How does Facebook really work and what are the social network’s implications for business executives? BlitzMetrics’ Logan Young and Dennis Yu tell CXOTalk about the “inner secrets” of Facebook, and why it was the tool of choice for Russians attempting to interfere in the 2016 U.S. election.

Dennis Yu is co-founder and Chief Technology Officer at BlitzMetrics, a digital marketing company which partners with schools to train young adults. Yu’s program centers around mentorship, helping students grow their expertise to manage social campaigns for enterprise clients like the Golden State Warriors, Nike, and Rosetta Stone. He’s also an internationally recognized lecturer in Facebook Marketing and co-author of the college textbook Facebook Nation.

Logan Young is the co-founder of BlitzMetrics, where he runs the company’s training programs, while implementing ad campaigns and optimizing marketing funnels for key accounts. He currently manages a team of 43 individuals. He is an internationally recognized keynote speaker and author of The Standards of Excellence, a book on Facebook benchmarks.

Transcript

Michael Krigsman: Facebook is one of the most important social networks, maybe the most important social network in the world. There are billions of people on Facebook, and Facebook collects -- God only knows what kind of data Facebook actually collects. Today on Episode #288 of CxOTalk, we are speaking with two of the most knowledgeable Facebook experts on the planet.

I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. Before I introduce our guests, I want you right now to tell a friend. Call a friend and tell them to watch this show and subscribe on YouTube. That helps us out a lot, so please subscribe on YouTube.

Without further ado, I want to introduce Dennis Yu, who is co-founder and chief technology officer of BlitzMetrics. Hey, Dennis Yu. How are you?

Dennis Yu: A pleasure to see you, Michael.

Michael Krigsman: Hey, likewise. Dennis, tell us briefly about BlitzMetrics.

Dennis Yu: We are a data and analytics company. We train up young adults to do Facebook marketing, so they get certified in digital. We serve a lot of enterprise and small business clients. We've been doing this since the very beginning, which is May 2007 when Facebook opened the FA platform. We love to get into the data and talk about all the things that are possible. We have built a lot of tools with Facebook to be able to build their ad systems and build the analytics products.

Michael Krigsman: Okay, well, we're going to talk a lot about that in just a moment. Our other guest is the other co-founder of BlitzMetrics, Logan Young, who is, sad to say, sick today but is still joining us. Hey, Logan.

Logan Young: Hey, Michael. Happy to be on. Sorry, I'm not feeling better. It's what happens when you travel a lot.

Michael Krigsman: Well, I know you guys do travel a great deal. Logan, I have to say I've seen a lot of your videos, and they are just awesome. Thank you, as well as to Dennis, for taking the time to be with us today.

Logan Young: Yeah, we're excited.

Michael Krigsman: Let's begin with context. Why is Facebook so important? I know it's obvious. Okay. All of our friends are there, we can share our cat photos, and rant and rave about politics. But, beyond that, from the data, why is Facebook so important?

Dennis Yu: Facebook has scale. And, because of the amount of data they have, you can see a Cambridge Analytica happen. You can see various fears that occur when people could do something with their ad targeting platform.

You know the same kind of ad targeting that Facebook has gotten in trouble for, Twitter, LinkedIn, and even Google have provided the same kind of targeting, but they don't get in trouble because they don't expose that same level of targeting and they're not seen as the big behemoth. Right? You wouldn't kick a dog that's injured, in the same way, you wouldn't see the government or the public come after twitter. But, because Facebook has such a dominant position in data collection, then they have so much more scrutiny.

Michael Krigsman: Okay. With Cambridge Analytica, Logan, what's going on with that?

Logan Young: Facebook is obviously in a big PR storm right now. The Cambridge Analytica thing, we all know, ties back to the 2016 election. A lot of people just aren't aware about how much data Facebook collects from people and how they make it accessible to other people. As that's come to light, it's freaked a lot of people out.

Facebook, in response to that, there's been a bit of a domino effect where they've now cut off third-party data providers from advertisers. You might have seen some of their commercials that are running on TV saying, "We're going to fix this. We're going to get rid of clickbait, bad ads that are spammy and all these things, and fake news." Facebook is trying to be really proactive right now in saying, "Yes, we have the data, but we're going to be more responsible in the way that we use it.

Michael Krigsman: Dennis, is that going to make a difference

Michael Krigsman: Facebook is one of the most important social networks, maybe the most important social network in the world. There are billions of people on Facebook, and Facebook collects -- God only knows what kind of data Facebook actually collects. Today on Episode #288 of CxOTalk, we are speaking with two of the most knowledgeable Facebook experts on the planet.

I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. Before I introduce our guests, I want you right now to tell a friend. Call a friend and tell them to watch this show and subscribe on YouTube. That helps us out a lot, so please subscribe on YouTube.

Without further ado, I want to introduce Dennis Yu, who is co-founder and chief technology officer of BlitzMetrics. Hey, Dennis Yu. How are you?

Dennis Yu: A pleasure to see you, Michael.

Michael Krigsman: Hey, likewise. Dennis, tell us briefly about BlitzMetrics.

Dennis Yu: We are a data and analytics company. We train up young adults to do Facebook marketing, so they get certified in digital. We serve a lot of enterprise and small business clients. We've been doing this since the very beginning, which is May 2007 when Facebook opened the FA platform. We love to get into the data and talk about all the things that are possible. We have built a lot of tools with Facebook to be able to build their ad systems and build the analytics products.

Michael Krigsman: Okay, well, we're going to talk a lot about that in just a moment. Our other guest is the other co-founder of BlitzMetrics, Logan Young, who is, sad to say, sick today but is still joining us. Hey, Logan.

Logan Young: Hey, Michael. Happy to be on. Sorry, I'm not feeling better. It's what happens when you travel a lot.

Michael Krigsman: Well, I know you guys do travel a great deal. Logan, I have to say I've seen a lot of your videos, and they are just awesome. Thank you, as well as to Dennis, for taking the time to be with us today.

Logan Young: Yeah, we're excited.

Michael Krigsman: Let's begin with context. Why is Facebook so important? I know it's obvious. Okay. All of our friends are there, we can share our cat photos, and rant and rave about politics. But, beyond that, from the data, why is Facebook so important?

Dennis Yu: Facebook has scale. And, because of the amount of data they have, you can see a Cambridge Analytica happen. You can see various fears that occur when people could do something with their ad targeting platform.

You know the same kind of ad targeting that Facebook has gotten in trouble for, Twitter, LinkedIn, and even Google have provided the same kind of targeting, but they don't get in trouble because they don't expose that same level of targeting and they're not seen as the big behemoth. Right? You wouldn't kick a dog that's injured, in the same way, you wouldn't see the government or the public come after twitter. But, because Facebook has such a dominant position in data collection, then they have so much more scrutiny.

Michael Krigsman: Okay. With Cambridge Analytica, Logan, what's going on with that?

Logan Young: Facebook is obviously in a big PR storm right now. The Cambridge Analytica thing, we all know, ties back to the 2016 election. A lot of people just aren't aware about how much data Facebook collects from people and how they make it accessible to other people. As that's come to light, it's freaked a lot of people out.

Facebook, in response to that, there's been a bit of a domino effect where they've now cut off third-party data providers from advertisers. You might have seen some of their commercials that are running on TV saying, "We're going to fix this. We're going to get rid of clickbait, bad ads that are spammy and all these things, and fake news." Facebook is trying to be really proactive right now in saying, "Yes, we have the data, but we're going to be more responsible in the way that we use it.

Michael Krigsman: Dennis, is that going to make a difference, do you think?

Dennis Yu: I think it's just PR because Facebook has never had a security, data, privacy, hack, breach kind of problem. They've always had an educational issue because as long as the general population is relying upon the newsfeed for their news, they're going to fall for fake news. They're going to sign up for things that they never really wanted, and that's an education issue that isn't something that they should have to solve, but it's one that they're being forced to.

The reason you see the regulators continue to try to clamp down on Facebook is because of the public outrage. How do they get around that? They have to be more transparent. They have to educate the public. They have to educate business folks like us on what is actually possible.

We were just with Facebook two days ago, and you guys know F8 is their big developer conference they have every year. One of their executives pulled me aside and said, "Hey, Dennis, you need to stop talking to the media about this kind of stuff because it's making us look bad."

I said, "What? You think I work for you? I'm going to tell people what the actual issue is because you guys have done an awful job in education. Every time you guys make a change, everyone is wondering what the heck is going on."

Last week we were with our buddy Michael Stelzner, who runs Social Media Marketing. Well, that's the industry conference for social media marketing, and no one from Facebook was there. Logan and I were the ones that were teaching those workshops on how to do Facebook ads. I told the Facebook folks, "You guys need to be there at this conference speaking with us."

Now, since then, they have hired a lot of lobbyists, as you know, in D.C., and they've started to redouble their efforts, but they're facing enterprise growing pains. They're no longer a tiny company. We talked to one department on the ads product side, another department on analytics, another on the sales team, and they don't know what's going on between different departments, which is actually normal inside big companies. You're going to expect that a company that has this much data is having trouble coordinating what has to happen between the sales team versus marketing versus PR versus policy versus the other groups. That's normal.

Michael Krigsman: Okay. Facebook is basically out of control. Yet, at the same time, from a marketing standpoint, from an enterprise standpoint, we need to be there. What does that mean? We need to be there. What does that mean for marketers? How should marketers relate to Facebook in the best way? You guys are experts at this. What should marketers do?

Dennis Yu: If you're a senior executive -- I'll just give a quick answer and Logan can say some more -- you can't not be on Facebook. It's not that you want to be on Facebook, Instagram, Snapchat, or whatever. It's that you can't not be there, so you have to put some amount of effort in creating content, running ads, building teams, a social team around this kind of stuff. But then, you don't know how to measure the ROI.

The reason that Facebook has gotten into this situation is that the consumers, they are using Facebook as their address book, as like a best friend, as like the phone to be able to talk to everybody. The very thing that's made it powerful from the consumer standpoint is the very thing that has been hurting them from the regulation standpoint, and it's also the very thing that's amazing for us as marketers because, when it's free to consumers, all that data, all that targeting that Facebook has exposed to us becomes amazing because we can target and drive more sales, which puts more money into their machine and allows them to invest more.

I had a conversation with Zuckerberg a few years ago because he was accusing me of spamming and riding the very edges of what's possible with their ad system. He said, "We never anticipated that developers like you would use the data from these apps to then be able to do these other kinds of things," so it's the same thing, like the guy who sold his app data to Cambridge Analytica.

I'll just back up a second. When Facebook launched the apps back in 2007, like, Michael, if you wanted to play a car racing game, or you wanted to mine strawberries in Farmville or whatever, the thing that made it fun is that you invited your friends, and these users were able to share their friends' data. That's what created a frictionless environment. But, being able to share not just your data, but your friends' data is the very thing that they didn't anticipate that advertisers or malicious marketers would take and do other things with that data because of how you shared the secret key. That was Facebook ten years ago kind of out of control because they were just build fast and break things, which was their model back then, right? I think they're still recovering from that.

I think, four years ago, they actually solved most of those problems because they've tightened up the API. Their head of engineering last week made a number of announcements about restrictions on insights data, ad targeting, partner data, like Logan talked about, which will initially hurt us as marketers. But, in the long-run, I don't think it'll matter because Facebook's system is so smart at optimizing, we don't need to do the fine tuning and touching.

One of the key points we got from meeting with Facebook a couple days ago was that most of these marketers that are sophisticated at the enterprise level, they're actually hurting themselves because they're touching their campaigns. Each time you touch your ad campaigns, you're resetting the ad rank and the system has to learn again. If anything, Facebook is making these easier by pulling this stuff back. It's not because necessarily of all this privacy stuff. It's because that was the direction that they were going anyway.

Logan Young: If I could add to that, Michael, it goes back to your earlier question, why should we be on Facebook? It's because ads are powerful when they're relevant. Some time ago, Proctor & Gamble came out, and they said, "You know what? We've tried this whole online advertising and we just found that traditional works better." Well, if you approach Facebook with a traditional mindset where you just have one creative that you blast out there to everyone, it's not going to work super great for you.

But, the power in Facebook is that you can sequence messages. The average consumer needs seven touches with a brand before they're going to convert. Let me give you some quick examples of how this will work on Facebook. If I have a video that I run there as an add, I could take people that watch 50% of it and show them something else, or I could take people that only watch 3 seconds or less and say, "You know what? They didn't watch that video. Let me try again with these folks."

If I have an event, for example, we worked with TiVo a while ago, they had this big event. It as a ten-year anniversary thing. I put the event out there. Some people would say, "Yes, I can go," some people would say, "No," and a lot of people would say, "I'm interested, but I don't know." Well, I could then retarget and say, "All the people that said they were interested but didn't make it to the event, they might be interested in something else," so I can target those people with another ad.

On Facebook, you can become really relevant with your messaging in a way that you can't do that with billboards, TV, radio, any kind of traditional. It's just not possible. That's really the power on Facebook, and that's the way it should be. Most advertisers don't do that, sadly. But, if you approach it with that mindset, then Facebook really becomes powerful for you.

Michael Krigsman: Dennis, tell us about this concept of the funnel. What do marketers need to know about that? I think that's what Logan was just alluding to.

Dennis Yu: In a traditional funnel, you have top, middle, and bottom. You have awareness, engagement, conversion, which is actually how Facebook organizes their funnel. I guess technically they call it awareness, consideration, conversion. We call it awareness, engagement, conversion.

You have marketers that are usually in two camps. One is, they're brand marketers where they're trying to drive awareness, and they're selling consumer packaged goods. Then you have direct marketers that are trying to drive leads, sales, and software, and trying to drive e-commerce, that kind of thing. Then, in the middle, you have this no man's land of engagement.

What Facebook is trying to do is bridge those audiences. They have built, for example, a new tool that is called Advanced Measurement, now called Attribution, which actually shows how Facebook can drive people actually going into the store, an in-store visit, actually buying at the point of sale. You're tying back your loyalty programs, tying back the POS systems, tying back email, remarketing between these different systems. Facebook is building all of these to be able to show that, when you have a funnel, it's not a Facebook funnel.

It's not that people are engaging on Facebook and then they are buying on Facebook. It's that Facebook is influencing the consumer to buy, and this here is the big thing. It may bypass the website completely. It may bypass the landing pages. In the last couple months, because of chatbots, Messenger, [and] Instagram ads, we have found, and they have found, through research, that by exposing people to short messages, that actually influences their decision.

Marketers that are marketing on Facebook, when they're driving likes, comments, and shares because they're trying to drive vanity metrics, a lot of those have zero correlation with the actual purchase, when you do split tests to determine a lift test and determine, is there actually an impact. The funny thing is that most of the social media marketers that are trying to drive likes, shares, and comments with cat photos or whatever it is, they are not changing the underlying behavior.

Michael Krigsman: Therefore, what should marketers be doing? How should marketers be thinking about approaching Facebook advertising?

Logan Young: Yeah, I think marketers, to our other point, need to recognize that it's not always a one-touch conversion, and you need to sequence this out. What we want to do is find a funnel that works for you that you can send all your traffic down. You want to test having multiple touches, but you want to go from the first touch all the way down to conversion and just recognize that, again, it's going to take multiple touches.

Advertising video is so cheap on Facebook where you can get a view for a penny or less, oftentimes we've seen, when we worked with the Warriors, we were getting views for just fractions and fractions of a penny, so it's okay to have multiple touches. A lot of markets are like, "Oh, you know, I don't have the budget to put multiple touches," but use video. That's the best way because you'll get the lowest CPMs. Your cost per views are just ridiculous. Try and test videos and find one that gets you a cost per view of one penny or less, and that's kind of a good indication that it might be working. Then you want to sequence a few different videos together. Again, lead from a first touch all the way down to they're going to the website and then converting, purchasing your product.

Dennis Yu: Yeah, video is so key. If you're not doing one-minute videos and 15-second videos on Facebook, you're not even in the game when it comes to Facebook because you can't remarket into Instagram or run things like Instagram stories 15 seconds or less or take those same videos and run in Snapchat 10 seconds or less. A huge thing that we see organizations struggle with is being able to make video central to their strategy. It's not just, "I hired a couple videographers," or, "I hired an agency that produced some videos," or, "I'm taking my TV ads," which is the number one mistake they do is just take their TV ads and try to run them on Facebook. It doesn't work in a sound-off environment. It doesn't work in a vertical environment, which is why you'd want to run square videos as your number format, things like that.

When you have video as central to how you drive engagement and sales at every step in the funnel, then you realize that you need to understand video analytics. There's a different set of analytics on video analytics than Web analytics. You need to understand video production because there's a certain way that you're going to edit and shoot these things for people that are 80% on their mobile phone. There's a certain way you do video sequencing, which is telling stories in light-weight touches. Instead of a 20-minute webinar infomercial, how do you tell stories in 15 seconds, what Facebook calls "out of sequence targeting"? You might have five or six different messages, and they all occur in a different sequence.

You need to figure out how to tie them into a catalog. If you had a product catalog and you're serving dynamic ads, even if you've not e-commerce, you've got lots of pieces of content based on the personas and products you're targeting with all different kinds of triggers, organize your content into a topic wheel, which is what we call it, so that people who like this, they also like that content. People who open this email or like this product, they might also like this other product. People who follow this person, they might like this other person. How do you build your content to be able to fit that format? That's really the challenge that people have. That means you have to build lots and lots of videos in a particular structure, which is not your content library.

Most people will say, "Okay, here's our January and February," and they have a content calendar. Right? "Here's our April content. Here's our May content," instead of, "Here's our content on this theme, and here's our content on another theme." That's why marketers struggle so much. Every time Facebook makes a change, their content calendar and their silo way of organizing their marketing content doesn't fit the way Facebook wants it.

Michael Krigsman: What's the best way to do that? Also, how do you organize? If you've got a series of very short videos and you have dozens of them, how do you organize all of that so that you keep the sequences together and flowing in the way that you want?

Logan Young: Right. There are three types of content in terms of the categories. The first one is calendar driven, like Dennis was mentioning. That's tied to some event: 4th of July sale, Black Friday, Christmas. Then you have spontaneous, which is tied to just random things happening: news, sports teams winning, elections. In the middle, you have evergreen content. That's content that can live forever. This is where you want to focus the majority of your time creating is these evergreen sequences.

When you have an evergreen sequence, it's different videos that, again, once you find the Rubik's Cube, you solved the path that kind of works--video A works well with video B, then video C, and then they convert--you want to send all your traffic down that. We've seen one in ten pieces of content is what we call a winner on Facebook. We recommend starting with a 3x3 where Dennis mentioned you have a three-funnel where you have awareness, engagement, and conversion. For each of those stages, I want to have three videos to test, initially. I have three videos for awareness, three for engagement, and three for conversion. Again, I could have more. I could do a 5x5 or a 10x10. But, keep it a little bit simple to start.

The point is that you might create something you think is really good, but we always like to let the data tell, so we want to put out there, initially, a small budget. Facebook is fantastic. You can test things for as little as a dollar a day. Again, you can't do that traditionally. The first ad I ever ran was in a newspaper. It cost $600; didn't work. Facebook, you just spend a few dollars. You can quickly find out if the content is good or not.

Create this 3x3: three videos for awareness, three for engagement, three for conversion. Put them all out there to test. Then, hopefully, you'll find some winners. Those are the ones you want to run with and start building out those evergreen sequences.

Dennis Yu: It's a key point. That's what we call a "Greatest Hits." See, a lot of marketers, they make the mistake of constantly focusing on creating new content - more and more new content. If you create content that's evergreen, there's content that we have used that's from years ago that continues to produce.

Logan and I, we went to a Guns N' Roses concert because they were playing at MGM Resorts International, one of our clients, and Appetite for Destruction was 1987. Is that right? They're continuing to earn royalties off of that. In almost every single industry that we've worked with, with the exception of news media and publishing, when you're able to organize your content into this 3x3, a story is going to last forever. Expertise you share on how you do something, that's going to last forever.

When you have things that are working well, you're going to use the ad systems. This is the one time Facebook should actually pay us a commission because we're wearing their shirts. When you find things that are working, the way to get an extension off of it is you put money on it. You allow it to live longer in the newsfeed. You recycle that into email. You mention it in a chatbot. You put it on a landing page.

You recycle the winner. You try to get more out of the winner, which is the idea of amplification so that if you're a CMO and you've got your marketing channels organized properly, you should be spending 80% of your time optimizing winners, things that you already have, and only 20% of the time trying to come up with new content. But, most people have it where they're like 90% of the time trying to make new content, which is just like whiffing, trying to get home runs every time, and they've got winners that they have allowed to die.

Michael Krigsman: When you talk about the winners, you basically advertise or see what works and then choose the ones that seem to be performing the best. Then put more money behind it?

Dennis Yu: Yeah. Ashley Furniture, for example, they're called Ashley Home Store now. They have some videos of some of their top salespeople not selling. When I'm decorating on a budget, these are the kinds of tips that I have, and these people are showing themselves, their personalities, who they are--they're a student in school; this is how they're earning money on the side--just showing how they're human, and those kinds of things -- two years ago, they were putting, "Oh, 4th of July blowout sale! Half off! Come out for free hotdogs!" or whatever. Their cost per engagement was something like $0.28.

Now, using the technique of providing video instead of recycling their TV ads, creating real video based on humans, so people can identify with the stories of who these people are actually sharing expertise, creating value, like we all hear but don't do, they have driven that cost down to $0.02 or $0.03 per engagement. And, more importantly, because they have tied the point of sale in each of their store locations back to Facebook, they have found that it drove an 11 ROAS, so every dollar spent in Facebook ads drove $11 in sales. Now, I think they're up at like an 18 ROAS month-over-month, or they get back $18, and people are actually buying furniture, chairs, sofas, and tables, and that's what they want, right?

Before, they were measuring on, "Oh, well, we were able to drive our customer engagement from $0.28 down to $0.25." "Oh, our fan base went from 100,000 to 120,000." Facebook is saying those metrics don't matter anymore. What matters are the business metrics, and that means you have to have your analytics, tracking, and all the tagging all the way. You have to track everything all the way down. That means you've got to do some IT infrastructure API stuff to bring that stuff back in. Otherwise, you have no idea the ROI of what you're doing on Facebook.

Michael Krigsman: It's not sufficient, your ROI having more likes or more followers. That's not an ROI.

Dennis Yu: That was a ten years ago game.

Logan Young: Yeah, we were just at Facebook two days ago at their headquarters in Chicago. They told us, "Do not choose that as an objective, you know, growing the fan base, getting engagement, just likes, comments, and shares." That's great, but it doesn't correlate in their studies of looking over the data to people actually buying. They're vanity metrics. They look nice. It makes you look big but, ultimately, it doesn't make your bank account bigger.

Michael Krigsman: Isn't awareness crucially important and don't these vanity metrics tie to awareness?

Dennis Yu: Awareness is important so long as you can track it all the way through to engagement and all the way through to some kind of conversion. But, awareness, just because you want to blanket the Internet with as many cheap impressions as possible, doesn't really mean anything. The key to awareness is that you actually have what's called a causal conversion, meaning that you're able to change someone's behavior. Just because you can expose somebody to a banner ad, to a video, or to whatever it is, doesn't change their behavior, necessarily, unless it is meaningful and relevant to them. Facebook has put out the relevance score as an estimate of, "Do we think that people are engaging with it?" as the number one factor. Number two, it's de-weighted by negative feedback because Facebook is crowdsourcing is content working or not. Organically and paid, it's the same algorithm determining what shows up in that feed. They're using combinations of positive and negative feedback to say, "Is this something that users want?" and that's why Zuckerberg is saying that advertising, he doesn't believe, is going to be adversarial in the long-run. It's going to be like a recommendation from a friend that happens to be paid because, for us to think about Facebook properly, it has to be the ultimate word of mouth machine.

Simply using Facebook as a distribution channel where you just put money in the vending machine and it shows ads at people, that's not going to work. But, if you find these signals, if you are able to collect videos of people that are sharing content, of your people, of customers, of things that are funny, of different one-minute videos of "why" stories, of sharing knowledge, and then you allow the system to optimize for friends of fans, you allow the system to bid to a business objective, then you will have stacked from awareness to engagement to conversion.

Let me give you one quick example. One of the things that we used to do, we spent millions of dollars that we didn't realize until recently, is that we were bidding to website clicks because, if you come from a Google world, then you want more clicks. You're bidding everything based on cost per click. Then you're going to compare your cost per click on Facebook, right? You'd think that makes sense.

Actually, that's wrong because what's more important than a click is a landing page view. What's more important than a landing page view is someone actually buying or becoming a lead. Because websites load so slow, the average website loads in eight seconds, we've seen in many cases that we'll lose two-thirds of the traffic where it's counted as a click on Facebook's side, but it doesn't make it all the way to the webpage, all the way loaded, because people don't have the eight seconds on mobile to wait.

That means you have to implement things like Google Amp and Facebook Instant Articles, which is instant loading of your content. Those are things that people that are doing Facebook marketing in a silo, they don't realize they need to do. They just say, "Oh, I ran ads on Facebook and it doesn't work." Well, yeah; your website was just leaking all the traffic. You weren't using the tools that Facebook and Google have provided to make things load immediately. You were choosing the wrong objective because you were choosing people that would just click on stuff and never buy instead of telling Facebook, "My objective is to buy."

You still want awareness, engagement, and conversion, but you want to have the right audiences, and you want to have the right content at each of these phases. That's why Facebook now has things like lift testing. We spent a couple million bucks for Rosetta Stone, and Facebook paid for a lot of it, which is cool. We did the same thing for YouTube, by the way. We took their money as well. We put them side-by-side and we said, okay, here's a group of all the people that we have email addresses for, for Rosetta Stone. Let's say nine million people. Half of them, we're going to show some Facebook videos. We're going to expose them to videos, half of them randomly, or not, and then we're going to send our regular email saying, okay, "Christmas sale," and we'll see, of the people that were exposed to Facebook, were they more likely to buy in any channel, not buying through Facebook, but if they're more likely to open their emails, they're more likely to come to one of our stores and buy, they were more likely to come to the website and buy? We found that the majority of the lift actually occurred outside of Facebook.

Facebook is where we were able to get the reach, but the sale -- you see, Facebook changed their behavior. That's the thing is you want a causal conversion because it changes their behavior. That's the way you really want to be thinking about Facebook, not mass impressions and likes; you want to change their behavior so that they're going to buy wherever they want to buy. That's why Facebook is an amplifier to these other channels. That's why you need to be able to tie all these systems together from a data standpoint.

Michael Krigsman: At the end of the day, then, is the value what happens off of Facebook? Facebook is a mechanism to drive people away from Facebook?

Logan Young: Obviously, no. As a marketer, yeah, we're most concerned about getting the results, whatever channel it happens in. We don't really believe in just being a Facebook expert or Google expert. A lot of people think we're Facebook experts but, really, you should just be a digital marketing expert or advertising expert because all these channels should work in conjunction with one another where it should be the same strategy and the same sequences across Facebook, Google Twitter, Snapchat, [and] email.

These are all different channels where people might start on Facebook, maybe as more top of funnel, and maybe they like to end on Google because they see Facebook on their mobile. Then when they're home, they search desktop Google. Then they buy on the website, right? They all work together.

It's the same strategy behind all of them. It's the same content, just in different places across them. We don't view them as separate, and we don't think people should either. There shouldn't just be these siloed experts. All the channels should work more together.

Michael Krigsman: Your video sequencing strategy, you do that for, say, Facebook and then do that for LinkedIn. Is that how you think about it?

Logan Young: Facebook, LinkedIn, YouTube: each of these properties is a little bit different with the intricacies. Long form video works a lot better on YouTube than on Facebook. The average watch time on Facebook for video is only six seconds. The average watch time on YouTube is over two minutes.

If I have a longer video, like Dennis mentioned earlier, maybe I do have a webinar, then I have to just recognize that I don't want to particularly use this on Facebook, but it might work well on YouTube. But, if I have shorter videos, like Dennis was talking about earlier, if I have 15-second videos, one-minute videos, then I know those are going to work great on Facebook. It's taking things where they make sense and using it all together.

Michael Krigsman: We have an interesting question from Twitter. Shelly Lucas asks, "What about organizations that are looking at metrics, looking at changes in behavior that is not a purchase, for example, influencer advocacy, because not all organizations can track social to a purchase and it can depend on the maturity of their social program?" What about nonpurchase activities? Where do the metrics fit in for that?

Dennis Yu: You can do the same thing, so you can have a proxy metric. You can use a secondary metric like leads. You can survey. Facebook has a brand awareness tool, which also gives you free serving at the end. You can run a poll against different audience groups and say, "Are you more or less likely to buy?" You know, "Is your opinion more favorable or less favorable?" If you have these metrics at different points in the customer journey, even if you don't have the very bottom because there's some crazy integration with Salesforce, it's offline, it's many, many touches later, or a high-end product, you can always step back up a couple levels and use those intermediate metrics as diagnostic metrics. You can still do lift testing.

A simple lift testing is, I've got a new cancer cure. Some people get the pill. Some people get the sugar placebo. You're going to do the same thing. You're going to think about Facebook in a scientific way where everything is an experiment. It's not because they don't have the data. It's not because they have all this data and you can run ads and there's a lot of volume. It's because you can segment this way. If you set up your campaigns to do this, which is very simple, which is already now built into the way that their ad sets are organized, Facebook does that for you.

Michael Krigsman: What about if you're selling a product? I work with a lot of marketing organizations in very large software companies. They are interested in reaching the people who are influential in their market, say industry analysts, maybe journalists. What about a Facebook campaign where the goal is simply to build awareness among that specific target group?

Dennis Yu: Okay. You're a SaaS company, and you want to be featured at Digital Marketer, Social Media Marketing World, Forrester, Jupiter, Altimeter, all these different places, Wall Street Journal, CNET, whatever it might be. If you have, in your content library, a list of all the places where your founder or your top people were interviewed, where your best customers have shared on stage, in an article, podcast. All of us have these kinds of things, right? You can take those items.

Here's the key. A) You have to assemble that list. B) Assuming you have that list, you cut out one-minute snippets, video ideally. You upload those natively to Facebook. You don't put a YouTube link on Facebook. That's like wearing Nike to Adidas headquarters. You don't do that. Then, you boost it to the people who are fans of whoever that publication is.

You can also still target a lot of people who work at these places. A lot of workplace targeting, and job title targeting, has gone away on Facebook, but you know what? You can do the same thing on LinkedIn. I can target all the people that work at Forrester. I can target all the people that work at Facebook.

Some of the engineers at Facebook, we'll go to a meetup, and they'll say, "Hey, Dennis. You've got to knock off the Facebook targeting, dude, because, like, I see your ads all the time. I totally know you."

My buddy Jeff Fowler does digital for the Wall Street Journal. (Indiscernible, 0:31:56) … "I've been seeing your ads all over the place. I know you're targeting people that work at the Wall Street Journal." Not people who read the Wall Street Journal; people who work at the Wall Street Journal.

If you hear about things like account-based marketing, this is an extension of account-based marketing using the paid side. If you want to influence people, then you want to influence the influencer. The idea of inception, which is the dream inside the dream inside the dream, is I want to target; I want to show the content that's high authority of the people that my audience respects, and then I want to deliver that against other people that are also high authority that will respect those people. I will use Facebook as an amplifier.

I have to put in my high authority articles. I can boost those articles. I can boost the one-minute video snippets that I'm editing, and I can think of Facebook as an extension of PR, but I'm using the ad system instead of using these people that are just like spamming journalists like me saying, "Hey, write a story about my stuff," right?

Michael Krigsman: Then the videos, you're saying that the videos need to be one minute in length. Why? What's the magic about one-minute videos?

Dennis Yu: One minute is for several reasons. A) We find that most organizations, especially in B2B, is that they have this aversion to wanting to create video. For some reason, they have arthritis and they just want to produce video, or they want to spend $50,000. They want to hire a professional video crew and all this. If you want to run a marathon and you've never run before, can you walk a mile first? Just walk a mile first. Then we'll talk about a 5K, half marathon.

We want to get them into the habit of producing one-minute videos because you and I know that it's way harder to pull out your iPhone and do a one-minute video than it is to do a 60-minute or, in this case, 45-minute webinar, right? You've got to get right to the point. One-minute forces you to tell a particular story. You can't ramble. It has to be on one topic. It has to be on one thing that happened, "Oh, one day this one thing happened and it's something that I learned," to confine it to that one story.

Users' attention spans are lower and lower, even if you're marketing to people that are 50-plus. What was it that Facebook shared, Logan? It was something like people consume content two times faster on mobile than on desktop. It was some statistic like that.

Michael Krigsman: We have a couple of questions from Twitter. The first one is Arsalan Khan. He asks, "How can bloggers generate good leads?" He says in his case he's in the management consulting industry. How can he generate leads using Facebook for his blog?

Dennis Yu: I'll just take the beginning part of that one. Leads assume that you have some kind of lead magnet. You have some piece of content that's so valuable, people are willing to put in an email address. It doesn't have to be this long thing like a course. It could be simply a goal or a list of five things, whatever it might be, enough to get someone's email address.

I think the best thing for you is, as a blogger, you use Facebook lead ads. You tie that in with a Messenger bot, for example. You could use Mini Chat or MobileMonkey. It's so easy using Messenger and using Facebook lead ads, which is integrated. It automatically prepopulates the email address and name. You should be able to get leads for like a $1 or $2. I guess it depends on what vertical you're in. If you're targeting really senior people in a very niche industry, maybe it's like $5 or $10, but absolutely.

If you've got your content that demonstrates authority, if you're a blogger, however much audience that you have right now, and you look at your Google Analytics and see how many people are coming, remarket from that audience. Remarket from that email list into your lead magnet using Facebook. Tie that in with a one-minute video saying, "Hey, I'm Michael. I created this guide on the seven ways on how to do--" whatever it is. "I'd love to give it to you right now. Just put in your email address." They hit, "Send Message," or whatever the button is that you choose for the copy, and they instantly get that. You instantly get their email address.

Lead gen, you can skip the website completely. If you have Marketo, Infusionsoft, or whatever, you can use that too. But, everything that Facebook is doing is around making the experience frictionless, where you can get that result immediately without having to tie in with all these other tools.

If you're a blogger and it's just you, and you don't have a big team, it's easy. Look at your Google Analytics over the last three or four years, or whatever. Find out what your best content is, what has gotten the most traffic, what ranks number one in Google, what is your best lead source. If you don't have a lead magnet around that, make a lead magnet there. Run a Facebook lead ad to that particular asset, and I think you'll find it converts super well. Your conversion rate from clicks should be, like, 30%, 40%. It should be really amazing.

Michael Krigsman: Doing all of this right on Facebook?

Dennis Yu: Yeah, for a dollar a day is all it costs you. You don't need a big budget. You don't need to hire a bunch of people. A dollar a day, put up your lead magnet, remarket against the people who have been to your website in the last 30 days or who are in your email list.

Michael Krigsman: Okay. We have another question from Zachary Jeans. This is an interesting one. "What has been most challenging to you or challenging you as a digital market, recently?" In other words, what is the nut that you're trying to crack?

Dennis Yu: I think the hardest thing, and I don't mean to be condescending, is getting people to make one-minute videos. It could be the executives at the company. It could be motivating the VP of marketing to collect this from their customers, integrating it in their operations to collect one-minute videos.

For example, one of our clients, they do wedding photography. At the point of sale or where the wedding photographer is taking all these photos, that photographer is also asking, "Hey, will you also tell us in one minute how we did?" "Oh, yeah, it was amazing. I loved the photos you guys took. You guys were prompt and serious," and all that kind of stuff.

It's how do you integrate into your operations to get some one-minute videos? Even if you're not doing something at scale, get just a few of them. If it's a smaller organization, or if it's people that you're sending out to speak at conferences that are figureheads by definition, how do you get one-minute videos out of them? Look, all you need is an iPhone, and all you need is one minute, so you can't claim you don't have any money, and you can't claim you don't have enough time.

I don't care how many meetings you have. You have one minute. It takes you more time to make excuses than to make the one-minute video. I know I'm kind of complaining, but that is the number one thing because, without being able to put lots and lots of one-minute videos into the system, then the system can't optimize. Especially B2B and enterprise, they have this fear of doing something wrong, but they only put out one shot. If only had one shot to make a free throw, that would be super risky, right? But, if I had 20 shots to make a free throw, I don't feel like there's a lot of risk.

Getting going and making lots of one-minute videos, which doesn't take a lot of money, doesn't take all these other agencies, is the number one challenge because, without the one-minute videos, we can't do the 3x3 grid. Without the 3x3 grid, we can't get to the why to the how to the what. Without the remarking, we can't drive the eventual sale. Without the eventual sale, we don't have the money to justify bootstrapping and putting more and more investment into here.

Then you have more meetings talking about nonsense instead of, "Let's actually take some baby steps. Let's optimize. Yes, most of your one-minute videos will suck, but they're not movie theater quality. But, the ones that look like advertisements are the ones that don't get clicked on anyway." You know what I'm talking about. You don't click on ads, do you?

Michael Krigsman: No, of course. What are the attributes of a great one-minute video? We only have about five minutes left, by the way. We're almost out of time. That seems important. Given the emphasis that you place on one-minute videos, let's talk about one-minute videos for a moment.

Logan Young: One-minute videos, there are four components that you want to make sure you include. The first is you want to have an interesting hook or intro because, again, we know the average watch time on Facebook is only 6 seconds and 70% of your traffic will not even watch the first 3 seconds. Some cardinal sins to avoid is: don't use a bumper. Just get right into the point. Hopefully, you're telling a story.

A lot of people want to introduce themselves, but more exciting than me saying, "Hey, I'm Logan. I went to BYU. I'm 27," is if I say, "When I was 16, I got held up at gunpoint," or, "When I was three, I went to SeaWorld and got attacked by a seagull." Those are a lot more interesting hooks that lead into a story. Obviously, people want to watch from there. That actually happened, both of those.

Then, the second thing is then you ignite some kind of pain or pleasure, so you create empathy with the consumer. Okay, why should I continue staying here? Is it a problem with a product or a service?

Then you need to describe the solution and then have some call to action at the end. So, start with a hook. Give them some incentive to watch. Again, we love just telling stories. Ignite some kind of pain or pleasure. What's the problem they have as a consumer? What is your solution as the advertiser for the brand? Then, what's the call to action? It could be a hard call to action. It could be, "Click now to buy," or it could just be, "I'm looking forward to talking with you more," or, "Learning more about you," or something like that.

Michael Krigsman: Okay. You create your one-minute videos, and now you start to populate the tools. Facebook doesn't call it a funnel but, essentially, the funnel: brand awareness, conversion, and so forth. What's the relationship? Do you run these in sequence? What's the best way to go about it?

Dennis Yu: Yeah. If you have nine one-minute videos--3 why, 3 how, 3 what--just post them all at once, unless you have such a giant audience that it's going to cause newsfeed overlap. I just say, put them all out there because your organic reach is so low anyway, like I'm not even worried about that. The average organic reach is 2% and it's going down. People complain that it's gone down even further. Two percent is basically zero.

You put it out there. Then, as these different videos are starting to get engagement, the ones that are doing well according to what Logan talked about, these standards of excellence, the ones that are getting a high watch time like north of 15 seconds and an engagement rate of more than 10%, which is the number of people that like, share, and comment divided by the views, then you're going to put more money against that. You're going to initially put a dollar a day, so you're going to spend $7. But, the ones that are working, you're going to put another $30 for another 30 days.

Then, pretty soon, you might have 30 or 40 of these videos, each of them spending $1 or $2 per day. Now, you've got a funnel that's self-reinforcing because things that are working, you're putting more money against. That creates a larger remarketing pool because you can remarket. People who watch video one, I want to then show them video two. If they watch video two, then I'll show them three, four, five, or six. The more people that fit into each remarketing category, the more budget I can spend because those marketing pools are increasing.

Now, Facebook is doing the work for me because, the whole point of collaborative filtering, you know on Amazon, like, people who bought this, they bought that, or Netflix. Oh, you've watched this movie. You'll like that movie too, maybe. That's the same thing that Facebook is doing. That's the same thing that's going on in the newsfeed.

When you organize your content in this way, Facebook is going to do the work for you and say, "Oh, people who liked video 3, they also seemed to like video 10," and they will make that connection for you. If you put the buckets together in the 3x3, they will figure out what video is best to serve next. You do not have to figure that out for them. You need to just put it out there, set up the remarketing audiences, and then set your business objective, and Facebook will figure out what the next video is that that person needs to see.

Michael Krigsman: Okay, so you basically create three videos for awareness, for engagement, for conversion. You put them out there. A dollar a day behind each one of those nine videos. You see what works, and you then put additional promotion behind the ones that are the winners.

Dennis Yu: $63, anybody can afford. It's $7 times 9 videos to run for a week. Then, after that week, you're going to put more money against the winners. Guess what. Like Logan said, 90% of the videos you make are going to suck. Okay. Just keep making more. Now, I'll make another batch of nine videos and then test again. Now, I'll make another batch.

We've seen ones, for example, that are so good. We started at $1 a day and most people are like, "Oh, I'm enterprise. I'm a big company. That's nothing." Well, we've seen ones we started at $1 a day, and now they're at $50 a day, and they've run for a year. It starts to add up because now you have a stacking.

Now your funnel, you're stacking many, many, many videos, each of them spending a few dollars a day. All of a sudden, you've got 50 or 100 of these little minions that are each doing work that are being triggered by particular condition because someone, we just got their email. Now we're going to show them this video. Oh, they just joined our list. Oh, they became a fan. Oh, they just bought our product. Any particular condition, we're going to sequence the next action. Now, you're a multichannel marketer.

Michael Krigsman: Okay. I have a friend who is a CMO. The CEO of that company believes that promotion, that paid promotion is "not valid."

Dennis Yu: We hear that all the time. But, guess what. You pay to send things through FedEx or the post office, don't you? We think of Facebook as digital postage, right? You certainly pay to have pizza delivered to you. You're paying for distribution.

Don't think of it as advertising. Think of it as social postage. If you're a CMO, a CEO, or a CXO, you need to have a public figure page, which is not your profile. It's a business page that looks like Michael Krigsman as a profile, but it's you as a page, a business page. Then you're going to put one-minute videos about who you are, what you believe in and, if you want, some family stories, so people can relate to you as a human. That's what creates sales. That's what gives permission to everyone else in your organization to also share their brand because your company's brand is the sum of the personal brands of your employees, customers, and advocates.

Michael Krigsman: Okay. Wow! We're pretty much out of time. Let's finish up by my asking each of you for final thoughts, words of wisdom for marketing, based on everything that you know. Logan, should we start with you?

Logan Young: Sure. Based off the last thing he said, we can all agree; word of mouth is always going to be more powerful than advertising and it's a better way to go about it. But, ads are powerful when they're relevant. My favorite example is, if I'm driving down the freeway on a road trip and my tank is empty, I'm totally okay seeing an ad that tells me there's a Chevron at the next exit. Or, if I'm really hungry, I'm totally okay seeing an ad saying there's a McDonald's two miles down the road.

If people buy when there's a need, think about how you can use that to your advantage and recognize that, as a marketer, advising is not just about blanket spamming people and sending it to as many people as you can. That is not valid. But, when you actually have something that solves that person's need and there's actually a relevancy, then the ads are a really amazing thing and the consumer is really grateful for them. It's just as good as word of mouth. I think that's the big takeaway that a lot of people don't understand. But, if we can get to that point as advertisers, then that's when you win.

Michael Krigsman: Okay. Relevancy is the key; not just throwing content out there but understanding your audience. Dennis Yu, if you would share with us your final thoughts, advice for marketers who want to engage in this way with advertising promotion.

Dennis Yu: Look. Marketing is confusing. People are off balance all the time. There are all these different … (indiscernible, 0:47:15). There's fear of missing out. My number one thing is, find the things that are working for you already. I bet you, you've got content that's a home run that was maybe a couple years ago that you've forgotten about. Find where it is. Was it an email? Was it something that's ranking well in search? Is it something that worked in YouTube? Take those assets and copy them over into Facebook and make them work on Facebook. You're going to save yourself a ton of headache because the system will learn.

Look at your top posts on Facebook. Look at your top blog posts. The things that have worked the best, you're going to put more money on. The things that suck, do not put more money on. They're already dead. If you got the e-brake on, do not floor the car. That's not what you do. Find your winners. Then, instead of trying to fight Facebook like most people try to fight Google on SEO by trying to trick their way around it, then the system is going to work for you.

I'll tell you one quick joke. A genie; the guy is walking on the beach. He gets the genie. The genie says, "I'll give you three wishes but, everything you do, your ex-wife gets double." He says, "I want 1,000 Lamborghinis." Boom. The ex-wife gets 2,000 Lamborghinis. "I want $10 million." The ex-wife gets $20 million. The final wish, "Genie, I want you to knock me half dead."

That's what's going on, on Facebook. Yes, there's a lot of change. Yes, you have to advertise, the "pay to play" game. But, the winners are going to win more because, when you have good tracking, when you have better goals, content, and targeting, everyone else is getting crushed. That eliminates your competition. That means you're focusing on your winners because that's the only stuff that's going to stay when the algorithm is super competitive.

Michael Krigsman: Okay. Great advice. Well, this has been a very, very fast conversation. I want to say thank you to our two guests who are both co-founders of BlitzMetrics and truly among the most knowledgeable people in the world on the inner workings of Facebook. Dennis Yu, thank you so much for being here, and I hope you'll come back and do this another time. Logan Young, thank you for being here and for being here while you're sick. Thank you, guys, so much.

Everybody, next week we have another great show. Take a look at the website, CxOTalk.com. Don't forget to subscribe on YouTube. All right, everybody. Have a great day. Thanks so much.