Meta’s CMO and VP Analytics Alex Schultz Talks Timeless Truths And Measuring For Impact

Key Concepts

Performance marketing, brand marketing, incrementality, media mix modeling, creative, data-driven marketing, AI in marketing, brand loyalty, the marketing brief, product marketing, the marketing funnel, lag effects, qualitative vs. quantitative measurement.

Why "Killing" Performance Marketing?

Alex Schultz argues that the term "performance marketing" creates a false dichotomy between performance and brand, implying that brand marketing doesn't perform. He believes all marketing can perform if done right, and the vast majority doesn't because marketing is fundamentally hard.

• Historical Context: The concept of performance marketing existed even before the internet, with direct mail being a prime example.
• All Marketing Performs (Potentially): Schultz emphasizes that TV ads, radio ads, and online ads can all drive sales if executed effectively.
• The Difficulty of Marketing: Great creative is hard to achieve, and reaching the right person at the right time is equally challenging.

The Two Pillars: Timeless Principles and Incremental Results

Schultz highlights two fundamental beliefs:

1. Tools Evolve, Principles are Timeless: Online marketers should learn from traditional marketing principles. Claude C. Hopkins' "Scientific Advertising" (over 100 years old) discussed split testing in an offline world. Direct mail principles apply to email, SMS, and push notifications.
   • Example: Targeting gardeners by mailing gardening magazines is analogous to online targeting.
2. Incremental Results are Everything: Focus on showing ads that have an incremental impact, not just sales. Incrementality can be measured at any point in the funnel (awareness, consideration, etc.).
   • Example: For Meta's Ray-Ban glasses and WhatsApp in the US, awareness is a key problem. Increased awareness directly correlates with increased sales.

Navigating the Non-Linear Funnel and Measuring Impact

The traditional linear funnel is outdated. Consumers move in and out of different stages.

• Media Mix Modeling (MMM): Used to understand the impact of different media channels.
  • Process: Run tests and experiments to determine the incremental benefit of each channel, both in isolation and in combination.
  • Multivariate Testing: Test combinations of channels to see how they interplay (e.g., TV ads increasing brand searches and retargeting conversions).
  • Model Creation: Assign weights to each channel based on incrementality testing (TV = X, Radio = Y, etc.).
  • Application: Apply the model to calculate the impact of a campaign based on impressions, clicks, and other metrics.
• Limitations of MMM: It's not a straight experiment and requires ongoing testing to ensure accuracy. Creative changes can affect channel performance.

The Importance of Creative and the Right Brief

• Creative Impact: Different creative concepts perform differently across channels. A concept that works well on billboards may not work on radio.
  • Example: Chick-fil-A's "Eat More Chicken" campaign is effective on billboards but may not translate well to radio.
• The Right Brief: A well-crafted brief is essential for effective marketing.
  • Key Elements: Brevity (one page), clarity (clear objectives and priorities), and alignment (agreement on all elements).
  • Schultz's Experience: He initially underestimated the importance of the brief but now emphasizes its critical role.

Overcoming Fear and Fostering Creativity

• Fear Kills Creativity: Fear of not showing measurable results can stifle creativity and risk-taking.
• Data vs. Judgment: Avoid sacrificing judgment to data. Use data to inform decisions, not dictate them.
• Cultural Imperative: Leaders should create a culture that encourages risk-taking and experimentation.
• Meta's Approach: Rigorously measure results, be honest about failures, and allow for risk-taking in measurable areas.

Measuring the Unmeasurable

• Qualitative Considerations: Some marketing efforts are difficult to measure directly (e.g., brand building, documentaries).
• Intuitive Belief: Base decisions on qualitative factors (e.g., brand alignment) and quantitative proof points (e.g., success of similar initiatives).
• Example: Meta's Netflix documentary about Kimmy Anteneelli and the Mercedes F1 team.
• "If you need a data scientist and a microscope to figure out if your project worked, it didn't work."

Understanding Lag Effects

• Lag Effects: Marketing efforts may have delayed effects, especially for products with long purchase cycles (e.g., cars).
• Strategies:
  1. Understand the Funnel: Track metrics related to awareness, desire, and other funnel stages.
  2. Expect Immediate Effects: Campaigns should also have an immediate impact on those closer to purchase.
  3. Blend Brand and Direct Response: Combine long-term brand building with short-term lead generation.

The Role of Founders and Product Marketing

• Founder CEOs as Native Marketers: Founders often have a natural understanding of marketing.
• Product Marketing: Focuses on launching products effectively, gathering insights from the field, and aligning product features with consumer expectations.
• Brand Marketing: Focuses on building brand awareness, creating compelling creative, and working with agencies.

The Future of AI in Marketing

• AI as a Revolution: AI will fundamentally change marketing, similar to the impact of the internet and mobile.
• Agencies' Role: Agencies will still be necessary to help enterprises adopt and use AI effectively.
• Data Differentiation: Data will be a key differentiator. Expert data will yield expert results.
• Human Element: Even with AI, human creativity and emotional connection will remain important.
• Bots Marketing to Bots: The future may involve bots making functional decisions, but human beings will still make emotional choices based on brand association.

Key Quotes

• Alex Schultz: "All marketing can perform. Sorry. The vast majority of marketing does not perform."
• Alex Schultz: "Tools evolve, but principles are timeless."
• Alex Schultz: "Incremental results are everything."
• Alex Schultz: "If you need a data scientist and a microscope to figure out if your project worked, it didn't work."
• Alex Schultz: "Brevity, clarity, and alignment" (regarding the marketing brief).

Conclusion

The conversation emphasizes the need to move beyond the outdated "performance marketing" label and embrace a holistic approach that integrates brand building, data-driven insights, and creative excellence. While AI will undoubtedly transform the marketing landscape, the fundamental principles of understanding consumer behavior, crafting compelling messages, and measuring impact will remain essential. The key is to leverage AI as a tool to enhance, not replace, human creativity and strategic thinking.