Emojis, Expression & Leadership With Holler’s Travis Montaque

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On this 236th episode of “Marketing Today,” I speak with Travis Montaque, the founder and CEO of Holler. This messaging technology company uses AI and content to improve consumer communication online. Holler is on the frontline of the ongoing battle to bring human emotion into the world of technology.

The conversation with Montaque begins with his time at Chick-fil-A as a teenager, starting as a cashier and eventually working his way to the role of district manager by the time he was 19-years-old. Montaque was able to make the “fastest transition from Main Street to Wall Street” that I have ever seen, leaving Chick-fil-A to work for a private equity firm at only the age of 20. Montaque then discusses the difficulties of deciding not to accept an offer with Goldman Sachs and instead start Holler and how the pursuit of passion “inspires people around you to invest with whatever they can.”

We then dive into Montaque’s efforts as a successful black entrepreneur to bring diversity into the corporate environment, but “diversity shouldn’t be the end goal, changing the current corporate culture should.” Holler is working to create a culture that is inclusive and focused on belonging. Finally, Montaque breaks down this idea of “service, not surveillance” and how big-tech needs to change how it interacts with its consumers if there is to be a relationship of trust heading into the future.

Highlights from this week’s “Marketing Today”:

  • Travis went from working at Chick-fil-A as a teenage cashier to a private equity firm in Miami during college. 1:43
  • At an early age, Travis was able to learn valuable lessons through hard work at Chick-fil-A. 4:00
  • Travis had aspirations of working on Wall Street but ultimately felt that he couldn’t make the impact that he wanted. 4:28
  • A side data in Big Tech led Travis to leave his job at Goldman Sachs and start Holler. 5:38
  • It was a rough process to explain to his mother the switch to a job that didn’t guarantee an income, but it was worth it. 6:58
  • Holler uses AI to make consumer conversations online better by providing content that consumers want. 8:19
  • Any sticker that you have been able to add to a Venmo note has been provided by Holler. 9:41
  • Travis partnered with students in the engineering school to create the prototype, pitched to investors, and hired employees. 10:18
  • Until he had the seed money that he needed, Travis had to use inspiration to bring in the investors he was looking for. 12:40
  • Initially, focusing on expressive emojis wasn’t a thing, but evolving from the initial company brought the ability to share feelings. 14:16
  • There has been a rise in categorical messaging, spreading to just about every category you can think of. 16:06
  • Body language makes up so much of home emotions are perceived, which led to the use of emojis in Holler’s peer-to-peer communication. 17:12
  • Holler is expanding into different brands and marketing companies, allowing those companies to connect with their consumers. 18:35
  • Share rates have reached up to 21% with some companies, bringing engagement to an all-time high. 21:10
  • Travis has achieved a tremendous amount of entrepreneurial success and also happens to be a black man; unique experiences have been had. 24:18
  • There is an issue of investment pipelines in industries where institutions only get their resources from the same source. 25:45
  • Travis believes that America’s entire corporate culture needs to be changed to include diversity at the highest ranks. 28:45
  • Holler is working on expanding its perspectives to include people from all over the world. 30:20
  • There are so many issues at this moment in time that the responsibility of leaders to take care of people is more prevalent than ever. 33:03
  • People will get upset when their leaders don’t know their beliefs, but that doesn’t mean they need to know all the answers. 36:00
  • Travis’s experience as a first-generation American and watching his mother’s work ethic shaped who he is today. 37:41
  • As a younger man, Travis learned from the fundamentals that he gained from his first jobs. 39:41
  • Bringing good practices and standards into how next-gen tech companies behave towards their consumers is something that Travis supports. 42:14
  • Travis believes that the largest threat to marketing today is the inevitable end of identity. 44:19

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Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on opportunities around brand, customer experience, innovation, and growth. He has consulted with Fortune 100 companies, but he is an entrepreneur at his core, having founded or served as an executive for nine startups.

How To Choose The Right Marketing Budget For Your Video Game

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Early in my career I was a brand manager and very infrequently was privy to how the marketing budget I managed had been derived. As I got promoted and got more responsibility, I started witnessing how budgets were being allocated. I’ve worked at more than seven game companies now over the course of 24 years and have been exposed to a few methods. These include a percent of revenue approach, a top-down budget, a share of voice/market budget and zero-based budgeting. Below I’ll discuss the pros and cons of each method as well as the kind of video games that typically use them.

Percent of Revenue Budgeting 

This is a simple method that includes a forecast of total revenue that the product or division is expected to make in the next time period. To arrive at your budget, you multiply the total revenue by the percent allocated toward marketing.

Pros: It’s very simple, very straightforward and it’s equitable. Assuming the same percentage is given to all the products, all of the titles and all the marketing goals, no single game gets more share than another, thereby preventing the need for complex analysis and saving a lot of time. The other good thing about it is that it scales. So if a product has a very large revenue forecast, the marketing budget is equitably raised because of that percentage of revenue.

Cons: It really has no recognition for differing strategies and budgets that may be required based on those strategies or differing product external factors. It doesn’t consider whether or not your product is in a very hotly contested genre or category where your competitors are trying to outspend you to make up market share.

It also doesn’t take into account a particular unique idea or marketing strategy that may be interesting to invest in. For example, let’s say you set your percentage of revenue budget and a new social media platform explodes onto the market like TikTok. When you set those budgets, you had no idea because TikTok didn’t exist. But now a massive amount of your player base is consuming content and you’ve got an amazing strategy to launch your next TikTok presence. In the percentage of revenue budget, if your forecast isn’t changing, you need to borrow that money from some other marketing tactic that you had allocated funding to. So you need to make one part of your marketing campaign suffer to be able to afford this new marketing tactic.

Typically used for: Premium AAA console blockbuster game launches where marketing campaigns are relatively short and spending is compressed.

Top-Down Budgeting

Top-down budgeting is when senior management from a very heavy finance background dictates how much you have to spend.

Pros: It’s fast and fairly predictable, which means your marketing team can plan for it and be ready to execute it very quickly. This method is advantageous when your competitor is slower to agree upon budgets because it enables you to get to market quicker than them, thus allowing you to take share of voice.

Cons: This approach removes any of the agency that marketing team members might have. They are not given a voice in the process and thereby could become discouraged from doing their best work because they feel their input wasn’t taken into consideration.

It also really doesn’t change with goals. Let’s say your goals change midstream, you have to ask the people that are doing the top-down budgeting for more money. For instance, let’s say the game is outperforming three months after you’ve been given your budget and it’s 20 percent over forecast. You then have to go back to the senior management team and beg, borrow and steal, or say, my games taking off and I need more money to fuel the fire. But you’re not the one that necessarily has a voice in that process.

Lastly, like with the percent of revenue model, the other negative is that it’s a fixed amount of dollars. If a new tactic that you wanted to exploit emerges, you have to borrow money from other tactics that you were planning on spending to be able to afford it.

Typically used for: Self-contained games that don’t have a live-ops or post-launch monetization strategy.

Share of Voice/Market Budgeting

This is a goal-driven method using benchmarks as targets. It requires good competitive data that deeply analyzes where your competitor is spending, how much they’re spending, the tactics that they’re using and what media mixes they’re spending against. It aims to erode market share against the category leaders through impression generation and all sorts of marketing tactics to make you look bigger than you actually are. 

Pros: This is really good for products that are trying to catch up or for products that are early in their lifecycle, especially if you’ve got a really high-quality product that’s only suffering because it’s not as mature as its competitors.

Cons: It’s definitely a slower process than the percent of revenue and top-down approaches, respectively. It takes a good deal of analysis and amazing competitive intel that some teams may not be able to gather. Though one of the best tools you have for the share of voice analysis and figuring out budgets is to look at search volume, specifically on Google and YouTube. And if you’re on mobile, looking at the iTunes store search data would be important.

It also doesn’t take into consideration outliers, such as other competitors that you’re not including in that competitive analysis.

Typically used for: A game in a category where you’re not the market leader.

Zero-Based Budgeting

In this scenario, the budgeting process begins from scratch, so marketers start from $0 and build a budget that fits the strategy needed to make their product successful. This requires a very seasoned and well-rounded marketer that deeply understands their product and what is needed for their product to be successful.

Pros: It provides great agency to the marketers and the teams who created the budget. They feel responsible for the marketing dollars that they have to deploy because they were the ones that decided what that dollar figure should be.

This method can be effective for gaining market share, driving brand awareness or winning back customers, among other goals. Maybe you’re marketing a product that’s older and you’ve moved away from the acquisition phase of the product, so now you’re trying to win back loyal customers. 

Cons: This is a 100 percent forward-looking process that doesn’t take into consideration anything that happened in the past; whereas some of the aforementioned budgeting techniques take a look at historic performance and spend and make decisions based on incremental increases to historic data.

Another con here is it’s a lengthy process that requires a great amount of debate between the marketers, the product owners and other people that have interest in that product on what goals should be set as the marketers’ goals may not be aligned with overall business goals.

This is a really challenging approach, but if done right, can be a very rewarding process.

Typically used for: Free-to-play business models, subscription-based business models and games with multiplayer online liveops support where there’s additional content being generated all the time.

The Pandemic Is Shifting How Consumers Shop In-Store And Online—Here’s How Marketers Can Respond

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Some 39 percent of consumers globally have abandoned a purchase due to slow or inflexible delivery options, according to “The Future of Shopping Has Come Early,” a report from Facebook IQ’s new Industry Perspective series, which taps a mix of internal and external experts.

When deciding whether to buy online or in-store, new factors have emerged for shoppers, fundamentally changing the consumer value equation. Price is still king, with 74 percent of consumers saying they’re focused on getting the best price for everyday items.

However, safety, reliability and proximity have emerged as key influencers. For example, 71 percent of consumers globally say it’s very important that a retailer create a safe environment to shop in-store. More than 70 percent of young shoppers globally say delivery time is very important in determining where to buy online, compared with 66 percent of Gen Xers. And for 32 percent of Gen Z respondents, the option of next-day delivery increases their likelihood of making an online purchase.

As a result of these shifts, a seamless return policy and excellent customer service are becoming major differentiators for brick-and-mortar retailers. Sixty-eight percent of Gen Z and millennial shoppers globally say good customer service is very important in influencing where to shop in-store, compared with 53 percent of baby boomers.

Another key differentiator for brick-and-mortar retailers is selling local products, as Facebook research shows that clicks on searches for local businesses increased by 23 percent from February to May. Similarly, 38 percent of consumers globally made a special effort to purchase from a local/small business.

With activism playing a bigger role in consumers’ lives, a brand should tend to its reputation and corporate social responsibility. Each of these shopping factors increased by six percentage points in the US from May to July this year.

Brand values are also influencing where consumers shop, with 56 percent of consumers globally saying it’s important that the brands they buy from support the same values they believe in. This is true for 65 percent of US millennials. Additionally, more than half of consumers globally consider sustainability important in determining where to shop both online and in-store.

For marketers, addressing new consumer expectations will require the creation of a safe in-store shopping environment and a reliable online experience. Marketers should consider offering a range of promotions, as well as communicate how their brand and business practices are helping the environment, its employees or society at large.

Brands must also seek ways to reduce friction points in-store and online as COVID-19 has heightened financial risks and psychological risks in consumers’ minds. Eighty-nine percent of consumers say they are at least somewhat concerned about visiting a physical retail store to shop because of the pandemic, and 36 percent of grocery shoppers have stocked up on products to limit trips to the store.

Interestingly, some 41 percent of respondents say they’d like to receive messaging from brands and retailers about the steps they’re taking to ensure consumer safety, while 37 percent would like more contactless payment options.

The pandemic has added nearly 145 million new digital buyers globally this year. When it comes to deciding where to shop online, 70 percent of respondents say they prioritize reliability and 68 percent prioritize convenience. Thirty-nine percent of consumers globally say they’ve abandoned a purchase due too low or inflexible delivery options. Thirty-two percent say they chose not to complete a transaction due to a poor returns process.

“Cart abandonment accounts for at least 50% of attrition from your purchase funnel, costing e-marketers about $2–4 trillion a year,” said Ian Simons, head of industry for ecommerce at Facebook.

As new shoppers pivot to online, marketers must address this confidence curve by communicating efficient product fulfillment and a smooth return policy.

For 79 percent of shoppers worldwide, the internet makes it easier to compare products by price. And for 67 percent, the internet makes buying products less risky. Still, 30 percent of consumers say the inability to touch/see a product in-person is a barrier while online shopping.

Over half (63 percent) agree that they want to virtually try on products from the comfort of their own home. Among those who’ve tried augmented reality (AR) and virtual reality (VR), 46 percent say they’ve done so for the first time since the pandemic started.

Another nascent format that consumers are growing comfortable with is live commerce, with 49 percent of online shoppers agreeing that they’d buy products directly from live videos where brands, celebrities or influencers they follow are launching new products.

Social media remains crucial for adding experiential elements and convenience to the online shopping experience, with 66 percent of consumers saying social media has become as important as other information sources when deciding what to buy.

As 58 percent of consumers have shopped on at least one new digital shopping platform since the start of the pandemic, brands must work harder to attract loyal customers. This will entail the evolution of loyalty programs beyond just discounts. The loyalty perks consumers globally want brands to offer include free delivery (55 percent), special price promotions (54 percent), free returns (42 percent) and points that can be redeemed (26 percent).

WARC: Global Ad Spend Will Decline By 10.2 Percent, Or $63.4 Billion, In 2020

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It will take at least two years for the global ad economy to fully recover from the pandemic as the year’s events will cause it to contract by 10.2 percent, or $63.4 billion, in 2020. Excluding US election campaigning, ad spend worldwide is set to decline by 11 percent to $552.3 billion this year.

That’s according to WARC Data’s “State of the Industry 2020/2021” report, which anticipates this year to be worse than the 2009 recession when ad investment fell by 12.9 percent, or $61.3 billion. Taking into account inflation and exchange rates, real ad market decline this year will be double that of 2009.

In 2021, global ad spend will increase by 6.7 percent, meaning only 59 percent of this year’s losses will be recovered, reports WARC.

Sectors that are hit the hardest include automotive, retail and travel and tourism. A full 17.4 percent of global losses stemmed from the automotive sector, where spend is down 21.2 percent, or $11 billion. Next is retail, with spend down 16.2 percent, or $10.5 billion. Travel and tourism brands cut ad spend by nearly 40 percent.

Next year, automotive will see a 14.1 percent increase, retail will see a 5.9 percent increase and travel and tourism will grow by 19.5 percent.

Marketers expect to invest the most in digital channels next year, with 70 percent of respondents planning to increase spend on online video, 64 percent planning to increase spend on mobile, 59 percent planning to increase spend on online search and 49 percent planning to increase spend on online display.

Traditional channels will continue to wane in 2021 as just 19 percent of marketers intend to up spend on television, 16 percent on radio/audio and 15 percent on out-of-home (OOH). Over half (54 percent) of marketers will decrease spend on print.

Year-over-year, online video is expected to be the fastest-growing format in 2021, with spend expected to rise by 12.8 percent. The second-fastest growing medium will be OOH, with ad spend rising by 20.2 percent. Social media is projected to grow by 12.2 percent in 2021.

Though investment is down for linear television, cinema, linear radio and paid search, next year all formats will see some growth. Newspapers and magazines, however, will remain down or largely flat.

Ad spend is down the least in the US at 4.3 percent, or $9.9 billion, to $221 billion. In 2021, spend there will grow by 3.8 percent, enabling it to recoup 89 percent of this year’s losses.

Though most ad money will be transacted by machines for the first time next year, just 15 percent of marketers name brand safety as one of their top concerns, followed by 10 percent for ad fraud.

Listen In: Search Is The New Advertising

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One part of advertising is changing emotions to create desire for a product. The other part is getting the right product in front of consumers at the right time.

Sarah Whedon, Content Marketing Manager at Teikametrics, joins Matt Bretz in our 24th episode of Listen In to talk about the latter.

Sarah defines the Amazon ad ecosystem and articulates the challenge for enterprise brands: to strategize, build and optimize around where most shoppers make their purchasing choice. In other words, to ensure advantageous placement on the first search results page on Amazon. Sarah also shares details about her varied career path, including her background in academia and as a doula, among other roles. 

The conversation also covers how Teikametrics uses their Flywheel software to optimize ads on Amazon including structuring campaigns, automating bids and identifying keywords, as well as the Amazon marketplace’s new ad offerings in this unpredictably shifting media landscape.

About Listen In: Each week on Listen In, Bretz and a rotating cast of hosts from Ayzenberg interview experts in the field of marketing and advertising to explore uncharted territory together. The goal is to provide the a.network audience with actionable insights, enabling them to excel in their field.