Understanding The Digital Economy

the answer is i think i'm already in my mind on on social commerce 3.0 which is the macro infrastructure like facebook needs on the tv the hardware to be able to you know see a commercial purchase it and have target deliver it because amazon's there amazon's missing one thing a social platform you've got your perspective i just want to be happy don't you want to be happy hey gary thanks so much for joining us today um i'm here with nick uh who i believe is sitting in a room um full of things that you've actually convinced him to buy pokemon cards to to whine um but you know really what we're we're here to talk about today is um we'd like to know from you sort of what the future holds um what are people missing um you know at arc we we cover disruptive innovation um which i've heard you say is uh you think is is just being practical yes um in your businesses uh so you know as as we look at um this this wild year in the digital economy and and sort of look at the the future of the ad space we have um consumers sitting at home uh multitasking um using their connected tvs while they're on twitter and other platforms um how do you think of sort of that juggling and and sort of that share uh going forward and and sort of who who loses who who wins out um what is sort of the future state of that you know it's interesting question given the context of who i'm making an assumption of is listening to this you know as a in perpetuity owner of my own businesses with the ambition to buy the new york jets football team you know i play a very very very different game than a lot of the potential listeners of this show given the context right and so so much of my money has been made on my ability to wait seven years for something to happen versus being held accountable for what's going to happen in 90 days or max you know 500 days right so i could you know i i i'm going through this very interesting period in my life where i'm like man i'm definitely not so so so smart in comparison to all these people i just have the luxury of knowing how to stay alive to take advantage of it when it happens i don't think there's a single person listening right now that is confused that ott and streaming is 100 doing to cable and network what cable and internet did to network what cable did to network what network did to radio this is like i mean every single person in your and my organization and listening to this right now would probably bet the farm the whole farm their kids health on a decade from today things look more a lot more like disney plus and and netflix and hulu than they look like abc or cbs or cnn and so i think the winners are the ones that are in a financial stable position to be able to invest in streaming and take all that advertising dollars that are never inevitably going to come behind it and the losers are the ones that are romantic or financially stuck in you know milking what they have i mean it's very common sense fortune 500 publicly traded company logic versus reality of the speed of innovation that's happening with the internet meaning if you're the ceo of procter gamble and or of you know of a large media conglomerate you know um out there epic you know or something of that nature where you know you're not gonna be in this seat in nine months or 18 months because you've decided for your family and yourself and you're striking all your stock options within 24 or 36 months after that day and what you're doing is you're holding your breath and making no investments so that you can maximize your personal economics 41 months from now but if you own the family business of viacom you'd never do that because you know exactly the consumer has told you what's already happening so i think the winners are the ones who can or are or are empowered by being historically correct you know look at that look at themselves as i'm going to be in this position for six years so let me do this now i you know ones that feel that they know how to manage the street to take the punch in the gut on the upfront capital they're gonna have to deploy quibby's gonna scare the out of people right you know just because you have the right just because you have the macro strategy of streaming is real that's like me telling everybody who's listening to become an nba basketball player because it's going to be a billion dollar contract in the future you have to be good enough to be an nba basketball player so it's not just deciding to do peacock how well is nbc gonna execute peacock you know it's not just saying that the fragmentation of ott is upon us and the ip within it like tomorrow the kardashian family can start k and probably do quite well but they'll have to execute as well as kylie's beauty brand not as well as a million other things we've seen fail even though the ingredients are there they didn't have the cook to cook it yeah so gary there seems to be you know two winners in this past year you have the streaming the ott video but then also you have social media companies and they've really come on in terms of digital ad spend so when you look at uh smaller companies they're going to obviously be you know more aligned with social media it's just cheaper you're not going to have a small company being able to go to these streaming services and advertise you know what's funny though like you know that's actually what excites me the most brother i if if ott is biddable you're going to find small businesses running commercials on friends that's a good point yeah right and like to me like you know the great luxury of my career at being 44 being young is i've already had real significant chapters in very small smb family liquor store business that i grew quite a bit a very big chapter in silicon valley where i did a lot of smart investing and then now really deep in fortune 500 consumer land and b2b land you know it's going to be pretty cool like i think of gary at 22 knowing that hulu ads are underpriced running commercials for a one-story liquor store against the wonder years that's like the coolest ever right so yeah but but to your but to your point um i think what you're gonna see is look i i couldn't be more uncomfortably bullish on ott and social over network and traditional like it i think the dealt is extreme i think common sense is the great missing anecdote of the business world yeah and i think and i think reporting and short-term financial arbitrage is why and i see it everywhere um but yeah i think those two platforms are going to continue to be huge winners and i would tell you that this year them winning is not an enigma because of the political year or because of covid this is the preview not the anomaly right and so if you look at one of these small businesses that want to spend on streaming ott or social where is where where are you directing those dollars today where's the best bang for your buck in terms of platform spent if you're a tiny tiny business it's linkedin and tick tock because they are organic reach too you know so organic is something we don't talk a lot about but it's absolutely the place where everybody fails fortune 50 companies deciding social media stinks because they're running an organic playbook on platforms that don't have organic reach and they haven't even tested media properly or they spend media on it like they're running television huge elephant in the room for everybody who's listening right now why people don't think socials roi positive comma tiny tiny companies facebook it has scale targetability and just ungodly proven capabilities of driving business results right and so so facebook seems to be far and ahead of other competitors and on the social landscape but just let me give you some interesting snap doing incredibly well for app download snap doing incredibly well for app so the answer is very very unique if you're a t-shirt company tick tock ads are remarkable if you're you know the big thing that nobody realizes is the number one the number one place to advertise is 60 to 90 year olds on facebook number one if you have a business that wants to sell the 60 to 90 year olds facebook dismantles fox news television dismantles it but yet nobody talks about that i mean i would i think facebook is one of the you know i'm a humongous advocate of its ad product but i think it's one of the worst comms companies in the world and forget about the whole like privacy thing in zucks and all the all the stuff that people get to of like hating it i'm going super narrow it has the killer product in the world if you're trying to sell to 55 to 90 year olds and every media planner in america buys television because they're incentivized too because facebook's harder to spend money on meaning you need skills you have to do fragmentation you need a lot of creative iteration but but facebook's a monster if you're selling retirement homes caskets um you know uh products that sell to 55 to 90 year olds um obviously tick tock is a monster if you're selling a 15 to 25 instagram and youtube own the middle snapchat if you're doing app downloads is really attractive linkedin is a monster b2b but nobody wants to pay the 25 cpms because everybody plays in media math not in business math um you know twitter is great for qualitative insight to hypothesis around creative so i use twitter a lot as a testbed for creative to see consumers actual opinions of so there's a lot this is real skill and people continue to think of social media as an afterthought but fortune 500 madison avenue mad men are and women are starting to kind of wake up but i still think we're 36 months away from where coca-cola is spending 55 of its ad budget on facebook inc and they will and you think that's going to come mostly from that linear tv ad spend like that seems to be the biggest bucket i do yeah i think 70 billion that 70 billion is such garbage yeah like like it is destroying the biggest brands in the world now super bowl is the best deal in advertising every brand listening right now or everybody who's got a board seat on a consumer brand you should yell at the top of the mountains once you cross your t's and eyes on my hyperbole here to do super bowl because the actual consumption of the ad for what you pay is remarkably cheap right after you go there tv couldn't be a worse bet now every report shows it's okay because nielsen's and miller brown and all these things it's an inside game all the mmas internally have been built around it it wait to the activist investors realize how much money is being wasted on marketing all these activist investors have focused on like flights and printing on both sides of the paper wait to 3g wakes up and realizes most of their marketing goes in the garbage when they run a tv and as you look over this past year and um you know you said as we often find with innovation things have accelerated during this difficult time um how how much how how how great do you think that impact has been you said you think like this is three years i'll tell you why it's been so big it's because decision makers became practitioners during this time cmos sit in boardrooms and have no idea what's actually going on there's no cans on keyboards people don't actually know right and agencies are all mainly owned by holding companies who are publicly traded who are going to keep pushing television propaganda into their clients because they make more margin selling tv than they do on facebook they're not incentivized their omnicom's interests aren't aligned with fords by the way on the record i have no idea if that holding company works with that brand but you know so so the um the thing that i've noticed in these nine months is getting a lot of emails and linkedin messages from leaders with things that basically said i used to think you were snake oil salesman but now that i've had time to actually look holy crap how can i get more educated on this or hey can we talk so i think more than anything it's not even consumer behavior acceleration it's actually decision makers education of that i think has serendipitously happened during this era do you think this change is permanent yes yeah if we're talking about what we're talking about which yeah yeah macro business how do we make things how does the ecosystem work with media brands opportunities yeah i think it's permanent because i think i i think you the thing that has always worked for me is never betting against the reality of the human being like nobody's going back there is no time machines like i'm we're not going to read print at scale only hipsters out of ironic behavior will 2029 queens might read the newspaper as a nichey funny thing because they're anti-establishment there will be a wave of of and we've seen it already of anti-digital propaganda so you will see some interesting sub-behaviors occur but the sheer scale of actual consumption on these 15 platforms youtube facebook snapchat spotify on audio things of that nature the cat's out of the bag i i'm flabbergasted other than being educated and this is where wall street sometimes gets caught other than the fact that i'm educated because i'm in it every day had i not known that it was in agencies vested interest to not allow the advancement of these products which are much more complicated to run planning execution creative media had i not been educated on this i wouldn't be able to understand why coca-cola and bmw and proctor and unilever do what they're doing i wouldn't understand nothing in my brain would be able to put the pieces together because i do know i understand that it's not in mind share the agency that does media for unilever's interest to do a contemporary execution now i'm like oh i understand and that is the great detriment of the iconic brands in the world which is why you're seeing so much growth on the ankle biter brands on dtc because they're picking up market share at scale on the back of overvaluations because there's so much money being printed and yes their economics aren't true but the problem is the unilevers the proctors they go out and you m a these brands and pay enormous amounts of money often that organ can't fit the body and it becomes a failed m a instead of just doing what they should be doing which is completely changing their media and creative strategies gary i want to talk a bit about the other side of this and that's the content the content creation you have all this money flowing into the ecosystems and there are millions of people signing up to be content creators you talk to someone who's younger they're saying i want to be a youtube content creator how sustainable is that market how big can it grow it follows a power law distribution you have ten percent of the people making ninety percent of the great qual content quality so how big is that market going to be as long as the internet is the foundational infrastructure of our society and as long as it doesn't get over regulated the answer is in perpetuity until it takes all the money out of the ivory towers yeah is is tick tock though the tick tock really opened my eyes this year in terms of uh democratizing content creation and i i think of that as a really powerful shift in the market um is it is it allowing you know is it breaking down barriers for people to create great content of course it started with instagram and snapchat you started to see subtle training wheels be put on content i would argue in a lot of ways it started with myspace but which is true but think about this twitter twitter comes along and creates a restriction because of sms protocol and creates a 140 character game which inherently creates a filter so really worked for a guy like me that is very hot take driven and very kind of like good at that thing and that's why i grew and other people who were more long-winded really didn't even come onto the platform for a long time because they felt so suppressed by that restriction then you had instagram that made everybody a better photographer literally a filter that literally just one little thing photos filters and it exploded because it was training wheels to become a better creator then snapchat came along stickers ar right made people bet to your answer better content creators tick tock infuses music which inherently makes everybody much better that becomes a bigger training wheel and all of a sudden people can come in so you've seen the last half decade decade even actually become a game where unlike facebook which was the dominant player and even to some degree twitter even though that had had that restriction the platforms that have gone on to become the next big player have given people a tool to create and i think this will eventually lead to things that look like what would adobe look like if adobe got very light and was the front end of a social network like where this is all going is an incredible suite of tools that are very fast and lightweight that allow us to make movies it feels like right you would think that youtube youtube is set to put an incredible upfront production product that can really take its platform or the way to innovate and actually become the next youtube is to be youtube with an incredible ai ml you know or just an incredible execution of tools this has been one big game of who can bring the most tools to make the best creative or help people that are average become better or great better become great or great to become all time boom boom boom that's what's happened for the last 10 years yeah tick-tock does seem to get a lot of roots from youtube it was just built for mobile right youtube is built for youtube and this is what we've seen youtube has done an incredibly bad job of innovating like youtube had all the permission in the world five years ago to come out with something called why or yt or whatever the hell they wanted to call it and really build tick tock but a lot of people try to defend the fort instead of putting themselves out of business yeah that's a good point um i want to change tunes here a bit because you do so much um one thing and you you called yourself a hot tick guy so i want to get your hot take on this topic right here um is texting replacing email we've seen through this okay there we go definitive answer yeah and let me go to where i know you're going to add value because i don't think the context was you know i was a bit of a little i'm having a little fun here wine text and oh by the way anybody who's listening right now if you want to learn this and make my father very happy because i built this for him you should go sign up for winetext.com i built wine library in 1996 on the back of email 90 open rates no cost texting does cost but text and commerce and i think what we did with wine text what i did with wine text is really fascinating because i eliminated friction in a way that is so remarkable so for everybody who's fascinated by what we're actually talking about you can actually see this in the wild as a preview to what i think is going to happen at scale go to winetext.com and sign up yes i think email as a sales channel is clearly been established as an incredible and still to this day is an incredible infrastructure but i do believe sms texting has the potential to become the establishment in five to ten years and i've been blown away by the consumer behavior on the back of wine text yeah sorry go ahead what do you think are the limits of of text what are what are you finding sort of is there is there a wall or sort of yeah what fits best within that realm uh you know to be very honest with you i think it's exactly like email except we created a ui that allows you to reply with how many bottles you want it becomes such limited friction you know i think it's consumed i start with attention common sense and attention is why i will buy the new york jets you know like you know i start with the fact that we live in our text sms and i and then i and then what i layer what i've done well in my 20 years is then once i understand where the co where the attention is i've always been thoughtful enough to bring value to the consumer versus value to me where everybody loses is their content is selfish instead of selfless or at least strategic where you're bringing value and then you're asking for something in return you know i think where you'll lose if you have a big sms strategy is you're going to spam people and they're going to unsubscribe where you win is when you bring inherent value and i think you know not only with wine techs are we bringing 80 wines for 35 bucks which follows a groupon model that works and because we have the infrastructure to be able to deliver on that promise and it's only 365 wines a year in a world where we buy tens of thousands so you're going to get 365 ridiculous deals we're also very focused on educating people we have very clear quant that shows that if we only serve these seven wines we would maximize our margin but because i want it to be a learning tool and expanding people's palettes i'm taking less dollars up front by getting people to explore converts for meters and dessert wines and champagnes but what that's actually doing is making it a service that's educating not just selling which ltv wise will play out so within even the e-commerce space you think the limitations or there there really are no limitations for tax or there are certain types of goods that will sell better inherently wine is the perfect example well to your point if you have a clothing item you might have some more syntax issues where you got to talk about size and this and there's going to be clearly if you're selling the unit as is and there's no alterations everything will do well a fork you know a hat you know sneakers if you just reply with you know you know if there's a cadence of size yeah it's i think the prize is going to be so lucrative that people will innovate to eliminate the limitations yeah and what about what about platforms like slack do you see them coming into play like what's what's next after a text well i mean look i mean whether it's slack or whatsapp or messenger or other thing you know china is advantage of being a communist country which gave those companies the ability to hold off their competition be vertically integrated and and play politics and good innovation and just scale that is unheard i mean i i'm so fascinated by people that don't have context on the chinese market you know whether it's live streaming or how much an influencer because i mean when i say things to people like you know when influencers sold 60 million dollars worth of this one product on one live stream they an american business person's brain breaks because they're if they're not being global about this so you know i think i think i think what's i i do think there's a ton of innovation in the american market let me phrase outside of the chinese market around live i think there's a ton on that um but it's all the same game whether you're youtube or spotify or facebook i believe all three of you all three of those companies are in the same business they're they need to show me that they can vertically integrate with retail i'm shocked that nobody's bought target yet like like i'm convinced that that facebook or tick tock or that somebody in content buys buys target you know i think walmart going to the tick tock route makes a ton of sense it's what amazon has over everybody i don't think i'm stunned by the big tech company's lack of understanding that retail is a component of the stack and so i think target's a huge target for m a activity from a facebook or an apple or spotify because i think retail is an actual part of the macro stack of the biggest companies in the world and i think you can see that with amazon's leverage you can see that um you know with content amazon prime is a leverage point against you know the video product against selling on its site walmart's going to need to replicate that facebook's going to find itself facebook is incredible in m a around its core strength of attention but i think they have to integrate hardware and retail to be a full stack monster and so i'm waiting for the companies in america to wake up to that full stack and we've seen it with amazon's seen it the most prime whole foods these are not by accidents i think bezos continues to outmaneuver his competition so how big do you think that opportunity is we we've kind of coined it as social commerce i think that's what you're touching on here this idea that mac but it's matt you see where i'm going you're i know where you're going with social commerce live shopping cart it's huge i think it extends beyond that i think think about it if if facebook owns target tomorrow and you're in feed and you could buy something but you could pick it up at the register if you want you know or all those locations like the answer is i think i'm already in my mind on on social commerce 3.0 which is the macro infrastructure like facebook feeds on the tv the hardware to be able to you know see a commercial purchase it and have target deliver it because amazon's there amazon's missing one thing a social platform so then who in your mind is winning social commerce 1.0 or 2.0 wherever you're at and or wherever it is the human beings that are arbitraging the platforms so the shopify's the shopify droppings yeah exactly the humans not the platforms the platforms are fragmented somebody's going to m a their way somebody's going to pull off the bob iger moment bob iger figured out that the ip was the value and he went over paid for lucas and marvel only to be proven to be historically true with disney plus somebody of the amazon google facebook inc snap spotify i think is a sneaky competitor to all this because they can add they can add video and boom like some of those six people seven people that have the attention are gonna add hardware and and social and and retail and win the game like apple buying target would make sense you know you know facebook facebook i'm stunned that facebook hasn't gone there because they have so much to lose against walmart and amazon if walmart and amazon buy twitter like there's a lot here and it's gonna go that route and so so you're saying amazon is already there in a lot of ways amazon's there if if amazon goes and buys twitter tomorrow they've completed the loop they're they're in hardware at some level and with voice and i think they should build i think all of them should make a television a dumb television that's just tricked out for no money get in homes like to me i'm to me i'm buying a television and and losing i'm doing the i'm doing the razer and video game business where i'm losing money on the television that's tricked out just to get you into my ios yeah but then how many players do you see in that ecosystem because it does seem like it has like winner takes most characteristics three right you know how it all plays out at scale right a and a b competing with a distance c i think q srs help us with that right mcdonald's burger king and there's wendy and then change thing will come along and chicken sandwiches matter like you know but like i think i think three feels very right five if you're fragmenting it out so do you think it's harder to go from the social to the hardware and the other macro pieces like facebook would have to get completely casting based on the ceo okay i mean it's money and testing it's who has vision you know it's who has vision it's like i'm a hundred percent positive what i'm saying is right and will play out yeah and that's called vision that's understanding consumer that's understanding business dynamics and historical trends and pattern recognition and and now it it's why it's i've always been historically i used to get booed at south by on my take on bezos versus steve jobs something about the way jeff has played always made me feel like he saw it the most and i think they're awfully close right they've got you know they're awfully close man they're awfully close i think they do need the social the one piece they're missing is the social component and i think you know if i'm bezos i put up a billion dollars for internal creation and just go or i go out and try to buy twitter um probably what about what about uh buying a gaming company because that seems to be like the new social or the next wave in social are these these games that's easier because you're buying a production company because to amazon's point they have twitch right facebook when i inquired mixer from microsoft microsoft by the other way is the other sneaky one i've been very impressed with the microsoft ceo you know i i've been very bullish on microsoft um i think they've been very smart i think linkedin was a monster move into the thing that i talk about as that's become more of a social network and i think they just have to innovate um a little bit more i could see them going into the hardware play heavy with xbox like come out with xbox tv or xtv if you don't want to alienate and make it to like somebody's gotta create the lost leader television that's stacked with their ios that is the game in a lot of ways where you can do social shopping or video shopping within it if you have the retail infrastructure again microsoft launches at x television goes and buys target and we're watching commercials on x television through their ios like a roku or thing like that nature and i click a button and targets deliver you see where this is going it's a subscription for all of your services correct there's no reason not to yeah it's the ultimate subscription at the end of the day and whoever controls the person's face wins which is why apple's blown it which is why i've always been down on what cook's done they owned this remote control and they didn't layer on top of it and there's really two remote controls this and the television so everybody who's in that game get a remote control get to the front of the screen and then build the stack underneath it that is the game that is the trillion dollar warfare so even with that i want to write a book called trillion dollar wars with the seven logos we just said and lay out the hypothesis i cannot wait to have this video playing in six years as a split screen of i told you so because it's 100 gonna happen youtube watcher what's up it's garyvee first of all thank you so much i hope you're doing super well during these times i also want to ask you please subscribe because my commitment and exploration of youtube is about to explode stories polls more content more engagement more surprise and delight this is the time to subscribe i hope you consider it and i hope i see you soon

Channel: GaryVee

Views: 54,243

Rating: 4.9447732 out of 5

Keywords: Gary Vaynerchuk, Garyvee business, gary vee, gary vaynerchuck, garyvee, business, success, entrepreneurship, entrepreneur

Id: U_ibDW5vSgM

Length: 32min 52sec (1972 seconds)

Published: Tue Sep 21 2021