How to Win Meta Ads with UGC (Finally) — Donatas Smailys | Why UGC Volume Wins, What Meta's Andromeda Algorithm Loves, Why Authentic Beats Polished AI, Why Trust Becomes Key, What Human-First AI Means for UGC (#449)

In this episode, we dive into how AI is accelerating the shift in user-generated content for advertising. 

Donatas Smailys, Co-founder and CEO of Billo, shares why social algorithms now demand high-volume content, his view on using AI as a scaling tool for real human creators (not for generating fake humans), and the crucial role of authenticity and variety in winning on platforms like Meta and TikTok. 

He also discusses the future of trust and AI characters in the content landscape.

Topics discussed in this episode:  

• Why social algorithms now demand high-volume content daily. 
• What makes a successful brand-creator relationship: emotion and performance data. 
• Why Meta's Andromeda algorithm now wins with variety and volume of creatives. 
• Why fake faces and AI-generated UGC are viewed as short-term gains with risk of backlash. 
• How Billo uses AI to instantly generate the next creative from existing real human content. 
• Why the future will require clear differentiation between real and AI content. 

Links & Resources 

Website: https://billo.app
LinkedIn: https://www.linkedin.com/in/smailys/ 

Get access to more free resources by visiting the show notes at https://tinyurl.com/y2zubc9w

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Transcript

00:00:00:02 - 00:00:17:09
Speaker 1
And now it's about volume. The social network algorithms are like black holes of content fatigue. So number one rule right now for all creatives, not just UGC, but especially UGC, is like you have to go.

00:00:17:11 - 00:00:36:17
Speaker 2
Hello, Welcome to another episode of the E-commerce Coffee Break podcast. Today we're diving into a big shift How user generated content is changing fast with the help of AI from deepfakes to data driven apps, the line between human and machine made content is fading. So what does that mean for trust and creativity? To break it down, I'm joined by Donatas.

00:00:36:17 - 00:00:45:11
Speaker 2
He's the co-founder and CEO of Billo a platform helping brands turn real creative ideas into high performing ads. So we have a lot to cover tonight. Welcome to the show.

00:00:45:13 - 00:00:47:17
Speaker 1
Thank you, Klaus. Nice to be here.

00:00:47:18 - 00:00:54:11
Speaker 2
So let's dive right into it. Many brands still mess up user generated content for good reasons. Why is that?

00:00:54:12 - 00:01:34:12
Speaker 1
Let's kick off with social algorithms have changed drastically and very fast. It used to be about a few creatives iterate on a small part of a creative like call to action or the hook. And now it's about volume. The social network. What network algorithms are like black holes of content fatigue. So number one rule right now for all creatives, not just UGC, but especially UGC, is like a great top performing type of content, is that you have to go volume and you have to go volume daily, weekly.

00:01:34:14 - 00:01:47:22
Speaker 1
So you're losing out. If you're if you think the game is still old and many marketers are still not shifting from old habits to to to the new world.

00:01:48:00 - 00:02:05:12
Speaker 2
Mm hmm. I see this in the market every day, and it's obviously very difficult to generate all this content all the time. A lot of marketers are sort of running into a burn out and get tired on this. Now, as I said, it's shifting a lot right now. And I want to talk about it. And how is that helping?

00:02:05:12 - 00:02:18:21
Speaker 2
Because air is the big tool for about two and a half years now. Let's dive right into the site. User generated content in the air. Isn't that sort of due to oversights and of content creation?

00:02:18:23 - 00:02:42:13
Speaker 1
Our view is that air is a tool is not a face. Let's let's start with this. So we we took we took a stance where we said that we're not gonna generate fake humans, but we will use A.I. as a tool to scale a real human. Because if a real human is committed to a brand, they're working together, they're creating great things together.

00:02:42:13 - 00:03:09:16
Speaker 1
And especially when it's a long term relationship, that means the human likes the brand or the product. And therefore we want to double down on this. We want to double down on these real long term relationships. And AI is great for content generation, I mean, entertainment, even like the fillers or whatever. But when it comes to creating something that is intended to look like a real human and it's not a real human, it's like it's off, it's wrong.

00:03:09:16 - 00:03:34:13
Speaker 1
So we decided to draw a line just there. In our case, what we're using A.I. for is to we build our proprietary technology that from many content pieces that our clients have, and they're in there below library. We create the next creative instantly with a click from the existing content from the from the content that the real human has created for the brand.

00:03:34:13 - 00:04:04:02
Speaker 1
So we think that's the right way to use. Let's let's talk specifically about like UGC and UGC type of content that that that that is the best use case. So you look at the data you look at, you do many variations. That's the key now, especially with Andromeda. Now how Facebook or meta algorithm works right now, you win with a lot of different creatives and I should be helpful for scaling real human.

00:04:04:04 - 00:04:15:00
Speaker 2
Mm hmm. Now, where's the connection between having a creator creating the right content that then you can scale with AI? What's what's the process there?

00:04:15:02 - 00:04:41:13
Speaker 1
The way it works in our platform is that, first of all, the relationship happens or a contact happens between a brand and the creator, and it's best that creator has relevance to the brand already. And in ideal case scenario, they like the product and they would become a user of the product. Another thing is that looks is also a subjective thing.

00:04:41:13 - 00:05:27:12
Speaker 1
So how a creator looks and sounds. So that's why we've implemented data and on our platform brands can choose creators based on real performance data historically how well they performed in ads. So this this relationship has to have an emotion as well as numbers as you go forward. So when you have data of creators that they've done previously, they're obviously, if you like, then the relationship starts and then you should look at performance signals once campaigns start to happen, whether it's like a a social post or a partnership ad or an ad in your like as library, you pick up performance signals from there and then you do next steps.

00:05:27:14 - 00:05:29:04
Speaker 1
So that's a step you.

00:05:29:04 - 00:05:41:21
Speaker 2
Mentioned about Meta Andromeda are the changes that are there. There's a big change going on there right now. I think a lot of people do not really know what's happening there. Do you have some insights that you can share with our listeners how it works at this point?

00:05:41:23 - 00:06:04:03
Speaker 1
Yeah, definitely. The way it works is that imagine like you have a, you know, a a pyramid. If you like, on top of it, you have the objective. Let's say you want to generate sales in the middle. You have the asset where you know you can use the advantage, plus that is matter promoting hugely now, which basically picks all the parameters for you.

00:06:04:05 - 00:06:36:15
Speaker 1
And then you have your creatives at the bottom and you need as many as you can have right now. Use be like five and iterate. Now you need like 20 and more. So that's the way you should think of it. And many advertisers still didn't move away from this. And what Andromeda does in my own mind and from the research and conversations that I had, you can just picture on one hand you have your potential customers, let's say in boxes.

00:06:36:15 - 00:07:01:23
Speaker 1
On the other hand, you have all the creatives that you are putting out in this campaign, also in boxes and claws. You and I could be users of, let's say, certain headphones, but the seller of the headphones may connect with us in different ways because different things we may like, different things may trigger us. So that's what the algorithm does.

00:07:01:23 - 00:07:23:03
Speaker 1
I think Andromeda is about volume, is about finding that niche box and connect it with that niche box on the other side. So connect the creative with the person for the for the reason that the person resonates the most, if that makes sense. So so it's not about like five assets anymore and changing the color of the background anymore.

00:07:23:03 - 00:07:25:04
Speaker 1
It's it's volumes.

00:07:25:06 - 00:07:49:15
Speaker 2
Yeah, that's becoming more complicated on the creative side of things. Does matter. The Andromeda System audio system is running. Recognize the content that you're uploading to match it. So when you create basically different styles and versions of your content and you upload this, is there some kind of link between the I and what you upload?

00:07:49:17 - 00:08:35:21
Speaker 1
Honestly, I don't know exactly how the algorithm works, but what the algorithm loves is variety. We felt it ourselves. We hear it from the clients. So, so the algorithm is hungry for variety. Another thing is that with with the change of remember, like influencer marketing was on the rise and it used to be like, you know, if someone has 20, 30,000 followers, if they are likely to get the reach and, and the eyeballs, and now these algorithm algorithms, not even on meta, it's also on TikTok, you can have no followers and put in upload a video that is so relatable to so many people that the AI does the matching that the boxes that I

00:08:35:21 - 00:08:58:00
Speaker 1
was talking about. So I think the key point here is that variety volume and I, I suppose like going nuts with creativity is important because if you put in things that are exactly the same that a lot of AI generated content is, it's going to be harder and harder to stand out. So variety is a key keyword here.

00:08:58:02 - 00:09:09:06
Speaker 2
Okay. At the beginning we spoke about trust, human, authentic human content. Is there any kind of briefs or recommendations from your side to your clients, what they should create?

00:09:09:07 - 00:09:31:20
Speaker 1
I hear that there are a lot of brands are jumping on AI. UGC put it this way, like fake faces. We're saying no to that. We think it's short term gains. We think that users could actually get mad and backlash because like, you know, some imagine that a person buying supplements or something from someone that is not real.

00:09:31:22 - 00:09:55:00
Speaker 1
It's a little bit insane if you think about it. Although with that said, I think these characters are here to stay, like A.I. generated characters are here to stay. If they're consistent and if people know they're not real. I think I think it's I think is fine like a movie character or a game character. But like going back to your question about trust, I think people want to see people.

00:09:55:01 - 00:10:20:04
Speaker 1
People want to relate to real people and the one thing that we see is working and we highly recommend is you find the people that are into your product and do not narrow them, what with very, very direct scripts. Let them do the voice of your brand for you, especially if they love your product. Just let them go nuts.

00:10:20:04 - 00:10:42:21
Speaker 1
Don't don't narrow them to very specific words because it something that looks very scripted or very, very polished. All the air generated people look very scripted and policy, You know, we can't we can't lose that. I think I think I think, you know, letting people do their thing could be like the best thing that could be done today to build trust.

00:10:42:23 - 00:11:06:18
Speaker 2
I couldn't agree more. I'm always a bit skeptic about agent rated podcasts, and I think a conversation like the two of us have right now is just more authentic. And I think it's yeah, it's about trust. And I think there's a bit of a hand out there, right? Everyone is looking, I don't know, on Instagram or other channels on trying to figure out if it's real or it's air generated because it's the it's sort of blurring right now.

00:11:06:20 - 00:11:31:04
Speaker 2
But I think on the long run, I'm totally with you real content, real people, real trust building connections with the client, with the brand will win. And at the end of the day, I want to dive a little bit more. We were talking about meta right now, but obviously there's also work on other platforms. What kind of platforms do you support and how would you distribute the content on these platforms?

00:11:31:06 - 00:12:05:11
Speaker 1
What I'm going to answer is where our clients are running ads. So it's majority is matter like 70%. Then another bigger chunk is tik-tok and we see like shorts are coming up as well, YouTube and the rest are fractions, but I think it's subject to change. So what I hear from our clients matter as far if we're talking about like reels ads, if we're talking about partnership ads, that is a thing that is coming up.

00:12:05:13 - 00:12:32:00
Speaker 1
I think there's not enough probably education in the market yet both on creator and and the advertising side. So so definitely by far matters number one TikTok obviously a huge player and then is shorts that is coming up and I think advertisers should definitely keep their eyes on YouTube and shorts because they've got a user base, They got a huge video infrastructure.

00:12:32:00 - 00:12:41:06
Speaker 1
And what I hear and see is that they're betting a lot to jump into this e-commerce game. But for now, this is what it is.

00:12:41:08 - 00:12:52:18
Speaker 2
Okay. I want to touch a little bit on the day to day side, working with below who's the person working with below? What's their day to day tasks? What data do they look at? How does that work?

00:12:52:20 - 00:13:30:21
Speaker 1
Good question. So it's either a DTC mostly brand up or Shauna is responsible for performance marketing marketing, or is an agency that is doing the exact same thing. Most of our customers are selling physical products. That's like 80%. It's health and wellness, apparel, fashion, CPG, tech things. Majority are based in the US, the others are outside of the US.

00:13:30:21 - 00:13:45:21
Speaker 1
But targeting the US use us as our main market. And so, so our creators are there. So marketers, performance marketers because they all nearly all run ads mostly on better than a stick talk than some shorts.

00:13:45:23 - 00:14:04:00
Speaker 2
Mm hmm. I want to talk about we don't want to talk about clients of yours, but a little bit on the results you can achieve. So when do people approach you? At what point in their I don't know, gross strong yet do they approach below? And what kind of gross to they see in a best case scenario?

00:14:04:02 - 00:14:24:18
Speaker 1
I'll say it like in general terms, because over time we had like 24,000 clients or something. We started off with very, very small brands in 2020 when this one use case was like new in the market, you come in, you connect with a creator that doesn't have many followers, but just creates a video for you but doesn't share it.

00:14:24:20 - 00:14:51:10
Speaker 1
So we started off with this years ago and the first ones to use it were actually very small companies, but they grew over time and our customers are growing over time. And the parts of their journey where they use below is when, you know, for DTC companies, e-commerce brands, it's it's like day one because if they sell online, they have to run ads.

00:14:51:12 - 00:15:03:08
Speaker 1
So it's always on. You have to you have to be social. You have to run ads, especially if you're selling like selling like, you know, the day are usually Ecom products like DTC stuff.

00:15:03:10 - 00:15:14:19
Speaker 2
Mm hmm. I want to talk a little bit of going into the future now. We are in this big air wave going on going forward. What do you think is happening in 2026?

00:15:14:21 - 00:15:45:21
Speaker 1
So first of all, I even had a call today in the morning, an emerging startup reached out and said so like the future is already happening. Now an emerging startup, like a new startup, reached out today and said, I actually had an introduction. One of the fellow founders in the same space, the Neil from Incense, and we spoke about their doing like a human verified tag on videos.

00:15:45:23 - 00:16:06:01
Speaker 1
So the future is happening now. Someone is actually thinking about it. So I honestly, I do have this problem when I'm look at the feed not even videos. Yeah, but also text. I'm like, I wanted to see content from you CLOs not chad GPT from like three sentence prompt, you know what I mean? So it's going to I think people are looking to the future.

00:16:06:02 - 00:16:26:11
Speaker 1
People are going to get more and more frustrated thinking is this real or is this not real? Maybe I'm in this segment of people who actually pissed off about this. I am sorry. I want to know whether it's real or not. You know, so so I think this is one of the one of the things for 2026, it's already happening.

00:16:26:11 - 00:17:01:09
Speaker 1
Like, is this real or not? So how is it going to go? I think startups will emerge to solve this problem and say, you know, we can differentiate what's real, what's not. Maybe a new social network will pop up. Who will claim that they're human only? Maybe a new social network like SA two will pop up and say, okay, this is all, Hey, I may be one of the major social networks will make a huge step forward and say, Look, we're clearly differentiating what's, Hey, I was human, but the problem is going to be there and but I think is here to stay.

00:17:01:10 - 00:17:24:16
Speaker 1
Like, I also think we're going to have an emerging wave of like A.I. characters, maybe even on social networks, air influencers, where people know they're not real, but they're so consistent. They have a character. Let's say they have values and people will follow them. I think they're here to stay. But also there's going to be camps peop some people like, I don't want to see this.

00:17:24:16 - 00:17:50:03
Speaker 1
I want to see a real person. And, you know, I think there's also going to be a trend from AI. So it's going to be like human. There's human that human first. But I think it's also it's also going to like mobilize people who are who who want to be like people first. And I don't think there are limits to human creativity.

00:17:50:08 - 00:18:09:07
Speaker 1
And it's going to be probably creativity is going to be the most essential asset to look for in a person, especially in marketing, creator, marketing and roles, word charge, beauty and clause and Geminis of the world can play a role.

00:18:09:09 - 00:18:32:03
Speaker 2
Yeah, I would agree. I think in the same camp I want to know if it's real or at least I want to see if it's imperfect and I might come to a point where it basically tries to be imperfect, but I just want to know what is real. And if it's a character and it is clearly marked as a character, there might be a value to it, then it's fine.

00:18:32:03 - 00:18:42:08
Speaker 2
So I'm with you there When I get back. To build brands that work with you, obviously there is a certain onboarding process involved. How does it work? How many steps are involved? How long does it take?

00:18:42:10 - 00:19:10:10
Speaker 1
The platform is what we hear. It's not just my opinion. What what the and my opinion. Obviously I'm biased, but the clients are saying that it's super UX friendly, like it's intuitive. It's so easy to kick off. You just jump on, register your brand, create a campaign, look for data backed creators. You can see how well they performed in the past, the examples that they've created.

00:19:10:12 - 00:19:36:15
Speaker 1
You create a campaign to deliver the video. You start getting performance insights, how our specific creators performing. You get suggestions what to do next, and you can actually generate from existing videos the next creative with just a click of a button. So we've developed this for like a a year now. In early December, we're going to launch a subscription product as well to take it to the next level.

00:19:36:17 - 00:20:04:04
Speaker 1
We're going to iterate on the insights, on the variations and working with data back creators. So it's pretty straightforward. And our actually our goal is obviously to have the minimum actions for our user required to achieve the result. But the human is always accountable. I want to emphasize this like the creators are real, The people that are using are real, but obviously AI's here and we embrace it.

00:20:04:06 - 00:20:06:07
Speaker 1
But it's a tool. It's not a face.

00:20:06:09 - 00:20:25:13
Speaker 2
MM No, I like, I like the approach. And in certain areas of my business, specifically with video editing, I'm sort of following the same process. There you have the raw material, you have to see generated content and obviously you want to make the most out of it and your tool helps with this is that you're from the pricing structure.

00:20:25:14 - 00:20:29:02
Speaker 2
You will go into a subscription based model, is that right?

00:20:29:04 - 00:20:54:18
Speaker 1
So the subscription will be paid for the brain of the platform, but it's not necessarily necessary. So you can also do the, you know, the partnerships with creators with where they post, where they create a video. You can run partnership ads and just for the benchmarks, an average video ad price is like $200. Now. So so it's very price efficient.

00:20:54:18 - 00:21:17:14
Speaker 1
But that's why we put it this way, because especially now with Andromeda and the way social networks work, you need volume. So we will work our asses off to that to maintain this approach. Human First a very reasonable pricing and volume that that's what advertisers need to win and also creators.

00:21:17:16 - 00:21:26:14
Speaker 2
Yeah. Makes advertisers life much, much easier before our coffee break comes to an end today. Is there anything you want to share with our listeners that we haven't covered yet?

00:21:26:16 - 00:21:52:23
Speaker 1
Two things. One, just a random sort of data. They think that I'm I'm also one of our values is growth mindset. We have to grow every day. We have to learn every day. We have to embrace people that are better around us. And and just a random thought that I'm going to share is that on Monday we have a social media person starting in our in our team.

00:21:53:01 - 00:22:18:15
Speaker 1
And one of the desires that we have for this person is that this person understands Gen Z and this person understands social networks very well. And when I say that, I just want the listeners and everybody to sort of grasp this, that we have to emerge and we have to evolve with the environment that is changing around us.

00:22:18:17 - 00:22:45:15
Speaker 1
So that's that's something very important. Maybe it's going to click with someone. And another thing is that for the first time in six years, I had a holiday last week where I didn't open my computer and did work related stuff and it made me so productive. And I feel I feel like I have missed out on so much productivity by not taking time off.

00:22:45:17 - 00:22:47:04
Speaker 1
So that's it.

00:22:47:06 - 00:23:04:14
Speaker 2
I like that. I'm at Anthropologie for 25 years. I'm with you. I can feel you totally make sense of that. You need to take a break to fill up the batteries and come back fresher and just get some new ideas. Good point. I should do this at some point as well. Where can people go and find out more about you and BIDU.

00:23:04:16 - 00:23:14:19
Speaker 1
Below DOT app. So be I. Ello dot app is our web and me. The best place to find me is my name and serve me surname on LinkedIn.

00:23:14:21 - 00:23:33:03
Speaker 2
Okay. I will put the links in the show notes and you just one click away and a lot of people will reach out. Thanks so much for your time today. I think it was a very good insight not only into AI and user generated content, but also on certain aspects of running a business and where it will lead us as business owners into the future.

00:23:33:03 - 00:23:35:23
Speaker 2
And I hope a lot of people will reach out to you. Thanks so much for your time.

00:23:36:01 - 00:23:36:16
Speaker 1
Thanks, class.