Episode 364

podcast photo thumbnail
1x
-15
+60

00:00

00:00

What do you think of when you hear about Disney? Fireworks, castles, and happy families all probably came to mind for a moment. But you probably didn’t think of dishware — and we’re not talking about those cups from the 90s with Lion King characters on them that were in every family’s kitchen cabinets.


Today’s guest, Alvaro Melendez, knows brands deeply in a way that most of us could never even imagine. If you think you know the core of what makes a brand who they are, think again. Alvaro has been developing and using machine learning to measure brand awareness or “Brand Love” for years to help companies, both big and small, understand what makes people connect with them.

In this episode, we discuss how Alvaro uses technology to help brands reach a bigger audience. He speaks about how to advertise effectively, how DEI is imperative for brands, and how creativity and technology go hand-in-hand in brand innovation.
And, if you’re still wondering why Disney is defined by dishware, you’ll just have to tune in to the podcast to get your answer.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

brand awareness

What You Will Learn in This Episode:

  • How Alvaro and his team are using machine learning to make brands trackable
  • Why organic social is the best way to advertise and promote your brand
  • How machine learning has taught major brands things they never knew about themselves
  • What the PPAI branding framework is, and how to use it to identify major brand metrics
  • How smaller agencies can learn from the experimentation of big brands
  • The importance of making DEI (diversity, equity, inclusion) a huge part of your brand identity
  • Why creativity and storytelling must still be people-centered and collaborative in an automated world

“I'm a big fan of the power of brands. Not just as a commercial expression of a business, but more so as the transformational agent that can change how we think.” @alonomas Share on X “The reason to focus on organic social is because that's the biggest platform any brand can have. And the biggest, because first, it has this strong tribe effect. Second, it's very authentic, and third, it's scalable.” @alonomas Share on X “If you are authentic to your brand and do something interesting for people that always performs well, you don't need to have a lot of production value.” @alonomas Share on X “We need to get rid of the idea that DEI is giving donations or something that you do once a year. DEI needs to be core to your brand. It needs to be how you think about the world.” @alonomas Share on X “Agencies have a hidden treasure, which is creativity. That is something that we're not going to be able to replace soon.” @alonomas Share on X

Ways to contact Alvaro:

Resources:



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.