Marrying creativity with technology for brand awareness innovation with Alvaro Melendez

Speaker 1:

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. The Build A Better Agency podcast presented by White Label IQ is packed with insights on how small to midsize agencies survive and thrive in today’s market. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody, Drew McLellan here from Agency Management Institute. As you might suspect, I am back with another episode of Build A Better Agency. Super glad you’re with us. I think this is going to be a topic that you find both thought provoking, fascinating, and maybe a little intimidating. I know I’m going to find the conversation all of those. There’s a lot I don’t know that my guest knows and I’m going to try and get as much out of him as I can, of course, but I think this is a topic that we’ve barely scratched the surface on, and that’s how agencies are using AI to measure brand.

So I’m going to tell you more about that in a little bit, but first I want to remind you that registration is open for the January workshops. So we have two January workshops. We have the build and nurture your agency sales funnel. That’s the one where you’re going to, it’s very hands on. You’re going to leave with a fully developed marketing and sales plan for your agency. You’re going to know who the audience is, you’re going to know how you’re going to talk to them, you’re going to know when, who the agency’s going to be involved. You’re going to have it all mapped out. That is January 19th and 20th. That’s a Thursday, Friday.

The following week on Tuesday and Wednesday, we are back with a brand new workshop from Mercer Island Group. So Robin and Steve and Lindsay will be with us and they are going to be teaching us, get it right, proposals that win. So we’re going to talk about all the ways we have written proposals and all of the elements in that written proposal. So case studies and cover letters and strategy documents, and all kinds of other things. And they’re going to show you how to do it better. They’re going to show you some examples that are good. They’re going to show you some examples that are not so good.

And some of you, if you register early, you might be invited to have your materials critiqued by Mercer Island Group and get some coaching from them on how to make them even better. So great workshop, January 24th and 25th, both of those are in Orlando. They are on Disney property. And of course, there’s a weekend in between the two workshops. So if you are so inclined, you might want to attend both workshops and then play for a couple of days in between.

So now let me tell you a little bit about our guest. So his name is Alvaro Melendez and he owns a company called CRANT and CRANT is a creative machine learning company that has become one of the most innovative companies in brand intelligence that so far exists today.

So they’ve developed an AI backed platform that helps brand measure and improve what they call brand love, and also you can also measure and improve how the world sees you in terms of your DEI involvement, but they have these strategies where they use the machine learning on public data to help agencies and brands improve the brand love scores of either the brand itself or your clients really fascinating stuff. How they’re doing that, how they are tracking certain elements in organic social that tells them what audiences are actually engaging with, what they care about and how they feel what the sentiment is about what brands are putting out either through their agency or on their own.

So Alvaro started in the agency business. So he worked at BBDO and lots of other big agencies. He’s won a ton of awards in his agency career. He’s won a Cannes Lion, he’s won Webbys, Clios and other things. And he got disillusioned with the agency business and how they weren’t able to measure brands. So he decided to do something about it. And that’s when he created CRANT. This is a really fascinating stuff. And so I think you’re going to really enjoy it. I know that in my initial conversations with him, my head was just spinning with ideas. And I think that this is going to be the case for you as well, but I’m anxious to get talking to him and begin asking him questions on your behalf. So let’s do that.

Welcome to the podcast. Thanks for joining us.

Alvaro Melendez:

Hey, thank you for having me.

Drew McLellan:

So give everybody a sense of your background, because you’ve had an interesting career trajectory that has led you to doing the work that you’re doing now. So give everybody a landscape of that if you will.

Alvaro Melendez:

Yeah, sure. So I started studying graphic design in Germany, and then eventually I found out it wasn’t a good idea because I’m colorblind, which I didn’t think it was a problem at that moment when I started studying it because you have all the color codes and you can work with that, which I did for maybe over five years. When I entered the agency world, I started at Gray Advertising in early 2000s. And from there, I was very curious about the advertising business in general, not just design, but I was lucky enough to have a boss that was not very involved with me. So he gave me a lot of freedom and I started doing my own texts and he didn’t care much about it. So I got to present them to the clients eventually. And I started having contact with the clients and I enjoyed the advertising business as a whole, from creativity to showing it, and then eventually to seeing it on the streets.

So after doing that for a while, I get interested in the business itself and I moved over to the client for a short time actually to direct an in-house. And there’s where I started learning about the planning and how you do all these creativity, but with a goal in mind. And after that, I returned to the agency world to Ogilvy where I led the Latin American Business in planning and doing that, I pretty quickly started seeing that our old frameworks were super interesting for creativity, not so well designed for measuring effectiveness. And that’s when I started to become more interested in technology, right? How can you track, how can you measure stuff?

And once I started doing that, we partnered with Google, created, assist them to use AI for brand tracking, but it didn’t really work within the agency because the clients were not hiring the agency for that, which I learned later. And I’m going to talk to you about that maybe later, but that was the exit door for me because that’s what I wanted to pursue. It was not possible to do where I was. So I had to leave and start a company that was focused only on that. And that’s when I started CRANT.

Drew McLellan:

Okay. And so your goal with CRANT was to accomplish what?

Alvaro Melendez:

Yeah. I’m a big fan of the power of brands, right? And not just as a commercial expression of a business, but more so as the transformational agent that can actually change how we think about stuff.

Drew McLellan:

Internally and externally, right?

Alvaro Melendez:

Correct. And it can change how we think about stuff, not necessarily just tied to your product.

Drew McLellan:

Great.

Alvaro Melendez:

It can change how you think about life. So when I started seeing that power and I saw that in the agency, we were not able to capture that and make it tangible. I started seeing that the clients moved to performance marketing. So they moved away from brand marketing and started doing more performance because that they could measure, right?

Drew McLellan:

Right.

Alvaro Melendez:

How many clicks, how many visits to the website cards and all that, which is great, but that’s not changing culture. That’s just transactional business, which is great. But I saw that lack of enthusiasm for what creativity and marketing actually should be about, which is building those brands. So that was the moment when I decided, okay, if clients are not doing this because they can’t measure it, let’s try to find a way to measure it.

Drew McLellan:

Right. Which led to the creation of the company you own today, CRANT. So talk to us a little bit about what that company has evolved to be able to do.

Alvaro Melendez:

So when we started the company a little over three years ago, it was actually super funny because we started the company in Miami. This is back in 2019, so pre pandemic. So Miami, of course, is a great hub for tourism and travel.

Drew McLellan:

Right.

Alvaro Melendez:

So we said, “Hey, this is a good area to specialize in and to offer what we want to do, which is brand tracking.” And I’m going to talk to you about diversity, equity and inclusion in a bit. But all of that, we thought travel and tourism is a great spot to do that. We launched the company in February, 2020 in a large event. We even had Barack Obama in the event. And two weeks later, we got into lockdown.

Drew McLellan:

The world shut down, right?

Alvaro Melendez:

Yeah. And the world shut down, but travel and tourism basically went to zero.

Drew McLellan:

Right.

Alvaro Melendez:

So we were standing there with a company designed to serve the travel and tourism industry, and there was no travel and tourism industry anymore. So we had to pivot and lucky enough, we went into working with Med Tech and the health space, which of course ramped up a lot.

Drew McLellan:

Was very busy, right?

Alvaro Melendez:

Yeah. And it was lucky, we didn’t plan on that. It just happened. So that’s what got the company going. Now we’re working with more industries, but yeah, that’s the story.

Drew McLellan:

All right. So let’s talk a little bit about how you’re using AI. And again, for the listeners, there’s probably a wide range of understanding of how AI is working and some folks have used it and some folks haven’t. So start us with the basics of what you’re using the technology to do and how it works.

Alvaro Melendez:

Sure. So AI, I just want to clarify, sometimes people throw that term around like it was everything, which there’s still not a consensus on if we have achieved artificial intelligence yet or not, but what we definitely have is machine learning. So just to clarify that if we have some experts in the audience, we’re doing machine learning, which many people call AI. So what we’re using is for, and just to understand the basic concept of machine learning is, you basically don’t teach the machine, how it should make decisions, which was the traditional way of programming. If you’re talking about AI or machine learning, you give the machine a set of examples and then it learns by itself, right?

Drew McLellan:

Yeah.

Alvaro Melendez:

So that’s the main difference. You’re not telling it how to make the decisions. How we’re using it is, as I told you before, we were very interested in the power of brand and making brand trackable. So what we did is dissect the brand. What is a brand? How can I measure each component of a brand? So a brand is a promise, but a brand is also active in different pillars. And each one of those pillars is defined by attributes. Those attributes can be verbal. So you can use words to describe what you do or to evoke an emotion, but you can also use images so you can have verbal attributes or visual attributes.

And that is how we’re using machine learning for, to identify those attributes in images, automatically, in thousands and thousands of images, and then helping brands understand where they are performing the best. But what’s maybe even more interesting is looking at benchmark brands. So the best brands in the world and telling them exactly what is working for them, which gives you the secret sauce of let’s say a Tesla or an Apple, or Walt Disney, any brand that you’re interested in, we can use AI to identify the secret sauce of what’s working for their brand and for their communication overall.

Drew McLellan:

So can you give us an example of that? If you looked at Apple or Disney, give us an example of some of the visuals or the words that you would be tracking and play that out for us.

Alvaro Melendez:

Yeah. So for example, Walt Disney World. So one of the biggest brands in Instagram, of course they have a beautiful imagery, right?

Drew McLellan:

Of course.

Alvaro Melendez:

The parks are beautiful. So what would you think is the visual attribute that drives the highest engagement for Walt Disney?

Drew McLellan:

A happy kid.

Alvaro Melendez:

Happy kid. So many people think the castle or Mickey Mouse, or a character at large, right? That’s what you would think, because that’s the image that we have from Walt Disney. That’s what they do so well. The reality is that the visual feature that drives the highest engagement for Walt Disney is dishware.

Drew McLellan:

Dishware?

Alvaro Melendez:

Glasses and cups and stuff like that.

Drew McLellan:

That have pictures of Disney characters on them?

Alvaro Melendez:

No, not necessarily. So it might be a kid holding an ice cream in a cup.

Drew McLellan:

Got it.

Alvaro Melendez:

Or it could be just an image of a cup of coffee on a table. It doesn’t matter. But what’s present everywhere is the dishware thing. So why do I bring this up? Because of course all the imaginary around Walt Disney is also driving a lot of engagement, but they would use this tactics. Of course, it’s a park, people need to drink and to eat.

Drew McLellan:

Right. Well, and they’re famous for their food, right?

Alvaro Melendez:

Right.

Drew McLellan:

That’s part of it, right?

Alvaro Melendez:

Yeah. So they make it very appealing that drink and eat experience. And that’s actually, what’s driving the highest engagement on Instagram. So let’s say you’re not Walt Disney, but you are maybe a restaurant or maybe a hotel or maybe something else. And you look at Walt Disney, you could learn of how they do that. Even you’re not going to have Mickey or the castle, but you are surely going to have coffee or tea. So that’s one example. That’s visual, right?

Drew McLellan:

Yeah.

Alvaro Melendez:

And just to clarify here, of course, Walt Disney doesn’t tag their images like dishware, right?

Drew McLellan:

Right.

Alvaro Melendez:

This is the AI looking at the image and saying, “Okay, here’s the dishware.

Drew McLellan:

I’m going to categorize that. Yeah.

Alvaro Melendez:

Yeah. Another good example that I like very much is Netflix, right? What would you think drives the highest engagement for Netflix?

Drew McLellan:

Popcorn.

Alvaro Melendez:

Popcorn. Okay. It’s actually shorts.

Drew McLellan:

Shorts?

Alvaro Melendez:

Yeah. Shorts.

Drew McLellan:

Shorts, the clothes we wear?

Alvaro Melendez:

Yes, exactly. And then if you look at that, of course it’s like a representation of [inaudible 00:16:25] lately. But the interesting thing is you could think, “Okay, maybe it’s a certain type of human being wearing a short.” But it’s actually not. So when you look at the Netflix data and you see shorts popping up, you’re going to see old guys, young ladies, kids, groups, fashion, not fashion, just shorts, it drives more engagement. So that gives you-

Drew McLellan:

The human mind is a bizarre thing. Isn’t it?

Alvaro Melendez:

It’s a beautiful thing.

Drew McLellan:

It is a beautiful thing.

Alvaro Melendez:

Yeah. And the point here is that, for me, that is just such a strong creative insight because let’s say you’re whatever brand you want to be. And you take, okay, for Netflix, you have shorts for Walt Disney you have dishware, and then for another brand you might have something else. And then you have your own things. And that’s like ingredients that you can use to cook up something amazing.

Drew McLellan:

So what happens on the word side? So that’s going to be something in an ad or a blog post or the tweet, is that the things that you’re measuring?

Alvaro Melendez:

So we’re focused on organic social. The reason for being focused on organic social is basically because that’s the biggest platform any brand can have. And the biggest, because first, it has this strong tribe effect, but secondly, it’s very authentic, and third it’s scalable. So you’re not limited to how many followers or fans you can have. Which of course, if you focus on just paid media, you’re going to be limited by your budget.

Drew McLellan:

Right.

Alvaro Melendez:

So organic social, in terms of words, we can analyze what’s going on in the captions, tweet is very text heavy. So tweets of course, LinkedIn is also very text heavy. So there you’re going to find things more like that. An example for you is Adidas. So we were doing a job in the sports industry, Adidas launched a bra, a specially designed running bra, which apparently didn’t really exist in that way. So Adidas owned that word bra in the category.

Drew McLellan:

Okay. Interesting. So Adidas launched a product that was not something that any of their competitors did, right?

Alvaro Melendez:

Yes.

Drew McLellan:

Okay. And so the word bra became tightly tied to their brand.

Alvaro Melendez:

Yeah, because they were very intentional in the way they used it.

Drew McLellan:

Yeah.

Alvaro Melendez:

So other brands had bras. But Adidas said, “This is a bra designed for-

Drew McLellan:

Runners.

Alvaro Melendez:

… women for running.” And they did a lot of that. So the word bra became part of the Adidas brand.

Drew McLellan:

Interesting.

Alvaro Melendez:

I’m not sure if that’s going to be a short term play or if that’s going to be a long term play. That doesn’t matter, but that’s what they do. Another example for you is the word magic in Walt Disney. Of course, they use that word a lot. So they own that word. But also interesting magic is the word example, but then they also have fireworks, which is the visual example and they never use the word fireworks. Never. But they have it in the logo, every movie has it, the parks have it.

Drew McLellan:

Yep.

Alvaro Melendez:

If you look at imagery from Walt Disney you’re going to see a lot of fireworks and that’s something that they own. And that is a representation of magic and of celebration.

Drew McLellan:

Yeah. Well, and I’m sure it’s probably one of the most photographed parts of a day at the park. As a visitor, when you’re standing on main street and you’re watching, everybody’s got their camera up, their phone up and taking pictures. So yeah. I’m sure on organic social, it shows up all the time.

Alvaro Melendez:

It does. Yeah.

Drew McLellan:

Yeah. So when a brand either learns what some of the best brands are doing, or they use your tool to measure how their own brand is performing, then what do they do with that information? How do you help them put that to good use?

Alvaro Melendez:

So we have designed, and I don’t want to claim much originality here because this is something that we learned from Loft Marks and Ogilvy’s big ideal, and all of these amazing classic branding frameworks. But we did our own, which we called PPAI, which is promise, pillar, attribute, influencer. It’s like a ladder if you want. So we help our clients decide that. So what’s your promise. So I’m going to be a magical place. So that’s Disney. Okay.

Drew McLellan:

Right.

Alvaro Melendez:

What are your pillars? So my pillars are going to be food, entertainment, joy, family, et cetera, et cetera. What are your attributes? Fireworks, magic, shorts, dining ware, ice cream. You get the idea, right?

Drew McLellan:

Yep.

Alvaro Melendez:

So once we have that, we start tracking on that so we can tell, Walt Disney, “Okay, your brand love, that’s the biggest metric.” Your brand love is how strong your brand is in the eyes of the organic audiences.

Drew McLellan:

Right.

Alvaro Melendez:

So how much they think you are interesting that’s brand love. So we might have a good brand love. And then we go in and look into pillars and we might say, “Okay, in the pillar of food, you’re doing amazing. You know what, in the pillar of family, not so good. You have a competitor that is doing better there.” “Why?” “Because this and this attributes are weak or we’re not talking about them or we’re not executing about them.” So we can make strategic decisions with a client if they want to strengthen that pillar, or if they make the decision of not doing it for whatever reason.

And the interesting thing about this whole story is that we start with brand love, which is the biggest thing, but the goal is to grow that. So we have to answer how you do that. So how can you do it? And you can use images like this. You can use words like this. You can use this type of social networks in this, or this way you could use more video or more imagery or more links. It starts giving the creative teams actually, very specific insights that they can use to craft their new stories. And then since this is really quick, you put them out and you see if they work or don’t.

Drew McLellan:

Right. Okay. I want to take a quick break. But when we come back, I want to talk about because you’re tracking organic social, and now we’re talking about creative teams putting together ads or whatever they’re doing. So I want to talk about the correlation between those two when we come back. So we’ll be right back.

Hey, everybody, I promise I would keep you more than a minute, but I want to make sure that at AMI, one of the things that we offer are virtual peer groups. So think of it as a Vistage group or an EO group, only everybody around the table, figuratively in this case, is an agency owner. So you have to be an agency owner to belong. The virtual peer groups meet every month for 90 minutes on Zoom. This was not a COVID creation. It was pre COVID. You see the same people in your cohort every time. So you get to create relationships with them. And it is facilitated by AMI staffer, Craig Barnes, who has owned his own agency for 25 or 30 years. So plenty of great experience, both from Craig, but also learning from each other. So if you have any interest in learning more about how that works, head over to the AMI website and under memberships, you will find the virtual peer group and you can get all the information there. All right? Okay. Let’s get back to the show.

All right. We are back. We’re having a fascinating conversation about brand and AI and how the tool that CRANT has created is helping brands measure brand love, but also the attributes that create that affection or that connection to the brand. And so just before the break, we were talking about how you can provide your clients with this hierarchy of information that allows the creatives to emulate in essence, what’s happening, what what’s being talked about or what’s being noticed in social. So do you see then, for example, so if Disney or Netflix or Adidas takes and builds out an ad campaign using the visuals and the words that the AI is suggesting to them that they use, what do you see? Do you see a lifted activity or volume on the organic social side?

Alvaro Melendez:

Yeah, that’s actually a good question. So we think paid media should always be a way to augment your organic brand. It shouldn’t live in isolation. So what we always do is if you’re going to launch a campaign that for whatever reason, I might not see on social, that could happen, that they never post about anything on social. We would see a spike in activity if the campaign is big enough, let’s say super bowl stuff, right?

Drew McLellan:

Yeah.

Alvaro Melendez:

Otherwise, what we always do is if you’re going to have a strong advertising campaign that goes to paid media, you have to have complement content on your organic. So behind the scenes, posting your ad, maybe other longer versions of your ad, maybe talk about the process, maybe talk about the person that you’re highlighting. And if you do that, which is what most of these brands do, then you’re going to see a big, big spike in brand love, mostly driven through engagement, not volume, right?

Drew McLellan:

Okay.

Alvaro Melendez:

So you’re being more effective with the content that you’re putting out there, you’re not necessarily putting more content out there.

Drew McLellan:

Right. Which would be lovely. Brands would love that, right?

Alvaro Melendez:

Yeah.

Drew McLellan:

So what about video? So you’ve been talking about images. Are those still images? Because everybody is investing more energy, time, focus, money on video. Does it change if it’s a still image of the bra or the fireworks versus a video version?

Alvaro Melendez:

So it depends. Overall, we could say we see video perform better. Overall, right? of course there is exceptions.

Drew McLellan:

Of course.

Alvaro Melendez:

So what I would say is, and by the way, what you do with an image you can do with a video, because the video is just a lot of images together.

Drew McLellan:

Right.

Alvaro Melendez:

So it works the same. What we always encourage our clients to do is, it’s always better to have one really interesting post than big productions, lots of planning, lots of stuff. If you are authentic to your brand and you do something interesting for people, that always performs well, you don’t need to have a lot of production value to it.

Drew McLellan:

So I would assume one of the benefits of using AI is the speed at which you can get data. So talk a little bit about the real time aspect of this. Because I’m assuming that this is just giving constant feedback all the time. Organic social is 24/7. So I would assume AI is, your tool is working 24/7 to update its recommendations, right?

Alvaro Melendez:

Yes. That is correct. So the bottleneck here is the human, not the AI.

Drew McLellan:

Yeah, right. Always.

Alvaro Melendez:

So you are right. We get the input everyday, right? So at the end of the day you just collect what happened and then next day it’s ready for insights analysis. And then yes, you could optimize daily. Most of the time. It doesn’t make sense because brands just don’t have that posting cadence. So most of the time we have weekly or monthly meetings where we look at a little larger sets of data, then we can have more concrete … But if you’re going to launch something very special and you expect it to have an impact today, you would be able to see it.

Drew McLellan:

Right. I was just going to say, I would think that where that real time would be most valuable is, we’re telling a new story or we’re launching a new product or show at the parks or whatever, we want to see if people react and you would see pretty quickly if that was the case.

Alvaro Melendez:

Yeah. I have a story for you there, a real quick one. So with one of our clients, large client, so making decisions is a little slow, right? We had those meetings, we identified a lot of insights that could be applied to their brand, but they were just not able to act on them because they had to get buyin from different areas. You know how that is, right?

Drew McLellan:

Yep. Committee decisions, yep.

Alvaro Melendez:

Okay. And that took months, right?

Drew McLellan:

Yep.

Alvaro Melendez:

That took months. But one day they said, “Okay, today we are ready. We’re going to start doing that tomorrow.” So we were like, “Okay. Yeah, that’s great. Let’s see what happens.” They did it. And their brand love did a spike that they had never seen. They surpassed all of their competitors in one day, of course, after thinking for months, but then it stayed there because they finally did the switch. “Okay, this is how we need to do it. Now we know it works. Now we can keep doing it.” That was a good experience.

Drew McLellan:

So part of this is again, recognizing that brand love is sticky, that people don’t unlike a brand overnight. So talk to us a little bit about the scale of brand love. Is that a measurement that you guys developed or are you using a universal measurement of that? How are you articulating that measurement?

Alvaro Melendez:

Yeah. That’s a good question. The concept of brand love is not, we didn’t develop that, it exists since last March, right.

Drew McLellan:

Yeah. [inaudible 00:31:10] write books about it and all of that, right?

Alvaro Melendez:

Yeah.

Drew McLellan:

Yeah.

Alvaro Melendez:

We didn’t develop that. But what we did develop is the way we are measuring it. So how we’re doing it is we’re taking in all the data points that we can on a specific brand. And that means posting volume sentiment of the comments type of comments, interactions, the social network it is in, exposure, all of that. And what we do is, we equalize that against the category. So what I mean with that is, for example, if you are in telecommunications, it’s a very active category and you’re going to get a lot of likes and a lot of use because there’s a lot of people there. If you are in Med Tech, it’s maybe not like that. So what we do is we equalize against what the competitors are doing so that we have a fair measurement of the brand love per category.

Drew McLellan:

I was just going to ask you, so when we talk about examples like Adidas and Disney and Tesla, there’s a lot of chatter about those brands. A, they’re universally known and B they’re brands that get a lot of activity. How does a tool like this work for a local restaurant or a law firm or somebody who doesn’t generate that kind of organic social? Is it still relevant for them? Or is it something that their brand love is not really being talked about in organic social?

Alvaro Melendez:

No, actually it depends a little bit, but if you are, let’s say a small, smaller brand, that doesn’t mean that your brand love should be smaller than anyone else’s, right? It’s just going to be on your scale.

Drew McLellan:

Right.

Alvaro Melendez:

So how a brand like this would use it as long as they’re active, they have to their social networks and they have to be doing some content of course. That if that is happening, then they can use the information to compare against similar brands. But we always say this, it is important that you learn from the best. So it doesn’t matter if you are a small restaurant, it doesn’t mean you cannot learn from what-

Drew McLellan:

No doubt.

Alvaro Melendez:

… McDonald’s or Burger King is doing, right?

Drew McLellan:

Right.

Alvaro Melendez:

Or someone else. So yeah, they would use it to track their own stuff. But especially to get those insights that permits them to grow their stuff. And I think this is super important for smaller folks, because most of the time, these mega large brands, they have very talented creative teams, large creative teams around the world working for them. So they are experimenting on a very high level, something that a smaller brand cannot afford. So what this allows is to learn from the folks that can’t afford it and just apply that in a natural, authentic way.

Drew McLellan:

So if an agency is listening to this and they’re saying, “I would like some of this in insight and information into maybe the mega brand that is my client’s want to be brand.” How do they access this information? How do they interact with a company like yours? How do you interact with the agencies versus the brands? Because I’m assuming you work with both, right, agencies and brands direct.

Alvaro Melendez:

Yeah. So most of our clients are clients direct and their agencies are part of the team but we’re hired by the client most of the time. We have also worked with agencies that hire us to do work for their clients, which is just the same, it doesn’t matter who pays the bill, it’s the same. But what I really think should be happening more that I’m not seeing happening is agencies looking at their own brand. Not of the clients.

Drew McLellan:

Right. I was just thinking about that. Right.

Alvaro Melendez:

Yeah. I would like to see more of that. And I’m going to tell you why in a second is, so we’re specialized in brand love, but a big, big chunk of brand love comes from diversity, equity and inclusion and how these companies are treating this very important matter, right? Agencies have been very slow with that. And I mean the big, large agency networks, they’re being very slow with that. They struggle a lot with that. They don’t really know how to handle that. And for smaller agencies, this is a big opportunity because making diversity, equity and inclusion a part of your core brand will be in the very near future. A matter of survival.

Drew McLellan:

Right.

Alvaro Melendez:

Real good talent is not going to go to a place that doesn’t have a very good DI policy in place, just won’t happen. What I was thinking is, and I’ve seen this in the places where I’ve worked, right? I’m a big fan of soccer, I’m sorry. Soccer.

Drew McLellan:

Yeah.

Alvaro Melendez:

So I always compare the agency with a soccer team, right? So if you don’t have the best players, there’s nothing you can do.

Drew McLellan:

That’s right.

Alvaro Melendez:

You’re not going to outperform no one else. If you don’t have a great culture, infrastructure and a big brand for yourself, the best players are not going to come to you.

Drew McLellan:

That’s right.

Alvaro Melendez:

So no matter how much you want to pay them, that doesn’t happen.

Drew McLellan:

Or they won’t stay.

Alvaro Melendez:

Or they won’t stay, right? So I’ve seen that in agencies over and over again, where I’ve worked. You are lucky, you have five talented people. They make the difference. The agency wins all the awards, wins all the clients. These people leave, the agency dies. I’ve seen that happen over and over again.

Drew McLellan:

Yep. Right. Me too.

Alvaro Melendez:

So what I think is, if you’re a business owner, if you’re an agency owner, you don’t need to worry so much about the talent. Of course you have to worry about the time, but you have to worry about the infrastructure that you build so that you attract and retain that talent. And that is I think, where your brand and your DI makes a lot of different. And a good case study, a fresh one, is the agency Gut in Miami in Sao Paulo, right? What they’re doing, it’s just a world leading agency, very small, but with an amazing culture.

Drew McLellan:

So talk about how AI interacts with DEI and how that impacts brand love.

Alvaro Melendez:

Yeah. So I was telling you about there’s the promise, and then there’s the pillars. So what we are doing is we’re turning DI into pillars. So yes, let’s say you want to talk about food. You also want to talk about race and ethnicity, and you also want to talk about sexual identity and you also want to talk about age and all the different DI pillars. So in the way that we have designed this product is that DI becomes a part of your core brand pillars so that you’re measuring them the same way you are measuring your traditional brand pillars. Of course, we have a DI index, which is of course a measurement that looks only just at your perception in terms of DI, which is interesting, but it should be core to your brand. So we need to get rid of that idea that DI is something like donations or something you do once a year or you do, right. That’s [inaudible 00:39:02].

Drew McLellan:

That’s probably a new story or, yeah.

Alvaro Melendez:

Yeah, no, no. DI needs to be core to your brand. It needs to be how you think about the world.

Drew McLellan:

And is there someone who’s doing a good job of that, that you can give an example of either a visual or a word that is scoring well on that index?

Alvaro Melendez:

In the agency world or in general?

Drew McLellan:

In general.

Alvaro Melendez:

Yeah. So for example-

Drew McLellan:

Because I’m thinking, dishware, would’ve never been what I would’ve guessed for Disney. So I’m wondering what images and words convey to an audience that any brand is invested in and believes in diversity and inclusion?

Alvaro Melendez:

Yeah. So the keywords there are a little bit more tricky in the sense that some of those are less known, let’s say so also less used, but I want to refer to the concept of DI in general. Athleta, are you familiar with that brand?

Drew McLellan:

Yep.

Alvaro Melendez:

Okay. Athleta is doing an amazing jobs in terms of DI. And they are doing it with race and ethnicity because they have Simone Biles, but they’re also doing it a lot from the gender identity perspective in terms of sports and how a woman can have mental health problems like Simone had in the Olympics and still be the best human she can be and making that conversation part of your normal world, demystifying it, is being beautiful how they are doing that. So that’s a very good example, but then there’s other more tangible examples, for example, Adidas with a bras, like what I just said or Lululemon, they just designed a shoe designed specifically for women, a running shoe designed specifically for women and they claim it’s the first, I don’t know if it’s true or not, but at least they’re presenting that, “Okay. So there’s gear that is designed specifically for how I have to run.” So it is happening. And the good thing is that it’s happening with tangible products. It’s not just stories and posts and declarations.

Drew McLellan:

So where do you see this going? It feels like, I think you and I were talking before we hit the record button. And I was thinking, “I think a lot of agencies are just beginning to dip their toe into AI.” And you obviously are much further along with your company and the tools that you’re using. What do you think is coming next?

Alvaro Melendez:

For the agencies?

Drew McLellan:

Mm-hmm(affirmative).

Alvaro Melendez:

Yeah. So my experience, of course, this doesn’t have to be for everyone the same, right. But when I started doing this within the agency, I just noticed, we don’t have the right clients. We just don’t have the right clients that would be willing first to understand the value of something like this. And then of course, pay for something like this.

Drew McLellan:

Right. And then to your earlier story, actually use the information they get, right, in a timely manner.

Alvaro Melendez:

Correct.

Drew McLellan:

Yeah.

Alvaro Melendez:

So I think agencies have a treasure, a hidden treasure there, which is creativity. That is something that we’re not going to be able to replace soon. Of course there’s AI generated creativity, but that’s a different thing. That’s more fun, I think. Actual real brand storytelling needs to still be done by human and agencies have those people that can do that. But what I always see is there’s a big disconnect between the creative world and the tech world. It’s like a different language, they can’t even talk to each other. So as long as that doesn’t happen, bridging that gap between, okay, I have AI doing amazing stuff, but if we don’t turn this into a storytelling piece, it’s nothing, right?

Drew McLellan:

Right.

Alvaro Melendez:

It’s just amazing insight that’s nothing. So we need this confluence of creative people with tech people. Sadly, what I’m seeing a lot is that the bridge is being created by the client. The client is the one that says, okay, you have to work with them.

Drew McLellan:

Interesting.

Alvaro Melendez:

Not ideal because then many times what I’ve seen. We want to work with agencies for example. And I know a lot of tech folks want to work with agencies because we admire creativity. We’re big fans. It’s like-

Drew McLellan:

Well, and you are part of the creative process, right?

Alvaro Melendez:

Yes but-

Drew McLellan:

Data, that’s right.

Alvaro Melendez:

… it’s like being an architect and you don’t want to work with the people that build your house. That doesn’t make any sense. So I think, maybe younger creators are starting to have a better sense of AI and of what it can do or willing, but we need the business owners to understand the importance of this and also understand. I think that’s important that you don’t have to do everything yourself, right? Because it’s not easy. I mean, you have to hire very different talent. You have to manage them very differently. So trying to do everything in house, I don’t think is a good solution unless you’re very large. Otherwise I would suggest partnering and experimenting. Agencies are great at experimenting. So just, “Hey, let’s try this with one client, get them on board, see how we feel, see how we can make it our own.”

Drew McLellan:

I was thinking, so my origins and agencies was as a copywriter. And I think about how cool it would’ve been to have the information that you could have given me so that I knew what direction to go in, or I knew what to pepper into my work. And then to be able to actually measure it and show the client that what we did, because as you said, everybody’s moving to performance marketing or something they can measure. And the danger I think, is that brand becomes something that is ethereal rather than really practical and applied inside businesses. And I share your belief, which is brand is super important.

And I think most agency people believe in the power of brand, but if we could create a stronger, better brand for our client and prove it and measure it and prove it, and then continue to keep notching up that brand love metric, our clients would be very invested in new brand, which would mean we’re actually helping them build their bottom line, which is good for them, which of course is always good for us too. So it seems like this is a way to save branding, being a central part of advertising and marketing.

Alvaro Melendez:

That’s exactly the way I want to see it. And I also want to see it as a way of giving creativity, the value that most people don’t know it has because what you were saying, as a copywriter, you write your amazing story, but then it doesn’t get approved and you have to do a low quality by this stuff.

Drew McLellan:

Water down version.

Alvaro Melendez:

Yeah. Of course, you know it’s not great, but you have to do it because that’s what you get paid for.

Drew McLellan:

Right.

Alvaro Melendez:

If I give you the tool where you can say, “Okay, let me do both, and we’re going to see tomorrow or in three days, what works?” You can go back and say, “This works better. Let me do it again.” And the client is going to say, yes, because they don’t want to have bad advertising because they love it. They want to have bad advertising because they think more creative advertising might be too risky.

Drew McLellan:

Well, and they don’t know that the dishware is what makes people engaged. That is the food and beverage experience or whatever. So part of it is just ignorance on their part and the agency’s part. You’re splashing around in the water a little blind.

Alvaro Melendez:

Yeah, yeah. And I wouldn’t call it ignorance because this is very difficult to … I must say we came up with this maybe two years ago and we haven’t seen nobody doing it yet. So there’s still a long way to go for the-

Drew McLellan:

Right. No doubt.

Alvaro Melendez:

… industry, right? We’re still understanding it and turning it into something. But we’ve seen very, very promising case studies of okay, when you do it, it’s so easy to go up.

Drew McLellan:

Yeah. To move the needle. Yeah. This has been fascinating. I knew that this would be an interesting conversation. I’m hoping it was really thought provoking for the listeners. If folks want to learn more about your business or they want to reach out to you, what’s the best way for people to have contact?

Alvaro Melendez:

So if they want to reach me personally, I’m mostly active on LinkedIn. So Alvaro Melendez. I don’t think there’s many people with my same name, but if you put Alvaro Melendez and then CRANT, I’m sure you’re going to find me.

Drew McLellan:

Yep.

Alvaro Melendez:

That’s one way. Then the other way is over the website. We just launched a new website it’s called Inklantern, everything together, Inklantern.com.

Drew McLellan:

Okay. I-N-K or I-N-C?

Alvaro Melendez:

I N K.

Drew McLellan:

Okay.

Alvaro Melendez:

Yeah.

Drew McLellan:

Inklantern.com.

Alvaro Melendez:

Inklantern.com. And that’s where we have the branding product. So if they want to contact me, they can do it over there as well.

Drew McLellan:

Awesome. Thank you very much for your time and sharing your expertise. Sounds like your instincts to leave the agency world and chase the data is paying off for you and your clients. So I’m sure it’s an exciting venture for you and your crew.

Alvaro Melendez:

Yeah. Thank you very much. But I miss the agency. So I want to work with agencies.

Drew McLellan:

Yeah.

Alvaro Melendez:

Yeah. It’s beautiful. The business is just beautiful. So I don’t want to go away from it.

Drew McLellan:

Yeah. Well, but you’re helping agencies do their work better. So yeah.

Alvaro Melendez:

Yeah. That’s for sure, totally what we want.

Drew McLellan:

Yep.

Alvaro Melendez:

Thank you very much, Drew, this has been interesting and I hope we were able to add some value to the people listening.

Drew McLellan:

Yeah, absolutely. All right, gang, this wraps up another episode of Build A Better Agency. I hope this has your head spinning. I’m already thinking about the AMI brand. And I’m thinking about how I still write things. And I’m sure that you were thinking about clients and especially those of you that build brands or create brands for clients or help them understand how to accentuate their brand. This has to have your heart very happy that there is a way that we can help clients do it better, measure it and actually recognize the value. Because I think sometimes that’s the hardest thing is when we can’t show them how it rings the cash register, then they want to skip some of those steps and they want to get right to the PPC or whatever it is that they can track and measure. And so to be able to track and measure something as important as brand, something as foundational as brand, I think is pretty cool.

So reach out, check out the CRANT’s new website and begin to think about again, what is possible for us when we start using tools like this and what can we bring to our clients that marries data and insight with our creativity and all the things that we have always had on the shelf to use. So again, another episode that begs you to learn a little more, dig deeper and think about how you can apply it to your business, okay?

So big shout out and thanks to our friends at White Label IQ, as you know, they are the presenting sponsor of the podcast. So Whitelabeliq.com/ami will get you some free hours. They do White Label design dev and PPC. Great folks, have been in the AMI community for about 20 years. And as always, just want to thank you for listening. Come on back next week. We’ll have another guest that’s going to make you think a little different, make you see the world a little differently and will help you build the agency that you want to have for the future. Okay? I’ll be back next week. I’ll see you then. Thanks for listening.

That’s a wrap for this week’s episode of Build A Better Agency. Visit Agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening.