Speaker 1: I can't imagine being a common-sense human being in September 2022 and not understanding that brand is built on social. I genuinely mean that. I mean, I don't, you know, you'd have to be so subconsciously religious about what you were taught in college about how brands are built to be anyone that doesn't see it. So I love when people are like, Gary, TV works for me. I'm like, you spent $6 million on that campaign. I'm like, it should work. That's why most brands are losing. They're wrong. You're absolutely right. I can't imagine being a common sense human being in September 2022 and not understanding that brand is built on social. I genuinely mean that. I mean, you'd have to be so subconsciously religious about what you were taught in college about how brands are built, to be anyone that doesn't see it. And so my philosophy is, why would you spend money on something if you can spend less money to achieve the same goal? So I love when people are like, Gary, TV works for me. I'm like, you spent $6 million on that campaign. I'm like, it should work. I'm like, the question is, did you spend $6 million on creative and media in TikTok, YouTube, Facebook, Pinterest, influencers, podcast, YouTube, what would happen if you actually spent that same money perfectly in the contemporary environments? And so, it's weird because I've been on this journey for 15 years and I was incredibly empathetic the first seven years because I knew people didn't know. But I literally have dinners now with decision makers who will spend the first 30 minutes talking about how social media completely controls their child's life. Then they'll spend the next 15 minutes talking about politics and how social media needs to be regulated because of how powerful it is as a proxy against democracy. And then we'll transition into talking about selling cereal and makeup, and they don't think social media can move the needle. I'm like, so let me get this straight. You think this platform is so powerful that we need to regulate it because it could put democracy on its knees, but you don't think it can sell cereal? And so, you know, my point of view is that it's the most underpriced macro platform to get actual consumption. It's also a place, if you understand it well, that really addresses the elephant in the room, which is the elephant in the room in marketing today is that creative's too expensive. And because it's too expensive, you can't actually get the full advantage of the media opportunities that exist. If it costs you too much to make creative, you're not gonna make 87 pieces of creative a day to distribute against 35 different consumer segmentations against 21 social platforms. You'll never do that. You can't. And so, yeah, I mean, to me in 2022, it's kind of an exhausting conversation to even like, like I'm struggling to get going to even be in the convo because I can't understand how people don't see it. The only thing that makes sense to me is when people are in corporations and the internal scoring system doesn't justify it. Then I understand you're trying to protect your job and you should, you have a mortgage and a family. But if we're talking real life, like human beings, like our kids' health depends on the results, how you don't understand that this is the place that brand's built, I don't know. This is Facebook, Twitter, and Tumblr stock. I made a very big bet 15 years ago where I took every dollar I had in the bank and invested in three companies, Facebook, Twitter, and Tumblr. Obviously, that changed the course of my life, but the funny story of why I'm pointing here, it's actually the answer to your question. When I invested in Tumblr, I called my brother and I said, AJ, Tumblr's gonna be bigger than Facebook and Twitter. It's gonna be the biggest one of them all. And he said, why? And I said, because Facebook and Twitter, you follow people. Tumblr, you follow things you're interested in. And so even back then, I was fascinated by the interest graph over the social graph. Now, that didn't become true because there's a lot of other variables to why a company will be successful, including who's operating it. But what is true is that what TikTok has tapped into in the last three years has completely changed and will change everything we're all doing and is the answer to your question. The way it's changed is the following. Now, now art, not math, is the most important equation in doing creative on social. The algorithms now reward retention more than ever, which means they're gonna show you things you want, right? Things you want are far more predicated on the creative than the math that gets them in front of you. Instead of the Facebook environment we all grew up with where you could get in front of the people you wanted to based on great data, and then you would pound them with advertising. What we need to win on now is creative, that is advertising, that is educating or entertaining, AKA creating consideration. Then once that is proven, then we can convert those ads to performance ads, but we have to start with the creative instead of what everybody here knows, which is the creative has been a secondary part of the equation, why we spend 80% of our money on the media and 20% on the creative. And as many people here know, people haven't really been doing marketing and branding, they've been doing sales. If you look at the creative of the DTC brands over the last 15 years, it's much more couponing and newspaper advertising than it is marketing. That has completely changed in the last three to four years and everybody here has to leave with two things. One, we need to actually get into the creative business and make things that people want to watch. Two, we need to make it for many different consumer segmentations. This is not television where you make a piece of vanilla and you hope that everybody on earth wants it. This is Baskin Robbins and we need to make a lot of different flavors and go up and then see the common ground and then understand what our brand stands for based on 37 different consumer segmentations of relevance. Once you can understand the upside down model of how brands are built, because the internet now rules, not the television, then you can really start to understand what to do. Web 3.0 is really slang for the consumer blockchain and why the brand should care about it is if they are a brand that does not want to transact on their business, aka sell it, in the next five years, then they should really care because it's 1999, 2000 all over again and 2005 internet was a hell of a lot more important than 99 internet, and 2000, what are we in, 22? And 2027 NFTs are gonna matter a hell of a lot more than 2022 NFTs. So why you have to care is it is my deep belief that what I saw the internet do to communication starting in 1996 and being in it every day is exactly what the consumer blockchain's about to do for transaction. that everybody here thinking about first-party data, sustainable e-commerce with high-cost shipping, aka how do we get people into memberships and monthly and packages instead of one-off SKUs, and a million other things that you think about day-to-day, the blockchain's better at solving it than the internet. Most people, even in this room, which I highly respect, and this is not a razz, this is being empathetic that people are busy and haven't had the time to spend 50 hours on it. Most people, even in this room, haven't really synthesized their strategies on the fact that the internet is different from the blockchain. And if you haven't done that, then you don't even understand the functionality of the blockchain. And how do I know this? Because it's what happened with people in the logical, real world were unable to do with the internet. When I was pitching winelibrary.com in 1996, literally everybody who I talked to said to me, who would ever go on the internet to buy a bottle of wine? I can go to the store and get it. And my response was, everyone. And so, and that blew people's fucking mind in 1996, right? Because we still had people, and you all know this, almost every single person on this call's parents was scared to put a credit card into a computer in 1999. And so what we're seeing now with people's fear, like most people in this room that shit on NFTs, if they do, don't realize that they've become their parents. Right, they're demonizing the technology without fully understanding it. And so for me, I actually think NFTs are gonna be one of the most significant innovations in CPG land, because when I see NFTs, my brain goes to LTV, it goes to retention, It goes to event marketing. It goes to monthly subscription. It goes to how I'm gonna control first party data and not be at the mercy of Google, Facebook, and TikTok. When you do your 50 hours, things get real different real fast. And that would be my takeaway here. You know, unfortunately, we just ended the summer where you probably could have snuck it in. But if you're listening and you understand the macro of what I'm saying, please use the winter holidays to really actually actually read on what a blockchain does. How it is a ledger that affirms a transaction that nobody on earth can alter and what impact that has. And then you are the currency. I am the central bank to be friends. I collect the royalties. I have the affirmation. I'm not at mercy of any technology stack or government stack. This is a big deal. It's a big deal. But it's internet 1996 and people are glossing over it. Especially because we have the internet this time. Last time we didn't even have the internet yet. So it's a very important, very important technology that I think can really matter, especially for some of the creative people here who are interested in General Mills or the Leo Burnett era of the 60s where you create characters and the value of those characters. Like I'm very into that. And so if you're, if you know, there's a very big reason I'm passionate about this technology. I understand the macro of the transaction thing to the communication thing I just referenced. I'm also highly affected by character development, the Marlboro Man, Keebler Elves, things of that nature. And I see NFTs as a substantial playground for that. These characters you see back here, My Disney, Be Friends, I fully intend to building a multi-billion dollar CPG business that looks like Fruity Pebbles or Mary Ruth's Organics or things of that nature. Why I'm very empathetic for so many people being confused is I live in this every day and I've been watching it since 2017 quietly when CryptoKitties hit and like I've been watching and waiting for my timing of the entry which obviously was about 18 months ago. The reality is 90% of the people that were in it last year were there for the quick buck and that DNA is very off-putting to people that are in things for, So unlike the internet, which it was in 95 and six where the crew was a bunch of nerds that nobody fully understood what the hell they were talking about, that's one version of like a niche that you gotta kind of like understand how to use. This one was very difficult because there was so much money involved and get rich quick and scams and like all the worst dynamics more like extreme Wall Street dynamics, which is why we had internet stock issues in the 90s. And then on top of everything else, you have social media, so you have all these people gloating, hey, I bought a donkey with a cigar up its ass and made $400,000. What normal human being thinks that's a good thing? And so I was very empathetic to the confusion. I continue to be empathetic to the confusion, but let there be no confusion. The consumer blockchain is the biggest invention since the internet, and every person in this room is gonna be highly affected by it because all of you will pay your taxes and buy future homes on it, So you better figure it out, because when you made fun of your mom for not using email or a smartphone, you're literally about to be that person with the blockchain in the next decade. So I highly recommend you figure it out. I do think, believe it or not, the luxury brands are a little bit ahead, because they're thinking about loyalty and retention. What you're seeing from LVMH and others, in my opinion, without knowing everything that they're thinking, but watching carefully, I do think they have a sense of, wait a minute, This is an opportunity for us to create communities, things like Amex Black Card, like I see certain nuances there. So if I was to tell you all to look, I'm always scared at this early of a stage to say, go look at Puma, because it's really hard to understand what it all means. What I would say is get grounded in the underlining technology, then you can do your damage. You'll understand how it works for you. The problem is when I look at internal teams across the board, it's a pretty bad sitch, because most people are mailing it in and they're either blindly DTC and want it to be sales and that's how the creative is being justified, or if they're even flirting with creative, they just think the 24 year old knows what to do on TikTok and so they're not even evaluating it. So we have an acronym internally at Vayner called SOC, strategic organic content. And all day long I just walk around on Slack, email and in the halls and say, it's the S in sock that everything lives and dies by here, which means, do you actually know how to make creative for Pinterest versus LinkedIn versus YouTube Shorts versus TikTok, and that is creative strategy and platform strategy and understanding attention and culture at a PhD level? And yet, most people just mail in their social and they care about all this other stuff, their brand and billboards and Remnant TV and I'm just watching this landscape. And so, A, to drive down cost, there are plenty of 22 to 30 year olds you can hire that will give you a better cost basis that are very capable of producing the content, but you need somebody at the top that understands the S in SOC like a champion, or the whole thing's a waste. Or B, I believe we're 24 months away because I'm in this business, We have gotten so far ahead of everybody in the last 24 months in Fortune 500 land that there are now copycat agencies or the big companies are starting to take the creative seriously and are looking to drive down costs, get away from $300,000 videos for television and getting into $200,000 a month of creative but making 650 pieces of creative that are meaningful for brand and sales. And so I'm starting to see the market go there. So finding someone who does it for real for real, like for a lot of mid-tier brands, P-back brands, really spending $40,000 to $50,000 a month on creative, that really builds brand to many different consumer segmentations, but also shows organic virality, which then become your performance ads, is where a lot of brands are gonna go, whereas they're mailing in that fee right now, and they'd rather spend it on media dollars, but their CAC numbers are going through the roof because iOS 14.5 came along and changed the game, and there's just a lot going on in the tactical operational side. By the way, influencers, really focusing on micro-influencers because you get content and distribution. Being smarter about your partnership deals. Like, if you're gonna do a partnership, at all costs, getting content out of the system and not having creatives that think about ideas, but having creatives that think and make. I'll give you a great comp. People are always like, Gary, but how do I know TikTok will be here in five years? I'm like, well, when you bought trillion dollar commercials on Seinfeld, you weren't trying to guess when they were gonna end the show. Right? You didn't need NBC to promise you that Friends would play forever. You just bought ads on Friends when the attention was on Friends. So for me, I'm unemotional. I don't give a shit about TikTok, Facebook, YouTube, Instagram, could care less. If they all disappeared off the face of the earth, I'd be pumped because all that attention would have to go somewhere and I think most people would struggle to figure out where and that's my favorite thing to do, right? So I would say a couple things. Number one, it's more about knowing if something resonates is the most common sense thing in the world. If you're a DTC brand, you can literally see it if you're asking for call to actions and if you're doing it for branding, the qualitative comments show you. One of the reasons I'm obsessed with social creative is not only does it build brand and give me a framework to be able to build relevance at scale, it's also the single greatest consumer insights machine of all time. But back to the S in SOC, 25% of the creative that I personally in my brand and what Vayner does that I put out is strictly made to get insights of curiosity of hypotheses I have about the consumer, literally. It is made to get the comments, so that I can build on the hypothesis to create affirmation, to create better content. And so, it's the most common sense thing on earth to know if it's working. You see it in the comments, and you see it in the sales if you choose to make it more of a sales DNA. It's a hell of a lot easier to know if your social creative is resonating than if your television or sponsorship is resonating. When we did television broad, Everybody saw our bullshit vanilla. When you do relevance at scale in this environment, fewer people cross over and seeing the different context. It was the reverse. Everybody saw your Heineken ad, and if it didn't resonate to them, which oh by the way it didn't to 90% because everything is vanilla when it's in a 30 second video because it has to be because it has to do everything for everybody in such a short period of time. So ironically, we're in a place now where we can, everybody always goes to fear. Oh, schizophrenia. I go to, we used to sell vanilla and hope that 10% gave a shit. Now we can sell on relevance and have a lot more people care about our brands. What has happened in business is everyone has gotten so infatuated with scale and efficiencies that we don't amortize out the actual value. So for me, and it's so funny that John just joined, I don't know if you guys see him on screen or if I'm only here, but if you see, do you guys see him? So J-Mo like held, he heads up all of Vayner's philosophy on media investment. And so we talk about day trading attention, all things we talk about all the time. But if you ask J-Mo and I, what is our favorite thing that we're working on, kind of in our secret lab because we're the weird ones, is a scalable human infrastructure that has 17 employees that work all day to be able to reach out to every single person on social and be able to price them out. And if they are a good buy at $850 to do an influencer ad, then it's a good buy. If they're 4,000 bucks and they charge 850 and it costs us $27 an hour to execute, we're in. but nobody wants overhead on unscalable, right? And so like scaling the humans is the most interesting thing for me right now. And so when we talk about, it's the biggest thing, one of the reasons I'm ultra confident about building VFriends is I'm right now building that infrastructure so that people are, every YouTube family on earth is opening up the toys and the trading cards, every cool person is wearing the hoodies and the t-shirts at massive scale. To me, everyone became infatuated with working media and became one-dimensional CAC and LTV monsters and are overpaying for awareness and I'm looking to win on depth and scaling the unscalable. And so influencers at scale are really interesting because everyone's focused on gross versus net. The net result of your cost of getting an influencer that you paid $4,000 for that is worth $26,000 is remarkable because you get the content and the media distribution, but you also get the word of mouth and the cosign and the endorsement and the long tail affinity. the next, video..