It’s not every day that a car salesperson becomes a founder and CEO of a SaaS company that is revolutionizing the way companies do localized advertising. But that’s the path that Diana Lee followed, and on this episode of Up Next in Commerce, we went through the whole story… and dug into how her company, Constellation Agency, built a technology that helped marketers stop crying (literally) because it was so hard to create hyper-local advertising. We also dove into how to think about capturing data in a world without cookies, and we discussed why, if you’re going to be in the market for a car in the next year, you definitely need to be ordering one right now. Enjoy this episode!
Main Takeaways:
- Scaling Creative and Locality of Ads: In the past, there was no easy way to do advertising at scale in a hyper-local way, which is one of the most effective ways to advertise. Making local ads was a problem that would take a month for advertisers to solve, and now it’s a one-click solution. By investing in this solution, not only was Constellation Agency solving a problem for itself, but stumbling on a solution that everyone in the industry needed and wanted.
- Life Without Cookies: The downfall of cookies is a worry for many marketers, but there is still a way to capture first-party data that will allow you to succeed. By rethinking the ad unit itself, and building all of the choice and preferences into the ad unit, you can ingest the consumer data you need in a way that you control.
- Don’t Water it Down: It’s a nice idea to be a one-stop-shop for your customers, but when you do everything, you’re never able to become an expert at anything. Find what you’re great at and focus on that because if you can be the best at one thing, you won’t need to do anything else because customers will flock to you for your expertise.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“My entire life, my parents have always said, “Shame on you if you do something that basically ruins our name, shame on you if you don’t actually marry the right person, shame on you if you don’t actually become a doctor or a lawyer.” So all these years of being trained as like, you must be something, not even for yourself, but for all of your ancestors and all of us out there, it’s a lot of pressure.”
“The reason we couldn’t scale it is if you look at social and how socials usually run, people run three to five ads on social. They don’t do what’s called hyper-localized advertising. They don’t go and actually really try to fine-tune the advertising. They make it very broad awareness-like. And what we felt like is the only way that customers can actually convert and have ROI is to make it hyper-localized based on the audiences and the targets that you’re actually approaching. But in order to do that, you need to make a lot more ads. But when you try to scale that model, Mark Zuckerberg is a really smart guy, but he made it for the user experience. You can’t do it on the backend. And so because of that, we decided to develop and make a technology that could do that and really scale the creative and the hyper-localization of the ads. And now full integrations with social, you can run now hundreds of ad units for a brand. And it’s all different ad units based on the target audiences of the users.”
“The reason we invented it was not because we decided to ever license anything. What happened was we would have our campaign team and they would physically cry. We laugh about it right now. And because we’ll do trainings for our new people that actually join our organization. And we’ll say, “Look, we need made this technology, we made these buttons because it made our campaign managers cry.” And our campaign managers that are still here will start laughing hysterically. And they’re like, “She’s not lying. It made us cry that we had to duplicate all the ads. It made us cry because we had to actually do hyper-local and couldn’t do it. It made us cry because we stay up until 1:00 in the morning trying to actually make all the assets.”
“We can make immersive assets where the ads go into full screen designs. And within the ad unit, you could put in products, color, trim, prices, everything that you want to know about that product. And you can click within the ad unit all the choices without ever leaving the ad. And the reason that this is so powerful is because if the future is cookieless and if the future means that we will no longer be able to actually target people based on preferences, if you don’t leave the ads unit and you make the preferences within the ads unit, you can now retarget people based on the choices that they made.”
“You have to know who you are and what you’re capable of. So user generated content is something that many people love. It’s not what we do. What we do is paid advertising. And if you can stay true to the core of what you’re good at, you can be the best at just that. And so that’s what we try to do is at the end, people want all different types of marketing, but I don’t want to do all pieces of marketing because at the end, it becomes so watered down in terms of your skillsets that you don’t perform well at anything. So people used to say, I want to be a one-stop shop for everything. Then you’re not good at anything. You’re a one-stop shop for everything. And you never become the subject matter expert of one thing. And that’s something that we want to say is we are the best at what we do, which is creative content based on paid advertising. That’s what we do. And we can show ROI on this because most of our brands will fire us as well as any other agency if their products don’t sell. And at the end, our job is to sell the product. It needs to sell, it needs to create ROI and they need to analytically look at it and then say, oh, Constellation Agency brought in 15.5 million of our revenue last year because they sold direct to consumer sales. That’s what the brands are looking for.”
“Now you’re able to actually have feeding systems of creative. Facebook launched the beta design last year. So now you could actually have creative that runs from a dynamically generated creative system that works off of feed. You don’t generate the content one at a time anymore. And it’s really important because we’re doing the first integrations with Pinterest, Snapchat, and Twitter. The future will be where feeding systems are all going to generate the content automatically and dynamically. It’s not going to be where we actually have to make one ad unit at a time. And the reason that we’re moving to this is those platforms are all smart learning. It’s machine learning, they learn a lot more, but you always have to give it content. Content is the biggest thing right now. But content doesn’t work if you have to constantly manually produce them. So those platforms are all going into what’s called a feed of all the creative.”
“The problem is if you don’t pre-order your car now, there will be no cars for you to get. So customers need to pre-order their vehicles now, even six months ahead knowing that their leases are ending. And if they don’t do that, they’re going to end up going to the dealership. And the dealership’s going to say, ‘Oh, guess what? I’m going to actually sell it for $20,000 over sticker price.’ And they’re able to get it right now. It is the Wild, Wild West.”
Bio
Diana Lee is the CEO and Co-Founder of Constellation Agency, one of the top 10 fastest-growing advertising/marketing companies in the US. In just five years, she built Constellation into a multimillion dollar business, without any outside funding, and now the company is on track to double its revenue from $20M to $40M this year without outside funding.
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Transcript:
Stephanie:
Hello, and welcome back to Up Next in Commerce. I’m your host, Stephanie Postles, CEO at Mission.org. Today on the show, I have Diana Lee who serves as a CEO and co-founder of Constellation Agency. Diana, welcome to the show.
Diana:
Thank you so much. Thank you so much for having me here today.
Stephanie:
Yeah. I cannot wait to dive into your current company, but especially your background. So you work with really big brands. I was looking through your credentials and I was like, “Well, this woman, she knows what she’s doing.” I started reading a bit about your story around starting back at the car dealership days back in college. And I want to actually start there, kind of like how you even got into the business world and what you were doing at car dealerships back in the day.
Diana:
Yeah. Thank you, Stephanie. So at 18 years old, which is a long time ago, I was going to college. And at the time, I didn’t really know what I wanted to do with my career. I thought I wanted to be a lawyer. But how I led from a journey of going to a car dealership was because in my freshman year, I decided that I needed a job because my parents were immigrants. We immigrated here in 1974 and they didn’t really have a lot of money.
Diana:
So at the end, I was just trying to prevent them from having to pay for my tuition, my room, my board, and everything I needed for college. So I looked at the local paper and saw that there was a job at a car dealership for a greeter. And so I applied for the position. I get the position. And then two weeks later, they said, “Oh, we don’t need greeters anymore. We need salespeople. So you are a salesperson.” So immediately, I get thrown into the showroom and immediately I start selling vehicles. And it was an amazing experience during the summer, because it was not something that I could ever predict that I could be good at. But it forced me to come out of my shell.
Diana:
And then at the end of the summer, they said, “You did really well. We will work around your college school schedule and you could stay and work here.” So I took classes from 9:00 to 2:00 and I worked 2:00 to 9:00 every day. That included Saturday and Sundays and it paid for my education.
Stephanie:
Wow. That’s amazing. And so what was your family thinking back then? Because I think there was a few quotes where they’re like, you need to be this, you need to be that. And they also had a very intense experience, seeing things happen in a certain way, trying to protect you. Like, what were they saying back then when you’re like, “I’m going to be a salesperson at a car dealership?”
Diana:
Yeah. So Stephanie, it was not something that they wanted me to do. At the end, they were like, “What do you mean you’re selling cars?” And they really thought that that experience was going to end soon as I graduated, they were like, “Oh, she’s going to come to her senses, she’s going to go to law school, she’s going to actually do something professional. That’s why she went to college.” I’m an Asian female.
Diana:
So my entire life, my parents have always said, “Shame on you if you do something that basically ruins our name, shame on you if you don’t actually marry the right person, shame on you if you don’t actually become a doctor or a lawyer.” So all these years of being trained as like, you must be something, not even for yourself, but for all of your ancestors and all of us out there, it’s a lot of pressure. And so when I said, “Look, I’m going to stay in the auto industry because I got a job as a finance manager.” And the role, it paid six figures back then. This is back, it’s been-
Stephanie:
You’re right out of college at that time getting that salary. That’s good.
Diana:
Yes. So I sold cars back in 1989. And so by 1992, I had a job making six figures. And so I broke the news to my parents and said, “I’m going to stay in the auto industry. I’m going to become a finance manager. I’ll have some direct reports. I’ll figure it out, but this is what we’re going to do.” And they weren’t happy with that decision.
Stephanie:
Yeah. Well, look at you now, though. So at what point did you start evolving into kind of like marketing and kind of, now I’m headed towards constellation right now? At what point were you like, “I want to do something a bit different for these dealerships?”
Diana:
Yeah. So after actually working in retail for, I would say a good 12, 13 years, I had a baby and then I decided to go into automotive consulting. And so how the whole marketing piece came about was the last job prior to me actually launching Constellation Agency, they were a experiential marketing company. And so I happened to be at that job launching projects for automakers. And they had said to me, “Look, Diana, if there’s another auto crisis, we’re going to maybe go under. So we need to diversify our portfolio.” So they asked me to go outside and bring in clients that were non-automotive. So I closed the Pfizer Pharmaceutical project. They wanted to go global on social media. And at that point, that’s when I basically had to hire strategists and everybody outside to join that project. And that’s how the full marketing thing came together.
Stephanie:
Got it. Okay. And then what was next? When did you decide to make a jump into your own thing? Because to me, that’s kind of scary working for others, having like a good paying salary, leading teams, having head count to being like, I want to do my own thing now.
Diana:
Exactly. And so it wasn’t intentional. What ended up happening is my husband got tired of me complaining coming home. And he would hear me go, “I could do it better and faster if they did this, this and this.” And so one day, he said to me, “If you don’t do it now, you’re never going to do it.” And I was like, “What do you mean?” And he’s like, “You’re 47, Diana. And it’s not that it’s an old age, but you are towards the tail end of your career. You’re not in the beginning and you’re not even in the middle right now. You’re getting towards the tail end of your career. So if you really want to launch something, you’ve got to jump now.”
Diana:
And he just, he said, “Look, very few people can do things like this, but you can either do it in your 20s because you don’t have the risk of supporting a family or you can now do it closer in your late 40s or 50s because our kids are on high school. They don’t need you nearly as much. So if you’re going to do it, you should do it now.” And that’s when he said, “I encourage you to do it.” And that’s when I made the leap and actually started Constellation.
Stephanie:
That’s great. Go him. Okay. So what was the original concept of the agency? What is it today and maybe where were you thinking it was headed back then?
Diana:
Yeah, that’s a great question, Stephanie. So what happened was we came up with the name Constellation Agency. It really was supposed to be an agency because we decided that we weren’t going to do digital marketing for the automotive space to start. And so everything was going well. And what ended up happening is we brought in too many clients right from the very beginning and couldn’t scale it. And realized the reason we couldn’t scale it is if you look at social and how socials usually run, people run like three to five ads on social. They don’t do what’s called hyper-localized advertising. They don’t go and actually really try to fine-tune the advertising. They make it very broad awareness-like. And what we felt like is the only way that customers can actually convert and have ROI is to make it hyper-localized based on the audiences and the targets that you’re actually approaching. But in order to do that, you need to make a lot more ads.
Diana:
But when you try to scale that model, Mark Zuckerberg is a really smart guy, but he made it for the user experience. You can’t do it on the backend. And so because of that, we decided to develop and make a technology that could do that and really scale the creative and the hyper-localization of the ads. And now full integrations with social, you can run now hundreds of ad units for a brand. And it’s all different ad units based on the target audiences of the users.
Stephanie:
Wow. Yeah. That’s amazing. I even read one little blurb. I was like, “Do you know the demographics in this city or this?” So I sure hope that you’re actually presenting ads in that language and not just English. And I’m like, “Duh, that seems obvious. But how many people are actually missing all the local variables that you could actually tap into and showcase ads for?” And then adding on the element of like actually making tons of them behind the scenes. That’s amazing. How does it actually work, though? How does it create so many different versions? What does it look like behind the scenes?
Diana:
So you’re going to laugh. The reason we invented it was not because we decided to ever license anything. What happened was we would have our campaign team and they would physically cry. We laugh about it right now. And because we’ll do trainings for our new people that actually join our organization. And we’ll say, “Look, we need made this technology, we made these buttons because it made our campaign managers cry.” And our campaign managers that are still here will start laughing hysterically. And they’re like, “She’s not lying. It made us cry that we had to duplicate all the ads. It made us cry because we had to actually do hyper-local and couldn’t do it. It made us cry because we stay up until 1:00 in the morning trying to actually make all the assets.”
Diana:
So we have interns that interned with us like three years ago and they came back and they said, “Oh my God.” They said, “The thing that actually would take a month for us to do takes five minutes to a button click now.” And that’s it. And we invented it because we didn’t want people to cry doing their jobs. I mean, that was really it.
Diana:
And then one day, I ended up pitching one of our clients or potential clients and they said they saw the technology and they said, “I don’t want the ads. I want that.” And I said, “What do you mean?” And they said, “That thing, that thing that you’re clicking all the buttons on.” And I said, “Oh, Alexia, our platform, our internal platform.” Yeah. I want the license to your internal platform. And that’s when we became from a managed service company to a SaaS technology where it was self-serve.
Stephanie:
Which is amazing, because that’s what every company wants to be now as a SaaS company, but actually having the tools to make it a worthy one, I think many don’t have. So kudos to you for actually even pivoting to that and allowing people to buy kind of like your secret technology behind the scenes because I’m sure that helped you scale in ways that maybe you wouldn’t have been able to before, I’m assuming.
Diana:
Yes. But initially, it was just a solving a problem for ourself that existed for everybody else, but we didn’t realize it. We thought we were just solving it for us and then finally realizing that everybody else had the same exact problems as an agency or even as a brand, anybody that’s actually buying media had the same issues.
Stephanie:
So I mean, when thinking about this industry right now, I mean a lot of people were worried and still are around like the cookieless future and tracking and pixels. And I want to hear your take on kind of how you’re approaching that with your platform and your brands. How are you advising them around this issue? Because I still feel like it’s not fully solved, people still talk about it.
Diana:
Yes. I mean, there’s so much confusion of what’s actually happening. So it starts with the first thing, which is obviously if you have an app right now, just like Facebook, everybody’s getting a message right now that’s asking them, do you want tracking? And that’s how they’re posing it. It’s a yes or no question. Apple’s not explaining that question. They’re basically just having it pop up and you have to answer yes or no. So I have a partner who’s 20 years younger than I am. So he’s like 32 years old. He answered the question no. And he’s a social media expert strategist who answered it no. 96% of the users are now answering no to that question. What makes me crazy is that people are not being asked, do you want advertising? Because whether you actually say yes or no, you’re still getting ads. That’s not the question. The question is, do you want personalized ads?
Diana:
So people don’t realize what is personalized advertising mean. That means that Facebook and social media platforms are discovery platforms. You don’t mean to actually discover the item. It just comes. So if you are fitness fanatic, you’ll see apps about fitness, you’ll see new equipment about fitness. But people actually love that. They don’t realize how efficient their lives have been because of the fact that it’s a discovery platform that knows you and will give you different preferences based on your choices of how you see yourself. That is going away. That part is going away. So if you say no, that’s the part that’s actually going away.
Diana:
So what we are able to do now, it’s because what we realized that people are not necessarily answering this question correctly is we can make immersive assets where the ads go into full screen designs. And within the ad unit, you could put in products, color, trim, prices, everything that you want to know about that product. And you can click within the ad unit all the choices without ever leaving the ad. And the reason that this is so powerful is because if the future is cookieless and if the future means that we will no longer be able to actually target people based on preferences, if you don’t leave the ads unit and you make the preferences within the ads unit, you can now retarget people based on the choices that they made.
Stephanie:
Within that platform, right?
Diana:
Within that platform. So if you stay on Facebook and stay on Instagram and you’re able to make all the choices within the ad units itself and you don’t bounce out, then that data can now get captured. And that’s really important because if the future is really cookieless, that means website data is going away. And that is going to be huge for are any marketers out there and any major brands that are actually doing this. So that’s the first part.
Diana:
The second part is your CRM data is probably one of the most powerful data assets that you have. That can be downloaded and you can actually target probably a 70% match back to everybody on your CRM on social. And then third part is you can also purchase data. And there are data aggregators like IHS, Oracle. These are all data providers, but what’s important about their data is it’s about purchases. It’s not about websites. That’s why they’re able to actually have this data. You can actually purchase the data of the people that most likely would purchase your product because they purchased like products like yours in the past. And that is still available where it can be ingested and actually match. And you could create lookalike audiences from those customers as well.
Stephanie:
Got it. Well, I mean, those are great workarounds. For the first one around like creating an ad that helps you understand the preferences within the ad, how do you think about designing something so it’s not like overwhelming, because I’m picturing like all these buttons where it’s like, slide this dropdown and this one and this one and I’d probably give up? So how do you guys go about creating a user interface that people actually want to engage with so they get a good ad?
Diana:
That’s a great, great question. So sometimes it could be too long, but I think the best way to do it is there’s nobody that understands the brand better than the brand themselves. So we could actually take a guess and we can make all these user experiences, which we think will work based on other experiences that we’ve had with other consumer related products or B2B products. And then we’ll present it to the brand. And the brand usually already knows.
Diana:
But the best way to do this is to test a lot of different assets. That’s the number one thing. Like, can we make, instead of just three to five assets, can we make a 100 and hyper-localize them based on the audiences, make them in different languages? And Alexia will give you the power to do that in scale. So things that would take you, I don’t know, like three months to actually make a 100 assets, Alexia can actually do within minutes time. So you could actually hyper-localize those audiences and be able to test out all of those and then see which ads perform the best based on the audiences that you are guessing at the time that should perform. And so the brand usually knows, but they give you a hint and then you actually put into action. And instead of targeting three audiences, we may target a 100 the first three months and then start shutting off the ads that aren’t performing and keep on the ad set too. And then we keep going from there.
Stephanie:
Man, efficiency. I love it. Sounds great. So when brands approach you guys, what is maybe some of the key things that they’re usually missing? Especially when it comes to like hyper local targeting, what are some things that you just keep seeing come up where it’s like, you guys are all not doing this and this is like basics here, everyone?
Diana:
Yeah. So mostly, every marketing company as well as the brands all have the same issue that we believe that come to us. They say they love their media team. They actually know that they can sell on Google, they can sell on OTT, they can sell on Facebook and Instagram, TikTok, Pinterest. They already know all the channels that they want to launch in or they’ve already tried all those channels. The biggest issue I hear all the time is they don’t have the creative. They have the CRM, which is they know who their customer are, they can make lookalike audiences of those customers. They already know that and they know the end, which is which media companies that they can actually approach?
Diana:
But how do they mass produce the creative to test out all the audiences that they want to test out? That is usually always the missing link. How do they make engaging content but they can test it in 50 different audiences so that they could see which audiences are going to perform the best? That’s where Alexia comes in. So at the end, they don’t have to change their agency. Keep your agency, keep your CRM. Let’s just mass scale your creativity, keep your creative side too. But let’s mass scale that creative to make sure that we can hyper-localize it based on the preferences of the customers that you want to target.
Stephanie:
Got it. Yeah. I would definitely say that’s the number one thing I’ve heard throughout interviews and even think about markers I’ve worked with like, oh, it’ll take me a long time to create 20 options and get them up and running. So I mean, you probably see a lot of trends, but you’re also having to create the trends. I mean, people are coming to you, you’re creating all these different versions of ads for them. How are you guys staying ahead of the curve? Because I feel like every day, it’s like something different is happening in the world of ads. One second, it’s you want really custom video content that’s well produced, then it’s UGC, everyone wants UGC. Then it’s like as little production as possible is working great. How are you guys staying ahead and also creating trends when developing all these versions of ads?
Diana:
Yeah. So that’s a great question, Stephanie. I think one of the things that I’ve learned in this experience is that you have to know who you are and what you’re capable of. So user generated content is something that many people love. It’s not what we do. What we do is paid advertising. And if you can stay true to the core of what you’re good at, you can be the best at just that.
Diana:
And so that’s what we try to do is at the end, people want all different types of marketing, but I don’t want to do all pieces of marketing because at the end, it becomes so watered down in terms of your skillsets that you don’t perform well at anything. So people used to say, I want to be a one-stop shop for everything. Then you’re not good at anything. You’re a one-stop shop for everything. And you never become the subject matter expert of one thing. And that’s something that we want to say is we are the best at what we do, which is creative content based on paid advertising. That’s what we do. And we can show ROI on this because most of our brands will fire us as well as any other agency if their products don’t sell. And at the end, our job is to sell the product. It needs to sell, it needs to create ROI and they need to analytically look at it and then say, oh, Constellation Agency brought in 15.5 million of our revenue last year because they sold direct to consumer sales. That’s what the brands are looking for.
Diana:
If you look at user generated content, there is no ROI at the end. You don’t know if it worked. It’s like a question mark, was it really that? Was it that that day? The analytics are not always clear. So we try to stay true to what we know, what we believe in and then really try to upscale that based on experiences of what we see.
Diana:
So one of the things that we’re seeing that’s happening right now is if you look at Google and you look at Facebook, they are two of the oldest platforms that are pretty much out there that everybody does some sort of advertising on, most of those platforms are all running in what’s called feeding system for creative. So Google came out first and now you’re able to actually have feeding systems of creative. Facebook launched the beta design at all last year. So now you could actually have creative that runs from a dynamically generated creative system that’s works off of feed. You don’t generate the content one at a time anymore. And it’s really important because we’re doing the first integrations with Pinterest, Snapchat, and Twitter.
Diana:
The future will be where feeding systems are all going to generate the content automatically and dynamically. It’s not going to be where we actually have to make one ad units at a time. And the reason that we’re moving to this is those platforms are all smart learning. It’s machine learning, they learn a lot more, but you always have to give it content. Content is the biggest thing right now. But content doesn’t work if you have to constantly manually produce them. So those platforms are all going into what’s called a feed of all the creative. And the first integrations are also happening on Twitter, Snapchat and-
Stephanie:
Pinterest.
Diana:
Pinterest. Pinterest. Yes. And so that’s why it really, really needs to actually go there. So it’s like McDonald’s first came out and they landed all these different locations globally as well as nationally, then Burger King came amount and they actually matched where McDonald’s were. And then Sonic came out, they did this sort of the same thing. So Facebook, Google, they actually started the trend. And the trend will continue to go that direction, which is people will no longer have to make manual creative in the future.
Stephanie:
Got it. Okay. So you can tell me if this is the wrong way of thinking about it, but if all these platforms are essentially creating the ability to have dynamic content based off what you’re looking at and they’re able to create all these ad units for you, wouldn’t that kind of cut into Alexia or like your guys’ platform, because it’s kind of like what you guys are doing except at like a very local level, which maybe the ad platforms will have that?
Diana:
The other ad platforms haven’t discovered it yet. They haven’t even done the integrations yet. So to be the cutting-edge of anything, to be in the alpha and the beta where basically these companies are now making the integration for you, Constellation Agency, to start doing that and testing all the waters and all that, that is what’s super exciting to me to do things that’s never been done and create a volume of content for brands, for users and for everybody else that changes automatically and dynamically. And that’s really where I want to stay and continue new to actually learn a lot more. So to me, it’s not, oh, should we do user generated content? Should we do influencer marketing? Should we do paid media? It’s how do we actually make it more efficient for everybody overall so that we’re all not getting bogged down by making individual pieces of creative in the future?
Stephanie:
Got it. Love that. Okay. So when thinking about all the platforms, there’s always seems to be new ones popping up. Are there any experiments that you all are running right now that you’re kind of like bullish on maybe a platform that’s not as mainstream as like a Facebook or Twitter?
Diana:
Yeah. I mean, it’s interesting because the platforms that I had just mentioned, Twitter, Snapchat, and Pinterest are all ones that are a little bit behind Facebook as well as Google. So if you look at Google, it’s a really well-built out platform. There’s so much integrations where basically ad platforms can go in and actually do a lot of the work in integrations. Most demand side platforms already have Google and they can do the bidding right through their demand side platform. It’s well developed. It has a ton of analytics. It already has data that you can actually analyze to see RoW ads. You could see the performance, you could see the customers actually buy on these platforms. Facebook’s the same thing. It’s the most robust in terms of being able to look at the analytics and say, hey, they bought based on this exact event that happened on the exact hour and the exact minute. And you can actually see the ROI happening on those platforms. All of the other platforms, they are not as built out as those first two that I just mentioned, Facebook and Google.
Diana:
And what I find is that those platforms are becoming much better, stronger with the ability to actually integrate. And so I’m super excited because it opens up the opportunity to be able to do things on the other three platforms that’s never been done before. And they’re open to actually doing those integrations in the future, which is going to open up more advertisers to enter and to be able to try different types of units, but also get the analytics to see if actually it sold the product or not.
Stephanie:
Yep. Cool. I mean, so when I think about all the brands who’ve come on this show, that one thing I always hear is like Facebook and Google, we don’t even do that anymore. I mean, and of course, some of them do, but a lot of like, that’s too expensive, the rates have skyrocketed and they’re all trying to find just different avenues, like direct mail or going back to TV. It feels like everyone’s just trying to do something outside of Facebook and Google. What are your thoughts around CPMs going so skyrocketing high apparently and brands kind of like scattering from the traditional platforms?
Diana:
I think that’s great that you’re even bringing this up because people don’t realize that when the iOS 14 changes have actually happened, there were a lot of brands that even reached us and said, I’m thinking about changing my agency right now because my RoW ads is dropping exponentially. And so we’ve heard a lot of that. I’ve had brands that called and said, I’m going to now go on to Walmart and Amazon. The problem though is if you go there first without going to have a direct to consumer plan, you’ve dropped the prices to the lowest event that you can’t go up from. Once you hit Amazon or Walmart, you can’t have a higher price anywhere else, because they’re going to continue to go to Walmart and they’re going to continue to go to Amazon.
Diana:
So that’s one thing that I would have to tell brands about, which is like, look, we can go to Walmart, we can sell on Amazon, we can try all of those platforms. The problem is these are the walk bottom prices. And you can’t go up once you go there. So that’s, you have to accept that, because if you’re going to go down to $7, you can’t have it on $7 Amazon and go $9 someplace else’s direct to consumer plan. That’s not going to work. So you have to decide as a brand, do you want to go wholesale? Because if you really want to go wholesale, then you can go there to those other channels. The problem is you lose all of your customer data by drying it there, you have no data, you can’t retarget them. The data goes to Amazon. The data goes to Walmart. So that’s one issue.
Diana:
The other issue is if they try everything else like direct mail and there’s email, I still think no matter what, it should be a multichannel approach, just because you do hate media, you should reapproach on email and direct mail as well. It should be a comprehensive marketing plan. Some of our brands, which I think is genius, they say, Diana, you guys go after new customers. And my job with my marketing in-house team is to go after the reoccurring subscription model. We’re going to actually do it through email and direct mail because once you get them in, they’re now in our email and direct mail cycle and we can actually get the subscription going on our second, third, fourth, fifth, 18th purchaser.
Diana:
And I think that’s a smart strategy to have agency do the upfront, which is get me the new customers and then have your marketing teams reapproach them with all of the other channels. But I think it’s a combination effort of actually working together to come up with a comprehensive strategy between your current marketing teams, the creative team that’s actually making the creative or using platforms like Alexia to generate creative.
Stephanie:
So I want to pivot a bit to something we were talking about before we started recording and it was around the automotive industry. I thought it was very fascinating. So on the show, we’ve talked a lot about supply chain issues. It’s always very much coming from a brand perspective or a niche, definitely not like an entire industry. So I want to hear your perspective around what is going on in the automotive industry right now.
Diana:
Yes. So in automotive, and people are not really talking about this much because I think that there’s a lot of brands that are very afraid, we’ve gone through a chip shortage. And what that means is back in COVID, the automakers were not selling vehicles, the very beginning of COVID, and many of the plants were shutting down. So they had told the chip makers, we don’t need these chip. And so the chip makers were super happy because people were staying home and they were gaming and they were doing a lot of electronics during that time. And because of that, the chip makers were producing more and more chips. The auto market came back and basically said, “Oh, we need those chips now for the vehicles.” Unfortunately, there’s not enough chips. There’s not enough chip makers. It takes five years to actually scale chips if you are a new chip maker, semiconductor chips.
Diana:
And so at this point, there’s a lack of chips. All of the vehicles that are coming out require more and more chips. So even the electric vehicles, because there’s so how much technology inside the vehicle require more and more chips, which now has created a huge issue. What is that issue? You have all of these leases that are coming to, and many of these people are going to listen to this and they’re going to say, oh my gosh, my lease is coming to, there’s not a lot of messaging out there, but you can’t get a car. Some of the biggest Honda stores globally around the world where they had 1500 new car inventory is now down to 18 cars in stock. 18 cars.
Stephanie:
That’s wild.
Diana:
Yes. So they have millions of leases that are all coming due within the next one year. The problem is if you don’t pre-order your car now, there will be no cars for you to get. So customers need to pre-order their vehicles now, even six months ahead knowing that their leases are ending. And if they don’t do that, they’re going to end up going to the dealership. And the dealership’s going to say, “Oh, guess what? I’m going to actually sell it for $20,000 over sticker price.” And they’re able to get it right now. It is the Wild, Wild West. I’ve never, I’ve seen this back in the ’80s. I have not seen it since then where people used to come in and fight for the Toyota. There was one in stock and three people would say, no, I want that car. This is the first time, it’s the first time in 35 years I’ve ever seen the auto market like this. So it’s oversaturated. You got all these leases coming in, these people need vehicles. And they also don’t know that they can extend their lease for a minimum six months right now.
Diana:
But if they’re going to extend it, they need to pre-order their vehicle right now, because if they don’t, there won’t be another vehicle. And if they can pre-think about this and actually put in the order, they’re going to get the best price for it because now they could say, oh, at least at this point, if I pre-order it, maybe I’ll just pay sticker price for it or maybe a little bit under sticker. But if you’re trying to get a car at the very last minute, it’s unfortunate, but it’s right now a dealership market.
Stephanie:
Yeah. I mean, do you see, is there any hope? Are there factories scaling up right now? Because to me, all I hear about is the issues, I see the stuff happening around Taiwan and that to me, and like feels very shaky. I think a lot of our chips come from there currently. I mean, you can correct me if I’m wrong, but like, do you see any hope on the horizon right now? Or is this kinda like going to be how it is for the next couple years?
Diana:
I think it’s going to be bad all of 2022. And I think that the automakers won’t announce it because they are publicly traded companies. Their stocks will sink if they announce the fact that they’re going to produce a quarter of the vehicles that are out there right now. The automakers are able to do two things, because think about it, how did they even stay afloat when they’re actually producing a quarter of the vehicles that they’re actually producing now than they used to produce two years ago? They’re able to stay afloat because they’ve cut all of the incentive on vehicles. You don’t see incentives. They don’t have to come out 0.9% or 2.99 for this Honda Accord. They don’t have to do any of that. So all incentives, it’s over right now.
Diana:
The second thing is cutting advertising. They don’t have to advertise because they have no supply of these vehicles. But the messaging should be that if customers want to protect, if consumers want to protect themselves, they need to, one, figure out if they need to extend their lease. And they can extend it up to six months. They can also to sell their vehicle for the most amount of money that they’ve ever been able to sell. They can sell their lease. People don’t realize you can sell your lease and make money on your lease right now. But in order to do that, you got to have a plan B, which is what car are you going to drive in the future and make that pre-order? And people are just not talking about it because they’re afraid. They’re afraid that their stocks are going to drop. They’re afraid that the manufacturers currently, they don’t want to do the pre-orders because they know that they can’t fulfill the orders.
Diana:
So many of these consumers also don’t realize that if they do a pre-order and the dealer says, oh, it’s going to come in February, it may not come in February. It might come in November of the following year. And so they’ll keep pushing back the pre-orders because they don’t have the chips. And so this is a big, big, big problem. Ford had just announced last week that they’re going to indefinitely extend their leases indefinitely. It’s not even a six month, indefinitely, because they’re afraid that you are going to defect. So if you are in a Ford right now, they’re afraid that you’re going to buy a Toyota or a Honda or a Subaru or Mazda, because they can’t get you the vehicle. So they’re saying you can stay in your lease in indefinitely right now. That’s how desperate people are becoming with this problem.
Diana:
But it’s important for the consumers to know this and protect themselves and try to still get the best deal that they can. And it’s really thinking about what they want to drive, what are they currently in? Do they want to sell their vehicle? How do they time it so they can sell their vehicle and pre-order and make sure that they can actually offset this and have a vehicle to drive? Because right now, there’s no loaners. Dealerships don’t have loaners. Rental cars don’t have loaners.
Stephanie:
Rental car issues right now, every time I try and rent a car, I’m like, “What is going on? They have nothing.”
Diana:
Exactly. They have nothing.
Stephanie:
So to me, this is like a big boom for the used car market though, because I mean we’ve had a couple different platforms come on some of our different podcasts that we have and they’re all around buying and selling used cars and finding the people easily, making it all a very seamless experience. I mean, to me, that’s like great. Like if you’re okay with a used car, there probably is a lot of them. Don’t you think? Who needs a new car if there’s a bunch of used ones?
Diana:
I think that used cars is something that’s booming right now because of the fact that the new car market has collapsed. However, it’s the same used vehicles also in circulation as well. So what my fear is, and it’s not going to happen immediately, but all these leases that are coming due are now going to the used car market. At some point, those used cars are going to disappear as well, because think about it, if the chip shortage affects new vehicles and they don’t produce it, there’s going to be fewer used vehicles in the end.
Diana:
And if you really think through this process, I don’t really know what’s going to happen with automotive because in a lot of ways the dealerships seem super happy right now because they can mark up the car for whatever price that they want, new or used, it is a frenzy. And at the end, they’re winning. However, how is this going to look a year or two from now when the used car market also dries up because there’s not enough coming in of leases? And then what happens to fix operations? So fixed operations is service. Well, look at the maintenance, look at the warranty and the repairs. What happens to that market if there’s going to be a third of the vehicles on the ground of what actually is there right now? So I feel like this is going to cycle out for the next two to three years. And it’s a mess.
Stephanie:
So I want to shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask you a question and you have a minute or less to answer. Are you ready, Diana?
Diana:
Yes.
Stephanie:
Okay. First thing, what is the best piece of business advice you ever received?
Diana:
Ask for more. So people are always afraid to ask for more because they think most people are fear-driven, they already think that all these things are going to happen. So they immediately don’t ask for more. And I’ve always told everybody there’s nothing wrong with asking for more. And at the end, you can always come down. You can’t go up once you actually ask. And so that’s my biggest advice to most people is like, who cares if they think you sound like an idiot? Who cares if they won’t do business with you? You have nothing anyway. Just take the risk and ask for more.
Stephanie:
Yeah. I love that. What is one thing you don’t understand today that you wish you did?
Diana:
I think that the biggest thing is I wish that I had the confidence that I have now in my 50s that I had back in my 20s and 30s. I think a lot of times when you’re super young, you’re so worried about what other people may think about you. But I think the biggest lesson to myself is it doesn’t matter what other people think, it matters more about what I think about myself. And to stay true to that is probably one of the biggest lessons that I’ve learned in my life is I have to stay true to who I am as a person and be okay with that.
Stephanie:
Yeah. Yeah. Good answers. What are three tools that you can’t live without? It can be work-life, personal life, whatever you want.
Diana:
Three tools. Okay. My first tool is probably my cell phone. It’s become a part of my body because I realized that so much of the functioning that I have is obviously with my cell phone. I also think two other things that I can’t live without. Let me see here. It would be my computer obviously, because I’m always on my laptop doing the work that I need to do. And then I guess the last thing that I can’t live without could be, let’s see, oh, my coffee maker.
Stephanie:
I like it.
Diana:
Mainly because I have to have a good cup of coffee early in the morning just to actually just even jumpstart and get started.
Stephanie:
Yes, I agree. All right. And then the last one would be, what’s the nicest thing anyone’s ever done for you?
Diana:
Oh my gosh. It’s been so many incredible things. I think the biggest thing, and I knew that this is probably going to be, it’s heartfelt for me. So I went through a divorce 10 plus years ago. And when you go through very traumatic events in your life, you realize who’s actually going to be there for you and who’s not.
Diana:
So I remember I called a man, his name was Ron Chatwin and I had done some projects with him in the past. And I said, I’m pretty desperate right now. And at the time going through the divorce, I was married to a physician who was actually bringing in a lot of income. And I was a consultant at the time. And I needed as many jobs as possible because I realized that I needed to support myself and support my son. And so I called him and I said, “Ron, can you help me out? Can you help me get on some projects?” And a lot of people are usually there and say, “Oh yeah, I can help you, I can do things for you.” But this man actually got me on projects that I desperately needed. Got me a job with BMW of America, with Volkswagen of America. And recently passed away. So it makes me cry.
Diana:
But I have to say that was one of the amazing gifts that anybody could have ever done for me was the restart my career when after I had my child and going through a very horrific event was there to step in and say, yeah, I’m going to help you. I’m going to make the networks happen for you. I’m going to connect you.
Stephanie:
Jeez. I love that story, I think. Yeah. It’s always fun to hear about things like that, just because I think there’s so many moments in people’s lives where they can point to one person who really did change the course of their life, their business. I know I’ve had moments like that when the company wasn’t doing well and I went to one of our clients, I said, “I need a year-long contract. I needed to get a loan. Here’s what’s happening. Like if I don’t get this, the company might not be here.” And they were like, “Oh, I think you just tell me.” Yes, of course. And it’s like that one moment in history literally changed the whole course of the company and my life. And it’s fun hearing about stories like that from others and just how people can really make a difference by opening up their network or saying yes to something that maybe they wouldn’t have otherwise. I think that’s great.
Diana:
Yeah. And I think it’s really important to realize that most people want to help you, but we’re afraid to ask for more. And so we hold back, we’re like, I shouldn’t ask, I shouldn’t ask. And then we limit our own opportunities. So those are learnings that I’ve had.
Stephanie:
Yeah. Cool. Well, Diana, this has been such a fun interview. I’ve really loved having you on for every moment of it. For now, where can people find out more about you and Constellation Agency?
Diana:
Thank you so much, Stephanie. Please, if anybody wants to learn more about Constellation, come on www.constellationagency.com.
Stephanie:
That’s amazing. Thanks so much, Diana.
