Latest / Talk Commerce / AI Marketing for Challenger Brands with Erik Huberman of Hawke Media
Transcript
- Brent Peterson (00:00.853) Welcome to this episode of Talk Commerce. Today I have Eric Huberman. He is the founder and CEO of Hawk Media. No relation to Tony Hawk, I think. But Eric, why don't you go ahead, do an introduction for yourself, tell us your day-to-day role, and give us one of your passions in life. Erik Huberman (00:18.326) It's funny you say that I was at a conference last week that I've spoken at a few times and I spoke there, I think it was 2018 and Tony Hawk also spoke there and I couldn't figure out why my talk on performance marketing was filled to the brim with marketers that like, was standing room only like crazy. And at the end, there's a local ski hill, this conference is in Banff and the ski hill called sunshine, the owners came up and were like, Hey, we'd love to have you out. Wanted to give you a tour and I'm like, thank you. I'm flattered. Would love to, I'm a diehard snowboarder. And like, if, Tony's around, we'd love you to bring him in my business partner's name, Tony. So I was like, uh, Tony's back in LA. I don't know what you're talking about. And, uh, show up at the, at sunshine and then realize they thought I was Tony Hawk's business partner. And when I let them know the bad news, they basically shrugged me off like, yeah, okay, we'll go have fun on the mail. And they did not want to talk to me anymore. The tour was gone. Um, but yeah, I've actually spoken at a few conferences with him. hung out with them a few times. yeah, background built and sold a couple of e-commerce companies and about 12 years ago was advising and consulting for a lot of large and small brands, work with Red Bull, Verizon, HP, a bunch of startups. At the time, digital marketing was still pretty new and everyone was trying to navigate it and I had done well with it. But when it came time to actually execute, I'd go and try to help these companies either hire people in-house or hire agencies and I found that At the time there were 24,000 marketing agencies in the US and 99 % of them were full of shit and had no idea what they were doing. And the few that were good only wanted to work with the Fortune 2000. And so the idea of being like, why can't there be an agency that's the best at what they do, but also easy to work with? Just never made sense to me that that didn't exist. And so we decided to build it. And thankfully fast forward now we're 250 people, give or take, we've worked with over 6,000 companies and you know, really. more more becoming the dominant lower and middle market marketing agency in the United States. The agency built for challenger brands, not for the big behemoths, so to speak. And we work with some of the big behemoths because they all like to believe they're challenger brands, but really we've built something that's nimble, flexible, cost-effective, but excellent at what we do. Brent Peterson (02:27.243) That's awesome and passions outside of snowboarding and hanging out with Tony Hawk. Erik Huberman (02:33.134) definitely family. Well, I spending time with my kids, got a three year old and a six month old and really enjoying the whole father with fatherhood thing. do a lot of tactical training, which is a little out of left field, but train with a lot of military and got into that more in COVID and, yeah, do private security and those kinds of things. Triathlons did a triathlon last weekend. I'd like to find a reason to train and to push myself. I find it really helps with stress management and stuff too. So a lot of fitness and. longevity stuff. I would've just got out of a IV just cause we, my, I was with my YPO group and one of them's a doctor and he's like, Hey, why don't we just do IVs while we're hanging here? So, that was a fun one, but yeah, I, I, I'm really into the longevity thing, really into just health and wellness. you mentioned it's snowboarding tactical training, to play guitar, played guitar since I was four years old, but kids have really taken up a vast majority of my free time and travel. Brent Peterson (03:25.577) Yeah, that's awesome. I'm reading David Goggins book, Can't Hurt Me. just learning about what's ahead. Yeah, exactly. That's awesome. Yeah, so before we get into that, I'm going to do the, I do this thing called the Free Joke Project. I'm just going to tell you a joke. It'll take 15 seconds. All you do is give me a rating eight through 13. So here we go. I did my first tandem skydive ever. Erik Huberman (03:29.71) Who's gonna carry the boats? Who's gonna carry the boats? Brent Peterson (03:55.177) This guy strapped himself to me and when we jumped out of the plane he said, so how long have you been an instructor? Erik Huberman (04:04.014) Let me give it a nine. I feel like there could have been a better punchline. Brent Peterson (04:09.419) All right, that's fair. I do, I had a chance. So I do a lot of marathon and half marathon pacing. So I always say, who's running their first half marathon today? And a bunch of people raise their hand and I'll say, yeah, great, me too. This is going to be fun. Let's see how it goes. Yeah. Anyways, it doesn't, you know, that doesn't land either. What's that? Erik Huberman (04:11.052) I think it was a good meetup. think you had a chance there. Erik Huberman (04:28.59) Yeah. And I'd say in the moment, No, but I think it's because if you're standing there in that moment, I think it's funny. yeah, situation. Brent Peterson (04:36.715) Okay, all right. The other one I say is, you know, running. In mile 20, I'll say like running is 90 % in your head and the other 15 % is mental. Erik Huberman (04:49.218) Yep, there you go. Brent Peterson (04:52.341) That's just a brain joke that you have to figure out at whatever. Anyways, I think I should stop while I'm behind, right? So talk a little bit about the niche that you found and it sounds like you're in a big niche, but a small, big niche, right, medium? Erik Huberman (04:54.924) Yeah, exactly. Erik Huberman (05:11.717) Yeah. Yeah. No, it's, the largest niche, probably as far as addressable market goes, period. I mean, it's every company that's not the top 2000 and I know our fees start at like $2,000 a month. So the niche is anywhere in that can afford to spend two grand a month on marketing to the fortune 2000. And frankly, we do work with a lot of fortune 2000. just, and the way we think about strategically how we build the business, it's more to build for everyone else that, but Turns out when you're really good at marketing and you have a great team, you still get a of the big guys too. And, and work really well with them because the ones that are actually like, I won't say who, but I just met with one of the biggest beverage brands in the world last week. And when I said we're really for the challenger brands are like, well, we're a challenger brand. I'm like, yeah. Who are you challenging? Like, like, well, I respect that you want to make the statement. and then I'm like, all right. And what's kind of fun is I can turn it on them, prove it, show me that you can actually operate like a challenger brand and you're not going to just get bogged down and bureaucracy then sure. Cause that's really the turnoff there is like the games and the bureaucracy and the politics that happened in these bigger companies. People are trying to, there's more people trying to keep, make sure not lose their job than there are people trying to build something great. And that's what turns me off from it versus like, really like to make an impact. And so that's been a really fun focus, but to your point, like there's, you know, I don't, I actually don't even know the stats now on SMBs in the United States, but it's millions. Like it's. There, and we've worked with 6,000 of them and we've been doing this for 12 years and we've been pretty successful. So we, there's, we haven't even closed to scratch the surface on how we could be building this. And so that's where I find fun in it. And I think that there's just a massive opportunity. Um, but it, for our business, it almost, it's interesting because we ended up drinking our own punch enough a lot because of this, because we ended up having to be a brand because to capture that market. It's not hand to hand combat. got to build, build something that people come to and do a lot of great inbound marketing, a lot of great content, a lot of great branding so that people come to us. Because if you're trying to like go meet those millions of companies, it's just not going to make sense. So it's fun. We've, know, between having a best-selling book that's now taught in a bunch of universities and MBA programs, we've got, uh, you know, a TV show on the air on Hulu and A &E called Kings of Barbecue, helping Cedric the entertainer and Anthony Anderson launch their barbecue brand. We've got our. Erik Huberman (07:32.47) our own podcast, Hawk Talk. we do a lot of things that allow us to just build the brand and build the ecosystem. just threw our annual summit Hawkfest had 750 brands and companies come out for that. So yeah, it's been a fun build. Brent Peterson (07:47.529) Yeah, that's cool. think that one thing I think about when you're talking about that S &B space and we partner with Shopware, which is a newer e-commerce platform that's entering the US. And they really found that that S &B part of the market is really, really important. And I think a lot of the platforms, and I come from... I come from the e-commerce side, Magento was what our agency was doing. know, Adobe took Magento and went up market and they purposely excluded that middle market and the small market. I mean, in the e-commerce space, you can guess who snapped everybody up and they were snapping them up 10 years ago, the rapidity, is that a word rapidity? Anyways, the amount of time it's taken Shopify to dominate the market is so small. And part of that is because they went after, they did their core. They went after entrepreneurs and went after the mom and pops, and now they're moving into the enterprise space. And a lot of these other bigger platforms have gone specifically after that niche of that Fortune 50 or Fortune 500. So I think it's an interesting play that you're doing. How about the idea of, how do you look at them? How do you choose the brand? And you mentioned I mean, had the AB Imbevo is one of our clients and I think they're a pretty big beverage distributor. But we were also focused on Latin America and I think that helps. Latin America is a place where you can be edgy and you can be a leader, where in the US it's a little bit different. How do you kind of determine who you're gonna work with? Erik Huberman (09:30.499) We focus on the U S and most, and at least English speaking markets, just cause we feel like it's hard to have an impact and with the language barrier. So like we'd have to bring in partners and consultants. so I'd say it's more about, know where we're good, but as far as we don't pick clients, like I think that's actually the pretentious fallacy of running an agency is to be like, well, we're not working with you. We're working with you. Like to me, thankfully we have a team, like, don't be wrong. If we can't help a company, that's one thing, but enough products and comp and you know, Brands have surprised me with their ability to hit market penetration that I don't try to like my personal opinion of whether a company is going to work or not. The good example here is I do a lot of investing. have a venture fund and a personal investment I passed on was I actually was at the incubator before this that launched Dollar Shave Club and their most recent success story is liquid death. And they called me and said, Hey, we're starting this company, liquid death. It's going to be water and it can, we're raising it a 5 million valuation. And my response was death water. You guys are idiots. And foot and mouth, they've done pretty damn well. We'll see where the accidents of happening, but still like that's, know, objectively that's become a big business. And so the idea that I'm going to be the arbiter of what's a good brand or not, that's bullshit. And I think that's anyone that tells me they can be as full of shit. So I, my goal is to build great capabilities that we can augment into any business that needs our help and give it a shot at success by bringing them scalable, repeatable, successful marketing strategies. And that's that. So. In the situation that that doesn't work, I would say if a company there's a fair, you know, I'd say every once in a while, a company that doesn't fit our sort of moral guidelines, like a puppy, mill we did not take on, that's once in a while, as well as the individual owner. If they're just an asshole, we pretty much part ways. know where that's going. And again, actually not out of pretentiousness or we're too good for it more about like, we know that that goes ugly. We know that that burns our people out. We know that that person is irrational and. Like not, not just a nightmare to work with, but a lot of times that's where you end up in illegal trouble. Cause a person's just a piece of shit. Like it's just not worth it. So we just don't do that anymore. The moment we see hints of someone being unreasonable, we'd rather just find a way to part ways. Brent Peterson (11:43.719) Yeah, and that's, mean, you know, going back to my agency experience, that was such a hard lesson to learn that, that it's really a bigger grind on your team than it is for you as a, as an owner or agency. You know, you mentioned you're in YPO, I'm in EO. So, you know, when, when you get older, you'll go into EO, maybe I'm making a joke again there, but how do you then, like, I know in EO anyways, we learn by just. Erik Huberman (11:55.95) All right. Erik Huberman (12:00.909) Yeah, very similar. Brent Peterson (12:12.135) seeing what our peers are doing, learning through experience. It sounds like you've been doing that already. How do you translate some of those learning back to your clients to help them grow in what they're doing? Erik Huberman (12:25.39) I'd say our clients, mean, it's an interesting question on the marketing side tons, because our people are articulating that that's what they brought us on for. so thankfully the vast majority of our clients are great and collaborative and work with us and we get to bring them our knowledge and what we're seeing in the market. And we also have visibility and doubt things are shifting. We're very tech forward because of the venture investing. We're constantly investing in new technology. Like we're one of the first funders of a GEO platform. So optimizing for all the LLMs. So we're one of the first movers in that. And I've been able to help a bunch of brands show up in the, chat GPT and Gemini on these places before anyone else could make a move on that. So they listened to that. I'd say from how to operate your business, I don't get even, you know, I try to remind people that hire us that like I've a lot of the time built a lot bigger business than they have, and I'm here to help, but I would say it's not common that they want to hear anything other than marketing from. Brent Peterson (13:21.193) Yeah, that makes sense. How about the idea of now that when ChatGPD came out, a lot of smaller business owners think they can just do everything by themselves. Like they don't value the team and they think that everything they can just do on their own. Erik Huberman (13:33.592) I don't know, dude. Erik Huberman (13:40.783) So I, it's funny, I've heard that sort of assumption by people watching the trend, but I haven't seen any entrepreneurs actually execute on that. You know what I mean? Like I've seen people, my favorite was when chat GPT three came out and you know, was that? November of 22. I heard a couple of people telling me they replace a content team with chat GPT three. It's like, wow, you must have a really shitty content team. If that's working, like that's just not, that's not going to work out very well. I think it's a fallacy that. CEO, like any decent CEO is going to replace other people with AI. that CEO sitting at a command center, just talking to AI all day. And that's how you're going to build a business. I'm not buying that that's going to be a big business. I don't, I don't see it. I don't see the trend there, which is why, like you saying that I've heard, I've seen the articles and the AI thought leaders saying that's what's coming. I think it's bullshit. And I have yet to see a great business running with one person, a bunch of AI. When I say great business, I don't mean like, yeah, someone can make a few hundred grand, a million bucks a year. Maybe running that, like no real business. Brent Peterson (14:43.359) Yeah, from a research standpoint, I wrote an article about Klarna's debacle where they laid off 750 people. But then I reached out to a whole bunch of Klarna ex-employees. And I did have a couple that had quit prior to that who applauded them for at least trying it. Which, you know, I think from an A-B experiment, hey, that's great. I think that maybe the way they executed, yeah, there's better way to do it. I think that... Erik Huberman (15:01.452) Yeah, which by the way, take a, take a, yeah. It's probably better to pass. Yeah. Yeah. Brent Peterson (15:10.933) people have to test the waters to see where they're gonna go. Where do you sit then on how to use AI in your marketing? Erik Huberman (15:25.078) Yeah, I would say generative AI is funny enough, the hype side that I think is a long ways away still from getting there. like whether it's Sora two or VO three, like they'll get there, but right now everything you generate in AI looks like AI. And so the problem is in marketing, one of the, and we talked about this in our book, one of the most important parts of marketing is trust. And by using AI, you immediately kill that trust because it's inauthentic by nature. And people know it is so unless it's used in humor or in some way they can authentically be AI, like let us show you what the future looks like kind of thing. It's going to turn people off. And so the idea that that's replacing that side creative, I think is crazy and never, and thankfully we've been working on our own AI systems for 11 years. And so we built a hawk AI, which is digesting about 7,000 companies, marketing media and revenue data in real time. And then we're able to plug in an individual company, do an immediate SWOT analysis on their performance marketing, see how they're moving compared to the market, where the opportunities are based on the benchmarks and really analyze what they need to be doing and fixing to make their marketing better. so that to me, like predictive analytics, data analysis, that side of marketing is really where AI can be compelling right now versus the hype side, which everyone's talking about, which is this generative, which reminds me similar of like AR VR in an era where like everyone's like, Oh, this is going to be everything. And then, know, the metaverse and Facebook changing its name to meta. It's this, they're making the same mistake again, which is hilarious to me. It's like, I've said this on the stage a few times. The second dumbest thing after changing their name to meta that I think Facebook has ever announced is that they're going to turn, take over all creative using AI and cut out all the agencies. And to be clear, I'm not that bias here. Cause like creative is not that big of a part of my business. Like it's a piece it's good, but like I'm not if creative goes away, my business will be fine. That's not what I'm worried about. So it's not coming from there. It's coming from a place of knowing how this works and knowing that like if everyone's using the same AI to create the same creative, like it's not going to be that compelling. It's not going to catch people's eyes and it's just going to quickly, it's going to work for like three months and then it's going to fall apart. And I've seen these things before with these platforms and it's that's where people are making the mistake. Again, where I think AI is really powerful is anything you would hire an army of 17 year old interns to do. Erik Huberman (17:42.319) So any type of tedium that could be handled by someone with low skill, that's where AI is really making a play right now. And I think that'll get more and more, but logic will beat over creative for a long time with AI. So things like your accounting, your legal, those kinds of things, really interesting. Your creative side, like I think that's a ways off. Brent Peterson (18:01.515) Yeah, and I agree with you. I think I've said that many times now where it's going to just turn into mud, right? It's going to be the same thing over and over. And I think that's the hardest thing for... That was the hardest thing when ChatGPT really came out, like I think you said, 2022, was everybody thought it was going to be the magic bullet. And I think my thing must have just done this. Erik Huberman (18:10.114) Yeah, exactly. Erik Huberman (18:24.842) Good. Got the shot. Brent Peterson (18:26.167) They thought it was going to be the magic bullet. And I think that a lot of people bought into that hype and a lot of people decided, hey, we're going to get rid of our content team. And maybe you're right. Maybe they decided that content team wasn't the best team for them. I think as a content team too, have to think about what your client needs and wants. And I think that looking and asking those questions. are probably the most important thing you can do. How do you kind of keep that loop with your client to understand? Like I know that the billable rate for content is much lower than it was. So how do you kind of... Erik Huberman (19:03.766) No, I mean, like we, so we never, I don't look at what is market and build that. look at what do we need to charge to maintain the margin we need to, be sustainable. And we charge that. So it like, it's treating this like marketing, like a commodity is where a lot of companies fail. Like, yeah, sure. Go with you. By way, you can outsource everything to India. It's way cheaper. Good luck on how that's going to perform for your business. So for me, our billables haven't really actually gotten, they've actually gone up. Now, what we look at is are there places where AI can augment what we're doing so that we can now overperform for the same amount of billables? And that's been something we really focus on is like, we're spending the same amount of time on this, but now we're able to do so much more. Because it's not like marketing, there's like a cap to where you're done. So it's not like, well now we can charge you a third the price and you can just spend less on marketing. Great. If that's the case, you should spend three times that and do three times more to grow your business. Like that's how most should look at it. and so it hasn't really compressed revenue, which is something that I think would come at some point, but I actually, decided to preempt it by going, how can we over-service using AI so that we are taking the benefits of all this to our clients in a way that like good luck to any competitor, because this is where we do win a lot is we have so much infrastructure, so much horsepower as an agency that competing against some small agency trying to win that business. Cause that's really who we're competing against. The goal for me is to make it an objective dumb decision to work with anyone else because of everything you get with Hawk versus what you're to get with a five person meta agency. Brent Peterson (20:36.713) Yeah, I think too, like what you said earlier about just the capacity and what each of those people are going to do on the team. know that competing against, know, my experience has always been in the development space and having a client who says, we're going to switch to an in-house developer. If they switch to an in-house marketing person, they're giving up all those other people that you have on the team to contribute to that. The same thing applies to the development space. You have a front end developer, you have a back end developer, you have a DevOps person, all those different people that are involved. How do you then work with the client? I think too that I suppose there's at some point of scale that the client already knows that. think one of the frustrating parts that I've always had is that you meet that growing client who has gone from zero to zero to 100 and they're just growing like crazy. Let's just say they're a founder entrepreneur who's gone from zero to $10 million and they think they know everything and they want to get to the next level and then you have to kind of educate them. Erik Huberman (21:44.995) Yep. And I think that comes from being a bigger business than them. Like if my business is smaller than the client I'm trying to educate, I probably don't have a lot of room. It's the same thing as like, don't take advice from people that haven't been where you're trying to go. Like that seems like a dumb thing to do. It's, you know, I, I've learned a lot as I've built this business that I, know, things I said very confidently many years ago, go, that makes sense. Now I get that. Like it's, meaning the, the, the opposite of what I might've said years ago, cause now that this has gotten a lot bigger. So. But that's part of the fun of the business we built is we continue to get bigger and bigger. And so I can speak with authority when I'm talking to a client and when someone says, you know, and we've had that, like we take them from one to 10 million and like, I think it's time to graduate. It's like, well, we work with Nike and Unilever. So if you think you're better than them, like probably not a good fit ego wise anyways, but yeah, we definitely know what we're doing when it comes to the big brands too. And I think that's from a service business standpoint, building the credibility. It's like, no, no, no, we've. We've done a lot more with a lot bigger companies than you in like having a little chutzpah about it. And like we're, we're good. I think is important for clients to see. Sometimes it's also just communication. They might not know that they might think you're built for the small stage and they've outgrown you and you've given them nothing to push back on. Brent Peterson (22:59.209) Yeah, and think that's really where it comes down for us anyways, it was always project management to help the client understand what are the new things that you're introducing. Where do you think the market's going now or where do you see, not where it's going, but where do you see that our market's going right now as we go into Black Friday, Cyber Monday, this holiday season, how do you see the market right now? Erik Huberman (23:22.154) I'm kind of fascinated by it because you have a few different things. So markets are by far at an all time high. I today was a crazy, another crazy day of record highs in the stock market. I mean, I looked at it at 1230 Pacific. So I think it ended up pretty good. You also have, you know, all inflation's down, employment's up. Like you have some really good metrics with, you know, interest rates coming down soon, which creates optimism. And the whole economy is driven by greed and fear. So we've been in a fear cycle since I'd say 22. Like 21 was odd because you had so much money pumped into the system that like it felt like a great economy, even though we were doing some COVID stuff too. But when they started ratcheting rates and creative quantitative, quantitative tightening and all that, the market took a hit. People felt tight and they felt tight for a little while, but then you have this social media thing of the extremes where people just get rewarded for speaking and absolutes. And so everyone's like, oh, it's a recession. It's all screwed. It's like, there's no indicator. And by the way, the opposite happened in 22 and 23. There were recession indicators all through those two years and nobody talked about it being a recession. So it's like this weird, almost gaslighting both ways. But that being said, it seems like it's a bit of a tale of two cities right now. And it's not about the 1%. It's about the 50%. From what I've seen in economic reports, I nerd out on all this stuff. The top 50 % of the U S is doing really well and the bottom 50 % are really struggling. That's not what we've dealt with in the past because we've dealt with, everyone's struggling, but maybe the 1 % or maybe in the 0.1%, but you know, in a recession and then in a boom of time, most people are doing well. It seems like we've hit this weird new milestone where again, the upper 50%, which are the people that own assets, the people that own some stocks that have some retirement accounts that aren't necessarily paycheck to paycheck are feeling really good, which by the way, that is where the economy is driven overall too, which is why stocks are so high, why consumer spending hasn't gone anywhere because The only people struggling there don't generally have that much discretionary spending. So what you've seen is it's the off price stuff, like off price clothing companies, et cetera. They're the ones that are struggling. Everyone else, all these DTC brands, the e-commerce world, the tech world, they're doing great because they get their money from the upper 50%. So I don't know how that plays out. I hope it's not as extreme as like the French revolution in that sense, but, I don't really personally believe in trickle down economics either. Erik Huberman (25:47.15) I've just witnessed it as someone that grew up with a dad that was ended up being very successful and I've had a lot of my own success too. I don't believe the more money people make the, the money multiplier to matriculate into the system, the same way that it would, if we had bottom up, think it trickle up economics makes a lot of sense to me. give someone making 30 grand a year, an extra $3,000, they spend that and more. And so to me, we've got to figure out how to bring up the bottom, but back to the point, if you're an e-commerce brand right now, you're probably. going to be, I think you're going to be in a good place. think the holidays, especially if they drop rates on Wednesday and they go into the holidays with that optimism and nothing else, there's no like black swan event that happens between now and the holidays. think people are going to feeling pretty, pretty good. Brent Peterson (26:29.353) Yeah, good. So Eric, we're rapidly running out of time here. We've gone past our 10 minutes of content. As they close out the podcast, they give everybody a chance to do a shameless plug about anything they'd like. What would you like to plug today? Erik Huberman (26:44.462) Uh, yeah, I'd say the biggest movement we've seen is, you know, I mentioned it, our new GEO offering. So if anybody wants, we're always happy to take a look at a business and how they're showing up in the different LLMs. have a whole technology behind it so we can coach people on, Hey, here's where the opportunities are to actually make sure when someone asks chat GPT for something you do, you show up. so, uh, I'd say, yeah, that's our offer right now. Feel free to reach out. It's just hawkmedia.com. Brent Peterson (27:07.18) Perfect. And I'll make sure I get that in the show notes. Eric Q. Berman, the CEO founder of Hawk Media. Thank you so much for being here today. Erik Huberman (27:14.413) Yeah, thank you for having me.