BeanCast 517: The Truth About Social Video
Date: 24-Oct-2018
Input sound file: 0517_The_BeanCast_Marketing_Podcast_The_Truth_About_Social_Video
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This episode of the bean cast is brought to you by linked in. When you advertise on linked in you can build lasting relationships with customers that often translate to high quality leads website traffic and higher brand awareness for our free 100 dollar linked in ad credit. Go to linked in.com/being cast, terms and conditions apply. Bandwidth provided by recruits of squirrel. Interactive transcription services provided by transcribing.com. Visit them on the web at transcribe
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me.com/being cast for up to 25 percent off. That's transcribe me.com. Episode 500 17 the truth about social video. For
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Monday, October 20 second 2018 it's time for this week's edition of the being cast per week weekly discussion about the news and issues. Facing marketers today? I'm your host Bob north. Thanks for joining us a few short years ago, both publishers and advertisers went all in on video only to
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experience less-than-stellar results. Now, we find that much of the viewership predictions were based on faulty data. How could this have happened tonight? We'll discuss also understanding I p g's purchase of axiom. Whether membership is the new subscription model packing voice for better results. Plus this week's at fell 5. That's the lineup. Lets me tonight panel.
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Thanks for joining us for this week's being cast. I'm Bob north. And with me on the panel for this evening. We start with creative director a campfire, Mr. nicb Rajya, Nick. Hi, how are you? Great bad really thrilled to be back things for having me on my pleasure now next up. We have the senior senior director and analyst for customer experience at Gartner, Mr. Augie Ray, I always love having you on the program Augie. I think it's because I love saying your name
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[laughter]. Also, I like to say provocative in silly thing. So strive to do so this evening. Fantastic. And finally, we welcome a new guests to the program the global executive vice president of business intelligence at derise DeVries global, Mr. Kobe Kobe vote. Thank you. I'm thrilled to be a on for the first time and look forward to the conversation. Yeah. Absolutely. I managed to stumble through your name. Let me say it. 1 more time Colby
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vote were excited to have you on the program. Well, let me just jump right into the into the topics because we have a lot to cover, and I stop a group of small advertisers who are suing Facebook are exposing a giant problem that may have led both publishers and advertisers monumentally astray over the last few years. Now, this is some backstory, so let me go through this back in 2016. Facebook was so bullish about the video viewership
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numbers that they claim that within 5 years text views would represent only a small fraction of user activity on the platform that would be dominated by video views. Now, both advertisers and publishers took this to heart radically adjusting, their head counts and resources to accommodate the coming wave that just never seemed to materialize. And now we find out that Facebook's numbers were ruinously inflated by as much as 60 to 80 percent. And that they knew it knew it
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knew about it. But said nothing about it to their advertisers and publishing partners shocked. I in shocked [laughter] now, obviously, obviously, Nick the results of all this have been disastrous for everyone involved, but is online video still the future of social interaction. I mean, do we have to view this in a negative light entirely? What your thoughts on that is videos? Still the wave of the future
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is just not gonna come as soon as we thought it was gonna come. I think it's always going to be part of the wave. But it's it's just a it's just a format, right? And social socials protein is from my point of view is sharing sharing as it makes all online social interactions happen. And the fact is that it takes more time to watch in more resources to create and scale video, and that's not going to change as
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long as people are kind of finding the reasons and the desire to share to share content that gonna wanna do that quickly. They're gonna wanna do that and shorthand and Texan image assets are always going to have a benefit there. There certainly been. You know successive video. There's bud buzzfeed's tasty. There's an entire platform called twitch videos, not going anywhere. But it's it's just a format. I think that the notion of pivot to video was was fiction having advertisers
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liked it because it skips ad blockers in gets impressions that are easier to count. But I think it it's it if if you're thinking. That 1 formats going to take over social media Uruguay people share which we can tie back to what you know. Henry Jenkins Sam forge Josh talk about and spreadable media the Sheffer status. This shared a show collective identities sort of hashtags like me too, and they share to strengthen a personal bond. That's what that's what is the life blood of of social
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interactions online now play. But I I have to caveat this because it's like, I I. I believe the video is easier and easier to to share than it ever has been before. But really the lifeboat blood of social. Is the people looking at the video or looking at the text messages are looking at the the content that is provided and it's all about the viewers. It's not about the sharers. So if it's about the
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viewers. You know, what that that's where the weak Lincoln video is occurred because people are still looking at text messages as much as they're looking at video content, probably more so in they're more interested in interacting in a tech space, fashions so. I'm just wondering from a social standpoint is video the future and Augier can sense you chomping at the bit. So [laughter] video maybe easier and easier to produce, but it's not easier and
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easier to consume. It takes time you need to have your headset on you know, you see people who are checking it at work checking social at work or walking down the street, which maybe they should do video takes more of the users resources. And when the content is something that only video can produce. You'll certainly something that's motion all the action of sports that sort of thing than people want to consume that. But the very idea that people are going to give up the inherent
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scanned ability. The thing that makes social so addicting. To sit and watch, you know, minute after minute of friends gathering instead of being able to skin scan tack text is ridiculous. And the thing that really kind of annoys me about the selection, you can tell I'm a little annoyed is. Brands and marketers keep complaining that Facebook is leading them astray. And at the very time they were list at the very time. They were hearing Facebook say that video was the future was exactly the same time
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when advertisers were complaining that Facebook had led them astray about organic reach of the power of fans. And so on the 1 hand, it's like the complained that Facebook lied to us, and we invested in all these fan strategies. And now he can't reach him. But all look they say everything's gonna be video. We should just be led around by our nose with fomo because they want to make money off of us. That's you know, that's on brands. It was ridiculous assertion. And I think anyone who understands how Facebook or
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Twitter or any of the social networks work would never have thought that 95 percent of the interactions gonna be video. It's it's just silly. Kobi? What do you suspect? The main motivations were for this. This move by Facebook to be so bullish about video at the time. Was it in a purely the they made a mistake or were they actively trying to create some kind of deception so that people would feel
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comfortable again with the platform like Augie seems to be suggesting. Well, Bob, I wish I was behind those doors to give you that answer. I'm art to not accuse anyone of misleading intentionally Donald they're going to weigh in on that part of it. But I will chime in just briefly on on what I think the power of video is, and I think the role of video into the future. I think of course, you know, the fact that this news was potentially not potentially was misleading is obviously a problem for
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a lot of brands. But what I will tell you. In my world in an communications and p r you know brands are trying on on an everyday basis to get at the hearts of its consumers and the way to do that is obviously to connect their culture and to appeal on an emotional level. And I think video actually does represent the best way to connect with consumers and to create that appeal, I think, you know, the question about consuming media is certainly a relevant. I think we're seeing more and more
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videos that have the captioning available to that makes it easier to consume whether it's on a train or at work, or whatever it may be. So I actually am still pretty bullish on the impact of video in the future. And I'll leave the intentional misleading or or accidental up to someone else to make that call. Fair enough coming come back to you there, Nick. I mean about this subject. I mean, what's your take on the whole thing about Facebook
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being potentially leading people astray as opposed to just making mistake because it seems like a legitimate legitimate argument on their part that the data was just wrong and the data's to show them something that they weren't really expecting at my feeling with an organization that big that is still that young. Is there a cut? I I tend to believe it that it's at least possible that maybe the left hand. Didn't know what the right hand was doing to some
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extent in also remember that it was a year ago a little over your gun Q 3 20 17 that they launched watch which I don't know. I don't I don't know if it's has attraction that they they thought it would. But I I believe that they probably thought that they had good data. We're through makes sense. I mean, it's it's like growing your when you're talking about the situation with Facebook coming. It's you know, they.
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They have some amazing data. But they also have some amazing challenges going on the platform, especially given their algorithm and trying to serve up the right content to the right people. Of course, it showed them that people were interested in a new shiny object. But maybe not as much as they thought it was Augie getting back to the whole thing about tax versus video. You know, when you're when you're trying to create an interaction with someone on a social
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platform. Video captures a lot of attention right off the bat because it's is it is shiny. It is kinda movement. It is exciting. But when it comes to an actual interaction. It's all about the tax. It's all about the actual content right down to the fact that a lot of the videos that are displayed show a lot of tax. So that you can watch it with the sound off like Colby mentioning. So. It seems to me from a strategic standpoint that we really need to double down on the
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textual portion of our contact with our consumers whether were publisher or whether were an advertiser as opposed to just being entirely focused on video or maybe using video to get that interaction of text based communication. Well, I mean, maybe we could just be mature about this as well. And just say that video has its place tax as its place audio has its place. 1 of my concerns over the last 10 or 15 years digital is just all the band wagons.
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And you don't have to wait too long for somebody jump up and say podcasts are the future. Well, podcasts are great as we know since we're on 1. But the idea the podcasts are going to push video on the way seems pretty unusual text is the future videos. The future audio was the future. It's all the future. And so smart brands are going to have a strategy to make sure that they are appealing to the right people in the right way. But that doesn't mean that video is going to rise. I just.
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Anyone who spends anytime on Facebook? And I understand that lots of people have given it up or at least some people have. But it's cannibal and you scan down it. Now, imagine if everything you scan down on your phone, you've gotta stop and watch. And if your friends you've got to turn on the audio because they're not gonna have subtext. And even if they do have the text on the video d really wanna sit for 2 or 3 minutes or do you want to scan? And so I don't mean to be a dead horse. It's just that. We've got to stop jumping on bandwagon. We have to stop saying that
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this is the new thing, and it's going to change everything us social media was not free advertising. And so we have to realize that people. Tended to try to avoid interacting with brands. They skipped ads. They listen to you know, an subscribed to audio. So that they don't have to have advertising on Spotify. They weren't gonna welcome it at Facebook. And you know, the reality was all of the people who preached that. This was going to be new free advertising were wrong. And it's just the same thing with video
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this idea that everyone's going to give up text. We just need to be more mature than stop looking for things that are going to be the easy 1 answer that are going to give us direction because marketing is difficult. It means understanding your audience in in a fractured world with lots of channels. It means having to deploy content in all sorts of different ways. It's you know, sheriff's preaching to the choir to everyone who listens now. But I think any advertiser who believed this was both
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buying a dream and doing themselves a disservice. But let me play devil's advocate for a second about the scan ability because when you're scanning through social feed, it's the analogy is scanning through channels on a television. So you wanna have something that catches the eye and gets people engaged with the content. And even if you're not using video you're scanning through looking at the pictures, and they're stopping at the pictures that interest you you're stopping at the video that interest. You
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you're stopping at the the big colorful text message that. You know, says something that catches your eye and. If if if it's all about trying to stop the scan and get someone into the content. Doesn't that make a stronger argument for doubling down on video over time as a great way to get attention as opposed to assuming that everybody's gonna you know, interact with your content directly as opposed to just stopping.
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Interacting because it was kind of catching your eye. So follow the 7 or 800 brands in your life decided to start throwing video at you. Would that make you stop and pay more attention? They already do that's exactly the model of reaching for the attention foot. That's why would react fast things that say promoted. I mean, look at the average brands YouTube channel, I mean how much engagement to brands get. I mean, some teenager can get more engagement on YouTube probably on average does get more engagement in YouTube
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than most brands, and so all I'm saying is video has a place. But no, I don't think that the world's gonna be all video based we have to be smart and get the right content in the right ways, we have to be multi channel multi content. It's hard work. But it's worth it. You know, when I'm looking at taking to hardwood. But argued argued said, you know, about the fact that you know, videos is not where used double down in that advertisers of always been attracted
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to the new shiny object in they constantly go Alwin when they should be looking a little bit more critically at the situation. I mean, what does this say about the situation with advertisers and publishers themselves, I mean, are are are we just being led astray or what's driving the intentional me know, ignorance that goes on within choice making about which kind of type of media gonna play when you're using social interactions. Yeah. I I
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think the points made by Augie were were spot on. I think you know, it's not that there's a particular medium that needs to be lead or go away. But you know, I think I'll just add to a little bit of context that you know, I think that the core point is that the content that you're creating has to resonate with your audience. So that's the first thing. Right. So whether the video former tax form, or whatever form it may be I think that's the first challenge that exists. I think the second thing
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is, you know, I I think you know, you guys mentioned this notion of a sponsored content is score. I buy it. I think that's where we're seeing the rise of influencers today. Because now it's incredibly important that you live with the message through someone that is deemed, trustworthy, or credible. And so if I see a piece of video content from a brand that I may like her baby don't like I may be more apt to look right past it. Conversely, if I see an influence or an individual that I saw I really like how this person
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thanks or this person's a thought leader, whatever it may be I'm much more apt to probably engage with that piece of content. So again, I think whether it's video or something else isn't quite as important. I'm still a believer. The video gives brands the ability to really communicate the essence of who they are as a brand and what they stand for. And I think the way that you still catch people's attention is probably through getting the right people to to spread share that message versus just always coming from a brand. Whoa. I could talk about this forever. Because I love this
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particular subject talking about social networking make for a very long podcast do would make for a very long. How are you going to move on? And I want to talk next about IP. Jeez. Purchase of axiom. And what that potentially means for the holding companies out there as far as what they're going to be doing in the next few years in terms of their acquisition strategies. We're going to get to that in just a minute. But first I want to talk about our sponsor. Linked in look when it when it comes to marketing your business. It's all
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their support of this program. Well, this was a big week for data news with the acquisition of axiom by holding company. I p g so Colby watch strategic value. Does I p g get from purchasing? What is essentially a list venture a vendor? And what is this move pretend for the future of the ad industry? As a whole. What's your take on this move? I know you can't speak a whole lot. But tell me what your thoughts are happy to. So as
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you mentioned up front. I work at defrays, which is at I p g agency happy to discuss what's. Publicly available and Ben shared. You know, I think you know, from my perspective, it it gives. I p g a really distinct advantage because you know, basically what I p PG's had to do in the past is really basically rent data and the challenges with that. Are you know, 2 fold number 1 with a a great deal of attention being placed on GDP, our and other
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privacy standards. You're you're more risk when you don't actually when you're not the owner of the data because you can't necessarily guarantee the integrity of that data. So that changes the game right there. Because of the fact that you've got the data integrity. You know, there's a number of different vendors out there who may be acquiring data in ways that are not ethical, and you may not know that so it number 1 takes away, some liability. I think the other main point that's come out of this is the fact that I p g has publicly stated that they had to turn away
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business. Not only from a data perspective. But also just from a a core amount of analysts that are needed. And so with this acquisition. It's not only does buying the data. But it's also buying access to a number of analysts that can provide some services for clients though. It hasn't been able to provide in the past. So, you know, frankly, beyond is from from my view a competitive advantage of having its owned data source, but it's also the ability to answer some of those complicated questions that clients have been
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asking at an IP g level. Augie do do what do you? What's your thoughts on this particular for to give a story because? I mean axiom is everything that Koby says I mean, he gives you an advantage in an unmatched advantage in terms of cleanliness of data. Different types of lists of. Potential targets to be after the analysts to support it. I mean, it gives you all the tools you need to be a
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data leader. But there are holding company that's based on churning out advertising. Essentially, I mean, and it's like managing the message portion of the show about that. I mean, I just think of all the times that I've been on and we've discussed in you've discussed with others in other weeks that the agency model has to change it has to become more like consulting organization. It can't just thrive on the advertising alone. And I think this gives I p g a chance to do that. It's not just the data that they have the
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anonymize date on something like 2000000000 or more consumers. You know, it's also the 1600 or more analysts they got. So, you know, they're turning themselves into a data consultancy. And you know, the interesting thing, of course, and everyone knows this. But data is the life blood of marketing, it drives your advertising targeting address personalization it, increasingly drives a I to all that makes sense that the thing that I think is interesting though. Is that a axiom stock took a big hit
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in a recent years in part because Facebook started turning off the spigot of data because of all of the issues that they have with a privacy. And of course, you've got GDP are. And so the thing about having all the state isn't just that it brings value, but it also brings responsibility I feel Spiderman quote coming on here. And you know, I just think that regulation is rising risks arising. So I'm sort of interested to see how this works out.
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I have an agency owning this kind of data capability absolutely makes sense to me. But but there's a big onus here as well. Well, you know, for you brought up the fact of the agency model has to change when we talk about the agency model, meaning the changes usually discussion about whether or not you need to be more like the consultancies, you know, you need to be more of a consultative relationship with the entire C suite, and you need to be focused on the entire business outcomes and
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generating shareholder value when you're buying a data vendor. You're essentially just doubling down on the problem that the agency world has aren't you? I mean, you're basically coming at them. With another vendor relationship as opposed to a consultancy relationship. You're giving them access to the data that they need. But you're in an area. It seems like it's almost a little bit shortsighted, especially considering the fact that it was generated was a
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sell for 4000000000 dollars. Right. I mean, it's the like a my wrong about that. It was is a lot of money that was put on the table for this. So. I mean got well, I I'm disappointed that it got block because I was planning to win the mega bucks lottery. And you know, what's left? You know, the thing is is that this is the way the agency model is worked right? They buy up things. And then they could offer it theoretically for cheaper practically for the same price. But with greater markup and
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margin. You know at the same time, they can integrate more we know that agencies routinely rely on a axiom data. So the question I've got is. If axiom is going to be as interesting to competitors. I would think that it would be anymore. And so will I p g get enough value out of it? But you know, I I can't really comment on it. I think it's a big complex and. Interesting play for I p g who of course, has not been known for its Emini
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over the last several years. But I think it demonstrates the level to which data has become just so essential of 4 for marketing. And for the agency relationship, I I tend to think that this might work out. I mean, all pricing aside. I can't comment on that wouldn't comment on it. But I think that the value of the data and the data knowledge will be great quake. Great for I g p. Speaking of the fact that a lot of companies
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are interested in the date of the side of the story right now this week. We also learned that P and G is pushing for access to more retailer data on the customers that the retail partners of. Kobi what factors are driving this? I mean, why is and G going after the well, I know why they're going after the retail data. They're going after the retail data because they need more data. So that they can target their customers. But what what possible incentive
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would the retailers have for freeing up. This information considering the fact that so many of the brands out there trying to go direct to consumer and trying to augment their data plays. So that they can do. So so obvious hit me with a couple of interesting cases. So not only do I work for I p j, but I but PNG's a big client [laughter]. My on this. You know, I think there's a lot of PNG
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brands that are still a little bit slow to adopt to a direct to consumer purchase. So there are things like dealer at their thing is like moisturizer there. But a lot of personal care items that people still frankly want to go to the store see it. It's it's a low cost purchase. So so today, and certainly it's on the rise. So I don't why don't mean to pretend that you know.com and direct consumers, not still important. But retailer a brick and
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mortar sales are still far and away the huge majority of sales for a lot of PNG Browns. And so I think, you know, that's certainly the the reason why the the interest is there. And I think the interest is there on the retailer side because of course, you know, selling those PNG products are also still very lucrative for the retailer. So I think you know, it's not a surprise to me. And so I'll I'll leave it at that. But I, but that's my primary
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feedback is that that retailers are still playing a huge role for a lot of PNG Brandt's. And Nick leave you out of this conversation entirely a minutes. It's like, no, this is not your forte. But there seems to me just looking on the outside here of this story that there's this can't be an accident that everybody's going after obviously all the companies out there all the agencies have been pursuing more of a data driven approach to advertising over the last few years.
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So that's not the surprise. But the fact that such big stories come out the same week shows me that there's some real movement in the industry. Right. There's something going on that's crystallizing in in making this a reality right now. So any thoughts on that? My instinct is that I think some of it's probably very savvy and smart, and some of it is kind of shortsighted I can't. Speak to the details
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of of the g deal. But I appreciate it. How upfront the brass was in their quotes that with the press. I mean, the fact is that for a big player holding company a strong data position is now table stakes. And when I look at the size of the holding company level RFP's that are flinging around these days, and how crucial they are to who's going to sink and who's going to swim big picture or who gets consumed. It
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just seems to me like I said earlier, it it is it is table stakes. And it's something that I guess I thought that they were missing in previous missed out on previous opportunities. So they're shoring that out, and I can't I certainly couldn't fault an organization for doing that because I know just talking to friends and other agencies. How important some of these winds or will be? Well, we're going to move on. And we're going to talk next about whether membership is becoming the new
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subscription model. Everybody's been talking about subscription being the savior retail. And now membership is coming into play. We'll get to that in just a moment. But first a word from our sponsor, Admiral. After months of strategizing and prepping budgets and looking at how we're going to position ourselves in the market. I didn't have anyone to fall back on. And I remember pulling the lever for all those campaigns biting my nails and just staring at the computer
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boat with all the talk over the last few years about health subscription would be the savior of CPG's should other brands be taking notice of this move. I mean, what what's your thoughts on this move by me undies to go to a membership model? You know? This reminds me of the first topic where we talked about that brands and marketers have to stop thinking. There's a 1 solution. And so 5 years ago. Everyone wanted to be the Uber of their
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category. You know that stopped than the, you know, in recent years, everyone wanted to be the dollar shave of their category and honest to God if you go to Google search for Dollar Shave Club of. You'll get over 20000 hits. And the fact that matter is as that's subscription models are interesting for a very specific. Need? And it isn't that? I want to have 300 different direct commerce relationships with 300 brands for everything
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that's in my kitchen closet and my medicine cabinet. Just doesn't make any sense for that. And so if you go beyond the soda fomo screaming headlines above the growth and success of some of these models, which you find his they're not that successful Dollar Shave Club Birch box and blue apron were all held up as being great examples of the future. Blue apron is struggling its stock is in its all time low Birch box in the last year was reportedly so desperate to find a buyer that they were in a fire sale that some labeled it a
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such and eventually no 1 would buy them, and they took a reinvestment from 1 of their existing investors at a value. That is just a shred of what it once was. Dollarshaveclub is the success because it got bought for 1000000000 dollars, but Unilever paid 333 dollars for each of dollar shave. Club's 3000000 customers. They only pay around 70 dollars a year. They have a churn rate that is 50 percent after 1 year and any of us on this phone, call could probably take a relatively
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good guess what their acquisition cost is. It wouldn't surprise me. If it was his highest 30 or 40 dollars a member. And so the math looks really really bad. I mean, I it it's it's head-scratching to be so. Here's the bottom line that I see as I look at these things. Instead, the reason subscription models have thrived as of most people just don't need them. It's easy enough to go to Jeter, Amazon, see what you bought before. And say, hey, I'm running out of that. I'm going to add that back in that's as much as it takes. It leaves me in control.
00:36:29
I don't end up with more than I want her less than I want is really no reason to do a subscription model, except for 1 thing that here's where I think it gets interesting. It isn't that every C P G brand needs a script subscription model is said subscription models work best when they are promotional when they give people an opportunity to trial things. So people will pay for the opportunity to get a bunch of new products, try them. And then if they choose to continue to buy them than the brand that helped promote him in the first place subscription
00:36:59
company can prophet because they now have gained a new customer. Those are the ways that tends to work best. I have a friend who loves getting up bark box for. Her dog because you know, every month, it's something new and different in every now, and then she finds that her dog loves something, and it becomes part of a regular purchasing. So I just think that once again, this was 1 of those things where everyone said the subscription model is going to save us. And it did it. It didn't just like the remodeled and save everyone just like ecommerce didn't save everyone. You still have
00:37:29
to think about this in a strategic fashion. Is part of the problem. The the the types of products being sold or so low margin to begin with. But you can't really make money on them. Effectively even a retail. It's really difficult for me consumer packaged goods makers to make money on products us in. It's like an eye on things that there's gonna be margin on the people are going to need to replace every so often, I've never I maybe
00:37:59
should admit this on the on the air. But I've never understood a subscription model for underwear. I'm not sure how often you replace yours. But I'm not sure I replace mine with the kind of alacrity that would require me to get a subscription model. Now, the other part of this question is the membership model, and it works out the same way mean do I really need to be a member of my toothbrush company or my favorite cheese company? I guess it depends on what the value. They're giving away as the thing about Amazon with membership that I think is so fascinating about prime is at on paper.
00:38:29
Amazon prime loses money. Amazon does not make enough money from the subscription fees, the charges to compensate it for all of the free shipping or all of the free content. But the reason they do it clearly is that it drives enormous value and driving frequency of purchase an average order value twice 3 times as high co according to many of the the research studies I've seen and so what you see is Amazon is thriving because it takes a very broad view of the value. It gets from it and
00:38:59
consumers thrive because they think they're getting a good deal. So the question is what are all the C P G companies can offer by way of membership. That would be enticing enough for people to join. What are they going to give away? And what are they gonna get in the end? And I'm not sure Macy PG companies have a good equation for that. Yeah. I can see that. I can see the problems. I I guess my my point was more though, through the fact that if you have a high dollar item direct to consumer makes a lot more sense than it does for the low dollar items that CPG is traditionally
00:39:29
known for because I can point to lots of direct to consumer advertisers who do tremendous amounts of business. I mean, it's it's like apple is arguably the biggest most successful direct to consumer operation out there. I mean, the airlines for that matter the airlines while they struggle. For many reasons or direct to consumer a large portion of their business at this point. Now, the problem it's a high value items as if they're also not the kind that you tend to burn through a need to be
00:39:59
replaced. They're also the things that take a little bit more consideration to buy. So you're not likely it's not like you're going to put your favorite brand of stereo headphones into a membership or subscription model and acid sent you a new pair every year. So I this is just a tough question. What you have to be able to willing to ask yourself is what are you willing to give up to people to get the membership or the subscription? What is the value that they're going to get from it? And how are you going to benefit in the end and the answer is going to be if
00:40:29
you can create an opportunity for trial and testing that is affordable than this is a wonderful way to promote yourself. But in a lot of brands are going to struggle with it. I think. Nick where and when does subscriptions still work in Europe in. I mean, it's like if you had a client who is actively considering having either a member super subscription model put in the play what would you recommend when it came to the
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subscription model where is it still effective? I think it can. I think it can work in a health and beauty. Potentially anything that requires, you know, daily upkeep stuff like supplements, I think can work. I was a subscriber for a long time to a product called shake allergy? But even with that stuff you can end up in an emotional situation. I call I guess I I would compare it to the feeling you get when you're paying for a gym, but not going to it as things start to stack up.
00:41:30
I call that Jim bitter, donating my money, but not going, and there was a there was a point ride bags of the shakes. And Finally, I went through the pro I went through the process to cancel. And it's it's always going to be tricky because it's come in that month, whether or not your behavior has been on par with with your supply or not and what I was really interested about with this story was the distinction between subscription and membership. If they're splitting hairs or if it's a if it's a
00:41:59
valuable. If it's a valuable distinction because it's in subscription, it's super binary you either enter your churn, right? But in membership, I wondered if they were if they were gradients if there are ways to give people a little something a little carrot, maybe something a little promotional like like Augie was was suggesting and then via that membership kind of shift that until like some of the basic. Almost like 20 years ago. Seth Godin permission marketing techniques once you once you have kind of have acquired them as a member
00:42:30
that you can use to really optimize a passionate consumer. And I think that can work well for lifestyle brands for home improvement barons be for makeup possibly for some apparel. But like, you know, not for brownie. In that brings up that brings up the customer equation. Thank you for doing that. Nick love to good Kobi's opinion about where customers stand on subscription versus membership. I mean, how have you seen any research or have you done any research
00:42:59
or looked at any kind of intelligence at your disposal? That tells you whether or not consumers are in love with subscription models, actually using them. Do they feel good about them? How do they feel about membership programs? I mean, what's your take? Yeah. So my my I take I von on me undies. And and is there a devastating membership and subscription as I I think membership is just a nice scan. But I think it's the same thing and candor. So so I'm not going to
00:43:29
differentiate must between in what is a membership versus a subscription, but what I can tell you is the little research that I've seen is actually that consumers are really appreciating and and joining subscription services at a much higher rate. I do think, you know, Nikki brought up things started backing up. I remember like maybe 1 of the original. Subscriptions Dili's die was involved. With was the Columbia house for DVD's and music. I'm like, I'm getting stop right meets it. But
00:43:59
but anyway, I think what we're seeing now as consumers are really getting to a place of, you know, convenience is so important to them. And if they if they feel that they're getting a good price, which must be subscription services are promising. And they don't have to remember. Oh my gosh. I've got a reorder or whatever it may be worth seeing a lot of adoption and consumers today are are valuing at slide on fits the timing is not giving us that feeling of those things that are stacking up like your shake allergy or what it may be. But we're seeing that
00:44:29
it's incredibly important to consumers to get this convenient solution at a lower price, and then there's huge benefit to the brands right? Because we know that once you get locked into a brand of it is a subscription service. Unless you really go out of your way to switch like you're locked in as a pretty loyal customer. So. I think there's certainly obviously I don't think there's much surprised that there's huge benefit for the brands. But I think we're saying that consumers are really apt to to try this. And and they're seeing the benefits. What do
00:44:59
they try it and stick with it? Then coming back up let me back up because it's just like. Obviously when you get someone signed up for a subscription service. They're locked in for a while. But once they figure out, but I don't need this much product. And MRs not working out for me when they cancel being never come back to that type of solution. Right. I mean, it's as. It seems like it's it's I work for a while. But now consumers are getting skeptical. Any thing this
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is I think this is a lot like lower. I joked earlier about the Uber of the net. Lots of brands wanted to be in that it didn't really work out of most categories listening to do a discussion of how people are gravitating. This reminds me of the last 10 or 15 years. So all the claims if people are gravitating to loyalty programs, right? Lots of data says people are gravitating the loyalty programs. You know, very little data shows that they the mostly Hutu programs actually get us with any frequency the number
00:45:59
of loyalty programs that people sign up for foreign which they're active is a tiny share of their total number. And so I think this is just the sort of thing where you have to ask yourself where does it make sense up? I jumped on. A subscription services for music very early on. I was 1 of the earliest adopters, I headed soon, I am happy to admit that on the air in part because I could pay 15 dollars a month and sample all the music I wanted and my friends couldn't believe it because they were still buying and ripping CDs at the time, and I never understood it. I was listening to more
00:46:29
music than they were for less money. Now that might not have been a great deal for artists that debate continues to rage job. But you know, most people have no gravitated to subscription services for music and for entertainment things like net flicks. Because it makes sense for them. The question is to what level do you need a subscription service or membership service for toothpaste and aspirin, and that sort of thing. If somebody puts together, something compelling, maybe. But I I just I don't this is gonna be another 1 of those things that 4 or 5 years from now we're going to
00:46:59
look back on and some of the early leaders will have crashed and burned. They're not doing that. Well, and it will make sense in some categories and not at all and others still toes nicely into Oshima's go through from Williamsburg have with a lot of the subscription products. That are popping up. I look at it. And if they give up their margins, and they think about for what they're selling. The just what the cost per acquisition is and how they can even predict lifetime value for some some of the niche products
00:47:30
is really kind of baffling to me. A lot of the stuff that I feel like a see big subscription drive for I see being interesting to a person for maybe 2 to 3 4 5 years of their life. And and not after that. But not a I just wonder if they're considering the the T V when they put all this investment into acquiring the subs rule than the others be at it repeat the data of Dollar Shave Club in in a, you know, some of this from multiple sources is that they lose half of their
00:47:59
customers in the first year, and they're down to a two-thirds churn in 2 years, and I can't imagine with any reasonable margin and any reasonable acquisition costs if that's going to be very sustaining. I think probably it isn't which is why after you bought it. It's no longer just about shaming right now. It's about all sorts of things that you replace in your in your bathroom now that might work really well for them but through diversification, but I think. Did you know this is gonna this is going to be very selective? Just like the
00:48:29
sharing economy was very selective with sharing a short-stay homes and transportation by and large. I think the same is going to be true with subscription to membership thoughts. Rome. I wanted to move into the left optic everything to dovetails really nicely with what we've been talking about. Mine may the press this week with a big talk about how brands need to prepare for a voice purchasing future. And we know that voice is very much driven by the recommendation that has made by the brand.
00:48:59
And by the hope that you're going to get some kind of subscription. But while they're points about brand loyalty being diminished on bra voice platforms without aggressive, optimization or well-taken. Will any of it? Matter Colby in the end, considering the abysmally small numbers of users who are leveraging voice platforms to order anything. I mean, obviously, we're real excited about voice, but we're not using voice to shop in any kind of record numbers yet. And then there's the fact that
00:49:29
optimization is a losing battle because you're only going to be the either be the recommended item or not be recommended at all when you're on the voice platform. So is it worth the time effort money is mindshare. Right. That you need to be hacking in making sure that you're coming up first on these voice platforms in order to maintain mindshare. No, no pun intended [laughter]. My cake as that, you know, you had the key word in that question which was yet because I
00:50:00
might take a again enough. I'm. If I'm betting on the future. I actually believe that this is a a pretty wise bat. That I think we are just scratching the surface in terms of thinking about voice, but. The the adoption of voice to you know, talk TV series, ask a question. Talk to your Alexa, unit your Google home. Whatever it may be. I think we're on the cusp of that really exploding. I think people are getting much more comfortable not. Typing into their phone and typing
00:50:29
into a keyboard. And all those things. So I actually am am pretty I'm a pretty big believer that the future of voice is really going to be huge. And so I think the brands that are getting add to that place of of leadership and getting on those recommend list today are going to have a huge payoff in the future money to your point. You know, I I don't know many people that go to their Alexa, and say, hey, you know, order me some. Soda or whatever it may be today. But I I do think that
00:50:59
that is the future. Whether it's you know, 2 years down the road or 5 years. I I don't know. But but I I see that as as a real strong area for growth down the road for for repeat purchases. I completely agree with you. I mean when you're getting into a situation where I always order the same brand of toothpaste. I can just tell Alexa. Go order me the same brand of toothpaste that I always get an an it works for me. But shopping inherently involves a lot more
00:51:29
senses than just your vocal chords in that study uses sense. Sorry, but [laughter], but it involves a lot more of the physicality of looking touching and seeing and. And sharing and talking and all the different factors that come into play. When we're out there choosing an item in a while. I I totally see the voice is going to play a big part in the way that we reorder stuff. I I don't
00:51:59
see any point in. Optimizing to be I in a search on a voice platform when the search is actually going on using your your eyes on a website or your your physical presence in a store, and then you reordering via the voice platform. So Bob what if it does? I look at it is I think, you know, the the voice is going to be the Google of the future riots. So I'm going to ask the same question. I'm not as to say order
00:52:29
reach if patient. It's going to say, hey, it happens to be crashed her, look, whatever granite may be. I think I'm going to ask Alexa, or Google home. Hey, what's the best chip-based should be buying? I've got sensitive teeth. Whatever it may be. I think in my opinion that interaction with the voice device is going to be very similar to looking at your screen. It's still going to have. Hey, harris. You know, it either. Here's what does influence or or this review site says is the the top rated. So I don't see it operating much differently than how were buying today
00:52:59
online. I just think how you deliver the request to the question is probably different at I'll jump in and say, I I'm not sure I buy all of that. If you say to an Alexa. What's the best toothpaste for sensitive teeth? You will get pitched whoever buys the top spot me right now. Yet. Well. True. But that's I guess the point though, is that if you could only hear 1 thing at a time. So we used to say you had to be on the first page, right? That was 10 organic links and
00:53:29
2 or 5 or 7 depending on how many ran down the center paid links. Now, you're going to get 1 thing. I'm with Bob. I I think that for reordering things that you know, it's going to work really, well, but 1 of the things we like to see things we also like to see prices and being able to scan. If I go to Jefferson and search for something I get a whole page with different quantities and different amounts in different prices. Are you going to let Alexa, choose what is really going to be the right deal for you. I up I actually had this
00:53:59
experience because I wanted to try my Alexa, now, I have since unplugged it because I'm trying to boycott Amazon a little bit which a completely different topic that I had an Alexa, and I asked it to buy me under a viewer. Just to see what happened and it arrived, and I compared the price and I got ripped off. Because the thing that was the top result was a pretty darn expensive. And so I just think that there is elements not even so much of visual -ality.
00:54:30
Although there certainly is for some things like style and beauty and whatnot. But just the opportunity to sort things to scan them to see what looks writer not right to look at prices. None of that happens with voice and with Amazon and Google who you may have noticed a both have a very healthy advertising business. You know? I'm just not sure that it's going to work out the way you want. I would love it too. I would love to be able to have my my voice device. Get to know me. So well and have the right artificial intelligence. So
00:55:00
that I say, what is the right shoe for me in it tells me, exactly right shoe? But advertisers, want Google in Andrey to be able to put their stuff on top. And when there is no on top when you get 1 result. And then have to say next a next a next. I just don't think it's going to work the same way. Well, we've without it's time for the Advil 5, but before we get to that segment of the show. I do wanna take this quick opportunity to thank my guest again. And allow them the each to a shameless plug.
00:55:29
Starting with Nick brought you you can find him a campfire NYC.com. That's the home of campfire, which is now part of the mill if you don't know what the millers you really should get your head out of your button pay attention to tell us what's going on. In your world is a great timing for a shameless shameless plug, so my colleague at campfire, Mike Menello, and I created an original horror podcast for shudder and see as Horace
00:55:59
streaming service. It's called video palace, and it drops tomorrow all 10 episodes on the shudder platform, which you can subscribe to 4 I think 5 bucks and the first episode will be on I tunes and other. Places where you where you can discover podcasts the membership model for this. Definitely subscription service. But just old just old the I tunes podcast. You can get episode 1. We're really really excited about it. It's I
00:56:29
would describe it as serial meets the Blair witch project and literally meets the Blair witch project. Because 1 of the hosts is was involved in. That project is is Mike Manila if anybody goes in there that he was involved with the Blair witch project. So fantastic. Next up. We have Augie Ray, you can find him Gardner.com. That's the home of Gartner, which is a fabulous consultancy. Where he is the director of word,
00:56:59
the senior director and analysts of customer experience. So tell us what's going on in your world, a Augie, what would you like to promote? Yeah. All I'll say is that, you know, the usual stuff that Gartner has to offer. I just published some research on how brands could very specifically begin to tie the ROI of customer experience back to their business KPI's. It's a really big gap. Lots of organizations get started in customer experience with the best of intentions, but it runs into a roadblock with you start asking for money because
00:57:30
the what is the value of having satisfied customers. And so proving that is 1 of the big gaps that we see that many organizations have. And so if those listening remember they could look for the report, titled Taylor customer experience dated metrics to improve customer centrisly. And if not, you know, why not you really should be a Gartner member another membership model. Oh my God. We're we're just wild with them. And again membership in subscription works when you have a high dollar figure
00:57:59
attached to it out there for you last. But not least we have Koby vote. You can find him it to degrees. Global.com. That's the home of the PR shop where he is the door a global global executive vice president of business intelligence that I get that. Correct. Colby. So tell us what would you like to prevent? Well, so I would just say, you know, at DeVries, you know, we are are really making some strong at Rhodes in terms of helping our
00:58:29
clients lead through decoding culture, and 1 of the things that my group and business intelligence is really focusing on is drawing that connection to wear a if a brand has made a connection to consumer circualr. How are we able to measure the effectiveness of the work that we're doing? And so that's where were really, you know, focusing a lot of our attention and our focus on it really cracking at code of of understanding where the PR work that we do connects to
00:58:59
business tangible business outcomes. So you can follow me on Twitter just to see some of my musings on on those thoughts around connecting, you know, the work that we do in in communications to business outcomes. Lentil, let's also Mona. And quite frankly, his really glad to meet you recently at an event and actually going and get coffee with you. Because this is some amazing work you're doing over there, debris. So definitely check that out at the res
00:59:29
global.com. As for me for more information about me or the show. Visit the being cast.com where you can find a complete shore 5 you can find how to consult with me even find out how to advertise on this program. So check it all out at the being cast.com. And don't forget we now have transcription services available for all shows. You can find a transcription of this episode in about a week. And it's all thanks to transcribe me.com. You can get a special rate on transcription services. If you go to
01:00:00
transcribe me.com/being cast, and we thank them very much further support of our program. Well, now, it's time for the Advil 5 a rundown of the lowest moments in advertising marketing and public relations from last week. And I up the time's up movement in the ad world was dealt kind of a blow when it was revealed that 1 of its key members Didi B's Wendy Clark contracted Ted Royer the ex chief creative officer of drug of 5 who was
01:00:29
let go over accusations accusations of sexual misconduct. Now, MS Clark stepping down from the time. Now, MS Clark stepped down from the times of steering committee over the revelations. Augie? You know, this is the I don't know if we want to touch this [laughter]. Well, we're all men on this call. So I think there is a little bit of a problem touching this. I'll just say this though, Ted earlier made money at I guess Wendy Clark's at me too
01:01:00
[laughter]. I guess so I get so no next up Nebraska has a new tourism slogan there, Nick it's called. Honestly, it's not for everyone. Now, this is either the stupidest or most brilliant headline ever because quite frankly, it's got everybody talking even Stephen Colbert made a big segment about this making fun of it. So all all public role. Primo press is good press against
01:01:30
a copywriter by trade. I respect the line. But the fact is that the band 3 11 put me off Nebraska for life [laughter]. So honestly, it's not for me. World's Crispin porter. Gusty announced that they were quitting all award. Shows Colby then they gave themselves in a word for doing. So all I'm saying is who believes here who is going to believe that they're actually out of award shows for good. I mean, anybody
01:01:59
anybody out as soon as the client list citizen KP? I I mean, I went through this 2 years ago when we were winning at cans, literally, well Publicis enhance their lack of interest in awards, and if they were backing out, and they think that they're getting back it now. So it's they said as soon as as soon as a client is interested in winning awards until the back in there. Bobby said, there's no such thing as bad PR. So I guess not [laughter]. They were funny about it. At least it was it was it was funny. It
01:02:29
was different funny. But I don't believe them next up. The Houston museum of natural science set out invitations for their annual Halloween event with the headline party with spooks. So Nick, obviously, they were simply trying to be racially inclusive with this line. I mean, I know I I it's 1 of those mistakes where you just go face far [laughter]. That's and I'm I'm actually very fond. If he said, it's a very diverse city. It's a great museum city. It's apparently not a great subject line city
01:02:59
because there were no we're not enough rounds of approvals there. Somebody somebody really really screwed up. No, really really messed up Republican. And finally, and this is not funny Colby. But it's you know, it's definitely shows you the problem with data a woman whose baby daughter had died was forced to publicly asked Facebook to finally stop bombarding her with new parent ads, and it's 1 of those situations where you go. You
01:03:29
couldn't put that hook into the algorithm. That's measuring all these well wishes and other types of things that are going on on Facebook to see that. Maybe we shouldn't be marketing new parents Dr. I definitely a tough day for Facebook. And I don't I don't know how you get that algorithm. Right. But it's definitely 1 of those awkward moments. We'll have something to add to this list or just wanna discuss it common online. Use the hashtag add fell 5 that's pound
01:03:59
Advil in the number 5. And that does it for this week's show if you'd like to subscribe to this podcast, visit our website at the being cast.com and click on the subscribe link if you're nineteen's listener, we've also provided a direct link to the teens music store or just search for the being cast in the podcast directory of I tunes and whichever podcast directory us when you subscribe, please leave us a review. Got a comment have a question. We'd love to hear from you just send your emails the
01:04:29
bean cast a gmaiLcom opening theme was performed by. Joe Saibul closing theme by C Jack's thanks for listening. I'm Bob nor p- we'll be back again next week. Hope you'll join us, then
01:05:12
she's exactly.
01:06:10
Cool beans.