Why an AI Agency Shouldn't Lead With AI

0:00We build AI commercials and celebrity models. >> Okay. >> And it has been a very interesting year, very volatile. >> Uh-huh. >> But yeah, we basically sell these commercials to brands of any scale after you know, talking with the team, I think focusing in on who our avatar is going to be a big focus for this year. >> Mhm. >> I think focus in general is also, as you glance at the three different directions that we're kind of pursuing in tandem.

0:30Um but yeah, as far as revenue, we're at 250k this year. The majority of that has been uh torched on basically doing R&D AI development of trying to >> burn rate right now? >> Uh it's like 32k a month. >> Okay. So it's you and >> uh two other full-time people. >> buddies. Okay, got it. >> one >> [laughter] >> yeah, right, right. >> Okay. So you got you and two friends and you guys figured out how to make AI ads.

0:57Commercials. >> Yeah, for like full-on yeah, my background's advertising 20 years. So then pivoted to production. >> Word. So who are you selling How many customers do you have? What are you charging them? What's the model? >> Yes. So we currently have two full-time customers. Um we sold the most recently on Abe Lincoln and Teddy Roosevelt, so I priced it a little bit lower, but it was Well, I mean the >> I wonder how much you charge for something like that, you know.

1:23>> They're basically they're cold inbounds um and they're basically SMBs. >> So you're doing cold inbound. Okay, got it. >> Yeah, we found a traction with Google search with very specific terminology, high intent when they're coming to us, which is great. So we're trying to figure out how to scale that, but um they're basically >> be like the simplest way to advertise this business? Yeah, so I would make an AI ad. >> Yes. Well, wait, yeah.

1:49>> Yeah. And be like, isn't this sick? >> Yes. Wait. >> Would you like that for you? >> [laughter] >> Right. So that I mean that that's definitely part of it. Um so, we're basically at 25k in ad for those two clients, and we still >> 25,000 for those ads? >> Yeah. >> [ __ ] man. >> Well, that our price point that we want to be at is 50k. >> Yeah. [sighs] Too much? So, I'll give you I'll give you this. So, um So, here's here's Alex's two cents on this. I So, is it are you more efficient with AI than you are like how much does it cost you to make these ads?

2:23>> So, our sales value prop is, you know, we start at price anchoring that a normal broadcast commercial 500k. >> Okay. >> The initial idea was, you know, we're 1/10 the price at 50k bringing the um same industry expertise and quality and fidelity. >> Mhm. >> So, for us I would say we're around like 18k as far as an actual 30-second commercial um as far as cost. We're trying to bring that down with building models like these. There's a lot of upfront cost, but then the cost comes down once you have your established model

2:52>> Yeah. >> to actually render it out. >> Okay. Um so, you were 20-year in this 20-year 20-year vet of this, correct? >> On front end of like creative creative direction, yeah. >> Okay. Do any of the contacts you have from those worlds care that you do this now? >> Um it has been challenging in that they are um very risk averse as far as usage. Also, the um negativity generally around AI. It was something that I thought we'd have more traction by now with the people in advertising.

3:22>> I'll tell you where I was going with this, which is that I I I don't think that there's anything if any I don't think there's anything special about AI. >> Yes. >> Fact. People want customers. Whether it's I I have a a flaming stick that I wave and customers come, smoke signals, wacky waving inflatable arm guy, no one cares, right? As long as they get customers. Um And so, if any if anything it's like I almost want the fact that you have AI to be a secret. Like

3:49>> Yeah. >> I'd rather just sell it for 500 grand. >> Yeah. >> Um and then have it cost 18. >> Yeah. >> And then be like awesome. Um and so the business that you're in right now, it's like So, I I was hardcore looking at a company for a while that does literally this. >> Yeah. >> Um and they had a lot of trouble and they had a they had a do-it-yourself a DIY version of making ads, right? >> Yeah. >> And what they discovered is that no one cared.

4:15And so then they just started offering marketing agency services. >> Yeah. >> And just had a more efficient model because they made better ads for less than competitors could and they could make more creative than everyone else could. Um I also, like if I had to really make a bet and this is hopefully this is doesn't like, you know, call babies ugly. Um I would be more inclined to figuring out how to do more volume of creative

4:41>> Yeah. >> than fewer nicer ones. Unless I had a really clear way of entering the market where those guys are spending 500,000. Um I I just the the demand for creative is just going through the roof from an advertising [snorts] perspective. And so if you can just solve that problem, how you solve it, no one cares. But if you solve it so people don't have to like like right now, acquisition.com would be a customer of yours if you could say I can give you 200 ads a month that are really good.

5:08>> Yeah. >> And I would pay you 100 grand a month. I don't really give a [ __ ] Cuz it just saves me time. So, I'm just saying like there's a gigantic demand for that. If I had to pay $18,000 per ad, I probably wouldn't spend that per individual ad anyways because meta it's it's about volume and about diff- about different look and feel and that's what Andromeda's all about anyways. Um so that's where from an assumption perspective of like either you have to go after the true enterprise guys and they're going to take forever and you I wouldn't lead with the AI angle. I would just say like we're 400.

5:39>> [laughter] >> Yeah. >> And then I would just pocket the rest. Or I'm saying I'm actually going to go a little mid-market or even do SMB. Um I would say I would say mid-market and up. And I would go for people who like you have to be spending at least $100,000 a month in ads or whatever it is. And you have to need at least 50 pieces of creative or 100 pieces of creative and we'll basically take over the entire creative team for you. That is a value proposition.

6:05That is how I would sell this. >> Just if I had to reorganize the resources into something that's like more valuable. >> Yeah, I think that's also hearing some of the other questions throughout some of the different sessions, it seems like the content need is less like a traditional 30-second commercial and more so that high volume AI content. >> I need 100% I need 100 pieces of creative cuz you don't know and I don't know which one's going to work. And so you're like I made an Old Spice ad.

6:32No one gave No one gives a [ __ ] like your mom says that was amazing and then that's it, right? So I think I think I I don't know how much tooling you have to do within in the tool. Uh but I think that if you can get like the cost per ad down to like 50 bucks, you know what I mean? And have it be like pretty decent. And do way more of that and then my value prop is like aren't you tired of managing creatives?

6:59And filming and shooting and hiring models and doing scripts, we will just do all of that and just give you the creative. And then the next thing that they're going to ask for is media buying. >> That's media buying, that's fulfillment, yeah. >> Yeah, so realistically media buying is the easiest part of running ads. So you could probably have one media buyer and you could do the whole thing. So I would say that would probably be like you would be a that you are the next iteration of what advertising agencies will become, which is people just pay you to do all of their ads as long as they have a proven funnel for, you know, getting customers.

7:33And I would say like you have to at least have a like this is me a qualifications thing. You have to have a year of profitable advertising, you have to spend at least a million dollars a year in ads, blah blah blah blah blah. And then with that it's like okay, we know the offers that work, we know the funnels that work, we already have target CPAs that we can go after and so then it's great. I'll just take this cost basis and really headache off your plate and that is a value prop. >> Cool. That's how I do That's how I do it. >> Perfect. Thank you. >> Yeah, thank you. If you're not getting as many leads as you want and your business is [music] demand constrained, meaning you could service more customers than you currently have, then this is [music] for you. So marketing is changing and I think ACQ tends to be on the bleeding edge of the stuff. We certainly spend the money to do it, but we also build custom software and we pay amazing vendors and very expensive people to figure out the system that we have right now and I want to share it with you kind of open kimono style. If you're not getting as many leads as you want, boy do I have the thing for you. Click below, book call and hopefully I'll see you in Vegas.