Making Use of the Marketing Machine

What Feeds the Marketing Machine?

MLD Back Again.

2 Ingredients to sports card investing success.

Sets by Total Auction Value.

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Transcript

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If you're just joining us, welcome. And if you've been riding since the beginning, thanks for strapping in. Let's catch you up. Episode 1 was the mission statement. We laid the foundation that sports cards are alternative assets, and that valuation boils down to three core forces market, legacy, and design. We challenged the idea of emotional buying, and put forward the concept that cards behave more like financial assets than most realize. And that understanding fundamentals, risks, and compounding interest is what feeds long-term success in the hobby. Episode 2 dove deep into the supply side of the market. We called it card history nomics, an economic walkthrough from vintage scarcity to the junk wax flood to today's junk color and junk slab eras. We drew parallels between monetary inflation and print run inflation, and how modern companies manufacture scarcity through endless parallels and cause grading dependent rarity. The takeaway? Most cards go down in value over time. Unless you understand how supply evolves and how to position against it. Episode 3 shifted to the demand side. We used the myth of the fates to illustrate that card value only holds when market, legacy, and design are in sync. We broke down how collector identity shapes demand, from team builders to goat chasers, and why expectation is the hidden lever in card pricing. Low expectation risers and post-hype sleepers often offer the best ROI. Overhype darlings create liquidity traps. Rookie cards and first sets freeze moments in time and are the ultimate vessels of nostalgia fuel value. Now in episode 4, we shift from theory to tools. We're going practical. We'll plug in real-world examples and figure out how to use the MLD framework, market, legacy, and design, to not just explain past movement, but predict future ones. Welcome to Slabnomics, the intersection of collecting, investment, and market theory for sports cards. Episode 4. The Marketing Machine. It was the summer of 2019, and in the crowded streets of Atlanta, Georgia, fast food chains bustled with the usual suspects. Chick-fil-A ruled the roost with its loyal customer base, clean-cut image, and famous chicken sandwich. Popeye's, though a southern staple, was known more for its spicy tenders and biscuits. In a modest marketing office at Popeye's HQ in Miami, a small team had been quietly developing a chicken sandwich, a buttered brioche bun, a crunchy well-seasoned fillet, two pickles, and a dash of spicy mayo. Internally, they believed it was good. Better than good, but they weren't sure how to make the world care. The sandwich dropped quietly in mid-August. No major commercial, no celebrity endorsement, just a few social posts and a tweet that simply said Chicken Sandwich. But this brave new foray into another roost ruffled some feathers. A Chick-fil-A tweet attempting to reassert dominance casually tried to put down this upstart by mentioning themselves as the original chicken sandwich. Popeyes fired back with a now iconic two-word response. Y'all good? The internet went ham. Twitter was a war zone where new chicken squared up on old chicken. Lines snaked around Popeye's restaurants. Instagram flooded with memes, taste test reactions, and brawls over the last sandwich of the night. Tension escalated. Popeye's employees work in 14 hour shifts. At some locations, customers were trying to bribe cashiers for one last bite of the now mythical sandwich. In Houston, a man pulled up to a Popeye's drive-thru at 8 45 PM only to be told the store had run out. Enraged, he pulled a gun on an employee demanding a sandwich. National news picked up the story, and just like that, the Popeyes chicken sandwich went from a viral to a cultural phenomenon. Celebrities tethered their wagon to one of the two companies. Late night hosts were hosting segments, and every fast food competitor from Wendy's to McDonald's scrambled to fast track their own chicken sandwich projects. Popeyes had ignited the chicken sandwich era. Then Popeyes did something genius that no one expected. Just when the frenzy was at its peak, they pulled the sandwich from stores, citing demands they had not anticipated. For two months, Americans were in mourning, tweeting countdowns, filming parody music videos, even scalping old rappers on eBay. The new rock star of chicken sandwiches returned November of 2019 triumphantly on a Sunday no less, when their competitor was sleeping in its roost. By the end of the year, Popeyes had gained an estimated$65 million in free media coverage. The parent company restaurant Brandsair National reported one of the best quarters in company history. Popeyes was no longer just a regional favorite, it was a national player. Not because of a billion dollar ad budget, but because of one tweet, one sandwich, and one moment captured by culture. Somewhere in a marketing office in Miami, a small team high-fived each other and proclaimed, We broke the internet with a sandwich. One thing I'm going to tell you right off the bat is I can't tell you how to go viral. Many of you have seen my content under at Slabnomics, and you know I have not even gotten close on Instagram and TikTok. Shameless plug though, that is where you'll see highlights and graphics for the data that I drop. So give it a follow if you don't like trying to imagine ten different numbers at the same time. What I can tell you though, is that simply understanding two things, expectation as the hidden lever of value, and the power of marketing as the noce of demand, is enough to plan most sports card investment strategies. For more discussion on expectations, go back to Slabnomics episode 3 about halfway through. Now before we get to the power of marketing, and you get too frothy on that, I'm going to pull you back with the necessary statement to KMA. Do your own due diligence. This content is for informational purposes only and should not be considered financial advice. Always do your own research and consult a licensed financial advisor before making investment decisions. Why do I cite marketing as the noce of demand? Marketing isn't an engine in and of itself. You still need a strong product, continuous development, distribution channels, etc. But marketing can give a tremendous boost to the sales motion of the product. Popeye's chicken didn't make$65 million because they made the best chicken sandwich the world had ever known. They made$65 million because they got the world talking about them, and kept the world talking about them. The simple fact people are talking about the Popeye's chicken sandwich seeds the tiny idea in your brain, and waters the Popeye chicken sandwich into a full, juicy, tender Popeye's chicken sandwich plant until you uproot it by paying them money at their drive-thru window. The reason I highlight these two companies is because Chick-fil-A is just as genius with their marketing, although it's more pervasive than viral. Chick-fil-A anchors its brand with Christianity, closing on Sundays. This makes you think of Chick-fil-A many Sundays as free advertising and wetting the restaurant and its product to something that's particularly important to billions of people. Sure. Chick-fil-A loses 14% by closing on Sundays, but after hearing that, I'm sure you agree that what they gain far outstrips that. Outstrips. Stuart H. Britt says it well. A great product without marketing is like winking at a girl in the dark. You know what you're doing, but nobody else does. PSA is standing on a stage with a jumbotron winking at that girl. It's you. You're the girl. PSA anchors their brand in one thing. It's not we're faster than competitors. It's not we're cheaper than competitors. It's not even we're more accurate or established than competitors. They anchor their brand simply on our cards sell for more. They tell you that and they wink at you, and you swoon and get a little bit flushed and maybe tee hee hee a little bit, and you send them your cards and wait four months for them to come back and tell you, hey Bestie, you did good on this one, so you need to send us more money, like they're your favorite FeetFinder account or something, not a sponsor. As we talked about in episode two of Slabnomics, card history nomics, we're in the junk slab era. The supply glut is so crazy that we have to grade cards to manufacture scarcity. A good way to know what stage of supply glut we're in is to look at the 9 to 10 ratio. When nines are going for less than raw cards, you are in one crazy supply glut for the market. So if we're in a crazy supply glut and the market demand constantly boosts and sputters based on media attention, should we give up and wait for things to die down in the hobby? You could. You could simply turtle and wait for a market reset, for prices to come back down. But volatility is where you can capture profit, both in short term and in the long, if you have an investment strategy. Remember the MLD valuation framework from last episode? Market, legacy, and design are the key factors in sports card valuation. I'll make it even simpler. It's really just a combination of player market and set market. Now before you tell me that straight bonkers type shit, the fact of the matter is buyer motivations encompass four main things teams, sets, roles, and archetypes. People buy players because they're a part of the persona they identify with, or a part of the set they identify with. A player's market thus has a team element, a role element, position he or she plays, and an archetype they exhibit, if they're a goat or never miss a game, or they're kind or whatever. The legacy is how often that player's name will be brought back into public consciousness, how marketable he or she is. You know what's crazy? Over the past 12 months, Michael Jordan, who's been retired for more than 20 years, has topped Kevin Durant in weekly Google searches every week. Kevin Durant, the active legend who is one of the top five unstoppable scorers the game has ever seen. That's legacy. And that's the true compound investment of a card long term. A card's market can be tied into the player, but can also be tied into a set. Sets have a legacy of their own, especially when they're the first installment of a brand that becomes iconic. The multiplier is critically important because human beings have short attention spans. Not you though, because you're listening to this long form podcast. But truly, when someone comes into the hobby or comes into a sport, they first have to learn the players, then learn the sets. The sets do get marketed. Search hashtag PrismFootball and then search hashtag score football and you'll see the difference starkly. So how do we know which set to buy for the long term? Well, like any good finance bro, I'll tell you that depends. It depends on your risk profile and your timeline. If you're convinced that Phoenix football is going to catch on fire because of the bright colors and honestly fire design, you have to evaluate the risk and how long you can hold the assets before considering your conviction a bad egg. Risk just means how much of your total asset contribution can you put into that set. So if you have 10k in cards and want to sell 1k of your prism and put it into Phoenix cards of the same players for five years, why not? Just know momentum is a thing, and Panini usually doesn't step back production. Although with losing licensing, maybe but tops is then gonna ramp up there, so probably not. But you do you. Consider the player's market, their expectations, their legacy. Think about what name first comes to mind of the sets for that player. When words like iconic bubble up for both player and a set, you're on a good path. The craziest thing is you can check PSA total auction value to get a beat on how iconic a set is. It essentially tells you a consistent reading of how much of that set has been sold. It isn't all of the sales, obviously, as there are offline sales all the time and cross grades and all that good stuff, but it's a pretty good indicator, all things considered. Let's give some examples. Ready for some bad radio? In a couple baseball heavyweights, 1968 Topps with the Nolan Ryan rookie, Johnny Bench rookie, and late Mickey Mannell, it comes in at a cool 20 million set value, versus the Black Beauty 1971 Tops with the Thurman Munson and a tough set to grade, managing a very respectable 10.3 million. How about basketball? Between 2012 Prism and 2003 Topps Chrome. Between 2012 Prism and 2003 Topps Chrome, who you got? Well, 2012 is rookies of Anthony Davis, Kawhi Leonard, Kyrie Irving, Damian Lillard, Kemba Walker, and Clay Thompson, while 2003 Topps Chrome comes in hot with Dwayne Wade, Carmelo Anthony, Chris Bosch, and some dude named LeBron James. Surprisingly, 03 Tops Chrome wins easily, 34.7 million to 8.4 million. Soccer rookies are a bit more complicated, so it's hard to factor them in, but 2014 World Cup Prism edges 2017 Topps Chrome UEFA, 2.73 million to 2.68 million, even with 2017 having Mbappe's rookie card versus no real rookies in 2014 Prism. Sometimes art really does trump design, even when that art is on the most frustratingly off-center set football ever made. 1989 Score Football with its hot rookies of Barry and Deion Sanders, Andre Ryzen, Troy Aikman. It's not the most artistic, but it comes in at 2.54 million. This falls well short of the 1984 tops, with that Merino and the 1.2% gem rate Lway, which comes in hot at 3.81 million. So sets and rookies are intrinsically linked. But in the Venn diagram of sports card buyers, goats get all the circles. It's usually a pretty easy rule of thumb, then, to chase sets that have GOAT rookie cards for long-term holds. If you're a Lamania Mall guy, you may want to take a look at 2023 to 24 tops chrome. Just saying. Short-term considerations are simpler. Where will the spotlight of media attention shine the brightest? To stay on soccer, the easy answer here in the next nine months is Christian Polisic. He gets called Captain America. You don't think when the World Cup rolls around and the$30 billion of gross output that's projected is on the doorstep, the media is not going to be ceaselessly promoting this guy? He'll have so many Captain America commercials sponsored by Marvel that Chris Evans will have a nervous breakdown. Market Movers says his cards are up 10% in 365 days timeframe and down all the more recent time frames. Market Movers lies. Try to find a good public card to buy and then come at me. By the time January 2026 rolls around, the white hot spotlight will be fixed on him and the money will follow. Other possible moves. There are a couple post-type sleepers I'm making bets on in my first love, the NFL. Kyle Pitts and Anthony Richardson specifically. Both had white hot markets coming in because they have crazy athletic profiles. So they have a huge ceiling and have absolutely tanked since they've underperformed. But this is a do or die contract season for both of these very young, very athletic Marvels. They're hitting that, hey, it's been fun, but now you either get to work or get to sell cars the rest of your life point. So they'll be the most focused they've ever been, and their team will be the most focused they've ever been on them specifically. That's a money combo. On the other side, who are players to sell? I won't play that game here, because that's how you get absolutely flamed. If you believe any players you're watching have lofty expectations that hold almost no upside and massive downside if they get injured, go Brittany, or just get distracted by life, that's your time to listen to your gut and take your profits. You can always then move those funds into a retired legend, decreasing the risk of your card portfolio through diversification. Thanks for sticking with me on this numbers-heavy episode of Slabnomics. We took a look at what feeds the marketing machine, it's chicken. We brought up market, legacy, and design valuation again and talked about how understanding two things leads to success. Those were that expectations are the hidden lever of value, and that the power of marketing is the noce of demand. We then explored sets by total auction value and had a little stroll around long-term and short-term investments. But most of all, we had fun. On the next episode of Slabnomics, we'll talk about something I haven't thought of quite yet. But one thing I will tease you with is that a couple tremendous collectors and entrepreneurs will be joining for future podcasts. So if you like listening to my voice and you're like, oh no, I'll only get half of Matt talking, that's weird, but I love you anyways. Owen, one more thing to think about before you go. With all this talk about sets across multiple sports and comparing them within the umbrella of that sport, someone with time and the cojones to be proven absolutely wrong could dive into what it looks like if sport markets surge. What if the World Cup being hosted in North America catapults the soccer sports card market into being as big as the basketball sports card market, if only for a short window? Tune in next time. This has been Slabnomics, episode four, The Marketing Machine. Thanks for listening. Keep building and talk to you later.