methodology? Methodology? Yeah. Methodic. That's what I was thinking of.

SPEAKER_02 12:33

Oh, okay.

Mark 12:35

Sorry, guys, I'm still on jet lag. Methodic way.

SPEAKER_02 12:39

Yeah.

Is The Media Buyer Dead

Mark 12:39

Um but if you can visualize it, it it takes a lot of the fear because then you know you're going into the the no man's land. Yeah. Like you're gonna hit that point on this graph of hey, I have diminished returns as I'm scaling, but the diminishing of those returns, the pace of diminishing returns will slow down dramatically and even stop or get better for you as you continue to scale.

Trevor 13:07

Yeah.

Mark 13:08

Generally.

Trevor 13:08

Yeah.

Mark 13:09

If you scale the right way.

Trevor 13:10

Yeah. And so easier said than done.

Mark 13:11

Like again, you need a you need a good media buyer. You can't just like throw a bunch of money.

Trevor 13:16

And you need a good strategy and you need good content. And yes. But like, for example, what this just did is let's just let's just say this person before required a three, right? I must have a three. Let's say they're best at at all said and done, like once you were minusing cost of goods and it's a good thing.

Mark 13:35

By the way, the three was not meant. We often see this, and we we we hope if you're listening, you reevaluate what you deem as successful in terms of a quote ROAS, yeah, or ROI or blended ROI or whatever you look at. Yeah. Because oftentimes with clients, we'll we'll find that we have this preconceived notion of a three or a four or five. A three seems to be the magic number. Yeah, a lot of people say three, but nobody really looks at the model to say, well, is it? Yeah. Why do we say three? Like, well, that's what it is. For example, this client, we they said, hey, we need to be at like a three-five or a four. Yeah. But their magical number, it's like, well, your break-evens like a two point two.

SPEAKER_02 14:18

Yeah.

Mark 14:19

So what are we doing all the way up there at a three five? And why are we playing this efficiency game in metric in Facebook? Because now we're not even using Facebook strengths. No.

Trevor 14:30

But anyways, what I was gonna say is like if it was at a three five, we the next the following month did like a two six and increased their overall profits by almost double like of their best month. We spent a lot more, but their overall total profits after you're excluding everything was significantly better. Yeah, 50% higher or something like that. So the other thing that's really cool uh that we didn't really talk about is you will find that you will also have a much bigger competitive advantage when you understand what that true what can I actually get down to. Because then what's happening is you start to stand out amidst your competitors in being able to out potentially spend them as they are still thinking, oh, I can't be at something lower than a 3.5.

Mark 15:27

Because now you're in there's an old adage in marketing that the winner is who is willing to pay the most for a customer. Yeah, exactly.

Trevor 15:34

And and it's not like you should always be looking at that. You should like that's not how you should live, but it's definitely a really beneficial factor on being able to beat out some competition. Yeah. So financial modeling.

Mark 15:52

Just know your numbers, really. Like a lot of people assume what those numbers are.

Trevor 15:56

Don't just know your numbers, but know the why behind it too.

Mark 16:00

Know your numbers based on the scenarios that you're trying to you're trying to play.

Trevor 16:03

Because I'm sure at some point that number was given to like it usually is, yeah.

Humans Still Matter In Service

Mark 16:08

It's usually like, oh, we need to do this, but that number is often given based off of the scenario at the time, which perhaps when you're small, you need a three or a four or a five.

Trevor 16:20

Yeah, because maybe cash flow in hand in the moment because of your POs needs to be higher.

Mark 16:25

Maybe cash needs to be higher, or maybe hey, that's what you need generally if you're spending generally the same amount every month to make sure that you're covering all your costs and you come out with a little profit. But it's not taking into consideration that once those opexes are met, once the variables are met, then you can stack your profit dollars a lot quicker. Yeah. And that's how you outscale the efficiency problem.

Trevor 16:50

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unknown 17:51

Yeah.

SPEAKER_00 17:52

Everyone's out of work.

Trevor 17:55

Marketing can now no longer there's no such thing as a marketer.

Mark 18:00

We're just being replaced. Everyone's being replaced by an AI bot. So we had we all had a good run.

Trevor 18:12

Pleasure. It was a pleasure working with you guys. It was a pleasure. So yeah. There's a lot of like scare like sky is falling. Yeah, there's a lot of skies falling. Who what who's that character? Uh the sky is falling? Chicken Little.

Mark 18:27

Wow, Maddox answered that in like half a second.

Trevor 18:30

Yeah.

unknown 18:31

I like Chicken Little.

Trevor 18:32

Yeah.

Mark 18:32

I've never seen Chicken Little.

Trevor 18:34

Your kids would love Chicken Little. The sky is falling.

Mark 18:37

I've seen Chicken Run. Yeah.

Trevor 18:40

No. Chicken Little. The sky is falling. Seems like Wallace and Grumman. It's like the boy cry who cried wolf. But it actually happens.

SPEAKER_00 18:47

I like that. Yeah.

Trevor 18:48

So yeah, sky's falling right now.

SPEAKER_00 18:50

It actually happens?

Trevor 18:51

The question, yeah.

SPEAKER_00 18:52

It's a real story?

Trevor 18:52

Yeah.

Platform Bias And Conflicted Incentives

SPEAKER_00 18:53

It's like a real It's a true story. It's a true story. It's a true story. Is it about a chicken? Yeah, it's about a boy chicken.

Trevor 19:00

Yeah. Okay. Um. So yeah, let's talk about it. Um the big thing is, yeah, people are saying, hey, there's the death of the media buyer. Because, for example, uh what happened in December? Manus. Meta bought manus. And manus is an AI agentic.

Mark 19:22

Manus or Manus?

Trevor 19:23

Manus. I think you might be right with Manus, sorry. That it essentially can upload the ads and can make all the changes and do everything and create the content and blah, blah, blah, blah, blah. Therefore, is a media buyer important and relevant. Do you even need a CMO anymore? Because you can build agents that, for example, like in Claude, I just built, or I'm in the process of building a competitive watcher that shows every time they dip their prices. It shows any, you know, if there's a surge of uploaded ads, it monitors all of their emails to be able to understand what competitors are doing to better position our brand in the market. Right? So I guess the question is like, what do we what is our take on it, maybe? What's our take on this? What's your take on it? Is the media buyer dead?

Mark 20:25

Let's just start there. What's my immediate take? What's my what do I think is happening in five years? Let's go immediate. When do I think the end of the world is gonna be? Let's go immediate take. Different questions. Uh immediate take? My immediate take is even if building something is much easier, building the right thing is still very hard.

SPEAKER_02 20:46

Yeah.

Mark 20:48

So 99.9% of what people are going to build and spend all their time doing in Claude is gonna end up being useless.

Trevor 20:57

Yeah. Well, it's kind of like what's happened with tools over the last five years, right? Someone has built an app or a tool for anything, and if you think about it, like we we run a lot, a massive we run a very successful marketing agency spending a lot of money. And think about how many tools we use that have been created. Very little.

Mark 21:20

And which tools have actually made an impact.

Trevor 21:22

Yeah.

AI Backlash And Disclosure Laws

Mark 21:24

So even with the availability of making things and making things is fun, like being imaginative and creating things is fun, but ultimately most things are not very useful and not needed. So most of the things being built are going to be garbage. However, it will present opportunities to do things like you know, we've already been exploring things like hey, this allows us now to do landing pages at scale in a way that was harder. It allows us to do analysis in ways that was harder. It allows us to now connect. Connect data from all these different sources for a client to provide better forecasting and better So it's absolutely augmenting what we were doing before because it's freeing up so much time and you can 5x, 10x, 100x, what you you're capable of. Um but and I could be wrong and maybe it's hopeful thinking. I think in the the immediate view the next one year, two, three years, it's gonna be pretty pivotal. I don't I don't see it replacing everybody. I see it augmenting. I see a lot of maybe entry-level people not really getting a shot at certain companies because they're gonna opt for crappy AI experiences. And but you know, is it actually getting better? Like is it actually gonna improve things?

Trevor 22:55

Yeah, our brand's gonna start winning at a better ratio.

Mark 22:58

Because the cost of tokens and the cost of power, and and a lot of these things are being floated by there's a lot of investment in these companies, so the cost I think is a little lower, it's a little subsidized right now. Um in a lot of ways, you're not necessarily saving money by using AI. Sure. In a lot of cases. So now that's gonna change. AI is gonna keep getting better, but but ultimately I think on a human level, and again, I could be wrong. I don't want to work with robots. And most people want to work with other people.

SPEAKER_02 23:41

Yeah.

Mark 23:42

Now, yes, we all want to save some money, and yes, there's margins and whatever, but at the end of the day, it's like I don't want to go to a dentist's office and talk with a robot.

SPEAKER_02 23:52

Yeah.

Mark 23:54

I would love for AI to automate and make their bookings a lot more efficient.

SPEAKER_02 24:01

Yeah.

Mark 24:03

So I don't have to wait so long just to get into the dentist.

Fake Content And The Trust Crisis

SPEAKER_02 24:06

Yeah.

Mark 24:08

But do I wanna do I want to like walk in and say hi to nobody and like check in like I'm in McThere's this level of human experience that I think some people don't care for, but I think a lot of people will, which will, which might start separating the industries and and companies into like higher level tiers and lower level tiers based off of what you want.

SPEAKER_02 24:28

Yeah.

Mark 24:28

Um, and then I don't know how it's gonna work out in the end, but I do think ultimately people want to be and interact with other people. And the more you take it away, the more it people are gonna want it. Yeah. And so, and but at the end of the day, like also AI still isn't quite there without you orchestrating it. So hopefully what it ends up being is people are orchestrating AI agents to be way more efficient and way more productive and free up their time. Um but ultimately, look, we're using all these AI tools in our agency. We're trying to be on the cutting edge of AI. Like we believe in AI and we think it's going to be the next thing. We just think it's best served when you have a human companion to it all.

SPEAKER_02 25:20

Yeah.

Mark 25:21

Um we're not trying to cut all of our team down just because we can replace some of their tasks with AI. What we're trying to do is get our team to augment themselves through AI to be better and to accelerate how they're learning, to accelerate how they're delivering.

Trevor 25:37

Which allows us, which maybe allows us to grow without having to hire the same amount of headcount, potentially.

Mark 25:44

Yeah. Or what it what it's actually like that's true, I think, in the short term, but in the long term, if everybody has AI, then there is no advantage in AI. No.

SPEAKER_02 25:54

Yeah.

Mark 25:56

So like the standard is just having AI. So you're not really going to be able to grow in the future just because you have AI or not AI. Yeah. Um so like it kind of levels. There's always like a short-term advantage. Like, yeah. Hey, if you had a if you're the first guy to have uh access to the train, you had an advantage getting your stuff across the United States. But you know, then that advantage kind of dissipated a little bit, and then you had cars, and then you had semi-trucks.

Practical Ways We Use AI

Trevor 26:29

It's the same concept of like, you know, we say this all the time, like 10 years ago it was never harder to start a business, never easier to stand out. Like 10 years ago, if you spoke Chinese or if you had a relative in Asia, it was very, very much easier for you to build brands and build products out there, and you had a very massive competitive advantage.

Mark 26:50

Well, some of the best brands we know right now that started out of Utah were like the bigger ones. Not I'm not talking e-commerce. Sure. I'm talking like the Love Sacks or the Purple or Purple or even like Camp Chef or what's some other ones around here? Traeger. I mean, you name it, like some of the bigger ones that are a little bit more of like global household type brands. A lot of them were started through connections because of Mormon missions in Asia.

SPEAKER_02 27:20

Yeah.

Mark 27:20

Like people spoke the language and they could go back, you know, they went to Taiwan, they learned Chinese or whatever, and then they could go back, they made connections for with manufacturing 20 years ago. But now it doesn't even matter.

Trevor 27:32

You could now there's not a very big competitive advantage, right? Because I could go develop a product in three months pretty easily.

Mark 27:41

Pretty easily, you know. So look, I don't know what the future holds. Either we all have no job. Like that's what's funny. It's like I guess no one has a job in 10 years. Then I don't know what the point of anything is. Right. Um, or it just becomes the thing that everyone is still using and everyone's jobs change, obviously, pretty dramatically. But like at the end of the day, right now, it still needs human companions. And the problem with AI is, for example, like you have Manus with Meta. Um I think it'll be great for us in making sure that we can get certain changes done on time and helping us kind of customize the way we're rolling out scaling of and and campaign structures, and it's gonna be a great assistant for what we're doing. Um but it's biased. It doesn't really have the company's best interest in mind, it has Meta's best interest in mind. It's gonna be getting trained off of all of what Meta needs, yeah. Meta wants.

Trevor 28:48

And so at least heavily leaning that way.

Mark 28:52

Yeah, and no offense to any meta-rep or TikTok rep. But like in the agency world and in the e-com world, we all know when you talk to a rep from a Google or TikTok channel, yeah. They're not they don't have bad intent, but they're they clearly have a conflict of interest.

SPEAKER_02 29:10

Yeah.

Mark 29:10

Which is they're doing what the company wants.

SPEAKER_02 29:14

Yeah.

Future Scenarios And Closing CTA

Mark 29:15

What the company wants isn't always what works best. Aligns works best for what the brand wants or needs. Yeah. Like when P Max was first rolled out and everybody's like, oh, just jump on P Max, it's great, it's great, it's great, it's great. And then you like do P Max and you're like, oh, it's just a branded campaign.

Trevor 29:31

Or like this is a really good one. Like, remember, remember in the early days when shop the shop uh like IG shop was a huge thing. Yeah. And they were giving us like$10,000 credits every month to different brands.

Mark 29:47

Get on IG. It's proven, and they gave you these metrics. Yes. If you're on IG shops, it's proven to increase conversion rates. It's a better experience. Like people just want to shop right here, right now.

Trevor 29:58

And they were incentivizing lots and lots of money. I think every one of our clients got anywhere from$10,000 to like$25,000.

Mark 30:04

Of ads and directed to shops as a destination.

Trevor 30:08

And the moment that promotion ended, and the moment we kept stuff going there, performance just well, on some, it's what was crazy.

Mark 30:19

And again, maybe it's just maybe it's in user error that these shops weren't optimized in the right way. But on certain clients, we started tracking link clicks, percentage of link clicks going to shops and percentage of link clicks going to website. Website, yeah. And measuring the purchases on each.

SPEAKER_02 30:39

Yeah.

Mark 30:40

And showing that shops was terrible.

SPEAKER_02 30:43

Yeah.

Mark 30:44

Like to the point where with certain brands, we were like, do not let any traffic go to shops because the conversion rate is terrible. Yeah. And it increased performance dramatically for those brands just by saying, we're not doing shops anymore over here. We're just going straight to website.

SPEAKER_02 31:00

Yeah.

Mark 31:01

It wasn't for every brand, but for there were some where it was a terrible thing for them to go to shops. Yeah, for sure. Again, Meta had the numbers. It said what was best. Why was it best? Well, Meta was also taking a percentage of spend.

SPEAKER_02 31:12

Yeah.

Mark 31:12

Or not spend of revenue for transactioning for the transactions happening on their Instagram shops. So they got a percentage there, and then it was usually synced with like Shopify, and then there was still transaction. So it was was it the best thing for anyone? I don't know, because they're not even doing it anymore, really.

Trevor 31:30

Yeah. So yeah, there's this human piece where I think we are still in the space of there is so much chatter that's making it feel like the world is falling. But it's very similar to like when Nano came out, Nano Banana, and it was like every editor is dead. Yes, editors are gone, uh, photographers no longer needed. And yes, there's a lot of that where I think a lot of brands were able to, or agencies have been able to utilize that tool and make things easier and better for them. We use it. Yes, we do. Of course we do. Yeah. And it helps it helps our team output a lot more.

Mark 32:11

We use AI, image, and video a lot. Yes. But guess what? We can't use it for certain things. Like it's great as a filler and as a companion, but it it's it cannot be the only thing you're doing. Because A, there's violations. Yeah. Right? We've talked about that with UGC. Like you can't have people using it and acknowledging it. So it becomes cold. Yeah. Like you can, sure, you can do like an AI ad, but there's no personal element to it, or else you're gonna be violating. And they're not cracking down quite yet, but trust me, I think when they do. Because not to get too conspiracy theorist here, I don't want to put on my tinfoil hat. Yeah. I do actually, I like putting it on. But there's going to be a huge backlash from regular people against AI.

SPEAKER_02 33:05

Yes.

Mark 33:06

And I don't think the tech bubble in Twitter realizes how vitriolic it's going to be. Because people aren't just going to be like, oh, this is great. Yeah. I don't want to do that. Like people like going to their jobs. People like having jobs. Yeah. People like doing things in their jobs. So there's going to be a political reaction soon to AI, whether that's overblown or not, there's going to be one. Yeah. So what I want to make sure is clear here is we're using AI. We think it's valuable, but there's going to be a political blowback to it. And when there is, there's going to be repercussions for using AI videos demonstrating products because that's going to violate, like, hey, you can't be showing people using your product when the pe those aren't people. Well, you have to acknowledge that, hey, this is AI. Or there's going to be something the same way with tobacco, right? Like when people when they crack down on tobacco, it's like, hey, you have to say that this can kill you. This can kill you on your box.

Trevor 34:10

Well, I even uh recently in I think early January, and I need to I need to read more about this, but California and Colorado either passed or are passing a law that if you use AI in any ad, it has to be disclosed. That's not even that's not even the violation one that we talked about.

Mark 34:26

No, that's not the violation. That's just you have to disclose if anything in it is AI rendered.

Trevor 34:31

Yes.

Mark 34:31

And I think that's going to continue to happen from a federal level. Trevor Burrus, Jr.

Trevor 34:34

Which is like what a buzzkill, right? Like to have to put that on your like an asterisk on your ad made with AI. Yeah, and I fall somewhere in the middle.

Mark 34:44

I don't think that's needed. But I also don't think you should get away with just having fake people saying just fake people saying fake things and trying to pass it off as real. Yeah. Like I think it's okay to have an AI rendered like, oh, hey, we made a video and we used AI to do a zoom in effect, or we used AI to do like some transition. Sure. I think AI is great, and I don't think we should just throw it out. But but there is like look, I know we're getting a little in the weeds here, and this isn't really actionable for anyone. There's gonna be blowback. There absolutely is going to be general political and general and bigger political reactions to what's happening. Um so we think it's still great and we should be using it, but people do value humans. Like people do value seeing humans and they don't want to be lied to. And no one likes to like see a video and be like, is this AI? Yeah. Yeah, for sure. So we've we've thought about I don't know when this comes out. I don't even know if I want to say this, but we've thought about using clever ways in videos to call out that it is not AI.

Trevor 36:06

Yeah. Yeah. I think we're gonna start doing that this week.

Mark 36:09

With a lot of ads, as a counter to people now wondering, because you can tell that the general audience is now starting to wonder with everything. Like even my parents.

SPEAKER_02 36:18

Yeah.

Mark 36:19

My dad and my mom, who are not, I guess, I don't know, elderly. They're not elderly, they're in their 60s. But they're not tech people. Yeah. Every time they see something on Facebook now, they're like, is that AI? Yeah. Hey, do you think this is AI? Yeah. Or like they can hardly go through anything without wondering if it's fake.

Trevor 36:38

Well, not only that, I mean, this is this is not AI, but this is like just the the conversation about real, whether it's AI or just a lie or whatever. I'm gonna say this story, but I do want to like end the podcast by saying, okay, let's let's maybe give some examples of how we're using it, because I know we've kind of like not we've trashed on it, but we've pumped the brakes on the fear-mongering of it, I think, a little bit.

Mark 37:03

Yeah, there's a lot of like consistential drama.

Trevor 37:07

Yes. So let's take five minutes at the end to be like, here are some ways we're using it right now, just so that people understand, even though we've said it, let's actually give some actual stuff. But the other day, so I was I just got back from San Diego with my wife, and we are in, we're on the beach, and I'm watching this guy who has a metal detector, right? And he's and I'm so excited to use my metal detector. And I I turned to her, I'm like, that would be so fun to like have something like that at a beach with your kids messing around. Okay. So I watch this guy, and I see him uh I see him dig a hole. So he's digging a hole, and uh he takes a fork out of his pocket and he buries the fork and he puts the sand all on the covers it up and makes it look like it wasn't just dug there. And then I see him back up a few steps and start to go like this, and you see his radar go off and he's filming himself from here, and he's got his metal detector here, and he di he's digging, and he grabs and he like holds this fork up, like no way, I just found this. And then like puts it in his knapsack, and then he like Are you serious? Yes, we watched it happen like in real time. I hate that. So it's just like we are in Can you believe that? We are in the day and age. Yeah, I saw it saw it like real time, and he looked at us and saw that like I was just watching him and he just seemed so sheepish, like like, oh shoot. Like you would have like, I would have just caught him like looking at a naughty image. Like that's how we looked at it. But you did. It was crazy to see. So not only are we in this like AI world of there's AI fakeness, but they're just like content is just fake. The majority of the stuff that like.

Mark 38:56

It's fake. It's fake.

Trevor 38:57

It's not even real, you know, and so you are going to get a lot of people.

Mark 39:02

Is that why streamers are getting so big? I think so. Is it because you're they're yes, it's it's still not totally real, but it's a lot a lot harder to fake.

Trevor 39:13

Oh yeah. I mean, I it's like we've talked about we're gonna start going live more often. Like we're gonna start doing it. I'm not stoked about it, but like, how valuable is that to be able to have just you and me maybe just sitting down and we're just gonna like talk shop, talk, you know, it's it's gonna be a little bit different than this, right? This is somewhat orchestrated.

SPEAKER_00 39:31

When am I gonna pick my nose? You just will.

Trevor 39:34

Yeah, yeah, it'll be real. Terrible. So, okay, really quickly, how we're using AI. Okay. Um, for example, we just got back from Argentina where we have a really big creative team, um, designers, video editors, etc. They're using AI to increase the output of real stuff that we already have or that has been filmed, photographed, whatever.

Mark 40:02

Yeah. For example, using transitions or hey, we needed this kind of shot. They can now use AI to kind of mold the video to fit a narrative or a selling point or in a way that they couldn't before because it's like, oh, we don't have we don't have somebody like jumping in the water with it, or you know, something something like that.

Trevor 40:22

Totally. Or even like if so, if we're let's say we're uh, you know, we're advertising a watch company um and there's a really awesome video, but the watch just doesn't stand out. You can utilize AI to get that to show more, right? There's there's essentially if our team on a monthly basis can output 700 assets or a thousand assets without AI, how do we get them to be able to output 5,000 assets utilizing it? So that's one way that we're currently using it. The other way we're using it big time is in financial modeling. So it just helps us get to these models that we're building by hand that takes time. Um we're now able to build financial forecasting modeling significantly quicker. It's just data analysis and it's helping us uh analyze decisions we made in performance um to be able to give us uh a good starting point to then dig deeper and then to ask it more questions. Yep. Uh we use it to track things. Um like I said, like to track what uh competitors are doing. Uh we use it to um identify problems and errors. What else?

Mark 41:49

Communication.

Trevor 41:50

Yeah.

Mark 41:51

Creative. I mean going back to analysis, like just creative analysis and also, yeah.

Trevor 41:56

Also communicate.

Mark 41:57

Creative briefing. We're using it. So like we use it. Like we said, we believe in it. Like we use it so much. We're trying to use it in every facet we can. We're trying to use it now to automate as well, things that can essentially be automated. Like, hey, let's get a daily report built that is communicated directly to the client every day. Like let's get whatever. So we believe in it. We think it is really helpful and it's augmenting people. Um and open claw, we know open claw is a whole thing. I mean, I obviously there's a security risk there, but um it is the future.

Trevor 42:38

Yes.

Mark 42:38

Like we will all be using it in some capacity.

Trevor 42:41

Yep.

Mark 42:42

But and should be right now, and you should be learning now. And I think the people who are and are integrating into their businesses are gonna be very successful. I think the people who are gonna be who are more resistant are gonna be quite behind the eight ball on it.

SPEAKER_02 42:56

Yeah. Yeah.

Mark 42:58

So and guess what? I think the beautiful thing about AI too is like if you're a business owner, there's gonna be a lot of agencies, not just us. There's gonna be a lot of people that are gonna be able to come in and have everything now because of AI. You're not gonna have to look and deal with like, oh, I gotta work with like 15 different people for X, Y, and Z. It's like you're gonna be able, it's gonna be a lot more easy to go to a one-stop shop and work with someone that you want to work with or people in a team you want to work with, that it's gonna be able to integrate everything into your system and use AI to augment your business. Yeah. And I think that's really where the where the future is going is it will enhance human connection by by allowing you to focus on dealing with one, two, three, four people, and then they're using AI to augment all of their processes and their teams, and then you don't have to worry about okay, I gotta hire an agency where X and Y and Z.

unknown 43:59

Yeah.

Mark 44:00

I can say, hey, I can work with this one group, and I can have confidence in that I can cover all of these bases.

SPEAKER_02 44:10

Yeah.

Mark 44:11

Okay. That's so I think the future is still bright. I am a techno-optimist. Because the worst case scenario is if it does take everyone's jobs, we're all in the same spot. That's amazing. I don't have to work anymore. I can go fly fishing. There's no currency at that point. Yeah, like if it if everyone loses their jobs, then like what are they gonna do? Take away all of our house.

Trevor 44:36

Like I don't like what are they gonna do?

unknown 44:38

Yeah.

Trevor 44:39

I mean if you go listen to Elon Musk talk about it, he's like, there will just be like a like we'll all essentially be rich if that happens. Hopefully.

Mark 44:47

Now if you really want to get scary, the dark side of the coin is materials will not go to zero fast enough. So you're gonna have a gap between information, technology, and materials. Yeah. So real assets. Where the real assets will not go to zero as fast as like the service and information and creative industries go to zero.

SPEAKER_02 45:15

Yeah.

Mark 45:16

Which will leave a huge gap. Which will probably lead to like a French Revolution stuff kind of situation. That could get ugly.

Trevor 45:28

Or the ugly the other ugly pieces uh will all just be like those uh floating uh fat people on Wally.

Mark 45:36

Not me.

Trevor 45:37

Do you know what I'm talking about?

Mark 45:38

I'm just going to the forest. I'm just gonna go live in the world. But you know what I'm talking about? Wally? Oh yes.

Trevor 45:43

Where they're all just like in front of those TVs and they're just like on those, they don't do anything.

Mark 45:47

Yeah, no.

Trevor 45:48

Sounds like a terrible life. That's the other piece of it. Wally fighting.

Mark 45:56

No way.

Trevor 45:57

All right, everybody. Thank you so much. As always, we appreciate you. And uh we'll see you guys next week. Thank you for listening to the Unstoppable Marketer Podcast. If there's a brand campaign strategy or marketing tactic that you want us to review, please DM me at the TrevorCrump on Instagram or TikTok or at the Unstoppable Marketer Podcast. And of course, if you got value from this episode or if you like it whatsoever, please make sure you're subscribing, you're liking, you're following, and for sure go leave us to review to let us know that we're doing a good job. We will see you guys next time.