Drive and Convert

Announcer:
You're listening to Drive and Convert. A podcast about helping online brands to build a better e-commerce growth engine with Jon MacDonald and Ryan Garrow.

Ryan:
All right. So Jon, interesting things have been coming up over the past week in my space and talking with partners. We had some interesting ideas actually come up last week with our partner, BigCommerce and we were trying to help solve a problem within merchants and trying to drive traffic off of a younger social platform called Snapchat.

Jon:
Okay.

Ryan:
Similar in that everybody wants Snapchat and TikTok to work because Facebook and Instagram are not who thinks iOS. So everybody's looking for the next new shiny thing. And I haven't seen it work yet.

Jon:
BeReal is the next new shiny thing, right?

Ryan:
Yeah. I don't think Snapchat's going to solve this problem for merchants at scale. But everybody wants to try it and everybody has to see the data themselves before they agree that, "Okay, that's obviously not going to replace Facebook and Instagram and what we used to have in 2019." And so over beers, which is where all good ideas generally start and then they get refined through my wife telling me it's a bad idea. Or for smart partners like Jon, telling me it's a bad idea. We've thought of a way that I think e-commerce brands should start thinking to help save themselves some of the pain. And I really got excited today in coming up with a topic because I think you already do some of these things for brands and they just haven't thought through this lens looking at other things as far as driving traffic. So I'll present my idea to you and then I want you to help me think through it and tell me if it's a good idea, bad idea, or-

Jon:
I love this.

Ryan:
Needs to be massively redone.

Jon:
So I can already tell you it's a bad idea. I'm just kidding.

Ryan:
I love it. Hey, you want to get married? Because that's what happens in my marriage. Bad ideas.

Jon:
The difference is your ideas don't cost me money. They cost her money.

Ryan:
Yes they do, unfortunately. And she usually saves my money in other areas so it works out well.

Jon:
Okay then.

Ryan:
So the problem we're solving for is like we talked about, everybody's looking for the new traffic source from a social perspective and we've got these new platforms that are flushed with cash. They've got cash to get people excited about coming and spending money. But the best way they've come out with doing this is kind of stealing a page from Google, which often isn't bad. Where Google for years was doing the Vistaprint cards like, "Hey, spend a hundred, get 150." And they still do that to a degree. These platforms are just flashing some more cash at people. TikTok I know has done some promotions where spend a thousand get 2000. So you go get on a webinar and they'll give you a coupon, "Hey, if you start spending today, there's only 20 of them, you can each get 5,000 bucks if you spend 5,000". Which sounds cool and they're moving upstream away from a lot of these small merchants.
But my argument was most companies that can spend five grand on Snapchat aren't probably going to get excited about the five grand in bonus money. They're going to get excited more about how do we just make it work? I'll spend 10 grand off my own money all day long if it's working.

Jon:
Right.

Ryan:
If you're just lighting my money on fire, I don't care if you give me 5,000 a light on fire because that is lit 5,000 on fire.

Jon:
Well, maybe this is where you're going with this, but 95 or 90% of Shopify stores, if we're just looking at that platform alone, can't afford to spend 10 grand on advertising every month.

Ryan:
Yeah. And these small platforms have to get money now. I mean, just a few days ago we saw Snapchat earnings and they dropped 25% after market in their stock price. I didn't think their earnings were that bad considering what I'm seeing in the market. But investors obviously were expecting something different. Maybe I should invest in the market up more appropriately. Because I would've been able to tell them. I don't think their numbers are that bad.

Jon:
You were all in on Snapchat, huh?

Ryan:
Yeah. No, I was. I just didn't... I had low expectations, so it didn't surprise me. Surprised a lot of investors. So in this space, I think there's a way that brands should be thinking about new markets or testing new platforms in kind of a crowdsourced model. And I guess it's not necessarily that... Crowdsource are the best, I guess word I could come up with to give me the right analogy. But if companies could come together and in an arena, share a lot of the things that they are seeing and doing in a, I guess a safe environment. What could the drawback be if I have a plant food company and I'm giving some of my Snapchat strategies or TikTok strategies that worked or failed to a company that sells desks, for example? I mean, I don't know why I wouldn't share that if I was in an area that I thought there was some trust and they were going to share with me.
But it's kind of like how you go out and take a site and we're going to go out to a bunch of people and have them all look at the site at different people, different demographics, and they're going to tell you what's working or not working. So you can see, "Oh, turns out we're working really well with the 65 year old woman demographic. They get the site, it does well. But the 15 year old male demographic failing miserably." If you want to target the 15 year old males, you might need to change something on your site.

Jon:
So I want to be clear about two things really quick. Are you talking about the businesses who are spending the money on the platforms, getting together and forming cohorts that they share their ads they're running and the results in the data? Or are you suggesting that these businesses start doing some type of data gathering before they run their ads or neither?

Ryan:
I mean, if you're smart business, you're probably gathering some data before you go spend money. I mean, that's just general rule. I need to know if the demographics of Snapchat, for example, are 15 to 20 year old humans and my product is for 50 year old men. I'm not sure spending anything on Snapchat would work regardless of what you want to accomplish. So at least go in...

Jon:
So you're talking about testing, essentially, right? You're suggesting people put their ads up, get some data before they throw a lot more money behind it because they want to know if I'm going to invest 5K, is that 5K going to get me a return on ad spend.

Ryan:
Or does it have a reasonable shot? Right. So the platforms should be able to tell us something about, does it have a shot before I get on there? Now that's going to take probably the brands have to ask a lot of questions and dig beyond the flashy, shiny presentation decks where everybody on Snapchat is there and every company makes money. They're like, "Well, I'm going to put on my skeptic hat for a little while before I give you my money Snapchat to filter through some of this data." So you want to see some case study because most platforms that are trying to emerge will have some case study data where there should be some hard numbers around what did work, what didn't work. So your least, you should be going in with some insight and the platforms want you to succeed. They're not going long term. They can't win if everybody comes on there spends five grand and has a terrible experience. The reputation will go in the garbage and no more money to be had.

Jon:
So there's a couple ways. Well, I don't want to get into solution mode yet. But I'm sparking a bunch of ideas out of this. So I feel like we're on a good path. You weren't sure if this is going to work. I'm thinking I have no idea what's going on. But now, I feel like I have a good idea of what you're looking for and I have some ideas. So when you're ready to hear them, let me know.

Announcer:
You're listening to Drive and Convert the podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. And Ryan Garrow of Logical Position, the digital marketing agency offering paper click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.

Ryan:
Yeah. Well the next step is I think there's a way or brands should be trying to create... Have you ever heard of the 20 groups in the automotive space? I think they're called G-20s or something, but it's basically a group of dealerships that don't compete coming together saying, I don't know if they meet quarterly or monthly but, "What worked? What worked? I mean, we're not seeing anything working. So are you seeing something like, Oh yeah, we read this great radio spot that we said that this and this and oh my gosh, foot traffic was huge".

Jon:
That's a great example and it just made me think of... Have you ever seen the John Oliver show last week tonight? I believe it is on HBO.

Ryan:
Yes.

Jon:
Something like that. Okay. He is funny.

Ryan:
I don't watch it as often as I want, but I do like it.

Jon:
He did a whole segment on how... I don't know, smaller car companies, sales companies, right. What they were doing was running the same script of an ad. So basically the same ad, and they would buy the script in the props and everything and have it all to go. Same music, same graphics, and then they could go online and buy that as a package. And it has been proven to work in other locales. And then they could run it on their local stations and all they would have to do is get someone to film them saying a few lines dressing up in the crazy costume, doing whatever. And what he showed was that there are so many of these similar commercials running across the country and people don't realize it. But he was almost making a joke of it, right? Like, "Hey, they've got this guy in California and this guy in Ohio and this one in New York and this one in Kansas, and they're all running the same ad with them acting in it." And they're all horrible actors because they shouldn't be in their own ads doing a script-

Ryan:
... Your cheap talent.

Jon:
Right. Exactly. And that was this whole thing was they're all equally horrible just from a production quality. But they all worked. And that was the thing was they were so campy that it worked and it was just like, "Oh, look at him. I trust him because he's an ad and he's trying or whatever." But what he was showing was that he dived into this and was like, "Why am I seeing this ad and the same ad multiple places, that's like different actors, same exact script. They're saying the same lines, they have the same costumes, whatever." And he found out there's actually a place you can go as a car dealer and say, "I want ads that have worked in other places." And they'll give you everything you need to produce that ad. And then you find a local video person in college or something to throw it all together for you.

Ryan:
That's fascinating.

Jon:
So this is an idea that is being played out, it's just not being played out online that we know of.

Ryan:
Yeah. I mean talking about [inaudible 00:10:50] business ideas. We actually had a business that we were trying to create little videos. They call them donuts where the structure's there and all you do is change out all the stuff like, "Hey, we found this video that worked for plumbers." We're going to go run it on YouTube, prove it, and then, "Hey, we'll sell it to plumbers and do this way." Didn't get off the ground because YouTube kind of fell apart and gets distracted by other cool businesses. But I think because the social space when you're... Especially in e-commerce, we're not held to geographic regions, unfortunately. So I think that's one reason it's been difficult for a lot of this to get off the ground in the e-com space. Because if you're a retailer selling plant food that's not mine in New York, you're technically competing with me online for the same eyeballs of people looking for plant food.

Jon:
Well, you can segment that audience, right? So you could say, "I only want people in northeast".

Ryan:
You could, but at the end of the day, I'm like, "I'm not going to limit myself as a brand. Why do I not want them?" I'm aggressive.

Jon:
Fair enough.

Ryan:
I'm going to get them and I'm going to be going for their market at least on the plant food space. But I guess in the social space, when you're testing a new platform, I would think there's a lot of value. If you had a cohort of business owners or brands that you just trusted and got together enough to say, "Hey, we're all going to go on to Snapchat together and we're all going to go spend three grand in the next two weeks and come back and talk about what it's going to do, we're all going to have our creative team come up with something. We're going to execute a strategy that we think is going to work in our space and come up with the reasons why. Well, maybe it's a one sheet of what we were going to do and then how we executed against it".
And we all come back together in two weeks and be like, "Who had success? Raise your hand. Okay, what worked well? What was your creative? What didn't work? What was a dismal failure?" And that's how you can scale. Instead of me just getting the data on $3,000 of ad spend, if I had 19 other companies, I just found, what does $60,000 of ad spend look like on Snapchat over a two week period? And what are the demographics we picked and then refine all that. If you had the data, how could that not be? I mean, you've got a community of people in the optimization space doing a lot of this kind of crowdsource like optimization work.

Jon:
Well, that's where I was going to go with this. So two more things I just thought of came up with. One is that you are creating essentially a two-sided marketplace here. So the way that this needs to work is we need people to contribute, to get access to the data. You have to open up your data in order to get access to the data. And then it is anonymized. So you don't know what brand ran it. I guess you could figure that out from the ad, but maybe you don't even... Do you show the specific ad?

Ryan:
I mean, I would think there'd be value and be like, "Who is your actor? Who are you targeting?" If I'm targeting... Again, I'll just make this up. I'm targeting 25 to 35 year old women on Snapchat. And I used a male model talking about my offer, and this company happened to be targeting the same demographic and they used a female and their ad interaction was better. Maybe it was script, but it would give me an idea like, "Ooh, maybe I thought the sexy guy in a swimsuit would be better for that demographic." But it turns out their grandma look was much more appropriate on Snapchat.

Jon:
I don't know what your feed on Snapchat is like, but-

Ryan:
I don't have Snapchat. If anybody listening knows that. I don't have Snapchat. I don't have time.

Jon:
Yeah. Ditto. Saying that everyone's always like, "Oh, I saw this on TikTok." I'm like, "Yeah. I don't have TikTok".

Ryan:
Yeah. I don't either.

Jon:
China doesn't know about me. Okay, so the second thing that I'm thinking about is optimization. You've mentioned that word a few times. There are ways to do this via optimization. So we've done an episode before on what's called rapid testing. You can apply that rapid testing to ads. So you can do things like run heat maps, eye tracking heat maps on ads, understand what people are going to look like, what's drawing attention and optimize the creative that way. You can do five second tests or two second tests with specific demographics. So you could very easily say 35 to 65 only female with this income in this region. However you want to target them. I mean, you can't get super specific, you're not getting Facebook demographic specific, right?

Ryan:
The super creepy.

Jon:
Right. But you can get pretty specific. Enough to be able to say, with some confidence, we can move forward with this.

Ryan:
And generally how much does that cost?

Jon:
Oh. It's fairly reasonable.

Ryan:
Are we talking a hundred bucks, a thousand bucks?

Jon:
Under a thousand by far.

Ryan:
Okay.

Jon:
Maybe 200 and you are well off to the races. You've proven yourself with 200 bucks, let's say. So if you're going to invest 5,000, what's 200 to make sure that you've got something optimized before you move forward?

Ryan:
Oh yeah.

Jon:
Right? That's a good insurance policy.

Ryan:
I agree with that.

Jon:
I think that is the way to do it now. You don't get the spend levels, you don't know the actor, the influencer, but you could pay the influencer and then do the testing or set up something with an influencer and say, "Hey, I need you to record this. I'm going to test it. If it hits these metrics, then I'll launch it and pay you." Right? That's an option.

Ryan:
You might be able to get somebody on cam, pretty cheap to be like, "Hey, I'm going to do a weird deal. Just give me permission to run it on Snapchat for a period of time".

Jon:
Yeah. What I was thinking was, before you spend any money, how could you do that without spending any money on the influencer, on the talent? So you say, "Hey, I'm only going to pay you if I run it." But what I am going to do is some rapid testing on this first so that I'm sure it's going to work. Or I feel more confident. If it hits these metrics during our rapid testing, then I'll compensate you and run the ad. So there needs to be some trust there that somebody's not going to run the ad until everyone is on the same page about when you compensate-

Ryan:
Yeah. It's almost like you need an escrow account for influencers. Maybe that's another business idea. I should write that down.

Jon:
I think that's the influencer agencies and there's a lot of [inaudible 00:16:43] there.

Ryan:
Yeah. That's true. Bad idea.

Jon:
The reality is here you can test a lot of things. And are you going to get a hundred percent of the data you're looking for? No, but I think you could do this on your own today without needing a cohort of people. If you were to be willing to throw a few hundred dollars at it and you have the team set up to optimize a bunch of different ads. I've attended, I've spoken at an event called GeekOut. I don't know, over a year ago now. They do one every quarter. All of those-

Ryan:
Oh yeah. You told me about that one. I was really jealous about that.

Jon:
Yeah. Geek out, it's been great. They have an amazing Slack group now, who's who of direct to consumer and e-commerce is in there. But here's the thing, they had a speaker who followed your original approach. Meaning they have a team, overseas team that can crank out 200 ads a day, variations. And then they would put a hundred dollars behind each one and see what sticks. But that required a lot of manual effort and you got to come up with all the different headline variations, et cetera. And they broke down exactly how they do it. They showed, I think it was an air table even where they said, "Okay, here's the different ad groups and sets that we're testing and if you use this headline, it gets put into each of these ad groups once." And it was a whole thing they had set up.
So that testing is possible, but you have to spend a lot of money to do it. So does not work for smaller brands. And that's why I keep coming back to how do you do this rapid testing in a way that is going to truly move the needle. And I think if you're okay without being able to test the spend levels and the effectiveness on the different platforms specifically, you could still get 80% of the way there. By testing the creative, testing the headlines, testing what's getting their attention. So the heat maps. If you could test all of that, I still think you'd be way farther ahead than your competitors who are just thrown stuff at the wall and seeing what sticks.

Ryan:
I agree with that. Yeah. I think there's too few companies are going in blind or just even just trusting somebody that's never been on the platform to a degree, "Hey, yeah. This worked on TikTok, it's going to work on Snapchat." Like, "Really?" I mean, maybe. I mean you got to be comfortable with the vertical video. But then I think the next iteration of that, for a lot of brands that are maybe the mid tier brands that are like, "Hey, I think brands have to invest..." I talk a lot about finding influencers and leveraging dark posts, but that's kind of a grunt work process unless you can hire an agency. So the smaller brands have to go out, just DM a bunch of people, get lost in DMs, try to find an influencer. And that's not easy. But that also means that it generally could have more upside if you do find one.
But if you were able to leverage companies that have relationships with enough brands to make introductions. If you went to Shopify plus, you went to your Shopify Plus account manager, they manage 50, 60 brands that don't compete often. Sometimes they do. Like, "Hey, I'd love to meet a couple brands that you don't compete with because I want to test some stuff if they're willing to talk with me." And you can almost create your own 20 group within e-com where you can go and be like, "Hey, we want to decide how this works." And I think we're going to test a promotion with big commerce where we... Instead of giving 20 brands five grand, we're going to be like, "Hey, you've got a hundred thousand dollars pool that Snapchat gave you to do this. Let's create a contest with a group of 20 brands to be like, Hey, we're going to have a group voted award for 20 grand. We wouldn't have maybe LP do a vote around, Hey, all of the account teams loved this ad." And then you get a reward for the one that was most successful.
But you're going to come into this group knowing you're going to share your data. And you're going to share your ad creative, what you thought was going to happen, what actually happened. Because then you're going to have 20 unique brands, hopefully using groupthink at a transparent level. That I don't think actually happens that often in e-commerce.

Jon:
Yeah. People are too afraid to share.

Ryan:
They are.

Jon:
I think there's a lot... I was talking about this GeekOut Slack group. I think there's a lot of these Slack groups that are out there, but I don't see people really truly getting into the weeds and sharing. So I think that's a big issue.

Ryan:
Maybe it's got to involve wine.

Jon:
Hey.

Ryan:
Hey, we're going to get together for wine, lower the inhibitions, start trusting people.

Jon:
Well, I don't spend much on driving traffic, but I'm in for that meeting. How's that?

Ryan:
Yeah. Well, Jon come in and be like, "Oh you guys, why didn't you do the rapid testing right before you did that? You could have saved yourself the thousand dollars right there. You just wasted...".

Jon:
There you go. I was more there for the wine, but I won-

Ryan:
Spend it on the wine.

Jon:
... Dish out.

Ryan:
Yeah. If you can spend it... Save a thousand dollars rapid testing, that's a nice bottle of wine to share with Jon and Ryan.

Jon:
I love it. Count me in. Well, Ryan, I think you have a good idea here. And I do agree that it's necessary, it's needed. I do think people could get 80% of the way there. But I think that last 20% is how it does on a particular platform. Natively on a platform. Maybe there are ways to... If you had a whole company, you set up a whole business around this, there might be ways to show it in a mock up Snapchat interface when you test it. And it's like something that's gives you that experience as a user.

Ryan:
Like in a feed, like, "Hey, which ad did you stop at?".

Jon:
Right. And you could even track that, right? You can do eye tracking on video. That wouldn't be hard to see what people were looking at. So I think there's options, but I do agree that, that 20% is probably going to be the key. So rapid testing, I think you're onto something otherwise, and I think the combination of the two could be pretty killer. Great idea.

Ryan:
You guys heard it here. Jon said, "Great idea." We'll refine it, I'm sure. But if you think it's a good idea, you should reach out to one of us on LinkedIn or somewhere you can find us and tell us you want to test this and we'll see if we can get a group together.

Jon:
There you go. The G-20 coming soon.

Ryan:
Yeah. And E-20, we can call it e-commerce-

Jon:
E-20. Ooh, I like that.

Ryan:
It's half of E-40 if you're an old school.

Jon:
Hey. Children of the eighties over here.

Ryan:
Yes.

Jon:
All right. Awesome, Ryan.

Ryan:
All right, Jon. Thanks for the feedback and letting me externally process something and see if we can come up with a valuable idea in the e-commerce world for-

Jon:
Great idea for recording. I appreciate it and I loved being surprised, so it's a lot of fun.

Ryan:
Thanks Jon. Have a good one.

Jon:
All right. Talk soon. Bye.

Announcer:
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.