The Disconnect Between Digital Marketing Vs Traditional Advertising Today

“If you are a business that spends hundreds of thousands of dollars on just one ad that you push to everybody on the internet, you are going to lose,” says Gary Vaynerchuk, summarizing his points from a VIP Breakfast talk at the Through The Lens Conference in Dubai, UAE last November 2018.

Internet marketing rockstar and entrepreneurship guru Gary Vaynerchuck was in Dubai recently for the Sharjah Entrepreneurship Festival, with a good number of other more intimate speaking engagements, such as this Breakfast Roundtable at Burj Al Arab.

At the breakfast event, Gary Vee talks about his thoughts on long-term brand marketing versus short-term sales funnels. “Businesses need to start making ads in a much greater volume that are designed for different demographics and even sub-demographics that can relate to a specific ad, instead of one extremely broad message that nobody really connects with.”


In the video, Gary continues at great length about this digital-traditional disconnect, and what we can do about it. “Nobody, including myself, Is putting out enough content to take full advantage of social media marketing,” he wrote along with this Q&A highlights clip that he put up on YouTube.

Below is a transcript of Gary Vee’s talk at the VIP Breakfast Roundtable.

Changing Times Needs a Change In The Way We Do Marketing

Something that’s become very obvious to me only in the last couple of weeks– that maybe I’ll pontificate a little bit here– which is I think the biggest reasons so many people within the marketing landscape do have disagreements with some of my points of view is because I really don’t think of myself as a marketer, per se.

I no question think of myself far more as a business operator who happens to have a knack or an intuition towards marketing, which has helped me throughout my career, but everything I believe in is predicated on the final result of what everybody in this room is trying to achieve.

I just think that marketing and communications is an incredible way to get there.

For a lot of you that don’t know my career, I was born in the former Soviet Union, I came to the US and my father grew from being a stock boy to owning a small liquor store in New Jersey and when I joined that business, first I fell in love with wine and wine collecting, which was great because it’s always good if you like what you’re doing, but I built my dad’s business from a three to a $60 million business very quickly in the late ’90s without any VC capital, even without a credit line.

When I think about how remarkable that growth was, it was completely predicated on practicality, which is really my North Star today.

If I had the luxury to sit and have dinner or breakfast with you one-on-one for four hours and we actually talked about what you’re trying to achieve in your business, so much of what I believe in, whether it’s Facebook or Instagram or content…

Text messaging is starting to really be fascinating to me because in the US and many other markets for about a decade we haven’t allowed marketing inside of our text numbers and all of a sudden, I’m seeing people willing to do that, which you can imagine is attractive for us marketers and business people.

I think the biggest reason I’m interesting and debating in the marketing landscape is I’m not a product or a son of Nielsen ratings or Datalogix or brand lift studies or impressions.

If you knew nothing about marketing and you were a normal business person, you wouldn’t be attracted to low CPMs. You would be attracted to high CPMs because it would lead to what you’re trying to achieve.

So, I sit in marketing meetings from major clients around the world, I sit at conferences, events like this and people pontificate on data in the middle that has nothing to do with the end business result.

That is my problem. That is why I’m an outlier. That’s why I’m different.

I’m not of the machine, I’m of the business result. It’s really interesting, by only running businesses for myself my whole life, I only care about long term branding and marketing.

A lot of times, people think about digital as a short term sales funnel. I think of it as reverse.

I think Facebook and Instagram and thank you so much for being a part of this, but I think that they’re doing not a good job in expressing how much branding is done in their channels because the conversion is so obvious for math and sales.

When I think about this room, whatever it may be, the business result that one’s trying to achieve, I watch so many of your behaviors globally in overspending for A-list celebrities in Hollywood that don’t have the value they used to and overspending in quant-based transactional Google and Facebook behavior where CAC and LTV are the religion and branding is not.

I watch a lot of things that if I bought your business or if I ran it, I wouldn’t believe in, but everything in the system, everything that the marketing industry has been built on for the last half-century values things that I just don’t think are mapping to reality.

I’m fresh eyes to this industry. I’ve only been in an environment where big companies have been part of my life for the last decade. Prior to that, it was only entrepreneurship and Silicon Valley.

So, it’s been an amazing journey for me the last half decade in watching what is put on a pedestal in an environment when you don’t see every dollar spent where it goes to, what happens when you fall too deep into just caring about the value of every dollar in the short term.

To be honest, for my DNA, it’s a bizarro world. An industry that goes to the South of France to celebrate itself on subjective creative and uses those awards to justify hundreds of millions of dollars in spend is fascinating.

(audience laughing)

It is and the giggles come from a deep understanding of the truth. Here we are in 2019 whether in the UAE, America, Europe, all over the world, you have a game of two individuals. You have people who are spending money and it’s not their business and you have people that are spending money and that’s how they feed their family.

And those two people, the way they spend their money and what they believe in have never been more opposite than today, and that’s what I’m fascinated by. The people that are incentivized of the health of the business in the short and long term versus the people that are incentivized on the KPIs within the machine that they have to navigate through.

I deploy empathy. I used to judge a lot of people in this room on paper a decade ago.

I thought I was smarter. I know I’m not smarter. I just know that I’m playing a different game. I’m running a marathon in perpetuity.

I put out content to be historically correct, so I can trade on reputation in a decade, not on what pays my bills in the short term. So, I have the advantage of the framework that I’ve stumbled into within this environment, but it doesn’t make it any less true.

So, couple things if you leave with anything, the one word I would leave with if you’re in here today is volume. The sheer volume of content that is needed by the businesses in this room is staggering. It’s staggering.

If you get your above the line creative agency to interpret your TV and make a ton more content for the internet, if you have a digital shop that does a lot of content, if you do publishing deals where Conde or Hearst or Refinery or PureWow are giving you content, if you build internal capabilities for content, if you have all four of those things humming, you’re still 90% short on how much content you need in a 2019 world if you understand how the Googles and Facebooks and Snapchats actually work.

If you are a deep practitioner of the media capabilities of 2019 across the biggest platforms, which by the way, in this region, have so much attention, it’s uncomfortable.

If you really understand that, you’ll realize, my God, I need 20,000, 8,000 unique pieces of content for different psychographic, demographic individuals and as you all know, even Vayner, which I’m trying to move in the direction of being the disproportionate leader in quality and quantity, there’s no engine in the world right now that’s even remotely close to the needs that we actually have.

So, that to me is the big one.

That to me is in the last six months the thing that is absolutely synthesized, which is– my God– if you really did it perfect and you really spent it every penny the way I did for my father’s business perfect, you need 20,000 pieces of meaningful content. For a year, that’s about 19,900 more than most people have.

So, that I think will be the debate over the next half-decade. How do you have quality content at scale to take advantage of the grossly underpriced media capabilities of the YouTubes, the Snapchats, the Facebooks and the Instagrams over the next half-decade, then consumer behavior will change either to our hope, the prices become appropriate like they did on Google search or people’s attention will move on like it was on MySpace.

That I don’t know. I don’t guess. I only trade on the day we live in.

What I know is if you look at the sheer data of what’s happening in this region specifically, and this is global outside of mainland China and Russia, if you look at the sheer actual consumption, not a GRP or an impression, which is a potential reach, but actual reach.

If you just look at YouTube, Facebook, Instagram and Snapchat, this is the golden year to market in this region and most people are not taking advantage of it because either A, they’ve allocated dollars to traditional places based on reports of yesterday or B, even if they are, it’s not successful because they don’t have enough content to fill the pipes of the media distribution.

That to me is what’s going on.

On The Type of Content Created By Agencies Today

TTL: You mentioned about how much of the content is actually made for utility or how much was actually made for ourselves, right?

GV: How much is made for them or for yourselves?

I think utility and entertainment can be made for them. I think that if you look at a lot of the communications in this room, I’m sure if you were to self-audit, you’d be surprised how much is self-serving.

TTL: Exactly, and that’s the point I wanna come to.

There’s a level of awareness that companies need to have in terms of what they’re doing inside the organizations for their own ego and how do you instill something, a culture in an organization, that they’re actually aware of what they’re doing for themselves versus for all?

GV: That’s very hard.

You do that by whoever runs the company sets that tone. Every company’s DNA is predicated on the CEO. Whoever she or he is, they’re gonna dictate that. So, if she or he are disproportionately egotistical around subjective creative, the whole organization will go up that.

I think that that’s something outside the pay grade of marketing that is just absolutely operational throughout the entire world.

What is being held up as a religion internally is fascinating. Knowing who’s in this room, you’re either mathed out or you’re arged out. There are very few organizations that have a 50/50 balance. You either have a DNA internally that disproportionately wants celebrities from Hollywood and wants a one minute video that feels good or you’re disproportionately Google and emailed out for CAC and LTV and I’m fascinated why most organizations haven’t found that 50/50 balance and understanding how both matter and then, more importantly, how do we actually score within that.

Creative Scorecard is laughable. It’s human subjectiveness or reports that are so laughably outdated or finally awards or finally three or four magazines that say it’s a good piece of creative.

Meanwhile, we live in a world where you can put this creative in a Facebook or a YouTube environment and you can get qualitative feedback at scale and just listen to the customer instead.

The problem is most people start top down, not bottom up. So, you overspend so heavily on one video that you’re at the mercy of reporting or Ipsos or ACE testing or all these things that are just, again, if you don’t know anything about them, like I didn’t eight years ago and you actually study…

First time I ever heard award-winning work leads to business results, which was like a big debate I heard in the advertising world, I just had two people on my team in research and strategy find out where that started.

It was funded by agencies. Sounds right. I think those are the themes of today, no question.

On Disruptive Shifts Across Industries Today

TTL: And themes in terms of risks, we’re seeing this huge disruption across lots of different industries, Uber, Airbnb, etc., how do companies try to identify the shifts that are gonna come, these tectonic shifts that are taking place and what should they do about it?

GV: Well, I think everybody here should take a very simple stance like I did a long time ago, which is that the internet will eliminate the middle.

If you actually understand what the internet does in its most basic form, it eliminates anybody in the middle that provides no value. That’s the squeeze.

So, for me, I think everybody in this room needs to think about a couple things. If the internet squeezes the middle, that’s how it plays out.

Airbnb made so much sense to me if you think about it. It’s just inventory that exists that the internet connected two parties to, mo different than Uber, no different than everything else.

Listen, if you’re an airline, obviously somebody has to then own a plane and that becomes a cog that’s more expensive than other things, but rooms have less costs involved as we’ve seen play out.

And then you start getting into experiences and other variables, but you can’t just rely on the utility part of that.

You’ve gotta layer it.

It’s how I think about what’s happened with television. It’s the reason I knew that commercials were gonna be in trouble. It’s not that I’m predicting, it’s every day that you see Netflix and YouTube consumption numbers go up, that’s a problem for a network television.

And then you just live in common sense, like consuming a commercial during a television program is a very wild rarity in 2019 when we all have mobile devices.

I always laugh when people in the US say, “but sports commercials are good.” Meanwhile, the data’s very black and white. The biggest spike on social media is during the commercials of major sporting events because everybody wants to talk about what LeBron or Messi or Tom Brady did.

It just feels like one big game of Inside Baseball where there’s a lot of financial incentives to hold up a facade that no longer exists and unfortunately for the biggest brands in the world, the executives making the financial decisions are not incentivized to do the right thing.

They’re incentivized to follow the scoring that’s been created internally. That’s on the CEO’s head.

What Can Marketers Do in the Face of so Much Disruption?

TTL: Given the shifts that you’re talking about, explain some of the other steps that you would take if you were a marketer, given the environment you just painted.

GV: You know, it’s funny. A lot of people razz on me for my absolute statements, but I think of marketing like poker. If you have the best hand, you go in.

I’m a boy and I say a boy because I was a kid when this happened, I am unbelievably… I regret tremendously not spending all my money on Google in 2001 to 2004. When I rewound how I built my dad’s business, it was because I was handed a full house.

It was called Google Day One, five cents a click. My CAC was 10 cents, my LTV was $8. I didn’t understand. Because I didn’t know. I didn’t have experience yet. I didn’t know how to quantify it. It seemed normal to me. I was digitally a native. This seemed like it made sense.

Why wouldn’t everybody do this?

And then it went away. And then 2007, 8, 9 happened. So, for me, we’re sitting in that moment right now.

Instagram Story Ads are so grossly underpriced, it’s almost uncomfortable. Actually, this is amazing. Maha, you in here?

(Yes, I’m right here.)

Well, you know this. In four minutes, in five days, my follow account on my Gary Vee Arabic page went from 900 people to 30,000–

(700 people.)

GV: 700 people to 30,000 because we found a single piece of content that I converted into Arabic from a piece of content that is achieving 1.9 cent follows on Instagram.

If you understand the friction to get somebody to follow you based on an impression, think about how inexpensive I’m getting in front of every Arabic speaking person that is on Instagram to get 1.9 cent follows.

So, when I found out on a $200 spend that that was working, I just poured all my money into and by the way, I’m gonna pour all my money into it in perpetuity cause I wanna extract the underpriced nature of the media and I figured out how to create the volume of content that broke through to eventually get me a 1.9 cent follow because we’ve gotten on our 30th piece of content, we got there, not on our first.

People are making one video and then putting it on YouTube and Facebook and then saying, does it work or not? We’re not producing creatively natively contextually to the platforms that we’re advertising on.

We’re using television mentality for the internet. It’s remarkably wrong. Not even Vayner and let alone all the traditional agencies are not in a position to create the work needed for the realities of the marketplace.

What Kind of Content Should We Be Creating Today?

TTL: Talk us through a couple of things there. You mentioned Instagram and obviously, there’s a shift towards video. Talk us through creating great content for that and also in an increasingly mobile world, can you build a brand on mobile alone?

GV: Of course, you can because you can build a brand on attention and the sheer amount of attention on mobile is extraordinary.

As a matter of fact, to me when I look at outdoor and I like outdoor. There was a nice little digital outdoor of me speaking today. I get excited about that, I like outdoor, but I don’t like outdoor pricing in a world where while I saw my little outdoor piece, I looked around the cars on the way here and every single person not driving was looking at their phone.

Even the drivers, to your point.

I’m a very simple guy. Tell me where the attention is, tell me what the cost is associated with it. Do I think that’s right? Can I then create creative to fill it at a low enough cost that I can test seven, 10, 15? This is not A-B testing, this is A to quadruple Z testing.

So, for me, it’s about producing quality content at a low enough cost. Quality being contextual and empathetic, not high production.

Let me say that very slow cause it’s super important. Quality being contextual to the distribution and being empathetic.

You have to know how to overlay a sticker or an animated GIF on an Instagram story to get people’s attention cause that’s native to that platform, not doing matching luggage of your TVC for a short form 15 second video for YouTube.

That’s what big companies do.

How Are Companies Approaching Marketing The Wrong Way Today?

TTL: Yeah, talk us through how companies are getting it wrong. You mentioned there what we can do–

GV: They start with television. You’ve already lost.

You make a TVC or a brand campaign and then you ask somebody whether it’s that agency or somebody else or internally to cut it down for Facebook and Instagram and YouTube.

You’re already in trouble for a couple reasons. By nature, brand campaigns and television are vanilla cause you’re trying to reach everybody with the reach of that campaign.

If you start from the bottom, you can go after ex-pats from the UK versus ex-pats from the US. As you can imagine, if you know that that’s who you’re gonna reach, your message is gonna be slightly different.

I’m filming right now everywhere I go, me and D-Rock. I’m standing outside with these beautiful views and we’re here a little early and I’m saying, hey Snapchat, find out why I’m here at the UAE.

I’m literally filming for the distribution just by saying, “What’s up, Facebook?”, as my opening line disproportionately increases the shareability and earned media because I made the creative native to the distribution.

I didn’t make one video that’s gonna be super glossy and then try to use everything. Everybody views these channels as distribution. I view them as contextual creative platforms.

I’m not trying to get reach that isn’t achieved because I didn’t make content for it.

Everybody’s playing in a GRP and reach world without having a common sense layer over it of are you actually getting that reach and then number two, does your content speak to that reach.

We didn’t have that with television, but now I can attack the seven million people in this market in 31 cohorts that matter. Men and women are different. 18-year-olds are different than 49-year-olds. Making a million dollars a year is different than making $40,000 a year.

We do not take that into account in creative because creative costs are too high. The machines for creative aren’t built for scale. That is the rub in our industry.

The media people know this. When I announced our framework that leads off of what I’m talking about in September where I started my company meeting with, I’m gonna put us out of business before somebody else does, it was the media people that most liked this creative strategy.

The creative people like to hold onto the political power of making a subjective call, not letting the market. It’s reactions quant and qual dictate creative adjustment.

So, it’s a very, very interesting time right now. We have way too many conversations in the ad world about the media side of things. We are not having the proper conversation of the subconscious bias against the wrong creative process for this story.

About Gary Vaynerchuk

Gary Vaynerchuk is the chairman of VaynerX, a modern-day media and communications holding company and the active CEO of VaynerMedia, a full-service advertising agency servicing Fortune 100 clients across the company’s 4 locations.

Gary is a highly sought after public speaker, a 5-time New York Times bestselling author, as well as a prolific angel investor with early investments in companies such as Facebook, Twitter, Tumblr, Venmo, and Uber.

Gary is currently the subject of DailyVee, an online documentary series highlighting what it’s like to be a CEO and public figure in today’s digital world, as well the host of The GaryVee Audio Experience, a top 100 global podcast, and host of #AskGaryVee, a business and advice Q&A show which can be found on both YouTube and Facebook.

(Source: Gary Vee’s YouTube Channel)

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