Podcast Summary

This interview with Abe Caspo, CEO of Verasoni and author of "Irresponsible Digital: How to Survive Marketing's Existential Crisis," explores fundamental problems with current digital marketing practices and offers solutions for more responsible marketing approaches.

 

Key Points

  • Marketing should be multi-channel, not single-channel: Marketing "is not a single-channel endeavour" regardless of what you're marketing - whether a pizzeria, college, or hospital - and focusing only on digital does businesses "a disservice" [2:10].
  • Engagement rates are extremely low: Organic Facebook post engagement rates are approximately 0.02%, meaning "less than a quarter of a person would possibly engage" even with 1,000 relevant followers [5:47].
  • Fake accounts undermine advertising effectiveness: Facebook purges "about a billion fake accounts a quarter," raising questions about who businesses are actually advertising to [6:12].
  • Bots create fake traffic and impressions: Automated bots create websites that mimic real users, generating false reports to advertisers about people who don't actually exist [6:35].
  • Traditional marketing channels still work effectively: "Television doesn't work, but it does. Direct mail doesn't work, but it does. Events don't work because they're too hard to put together, but it does" [10:23].
  • Businesses should focus on fundamentals first: The solution is to "go back to the product, the service and the brand position and figure out where your sales come from" before determining where digital fits [15:56].
  • Key metrics remain unchanged: The important measurements are still "repeat purchase referral rates and customer lifetime value" - fundamental business metrics taught decades ago [17:23].
  • Strategy should drive tactics, not the reverse: Rather than chasing algorithms, businesses should take a strategic approach, conducting annual "therapy sessions" to review data, campaigns, and products to determine messaging, brand, and channel needs [18:27].

 

Solutions and Best Practices

Return to Fundamentals
Businesses should "go back to the product, the service and the brand position and figure out where your sales come from" [15:56]. Focus on traditional metrics like "repeat purchase referral rates and customer lifetime value" [17:23] rather than chasing new technologies.

Strategic Approach Over Tactical Execution
Work "from the brand forward, work from the brand or the customer backwards, and then figure out where digital or anything else fits" [16:17]. Treat marketing channels like "a mutual fund" with diversified investment.

 

Podcast Transcript

Transcripts are auto-generated.

 

Kiran Kapur (00:01):
Hello and welcome. This week we are in the world of digital marketing, and I'm delighted to welcome Abe Caspo, CEO of Verasoni.

Abe Kasbo (00:09):
It's sort of like business is funding this sort of fake commerce, and what gets hyped are the successes, never the failures. Never the failures.

Kiran Kapur (00:22):
A fair to say a critique of the way that we do digital marketing at the moment. His book, Irresponsible Digital: How to Survive Marketing's Existential Crisis, is available in a number of places, but it's a really interesting read. Abe, let's start with why you think there are problems with digital marketing.

Abe Kasbo (00:42):
First of all, thank you for having me on the show. This is great. I'm excited to be here. Look, and I think digital marketing is just framing it as digital marketing, I think it's a problem. Because digital is a way of marketing and it's really one way of marketing. But what it has done over the years since, probably about 2006 when Facebook came on the scene, is it just sucked the life out of everything else. Because the perception is that it is easy to do digital marketing. It will provide you with metrics. It will do all kinds of things, including cleaning your house.

Kiran Kapur (01:28):
Oh, if only.

Abe Kasbo (01:31):
Right. Exactly. And to a certain extent, it democratised marketing. But by democratising marketing, it has also diluted it to sort of the lowest common denominator, and really has made folks think about it from just strictly a digital perspective.

(01:54):
And marketing is not that. Marketing, whether you're marketing a pizzeria, a college, here in the States, a hospital. I know that's an anathema to some of your listeners, including all of the UK, and Europe and everywhere else around the world. But here in the US, we do spend a lot of money on healthcare marketing. Whatever it is that you're marketing, it's not a single-channel endeavour. It just is not. And so by spending so much time thinking about digital marketing and digital marketing only, businesses actually do themselves a disservice. And regardless of the size of the business, we could be talking about IBM, or we could be talking about the local merchant on Main Street here in Mendham, New Jersey.

Kiran Kapur (02:41):
So why do you think that's such a problem?

Abe Kasbo (02:45):
One, there's fraud involved in digital marketing.

Kiran Kapur (02:49):
That's a big claim.

Abe Kasbo (02:50):
Well, lots of it. I mean, I'm only the mouthpiece, but all you have to do is just Google digital fraud. The amount of fraud within the space is palpable. And I talk about it in my book. Let me give you an example. Maybe about three, four years ago, and this is in the book, the Chief Marketing Officer of Uber went to the board and said, "Folks, I'd like to report that I lost about a hundred million dollars in digital advertising." Now, Uber doesn't have a store. Uber is a digital product. Uber is a digital-only product. Uber is supposed to be the creme de la creme of digital businesses. And that will lead me to think that it's Chief Marketing Officer by default ought to know what he or she is doing. In this case, it happens to be he.

(03:46):
And when they asked him, "How did you lose this? " The response is, "I don't know. " So my question to everybody in the space, including all of the agencies and certainly people like us, is that if the guy at Google didn't know what he was doing and lost $100 million, what do you think I know? And what do you think you know?

(04:12):
So that's just one example out of many. We're talking about billions and billions of dollars. If you follow, there's a bunch of ... Analytics here in the States is a firm that actually follows this, and publishes reports on the fraud. And it's interesting because you're looking at people like TikTok, you're looking at people like, again, digital only players who seem to be getting ripped off online.

Kiran Kapur (04:45):
And when you're using the phrase being ripped off, is that because they don't really understand what they're spending, or they don't understand what they're supposed to be getting back on it? Why do you think it's a ripoff?

Abe Kasbo (04:57):
There's a lot of nuances in the space and let's break it down into organic and because of time, I'm going to give you two examples. What do you think, and I'm asking you, Kiran, I'm going to put you on the spot.

Kiran Kapur (05:11):
Oh, dear.

Abe Kasbo (05:11):
If I was on stage or if I was in a room, I would ask the same questions. What do you think the average engagement rate for an organic Facebook post is? And let's define what an engagement is on Facebook. Let's define it as a like, or let's define it as you mousing over or something like that. What do you think or making a comment? What do you think that is?

Kiran Kapur (05:37):
I would guess based on my own behaviour, it's incredibly low because even if I've noticed a post, I'm very unlikely to do anything with it.

Abe Kasbo (05:45):
Right. Give me a number.

Kiran Kapur (05:46):
2%.

Abe Kasbo (05:47):
Okay. It's like 0.02%. 0.02%. And I'm really horrible at math, but let's say you are able to bring a thousand relevant people to your Facebook page and we all know how hard that is.

(06:04):
And you were to post something, that means less than a quarter of a person would possibly engage in that. So what are we doing? So that's on one side. I hope that kind of illustrates the activity versus proactivity. So that's one. And also two, Facebook will tell you that they purge about a billion fake accounts a quarter. So if that's the case, I'm a business, who am I posting to who's actually looking at my ads? Relevancy is a big deal. So that's one. On the Google side of the house, there are bots that run around making websites and because advertising in that space on Google happens through quote unquote programmatic, well, if these websites are mimicking a middle-aged person in South Carolina or in the south of France, then those reports are going back to the advertiser saying that this person saw that. And meanwhile, it's not a person.

(07:09):
That's just sort of like scratching the surface on all of this. Having said that, Uber advertises on television. There are three billboards outside the Lincoln Tunnel for them here in New York. So the idea that advertising, marketing, it's already sort of fraught with risk.

(07:30):
Because you're dealing with human behaviour. And so selling it as the digital stuff is the nirvana of marketing when it is fraught with danger, and I gave you two or three examples, is I think we need to kind of take a step back as business owners, as marketers or business leaders and say, "All right, what's happening here? Are we doing this responsibly?"

Kiran Kapur (07:58):
And is that also a question of thinking, "Are we doing it for the right reasons?" There's been quite a lot recently about media platforms produce metrics that are maybe more useful for them than they are for the advertiser.

Abe Kasbo (08:11):
Clickbaiting and chasing clicks is an age old, even though the business has only been around since about 2000, right? It's not that old, but it's an old story in the business. Absolutely.

Kiran Kapur (08:27):
And I have to say, I mean, you have some wonderful phrases in the book. I loved your suggestion that we as marketers, get obsessed with social media virility and we end up with this sort of fever dream. And you actually said that it's not just digital marketing, it's where we also are with AI at the moment.

Abe Kasbo (08:48):
I was onboarding a new client last Friday, and these folks are just, they have a great company. They've built a great company. The issue is their brand, right? The issue is their brand. And the first question I got when we sat down was, what are we doing about AI?

(09:11):
You have a brand issue, and AI has already sucked up all this stuff just much like social did and does. AI right now is doing the same thing. And I think I said it in the book and not that my opinion or my experience is, but I took maybe a good two years to really try to understand what's happening with social before we invested for our clients, which I mean, there was a sense of frustration around that, but I don't want to spend my client's money, unless I know how to spend their money. I think we're at that moment here too with AI, because I mean, you're seeing, there was just a report where, and it's a pretty substantial company where the AI actually went rogue, and then it wouldn't allow the company to delete it or stop it. I mean, there's some crazy thing, but this was a headline last week, and I saved it.

(10:18):
I'm going to get to it sometime this week, but there's still a lot that we don't know. And meanwhile, they tell you that television doesn't work, but it does. They tell you that direct mail doesn't work, but it does. They tell you that events don't work because they're too hard to put together, but it does. But isn't work supposed to be about work?

(10:38):
Like work, right? That's why it's called work.

Kiran Kapur (10:44):
It's a very, very good point. And we do tend to go, "Oh, well, we won't use, I don't know, billboards or TV or radio because we can't measure the output, but we can measure what happens with social media."

Abe Kasbo (10:57):
Absolutely. And I mean, yes, just because you have a dashboard that provides you with analytics doesn't mean you're ... I mean, yes, you're measuring something. And yes, you can track sales that way. It is easier. But the amount of throughput that each business, and each business is unique, and each business's experience, even by industry, by store, by product, is unique, and it can change from quarter to quarter, it could change from month to month. And I think what some of the clickocracy that I complain about in the book, they're selling formulas. And I have not been to a conference where a clickocrat on stage is showing all of this wonderful work. They'll tell you what to do, but they never tell you how to do it. Tell me how to do it. I mean, I'm still trying to figure it out. And I do talk about being humble in this thing because this space really humbles you.

(12:04):
I mean, I don't believe half of my BS, half the time. You sort of have to split yourself and say, "Are you sure you want to do this and why?" Right?

Kiran Kapur (12:16):
You also have a lovely phrase in the book about scrambling to plant flags on algorithmic quicksand, which I think is exactly summing that up, isn't it? I love the fact you're shaking your head at me.

Abe Kasbo (12:28):
Yeah. And I want to give some credit to my editor, Diana, who sort of helped me come up with these things because it's so true. I mean, where does AI learn all of this stuff? It learns it from right at this point, public information. And so it's sort of simplifying things back at you, but is it like, do I really have to be proud that AI is writing my press release? I mean, in all seriousness, what is it that we're doing? Now, I understand on the operations side, it may be simplifying operations, but from a marketing perspective, I've listened to AI calls.

(13:16):
I have no idea why these people are in business. I mean, yes, I'm pretty sure the product's going to get better, but people are buying AI things to answer phones. It talks over you, it's robotic, and I've tested three or four of these things. We're not there yet. I don't want my clients to be guinea pigs. So we will invest for our clients when AI is ready, and when we are not on that quicksand situation. I want to be on firm grounds. I want to be responsible with the dollars, and what am I missing? Seriously, what am I missing? I'm not really missing much right now.

Kiran Kapur (13:57):
It's interesting, isn't it? Because we do have this view. We had it when digital marketing first came in. We definitely got it now. And you describe it as a dopamine of disruption. We've just got used to the idea that everything's got to be new and shiny all the time.

Abe Kasbo (14:12):
Yeah. I mean, how about just closing a sale? That would be new and shiny. What do we do with leads? How do we make people feel about us as a business? I talk a little bit about pet rock here in the States, and I don't know how it was received in Europe, if it was in Europe. But in the 80s, some guy went around picking up rocks, put them in a box, and they sold them to people, made millions.

(14:42):
They bought a story, they bought a feeling. They weren't buying rocks. Toshiba had the iPad way before Apple did. They weren't good storytellers. And now you could tell the story online. Now you could tell the story through digital. And so then what's the quality of the story? So we rush to post, we rush to do all the stuff on the digital side. Are we just pushing stuff out to push out or what's the quality? And digital requires speed, right? What's the saying? You can have it quick, you can have it good, you can have it cheap, but you can't have all three. And the other thing is that luck is, I don't want to say this, but luck has a lot to do with all of this. The right timing, the right algorithm, the right ... And I want to be more certain in the way that we do things.

(15:38):
I don't want to rely on luck.

Kiran Kapur (15:40):
That's very fair. So we've sort of talked about some of the problems, and we've talked about why we've got some sort of existential crisis, but what should marketers do? So I'm listening to this, and I'm thinking, "Yep, you're absolutely right, Abe. I need to go and do something. What do I do? What's positive that I can do? "

Abe Kasbo (15:56):
Well, what's positive is go back to the product, the service and the brand position and figure out where your sales come from, really, truly come from and fix what needs to be fixing. So like the example I gave you before with this new client, AI is not the issue. AI right now is a distraction. The brand is the issue. They've built a wonderful business, but we've got to fix the brand. Work from the brand forward, work from the brand or the customer backwards, and then figure out where digital or anything else fits into all of this. Because all of these issues, I think are experienced by all of us in business. However, every business is unique. Coca-Cola will go to market with a particular campaign, and it will work. If Pepsi tried to do the same thing, it may not work and vice versa. If you go back to the product, if you go back to the brand, how do people feel about you?

(17:00):
Then figure out what the channels are. Then what you could do, it's much like a mutual fund. Say, "Okay, we're going to invest here. We're going to invest here. We're going to invest here. We're going to figure out what works for now." And that's how you sort of get off of the digital crack, that we all need to go into rehab about.

Kiran Kapur (17:23):
I loved the fact that in the book you talked about the key things being repeat purchase referral rates and customer lifetime value, which was just wonderful. And I was being taught that at business school 30 or whatever it was years ago. Yeah.

Abe Kasbo (17:36):
I mean, I think innovation today has a lot to do with execution and less to do with technology. Technology, digital, these billboards, whatever it is that we're talking about, there's simply tools of building a relationship with your market, with the person who's going to buy your ideas, your services or your products. And so then, what does that look like? And that literally is different for every business. And when we start an engagement, we go in, we sit down, we just close our mouths, we just shut up and let our clients talk, and we take a lot of notes. And then from there, we build a plan together. And I think that this sort of therapy that I call it, it's once a year folks should just go into a room, get a whiteboard, and go through that therapy session. And people do it in these management meetings, which is great, but I recommend it being less formal.

(18:51):
Bring in the data, bring in your campaigns, bring in your products, and review what happened last year, look at what's happening this year, where do you want to go? And then is it the messaging? Is it the brand? Is it the channels? I don't know, but all of those have to be on the table.

Kiran Kapur (19:08):
That's interesting. So you really are looking at sort of strategic. It's taking a step out and looking at the strategy rather than getting caught up in the digital quicksand or the constant algorithm chasing.

Abe Kasbo (19:19):
I don't want to chase anything. That's exactly right. And it's funny that you said that because a couple of weeks ago we were talking about chasing at a conference here. No, I don't think that businesses should chase this stuff. And here, I'm going to give you another example, which is in the book, but I stopped the presses on the book when I heard Mark Zuckerberg say this.

Mark Zukerberg Audio Quote (19:41):
There's the stat that I always think is crazy. The average American I think has, I think it's fewer than three friends and the average person has demand for meaningfully more. I think it's like 15 friends or something. I guess there's probably some point where you're like, "All right, I'm just too busy. I can't deal with more people. " But the average person wants more connectivity connection than they have.

Abe Kasbo (20:01):
So we're going to create digital friends. Now, knowing what we just said, so they're going to create ... So that would be 12 more friends than I would like actually, human or digital at this point, right? But just think about what he just said, and if he was serious and people were applauding this. So this is a company that tells us they purge a billion accounts, fake accounts a quarter, which means that if we're spending money in that space right now, potentially highly likely that there's interaction with some fake accounts. But now they're going to create more fake accounts to interact with real people, that businesses really have to pay for because you and I on Facebook, we use it, we are the product.

(20:53):
It's sort of like businesses funding this sort of fake commerce and what gets hyped are the successes, never the failures, never the failures. And I will tell you that me, as somebody who's been doing this for a long time and people might just say, "Hey, you just suck at it. " Fine, we don't. I don't care about your opinion. We have data, but people do say that to me all the time. You really have to take a step back and look at the larger view of where your customers come from, how you're treating them, what the product is, and digital is part of all of this, but to what extent?

Kiran Kapur (21:39):
You're right, but it's so important to think about your customers as yes, you can segment customers, but you do have to think that you can't just say, "I've actually heard somebody said this to me last week. Oh, we're targeting Gen Z. They are all like this. " No, not of all Gen Z are on TikTok. They don't all do the same thing.

Abe Kasbo (22:00):
And I actually addressed that in here as well. So Gen Z, as you said, Gen Z here in the States,

(22:10):
The greatest generation. I don't care who these people are. I do not care about the category. They're categorised for marketers. They're categorised to create a story to make things easier. What I care about are customer profiles, right? Who's our customer? And if they happen to be a certain segment within what people are calling now Gen Z or Gen X or whatever, I don't care. What I care about is, are these folks in my market, are they likely to buy my product? Are they likely to be my customer? Are they my customer? How do I keep them? And then how do I keep them and make them happy? So I don't have to spend a lot of money on all this other BS, and my customer acquisition investment is lower, thus the lifetime value of the customer.

Kiran Kapur (23:08):
You're right. And again, we can get very caught up on all sorts of ways of describing things and what have you, but ultimately it's a person with a pain point that's going to buy your product.

Abe Kasbo (23:16):
100%. 100%. And the messaging side of the house, the creative side of the house, I think suffers a lot with digital because it's incompatible with speed. I made an observation of my wife the day. I'm like, I could tell this series is in season four. The writing gets tired. I know the writers get tired around season three, season four. And then something happens, and then if there's three or four more seasons, but around season three, season four, just my personal observation of any of these series, people get tired. Now we have to do this every minute of every day. And look, it is cheap, right? Not everybody can be on TV, but let's look at direct mailpiece. We have these magazines around here. With the right creative, I can get out to 10,000 people for $500 a month. I don't need to do my own direct mailpiece.

(24:17):
And I could do that over time over the next ... And now I've got a $6,000 investment in a direct mailpiece within that magazine, but it can't be crappy creative.

Kiran Kapur (24:29):
And I mean, I don't know what the magazine readership is in the States, but certainly in the UK, if you are reading a magazine, you've usually chosen to do so. So it's either a membership magazine, in which case you've paid a membership, so you're saying that you're interested in something or indicating that you are, or it's a magazine you've picked up off a newsstand. But again, you've chosen to do that. So you're spending your own hard-earned money on something that interests you.

Abe Kasbo (24:55):
Correct. That's right. And so I think what we do is harder for us. I think it's harder. And I'm choosing that word because it is so much easier to do it the other way. And it is so much easier to say, here's our dashboard. But offline stuff today can be tracked. We could track offline stuff. We couldn't do that let's say 10 years ago, and we should track it.

Kiran Kapur (25:21):
I think I'm going to let you talk a little bit about what Verasoni does, because you've said several times very charmingly, that maybe this isn't an area you know a lot about, but hugely, clearly you know you're a huge expert in this area. So what does Verasoni do?

Abe Kasbo (25:35):
So what does Verasoni do? I don't know what we do actually.

Kiran Kapur (25:43):
Do you know, sometimes as the CEO, I feel like that. So yes, that's very reassuring.

Abe Kasbo (25:48):
This is like the interview question. I'm like, where do you see yourself in five years? I have no idea. But ultimately, I think what we do, in fact, I know what we do. What we do, is we help, one, we help businesses make sense out of all of this. That's number one. But two, I tell our clients to think of us as sort of like a McKinsey and Sachi and Sachi together, obviously not on that scale. Where we come in, and we look at the business side of the house first, and it really is business, and then we look at the operations because the op side, and I don't care how big you are or how small you are, some of these things have to work together, especially today when you're dealing with intricate CRMs. It's a business approach, marketing as a tool. And then how do we implement campaigns to help folks achieve whatever it is they want to achieve, whether it's increased sales, turn a product around in terms of perception, brand issues, or sell companies.

Kiran Kapur (27:00):
I noticed that's very much focused on the customer and what the customer is looking for, your client in this case, and what they're looking for. It's not imposing any sort of algorithm or metric or anything else on them.

Abe Kasbo (27:11):
Right, because everybody, and it's cliche, but everybody's problem, it really is unique. And we take that time to sit with our clients. And we also work in real time, meaning that we don't have an agency model. Our model is when you hire us, you have access to an entire team working in real time. Stuff has to move in real time.

Kiran Kapur (27:36):
Abe Caspo of CEO Verasoni and author of Irresponsibly Digital, How to Survive Marketing's Existential Crisis. Thank you so much for your time. I've really enjoyed your insights, and the idea of planting flags on an algorithmic quicksand is becoming one of my screensavers. I think that's just a fabulous phrase.

Abe Kasbo (27:55):
Oh, that's brilliant. Thank you so much. This was a lot of fun, and thanks again.