Today in Digital Marketing - BONUS: Creative is the New Targeting: A Meta/Industry Panel

Episode Date: June 23, 2023

A panel discussion on the role of creative in an AI world, from Meta's recent Performance Marketing Summit. Featuring: Jimmie Stone, Meta's Head of Creative Shop; Matt McKim, Meta's VP of Auction Science; Juhi Pikale, Marketing Director, Fabletics; and Frank Lee, CEO & Co-Founder of RealEyes Digital.--Each day this week, we are putting an extra episode in your feed — earlier this month Meta recently held its Performance Marketing Summit. Since Meta is such a big part of many marketers' spend, we are replaying some of the most relevant presentations from the summit.This is not a paid placement — Meta hasn't paid for this, and didn't ask us to do this. Also, of course, these are Meta reps at a Meta conference, so it's pretty heavily promotional, sometimes comically so. That said, there are some pretty important things discussed in these sessions — like their take on AI modeling, how they see the future of creative, and a bunch more.If this isn't your jam, you can just delete these — our regular daily newscasts will continue to come your way.Our Sponsors:* Check out Kinsta: https://kinsta.comPrivacy & Opt-Out: https://redcircle.com/privacy

Each day this week, we are putting an extra episode in your feed. Earlier this month, Meta held its Performance Marketing Summit. Since Meta is such a big part of many marketers' spend, we are replaying some of the most relevant presentations from the summit. I should note, this is not a paid placement. Meta hasn't paid for this. They didn't ask us to do this. Also, of course, these are Meta reps at a Meta conference, so it's pretty heavily promotional,

sometimes comically so. That said, there's some pretty important things discussed in these sessions, like their take on AI modeling, how they see the future of creative, and a bunch more. If this isn't your jam, you can just delete these. Our regular daily newscasts will continue to come your way. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen.

Today's episode is from a session they did called Creative is the New Targeting. This is the last in our series this week. It is a panel discussion. The two moderators you'll hear from first, Matt McKim, director of Meta's Auction Science, and Jimmy Stone, Meta's head of Creative Shop. They will introduce their two industry guests.

Okay, last year we stood here and we discussed that how creative is a catalyst for growth and how creative is one of the most critical levers in performance that we have to maximize the power of our auction. And since then, we have seen so many great examples of that. Advertisers all over the world have ignited their performance through creative diversification in both content and canvases, leaning towards the lo-fi aesthetics, collaborating with creators, and doing a lot on community-led content and engagement. And while there has been a lot of changes since then. And, oh, a lot of changes. I'm so glad to say that one change remains,

one fact remains unchanged. It's creative. It will still be and will continue to be a catalyst for growth. You got it, Jimmy. The numbers speak for themselves. In a recent study aggregating 2,700 tests, we found that creative diversification resulted in a statistically significant improvement in advertiser CPA. And the more visually distinct the creatives, the better the performance left. In fact, the performance was 32% better when creatives were the most visually distinct. And beyond that, brands that use differentiated creative are able to increase their incremental reach by 9%. This really

highlights the potential of the ways that creative differentiation can mitigate audience saturation. That's an amazing result when you really look at them. Amazing results. So what has changed in the last time that we saw you? Well, this year, we have seen a tremendous leap forward in technology, as we all know. Especially AI has come to the forefront of many of our conversations, particularly when it's fueling marketing performance. Earlier today, you heard from Simon the scale of Meta's investment and commitment to AI. We're here today to talk about what it means in the context of creative. Yes, AI will revolutionize the way that we work. There's no question about it.

It will help us do faster, more efficient work. But making our work more effective will still require something that is uniquely human. Empathy. Empathy is a human craft. And despite all the advances of AI, we still need to understand the art and science of what people fall in love with our products. The more you understand your audience, and what's meaningful for them, the more effective your creative will become. While AI will help us generate fast all these multi-assets that we know that are important to maximize our performance,

we need to understand why. The why, the ad resonates with our audience. So we are able to prompt whisper and find and focus the machine. So as technology advances, the role of creative will still continue to grow. Our incredible distribution system is becoming fastly, increasingly more efficient at finding the right people at the right time and the right moment to show your message. As you increase your understanding of what resonates with different groups, you will also increase your potential to reach new

groups of people that are interested in your brand. So the more intentionally we are in inputting creative into the system, the better and the more efficient the system will be to reach those diverse audiences, to reach your audience, to message, essentially expanding your audience. So today, we're here to say, with confidence and strength, that creative is the new targeting. Whatever you put creative into this amazing system, it

will find your audience. So Matt and this awesome panel that is coming right after here will discuss how creative diversification is so critical moving forward and how AI will be instrumental in the potential for AI

to help us do that. Take it away, my friend. Thank you very much, everyone. Thanks so much, Jimmy. Great to be on the stage together again. I'm excited to be joined by two awesome panelists. So, Juhi Pakali is going to join us. She leads performance marketing at Fabletics. She has 10 years of experience and is a real pioneer in best practices on

all paid social platforms. She's also built up creative, offline, paid search, CRM, affiliate programs for many brands from the ground up. I'm also excited to be joined by Frank Lee. Frank is the co-founder and CEO of Realize Digital and I'm also proud to say a Meta alum. Frank is a seasoned digital marketing executive. Yeah Meta alum. Frank is a seasoned digital marketing executive. Yeah, thank you. Frank is a seasoned digital marketing executive. He has a proven track record of helping businesses to define creative strategies that really resonate with each of the consumers along their stage of the journey and ultimately

able to drive profitable growth, which is what we're all here for. So excited to welcome Juhi and Frank. Thanks for joining us. Juhi Chawla. Juhi Chawla. Juhi Chawla. Juhi Chawla. I love the moonwalk.

Well, just for that, Frank, we're going to start with you. I love the moonwalk. Well, just for that, Frank, we're going to start with you. Okay. So I would love to kick our discussion off by talking about something that's on everyone's mind. How do you see generative AI really shaping the future of creative development? Well, generative AI, I mean, AI is definitely going to play a role on the production of creative development? Well, generative AI, I mean, AI is definitely going to play a role on the production of creative.

When I think about our industry as a whole, one of the things we've always had a challenge with is getting the scale of creative needed to either raise your performance or get to another level. And so when I think about AI, it can really be an extension, a technology that's going to be able to scale human ideology, like human creativity, and then using tools to scale. We're already seeing that today. Like there's tools out there like 11 Labs and Murph AI that allow you to help do voiceovers so that you may not need to use voiceover talent anymore.

And so I think that's some of the role. There's also another example where a friend of mine told me a really good example where he would take a creative brief and he would use the creative brief to build ads internally. But then he'd also use the various AI tools with the same creative brief and just match what's the output. And it's not there yet, but it keeps getting a little bit better and better every time. So I think as an industry, we should just stay close to it and figure out ways how we can scale our creative ideology.

DAVID BANES- I love it. Juhi, what about you? JUHI LAMONTALA- Yeah, so we've been doing our research into it. And I personally think it's going to be more of a crawl, walk, run approach in the advertising space, at least in performance creative, the way we're thinking about it.

So the crawl approach would be simple things, but still super impactful. For example, resizing feed ads to story. Now, that might sound super simplistic, but when you're doing it at volume, that saves a designer a lot of time. Similar, another example is just tagging products in an ad based on the product catalog.

That, again, can save a lot of time and can actually have an Impact if people are able to shop that exact product directly. The walk approach would be like say you have a winning ad. Those are really difficult to find, right, from so much Testing. And that ad starts to fatigue in ASE campaign or something like that. Can the ai generate extra headlines to increase its lifespan and have it continue winning?

So I think that's more like a walk approach. And then the run approach, which I think everyone's waiting for, is can the AI actually absorb and ingest all the historical learnings in an ad account and create a net new concept that actually ends up winning? That's what we want to get to. But yeah. I love that North Star. And the other thing I love is that both of you seem to be mentioning AI is going to be

an augmentation. It's going to be a way that we do what we already do even better. So I'm super excited about that. And wanted to follow up on AI more generally. So obviously AI doesn't just apply to creative. We've talked all day long about different optimizations and how we're using AI throughout our entire delivery system.

So my question to you, maybe, Juhi, is how are you thinking about using creative to diversify delivery and reach new audiences using the AI in these other systems? JUHI NGUYEN THAO TAKAHASHI- Yeah, it's a great question. So we've been using broad targeting over 10 years now. So even before it was part of Power 5,

all performance life. And as a result of that, when you're doing broad targeting, creative is literally your main lever for targeting. So we take that really seriously. So I don't know if you're ready for this, but we actually produce and test 50,000 ads every single year.

And that is just for meta platforms. How do you produce 50,000 ads every single year, And that is just for meta platforms. How do you produce 50,000 ads? That's crazy. We're going to have to pause. How do you do it? How do you make that work? How big is the creative team? i think this is going to be a Whole separate panel, matt. If you want to schedule another one. I'll break it down into three simple steps, though, as simple as I can get.

So we are in fashion, so as a result of it, we have to be visual, just to showcase our products and new collections and things like that. So we're sourcing content from various sources, and because we're in fashion, we have access to that. So think about we have our internal editorial and still live shoots that are happening every single month. We have a pretty robust influencer marketing program, so getting a ton of content there. We have a UGC program to get prescriptive content for ads. And then we're also working with third parties if we need additional perspectives, such as in short

form content and things like that. So we source all of that content and bucket it, and so we have different diversity there. The second step is having a lot Of diversity in ad formats. So this was talked about a little Bit earlier as well, but like wherever, you know, there are Impressions or impressions being generated, we want to have a Presence there. So you want to be on stories, Collection ads, click to messenger, feed, reels, dynamic Ads, like, name it.

We try to keep testing there just to see maybe one month collection could pick up, another month stories could pick up. So we keep testing. And then the third thing is reporting. It's super, super important. So we have a pretty robust naming convention and we're tagging all these creative elements. So think about offer, no offer, which product categories we're tagging all these creative elements. So like think about like offer, no offer, which product categories we're running, swim or leggings or shorts or whatever it is, which

influencers are we using? What hooks are we using? And then we're able to sort of slice and dice and see what works and then sort of, you know, continue the whole cycle with those learnings. So that's a little bit. I love it. It's the season for new styles and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first. Join free at rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join

at rakuten.ca. R-A-K-U-T-E-N dot C-A. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. Frank, anything from your side you want to add on there? I'm still stuck on the $50,000. Be protected. Be Zen. it was really powerful then, and it just continues to get more and more powerful. Such that, to your point around broad audiences, this idea of presupposing and creating micro-targeting audiences, that just doesn't work, or you don't need to because the AI is actually better

to do it. What we think about creative, we think about it more as a persona-driven creative. So the idea of figuring out different types of content to increase or expand your addressable audience or your reach. One of the things that we do when we onboard a new client is look at all their ads. And then just hire talent that looks differently than the talent that's in those ads already. We have trust that the auction is going to be able to take that content and reach different cohorts. A simple example is we have a pet store, a pet food brand. And so we create content with dogs in them,

and we create content with cats in them. And we know that content's going to reach different audiences. And so this idea of persona-driven creatives is the way you do kind of think about targeting. I think you guys said it earlier, which I love. Creative is the new targeting. That's the playbook. Nice. So obviously with all of

those different personas, you're thinking a lot about testing, right? You're probably having to iterate through lots of different options to ultimately arrive on what's optimal. So can you tell us a little bit about how you do that? How do you set up your test and learn approach to find the best options?

I mean, testing is, I mean, that's just something we do, right? In performance marketing, we always test everything. I would actually say in the world or the traditional world, oftentimes, if you're looking at data and analytics, the decisions are kind of binary. Like, it either worked or it didn't. With the creative world, inspiration comes from everywhere. And so, like so you may have an idea or you may have an idea and I would, but we just don't know what's going to land. And so we have to test what type of hooks, what type of message, what type of concept actually work.

The key that's oftentimes under, like, we don't talk about it enough, is this tolerance for creative testing budget. Every time we work with a client, the first thing we want to say is, like, you need to earmark a budget for testing. And, you know, depending on how big, I mean, if you guys are your size, I don't think it's that high, but, like, let's just say 10% of budget

going to creative testing. But the moment ROAS gets wobbly, that's the first thing to go. And the irony there is, in order to improve that ROAS, you've got to be able to think about testing and seeing through the different concepts that work so you can get into the main account.

So it's a hard thing to kind of accept, but if you can think about different KPIs for that testing budget, don't hold it to a ROAS target. And the KPIs are things like hook rate, hold rate, and click-through rate. Those are, like, the things that you want to learn from when you do the creative testing, and then just bring it back to the business as usual.

Nice. Juhi, it's got to go over to you. 50,000 pieces of creative. This is crazy. You must have a really strong test and learn approach there. Can you tell us a little bit about maybe how you do that? Yeah. I mean, the main thing is we're not testing ads just to test

ads. There has to be some quality and some thought behind it and also I mean like every time you test an ad like even if it doesn't work you're learning something from it so you know you're ultimately like basically sort of creating that playbook so that when you make new or newer concepts and you continue to make them they're defined by the things that you learned so So I think in general, too, once you develop some sort of learnings and playbooks, your ads just get better. I also think it's really, really important to stay on top of organic trends.

For example, in the last couple of years, just consumers have just shifted to engaging and consuming content that's short-form video. And as advertisers, if that's what they're engaging with, then we have to meet them where they are and give them what they need and what they're looking for. So we need to invest in making things like short form content and things like that so that they engage with the ads as well, which I think is really important.

And also when you think about how do you target people and things like that, I think the last panel was really telling, right? I mean, if you need to reach Gen Z, you probably got to learn some Gen Z lingo and put it in there. I learned something new today. Right? Yeah.

She's so smart. She's so good. Well, cool. We're all here today to share ideas on how we can maximize performance. Juhi, I'd love you to tell us a little bit about how you've used Creative to really improve performance for the Fabletics business. Yeah. So I think the biggest thing for us is, like, having the different perspectives.

So you know, UGC had become something that people were really engaging with. So we started developing a lot of UGC. Then obviously we have our influencer program and getting a lot of different personas and things like that through that. And then obviously like static, like we can't forget about that. It's like tried and true, bread and butter. And just got to continue innovating on those flat lays and things like that. It may be boring, but it works.

So I think it's really important to have diversity in that sense. Yeah. Awesome. Frank, how do you help build this out as you're working with many different brands? Obviously you're trying to find the right fit. How do you do this? Well, I mean, from our perspective, we think, I mean, it's creative first. The job

to be solved, I realize, is to help drive performance. But we take a creative first mindset. And there's two brands I think of that we work with. I think they're here. True Classic is one of our clients. If you think about their journey, yeah, there you go. Give it up. True Classic. Like, we started

working with them, and they were just doing the stuff that you need to do, UGC testimonials. But through testing, through mining comments and data, they took this, like, story arc around creating content from UGC testimonials to, like, this comedy. And it's really funny. And if I think about their performance marketing company, and they sell men's basics

and t-shirts and apparel, but somehow they're now synonymous with black t-shirts and humor. And that was the journey that was required because they were a new brand. It's one thing like Fabletics, you guys have been around for a while. You're playing with house money to get, to continue to grow market share. These guys were brand new and so they had to take a wholly different playbook and this playbook was really around creative. Another one that we really kind of dug deep with is House Labs, Lady Gaga's brand. It's a beauty brand. Hari is in here somewhere, I know that.

But these guys, when we first started working with them, they were all about highly produced premium content out of the gate, which makes sense. You're representing Gaga and you want to make sure this beauty brand is on point. And through a lot of kind of strategic planning and discussions, we went to creative diversity. So we have the premium content, but they did like UGC around testimonials. Gaga even did some testimonial like how to's. And like the numbers speak for themselves. It just continued to grow and grow.

I remember early on their CEO came to me and they said, Frank, you've got to improve performance, big guy. You've got to make this work. And with Hari and his team, and Hari's really focused. When he's on to a goal, like his operational excellence, we just turned this thing around and now we're thinking about how to continue to get Lyft on top of Lyft. Those types of repeatable patterns just continue to show me that, like, the playbook here is created first.

SETH LADD- Awesome. Well, I want to follow up on that. So obviously you're working with lots of brands and maximizing their performance. One of the questions on my mind is where do you see this going from here? Obviously the landscape changing very quickly. In this sort of new world, what role does the agency play? Yeah, that's a good one. Again, our point of view is creative first, right?

I realize, though, the definition of creative first is different for everybody. And the way we see our role as an agency, and I think I speak for, I think, all the agencies, one of the values that we bring is we see a pattern of success, things that go well across our book of business versus things that don't. And our job is to take the stuff that's working well and just service it up to all the other brands. The playbooks, that is, right? The creator-first mindset has continued to kind of be the success lever for us. But it is still like inertia. It's like trying to get people to reframe what that definition of creator-first is.

And that's always been the challenge. So in many respects, I feel like an agency in today's world is more of a change agent for the brands. One brand, though, or one company, rather, I spoke to their founder, and he just kind of pinpointed it for me. His performance marketing department is 75%—the staff is 75% creative. And that just kind of blew my mind. I mean, for some of us that have been doing this for over 20 years, if you would have asked me in 2004,

if you're running a performance marketing team, three-fourths of them were going to be around content and creative, I would have said, no way. That's not, that just doesn't make sense. We're day trading bids all day long. And so that was like a reframing. And I feel like a lot of the role that an agency plays in us as a community is to be change agents, you know, pick up on the fabletics of the world, pick up on the true classics and the, and the Hari and, and house labs and just reap reproduce the playbook. So I love it.

So that is it for our special week of presentations from the meta performance marketing summit earlier this month, back to normal next week. Have a great weekend.