Today’s episode of Decoder is a fun one, I promise: it’s about advertising.
The modern ad industry is an enormous part of the economy that’s been completely reinvented by technology, that all of us experience every day, and to which most of us don’t pay any serious attention. And advertising is now also a data-intensive operation that has way more to do with technology and how it’s deployed than any of the Mad Men-era stereotypes we’re familiar with. When Mark Zuckerberg testifies to Congress that Facebook is free because it sells ads, what he’s really talking about is a massive ecosystem of data collection, user targeting, and sales tracking that operates in every corner of the tech industry. Facebook and Google have taken the old advertising cliche of finding the right customer at the right time at the right place and automated it at a vast scale that’s turned them into giants.
This shift has upended other traditionally ad-supported industries like the news media and television in ways no one ever really expected. On top of that, there’s an entire ecosystem of influencers who make all of their money doing brand deals — an entirely new approach to selling products on social media.
Now, if you’ve been following the tech industry, the broad strokes of what I just described are probably pretty familiar. But while we pay a lot of attention to Facebook and Google, the users of those services, and to influencers, we never really hear from the money — the people who actually buy the ads.
So I wanted to spend some time with Melissa Grady, the chief marketing officer of Cadillac, the person in charge of all of Cadillac’s advertising. Her job is to spend Cadillac’s marketing budget, and the way she spends it is fascinating. Her goal is to sell more Cadillacs, but she uses an enormous array of technology to get it done.
This transcript has been lightly edited for clarity.
Advertising is such a complicated subject that I actually started by asking Melissa to explain the absolute basics.
How do you buy an ad, and how do you measure what you’re paying for?
It goes back to: you figure out who your target is. You figure out where they are. And then you have an IO, which is an insertion order, and you fill it out and you say, I want to —
Like on paper?
You just made a pen motion, so I was—
It’s funny that you say I did that because I was thinking about how not automated that is, too much of the time. But, yeah. Then your ad runs. And then people come back and they say, “You were supposed to get X. You actually got Y.”
What are the units of X and Y?
Usually impressions, sometimes engagements, sometimes views. On YouTube we won’t buy impressions, we’ll buy views, because too many people are skipping, right?
If you were supposed to get X and Y is bigger, then everybody is happy. We’re all smiling. We’re all nodding, “Here’s how we’ll do it again.” And if Y was less than X, then we get what’s called a make-good or an ADU [Audience Deficiency Unit], and we go back and we say, “Okay, now because I said you were going to get a million and you got 700,000, I’m going to give you these three to four hundred thousand in these places.”
Sports have been interesting lately because coming back into sports I thought — I think we all thought — that sports were going to be through the roof. But the truth is, people haven’t been buying sports. So we bought some spots, like in the NBA Finals, and then got extra because not enough people had watched.
I also asked Melissa to explain how she knows whether her ads are successful — after all, her goal is to sell more cars. But how can she know if a website banner ad is helping her more than a TV ad during an NFL game? It turns out that big advertisers will actually buy ad spots and then show things like public service announcements to a small group of people to create control groups — a base case to see if the people who saw the real ads actually reacted to them.
For a TV ad, we actually will do studies with panels of people and ask them, “Do you remember seeing any of these ads? What did you like?” and we measure it that way.
For digital or addressable [TV], we will hold out our control groups. We also have an overall model that we do that will tell us, “multi-line advertising works better than this, if you do this.” There’s just a lot of different ways that you experiment. And then sometimes you’re looking at what percent of people engaged with the ad, which is: they were given the opportunity [to engage]. Did they or did they not?
I find all of this completely fascinating. This is how the money on the internet works now, and people like Melissa control the budgets that push and pull different parts of the tech industry in various ways. If you know me at all, you’d probably expect my conversation with the CMO of Cadillac to be mostly about the new Escalade. But really, we talked about data privacy and how Apple and Google’s plans to stop tracking people using cookies in web browsers will change the ad industry.
Melissa Grady — you’re the CMO of Cadillac. Welcome to Decoder.
Thank you so much for having me. Very excited.
I am very excited to talk to you. I feel like so much of the culture of the internet, and really the world, runs on advertising, and it’s not really explored outside of [the] ad world. So I’m excited for you to help me understand it. You’re the CMO of Cadillac. That stands for chief marketing officer. You’ve had that job for a little bit over a year. Give me just a sense of your background. How does one become the CMO of Cadillac?
I think as far as CMOs go, I’m more of an interesting story, because I really grew up in data-driven marketing, and that has been my passion since I was in college. I am weirdly passionate about statistics. But also, I think why I’m in marketing and not doing something else is [that] I love the combination of right-brain and left-brain thinking. How do you take data and drive insight, which then drives really great creative [and] really great planning? All of those things [are] so important. It’s obvious because you can have the best data analysis in the world, but we use blank ads for control groups. We’re able to now do control groups when we do advertising, and when you run nothing, or you run public service announcements, you don’t see the results. So it’s not just about who you’re targeting. It’s how you’re connecting with them.
Literally, that whole thing is my whole career.
Give me just the most basic rundown of what a CMO does every day. You wake up, how do you begin?
It’s really funny because I get asked this question a lot. I cannot tell you a general day. It’s interesting because you move through so many different things.
Just today, I was in some future product meetings, and we’re talking about the future of Super Cruise and EV vehicles. We had a holiday luncheon. I played some trivia — that was a fun little aside. I’m sitting here doing a podcast with you, which is something I think I hadn’t really thought a lot about when I was thinking about what being a CMO would be. There is this side of doing different presentations, being on a stage sometimes, that I think was an interesting aspect I hadn’t thought as much about. And then, obviously, a ton of time on brand campaigns, on targeting strategies, on those kinds of things that we think about when we think about marketing.
What are some decisions you have to make? What does your decision set look like?
Again, it’s across the board. It really touches everything, and I think anything that touches the customer is something that marketing is either putting input into or making decisions on. What is the customer experience of the future, how are people going to seamlessly shop? What are our digital experiences? What commercial’s going to be on TV? Who’s going to be the lead in the commercial? [It’s] all of those things, and it’s broader than I would have thought it was going to be.
I ask everybody for their decision-making framework — how they think about making decisions. You’ve worked in a bunch of different industries. Data-driven advertising and targeting is a new way of thinking about it. What is your framework? How has it evolved?
Probably not surprising — it’s very heavily reliant on data. When I look at things and make decisions, I like to have a lot of data, and I think my brain starts to categorize things. I like statistics, and that works for me. I tend to almost plot things out. I can give you a very random example that has nothing to do with cars or my career, but will explain how I start to make decisions and understand things. I take things apart, and then I put them back together.
A good example of this is [that] I really like wine, and there are some wines that I like better than others. I don’t know how to describe them. So I started asking — when I would like a wine, I would have the sommelier or someone who understands wine describe it to me. What I understood and what I started to see was, there are certain words that are repeated in this. I like “earthy.” I like “spicy,” sometimes a little “leather.” I don’t know, actually, what any of those things mean, but I know that I like them because I’ve seen the frequency of them.
So that’s how my brain works. When we look at any decision that I’m making on a regular day, the first thing I want to know is, “Who’s the customer? Who’s it going to impact? What’s important to them, or how do they see things?” Then I will ask all of my direct reports, “Tell me what you think about this.” I gather the information. My brain parses it out, and then I’m like, “Okay, here I go. This is what I want.”
I think a lot of people think of advertising in this Mad Men context of creatives and brand campaigns and photoshoots. You have what seems like a very data-driven job, essentially a tech job. Is that how you think of it?
Yeah, definitely. I absolutely do.
What’s very funny is my late grandfather was basically Mad Men. He was in advertising in the ’50s. He was a very successful photographer, and so we used to trade a lot of notes. I think he was fascinated by how things have really kind of come along and changed.
Underpinning any good marketing strategy today, you need a really strong technology and analytics strategy, and you still need the good creative. But I think that once you get to a good insight, which is really data or research-driven, that’s when you can really get to good creative. And I love technology and how things work and are put together and evolve.
So at the really basic nuts and bolts level of it, you have a big ad budget. Cadillac does not skimp on its ad budget. You have a big chunk of money, and you decide how to spend it on things like TV advertising, on podcast ads, on radio spots, print, digital.
The flip side of it — the part I want to explore — is there’s an entire economy based on people like you spending that money. The Verge itself is supported by advertising, by and large. Broadcast television for years and years and years. Now it’s shifting to streaming, but still, the engine of the television industry is advertising.
Print magazines [are] collapsing because those ads don’t perform as well as they used to, because no one reads print. Do you think about the flip side of your job when you spend those dollars, that advertising powers the culture in that way?
Yeah, it is an interesting thing. I think about it a lot, and there’s a few different examples I can give. One of the things I’m thinking a lot about now and that my team hears me say a lot is [that] the world’s going cookieless, and everyone is sort of freaking out about cookies going away.
Can you explain what a cookie is in this context?
The easiest way to know what a cookie is: it’s a digital identifier of who you are. It’s something that as you go around the internet, follows you as a little piece of code. If you go back to a website that you’ve been to before and it recognizes you, that’s because of a cookie.
There’s some early indications of how that could change. First-party [data] becomes more important, how you’re matching first-party [data] to first-party data. But this is where, over the next year and a half, we’re going to see a lot of innovation, because, to your point, a lot of things are run by advertising, and no one’s going to let that just go away. No one’s going to let that not work anymore.
I asked some people in my part of the ad world what I should talk to you about, and one of the first things that came up was cookieless. The phrase they used was “cookiepocalypse,” which I thought was very good.
Specifically, what you’re saying is [that] Apple is being very aggressive with Safari on the iPhone, and on the Mac, to stop tracking. Then Google is supposed to do it in 2022. I think they’re a little bit more worried about antitrust stuff because they control a browser and they’re already in trouble. But you’re saying the primary mechanism of ad targeting is going away.
You said first-party. What do you mean by first-party?
There’s a few different ways to break this down, but now when you go onto a website, you have to accept if they’re going to track you or not.
What we don’t realize is how much we appreciate advertising. As you have to start to pay for more and more subscriptions and you realize how much advertising was fueling, I think people are going to start to [realize], “Oh my gosh. Now I’m paying $200 a month for all these different TV subscription services. But if I let Hulu give me ads and I let Sling give me ads, then that’s going to go down.”
What’s going to happen is people are going to understand the exchange a little bit more. But that means you’re going to realize why and where you appreciate cookies and being tracked. For example, if you have to go to a website and you have to keep filling out the same five questions and it’s something that you go to three times a week, you want them to remember you because you get tired of having to answer the same thing. You’re going to start to say, “Oh, yeah, please. Here’s my cookie. Take my information, but let me understand how you’re sharing it.”
So having visibility into how people are sharing things is going to become more important. When we have information about people, and people have said, “Yep, when it’s serving me, you can share it,” as an advertiser, that’s your first-party data. Someone has said, “Here’s my information.” You order something, you fill out a form, or you say, “Please remember me.” That’s your first-party data.
If I have a million people who have signed up to hear about the Cadillac LYRIQ and want information, that’s my first-party data. If I think that a website that talks about electric cars might have a good list that we want to talk to, that’s third-party data. Today, a lot of the internet runs on third-party data, or people using other people’s data.
How you use your data and are talking or matching with other people, I think that’s going to become the way. So when I say I’m less worried about cookies — and trust me, I’m worried about them — it’s because we’re learning new ways to combine the data we have.
From an advertising perspective, our agency Dentsu has a platform called M1, which is like Experian for ad data. We don’t ever see that data and it’s anonymized, but we do know who we want to target or work with. Dentsu goes out to people who they have relationships with, who they know are safe, then we start to target based off that.
A lot of it will go back to how advertising used to be, way back, like, “Okay, you have a good audience. I’m going to talk to you. Here’s who I want.” People are going to have a lot more control, and in the end, I think we’ll all end up in a better place, because when it comes down to it, I don’t really want to talk to everyone, and I surely don’t want to be spamming people. So as we get to this better place, I think we’re just going to have to be a lot more specific.
There’s the old adage that marketers always love to talk about, Wanamaker’s dilemma: “I know 50 percent of my advertising is wasted. I just don’t know which 50 percent.” Well, I think we’re getting to a point where you’re going to have more specific relationships, and that problem’s not going to be a thing anymore.
Let me zoom you all the way out. I feel like I could fall down that rabbit hole with you for the next hour, but let me pull this all the way back.
Cadillac just introduced a new Escalade. It’s very fancy. It has a 38-inch OLED screen. It’s got Super Cruise self-drive. I’ve configured this thing 50 times on your website. I can’t get it to be under $100,000. So you’ve got a $100,000 super truck that you’re selling people. You’re the person in charge of marketing it. How do you start?
The first thing we start with is data. Who are the current Escalade owners? We did some modeling on those people to understand who were the new potential Escalade owners. Then we got into the insight portion of it. There’s some things that are very true about Cadillac, and then there’s some things that are very true about Escalade because Escalade is the same, but different.
So when you get to the insight of who is “a Cadillac person,” it’s so fascinating. When you go into our database of owners, the thing that indexes probably the highest is someone’s job title — the job title that indexes the highest is president or CEO. The reason for that is because we’ve got a bunch of entrepreneurs and self-made people. People who push themselves, who have started low. They’ve worked their whole lives, they’ve gotten to a certain point and they reward themselves with a Cadillac. If you go all the way back to Motown, there’s stories that as soon as you got a hit record, you got a Cadillac. And that feeling of reward and entrepreneurship and that type of person who’s drawn to it is very consistent across Cadillac.
Now, as we look at the Escalade our campaign is called, “Never stop arriving.” Regina King is the person who is featured in our ad for the Cadillac. And the reason that we’ve been working with her is we wrote a manifesto earlier in the year that really resonated with her. She was like, “Look, you guys are really talking about me.” When you get down to it, Cadillac represents the American Dream. If I want it and I work hard enough, I can get there. And so when we wrote this manifesto and Regina was introduced to it, she was like, “That’s my story. I started as an extra, then I had a TV show, then I was in some movies.” You may have heard of Jerry Maguire, but [she’s] not the main character. Then she’s an Oscar-winning actress who’s now a director.
We went with “Never stop arriving” because this person who gets success doesn’t lean on their success and say, “Hey, here I am.” They’re like, “Now, what am I going to do next? How am I going to keep making the world better? How am I going to keep making myself better?”
That’s a lot of background on how we got to “Never stop arriving.” So now we know what we want to do with this campaign, and the basics of how we go about marketing that is with our data and our insight. The third piece is, show up differently. Innovate. When you look at our Escalade campaign, we ran some TV ads, we know where our audience is there. And that’s obvious, here’s the data, here’s the output. We run our ads in digital, in addressable, very heavily—
What do you mean by “addressable”?
Much like digital ad buys, addressable TV is targeted. You have regular broadcast TV [and] addressable is where we know who is watching. There’s a subscriber base, so you know who’s watching something, and then we can deliver relevant ads so that we can select an audience. You select an audience, you target them. If you and I are sitting in two different apartments in New York, you may see a different ad than me.
This is like the holy grail of television advertising. I’ve heard this talked about for a long time. I’m watching Hulu, they know who I am, they’re going to serve me a different ad than you. You’re saying that’s already happening.
Absolutely. We’ve shifted a good portion of our budget this year into addressable. To get away from Escalade for a minute, addressable TV actually really helped save us during the pandemic.
If you want to talk about the beauty of addressable, we were able to do this: No. 1, we stopped production, as did everyone else, so we don’t have a lot of inventory. No. 2, we know how regional COVID was. So while New York was shut down, there were parts of the country that hadn’t yet been affected. And No. 3, we knew what our incentive structure was and our inventory. We know inventory, we know how people are feeling, and we know incentives.
We were then able to, on a market by market basis, say, “Here’s the messaging we’re going to have in New York, and it’s all about, ‘We have your back.’” People don’t need to see any kind of fun advertising right now. I think in the beginning of the pandemic, all of us marketers had the somber advertising. You had to do it and it worked really well then. The beauty of addressable is [that] I think we all know the moment we were done with that kind of advertising. Every two weeks we were updating our creative and we were able to figure out region by region, what creative to play where, based on how people were feeling, what they were going through, and what our inventory was.
So in New York, we might be saying, “Health care workers, we can help you with a car purchase discount, and here’s what we have,” versus in Texas, we might still be running an XT6 ad because people were still living a lot more normally.
That’s incredible. So how do you track that? Because underlying all of this, all of your data collection, is a sense that you’re collecting all the data because you can see how well this stuff works.
Let me just offer the simplest example so we can hook onto something that everybody can understand. We read ads on this podcast. I say, “Go to this website, use ‘Decoder’ as your promo code.” I know that advertiser is tracking how many times people use the promo code. That’s how they measure, in just the most brute force way, if their ad on this podcast was effective. You’re obviously not having people in Texas use a promo code—
Walk in the dealer and say “Decoder.”
Yeah. I mean, if you want to do it, let’s innovate. But I’m curious, when you’ve got your fancy addressable ads running on different markets with different campaigns, how are you tracking what’s effective and what’s actually turning into the sale of an Escalade?
We’re tracking sales. That’s the beauty of addressable. What we do is, if we, say, have two million people in a market that we want to target, we’ll hold out a control group. And there’s a lot of syndicated data that we’ll look at. There’s a lot of syndicated data on who bought a vehicle. Again, using this privacy-safe environment that we have, we build out this segment, we hold out a control group, and then we go back and we look, how many people purchased overall, how many people in the control group purchased, and what’s our difference? What’s the lift? So for someone who loves statistics, experiments, and data, it’s pretty fun.
Let me ask you another really, really basic threshold question, which I think every generation goes through. Does advertising work?
The audience can’t see Melissa, but she started vigorously saying yes. [Laughs]
But what I mean is, you’re measured, I think, at the simplest level, on whether sales went up or not. Right? You do a bunch of stuff, you collect your data, you spend the money on marketing. At the end of the day, the CEO of Cadillac is like, “Did it work? Did we sell more Cadillacs than we would if we hadn’t done anything else?” Or is there something else you’re measured on?
In the end, it all comes down to sales.
Of course, we also look at brand opinion. We track things like that, opinion and consideration, and I’ll divert for a second and say why that’s important. There was a third-party study done during the recession. And it was looking at how brands went down and then bounced back, and they separated it based on having a strong, an average, or a low opinion and consideration from consumers. And brands that had a stronger opinion stayed high longer and bounced back faster. So there’s actually data behind why opinion matters. It can feel a little soft when you talk about it. But for me, again, I’ve got to peel things back, I’ve got to understand the data. This is why I’m okay with opinion and consideration.
But does advertising work? It definitely does. We all think about advertising as annoying, and it is sometimes, but people actually love advertising. A few examples of that are—
Every ad person says this to me, by the way.
Yeah. I’ll give you some examples of things I’ve done, and then I’ll just give you the basic one. How many people are so excited on Super Bowl Sunday to see all the ads? That’s good advertising. When advertising is good, we don’t mind it. As we go back to Escalade — and I’ll finish up how I come up with that plan — we start to look for different activations and consider, “how are we going to show up differently?” So we’re going to run the TV ads. The TV ad features Regina. It shows Super Cruise really well, shows the speakers. It’s very cool.
But we have a lot of different activations. In one of them, we sponsored James Blake’s new song. We had a contest to find his best fans. We drove them to a hangar out in LA. He performed for them, and we “gave” a first listen of that new song to them.
So the Cadillac messaging within there: it showed off the features of the vehicle pretty well, but it wasn’t a “sponsored by Cadillac” ad. But everyone who watched that new song knows that Cadillac has a new Escalade. 30 million people who watched that video online enjoyed that experience. And now they know about Cadillac.
I always try to be additive to an experience and less interruptive, and that’s why good creative and good insight is so important. Because if a commercial is really funny or good, we don’t mind it as much. I’m not saying we love them, but the more that you can do things that make it interesting, the better.
For instance, podcasting. We’ve been experimenting a lot with podcast advertising. And for the Escalade, one of the things we did was add an Escalade Visualizer to one of the podcast players we had. So as you’re listening, you could play around with the Escalade. And we had a “roadblock” where our segment heard Regina before the podcast, and then we had this ad in there.
You have to say what a roadblock is.
Oh, good call. A roadblock is where every single person within a period of time experiences whatever your advertising is. The way that used to be is you would go to a homepage like Yahoo.com and you’d see a big ad that was there for a day or two. That’s a roadblock. For an audience, if there’s a certain audience that you’re buying, only those people will experience that ad when they get there. So, this was an audience roadblock of Regina talking about the Escalade.
You and I are talking on the day that the government is suing to break up Facebook. They filed the lawsuit 20 minutes before we got on the air. You’ve talked a lot about data and tracking and making sure you’re converting into actual sales of a car.
When most people think about data and the internet and tracking, they think about Google and Facebook. We have endless conversations about privacy. First, you are talking about an awful lot of data and an awful lot of tracking, so I’m curious how you’re thinking about privacy. And then in the context of Google and Facebook, they have the most data, but they’re not the first place you’d think of necessarily. I don’t think of Cadillac advertising showing up on Facebook, for example. So, I’m curious how you think about those two platforms.
Let’s start with privacy. You have talked a lot about data and tracking. How do you think about privacy? I mean, tracking is what the industry runs on right now, the advertising industry. So, how are you thinking about that evolving?
I look at how I’ve grown in my thinking on this over the past 10 years. I’m a data geek, and what we were all talking about for the past 20 years is when we can actually specifically target people, when we can get the right person with the right message at the right time, we’re going to know and we’re going to be able to track it.
10 years ago or so, when some of this really started to come to fruition, I was very excited, and I was full force, “How do we work with this partner? How do we do that?” As you started to see how different people were using data, or see people not understanding what they were opting into, I think then I started to realize, “Hey, we need to be really careful here.”
And I will say from a GM perspective, on anything that’s safety-related, we are going to be as careful as possible, whether it’s with a person’s life or advertising. We want people to be safe. And that extends to their data and their privacy. It’s interesting, at GM, we start every meeting with a safety message. And when I first joined, I was like, “Oh, that’s going to be weird.” But actually, it’s something that Mary [Barra, chair and CEO of GM] came up with while she’s been here: “how do we really take safety personally and do it every day?”
One thing is, we share personal stories. Someone will tell a story like, “I was putting up my Christmas lights and I fell off a ladder, so be really careful.” Or “I saw someone who got in a terrible car crash from texting and driving, so let’s remember, don’t walk around looking at your phone.” All these little things really start to ingrain into your own brain and to the GM culture. So, when we talk about people’s data and privacy, as much as I personally think it’s really important, GM also is trying to set [the] highest of standards.
As we talk about having people understand what they’re opting into, having different levels of control and only working with partners where we know what’s going on is important. Now with our agency, they’ve been through the highest levels of clearance and we know how they’re doing everything, and on top of that, they anonymize their data. So it’s this safety net around people. As excited as I was 10 years ago, now I think there’s a big responsibility that we have. There’s a lot of money at stake, which sometimes leads to not the best behavior in certain people.
Do you think Facebook and Google have been as responsible as GM?
I think that there are very public examples of Facebook learning some lessons. I don’t know as many examples of Google. I think within Google’s own ecosystem there’s more visibility into what’s going on. As it started to be clear what could happen, they really locked it down. So I think they’re probably learning too, they’re on a journey as well.
That leads me into talking about platforms and how you think about platform advertising, and broadly, what you think it’s good for.
We spend a lot of time covering YouTube and Instagram. They have ad formats. They’re big, valuable businesses for those companies. Do you think that advertising, those formats, are as effective for you as addressable TV or print advertising or the NFL, or wherever else you are?
Absolutely. When we talk about being additive to an experience and making sure that what we’re doing is relevant in the experience, it’s a lot of buzzwords, but it extends to online platforms, too.
We have something called Cadillac Live. Cadillac Live is a showroom that we have in Canada, where all of our vehicles are there and people can dial in on basically a one-way Zoom or video call and have their own auto show specialists describe the vehicle to them. It’s pretty cool. And in the pandemic, it really saved us because as people couldn’t go into showrooms, they could just dial into Cadillac Live. On Instagram, we do [a] broadcast from Cadillac Live. And we had one a couple of weeks ago where the lead product person on Escalade was showing the first Escalade versus the current. And then we boosted it so that more people could have the opportunity to see it. That’s really good advertising on Instagram.
YouTube is the same. I try to be very careful on YouTube because the easy thing to do is to take your TV commercial, cut it down to 15 seconds and run it on YouTube. I think that’s really annoying to people watching YouTube. So I’m trying to find ways that we do more interesting things. For example, with the XT6 launch, we actually had six-second videos. It’s amazing how quickly you can get a point across in six seconds. We ran those on YouTube. Instead of someone having to watch a whole video, they’re like, “Oh, that’s cute,” and then they’re on their way. What I try to do is make it more fun for people, so that they actually enjoy it. Each platform has its benefits, but YouTube and Instagram are great.
When you think about those formats, I always wonder what advertisers think of the “skip ad” button on YouTube, which is YouTube’s great innovation for users. They only have to sit through four seconds before you can skip the ad. My instinct is that everybody skips the ad. Does that bother you? Does that work for you? Am I totally wrong? Do people sit through the ads?
People do [skip] a lot actually, but that’s always my challenge to the creative team. You have three seconds. What are you going to do in those three seconds that’s going to make someone not skip and if they do, to make sure that they got the message? So that’s just how we look at it. But it is interesting how many people actually watch the ads. You’d think you want to skip it, but if it’s interesting enough, you don’t. That’s our challenge as marketers. We’ve got to step up to the challenge.
YouTube has frequent “adpocalypses” where they demonetize creators or they’ve got a moderation problem. Over the summer we saw organizations like Sleeping Giants come at big advertisers and say, “You gotta walk away from Facebook. You have to walk away from Fox News.” In the context of where we started, the idea that advertising funds culture, does that stuff hit you? Do you think, okay, YouTube is a little crazy right now. I’m going to pull those dollars away until they figure out whatever controversy is happening right now?
So I’ll give you a “yes and” answer on that.
If there’s something that we feel is misaligned with our brand, we don’t want to be there. And so, as we advertise, we have really strong inclusion and exclusion lists of sites, content, and other things like that. And whenever we’re made aware of a problem, I don’t want to be there because I don’t want Cadillac to stand for that. Cadillac has a lot of meaning. And we’re very careful about what our brand means. It’s got a long history, and it’s a history of inclusion and standing up for people, and helping people who want to help themselves. That’s strong and powerful and I can’t ruin that by being in the wrong place. I think sometimes we have to stand up in whatever format that we’re willing to.
What’s the mechanic of that? Do you get a text and then you pick up the phone and you’re like, “Susan, pull my ads off YouTube.” How does that actually work? That’s what I imagine — you’ve got a red phone to the CEO of YouTube and you’re always just yelling at them.
What’s funny is, you’re not far off.
What happens, if something runs where it shouldn’t, [is] you start getting texts and IMs, or you have an angry customer that writes in. It’s amazing how many people will write in and tell you their opinions. But yeah, something like that will happen. And then we will go back and say, what happened? We’re not supposed to be there, so how did this get there? Or if it’s something new, then it’s like, “Get it off now. We’re not going to be part of that.”
One of the things I wanted to ask you about was influencer marketing. And the reason I’m asking about controversial content is, influencers broadly are an entrepreneurial bunch. I think the influencer and creator economy is amazing. The platforms have enabled it. But there’s still a lot of 25-year-old millionaires out there. And to me, the idea that we’re going to give the keys to a $100,000 super truck to a 25-year-old millionaire seems very risky.
How much influencer marketing do you do? How effective do you think it is? Is there a parking lot full of wrecked XT6s somewhere? How do you manage the cost of that, versus the reward?
A few things on that: we know what we stand for. We know what our values are. And our influencers are very well aligned with that. So like Regina King—
You think of Regina King as an influencer?
I guess, yes and no. I think there’s influencers who are just people, who by definition have a large social following and a large presence in the world. And then there are the YouTube stars, right? We’re not giving a lot of YouTube stars cars, no. Someone like Regina King, I don’t worry about her. I think she stands for a lot of good things in the world.
One of the influencers that we do work with is John Henry, who is in his 20s. I’m not worried about what he’s going to do, because he’s someone who stands for the right things. He’s very aligned with us. He’s a young entrepreneur. We recorded the show Hustle with him about a year and a half ago, and we’ve just remained partners.
Another one is Melissa Butler from The Lip Bar. She started The Lip Bar and she’s pretty awesome. She was on Wall Street and realized, “I’m doing the wrong thing,” and started Lip Bar. And I think she had to deal with a lot of people questioning her before she was successful, like “How could you leave such a good job?”
But when you have people like that, who are strong-willed people who want to do better in their life. People who are striving to be the best version of themselves, then I think they’re less likely to do the stuff you described.
Step out of your Cadillac role for a second and into your “thinking about the advertising industry” role. Do you think influencer marketing is successful? Is it growing?
Because when I think about YouTubers and I think about Instagram stars, they don’t make any money from the platform. The average YouTuber is getting checks from YouTube, AdSense and their partner programs, but the real money comes from the brand deals they make. The real money comes from the products they endorse or the integrations they have. Maybe Cadillac isn’t doing it as directly, but do you see it working as another category of advertising that is competitive with television, digital, and all the other stuff?
I think in the right categories, it is. I have a 16-year-old niece, if she sees someone who she’s watching on YouTube all the time and they’re talking about Lip Bar lipsticks, then she’s going to be like, “Oh, Lip Bar is really cool.” So when you’re in a category like that, that is, a more accessible product and not a big purchase, it works. I think it’s a lot harder with a $100,000 Escalade to have that influence with those people. Although I will say, when some of the car people on YouTube we talk to review a car, like CT5-Vs we’ve given to some, it definitely works. So I think there’s different levels and ways into it, but overall, yeah, it works.
Cadillac is moving into EVs. It’s a big shift. I know it’s not without its controversies and challenges, but you’re doing it.
Arguably the biggest influencer in [the] car world is Elon Musk. Tesla does not do any marketing besides Twitter accounts and stunts. Have you ever thought about making Mary Barra, the CEO of GM, a Twitter maniac? Have you ever thought about taking Rory Harvey, who’s the CEO of Cadillac, and just letting him loose on social media?
I’ll say yes and no. The thing about it is-
What percentage “yes,” to go loose on social media?
I would love for Rory to have a really strong social media presence. The thing about it is that no one at GM is going to be the same.
Let me just give you an example of how it’s different: when Elon will say something and then stock prices go up or tank, it’s a weird luxury that they have that.
At GM, you can’t have that same sort of discourse on a social media platform. I think that Mary is incredible, and as much as we are able to get her voice out into the world, that’s great. I just think how we approach EVs is going to be very, very different than the Elon Musk effect, which is incredible, honestly.
When you think about all the tools that we’ve talked about, there is digital advertising across platforms, there’s digital advertising across publications. There’s addressable TV, there’s influencer marketing. There’s four-second ads on YouTube that make you keep watching the whole thing. There’s a litany of formats. You’ve got to shift the perception of Cadillac to being an EV maker against Tesla. What’s your plan? How do you use all those tools?
You’re going to hate this answer, but we’re going to have to use all those tools. I think next year is the year for us to get our story out because the way that we’re approaching EV and the way that we’re creating these vehicles is pretty incredible. It’s a matter of getting that story out, GM’s “zero crashes, zero emissions, zero congestion” vision, and how Cadillac fits into that vision. Some of that is going to be through influencers or experts talking about saving the world. And some of that will be talking about our new features like Super Cruise. Super Cruise, for anyone who doesn’t know, is our hands-free driving. We are actually the first hands-free driving in the automotive industry.
We like to talk about the Super Cruise effect. Basically, there’s a moment where you’re in this car, you push a button and you take your hands off the wheel, and you almost can’t breathe. You’re like, “Is this car going to keep turning around the curves of the road and going 60 miles per hour and keep me safe?” And it works. And then you’re just like, “Wow.”
So it’s telling that story of what our technology is and can do. Like AR nav. I drive an Escalade and I can often see the road better in my AR nav than I can on the road itself because it’s so intense on the OLED screen.
Or things like night vision, that’s another cool one. I have a place in the mountains. There was a deer that was coming towards the road as I was driving up and I saw it with night vision, which I wouldn’t have seen otherwise.
As we start to tell these technology stories, I think people will start to understand. So it’s going to have to be firing on all channels next year.
You named a bunch of technologies, some of them are directly competitive with Tesla. Do you think you have to make the direct comparison and say, we’re better than Tesla’s self-driving stuff? Do you have to ignore it? Yes, you’ve got to use all these tools. But inside of those places, do you tailor the message and say, “We want to get people who are considering a Tesla to consider us, and here, we’re making that direct comparison”? Or is it a little broader and just saying, “Hey, look at how cool this is?”
Yeah, it’s a little broader. I’m not taking anything away from Tesla’s innovation. I think it’s amazing what they’ve done, and very different from where we are. When you look at EV being about 1 percent or so of the auto market now — or under 5 percent, let’s say — then there’s a lot of room there for both of us. I think the trajectory of EV growth is going to be huge. Once we get the infrastructure, once we have the products, and once people consider the changes in the world, I think all of those will be motivation to consider what we’re offering.
Things like that [are] going to drive EV adoption. We’re going to have amazing products at exactly the right time. Yeah, I don’t need to go say, “This is better.” Other publications will tell you our self-driving’s better. I don’t need to—
[Laughs] Where’s my fleet of influencer Escalades?
One of the things that I’ve been doing [on] episodes of Decoder that has really stood out to me, is having guests tell me various trends that have been dramatically accelerated by the pandemic. And one of the biggest trends is e-commerce. Obviously, everyone’s shopping from home.
You don’t sell what I would think of as an e-commerce-friendly product. I don’t think you’re going to sell Escalades on Amazon anytime soon, but has that accelerated for you? Is that something you’re thinking about — we should make it easier to just buy a car from home? GM is a big company, lots of dealers, lots of relationships. Is that something you can just move? Or is that something that has accelerated?
This is one of the things that I think of when we look at silver linings that came out of the pandemic. I think in automotive it was very hard to change consumer behavior. You buy a car by going into the dealership and you expect to do it a certain way. And what the pandemic really gave us was the gift of being able shift things. GM has an e-commerce platform. It’s called Shop Click Drive, and it’s integrated in with our dealers. Usage on that was lower before, just because consumers didn’t really want to engage with us that way. They wanted to go in and haggle with the finance manager.
I talked before about Cadillac Live and how we’re changing how people shop that way. We are, I think, where some automotive companies saw higher acceptance of existing products, I think we were able to actually pull up some of our in-development things that weren’t supposed to come out until next year. We sped up the development of them. And we’ve seen big shifts in the way that people buy cars.
It always culminates in the dealer. Our dealers are one of our best assets. But how we let the dealers best use their time can change. If someone wants to look at Cadillac Live, find out about all these vehicles, and then look on Shop Click Drive online and see how much that costs, then they can have a very good, educated conversation with the dealer.
How many cars have you sold where people click a button and the car just shows up? Is that something you can do yet?
“Click a button and the car shows up” happens more than you think. Someday, the car will be able to drive itself there when it’s done. But what is happening now is concierge service. If you want to get your car serviced, you can call the dealer and they will come pick it up. They can drop off a loaner if you need it too. The same thing happens with delivering a car.
There are some states where you can’t do it, but there are a lot of examples where a consumer could configure the whole deal online. They would then talk to someone to arrange delivery. And they come and sign and take the car.
I had the delivery service. One of my cars needed servicing while we were at home. And it was pretty crazy to just sit in your house, get up from a meeting, give someone your keys. He disinfects them, goes and gets in the car, and a couple of hours later your car’s back. It was great.
What’s next for Cadillac as you think about marketing the brand next year? After the pandemic, people are maybe not going to want to look at screens so much as we all have for the past year. Do you think you need to make a shift in how advertising works again, post-we’re all locked inside?
You are asking me my biggest question. And not only just for next year when I think we want to look at screens less. I think that when we just look at this year, we know behavior is totally shifting. People are gaming now. We’re experimenting in gaming. People are not watching sports anymore. So, how that behavior is changing and what people are going to do is my biggest question. But I definitely want to be there hopefully helping them make that experience better, in a safe way, as it changes.
You’re a data person, what’s the biggest signal to you about changing behavior right now?
I probably just gave two of the bigger examples. Looking at sports ratings being down so much, that was really a surprise to me. Gaming being so big right now, I think what was amazing was how many people found a sense of community through gaming. I think those are two of the bigger things right now that I’ve seen.
Decoder with Nilay Patel