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Gary Vaynerchuk on entrepreneurship during COVID-19 pandemic

VaynerMedia CEO Gary Vaynerchuk talks with Yahoo Finance reporter Melody Hahm about how digital audiences are transforming during the COVID-19 pandemic as well as how to be an entreprenur durign such trying times.

Video Transcript

- Gary Vaynerchuk is a serial entrepreneur, CEO, best-selling author, tech investor, and marketer. Among his many endeavors, Vaynerchuk is the CEO of VaynerMedia, a digital advertising agency servicing Fortune 100 clients. He's also a much sought after public speaker and influencer.

MELODY HAHM: Hi, I'm Melody Hahm from Yahoo Finance. And I'm so excited to be speaking with Gary Vaynerchuk today. Thanks for joining us, Gary.

GARY VAYNERCHUCK: Thank you, Melody.

MELODY HAHM: The theme of this year's AMS is Road to Recovery. Tell us what you're seeing in VaynerMedia. Your focus has always been on innovative, experientially marketing. Of course, that has sort of been thrown out the window, to a certain extent. Tell us how you've been able to pivot during this time?

GARY VAYNERCHUCK: It's really funny the way you've instructured that. And I totally get the positioning of us being innovative, or disruptive, or things of that nature. But in actual business meetings with big and small brands, I've always clarified kind of my persona or like the vibe around us. I've always said, look, people think that we're innovating. I think we're practical.

I think that most people talk about today in a very confused way. Most companies really put yesterday on a pedestal, what used to work. And they think of today as the future. But it's actually today. So ironically, I've always thought we were practical versus disruptive or innovative. So to your point, in the way you set that up, we were never doing VR or AR.

The things I talk about or what consumers are actually doing now. Like, I think we can all agree that consumers give their attention to this device. And so when we're doing media and creative in these channels and OTT, Facebook, Instagram, YouTube, TikTok, whatever they may be, LinkedIn for B2B companies, we think it's practical. We think it's underpriced no different than back to Yahoo and the early days of Yahoo, that ad product, Yahoo, Google Ads, Yahoo ads, that was a driver for my family's business.

In '99, 2000, 2001, 2002, people thought Yahoo Ads was so futuristic. But if you were doing them, you knew they were practical. You were doing business. So what's actually happened for us is people have thrown out yesterday and have opened their eyes to today, AKA, the biggest brands in the world that we work with are starting to understand that paying $600,000 for a production to run on television might not be the best use of their money and have leaned into e-com, DTC, and content and media being together in digital channels to drive business results.

And this has been the greatest era of CMOs and real marketing individuals at the highest levels becoming more practical and practitioners. So we're seeing a lot of growth, to be frank and we're seeing people finally have the aha. You know, I was reading about this on Yahoo, or Wall Street Journal, or Add Age. But I never took it seriously. Because I put yesterday on a pedestal.

And now, I actually see what you meant. I can't believe Facebook Ads and Creative can drive my business so much. So we're seeing a big sea change in Madison Avenue and even startup land, to a degree. And obviously, we're excited about it from our perspective.

MELODY HAHM: When we see this wide divergence when we look at the industries, right, that are actually spending those ad dollars, even if they're rejiggering their budgets. Of course, retail, financial services, are two of the top spenders when you look at even the growth that's happening in 2020. How are you seeing that manifest in your business? Are there any particular bright spots that you can call out or perhaps laggards in the space overall?

GARY VAYNERCHUCK: You know, the bright spots for me are I can't believe how many-- whether it's Kraft, or Procter, PepsiCo, the conversations I'm having where the actual sales data is becoming the KPI, not the internal MMA or Nielsen Brand lift studies. So, you know, I actually see a lot of-- I mean, you know, we're very heavy CPG. We're heavy financial services, as Chase is a client.

We're seeing-- we weren't in a lot-- we weren't in airlines or hotels. Like, we got lucky, is the only word I can use. Our client mix was very benefited by COVID, to be honest, in the short term. In that time frame-- because they're worried about supply chain, to be honest, right? Our clients are much more worried about making more of their stuff than anything else. I think it's just affirmation of my prior statement, which is, the bright spots or the advancements are as following.

We are seeing bigger allocation to marketing because we finally got clients to measure on how well they're doing on amazon.com or proving to them that we're moving product at Kroger, or Walmart, or Home Depot. So what's happening is they're investing more, because the debate went out the window, because they weren't lazy with their money, because nobody could do TV productions.

So you're seeing a real world of haves and have nots. You know, the industries that were most affected are obviously in trouble, more so than others. And then the industries that most benefited from it, food, necessities, were unable to spend their marketing money the way they're accustomed to. Meanwhile, what was happening was, the way they were accustomed to, big productions on TV, and then doing matching luggage to that TV spot on digital, was, for the last decade, wrong, or at least wildly overpriced.

So they have more business and more opportunity to spend marketing money. They can't waste it to the way they've been wasting it, especially in 2019, '18, and '17. Because all the consumer behavior has been shifting more that way. And now, they're seeing something new. And they're seeing the business results above and beyond the COVID effect. I mean, this will be a transformational moment on Madison Avenue forever.

The television commercial industry will evolve, not to mention, as you know, and everybody watching knows, the growth of OTT consumption versus cable television and network has exploded. And OTT look a lot more like a Facebook or YouTube commercial than they look like buying a TV upfront. I mean, let there be no confusion, without knowing who and what everybody who's watching this comes from or what their angle is.

MELODY HAHM: What do you think about, early on in the pandemic, you launched VaynerCommerce, of course, after acquiring Music Fusion. It's actually-- you're charging top dollar to companies that have been trying to pivot into this e-commerce space. Tell me about some of the findings over the last couple of months, some of the sort of successful strategies that you've been able to implement.

GARY VAYNERCHUCK: So what we're doing in that world-- it's been about 3 and 1/2 years. I started VaynerMedia to eventually buy brands. So I didn't want to go into agency landscape, especially not after some of the good things I did prior to starting VaynerMedia. I wanted to learn Fortune 5,000 land and understand what they knew that I didn't. Because I was a from-the-streets entrepreneur kid. So I didn't have certain things that I just didn't know.

I didn't understand why Coca-Cola, and BMW, and Hertz, and whatever were doing what they were doing. And so three years ago, I went on a journey to try to buy through M&A or start my own e-commerce capabilities. And we started our own side of VaynerMedia. But I knew I wanted it to be a standalone VaynerX company, which is the name of my holding company.

Because I knew that e-commerce was evolving. DTC was imperative. I needed to be omnichannel when I bought these brands. So the intent of buying was the fusion and integrating it. And we were going to launch VaynerCommerce in June. Obviously, we sped it up a little bit. Because e-commerce became-- all the conversation immediately with COVID was to help people build out the platform for macro LTV, not just getting the ads to work on [INAUDIBLE] and LTV, and the micro, but packaging, 3PL, building on top of Shopify Plus, which is more nimble than some of the legacy softwares that Fortune 500s were building on.

Understanding and advertising out math matrix to make sure that these big companies could ship direct to consumer and make the economics work versus what they use with big retail, so it's been wildly successful. I think the biggest thing that we've taught the Fortune 500 landscape right now in the early days is you can do it yourself. You don't need to rely on Walmart and Amazon.com, though those are incredible partners, along with Target.com. You can do it. You just have to do it right.

You don't have to spend a billion on an M&A acquisition into your company like many of them think they do. You are capable of doing this yourself. But you have to act like them, not act like yourselves. Because your selves are built to stack it high and let it fly at Kroger's. At Albertsons, at Publix. And that's not going to work with DTC. You're going to have to go consumer up and make the economics work. And so far, it's been an extremely fruitful venture.

MELODY HAHM: Of course, in addition to your kind of business portfolio, and the vision you have there, you, as a brand, have been extremely successful, not only with the hustle and entrepreneurship lessons that you've been able to share, especially with the younger audience, but I'm curious if you've attracted a new demo during this time. We see the state of the economy. We know, as you say, it's a world of have and have nots, right? How do you think about this period of time where, perhaps, some folks who wouldn't have been a Gary V fan, have they kind of come into your universe in a surprising way?

GARY VAYNERCHUCK: I think the word of mouth of the individuals who, you know-- you know, obviously, hustle gets a lot of the headlines. And I've really been spending a lot of time trying to understand why in a world where I talk about patience, or being happy over money, or all these other things I talk about, that hustle really rose to the thing that people latch onto. Especially concerning, for me, that people misinterpret it as burnout versus what I'm actually talking about.

And that's something I have to look at myself to make sure that I'm communicating properly. During that time, what became very interesting is, over the last 18 months, I tweaked and made sure it was very clear to people where I sat on certain things, like how many hours I like to sleep-- seven or eight-- you know, how I think about it loving process versus what you could buy with business success. What's been really interesting during COVID is how many people reach out to me that, prior to COVID, me talking about them being insecure and caring about other people's opinions-- which is why they buy Prada bags, or BMWs, or Supremes-- is a bad idea, and don't use physical products to close up your insecurities.

"Save money" should be cool. What really made me emotional was how many people in March, April, May reached out to me and said, the fact that they've lived that simplistic framework for the last year and actually saved some money is now reaping huge benefits from them and limiting their anxiety of losing their job. As you can imagine, Melody, that was huge for me. I think, for a whole 'nother group, they were aware that I'd been yelling about that for a good two, three years.

And now they're like, oh, crap, that's right. And I wish I listened. And so that realization. So, yes, of course, there's been people that have stumbled on my content and maybe look at it for a different reason. Actually, to your point, a lot of people have come back to it. I think the biggest thing I've noticed is a lot of comments, and emails, and messages around, hey, I was off of you for three years. Because I was off and running. And I felt like I got what I needed. But now, I'm in this new restarting spot. And I really-- you were valuable to me then.

And so that's been nice to hear. But then there was also a dynamic that was pre-COVID. I had been exploding on LinkedIn and TikTok for the 18 months prior to COVID, for the last 24 months. Because they were the two places where you could get organic reach in a way that you couldn't anymore on Instagram, and Facebook, and Twitter.

MELODY HAHM: Yeah, that's fascinating. I mean, you, of course, started with a wine family. You sold Empathy Wines to Constellation Brands. But also, you've been really passionate about sports cards, right, during this time. We at Yahoo Finance have seen this huge uptick, right, in retail investing, whether that's traffic to our site, looking up stock quotes. How do you suggest folks diversify their portfolios during this time into sports cards, booze, art? Tell me kind of a quick thesis there, when you think about people who are trying to really see the gains of certain industries, especially during a downturn in the economy?

GARY VAYNERCHUCK: There's a very simple and very complicated answer to this. On the complicated side, you have some really wild conversations going on with the most sophisticated financial engineers in the world around just how much money is being printed around the world, flat out. Cash being a commodity. So as you can imagine, some of those individuals strategically have diversified in a much more unique way around tangibles. Or, you know, that's what led certain people down cryptocurrency. And it's what has led people down art, wine collecting, and, to your point, modern sports card collecting.

That 28-to-42, high-net-worth individual is a little bit more excited about getting a Charizard Pokemon that's worth 250,000 than, let's say, maybe that same 40-year-old 40 years ago going to Sotheby's and buying a $250,000 antique that they may put in their home. So you're seeing that shift.

So there's just a very complex conversation of the amount of money being printed in the world. And do you then go into those things? And then you have the complete opposite side of the coin, if I may, which is, a more thoughtful conversation around happiness.

In its most simple form, I have had more than a dozen conversations that look exactly like this. Hey, Gary, you know that whole thing you've been talking about for three years with sports cards? Well, I kind of got caught up in it. And I decided to spend $100,000 buying Michael Jordan's or Wilt Chamberlain's, or Ken Griffey Junior rookie cards. And I found myself being happier on my 30% or 40% win there than my 30% or 40% win on Tesla or Apple.

So there's an interesting conversation to be had right now of just sheer happiness. Like, even if you make less money investing in something like sports cards, was it more fun than just doing that with AT&T stock?

MELODY HAHM: Hmm, so interesting. We always appreciate your insights, Gary. Thanks so much for joining us, Gary Vaynerchuk.

GARY VAYNERCHUCK: Thank you for having me.