Ron Oren of Imagen on whether paid ads are really driving growth

Ron Oren 00:05

Hello. What's up?

Ron Oren 00:35

It's always hard to know when to start about the journey, what's the right place to begin, but I'll start here: I've been an entrepreneur for my last 20 years, after the army. My journey is quite eclectic, I'd say. I've been in China for many years, where I built a few restaurants, and then I moved to New York to learn copywriting. Marketing and copywriting is really my passion.

01:07 I joined Sisense. I led Sisense Labs, the innovation and product-innovation lab inside Sisense back then. Amazing experience, I'm very grateful for that time. A short period in a company called SparkBeyond. And then we founded Imagen, Imagen AI, but today we only pronounce it as Imagen. Imagen is a game changer in the photography world, basically. If you'd like, I can elaborate on Imagen as well.

Ron Oren 01:37

Yeah, I mean, we're not competing with them. They're basically part of the revolution that we've been in. We've been in the revolution from the early days, I'd say. Imagen was founded five years ago. My partner started the research seven years ago. AI was, I'd say, a buzzword back then, but nothing practical around it. To give a bit of context, Imagen learns how a photographer edits: it learns their style, then builds what we call a profile. Think about it as a DNA component of your photography style.

02:39 Once that profile is trained on your data, a photographer can edit their photos with Imagen immediately, in the same quality as they would edit them. Their style is very important to them, so we keep their style as they would edit it, because it trains the model, and we do that in less than a second. So what a photographer would do in three days, now happens in a few minutes.

03:09 That's the editing part. Since post-Covid, where we really boomed, there was a big demand for wedding photography, and everyone started getting together again, which required more and more capturing of moments. Since we boomed we've developed more of the workflow: complete for photographers now, we also do the culling, which is the selection of images, plus storage and delivery to the gallery.

03:40 So it's a full workflow environment for photographers: saving time, keeping consistency high, and basically letting the photographer focus on what they love, which is more photos, or being with their families. We have our own proprietary model for photo editing, specifically for professional photographers who care a lot about their style, and we know how to work with RAW files, the file type you need as a professional photographer.

04:11 The general-purpose models can be personalized like Imagen, but they produce a generative image, while we capture real footage and know how to handle that through AI. So the big difference is whether there's real light in the photo: whether we captured the photo or generated it. The question that would differentiate us, or threaten us in the end, is whether the consumers, say the bride and groom, would prefer a generated wedding photo over actually having a wedding. When that time comes, Imagen will need to rethink its position.

Ron Oren 05:11

I just want to emphasize again, none of this is really a revolution, it's not threatening or changing where Imagen is heading in any way, because again, we're not in generative AI, which is important for me to emphasize, because we're an enabler for photographers, not a replacement for photographers.

05:41 About KPIs: you're right, there's an advantage to being a founder and a CMO when you look at marketing KPIs, because it's a much broader view. First of all, the company KPI is growth, ARR growth. Now, ARR growth can be a challenging metric by itself, because it can lead to mistakes in strategy if you solely focus on ARR, and sometimes you're not focusing on healthy ARR.

06:12 As a marketing team you need to translate it into a proxy, into early signs of growth. The most obvious thing to do is first think about new ARR, not only ARR, then break it down by geo: how do I grow in a specific geo or a specific channel. That helps you see whether the teams are all heading to the same, right place.

06:44 Following ARR you can also find a deeper layer as a proxy for your north star. In our case that can be subscribers: how many people subscribe, and earlier than that, a good indication of what a subscriber could be, someone who signs up and has a parameter that predicts a subscriber further down the funnel. So we have data teams coming up with predictions of what a subscriber could be, and we optimize for those events.

07:14 Another angle in this whole process is brand activities, where we see lifts, for example a lift in a specific geo, that can eventually lead to early indicators of subscribers down the road.

Ron Oren 07:45

I can tell you, I'm not sure who's listening right now, but I'm sure everyone can relate. First of all, it's so dynamic, it evolves with you as you grow the business, and it keeps changing, because the persona changes and the business rhythm changes.

08:16 So it's really about understanding the purpose. The most simple and obvious answer, I'd say, is that once you onboard a data team, they bring in a lot of insight and different perspective by themselves. So listen to your data team quite carefully, see what they think about how they predict and which data they take into account, because by understanding where the weight of your data is, you can understand what can be correlated to your proxy.

08:46 So first it's a data-analysis process, understanding the correlations and what's stable in terms of progression. Second, it really grows as you scale your budgets. For example, when we started, and I'm very proud of this, I'd love to elaborate on it later, we were highly focused on word of mouth, referral, organic: basically we built a really good brand, and in that sense we focused on subscribers. We wanted to see that we were actually bringing in enough sign-ups and subscribers, so the metric was easier.

09:18 But then, when we moved to spending more on user acquisition, on paid ads, we realized we needed to make sure it makes sense, that we're not bringing in subscribers whose unit economics don't make sense for us. So once ROI joined the game, things got more complex: the CAC calculation, and growth in different geos came with a different flavor, and then we added LTV too. So in the beginning it's pure churn and subscribe, net growth. Then you add ROI and it gets complex, and fun.

Ron Oren 10:18

I mean, sorry for not having a more in-depth answer, but I just don't follow the platform analytics at all. We only follow what we capture. We obviously see the clicks and impressions, and we do our own analysis, but looking at the platform itself is really just for cost and finance, usually. The way we measure it internally is by following the proxies of growth, and deciding from there. What's important on a platform, Google or Meta, is the optimization event, and the optimization event is what you're trying to keep testing all the time, making sure it's the best.

11:18 This is a learning process. The optimization event really changes every few months. It's constantly growing and evolving, so you need to stay in very close touch with the data and see if you need to change your optimization event.

Ron Oren 11:49

Sure. We're not going to go into all the details, but I'd say that when we started, we tried to optimize to a subscriber, it made sense to bring on more of those. Then we optimized to mid-funnel optimization, meaning something the person did that can indicate they're a subscription proxy.

12:21 Now we're optimizing to match, to increase, the upper funnel. It really depends first on what's bringing you more quality, but also on where you are as a company, what your aspirations are at this point. As for Imagen, we're at hyper scale, I'd say, so we're trying to develop the top of the funnel more and more. So I have an interest in a higher-funnel event, which is less engaging, less optimized for subscription, but more optimized for awareness, in that sense.

Ron Oren 12:51

There's one strategy going on right now where we're clearly seeing the results these days: we've shifted our local marketing. In the strategic geos we operate in, we've shifted our marketing management to be owned by local marketing managers. For example, if Germany is a geo we're after, a few years ago we'd do our marketing there like we were doing in the USA, maybe slightly different ads and copy, but the marketing team looked at Germany as a whole. Now we've allocated a dedicated person who lives and breathes Germany. She has her own dashboards and analytics, she decides on keywords for SEO and marketing tactics, how ads on Meta should look, and what partnerships she needs to collaborate on. She reports to, and collaborates with, the mothership in Israel, but the ownership is hers, and this approach is yielding a really nice result: first for ownership, second for creativity, better activities are being established.

14:26 I definitely believe in working in those regions. What I've seen is that the differences aren't really at the keyword level or the ad level, they're more culture-wise, in how the product is perceived in, say, Germany compared to the US. With clients I personally work with, sometimes we actually change the promise, not the product, but the positioning, for that geo.

14:58 Exactly. A photographer in Germany, for example, cares a lot about GDPR, and a photographer in the US has a message that's less about what AI is and more about how you differentiate from your competition. Two different narratives, two different stories. If you talk to them all the same way, your funnel will be broken. Someone needs to know that persona well and communicate to them specifically, and know where they need other resources.

Ron Oren 15:30

It's happened a lot. Everyone will say it didn't happen to them, but I just question whether they tried different tests, and whether they had the courage to try things, because we fail a lot at Imagen, I'd say that proudly.

16:02 I'll give you an example from the recent months, to be honest. This year we tried different types of promotions. In August we had our birthday, and we did a huge promotion for it. We thought, if we just give a discount, everyone will buy for sure, right? So the answer is no. We spent months of preparation on this promotion, which is an insane amount, and it was a very bad result, the result wasn't sufficient. I can go into why I think it didn't work, if you'd like.

Ron Oren 16:32

I think it's less about the board, because the board usually does have the right perspective, it's more about founders with their marketing teams. Founders usually tend to be very performance-oriented, which they should be, they should follow the numbers, and they need to be worried about tomorrow, in a way.

17:02 I think marketing is a very rounded animal, much more holistic. Brand is very important to the game, and brand takes much longer cycles, it can be half a year, a year, or at minimum a quarter. When you're building a brand, that should be a prism, a perspective, that lowers into everything else in the end. Founders, I think, usually tend to measure everything by performance, which can be daily or hourly sometimes, and they miss the opportunity of building the brand, which takes time and effort and a different perspective.

18:04 So you need someone on the team to tell you why brand is important, what the strategy around it is, and what the tactics are to achieve it, just to make sure you're not totally abandoning it.

Ron Oren 18:34

First of all, do not allocate 40% of your performance budget to brand. Either you work up to it, or you allocate a much lower percentage into brand without knowing how to measure it. If you know how to measure it, go, that's a pure performance thing.

Ron Oren 19:38

Think about it like a north star. First, try to understand what the share of your acquisition is from non-paid channels: organic and direct. Try to predict the share of paid versus organic and direct. What's the composition of organic and direct? It can be coming from social, from community, or from partnership. Then try to understand what can actually be correlated to your growth. For example, if you're doing an activity in the USA and you see a lift in sign-ups, and you know it's correlated to that activity, and it's actually made the funnel healthier, once the activity is done, you should follow those numbers.

20:38 So the answer for you, the CMO listening, is to try to come up with as many tests as possible, and understand what metrics you're trying to evaluate. Usually it's a lift in CTR: if you want to see if a specific message is working, focus on CTR. If you want to see a lift in awareness, then impressions, in specific geos, don't go too broad, specific geos, even cities if you can, that would be great, and see what happens.

21:09 Also, be brave enough to do a blackout for performance campaigns, just to see the real impact on your performance. Do that responsibly. But that's also an important phase to do when you're growing, and not be too manipulated by the paid metrics. This could be an entire episode on its own, this discussion, but we'll leave that to next time.

Ron Oren 21:40

I think it's what we discussed before, it's my [own story] too: as a young startup, my intuition in the beginning was, let's take the money and spend it on ads. I think going to ads and advertisement should be the third, or even the fourth, play. The first play should be to try to build a brand, then try to get influencers to rave about you and be happy about your product, third, see if a community, if the people around you, are rallying and want to talk about you, and then, once you get all these indications, put a lot of money on paid, once you've unlocked the healthy metrics.

22:41 But as a young startup, you're always saying, where is Google, where is Meta, let me spend some money. I mean, I don't have the money myself, but let's just spend it. We've been there too, and then we shifted to a brand approach, which today we're really enjoying.

Ron Oren 23:11

I hope it's not too obvious, but I think, first and above everything else, is a sense of ownership and accountability. In a young startup like ours, a small team, I need everyone to be the CEO of their own position.

23:42 That's important because, to be honest, we only hire people who know how to do what they're doing better than us. We want to learn from each person who joins the company. When there's no sense of ownership, someone else has to do double the work, which isn't healthy for the company. Second, at Imagen at least, an imaginative mindset, I'd say. We need to stay a few steps ahead, and make sure we're really innovating in how we approach messaging and marketing thinking. Every step should be highly tied to creative, which is also important, we're a very visual company, so it should be appealing. Also driven by data: we're a startup, everything should be backed by numbers. That's part of being an owner and being accountable for your actions. If you're not following the data, you'll vanish.

Ron Oren 24:44

There are so many startups I admire. [unclear @ 24:44]

Ron Oren 24:44

I'll give you two, and elaborate on one. My two will be [name unclear], which I think is an amazing product, and I love the way they approach their referral program. And two is Figma, which I'll elaborate on. Figma is a stunning, stunning product and startup.

25:16 When they started, they started with everything I've talked about here: they started with small, local communities. They hacked it the right way. They had a community in, say, a specific city in the USA, but also a community in London, not just the UK broadly, London specifically, and a community in Tel Aviv, each led by very strong community managers. Think about someone who loves the product, doing a lot of meetups about it, educating people about the product in their city, and doing it so naturally and intuitively that it feels like no-sweat marketing.

25:48 I think that's really what boomed them, beside having an amazing product, which is the baseline. I think the way they approached communities made them a competitor to Adobe in the end, and I admire them for that. Beside that, they have a beautiful brand, and they're very creative about how they approach their brand position.

Ron Oren 26:18

It's quite personal, but I'll share it anyway. I'd say: be less sensitive, stay focused, dream big. Being a founder, and working in a startup environment, is like being an athlete, like someone who trains for the Olympics, you need to really work hard and stay focused.

26:48 Dreaming big is something you need to keep telling yourself, again and again. You're the creator of this world, of what you can achieve, it really depends on you. Being less sensitive means iterating a lot: if you see something that doesn't work, change it. If you think you have something in your personality holding you back, whether you're driven by ego, or too emotional about feedback, or about relationships with the people around you, whatever it is: be less sensitive, just stay focused on the target. I'd say that to myself again and again in my next adventures too.

Ron Oren 27:52

I think it's a question for this generation, in a way: how do I balance life and work? How do you have work-life balance, how do you balance everything together with fatherhood, and career, and being present in my life. How do I balance saying that's good enough sometimes, and not being a total perfectionist about things, which isn't easy. Saying good enough, and being productive and efficient.

28:23 And knowing when you have time that's not related to work, and the importance of those moments, like when you're with your kids. When I'm with my daughter, I remind myself to be present as much as possible in those moments, because who knows what will happen tomorrow. I know that in the end, when I go to sleep, it makes me feel much more complete. I don't know how cliche it is, but it's like that.

Ron Oren 28:53

So, being present, and controlling the rhythm, the rhythm is high by nature. Sometimes you just need to say, this is what I can do within this rhythm, to be present for other things in my life.