One of the biggest and strangest reversals in recent marketing history is taking place, unnoticed by most, in the supermarket aisles of the UK. In these fantastical days of Trump, Brexit and ad fraud, this statement might strike you as somewhat odd. But trust me, what’s going on with price promotions right now is worthy of your significant attention. Well at least a column’s worth.
For the past decade, British supermarkets have been engaged in a spectacular amount of promotional activity. The two great barometers of grocery buying, Nielsen’s Homescan and IRI’s Infoscan, disagree on the proportion of supermarket purchases that are made while the product is being offered on some form of promotional offer. Nielsen estimated that over the last 10 years the figure rose to around a third of all purchases while IRI had the number reaching around half of all supermarket sales. But both firms agree that this figure has risen consistently throughout the 21st century in the UK and that British consumers buy far more promotional items than any of their European cousins.
But, according to Nielsen, all that changed last month. In the four weeks ending 25 March only about a quarter of all spending at UK supermarkets was on products that offered a temporary price cut (for example, 20% off) or a multibuy deal (such as ‘buy one, get one free’). That might sound a lot but it’s back to levels we last saw in 2006. What is going on?
Well nobody actually knows. But there are three possible explanations to consider.
First, and I should point out from the outset that I don’t buy this one for an instant, maybe marketers have become a bit smarter. Sales promotions are a notoriously stupid thing to do and, even with your supermarket ‘partners’ squeezing your extremities so tight it’s hard to even scream, are something that should be resisted wherever possible.
The UK is a wobbly, worried place for consumers right now and that feeling will see us through until the end of this decade.
Yes, they shift a lot of stock and also help provide short-term differentiation for your brand over the competition. But that short-term sales bump comes with a much greater hangover as even the smallest cut in price causes financial disaster to bottom line profitability. Most marketers never get this point but when you cut your prices by 10%, while you might increase sales volumes by 20%, you probably reduce your net profit by around 40%.
Perhaps worse, the longer-term effects of forward buying while the brand is on special offer and the gradual commodifying impact of the promotion on brand equity lead to a subsequent dearth in demand that can only be resolved with… you guessed it…another sales promotion.
The influence of Aldi and Lidl
Maybe brand managers across the country have evolved bigger brains and stronger spines and pushed back against sales promotions – at least the price-based ones – in favour of smarter and less damaging promotional fare. A more likely explanation is that we are now seeing the ultimate results of the Einfluss (or influence, in English) from Aldi and Lidl’s growing success in the UK.
It’s perhaps no coincidence that on the same day we learned about the sudden downturn in promotional sales we also learned that the two German giants had taken another record share of UK grocery shopping. With Aldi enjoying 6.8% and Lidl 4.9%, according to Kantar Worldpanel data, both retailers are are achieving double-digit growth in the UK once again and are becoming ever more influential on the British high street.
That growing influence is crucial because the greater these two discount retailers penetrate a country the lower the proportion of promotional activity you are likely to see. That’s partly because the growing proportion of sales at Aldi and Lidl are drawn almost exclusively from their policy of everyday low pricing and not from sales promotions. But it’s also a reflection of their impact on other retailers, which gradually reframe their own tactics and private label approach to respond to the changing competitive threat and the expectations of consumers clearly enamoured with Aldi and Lidl’s no-nonsense, we-don’t-even-have-a-toilet-or-any-fucking-windows approach to merchandising.
The last, and probably most persuasive explanation is Brexit. Again. With sterling taking a major hit versus other currencies the cost of producing many of the products in the British supermarket has risen and so have prices. Those higher prices and uncertainty about the British economy have sent many British shoppers on a flight to value. Sales of private labels are up around 5% on pre-Brexit levels, and low prices – rather than special offers – appear to be the order of the day across grocery aisles.
That was certainly the opinion of Mike Watkins, who runs retailer and business insight for Nielsen in the UK. “To be more price-competitive, supermarkets have turned temporary price reductions into permanent cuts, so there’s less promotional activity as many prices are cheaper all-year round,” he explained. “There’s also been a shift away from multibuy to simpler price cuts, which is in tune with shopper needs to make it easier to manage their basket spend,” he added.
Whatever the reason, this looks likely to be a trend that will continue for the foreseeable future. Aldi and Lidl will only strengthen their grip on the British high street as we head to 2020. Whatever the long-term economic outcome of Brexit for the UK, the short-term implications for the next few years are already obvious. The UK is a wobbly, worried place for consumers right now and that feeling will see us through until the end of this decade when the twenties (yes, pinch yourself, the twenties) begins.
After almost two decades of domination the age of price promotions appears to be in retreat.
Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from April 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.
Before Will Smith got hold of it and turned it into total pants, I Am Legend was a remarkably disturbing novella from science fiction author Richard Matheson. In the book Matheson’s hero Robert Neville is the last man left alive after a zombie plague infects the rest of the human race. He spends years avoiding the undead and trying to make sense of the strange place the world has become.
I feel a lot like Robert Neville these days. Trying to be a marketer in 2017 is a frighteningly difficult existence with death apparently at every corner. In a few brief years the discipline of marketing has been turned into a fatalistic doom-fest in which every major brand, core feature and widely-held concept is portrayed as either dead, or near death. I challenge you to go a week without some marketing numpty turning up and making headlines by proclaiming the death of this or the imminent demise of that.
This week, for example, Alexis Ng of agency ReFUEL4 is at it over at The Drum pointing out that “the death of advertising as we know it” is under way. Apparently because technology allows companies to advertise in “smarter and more precise ways” the “slow death of traditional advertising” is upon us. Can I humbly suggest Ng takes a look at just about every news story about Google’s highly stupid and imprecise advertising to see a slight flaw in her argument.
While it’s true, as Ng points out, that digital advertising is indeed passing the 50% ad spend mark in many countries, the last time I looked “traditional” advertising forms like TV, radio and outdoor were about as far from death as you can imagine. There is a difference, you see, between being “dead” and simply being “a lot less powerful than you used to be”. But that distinction is lost in a hyperbolic death cult that sees anything more than 10 years old as ready for the knacker’s yard irrespective of what the actual data might say.
Why stop with advertising? We are repeatedly and reliably informed that the death of TV is not just imminent but has, in case you had not noticed, already happened. As the Ad Contrarian blog author Bob Hoffman drolly observed recently: “TV To Die Soon. Again”. The latest obituary was written last week in Ad Age by consultant Shelly Palmer, who used the “profound implications” of the newly announced deal in which the NFL will broadcast 10 games on Amazon Prime later this year to predict that “TV may actually die soon”.
We have become a doom-laden profession, applying imminent death to almost everything we see, feel and touch for too long and its getting kind of embarrassing.
What Palmer neglects to mention at any point in her article is that this is not the first time that the NFL has partnered with a tech giant. Last year it signed a similar deal with Twitter. That sparked a whole load of bullshit articles about the death of TV then too. Guess what share of the audience watched the games on Twitter? Just over 1%. So much for the death of TV.
You know the reason why Twitter failed with its NFL broadcasts? Come on, you know! Because Twitter is obviously going to D-I-E in 2017. That’s the argument over at Wired, where writer Davey Alba suggests that unless Twitter quickly adapts to the changing world of tech it will perish. Of course, the other alternative option, the one that will almost certainly transpire this year is the one that Alba completely rejects. That would be the scenario where Twitter sits back on its gigantic cash pile and stumbles about losing money for another five years while occasionally making bold but pointless announcements that have no long-term merit.
One of the reasons that Twitter is deemed to be in so much trouble is that it is being killed by Google. But that can’t be the case because – and you may have expected this news – Google is also massively dead too. Oh yeah. Over at Medium this week digital developer Daniel Colin James was eloquently, and entirely unconvincingly, arguing that “in a few short years, Google has gone from a fun, commonplace verb to a reminder of how quickly a giant can fall”. Yes, you read that right, Google – bigger than God, part of the ‘digital duopoly’, worth £470bn, eating up all the growth in digital marketing spend globally – that Google. Apparently, they’re fucked. So there you go. Dead by Christmas.
The main reason they are dead is because of Amazon, according to James. That makes sense because Amazon is not only killing Google at the moment, it’s also killing brands. Which brands I hear you ask? Well, it turns out, all of them. Every single one is totally dead according to business school professor Scott Galloway. The fast-talking NYU marketing professor turned up this week on an episode of Business Insider’s ‘The Bottom Line’ with Henry Blodget and talked bollocks for about 20 minutes about how “Amazon has effectively conspired with voice and technology and half a billion consumers to kill brands”.
That thesis hardly makes sense given we were told to expect the death of digital in 2016 by another academic prick with a laser pointer and a loud shouty voice. The numb nut in question was…oh, hang on. That was me. Let’s move on.
Dodgy predictions
My point in all this is that perhaps marketing should scale back on the death tropes before the whole thing gets out of hand. We have become a doom-laden profession, applying imminent death to almost everything we see, feel and touch for too long and its getting kind of embarrassing. Like a school playground marketing has become a tedious, repetitive world in which cries of “you’re dead” and “no, you’re dead” drown out more delicate, prescient comment.
It wasn’t always like this. If you pick up a copy of Marketing Week from the 1980s you won’t see a single theoretical funeral. The magazine is busy covering the industry, the main issues and the lessons for marketers. Nothing is dying, just evolving.
Picking up a 30-year-old copy of a marketing magazine is not something many of today’s marketing experts do. The very suggestion will have them scoffing into their lattes. That’s a shame. Because the gift of marketing history is two-fold. First, it shows us that not as much has changed as we might imagine. Second, it demonstrates that while our profession is always changing, it does so at a much slower speed than most of today’s trigger happy predictions might suggest.
For the past decade a marketing moron has started every year with a bold prediction that this will be the one when virtual reality and 3D fucking printing finally change the face of marketing forever. My point isn’t that these two events might not eventually happen but that, if they ever do, it will be a very long time from now and not next year.
In the meantime nothing is going to be killed as a result. In fact, you can make a very strong, historically supported argument that even if virtual reality does become a major trend in 2018 (it won’t) the pre-existing technologies it displaces will not die but rather evolve to accommodate it. Radio was going to be killed by TV, but it is alive and well. Cinema was dead when the VCR turned up, and then sidestepped and kept going. Death, in marketing terms, rarely comes.
I’ll bet you a bucket of beer that the world of marketing will continue with brands, Google, TV and advertising all alive and well – and perhaps evolving – for our lifetimes as marketers. The only thing that should die, but probably won’t, are these tediously funereal predictions of the death of everything.
Last Thursday I found myself addressing about a thousand marketers. I was one of four speakers debating the motion ‘Digital Metrics are Bullshit’ at Australia’s biggest marketing conference Mumbrella360. My teammate, a senior figure from news media, and my good self were designated to go first. Then our opponents, two big hitters from the world of digital media, would present the case against the motion.
I’m a man who leans heavily on Powerpoint most of the time, often using it to explain things to my wife or properly park my car. So the absence of graphical jiggery-pokery had me on the back foot from the outset. As my name was read out I approached the lectern and glanced up at the bright, eager faces pointed in my direction. I took a long pause and opened up all four barrels of the erudition machine.
“I measured my penis this morning,” I began. “I took out the small, Swiss leather tape measure that I carry with me on my travels and spent five minutes carefully and accurately assessing both the length and girth of my penis. I noted down the specific numbers in a matching leather journal, also Swiss-made, which I have used to record all my penis measurements since school days. I then contemplated the metrics for several minutes and eventually reached for my phone.”
At this point in my speech I looked across the room for my old mate Charlie Murdoch who sat oblivious and entirely unaware I was about to bring him into play. “Where is Charlie Murdoch?” I asked the bemused room. “Charlie, you see, also measures his penis most mornings, isn’t that right Charlie?”
Charlie’s head dropped for a second and then he shot me the sad smile and barely perceptible nod of a man that knows there is no use fighting. “And I asked Charlie if he wanted to pop over to my room and double check my measurements while I had a go at his. Within minutes Charlie was up in my room and we were at it with tape measures until we both agreed our measures were indeed correct. Then we ate some pastries.”
Facebook has been so successful that more than 100% of all young people now use Facebook. Yes, you read that correctly.
Story over, I used the remaining five minutes of my time to contrast my bizarre measurement habits with the world of digital metrics. Every time I measure my penis I need to be certain that the measures are true. A sudden reading suggesting my penis has become smaller overnight or, even worse, is now inexplicably larger than it was the morning before is likely to send me into spasms of concern. Good metrics need to be reliable.
Facebook’s digital metrics errors
The current panoply of Facebook errors which has now moved into double figures (if my metrics are correct) demonstrates exactly the problem. Indeed, Facebook has been so successful that more than 100% of all young people now use Facebook. What? Yes, you read that entirely correctly.
Simon Redican, the CEO of the National Readership Survey, and Dominic Mills over at Mediatel both uncovered the remarkable statistic that Facebook reaches more 15-24 year olds in the UK than actually exist. Facebook claims to reach nine million of them, which is about 800,000 more than inhabit the UK according to the Office of National Statistics.
At least that 10% overstatement is consistent with the global data where Facebook also manages to secure a greater audience than is actually physically possible. Marketing consultant Simon Kemp recently observed that there are “more 18 year old males using Facebook than there are 18 year old males living on Earth”. Ahem.
Secondly, metrics must be elegant. I believe too many of our friends of a digital persuasion are confusing the raft of different, ever more bemusing metrics on a giant flashing dashboard with the power and elegance of measuring less but doing it with more certainty, focus and elan. Rather than measure everything, why not measure a few things (like reach) properly.
When Facebook, to pick on them once again, starting uncovering their measurement errors last year they boldly promised to head home and check on their other existing 220 audience measures to make sure there were not more errors in the mix. Can you imagine: 220 measures? Is it any wonder there is confusion in client land, non-transparency in media world, and mistakes from digital platforms?
I use simply length and girth to measure my penis because, well, that is all I need to know what is what. I could in theory have a whole arsenal of other metrics such as square inch coverage, elasticity ratios, median surface temperature but I have decided they would not aid me in actually monitoring the essential issue at hand.
We either look upon the flailing complexity of digital data as a paragon of empiricism or as a contagion of suspicious flaws and missteps.
And while I could measure my penis all afternoon long with a small bundle of electrodes, which would relay – with the aid of Bluetooth and a tiny aerial discretely inserted into my boxer shorts – real-time updates on my penis size to my smartphone, I have decided that a single measure several times a week will suffice. Sometimes, even in the world of penises, less is more.
And then there is Charlie. Dear, dear Charlie. What good is measurement without objective and entirely comparable measures from others; being able to ask him to double-check my numbers, to compare his measures with mine. To know, with an infallible sense of superiority, how my own measures compare to his is just as important as the reliability issue of how my statistics vary from day to day. The whole point of a metric is to enable accurate and trustworthy comparison.
And yet where are those comparison metrics? At some point surely we will start to see – apples to apples, penis to penis – how Facebook video stacks up against YouTube video for certain audiences at certain times. While TV measures are hardly perfect they do offer us an immediate and comparable picture of different channels and programs. This is still largely missing from the digital world.
P&G marketing chief Marc Pritchard recently bemoaned the amount of time his marketing teams must spend trying to decipher between the various digital platforms and their special, unique metrics. He compared the situation to trying to administer a football contest in which each team had its own rulebook, measures and conception of what a goal consisted of. Chaos in other words.
Marketers’ digital blindness
My 10 minutes was up and I sat back down, my point hopefully made. I concluded that digital metrics are bullshit because they are not reliable enough. They are bullshit because there are too many of them. They are bullshit because they obfuscate comparison rather than optimise it. They are bullshit because, when it all comes down to it, two giant companies will not share their source data with each other or anyone else.
I find that disappointing from Facebook. But I find it frankly befuddling from Google, a company that travels the world openly and repeatedly boasting about its mission to “organise the world’s information and make it universally accessible”. Why bother with the world? Just start with your own company.
I was followed by my co-speaker, who talked rather eloquently and with great reserve (no mention of penises, not even once) about the problems of measurement and the need for digital metrics to improve. Our opponents then took the floor and used an array of slides and videos to first suggest that the metrics for TV, radio and outdoor were bullshit and then to lampoon your humble correspondent with various animated images and recordings of me in an attempt to suggest I was a Donald Trump-like figure who was on a par with climate change deniers.
While slightly painful to endure, this was all fair game. But none of it spoke to the issue of the debate. Not one bullet point. We were not there to debate whether traditional media metrics are flawed (they are), or whether I am a plonker (I am), we were there to discuss digital metrics. And we heard nothing on the topic from either debater.
“We’ve got this nailed down,” I whispered to my co-debater. “No contest.”
And yet when our chairwoman asked for a show of hands at the end of the debate it indicated far more of the audience disagreed with the motion that digital metrics were bullshit than agreed. We had lost. And lost badly.
It was clear that we have reached a kind of ‘Rorschach moment’ in marketing. We either look upon the flailing complexity of digital data as a paragon of empiricism or as a contagion of suspicious flaws and missteps. What depressed me most about the news that Facebook had more users than existed on the planet was not the mistake itself, but the army of digital apologists who instantly sprang up to explain, without apparently missing a beat, why it was entirely possible – preferable even – to have more users of Facebook than human beings.
Nothing to see here. Move back to your terminal.
We live in divided times, both politically and commercially. You either believe in the power of digital metrics or you think they stink to high heaven. And there are very few people sitting on the fence anymore. Most, if my debate is anything to go by, have already clambered over it and are sitting on the other side nestled between the two digital mountains of Google and Facebook, enjoying the shade.
Or maybe I am just a bad debater. As one member of the audience, a certain Charles Murdoch, noted as we left the room, he did not need a tape measure to assess just how big a dick I was. Precisely.
Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from September 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.
Nothing is ever completely straightforward with advertising but the latest turn of events at KFC is odd even by ad land’s standards. The story so far…
After 15 years with Bartle Bogle Hegarty, KFC launched an agency review at the start of the year and eventually opted to move its business to Mother, but not before BBH bowed out with a quite spectacularly strange ad featuring former Game of Thrones actor Kristian Nairn and a hoard of hungry customers.
Barely a week later and new agency Mother has already premiered its first work for KFC. The new ad introduces a very attractive chicken that looks into camera and flaunts her stuff provocatively as rap music blazes away in the background. The strapline, ‘The whole chicken, and nothing but the chicken’, ends the rather entrancing little film.
The ad itself is beautifully shot and clearly part of a new KFC strategy to focus on the provenance and quality of its meat. KFC’s CMO Meg Farren confirms that: “At KFC we’re proud of our chicken, we’re not afraid to show it. ‘The Whole Chicken’ represents a step change for us, taking a bolder stance when it comes to engaging with our loyal customers and fans.”
But there are two potential problems with such a bird-centric approach. First, most consumers like to live in a world in which animals and meat have either no, or only a tangential, connection to each other. Carnivores are notoriously hypocritical beasts. They don’t eat pigs for breakfast, they have bacon. Deer becomes venison. Baby cow becomes veal. That little bag of dried pigs blood is black pudding. We keep as much distance between the beast and the meat as we possibly can.
That’s clearly a problem for KFC because they are now transgressing one of the oldest rules of meat marketing with their new campaign. You can show the raw meat glistening on the plate. You can have as many long lingering shots of the joint coming out of the oven as you like. You can even have a small army of relatives sitting round the family table eating away. But thou shalt not show the actual beast in question at any point or risk alerting the happily hypocritical carnivore that the little life in front of them is about to get carved up to satisfy their hunger.
I know Mother is being disruptive here and someone down in the Redchurch Street HQ was keen to break the rules for its new client. But some rules, even though we don’t like to say it in marketing, are best left unbroken.
KFC can’t carry this off
Clearly those rules have started to change somewhat in recent years. Hugh Fearnley-Whittingstall has almost single-handedly pushed back against the separation of beast and meat and reconnected them in a noble attempt to highlight the importance of eating animals that have been well treated and humanely butchered. Perhaps KFC and Mother are hoping to tap into this new demand for provenance and greater connection between the meat we eat and the animals we butcher.
But therein lies the other, bigger problem for KFC and its new campaign. There is a world of difference between the long-lived, healthy animals running around atop plush green hills at River Cottage and the unfortunate army of juvenile birds destined for a KFC bucket.
KFC might be proud of its chickens; everyone else is less impressed.
I have no idea the age of the attractive white bird in The Whole Chicken ad but she looks a little old to be working for KFC. Its birds don’t make it past their 42nd day on earth before they are gassed and processed. And I say “earth” but that really isn’t fair. As the BBC’s 2015 Billion Dollar Chicken Shop documentary revealed, KFC birds never see “earth”, instead they spend their 42 days on sawdust and bird shit inside giant buildings with 30,000 other birds and never set foot outside.
KFC says all its suppliers meet or exceed UK and EU legal requirements and adhere to Red Tractor welfare standards. But the captivity and concentration of these animals are two of the reasons KFC continues to use antibiotics in the UK and, according to its own CSR website, believes that they play “an important role” in maintaining the health of its animals. In the US, the brand is phasing out antibiotics by 2018.
My point is not to accuse KFC of cruelty or recommend anyone take up a meat-free diet. This isn’t PETA’s weekly newsletter. My point is that before you start showing animals in your ads, promoting provenance and talking about how “proud” you are of your chickens, you need to be able to deliver. One of the oldest mistakes you can make with advertising is to position your brand on something the customer wants that you simply cannot deliver on. And I don’t think KFC has a good enough approach to animal welfare to be able to carry off this new ad campaign.
And I’m not alone. It would be unfair to use animal rights evidence against KFC when so much of that material is tainted with an anti-meat agenda. But the gold standard for animal assessment is The Business Benchmark on Farm Animal Welfare (BBFAW). Compiled by independent experts, the BBFAW ranks all the major food manufacturers around the world on the manner in which they raise, manage and butcher the animals they process.
The ranking itself runs from ‘tier 1’ companies like Waitrose and Marks & Spencer, which are seen as global leaders when it comes to animal welfare, down to ‘tier 6’ companies like Domino’s and Kraft Heinz, where BBFAW finds “no evidence” that welfare is on the business agenda. KFC, part of the Yum! conglomerate of brands, was ranked in ‘tier 5’ in 2016, where companies that demonstrate “limited evidence of implementation” are put. KFC might be proud of its chickens; everyone else is less impressed.
Again, let me reiterate, I am not saying that KFC or Yum! are doing anything wrong in being ranked so poorly on animal welfare. My point is that even if I were M&S or Waitrose and justifiably proud of the way I rear animals, I’d still think very carefully about showing a beautiful, personable and extremely alive chicken dancing around in my TV advertising. If I were KFC I’d stay about two million miles away from it.
Talk about Kentucky. Talk about being fried. Hell, talk nonsense using one of the stars from Game of Thrones. Just don’t mention the chickens and certainly don’t put them front and centre in your advertising.
Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from September 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.
Wilson was quizzed about Lululemon’s recent quality issues with its best-selling yoga pants. Wilson admitted to design flaws but also pointed to a consumer issue too: “Quite frankly, some women’s bodies just don’t work for [our product],” he explained. “It’s about the rubbing through the thighs,” and “how much pressure is there.”
Despite backtracking later in the interview and suggesting the brand could be worn by all women, the comments caused an immediate sensation. “Lululemon founder Chip Wilson blames women’s bodies for yoga pant problems”, claimed Good Morning America’s website the next day. “Lululemon founder blames yoga pant problems on customers’ thighs”, announced Yahoo.com. Wilson was branded “clueless”, “sexist” and a “body fascist” on Twitter.
To make matters worse Lululemon was already in hot water for making its yoga pants only up to an American size 12 (UK size 16), thereby actively excluding most American women, whose average dress size is 14 (UK size 18). The brand has made no secret of its policy, claiming that “larger sizes are not part of its formula”. Even its size 10 and 12 pants are often relegated to the back of the store.
The approach has garnered plenty of criticism. In 2012, a national petition was launched to pressure the company into offering plus-size options. “Wouldn’t it be amazing if Lululemon took an active stand in showing women of all sizes being athletic?” the petition stated, calling for the company’s support for “fitness at any size”.
Thus far, Lululemon has ignored the appeal and, from a marketing perspective, you can see why. Brands cannot be for everyone. One of the most established principles of our discipline is that mass-marketing does not work, while targeting a specific segment of the market exclusively usually does. If you want a perfect example of that principle just look at M&S and its clothing line. The reason for nine consecutive quarters of decline is entirely related to a marketing department intent on appealing to every adult woman in the UK. Their latest Christmas campaign is, for the first time, far more targeted.
Is Lululemon really guilty of anything other than having a clear target segment and designing for that specific group? Is it any different from a brand like Marketing Week that aims at marketing professionals and eschews a broader professional readership?
It’s tricky because, of course, the answer depends on how you segment your market. Do it by profession, postcode or income and you still fall within the bounds of political correctness. Use body size, age or physical attractiveness and you cross over into very choppy waters, especially in America.
That’s not to say we aren’t increasingly sensitive to clear targeting in this country too. In the cavalcade of criticism of Guinness’s ill-fated RoundUpYourMates campaign last month, most reviews cited piss-poor execution or ridiculous strategic thinking. But a significant number also cited the exclusive male focus of the campaign as sexist and inappropriate. Is that really fair on Diageo when more than 90 per cent of the brand’s sales in the UK are from men?
Do marketers really have a responsibility to cater to each and every possible customer? Should founders of brands like Lululemon eschew targeting and open up their offer to everyone even if, paradoxically, it results in diminished sales? It might make sense politically but from a strategic standpoint the results of clear target marketing remain inarguable.
Like it or not, the only crime Chip Wilson committed last week was the sin of honesty. The lesson for marketers is that while we must continue to segment appropriately and target exclusively, we must do so while keeping our lips closed. In public, infer that everyone is potentially welcome to patronise your brand. In private, ensure clear positioning and consistent execution of the four Ps will delight the consumers you want and exclude the ones you don’t.
If you have been following recent events in Marketing Week it should have become clear that one of these supermarkets has a winning strategy and one, very clearly, does not.
Before we get into winners and losers, however, let us define the game. Too often in marketing we are unclear on what we actually mean by strategy in the first place. My favourite video on YouTube at the moment is a short three minute presentation from Harvard Business School featuring Roger Martin. The now retired Dean of the Rotman School of Management in Canada, and one of the great gurus of modern strategic thinking, lays out in a characteristically Canadian manner a very simple and straightforward explanation of what strategy is and how you create a good one.
“Given the array of intimidating and often confusing strategy tools out there, it can be hard to even know how to start,” he explains. “So here’s how. Think of strategy as the intersection of two critical dimensions: where you will play and how you will win there.”
It really is that simple according to Martin. You make explicit choices on where you will compete and then make sure your differentiated tactics enable you to win there. Attacking the same market as your competitors with the same strategy is, as he points out, a recipe for a financial “blood bath”.
Now, consider the strategic wisdom of Tesco’s recent announcement that they will launch “pound zones” in up to 300 of its stores. The zones, which will offer non-food bargain items such as beauty products and pet toys, are directly designed to counter the threat of the growing success of bargain retailers like Poundland and Poundworld.
The two key questions that Tesco has to answer are the strategic ones posed by Roger Martin. First, does Tesco really want to compete with the likes of Poundworld and German retailers like Aldi and Lidl? Ideally, of course, you would want to avoid this battle but Tesco’s market share of almost 30% of UK groceries combined with the growth of these discount operators means it’s almost impossible for Tesco to ignore the threat. They have to go toe to toe.
But where Tesco are coming strategically unstuck is the second question of how to win. Clearly replicating the prices and promotions and look and feel of the bargain retailers is a mistake. First because you cannot beat your competitors at a game they invented. Second, because as you attempt the impossible you switch off the majority of your shoppers who aren’t interested in Poundland and who came to Tesco because, well, they wanted Tesco.
Contrast this muddled strategy with the triumphant approach of Waitrose if you are still unclear on how to “do” strategy properly. At a recent visit to a new store in Swindon Waitrose’s Chairman, Mark Price, provided a sneak peak into how Waitrose are combatting the discount threat. Highlighting the retailer’s recent innovations such as wine tasting areas, free coffee and their extended product range Price declared; “We’re going to be everything that the discounters aren’t.”
And Price went further, noting that his major concern was not only the discount retailers but also how Waitrose took the battle to its more traditional rivals. “It is more about how we respond to Sainsbury’s and Tesco in terms of what they do with pricing,” he explained during the store visit.
It’s clear that Waitrose is winning the strategic retail war and is set for a period of unprecedented success. First because it has identified a truly different way to complete and second, because traditional rivals like Tesco are losing their own focus as they attempt to combat the threat from below.
In a recent Which? survey of 7,000 shoppers Aldi and Waitrose finished bareley a percentage point apart at the top of the table for ‘most satisfying’ supermarket chain. That might seem a curious result given just how different these two retailers are. But that’s the point. The one thing the two do have in common is strategic differentiation. Both know where they want to play, and how they are going to win.
Let me review both options for you because, as we enter June, those of you who do it smartly and work to a January-to-December planning year are literally starting the process as we speak. If you set budgets the stupid way, you have nothing to worry about for another four months.
Stupid marketers let the finance department set their budget. They arse about with tactical stuff until mid-September, when they are issued with the expectations for 2015.
So, for example, the finance team might instruct the marketing department that next year they are expected to grow top-line revenues by 7 per cent and achieve sales of £75m. They are also told that their marketing budget for the year ahead will be £3m based on the 4 per cent advertising-to-sales ratios that the company uses to derive marketing budgets.
It can look deceptively logical until you look at where these numbers come from. As one of my favourite clients likes to put it – they all derive from the SOOMA Database – SOOMA standing for Straight Out Of My Arse.
The 7 per cent growth rate isn’t based on strategy or research. It comes from arbitrary growth expectations that your board or global team have applied to your business, irrespective of the fact that they have seen no data and probably not even visited your market in years.
The 4 per cent ratio of revenue to marketing spend is doubly stupid. First, because it is another completely arbitrary number (why not 10 per cent, or 2 per cent?) that senior managers deem acceptable. Second, because this ratio is applied after the £75m revenue expectation has already been set, it is clearly derived from a belief that marketing is not an investment that can increase revenues but rather a cost that we must pay each year, irrespective of sales.
The serious point about all this is that when a company sets a budget for 2015 this way, all strategy dies. Any serious marketer will realise that if the numbers and the investment levels are already in place long before they have even looked at research or strategy for the year ahead, he or she is literally pointless. The joke is on any and every marketer that accepts these bullshit budgets and works within their parameters for a whole year of their life.
It does not have to be this way. The smart way to build a marketing budget does not start top-down with the senior finance team but rather begins bottom-up with the marketing department.
The financial plan for a calendar year will always be set between September and October, so it’s crucial that marketers don’t wait for a moronic number but rather start working on their proposed 2015 strategy now.
That might sound early, because it is. But if you don’t get the strategy in before the budgets are set in September, you will be lost in stupid-land like everybody else.
A smart marketer collects research in June and July. They build and populate their segmentation. They decide on their targets for 2015 and then, crucially, decide on their objectives for each segment. Here you will note that I am not talking about the flaccid, open-ended objectives that populate most firms. You know the type – “Improve brand sentiment among young adults”. I am talking about SMART objectives you can hang your hat on and pay bonuses on – “Increase brand preference among the ‘Out to Lunch’ segment from 29 per cent to 65 per cent by 1 December 2015”.
Once you set a real objective, you can work out what it’s worth. Annualise the figure for 2015 and go and brief your agencies. Share the objectives with them and ask them to come back with tactics and associated costs. Put all that together and you have a bottom-up, strategic budget to propose to top management. You can propose how much money you need and how much money you can generate in the year ahead.
Or you can sit on your arse monitoring how many followers you have on Twitter for another four months until some idiot from finance looks at a line chart for 10 minutes and tells you what to achieve.
Tesco’s half-year profits have dropped from more than £1bn to just over £100m. Sainsbury’s lost nearly £300m over the same period. Morrisons and Asda have fared less badly but both saw sales decline in their latest quarterly results. It does not take a marketing genius to work out why the big boys are losing money. The German retailers Aldi and Lidl are growing at a rapid rate with 12-week revenues up by 26% and 17% respectively, according to Kantar Worldpanel, and that growth is rocking the big four’s boats.
Mark Price, the managing director of upmarket supermarket chain Waitrose, believes the impact of German discounters on the high street is creating an “inflection point” of enormous importance for British consumers. “This is as fundamental as supermarkets coming into the UK in the 1950s and reinventing what food shopping was all about,” he recently told The Daily Telegraph.
We also don’t need any heavy analysis to work out how all of this came about. As the big four supermarkets started to run out of market share gains they used price increases to maintain their profit growth. That kept the stock market happy but over the last five years it also created a bubble in which the German discounters could grow and establish themselves as genuine alternatives. According to Goldman Sachs Rob Joyce, too much focus on profitability allowed the “discounters to get too strong”.
Now the twenty billion dollar question is what will the big four do about it?
We certainly know what they are currently trying to do which is to fight fire with (a smaller) fire. All the major supermarkets are engaged in massive discounting and sales promotions as they tussle with each other to maintain share against their traditional, suddenly desperate rivals and the growing threat from their new German competition. There is much talk in the industry of “war”, “battles” and “fatalities” and that’s more than the usual macho retail bullshit. Next year promises to be a bloodbath on the grocery aisles – the like of which modern marketers have never seen before.
What makes the imminent discount battles particularly interesting is that they won’t work. You can’t beat Aldi at low prices and to even attempt such a mission will result in billions lost and, ultimately, nothing won. “We believe that any major price investments by Morrisons, Sainsbury’s or Tesco can be exceeded by the discounters,” Goldman Sachs concluded in a new report published this week. It’s a classic strategic error – you try to beat your competitor on a core competence that you simply cannot match them on.
Aldi will tell you the same thing. Matthew Barnes, its joint UK managing director, recently admitted that the big four’s price war had benefited his business. “With all the clamour around reducing the gap on Aldi, the psyche of the British consumer has been to examine what value means,” he told Retail Week. “And that’s just played perfectly into our hands. The acceleration of our growth since the price war has begun is testament to the fact we are more than ever resonating with customers.”
So what can the big four do? The answer is to “grow small”. They will need to close a significant proportion of their stores in the next two years in order to survive. Closing stores enables them to get rid of their weakest and least profitable locations which will eventually improve margins. More importantly it will allow the big supermarket chains the chance to re-focus and rebuild their offer around a meaningful differentiation that somehow competes with Aldi and Lidl.
Shutting stores also has one other advantage – it enables the big four to catch up with the German rivals in terms of store design. The “inflection point” Mark Price speaks of is not one of low prices, it’s also caused by smaller stores. The average Tesco has 25,000 products on its shelves while the average Aldi has fewer than 1,500. British shoppers aren’t just putting up with less choice for better prices, they prefer it. The giant floor-plans and enormous ranges that made the big four so successful in the Noughties are now a potential causal factor in their downfall.
Expect 2015 to be vicious. Expect it to be price-based. Expect one of the big four to start to fail. And expect Aldi and Lidl to emerge triumphant.
Last week, we got one answer to the question. It appears that many of them get into private jets and head to an Alpine mountain to prance about in snow shoes. I am referring, of course, to that corporate circle-jerk (look it up if you dare) more commonly known as Davos.
The World Economic Forum at Davos is a peculiarly pointless annual event in which political titans, religious gurus and corporate leaders meet and feel important while feeling the world’s pain. I can just about understand why priests and politicians are drawn to the event, but why do CEOs and CMOs of FTSE 500 firms go there? Call me naïve, but I always assumed that successful capitalists and diligent marketers had better things to do with their time.
Jakob Riis, the much celebrated vice-president of marketing at pharmaceutical giant Novo Nordisk, has a busy 2015 with a series of high-profile launches including Xultophy and Saxenda, so how can he have time to attend Davos? I can appreciate the visceral thrill of being in the same elevator as Andrea Bocelli but surely multi-billion euro launch plans should have kept him at HQ this year? And if I was Anne Finucane, global chief strategy and marketing officer at Bank of America, I might have reviewed the appalling financial performance of my company in 2014 and the piss-poor ratings of my bank’s service scores versus most of my competitors and decided that perhaps Davos was not the top priority.
But, when there’s a chance to share apéritifs with Bill Clinton and discuss interest rates with Paloma Faith, what’s a marketer to do?
It’s not just the guest list that beggars belief. This year’s event identified 10 ‘global challenges’ for discussion. Despite the worthy intent behind the list, it was undermined, at every turn, by the event itself. So while attendees debated ‘environment and resource scarcity’, most of them presumably forgot that they had arrived in one of the 1,700 fuel-hungry private jets that brought Swiss airspace to a standstill last week. The discussion of ‘gender equality’ was surely undermined by the fact that 80% of attendees were male.
Ironies and oxymorons abounded. Executives sporting six-figure time pieces railed against economic inequality. Representatives from the very banks that brought the world economy to its knees with their short-term stupidity earnestly debated the value of long-term investment strategies. Rarely has corporate hypocrisy been so blatantly on display.
One might expect the world’s media to point some of this out. Alas, the majority of journalists were victim to a collective case of dissonance reduction because they (or their bosses) also attended Davos. In a master stroke of organisational propaganda, its organisers nullified the criticism from media channels by inviting them too.
Pop stars, gurus, CMOs and journalists. The only thing missing from Davos is, of course, any coherent list of actual achievements. Despite 40 years and hundreds of millions of dollars in wasted executive hours, the output of the World Economic Forum remains entirely underwhelming and unconvincing.
One might therefore conclude that Davos is an inappropriate event. Nothing could be further from the truth. In this over-paid, under-performing, uber-ego world of modern leadership, nothing better captures the current state of post global financial crisis capitalism than the World Economic Forum. In an era when our leaders set examples for others and not themselves and firms openly flout the regulations and values that they are meant to uphold, Davos is the perfect encapsulation of our times. The ultimate international ‘fuck you’ to the 99% signed, with a flourish and a group photograph, by the 1%.
I’d like to propose a new metric for great CMOs and other senior executives who might have been invited to attend but managed to evade the giant Swiss twat magnet that is Davos and got on with their jobs instead. That’s my kind of leader.
Despite all the hullaballoo, the boldest and most famous example of wearable technology is currently floating, face first, in the ocean somewhere off California. In mid-January, we learned that Google Glass was no longer a going concern, at least in its present form.
The interesting question is why the much-hyped spectacles failed so badly. Clearly, it wasn’t to do with targeting. Google played a blinder two years ago by running a social media contest to recruit the first 6,000 customers for Glass. The contest created acres of publicity but also ensured that the first phalanx of Glass wearing customers were non-geeky, super cool, emotionally intelligent types, which the advertising world often refers to as ‘aspirational’.
You also could not fault the communication campaign that promoted Glass to the world. A seamless blend of social media and more traditional PR and events saw Glass feted globally from Vogue to The Simpsons to The Colbert Report. Everywhere you looked in 2014 you saw Glass. And no-one could accuse Google of getting the pricing wrong. There were raised eyebrows at the initial price of $1,500, but the scramble to get hold of them and the subsequent grey market activity on eBay suggest that the price was indeed right.
Distribution was equally well managed. With the exception of those few errant pairs on eBay, Google sold all their units direct, ensuring a perfect control of price, availability and targeting. The absence of big box retailers and their usual addiction to sales promotions also helped build brand equity.
The product itself worked well too. Even confirmed technophobes, like your humble columnist, looked at what it could do – audio without headphones, visual recognition software, recording video from real-time line of sight– and cooed appreciatively.
So where did it all go wrong? Marketing theory would suggest that if you have the right target and the correct mix of the four P’s, you will make a big heap of money. It’s taken me much time and analysis to come up with my thesis but I’m certain the fatal flaw in Google Glass was that it made people look like wankers, or, as they became known, ‘Glassholes’. Even if you were a super-thin, super-cool, supermodel, when you wore Glass you looked super stupid. And the reason for this was because the product was ugly. If you don’t believe me try a, ahem, Google image search for ‘people wearing Google Glass’. See what I mean? You get the usual blend of supermodels and, fashionistas but they all, without exception, look like wankers.
Google Glass was good for tech, but hopeless on the wearable dimension. The reason it failed so miserably on the latter is all about Google and its core competencies. You may remember the concept of “the core competence of an organisation” – it’s one of the simplest, and most important, theories of strategy and was invented by CK Prahalad and Gary Hamel in a blast of early 90s genius.
The authors posit that companies are good at some shit (I am paraphrasing) and less good at other shit. It may sound a trivial theory but, and I encourage you to read the full paper in the Harvard Business Review, it explains pretty much everything including Google and its Glass failure. It certainly explains why Google can build successful websites and email apps (clunky, plain, devoid of distraction, evolving with usage) and why its eyewear was always going to suck, big-time.
Prahalad and Hamel said that a firm should come to recognise where it lacks core competence and outsource these challenges to someone who can help out. In contrast to Google, Apple has the core competence of design thanks to Steve Jobs and his love for simplicity and appearance. He once famously said: “Design is the fundamental soul of a human-made creation that ends up expressing itself in successive outer layers of the product or service.”
There’s every chance that wearable tech might pause with Glass and only truly enter fast-forward mode when Apple’s Watch is launched. Glass is on the drawing board of a new design team who report to Tony Fadell, an ex-Apple executive. Hamel and the late, great CK Prahalad would surely approve the decision.
Your humble columnist was unconvinced. Attaching what appears to be a large tablet connected to a diver’s mask to your face appears to be a bit of a stretch when it comes to persuading consumers to do anything.
But I am very much in the minority when it comes to virtual reality and its potential. Every marketing magazine on the planet is now saturated with inane articles ruminating on the enormous game changing implications of the aforementioned digital frog masks for our profession. The very nature of our discipline is that anything new that most people have not heard of will instantly become feted as the next big thing for marketers, irrespective of how unlikely or unrealistic the item might actually be.
We have a long and illustrious track record of being inanely attracted to the latest flashing knobs of technology. Before virtual reality it was 3D printing. Last year you could not breathe without running into a jock from some tech start-up peering menacingly from behind a giant machine that was taking 36 hours to produce a very dodgy-looking yellow thing and a headline proclaiming ‘Why 3D Printing Changes Everything for Marketers’.
Go back even further and it was Neuroscience. Marketers were agog at the potential of insights derived from burying consumers inside giant technological sarcophagi and studying their brain responses to various marketing stimuli. Five years ago we were told that these new ‘neuromarketers’ were going to change the game completely and that companies were using neuroscience to develop amazing new insights into their consumers and how to influence them. The coverage was so extensive that we even started to see a counter movement opposed to the ominous new capabilities that neuromarketing conferred on the corporations who did it. The Huffington Post, for example, asked: ‘Who wouldn’t be concerned about a global corporation spending millions on “neuromarketing consultants” and appropriating the innocent toys of childhood in a high-tech scheme to change kids’ food preferences?’
It was all total bollocks of course. These amazing new insights largely consisted of very ambiguous brain scans that purportedly showed that when consumers thought about their favourite brands their brains (sometimes) showed slightly different activity compared to their response when they thought about orphaned puppies.
And who can forget Second Life? That was vintage marketing horseshit of the highest grade. Try and get marketers to go out and do some ethnographic research on real consumers in real settings and you got a flood of excuses. But offer those same marketers a chance to create an Elvis avatar and go online with half a dozen highly pixelated perverts who come from countries where your brand is not sold and who keep interrupting your ‘interview’ with proposals of cybersex and marketers lined up around the block. Second Life as the future of consumer insight. Remember?
What makes marketers’ obsession with spangly new shit so annoying is that our discipline does the basics so badly. We can be so easily diverted into incredibly pointless new stuff with the flick of a glittery switch while failing to follow even the most basic tenets of marketing competence. The general quality of the marketing plans I see from big brands is terrible. No qualitative research driving a good quant survey.
No segmentation of any kind and certainly no explicit targeting. No buying path. No smart objectives. No IMC. No bottom up budget. The basics of marketing are usually missing. But my only hope to get marketers interested in doing their job properly is calling the standard approach to marketing strategy a ‘thwackometer 4000’ and presenting it exclusively to marketers via a virtual reality app made on a 3D printer that was originally promoted on Vine.
The title of the article in The Marketer gave it all away last week. It was called ‘The battle of the realities: which one will prevail for marketing?’ Readers were meant to opt for augmented or virtual reality by the end of the piece. How about another alternative? How about Actual Reality instead?
In the first camp are the steadfast ignorers led by the likes of Patek Philippe and Breguet. These brands, very much in the conservative corner of the luxury watch industry, see smartwatches as fundamentally different from what they offer. When you sell heritage and the pinnacle of luxury at around £30,000 a pop it’s easy to see why these brands are unconcerned with Apple and its ilk arriving into the market. Marc Hayek, who heads Breguet, Jaquet Droz and Blancpain, typified this conservative approach: “The Apple Watch is not a real watch but a consumer electronic,” he told Reuters.
Troublemaker – The Apple Watch
A second group of watch brands were similarly unconcerned about smartwatches but were convinced that the new entrants would eventually spur younger consumers to trade up to a ‘proper’ luxury timepiece. “When it comes to a higher end watch I strongly believe in mechanical movements – the beauty is that they last for generations and you don’t have to worry about batteries and recharging,” Chopard co-president Karl-Friedrich Scheufele explained. He said that this new breed of smartwatchcould “feed a chain of aspiration” that would lead to more watch sales for brands like Chopard in the future. That’s an important opportunity for luxury watchmakers that openly acknowledge you no longer need a wrist watch to tell the time given the preponderance of other digital devices in most people’s possession.
Intel, Google and Tag Heuer Join Forces
Finally, a third group of watchmakers are experimenting with smart features to create hybrid watches. Tag Heuer announced that it is partnering with Intel and Google to launch a smartwatch later this year. For Tag Heuer, which has traditionally occupied a lower price point than many of its more exclusive rivals and is positioned as a technological pioneer, the partnership makes strategic and branding sense. It’s a similar story for Google, which was recently burned by the failure of Google Glass and is looking for partners with core competencies in design and aesthetics to bolster its own apparent deficits in these areas. Breitling is also dipping its toe in the digital pool with the launch of B55 Connected, a Swiss-made watch that offers Swiss-made apps and connectivity. The networked functionality of the new watch is limited but, as Breitling soberly observed, “the watch remains the master”.
The Watch Remains the Master – The Breitling B55
Underpinning this entire debate is a strong sense of strategic déjà vu. Twice before the Swiss watch industry has been plunged into recession and revolution by new competitive developments. The ‘first technological crisis’ occurred in 1876 when the Swiss discovered to their horror that American engineers were now able to replicate and improve on their mechanical movements. The second crisis, often referred to as the ‘Quartz Revolution’, occurred a century later when cheaper, battery powered watches emerged with superior accuracy to an automatic movement at a fraction of the cost.
In both prior instances the arrogance and insularity of the Swiss watch industry cost them dearly and their dominance was restored only when it adopted the competitive threat into lower end offerings (the development of the Swatch quartz offerings for example) and refocused its efforts on super-premium watches and traditional savoir faire.
Expect nothing different from this third ‘crisis’. Lower end watchmakers like Seiko are in for a genuinely rough ride as smartwatches evolve their functional offerings in the sub-£250 market. But we will need to wait a generation to discover if today’s tech-teens will keep their smartwatches and eschew luxury alternatives as their earnings and waistlines expand.
Personally, I doubt it. When you spend four figures on something that your tablet or phone does for free, you are making a genuine luxury purchase. Customers in this segment are seeking distinction, design and an enduring thread of authenticity back to the original Swiss brands of old. That’s why a great watch will increase in in value as the years progress rather than lose almost all of its worth the moment it is purchased.
Buying a watch that goes up in value? As many of the attendees at Baselworld joked last week, that’s the smartest watch of all.
Eventually I saw the light and found myself in a room filled with bright, smiling junior marketers. I had an hour to instil in them the kind of fear and loathing that had taken me a lifetime to achieve. I picked on topics that I wish someone old and fat had told me when I was young and keen. Here they are.
First, never ever talk about a logo. Ever. Most bosses believe marketing is pointless superficial piss, so the minute you turn up talking about a “consistent look and feel” and presenting different font options, you are confirming their worst fears about you and the discipline you work in. Hire an agency to present all the superficial fluffy stuff and stay above the fray.
There is no standard terminology in marketing and that can cause young people to freak out and lose confidence. Take the concept of brand positioning. In a typical week, you can hear it called brand values, value proposition, brand attributes, brand image, corporate reputation, brand purpose. They all mean the same thing but you need to have the confidence to work out that when some bozo asks if you know about ‘brand philosophy’, you understand what he is on about. Confidence, decent marketing training and a good bullshit detector will get you a long way in the industry.
Speaking of training, you need some. The only people who tell you that you don’t need a formal qualification in marketing are those that believe marketing is ‘common sense’ and ‘creative’. It’s neither and you need proper training to know what it really is all about.
The most important concept in marketing is the one the majority of marketers have not heard of – market orientation. Market orientation has a long and complicated origin but in a nutshell it means that you always have to remember that you don’t actually see the world like the consumer – you’re getting paid to work for the brand for starters – so don’t start making assumptions about what they want or feel. If you are market oriented, you don’t just do research, you depend on it because you know NOTHING.
Use market orientation in meetings. Too many marketers go into a room full of executives from their company and warble on about the need to build brand awareness and brand equity. No-one gives a fuck, except you – and presumably you are already on board. Good marketers work out how to link what they do with what other stakeholders within the organisation want – employee retention, improved profits, clearer leadership. You get the idea. Always have a good think about what everyone wants around the corporate table before you open your gob.
You will always underprice everything. There is loads of supercool research (that I cannot find anymore) that shows that when managers get the price wrong, 90% of the time they go too low. Marketers have an inbuilt bias for volume over value. Remember that because if there is one sin you cannot afford in marketing, it is low prices. They undermine brand, reduce profits and turn off your target customers. Horrible stuff.
Next, don’t even think about tactics until you have a target segment, a position (or whatever your firm calls it) and a strategic objective or two. All shit marketers care about is executional stuff – let them flounder down in the lower depths of our discipline. The social/digital revolution has changed the tactical options but the strategic game remains the same. Never move into execution until you know your target, position and objective.
Finally, the thing that will totally mess things up is time. It takes time to work out what is going on. Time to come up with a strategy. Time to develop the tactics. Time for the tactics to work. Time for the money to come. Unless you find a way to give yourself time your impact will be tiny – even if you made all the right strategic choices.
Irrespective of the exact date, it’s clear that marketing is now more than a century old. Age confers many advantages – not least acceptance. Thirty years on, I can still remember the look on my beloved English teacher’s face when I told him I was off to Lancaster University to study Marketing and not Oxbridge to read English. “Marketing!” he exclaimed with the horrified look one might use on being told of an intended career as a heroin dealer or African warlord. “Marketing!”
Those days are thankfully over. But gentrifying marketing confers other risks. As our discipline ages and the concepts of marketing become established and embedded into the lexicon of everyday life, we risk forgetting what their original definitions meant and how we were supposed to apply them. Let me give you three very real examples.
Exclusive. It’s a word so beloved of modern marketing it has become paradoxically widespread. Traditionally the term has come to be associated with anything that carries a premium price. Now, you can buy exclusive ice creams or children’s toys or doorknobs (as I discovered last weekend). It’s all patent nonsense, of course. An exclusive brand is not simply one that fancies itself as such or one that attempts to charge more than its rivals. To be truly exclusive a brand must only appeal to a tiny minority of the market and then steadfastly reject all others. To be exclusive, at least in its original meaning, is to say to vast swathes of the market: ‘Piss off, I reject you from my brand and will do everything in my power to keep you out.’ Exclusivity demands that the traditional four Ps of marketing are not harnessed to generally maximise sales across the whole market but rather as a weapon that turns off, shuts down and closes out most potential buyers. There are very few genuinely exclusive brands left in the world but Ferrari is certainly one of them. I say that not because of its high prices or high quality, but because its most recent offering – LaFerrari – was only available to customers who already owned at least five previous models. That’s exclusivity for you.
Differentiation. At some point in the last fifty years the concept of differentiation became so generic that it was absorbed into every brand plan without exception. Let’s be clear what differentiated means – it means to walk a completely different path that no other brand in your category understands, let alone can replicate. A truly differentiated brand requires three key ingredients: a tight and distinctive positioning, a creatively charged set of executions and a brand manager with balls the size of watermelons – metaphorically speaking. To be differentiated is to take an axe to your category and exclaim: ‘Fuck it, let’s break everything.’ Again, there are few brands in recent years that one can point to as truly differentiated but I would hold up Benefit Cosmetics as a proper example. The world of beauty has become so serious and so very boring but Benefit is the differentiated exception. I defy you not to smile when you encounter them next.
And finally there is brand loyalty. It has become the custom to identify any customer that purchases your brand more than once as a ‘loyalist’. Alas, as most young agency types eventually learn, two consecutive nights of lovemaking does not a relationship make. To truly qualify as a brand loyalist in the original, intended meaning of the word is to exit the category and refuse to satiate your need because your brand of choice is not available. It’s an increasingly rare phenomenon these days but it still happens. My favourite (correct) definition of brand loyalty came from the former CEO and chairman of Heinz who once explained his idea of brand loyalty for his brand: “A shopper goes into a supermarket looking for some beans. There’s no Heinz. She comes out without any beans.” Could it be any simpler?
So there you have it. Marketing is an old profession these days and so are many of the concepts within it. But remember their original intent. There’s more power and direction in their traditional form than you might expect.
Twitter might be struggling at present as a corporate entity, but it still occasionally provides outstanding moments of quality social media. And by that I do not mean return on investment or conversations between customers and wood adhesives. I literally mean a social medium in which people interact with each other over a specific app or platform.
And so it was last week when my iPhone pinged to life with: “What is all this Gen Y, Z, millennials bullsh*t? Brains don’t change in a decade. We’re still driven by the same goals as our ancestors.”
I had no idea I followed Phil Barden, managing director at consulting firm Decode Marketing, but when his 140-character missive popped up last week I was jolly glad I did.
Barden is right, despite what you might have read in the 8,000 articles penned this week on the subject of millennials and how they are completely, unquestionably and massively different from the rest of us and how we are totally screwed unless we rip up our marketing plans and start again. It’s all total bullshit.
For starters, if you have been around longer than two years, you might have noticed that the ‘unique characteristics’ that define millennials are the bloody same traits we were ascribing to Generation Y not that long ago, and Generation X before that. You know the bit about how millennials want to ‘give back to society’? Or their ‘discomfort’ in traditional career roles? Or how they have a more ‘global mindset’ and ‘egalitarian principles’? And their literacy with new technology? These are not radical new psychographics, they are part of what sociologists refer to as ‘being young’.
I will hold my hand up. When I was a very inexperienced PhD student in 1994 I wrote a paper on Generation X and its implications for marketing. I got a free train ticket down to London and presented my bullshit paper to a bunch of old people who nodded and wrote stuff down as I went on about how Gen X were not looking for the same kind of career path as baby boomers and about how we cared about the environment and wanted a fairer world.
It might have been true at the time but it sure as hell wasn’t some new trait or one that Gen X would retain past a mortgage, two kids and the inevitable ball crushing reality of mortality gradually unveiling its ugly face every morning in the bathroom mirror.
And even if the bullshit about millennials is true, what, as a marketer, are you going to do with it? Remember how you were trained to avoid mass marketing and to reject broad assumptions about the market? Well, what do you think millennials are? The minute marketers start thinking all millennials are the same, they reject the behavioural and attitudinal nuances of a hugely heterogeneous population and collapse them into one big, generic mess.
If you buy the idea of millennials, then you must, by definition, reject the concept of proper segmentation and of consumers holding different perceptions and experiences. Millennials are essentially the same. They all have 0.3 kids, two-thirds of a degree and one testicle each. Whether they went to private school, have a same-sex orientation, have used your brand before, are female – all of that is trumped by their birth year and the cod-psychology of a bunch of assumptions about their demographically driven motivations.
The most disturbing problem with millennials is that they reinforce the ongoing love affair between marketers and young people that comes at the expense of their more populous, financially bestowed peers who happen to be – look away now – old.
I spent last week travelling around Canada (it’s a long story) with famed misery-guts Bob ‘the Ad Contrarian’ Hoffman. He was even more brilliantly miserable than billed and one of his great observations was that Americans aged 75 to dead will buy more new cars than those aged 18 to 35. Guess who appears in almost all the car ads?
Creating a constant yet changing demographic dynamic allows marketers to focus all their intellectual capacity and tactical efforts on young people and ignore the pasty old fuckers with all the money and buying intentions that they should be going after. And just as the youth segment starts to age and get interesting, we rewind up the age curve to the next revolutionarily different group of young adults.
The only thing that will kill our obsession with millennials is the deadening certainty that we are only a few months away from a new demographic cohort called Blah-Blahs or Generation Q, who will supplant the now over-the-hill millennials and surprise us with their, you guessed it, discomfort with modern career paths and concern for the environment and social justice.
When the Premier League season began in August Leicester City were favourites for only one thing – relegation. They had only just survived the drop during the previous season and their manager had recently been sacked after a team scandal. To make matters worse, Leicester had appointed Claudio Ranieri as his replacement. The Italian was available after being fired as manager of the Greek national team following a humiliating loss to the Faroe Islands. Little wonder then, that at 5000-1, Leicester winning the Premier League was seen as more unlikely than the Second Coming of Christ by most British bookmakers.
Six months later and we are still waiting for Our Lord and Saviour to return. But Leicester are sitting pretty at the top of Premier League. It is a remarkable story and one that marketers should pay special attention to. I am opposed to the typical horseshit analogies that derive extremely tenuous marketing insights from current cultural ephemera. You know the stuff I am talking about: What can marketers learn from the Kardashians / Lego / the North Korean missile crisis. But in the case of Leicester City and the remarkable Ranieri there are genuine lessons to be learned.
The first comes from Ranieri’s initial days at Leicester. As an Italian he had arrived with some clear notions about how the team should play. “When I arrived in August I started to look at the videos of all the games from the previous season. When I spoke with the players I realised that they were afraid of the Italian tactics,” he told Italian newspaper Corriere della Sera. “They did not look convinced, and neither was I. I have great admiration for those who build new tactical systems, but I always thought the most important thing a good coach must do is to build the team around the characteristics of his players.”
The first step in any future marketing success is diagnosis. I beat this into my MBA students in the first few weeks of their brand management course with me. It’s crucial not to arrive with established strategic approaches and a priori tactics already in place. Understand the new brand, the organisation behind it and the consumers that buy it. You only ever get one chance to perform a proper diagnosis so take your time here. Look for good secondary data, study the brand history and do as much in-market ethnographic work as you can.
The second lesson from Ranieri is his subsequent strategy. He quickly realised from his diagnosis that his new team was not exactly skilled in the art of possession football. Leicester’s starting eleven cost a total of £22m to assemble; that’s about half a Rooney. Ranieri realised he would not win anything if he tried to play the game like everyone else. Instead, he gave up on possession football and focused on his team’s overriding advantages – speed and an inherent work ethic. Typically, when a team wins in the Premier League they have on average 60% to 65% of the possession in matches. Leicester are winning each week, often by several goals, with as little as 35% possession. Rather than control games, they use their speed and tenacity to break quickly with lethal counter attacks.
The great insight here for marketers is to recognise that strategy is not associated with specific tools or tactics. It’s about genuinely studying the situation and your strengths and weaknesses to identify a clear and often distinctive way to win in the market. Who will we target? How will we win? How can we play the game differently from the rest? These are the great strategic questions that set the direction for brand success.
Finally, guided by a clear diagnosis and a distinctive strategic plan, Ranieri set in place the tactics to deliver results. Leicester play long ball football to allow fast breaks. They harry and hassle their opponents until they can win the ball and attack immediately. Their star players, Jamie Vardy and Riyad Mahrez, are encouraged to push forward and await the counter attacks that inevitably result from Leicester’s pressing approach.
Again, marketers can learn here. The tactical execution and the tools you use can only be applied after a clear strategic approach has been decided upon. Too many marketers are ready with tactical approaches but when you push them on the rationale for their execution it becomes apparent that the big strategic questions have simply not been asked. You cannot be a successful marketer with just content marketing or social media or CRM. These tactical choices are predicated on bigger issues.
Leicester will win the Premier League this year. Of that I have no doubt. Will marketers learn from this extra-ordinary achievement? I’m less certain.
Advertising Age published a fantastically unhelpful article last week. In it, the chief marketing officer at Publishers Clearing House, Jason John, recounts his recent purchase of a coffee maker.
John first describes realising that the weird noises and less-than-perfect coffee emanating from his coffee maker mean he might need a replacement. Next, he searches online for ‘best coffee makers’ and, as a result, on the way home that evening is greeted by targeted mobile ads for coffee makers during his commute. That weekend he heads into store to check out the options in person but is deluged with online coupons sent to his phone offering various deals. He decides on a brand and opts to order the machine online for a better price. That evening, once home, he places his order on his laptop.
After recounting this story John goes on to conclude: “People say the sales funnel is changing – that, in today’s digital world, the way customers buy is no longer a simple path from awareness to prospect to sale. That’s just not true. The sales funnel isn’t changing – it’s completely and utterly dead. It’s been brutally turned upside down, inside out, with little left to identify it as the clean, straightforward process it once was. Today’s shopper jumps in and out of channels, views alternatives to purchases, and searches for better deals – all at the tap of a screen, the click of a button, and oftentimes while standing right in front of the item she’s trying to buy.”
The sales funnel has been a cornerstone of marketing strategy for over a century. It was invented by E St Elmo Lewis in 1898 and is widely regarded as the first formal theory of marketing. It evolved throughout the 20th century, becoming better known as the ‘hierarchy of effect’, the basis for the Dagmar (defining advertising goals for measured advertising results) models of advertising planning and as a major structuring tool for large consulting firms. It’s rare to encounter a major McKinsey engagement that does not, somewhere near its heart, contain a purchase funnel of one sort or another.
Very simply, the sales funnel represents the yellow brick road of marketing. Having identified a target segment, the funnel charts the various steps in the buying journey and then populates the steps with the proportion of that segment at each stage in the process. With this analysis complete a marketer can use the funnel to decide where to focus their efforts, what the brand objectives should be, what tactical tools to invest in and what investment and return are expected. I am on about my 300th sales funnel, having built them for the last 15 years for a variety of clients. Each funnel is different depending on the product and, crucially, the segment being targeted.
I have grown used to, on an almost daily basis, encountering marketers and consultants claiming that the whole world of marketing has been changed by the new digital era. But it’s rare for an article disclaiming a particular part of marketing theory to actually disprove its own thesis in its opening paragraph.
Re-reading Mr John’s coffeemaker odyssey it is quite clear that his purchase is structured by a very simple set of steps. First came his awareness that he had the need for a new product. Next came the information search stage. After this, he formulated his preference based on product, price and some promotional offers. At the end of the preference stage he went home and made the purchase. The only step missing is his post-purchase reactions to his new machine which, alas, he does not include in his account.
The error that Mr John makes is looking at the tactical resources that he uses to traverse the various steps in the buying process, rather than the journey itself. Clearly today’s consumer is availed with a whole set of resources and influences unimaginable a decade ago. But that is not the point of the sales funnel, which charts the consumer journey, not the tactical attempts of brands to influence it.
Can I again remind the reader of the difference between strategy, in this case working out what the stages are and which one to focus on in order to increase sales, and tactics, the various actions I will invest in to execute the strategy. One of the great problems of the new marketing world we live in is that all these dreary marketers who feel it necessary to prefix their job titles with the D-word simply do not understand the difference between strategy and tactics.
The sales funnel precedes the invention of television, direct mail, telemarketing, cinema ads, the internet and smartphones. Each and every one of these technologies has changed the tactical options available to marketers, but the essential challenge of marketing strategy and the enduring value of a properly derived sales funnel remain undimmed.
Enjoy your coffee.
Catch Mark at this year’s Marketing Week Live, with his talk: ‘Eight marketing concepts – four stupid and four stupendous‘
Topics covered included:
The marketing world continues to focus much of its efforts on the wrong issues while ignoring the more useful ones
Which concepts continue to offer value to marketers as they approach 2017?
Which concepts, despite the noise associated with them, are distracting marketers from their core purpose?
Customer Journey Mapping, Digital Marketing, CSR, Brand Tracking, Brand Purpose, Zero Base Budgeting and Virtual Reality
Bruce McColl, the Global CMO for Mars, was in no mood for prevarication last month at the Advertising Research Foundation’s annual ReThink conference in New York City. “I’m not a great believer in targeting,” he explained to the audience. “Our target is about seven billion people sitting on this planet”. He went on to define the challenge for Mars in equally unequivocal terms: “Our task is to reach as many people as we can; to get them to notice us and remember us; to nudge them; and, hopefully, get them to buy us once more this year.”
At first sight you might assume that McColl is lacking marketing expertise. After all marketing theory for the last half century has demonised mass marketing as the antithesis of marketing excellence. Millions of marketers have been indoctrinated into the ‘holy trinity’ of marketing strategy in which a market is first segmented, then a specific target segment is selected and finally the brand is positioned accordingly. How could McColl get it so wrong?
The answer is not so simple. McColl is a fine, very experienced marketer with an impressive track record. He is also not alone in his new found love for mass-marketing. Barely a month passes these days without a senior marketer from one big brand or another stepping up to decry the fallacy of targeting and favouring a mass approach instead. Targeting is in danger of becoming an outdated marketing concept.
Most of the blame/credit for this sea change can be traced back to the Ehrenberg Bass Institute and the remarkable success of Byron Sharp’s book, How Brands Grow. Sharp’s book is as radical as it is influential. Sharp has successfully reframed a wide range of marketing concepts with a potent mix of data, case study and a thinly disguised distaste for fluff.
I recommend the book but, of all the many claims contained within it, the broad rejection of targeting troubles me most. Certainly there is a strong case to be made for companies like Mars broadening their scope and aiming for mass household penetration. Indeed, many of our biggest consumer goods companies including Coca-Cola, Unilever and others are now following the Ehrenberg-Bass system and have reversed decades of STP – segmentation, targeting and positioning – and returned to a mass-marketing approach.
As much as this might make sense for some, I would caution marketers to consider the move carefully before jumping onto the anti-targeting band wagon. There are still many instances where a clearly identified target segment will make you more money than a mass marketing approach.
Smaller companies, for example, without the resources or scale of a Mars would do well to start by taking a smaller, segmented bite of the marketing apple and gradually building their presence. That’s especially compelling if the big boys you are up against are now all engaged in an Ehrenbergian attempt at mass marketing.
In markets where dynamics exist between segments, the case for targeting also remains strong. I worked last week for an American fashion brand that had aged with its client base and had suddenly discovered it’s once twenty-something customer was now forty-something. Nothing wrong with that customer or her sales, but without an explicit re-focus on a new generation of younger clients the brand in question was looking at a long, slow death.
Similarly, in the much less discussed world of B2B marketing, where the sales force forms an inextricable resource constraint, it would be suicide to try and apply such a mass marketing approach. While Ehrenberg-Bass is correct to challenge the applicability of Pareto’s principle that 80% of sales derive from 20% of the customers in categories like dog food and confectionery, I can assure them that the old Italian’s theorem applies beautifully in B2B settings. These consumer asymmetries combined with a tiny sales force impel an organisation to target tightly.
Clearly Mars think they have a sound strategy and who am I to suggest otherwise? But if targeting becomes a dirty word across the whole of our discipline we risk a return to the marketing dark ages. It is impossible to teach targeting to MBA students these days without extensive reference to Ehrenberg-Bass and its theories, but I still teach targeting as an explicit strategic choice. Do we target everyone like Mars? Do we target a couple of segments? Or do we make the leap of faith that says because of our size or the market’s dynamics we will only go after one segment?
Seen this way, targeting remains an essential strategic question for all marketers. But it becomes a question of who rather than if. I would argue Bruce McColl is mistaken to claim he is not a big believer in targeting. I think he has decided – in this instance – to target everyone.
Catch Mark at this year’s Marketing Week Live, with his talk: ‘Eight marketing concepts – four stupid and four stupendous‘
Topics covered included:
The marketing world continues to focus much of its efforts on the wrong issues while ignoring the more useful ones
Which concepts continue to offer value to marketers as they approach 2017?
Which concepts, despite the noise associated with them, are distracting marketers from their core purpose?
Customer Journey Mapping, Digital Marketing, CSR, Brand Tracking, Brand Purpose, Zero Base Budgeting and Virtual Reality
There is no easy way to start this week’s column without sounding like a wanker, but I am genuinely worried about the state of our discipline. We’ve never been regarded as the most strategic part of the organisation but in the last few years marketing seems to be devolving into a base tactical pursuit devoid of strategic thinking.
To understand my point, you have to realise the distinction between strategy and tactics. Marketing strategy is where we play and how we win in the market. Tactics are how we then deliver on the strategy and execute for success. In traditional military strategy, the generals of old would gather, survey the battlefield in depth, review the enemy’s forces and then decide exactly where to attack, at what time and with which forces. Strategy agreed, the orders would be sent down to the various battalions who then concerned themselves with the tactical business of executing their respective objectives. A troop charged with taking a hill, for example, might deploy its archers and then send in the infantry to finish off the enemy.
In the traditional world of marketing we follow a similar systematic process. First we build a map of the market from research in the form of a decent segmentation. From there we can decide which segments to go after and how to position our brand for optimum success. Finally we devise clear strategic objectives for each target segment specifying the goal we will achieve. Only then – with clarity on who, what and when – do we start to think about tactical execution and which specific tools we might apply.
But that last paragraph now describes an approach in apparent decay. The last decade has seen marketing deluged with a sea of new tools and techniques. The concept of real-time rather than long-term planning has added fuel to the fire. Finally, a new breed of marketer who prefaces their title with the tactical term ‘digital’ has inundated our discipline with under-trained, overly tactical managers who have already selected their mode of execution long before any research or strategy has been even countenanced. They already have their crossbow drawn with no clue where, who or what they are attacking.
Over on the other side of town, Marketing magazine – the long standing rival of Marketing Week – has just been retired and subsumed into a tactical title called Campaign. The editorial team behind the move talk about “creativity”, a “new breed” and “breaking down silos”. But if the exit plan is to move from silos to a giant tactical ghetto where does that leave our discipline?
There used to be a section in every marketing and retail magazine that featured hundreds of promotional gifts and freebies. Golf balls, frisbees and branded pens – you know the kind of thing. There is a very real danger that Campaign and then the rest of British marketing goes this way over the next few years. All this talk of social media platforms, virtual reality and 3D fucking printing is missing the point – the strategic point – of marketing. Our discipline must be founded on understanding consumers and then coming up with the strategy that helps our organisation win in the market. All the tactical mish-mash and creative hoo-haa that follows is an important part of the marketing plan, but it’s not the starting point and it’s certainly not the most important bit.
A general manager at a client I advise recently asked me to chat with a marketing manager about his 2016-17 marketing plan. The GM was worried it was all “bells and whistles”. Sure enough when we went through the plan there was a surfeit of digital tactics for the year ahead but when I asked him about his targeting, positioning and objectives the look on his face astonished me. It wasn’t that he was unsure of his answer, it was his abject confusion that such questions were even appropriate any more. I used to battle against the executives from finance and accounting who sneeringly referred to marketing as the “colouring-in department”. As time goes on I fear they might have a point.
As the greatest strategist of them all, Sun Tzu, observed more than two millennia ago: “Tactics without strategy is the noise before defeat.” I hope so. Because we need an urgent re-centering of marketing back towards strategic fundamentals before it’s too late.
If you disagree with me get over to Campaign and sign up for their shiny new publication – the website’s front-page stories this week are on millennials, Snapchat, billboard hijacking and digital dating. For anyone else, I recommend climbing back up the disciplinary ladder to a higher place. It’s called marketing. We cover it weekly.
By now you almost certainly know what is at stake. If British voters opt to stay in the European Union next Thursday we lose the last vestiges of sovereignty, immigration will run amok and rule of law will permanently cease to be a matter for British courts. If we vote for Brexit our economy will most certainly crash, we will become a political and economic pariah state and, if European Council President Donald Tusk is to be believed, we will usher in the end of Western political civilisation as we know it.
Clearly, it’s rhetorical nonsense on both sides. The debates have become childish slanging matches in which both sides throw bullshit in ever increasing volumes at the other. I have no idea which way I will vote and even if I did, I certainly would not be advising you what to do. This is Marketing Week after all, not The Spectator.
But I can use my marketing skills to tell you who is more likely to win the vote next week. The current poll of polls has the difference between the leave and stay votes within the margin of error. But if you look more closely at the central arguments of both sides, it’s clear which one will gain the greater popular support and win the day.
To work it out you have to remember your basic marketing training, and specifically the concept of positioning and the benefit ladder. The idea of the benefit ladder is deceptively simple. You start with whatever product feature you believe your product offers that is superior or different from the competition – a micro-camera fitted to a toaster that can identify colours, for example. You then look for the benefit to the target segment that this feature will deliver – perfectly toasted bread every time. Finally, if possible, you push towards the heavens and look for the emotional benefit that this this product benefit will confer – you are the perfect parent because you make perfect toast every time. The higher up the benefit ladder you can authentically base your positioning claim the more powerful and successful it is likely to be.
If we look at the Remain camp it’s obvious what the product feature is – the continuation of the UK’s membership in the European Union. The benefit of staying in Europe is to avoid the fiscal penalties that Brexit would incur. Specifically, the pound will weaken and our economy will worsen. Emotionally that translates into tougher times ahead for families who will face more expensive holidays, less job security and, if George Osborne is to be believed, “£4,300 less money per household by 2030”.
The Remain Argument:
Contrast that with the Brexit argument. Their product feature is to exit the European Union. The benefit of such a move is to return to British sovereignty and the ability to properly control immigration. The emotional benefit of Brexit is to prevent the UK being over-run by a growing tide of foreigners who will weaken the national spirit and use up its precious resources to our detriment.
The Leave Argument:
So which of these two arguments is most important to the British public? Last week’s poll from YouGov has the economy three points above that of immigration. But, there is a big difference between rational box ticking and the emotional implications of these issues when they come close to home. While no one wants to be worse off, the dreaded spectre of continued immigration and all the manifest threats to both economic and cultural life that it portends makes it a far more emotive and therefore persuasive argument. That’s why the most recent polls show that only 66% of Remain believers are definite that they will actually vote next week in contrast with 78% of Leave supporters. That’s a crucial gap when the polls are so tight.
With still so many voters undecided, clearly the vote could go either way. And much depends on how both sides handle the final week of campaigning. But the more the Leave campaign openly and repeatedly pushes a reduction in immigration while the Remain side continues to promote the economic advantages of staying inside the European Union, the more sentiment will swing towards Brexit.
It’s a fascinating case study because the product features of both sides are equally attractive. Half the British population want to remain in the EU and half wish to leave. The population are equally split on whether the economy or immigration is the bigger issue. But this whole decision, arguably the most important one in recent British history, will come down to the benefit ladder and who can play the emotional advantages better than the other. My money, if not my heart, sides with Brexit.
We’ve teamed up with award-winning columnist and Professor Mark Ritson to bring you a new online learning experience. The MW Mini MBA in Marketing is a CPD accredited, MBA standard course. Cover the same core modules as leading MBA programmes, in just 12 lessons, it will give you the tools you need to do your job better. For more information click here.
Sitting on a train on Friday grading exam papers I got a tweet from marketing consultant Glen Gilmore. The tweet was a little grid of 24 headshots and the message, “24 Marketers you Should Follow on Twitter”.
Intrigued, I clicked the link and discovered it was actually an article by Nicholas Scalice for Earnworthy.com in which he presented a list of his “24 top-notch marketers”. I scrolled through the list. Some of the faces were familiar to me and I smiled when Gilmore himself appeared. I was about to head back to my exams when I had a fantastically cynical thought. “I wonder,” I said out loud to the immediate concern of the woman sitting opposite me, “how many of them have actually studied marketing?”
It’s a reasonable question is it not? If they are being held up as experts in the discipline of marketing – not just digital communications, you will note – you would certainly expect them to have a qualification in the topic. If someone sent me a list of the 24 leading experts in brain surgery or physiotherapy or 17th-century romantic fiction I would expect most, probably all, of the names on the list to have a formal education in the subject matter in question. Why not marketing?
Before I knew what I was doing I had Excel open on my laptop and LinkedIn windows were popping up all over the place. I went through the list of 24 experts and finally sat back with my research compete. Do you know how many have a formal training in marketing of any kind, according to their LinkedIn profiles?
Four of them.
In that whole list of 24 world-leading experts in marketing only four have a formal education in the subject. There was one MBA, two undergraduate degrees and a community college certificate.
Now that’s not to say those other 20 thought leaders aren’t intelligent people. They have degrees in all kinds of subject areas – electrical engineering, English literature, political science. It’s just that they don’t have any training in the thing they are meant to be telling you about. The author of the article, himself an expert in “inbound marketing tools” (bachelor’s degree in criminal justice, master’s in public administration), had managed to pick a list of people that are less well trained in marketing than the average local PR agency.
Now I know how this reads. Middle-aged marketing professor with a BSc and a PhD in marketing is pissed off because he did not make a list of global experts. Or worse, out-of-touch marketing academic wishes people would still listen to business school professors because he is one, and they don’t.
But look beyond that and I think there are two serious concerns. First, despite their billing as leading experts in marketing it’s clear from even a cursory examination of the list that these people are actually experts in just one area of marketing – communications. They sell it using a variety of different, new conceptual names like “traffic”, “content”, “lead conversion” and “digital marketing” but this is what ancient professors used to call the promotional part of the marketing mix. Nothing wrong with that but this is a very small part of marketing discipline – about 10% by my estimation.
The new breed of experts are big on tactics but light on market orientation, research, segmentation, positioning, brand equity, strategy and all the other rich substantive matter that makes up the remaining 90% of marketing once you take the promotional P out. Our new generation of experts are actually confined to a very small tactical box, despite their billing as general marketing thought leaders and that makes for an overt tactical focus in those who follow them.
Second, the experts aren’t just out there teaching marketing to the masses, they are openly and explicitly altering it. It’s become the norm to suggest that “traditional” approaches don’t work and the new approach to content/purpose/inbound/digital/storytelling has disrupted everything. But I’m uncomfortable with people who don’t have a formal knowledge of the marketing discipline suggesting what needs to change before they actually understand in totality what it originally was.
I think before you become an expert/ninja/guru/visionary in marketing you should learn the discipline. I think before you start creating new rules and insights you should know what the existing ones are. I think before you explain how marketing is changing you should understand what it was before you started announcing the change. I think you need a qualification to be qualified. Surely you must agree?
Or shall I go get my coat and try my hand at becoming a world expert in origami, tree surgery or some other alien pursuit I haven’t got the faintest fucking clue about, and leave marketing to the ninjas?
We’ve teamed up with award-winning columnist and Professor Mark Ritson to bring you a new online learning experience. The MW Mini MBA in Marketing is a CPD accredited, MBA standard course. Cover the same core modules as leading MBA programmes, in just 12 lessons, it will give you the tools you need to do your job better. For more information click here.
I tried to resist as long as humanly possible. But the gravitational pull of Pokémon Go has pulled me into its digital tractor beam and forced me to join the throng of marketers enthralled by every facet of its augmented reality.
Like millions of other marketers, I now openly acknowledge that there have been two eras in the history of marketing – BPG and APG. All the old rules about having a strategy, doing research and thinking about stuff are clearly redundant because they were invented before Niantic and Nintendo managed to geo-locate small fictional creatures onto my smartphone.
For starters, the language of marketing must change. Words such as storytelling, social, inbound, disruption, content and millennials clearly represent the vocabulary for marketing success. But it’s becoming clear that without the addition of Pokémon Go this lexicon is growing dangerously ‘traditional’ – and there is nothing worse than that.
Whereas in the past it might have been advisable for a marketer to tweet about ‘How to disrupt social storytelling and target millennials with your inbound digital content’, in the new APG era it’s imperative to upgrade this to ‘How to disrupt social storytelling with Pokémon Go when targeting millennials with your inbound content marketing’. It is a subtle shift, but essential if you want to prosper in the brave new APG era ahead.
Just in case you think I am taking the piss a little too much let me share some of my favourite implications of Pokémon Go from marketing experts/ninjas over the past week. Pokémon Go has been variously associated with the “beginning of a shift in the way we advertise”, “taking customer relationships to a level like we’ve never seen before”, and “solving one of marketing’s biggest conundrums”.
(From left to right) – How you catch Pokémon in the real world, how the in-game world looks, a squad of Pokémon
If you think the experts are embarrassing, how about the brands that have apparently tossed their marketing strategies out of the window in a fevered tactical chase to associate themselves with Pokémon Go and its crazed following. My favourite example last week was Mercedes. The German automotive manufacturer has invested in so-called ‘lure modules’ near ‘PokéStops’ to attract monsters and therefore people playing the game to their showrooms. Mercedes-Benz dealers across Germany have apparently been issued with a “detailed manual” to explain how Pokémon Go can be used to drive traffic to their showrooms.
I’m not sure whom Mercedes is meant to be targeting in Germany but I’m pretty sure it’s not sleep deprived pre-pubescent boys staring inanely into their smartphones. And even if that is their target customer I would be looking for a better time to try and sell them a car than when they are wandering, zombie-like, round the back of your dealership looking for Pikachu among the recycling bins. I’m also betting that if I challenged Mercedes’ current marketing department to tell me what their positioning is, they are more likely to tell me it’s “next to the big green Bulbasaur over there” than give me a proper, strategic answer.
Ever since the world was young we have had sudden fads that create a global sensation. The hula hoop, Rubik’s Cube, Cabbage Patch Kids, Tamagotchi – pick your fad based on your birth year. What makes the current Pokémon Go phenomenon so different is the way it has exploded out of the world of consumer fascination and into the world of marketing and business. We all went a bit mental about Cabbage Patch Kids back in the eighties but some bearded muppet from the Marketing Society did not turn up on the six o’clock news and start telling Angela Rippon how they were changing the face of modern advertising.
The real lesson marketers can learn from Pokémon Go has nothing to do with the game, and everything to do with the wobbly, ephemeral state of marketing these days. We blindly accept that there are 400 million players of Pokémon Go without checking for two seconds and concluding that this number is clearly nonsensical. We glibly assume that Nintendo will make “$12bn” from the new game before anyone realises that, as they did not actually create the game, they will make only a fraction of that sum from it. We watch brands confuse attracting any customer with a pulse and a smartphone with proper targeting in which strategy drives tactics.
Perhaps worst of all, we assume that today’s Pokémon Go player will be playing tomorrow. If we have learned anything from the fads of the past it is that Lucy grows tired of her hoop and Paul pulls the stickers off his Rubik’s Cube and starts using it as a football. Fads burn bright and then fade fast – how about that as the big lesson for marketers to learn from Pokémon Go? Or is my content too disruptive for you?
We’ve teamed up with award-winning columnist and Professor Mark Ritson to bring you a new online learning experience. The MW Mini MBA in Marketing is a CPD accredited, MBA standard course. Cover the same core modules as leading MBA programmes, in just 12 lessons, it will give you the tools you need to do your job better. For more information click here.
A lovely long lunch with a couple of advertising people remains one of the great unadulterated pleasures in life. Like cigarettes at midnight or urinating on your lawn, it is a lovely combination of illicit fun and the magic of bygone days.
So it was last week as I launched into a third cocktail and my two lunch companions bemoaned the state of modern marketing. “Yes, I do feel your pain,” I nodded as I cancelled the rest of my meetings with a drunken swipe across my iPhone. “It must be awful.”
The conversation we were rather blurrily having is one I, and perhaps you, have had before. Most good advertising people these days are obsessed with the fact that they give most of their best work away for free.
The great strength of a good advertising agency has always been the synergy of an amazing planning team who can work out what you need to say to customers and then an amazing creative team able to articulate it in 30 seconds or less. None of that made money for the agency of course. Like most marketing people, they gave away the valuable service for free and made their margins on the superficial stuff. It was when the ads were made and commissions were charged that agencies could finally see some coin.
But times have changed. The need for great planning and creativity is as big as ever in client land, but the days of charging millions for the execution of the campaign are now long gone. Freelancers, client procurement and pesky modern technology all mean that agencies cannot make their money as they once did.
It is a similar story over at media agencies. Once upon a time they laughed at creative agencies because their model was so much more profitable. Buying media on behalf of clients meant you could make money on the commission you charged them, the tasty surcommission you received from the media owners you bought from and – if you sat on the client’s media budget for 30 days before paying out – a nice little earner in an escrow somewhere to boot.
Media agencies similarly gave away their most valuable skill – namely, media expertise and planning – and made all their money on the relatively inane task of buying it. But once again life has changed in recent years. Client procurement has squeezed those commissions and ensured no more 30-day holding periods. The recent attention on surcommissions does not bode well either.
And it’s exactly the same tale at the big market research agencies. At one time they worked with clients to devise ever more intricate systems for understanding consumers and measuring brand equity. They did most of that work for free and then made the money from the mundane business of recruiting a sample and getting them to complete the survey.
But the growth of independent customer panels means that all the smart clients I know are designing their own questionnaires and going straight to the panel firms to execute the research. Questionnaires have got shorter, quicker and (if I’m honest) better now that clients are going direct.
Newspapers are in a similar bind. They used to make money by literally selling paper. The whole journalism, writing and opinion stuff might have been the difficult part but papers only made money from the relatively simple printing bit. As print circulations decline, the difficult challenge of getting people to still pay for the thoughts and opinions of journalists appears entirely beyond the capabilities of most mastheads.
And so as my long lunch progressed, my agency friends interrogated me about the manner in which I managed to make money from strategy. I sensed their despair when I told them most of my consulting money comes from training – like most marketers, I do the difficult bit of designing the content for free and then make my money on the execution.
In a final act of desperation, my lunch mates asked about several of the top-tier strategy consulting firms I had worked with. How did they make money from strategy? Again I had to disappoint. These firms might charge a little for boardroom time but, alas, they too make most of their money from junior associates billing thousands of hours executing the strategy in endless supply chain rationalisations and organisational reviews.
We concluded the lunch in disgraceful shape. The only sober thing in our taxi on the way home was the thought that the most difficult stuff seems to be given away for free only for the easy work to then bring in the cash. The problem for marketers is that despite the hard stuff never being in greater demand, the easy stuff no longer pays the rent. How many long lunches are left I wonder?
If you’ve been a marketer for the past five years you have almost certainly been sucked into the ongoing debate about the death of TV as a channel and as an advertising medium, and its imminent replacement by digital video, ostensibly from YouTube and Facebook, aka the digital duopoly.
Well, things have not quite turned out as predicted. Despite hundreds (yes hundreds) of articles predicting the death, decline and general apocalyptic end times for TV, the big stupid screen from the 20th century is still very much turned on.
The latest data from BARB/Thinkbox for the first half of 2017 does not appear to show a medium in terminal decline. The indomitable reach of TV continues to hover around the 90th percentile. Over the last 10 years the average amount of daily TV viewing has remained remarkably constant at around three and a half hours.
Yes, younger people watch less than older people and that figure has declined slightly. Yes, some of that TV is now taken up with time-shifted viewing and video-on-demand channels like Netflix. But the dominant paradigm of free-to-air commercial TV does appear to be relatively healthy. In 2007 the average viewer was exposed to 40 TV ads a day; that figure now sits at 43. Reports of the death of TV advertising have clearly been exaggerated.
I will pause at this point for those of you of a digital persuasion to question the probity of BARB, the accuracy of Thinkbox and the impartiality of your humble columnist. I know you think there is some kind of plot to present TV as a healthy medium and, based on your own experience of watching no TV in your own home (n=1), you reject BARB data (n=11,500) and remain convinced that TV is “pretty much gone”. My advice is stop reading now, because this column is only going to make you even madder in the paragraphs below.
That relatively stable situation for TV viewing is supported by the estimates of ad spend in the UK. Newspapers, magazines and direct mail have suffered annual double-digit declines since the ascent of the digital duopoly and arrival of mobile advertising. But investment in TV advertising has continued, relatively unaffected, throughout the digital decade and maintains a stable and significant share of the advertising pie. While journalists and tech publications were constructing a narrative of terminal decline for TV, its audience numbers and the advertising figures have told a very different story.
If we look back on the past five years, the relationship between TV and digital video presents itself as a three-act play.
Act 1: Tomorrow’s World
With the advent of digital video and the opportunities to advertise within it, the initial rhetoric was one of imminent death for traditional TV and its rapid replacement by a superior technology. Both Facebook and YouTube pointed to the fact that they attracted significantly larger audiences to their sites than the big cable and network stations in America and claimed they were already “bigger than TV”.
“We are talking about Facebook now as an evolution because of the amount of scale we have built and the fact that we can have targeted reach,” explained Facebook’s Carolyn Everson in 2013. “Those are very important terms to a marketer.”
In many ways, the incredible reach of YouTube and Facebook combined with these companies’ voracious appetites for growth make video a natural target for advertising income. The more granular targeting advantages of digital merely serve as the final cherry of differentiation on top of the cake. But if the digital duopoly was right to boast of their audience size and granularity, they were wrong to ignore the unfortunate media context that surrounded their newly created digital view ads.
It turns out that television is, quite by accident, a very fertile place for advertising. Consider the audience. ‘Often reclining and frequently exhausted’ might not sound like an ideal psychographic state for persuasion but a lack of activity on the part of the viewer ramps up the likelihood of them watching ads.
The audience for digital might be billions wide, but the window of opportunity for digital video is often only a couple of seconds deep.
True, a lot of these commercial messages are lost to zipping, zapping and the irresistible siren song of the downstairs shitter. But many of these program breaks results in ad watching at regular speed, for the full duration, and with complete attention. My best estimate, which tallies with the work of others, would be in the 35% to 40% range, though this varies significantly by time of day, room population and a host of other so-called exogenous variables.
Compare that with the jumpy, multi-screening smartphone user who is swiping and scrolling their way through a kaleidoscope of different channels while riding the bus to work. There is a reason why Procter & Gamble thinks its average digital video is garnering 1.7 seconds of attention and why Facebook is spending millions to persuade advertisers that two-second views of digital video can drive sales.
The audience for digital might be billions wide, but the window of opportunity for digital video is often only a couple of seconds deep. Add to this the problems of muting, viewability, bots and a series of highly irregular metrics and things did not quite emerge as many predicted back in 2012.
None of which is to say that digital video is not a decent tool or that it is unworthy of client investment. But it became clear that digital video presented on existing digital platforms was never going to be a straight swap for TV ads. If anything, the technology was much closer to digital display or even digital outdoor on your phone than the 30-second epic TV ads that it originally hoped to displace.
Act 2: Grandstand
The realisation that inserting anything remotely resembling a TV ad into YouTube or a Facebook feed was a tantamount to trying to bang a TV-shaped peg into a round digital hole kick-started a new approach.
Clearly what was needed to make digital video advertising work was the kind of involved programme context and relaxed audiences that TV was enjoying. Very quickly it became apparent that sport was a natural fit. Major events were frequently offered up for auction and could be purchased by the highest bidder.
Handily, many of the major sporting codes were concerned that young people were likely to lose interest in their offering if TV was the only way to consume their games because – rumour had it – the youth of today no longer watched TV. Best of all, sporting audiences were likely to tune in, relax and potentially offer the kind of stable media context where targeted audiences would potentially watch longer digital video advertising.
At first sight the digital streaming of sporting events appeared to represent a genuine opportunity. ESPN had reported an audience of more than 100 million viewers for the World Cup in Brazil and many thought the Rio Olympics would represent a watershed moment in which younger demographics and increasingly digitally savvy audiences would opt for the free digital coverage over the old-fashioned TV offerings.
Buoyed by these insights and worried about a lack of millennial viewers in the future, the NFL, which runs American Football in the USA, signed up Twitter to livecast its Thursday Night Football games on its platform in late 2016. Initial coverage in the press, which remains on hand at any point to confirm TV is dying and digital its replacement, suggested that Twitter’s first broadcasts had been a big ratings success. Two million tuned in for the first game and live sport was declared a “kingmaker” for Twitter.
The reality, however, was very different. In fact, that whole digital shift for sporting events turned out to be almost total pants. Yes, ESPN managed an audience in excess of 100 million for the World Cup but that was only if you used the stupid digital view metrics that renders anyone after three seconds as part of the audience for the rest of the month.
When Nielsen helped turn this number into a regular per-minute audience in the manner that TV audiences are estimated, the number dropped from 100 million to about 300,000 viewers, or 7% of the total World Cup audience. Not bad, but hardly grounds for a revolution.
Similarly, despite all the promotion and expense that various TV companies committed to in their digital coverage of the Rio Olympics, the audiences remained pitifully small. In the US NBC admitted only 3% of its coverage was watched digitally; in Australia the number was 2%.
And it was an equally disappointing story for Twitter and its NFL coverage. The quoted audience of two million was, once again, a stupid digital view measure. Turned into a TV metric the average audience barely made it past 265,000 viewers.
The next wave of digital video appears to confirm the ancient adage that if you can’t beat a medium, you should join it.
Not bad until you set it against the 14.5 million people who watched the game on TV. And while 70% of those 265,000 viewers were indeed millennials, a significant proportion of the significantly larger TV audience for the NFL game was in that age range too. The NFL reached approximately 15 times more millennials on Thursday night via TV versus Twitter.
But the most amazing statistic from Twitter’s brief foray into sports broadcasting was the cost of its advertising. While NBC was offering 30-second sports at its usual price of $550,000, Twitter offered their 30-second ads for $250,000. That might look a bargain until you factor in an audience that was more than 50 times smaller than TV. Advertisers lined up to pay 25 times the CPM to place their ad on Twitter versus on TV.
Disappointed by the outcome, the NFL moved on this year and signed a new digital deal with Amazon Prime. With bigger marketing muscle and more than 50 million viewers in America signed up for Prime, the hope was that this time digital audiences for Thursday Night Football would finally bloom. The audience did increase by 50% over Twitter in 2016. But the 391,000 who watched the game last Thursday was once again dwarfed by the 15.4 million tuning in on TV.
Act 3: Till Death Us Do Part
It’s now clear that TV will not simply be replaced by digital video. If anything, the last 12 months have seen a reaffirmation of the power of TV ads to drive the “long game”, as ad effectiveness experts Peter Field and Les Binet would call it, and build distinctiveness and brand image. Faced with this more durable foe and its stubbornly flat share of advertising, digital players are clearly opting for a new approach.
Rather than the aggressive replacement of TV, the next wave of digital video appears to confirm the ancient adage that if you can’t beat a medium, you should join it. Various partnership models are now in play in which digital aggressors and TV incumbents partner up to offer a hybrid model of television content and digital advertising.
Google is the most notable partner in this new approach. You may have noticed that CBS launched yet another new Star Trek series last month. You might even have caught the first few episodes on Netflix where it airs in the UK. But in the US CBS’s biggest new series of the year aired only its first episode on TV. After that all the remaining episodes of Star Trek: Discovery will be exclusively aired on CBS All Access, the station’s pay per view digital channel. And Google is handling all the digital ads that appear during the series’ run.
CBS is not the only one partnering with Google. It has also recently signed deals with a host of other TV networks to deliver ads in their digital streams, including Bloomberg, AMC, The CW, BBC America and Lifetime. The addition of supplemental search data makes Google a superior partner to work with to provide digital advertising.
The big question for CBS is whether moving Star Trek: Discovery from a TV platform that delivered 10 million live viewers and five million time-shifted viewers for the opening episode, to an online platform that hopes to reach four million subscribers by the end of the year makes financial and strategic sense.
It’s a growing issue for digital broadcasting. Offer the content through both TV and digital channels, and TV will outshine the digital alternative. Even ITV’s Love Island, which offered ‘must-see’ TV to millennials across both TV and digital devices, still racked up 72% of its 2.8 million audience from TV viewing.
But attempt to push the viewers to a digital only offering and the digital views might increase, but in nothing like the numbers that TV can deliver. Despite an enormous marketing push and a budget of £160m, Jeremy Clarkson’s Grand Tour on Amazon Prime only managed to pull in a third of the audience that usually watched its less promoted predecessor Top Gear on BBC Two.
Clearly TV stations must evolve a digital offering while digital proponents like Google are increasingly appreciative of the content, audience and platform that TV can provide. Rather than digital killing TV, perhaps the two will meet in the middle.
Of course, the other important issue for TV companies is whether partnering with Google for digital advertising will provide a suitable hybrid model for a successful digital future, or a Trojan horse that finally allows TV’s digital nemesis to get into the game and start making money at broadcasters’ expense, leading to their ultimate extinction. As one nervous TV executive told Business Insider last week: “You’ll have to consider whether you want to partner with a company that wakes up every morning trying to kill you.”
As Bob Hoffman, the famed Ad Contrarian, often points out, TV is not dying – it’s having babies. That metaphor might be a little premature for the current situation, but it’s clear that TV and digital have started dating after playing hard to get for the last five years.
The big question is who, if anyone, is eventually going to get screwed as a result.
The recent surge in attention being paid to the Russian influence on American society via its use of social media has produced a stream of ever more amazing insights.
A few months ago the headline that Russian operatives were using Google and Facebook to destabilise America and undermine its democratic process would have struck most people as the stuff of bad fiction. But as US lawmakers continue to investigate Russian social media tactics it is becoming clear that the question is not a matter of ‘did they?’ but rather ‘how much did they?’ and the answer to that second question is ‘fuckloads’.
But among all the incredible stories of bots, fake news stories and some of the most disingenuous advertising campaigns in the history of marketing, it was a far more legitimate, strategic insight from Facebook that grabbed my attention last week. According to Buzzfeed, Facebook approached political parties last year with a segmentation of the American population (pictured above) that was widely used by the company’s sales team to encourage advertisers to invest in Facebook advertising.
My point here is not to suggest, as others have done, that this is somehow a salacious, underhand or even creepy way to classify American voters. In fact, my point is exactly the opposite. I think this is a very basic, but also very impressive bit of work from Facebook’s American marketing team.
Let us break down the approach, step by step, for all those marketers who lack a proper training in basic marketing or those who think that segments, like much of the traditional approach to marketing, are now ‘old hat’. You can learn from how Facebook has done this.
A sophisticated segmentation
First, Facebook’s approach is what we call hybrid segmentation. It uses multiple data sources drawn from a combination of different types of consumer data to build its picture of the market. There is a combination of general attitudinal data (eg supporting marriage equality), behavioural data (eg donating to conservative political causes) and demographic data (eg 73% female).
Crucially, the Facebook team started with the attitude clusters, then moved onto behavioural indexing and then finally looked for demographic distinctions from the general market mean, rather than the more inane method of segmenting by age and gender and then making up a bunch of stereotypical bullshit about what this ‘segment’ probably wanted.
There are millennials in Facebook’s segmentation but, crucially, the data confirms that this is not one single homogenous group. Rather, there are three different types of millennial cohort when it comes to political activity and each has very different characteristics. There are also other segments, like the ‘transitionals’ for example, that are filled with millennial-aged voters but whose behaviours and attitudes preclude them from being given the ‘M’ label at all.
And you can be sure that, although the average age of segments like the ‘politically engaged adults’ is significantly greater than the millennial cohort, there will also be a smattering of millennial-aged consumers in these segments too. Neat demographic bullshit falls apart with a bit of empirical input.
While other media send media salespeople to sell media, Facebook sends experienced marketing executives to show how clients can make more money.
Next, look at the numbers. Add all the segment populations together and you get a total of 164 million people. Why 164 million? Because there are 240 million people old enough and eligible to vote in American elections but only 68% of them regularly use Facebook. Multiply 240 million by 0.68 and you get, you guessed it, the 164 million people in the USA who are old enough to vote and who also use actively use Facebook.
That’s again important because Facebook has avoided another classic error that is made all too often by marketers: targeting prior to segmentation. It’s crucial to segment the total market before you target. Every possible target customer, even those you are unlikely to ever want to go after, needs to be inside the square and attached to a segment. Personally, I would have added non-Facebook users too as a single collapsed segment of voters, but I can appreciate why Facebook’s political vertical team were not keen to broadcast to all their clients the fact that 76 million potential target consumers do not use its service.
Now examine the names that Facebook have used to title their various segments. They provide clear evidence that this is a well-constructed segmentation and has been done by, dare I say it, some well-trained ex-FMCG and MBA veterans. I can smell it.
Naming is super-important because very rarely does anyone outside the marketing department read the portraits of the target segment or examine the detailed data. The segment name is therefore the one thing that everyone from the CEO to the sales manager uses during execution and must represent a quick and accurate amalgam of the main drivers and behaviours of the segment. That’s exactly what names like ‘youthful urbanites’ and ‘the great outdoors’ manage to achieve; they give you an instant insight into who this segment is and what drives them.
Note also that these are not names based on targeting but rather segment identity. Again, a common mistake is to name these segments after their attractiveness and use titles like ‘top priority’ and ‘gold’. The crucial challenge of segmentation is to base it on the market being profiled and not on the company doing the profiling. You need to finish the map before you plan a journey or it will go horribly wrong.
Similarly, you need to complete segmentation before you move to targeting to ensure the former will drive the latter. As my old marketing professor used to say: “We call it market segmentation because it’s about the market and not the company doing the analysis.”
Finally look at the number of segments. There are 14. Why 14? Because like any good segmentation there has been an attempt to cluster consumers into as small a number of segments as possible without over collapsing the segments and combining distinctive types of consumer into the same group. Using the data-mining technique of ‘k-means clustering’ enables Facebook to create the ideal number of segments, ie the smallest possible number.
Any more segments and the approach would be unwieldy and overly complex. Any less and some of the segments would break one of the prime laws of segmentation and contain significantly heterogeneous people in the same group – thus rendering the approach unreliable. A good segmentation collapses the number of segments as much as possible but does not collapse too much.
Facebook’s targeting advantage
Because this is Facebook we also get another massive advantage with this segmentation. We can reach everyone. Usually a giant segmentation of millions of consumers now leads to compromises in the targeting and reach elements of the tactical execution. For example, we might buy 30-second TV spots for a right-wing political party on the show Duck Dynasty to reach ‘travelling baby boomers’, ‘small town America’ and ‘millennial country culture’. But clearly some of these customers might not watch the show or be watching on the night we run our ads.
Similarly, a significant proportion of this show’s audience might also lean left politically, thus representing wastage for our campaign spend. We pay for the whole audience even though only 40% might be made up of our target consumers.
With Facebook, however, we can be assured that we can continue to sub-segment this audience into even smaller targetable groups. You want travelling baby boomers that live in suburban Minnesota, own their own home and have a significant mortgage left on the property? Here are the names. You need to target millennial country culture voters who are female, unemployed and live in small towns with significant immigration issues? No problem.
That ability to slice, dice and then target down to the individual level is supremely useful when it comes to designing political messages that will press the right buttons as election night approaches.
As Brad Parscale, the digital director of Donald Trump’s election campaign admitted earlier this week, Facebook is fantastic at driving targeting messages at very specific segments. “When you’re trying to raise money, different people like different colours, people like different messages, [people like] long form, short form, pictures, images. You put those across each other and automate the construction of the ads, and your math goes up really fast.”
This is a fine bit of segmentation and something that most marketers should admire and learn from.
Of course, this kind of segmented approach was not a special one-off effort from Facebook for last year’s election. It is simply what one of their vertical teams – the one charged with selling political advertising – came up with and sold to local and national political advertisers last year. Right now, similar hybrid segmentations for other verticals like motoring, vacations and banking are doing the rounds in all of Facebook’s major markets including the UK.
While other media send media salespeople to sell media, Facebook sends experienced marketing executives who used to work in the industry they now target, armed with extensive hybrid segmentation data and a host of tactical suggestions to show how clients can make more money.
There is a great irony in all of this. While most digital marketers are obsessing over communications, exclusively tactical decisions (such as ‘how do I livestream myself to millennials connecting my VR headset with my 3D printer?’) and micro-metrics like CPM and CTR, Facebook is building the fastest-growing digital business in the world on the basis of doing good basic segmentation and then offering it to clients who are increasingly unable to do any of this themselves because a) they do not know how to do it or b) they don’t think such things are important any more in the overly tactical world of modern marketing.
God knows I have shoveled some piles of shit onto you from this corner of the Marketing Week website for the past decade, but in this case, Facebook, I doff my marketing cap in your general direction and offer my congratulations. I would have added inter-segment influence using spillover dynamics if you had asked me to improve it further but, hey, that’s a minor issue.
This is a fine bit of segmentation and something that most marketers should admire and learn from. Granted, it’s only going to make your half of the digital duopoly even stronger and more dominant next year, but – and I think we can all agree on this – that was going to happen anyway.
I am depressed and impressed in equal doses by your masterful segmentation approach.
In 1996, the United Nations General Assembly proclaimed this day, 21 November, to be World Television Day. That’s right on this very special, if rather arbitrary, date we are meant to spend the day celebrating, promoting and proclaiming the power of telly.
I thought for this auspicious occasion I would turn my column into a bit of an agony uncle session. In 1996 celebrating TV was probably a pretty bland affair. Back then TV was the centre of the world’s video consumption. Sure, there was a bit of occasional cinema but for audiences and marketers TV was the biggest medium in town.
But that was 21 years ago; things aren’t what they used to be. For starters two digital upstarts, Facebook and Google, have turned up and pumped out all kinds of nonsense proclaiming themselves to be bigger than TV in terms of video consumption and advertising impact. Worse still, a large section of younger marketers have taken the duopoly at their word (never a good idea) and now spend their time promoting the death of TV and its apparent replacement with new alternatives.
Rarely does a week pass without me encountering a tweet, LinkedIn post or pub conversation in which an utterly delightful but entirely wrong young media person talks total bollocks about TV. Usually I bite my hand, Sonny Corleone style, and wait for the bollocks to pass. But this week, just this week mind to honour the UN and TV, I thought I might do my bit by responding to the usual bollocks with some thoughts.
To do this, I’m going to turn to young digital marketer Aled Nelmes and a very helpful article from the Guardian entitled ‘A dying habit’ which suggests that the average BBC One viewer is 61. Aled asks on LinkedIn “Should millennial-minded marketers even be considering TV anymore?”.
Well Aled, it’s an excellent question so let’s break this down and work it all out. First the Guardian article is a bit unhelpful with its reference to 61-year-olds and “dying” and all that. Averages, as my old statistics professor used to warn me, are a very misleading statistic. They tend to hide more than they reveal. While 61 does seem old – it is old – we should probably remind ourselves of some of the other facts contained in the article.
First, the BBC (never mind TV) still reached 91% of all 16- to 34-year-olds last year. Ofcom estimated last year that YouTube reached about 62% of the UK population so that does put things in a bit of context.
To be fair, the BBC is struggling to match Facebook for reach but, as you might recall, that is because the social media giant has unbelievable reach. And I mean unbelievable. Facebook currently claims to reach more than 12 million 20- to 29-year-olds in the UK, for example, despite the fact that less than 9 million actually inhabit it. So aside from Facebook’s incredible reach of 140%, you have to accept that 91% ain’t bad. It’s hardly a statistic that connotes death or suggests you should discard TV if you are “millennial minded”.
But what about the actual duration of viewing? While it’s true that grandma is watching a lot more BBC, there is plenty of inconvenient evidence that so-called millennials are also watching the BBC too. The Guardian noted in its article that 16- to 34-year-olds are spending “just” 11 hours a week with the BBC. The “just” bit is interesting. Because a recent study from Mediakix puts the average YouTube user at 40 minutes per day and the average Facebook user at 35 minutes. Multiply those daily figures out to weekly levels and you end up with 4 hours 45 minutes a week on YouTube and just over 4 hours a week on Facebook. To be fair, that was an average figure across all users, but it still adds up to significantly less weekly time than is spent with the BBC. Never mind all TV.
But the ultimate evidence of TV’s rude health in this younger demographic group comes from Thinkbox. Yes, they are the industry body responsible for promoting TV in this country, but they use representative data from BARB, comScore and Ofcom to run their analyses and the findings are pretty conclusive. The data confirms (see the chart above) that TV continues to represent 40% of all video consumption for 16- to 24-year-olds – significantly more than YouTube and Facebook combined. In fact, you can add together all online video and porn and all the subscription VoD channels like Netflix and this younger demographic group still gets more of their video from TV.
I know those people lying motionless on their couches in front of their TVs look pretty depressing to a young man of enviable prospects and vitality, but they are a marketing gold mine.
I know it’s difficult, Aled. You have Facebook and Google making big claims. You have all your mates saying they no longer watch TV to look cool. You have the general anti-TV propaganda from places like the Guardian that try and show that TV is in a death spiral. Then you have blokes like Gary Vee wandering about talking total bollocks as well. But always rely on data. And while the data says TV is watched less by this demographic than their older peers and that this age group watch less TV than their predecessors in the 1990s and 2000s there is a big but: TV remains the dominant source of video for younger consumers.
But that is just total video. The bit that really should convince you of the potential of TV for younger demographics is advertising consumption. As you may have noticed, the digital landscape is totally fucking hopeless for ad viewing. What with ad blockers, multi-screening and general active audiences, the ability to hang onto a viewer and actually show them some ads in the digital world is terrifyingly hard. I know those people lying motionless on their couches in front of their TVs look pretty depressing to a young man of enviable prospects and vitality, but trust me, Aled, they are a marketing gold mine. They occasionally take a crap or make some pasta, but far more than the annoyingly active smartphone viewer, they also watch a fuckload of ads too.
As you can see from the chart above, TV might only account for 40% of the video consumption of 16- to 24-year-olds, but it represents nearly double that figure in terms of the amount of video advertising they see. Almost eight in 10 of the minutes they spend watching ads takes place on a TV. I am not sure what benchmarks you are used to, but 80%? That, combined with the reach of TV, still makes it an amazing medium.
Now, before we go any further – a few caveats. Your question was about “considering” TV advertising and I hope I have made the case for it. But that does not mean a brand should or must use TV. A whole raft of other factors such as budget, creative, strategic objectives and target segment come into play to dictate whether you should actually invest in TV ads. But should you consider them? You’d be mental not to.
It’s called ‘media neutrality’ if you want a name for it. We used that concept a lot before digital marketing turned up and starting taking a giant piss on most of the established concepts of marketing and celebrating a complete ignorance of core marketing concepts and training. You don’t have to proclaim TV to be dead for digital tactics to be valid. Actually, the two work very nicely together in an integrated fashion.
That’s another old-fashioned word from a previous century Aled – “integration”. It’s the notion that rather than a or b, you are much better off with some a and b combined into a campaign. In fact, many of the most effective campaigns will use four or five different channels, drawn from both “digital” and “traditional” sources, and have a significantly better impact than those using one or two.
Of course, all that’s impossible if you are a ‘digital marketer’ because you do not want to touch TV, or radio or outdoor. But that’s why digital marketing is actually the thing dying, not TV. As the new marketing boss at L’Oréal noted last week – digital is marketing these days and we should just get on with it. Rather than building a big silo with the word digital on it, we should just see digital marketing as marketing and stop looking at what we should not consider, and try considering everything.
So, there you go. Sorry to bang on but I hope this helps on this special day to answer your question. Should millennial-minded marketers even be considering TV advertising anymore? Yes, they should Aled. They most definitely should.
I don’t know about you but when someone on social media tells me to “take a look at this video” my first instinct these days is to hide in the wardrobe. It’s either some highly suspect motivational film in which a man tries, fails, then eventually succeeds to achieve his goals, and his success is followed by an extremely cheesy set of life lessons from a bloke in Delhi, or it’s some sweaty young digital guru telling me to “hustle more” in a dire attempt to be the next Gary Vaynerchuk.
So, it was with some trepidation that I clicked on a video from an old advertising mate who had asked me to do just that on LinkedIn. What I saw next was, to my total surprise, one of the most wonderful and uplifting bits of advertising that I have seen in a long, long time.
I’m referring to Wieden+Kennedy’s little urban masterpiece for Nike, Nothing Beats a Londoner. By now you must have seen the three-minute manga mash-up of every sport on earth being played by a succession of ever more determined London adolescents, all dressed to the nines in Nike gear.
Aside from the celebrity cameos, breakneck editing and pulsating storyline this is also an ad that screams authentic London street culture. Well, at least it screams it to me, a middle-aged marketing professor who wasn’t very ‘down with it’ even when he was meant to be 30 years ago.
The strategy behind the execution
But the hypnotic creative execution is not the most interesting aspect of the campaign. All too often marketers are off assessing tactical execution in a subjective manner with little if any reconnaissance of the strategic fundamentals behind the campaign. Specifically, as with any marketing strategy, we must first ask who is being targeted. Then, what the positioning is behind the campaign. And finally, the objectives that the communication is trying to achieve.
For Nike’s strategy to make sense, the outer regions of the country must aspire to London life and I am just not sure that is true.
Items two and three are straightforward and wonderfully achieved with this ad. Clearly, this is Nike trying to transpose its eternal message of ‘Just Do It’ away from a more American, athletic context and onto the real, urban environment of our capital city.
Equally clearly, the strategy is designed to build, revitalise and bolster Nike’s master brand. The anthropologist Grant McCracken once called branding a “diecasting mechanism”, in which cold commodities are painted with cultural meaning through the process of advertising.
Nike is generating awareness and associations for its brand here and playing a blinder in the process. Whoever runs brand tracking for the company will be smiling next week.
But it’s that first meaty question of targeting that has me scratching my strategic head, even while my tactical feet are tapping to the ad’s soundtrack. This is very much a London ad. The locations, the ethnic mix, the references, the accents – part of its pleasure is that it is so demonstrably London in every one of its 180 seconds of unmitigated joy. Even London’s mayor, Sadiq Khan, was impressed.
But is this the right targeting strategy? It’s clearly not an issue for Wieden+Kennedy, who were simply responding, brilliantly, to a brief from Nike to focus on the capital city at the expense of the rest of the UK. Nike’s new strategy is to focus not on global marketing but on a much smaller, much more defined, sub-set of locations.
Last year the company identified 12 cities – New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan – as its biggest growth opportunities. Nike expects 80% of its growth to come from this urban shortlist over the next three years.
On the one hand, this is exactly the kind of marketing strategy so often missing from big brand thinking. A combination of laziness, strategic naivety and a steadfast belief in a big red book that tells them to target everyone because of science and stuff has resulted in an abject lack of good strategic decision-making in recent years.
It has been hard to find any major brand making clear and explicit choices about who it will and won’t target, and what it will and won’t stand for, and being equally selective in the strategic objectives it attempts to deliver on. All too often these days the answers to these strategic questions are targeting everyone, being everything and achieving all. Either that or Blockchain and a dude wearing a VR headset.
And yet here is Nike doing strategy properly with this new campaign. London represents only 13% of the UK population and yet it is receiving all of Nike’s creative and commercial attention. The essence of strategy, the great god/professor Michael Porter once explained, is deciding what you will not do. Well, Nike is being very strategic here and not directly going after 87% of the market.
Excluding a much bigger market
The creative results speak for themselves. Freed from the sloppy constraints of having to talk to everyone about everything all the time, globally – look at Coke if you want to see what that looks like – Nike has zoomed in on London and the cultural joy of the city and its young people to create an amazing campaign. The subsequent distribution and event focus on the city will also ensure that this campaign delivers in spades.
Yet, while I admire that strategic focus and the corporate courage it took to make these decisions, I have a niggling feeling there is something not quite right about the 12-cities approach. I get the idea that you should focus on the most concentrated and highest-potential markets. I also appreciate that cities like London, Tokyo and New York have extraordinary spillover onto the other populations that surround them.
But what I am uncertain of is whether a marketing strategy so intent on targeting London should do so in such an overt and explicit manner. There is a genuine risk that in capturing the mood of London youth so precisely, it will exclude the much bigger market outside the city limits.
I grew up in Cumbria; not the Lake District, but West Cumbria – a tough, working-class region with as much in common with Peckham as Eastern Mongolia or Chad or the outer rings of Saturn. I’m just not sure how that part of the 87%, or any other part of it for that matter, will feel about this campaign. For Nike’s strategy to make sense and for the campaign to become successful, the outer regions of the country must aspire to the London life as explicitly and enthusiastically as the Londoners shown in the ad, and I am just not sure that is true.
From the initial comments on YouTube there appears to be a very clear binary distribution between London-lovers, for whom the campaign resonates, and a significant proportion of other commentators who live elsewhere and dislike the ad intensely. “Never been so proud to be a Londoner” was a typical positive comment on YouTube this week. “London should be on Donald Trump’s shithole list”, was one of the milder critiques.
To be fair, social media comments are hardly the basis for any sensible analysis of a major piece of strategy like this. It will take time, some decent representative samples and a tight little questionnaire to find out if this campaign has improved Nike’s brand equity and, crucially, whether that swing occurred nationally or just around London and the Home Counties.
I appreciate London may well influence the tastes and trends of the rest of the country. I am just not sure that such an overt attempt to focus on it will have that desired impact. Nothing beats a Londoner, except perhaps the entirely different mindset of the other 87%.
Professor Mark Ritson will be teaching the next Marketing Week Mini MBA course from 24 April 2018. To book your place, sign up at marketingweek.com/mini-mba.
Being sent new research or industry reports is a common experience for columnists. I’ve been writing for Marketing Week for a long time and rarely does a fortnight pass without an approach from an entirely delightful PR person or corporate marketer wanting to share the results of the latest wah-wah about blah-blah arriving at my door.
I always have a little sniff: who knows what has been uncovered and even if the sample is too small or the method highly incredulous, it always gives you an idea of the current marketing context to see who is researching what.
So, a few weeks ago when a contact from the radio industry told me she had some “research she wanted to send my way” I told her to do just that and promptly forgot all about it until the report, ‘Re-Evaluating Media’, arrived in my inbox.
I opened it. And I am not sure when my mood went from the usual polite suspicion to the state of mind I like to describe as ‘fuck me’, but it happened so fast I was emailing questions to my contact who had sent me the report within five minutes of opening it for the first time.
It’s hard to explain just why this is such an important report. Hard because the world of marketing is so cynical and tribal these days that every piece of research has an almost immediate rejection factor before it has even been viewed. It’s also hard because this report fits with my worldview, which makes it look like that is the reason I love it.
In truth, it’s nice to see empirical evidence of your own hunches but the real value of this new report is the rigour that has gone into it. That, and the simple elegance of what it tells marketers to do as a result of the findings. I have no doubt this will be a signature source of data – quoted and debated for many months to come.
Methodology
Radiocentre – the group charged with promoting the use of radio as a commercial medium in the UK – hired communications consulting firm Ebiquity to review the state of marketing media in 2018. The media examined in the study are the 10 major channels that account for the vast majority of advertising in this country: direct mail, magazines, newspapers, online display, online video, out-of-home, radio, social media and TV.
Media like radio and newspapers are dismissed far too easily by marketers, who need to open their minds to the real possibilities.
Now before I go any further I know what you are thinking: this is just going to show that radio is the best medium for ROI, reach, engagement, everything. Every major channel has knocked out some dodgy research in the past few years with a slightly ropey academic, which claims they generate 14 or 20 times the value of their rivals and you should spend all your budget with us not them.
Well not quite.
After the initial brief, Radiocentre allowed Ebiquity to work on the project without any direction at all. None of the agencies or clients interviewed knew that the research was being conducted on behalf of a radio client. You also have to remember that Ebiquity has to guard its independent status too or lose most of its current, not insignificant, standing in the world of marketing and media.
Most impressively, despite radio paying for this research it does not come out top of the rankings, as you will see as you read on. In fact, of the 13 tables contained in this report comparing the different media, radio makes it to the top of just one of them. That does not sound like fluff or research bias to me.
Ebiquity’s challenge was to compare the perceptions of advertisers and agencies on various advertising media with the reality of what each of these media channels actually offers, according to third-party assessment.
For the perceptions part, Ebiquity interviewed 68 marketers working in companies that spent £2m or more on advertising last year. There are not that many companies spending that much on advertising so this is a big sample.
Ebiquity also interviewed executives from 48 different advertising agencies (covering the gamut of media and creative shops). This must be, by some measure, one of the most robust samples of British advertising people in quite some time.
To assess the actual performance of each channel, the Ebiquity team used secondary data from a wide variety of places. Fifty different sources and more than 75 published reports – all conducted since 2010 – were used to build a picture of how each channel performs against the others.
Ebiquity combined this data with its own proprietary benchmarks from working with a multitude of global clients and linked this information to third-party evidence such as the IPA’s influential touchpoints data. It’s a huge effort and one that provides an up-to-date and highly detailed view of the current British media environment.
The results
Even before we get to the actual performance versus perception data for the various media channels, this data provides a fascinating snapshot of what marketers want from their media in 2018. Participants were asked to rate the importance of the dozen different criteria for media using a MaxDiff trade-off method (identifying the most and least important options from multiple lists), which avoids the usual criticisms of simple verbatim answers or ranking data.
It is clear that there are four main drivers for media selection in 2018. Marketers are looking for clear targeting cut-through, the ability to show strong ROI, a positive emotional response to the message and increased brand salience at the same time. If you put Byron Sharp, Peter Field, Les Binet and the IPA in a big industrial blender this is probably the juice that the concoction would produce. So, no real surprises.
In contrast, many of the industry’s other obsessions appear to be far less important to marketers. The push for transparent third-party measurement and brand safety might be hot topics for most marketing conferences but they are not on the radar for the average advertiser. Low cost does not appear to be much of an attraction either.
If I could be critical of the sample’s responses just once it would be the relative weak performance of ‘gets your ad noticed’. There is a ton of evidence to suggest that most advertising simply does not even break into the consciousness of the target market and I would have expected marketers to push this issue higher up the agenda.
But the interesting part of the report is examining how marketers think the various media perform against these dozen demands and then looking at what the hard evidence says their actual performance is. For reasons of focus and length I will keep my assessment to the top four main drivers for this column but interested readers are encouraged to download the full report here.
Targeting
It’s perhaps no surprise that direct mail (the legacy medium for micro-targeting) and social media (the digital entrant most famous for its ability to reach very specific audiences on a personal level), feature at the very top of the perception chart for targeting. It has been drummed into every marketer that the personalisation of LinkedIn or Facebook makes for dramatically different marketing opportunities.
And yet, when the data is crunched, at the top of the evidence-based ranking is radio – thanks to its ability to reach consumers by geography, demographics, context, time of day, day of week and even addressability with the new connected listening revolution that is taking place.
It might look like a dubious result – and it is the only category that radio triumphs in – but the big insight is that if you use multiple stations and distinct program context combined with time of day, the ability to slice and dice your audience and reach a tight segment of the market is not only possible but readily advantageous.
You do have to feel for the executives at the Radiocentre and begin to get a glimpse into why they have ploughed so much money into this research. There is radio, top of the performance charts for targeting according to the data, and yet it sits at the bottom of the perception charts, joint-last in the mind of clients. Radio has a marketing problem; that is for sure.
Return on investment
For return on investment (ROI) there is, at least, a much closer correlation between perception and performance. Echoing other research from other independent sources, it is clear that digital media in general gets far too much credit for delivering an ROI versus its actual performance.
In contrast, one again must feel some sympathy for news media, which are perceived as having little to any impact on ROI. In reality, they offer some of the most significant campaign lifts for those clients that can look beyond the bullshit of the ‘death’ of news media and see both the continued potential of print advertising – the campaign of the year so far, KFC’s FCK ad, was a newspaper ad, lest we forget – and the growing potential of premium digital news media ads.
For the team at Thinkbox, there should be genuine celebration that their concerted and extraordinarily data-driven campaign to push the ROI of TV has worked brilliantly. Similarly, the Radiocentre campaigns to push the return on radio advertising appear to have worked. This is not the attribute they need to focus on any more – many other perceptual shortfalls must be corrected.
Emotional response
Again, it is impressive to see that marketers are very much aware of the power of both cinema and TV in driving emotional response. As we learn more and more about the longer-range, mass-targeted power of brand-building campaigns, we are also becoming increasingly keen on media that can deliver brand messages with an emotional charge. TV and cinema win out here and the evidence and perceptions of the country’s marketers are aligned.
The interesting disparity comes with online video. Clearly, those investing in the medium believe it vies with the big traditional screens for emotional depth and engagement but, as the ebiquity research shows, the small screen, fleeting attention and often distracting context for consumption lead to it performing dead-last in terms of generating an emotional response.
It’s worth pointing out that all the digital media perform worst on this dimension, meaning that those looking for broad engagement and a more effective advertising impact need to consider investing their money elsewhere.
Salience
The concept of brand salience is a fascinating one. It was once a key focus for marketers, then seemed to die away as creative executions and an exaggerated faith in ‘brand love’ led many marketers to believe that their brands were automatically noticed by target consumers.
The reality, as more and more data emerges, is that brands are weak things. Even when consumers can recall an ad the brand behind it is – more often than not – completely ignored. Smart marketers have begun to revisit saliency and ask whether their brand is even noticed before moving on to how it is perceived.
Again we must tip our hat to Thinkbox and the TV companies who have manged to maintain a steadfast claim that TV remains the single best way to get the UK to notice and think about your brand. Again, let us spare a sad few seconds commiserating with news media companies on this issue. The combined data suggest newspaper still set the tone for much of the country and are a great way to propel your brand into the national consciousness, but marketers don’t see it that way.
The grand prix
The story continues for the other eight attributes in the ebiquity report. But with all the data compiled and analysed there is one last tantalising league table to show – a grand prix if you will – weighting the 12 attributes to reveal the overall best advertising media.
And here it is. The perceptual table looks very familiar: the idea that TV, online video and social media represent the three leading advertising channels in 2018 would surprise few people. Even the presence of out of home in fourth spot fits with that media’s current renaissance, thanks to the growth in digital screens.
But it’s the evidence-based performance table that should stun marketers. TV retains its dominant position; it’s worth underlining that point given we continue to face dreary marketers getting on stages in their hoodies predicting the end is nigh for TV. But then look at the next top performers according to the actual performance data.
Radio and news media offer significant superiority over social media and online video on the issues that matter most to marketers. And yet radio can only hope for a flat line in terms of advertising spend this year and news media would be happy, I’ll bet, to lose 10% of its share of the advertising pie in 2018.
Meanwhile the digital revolution continues in this country. Marketers and agencies continue to move more and more of their ad spend across to social media and online video despite all the evidence to the contrary.
Here we should pause and apply a major caveat. I continue to believe that there is no superior advertising medium. I believe that it very much depends on your strategy as to which media you should and should not invest in. And when I say strategy I mean four things: the target segment, the strategic objectives, the positioning of your brand and the actual budget you have at your disposal.
Only last week I was arguing strongly against an outdoor campaign in favour of moving money to social media advertising and premium digital display, because my target segment was tiny, my objective was achieving a first appointment, my brand was positioned as a high-end exclusive service, and our budget was more than adequate to get a return there.
Marketers can always justify their media choices and make such a good argument they fool the most critical audience of all – themselves.
My point is that, despite what a bunch of fuckwits from digital agencies might tell you about me, I don’t “hate digital”. I hate it when digital is already being planned and we don’t even have a strategy in place.
I also continue to believe that synergy beats specialism. The idiot marketers (and I insist on the term because I mean it) that continue to push a digital-first approach to media must be shouted down. The power of a good campaign has always been in the combination of different weapons at different stages of the execution to get the job done.
I believe a bit of TV, backed up by radio and then linked to search advertising will deliver a better result than pumping all my money into any one of these options. These Ebiquity league tables show none of these synergies because they treat each media channel, as they must for their analysis, as a separate competing option.
Don’t take that separation into your own brand planning – multiplicity always delivers a bigger outcome than duplication. Diversity beats uniformity hands down. Learn to spread your money accordingly.
But with those two caveats I come back to the same old mantra that has been the boring old bane of my career for the last seven years. I think digital media brings some interesting new options to brand execution but I remain convinced these media are over-sold and over-invested in across most marketing plans.
Media like radio and newspapers are dismissed far too easily by marketers, who need to open their minds to the real possibilities that these fantastic channels can offer. I am not saying spend all, or any, of your money on radio. I am saying if you do not ask your media agency to include radio and news media in your initial consideration you are a fool.
Will it make a difference?
My general admiration for this report and the rigour and sampling behind its findings could not be greater. But now let me remove the happy clown face of empirical respect and reveal the bastard grimace of practical marketing reality. This report is brilliant and it will make not one whit of difference to media spending in the UK, for three insurmountable reasons.
First, a significant number of marketers are not driven by data any more. They look at their own highly unrepresentative media consumption and use that as a proxy for their media planning. The chaos of the last decade of media wars has left many now-senior marketers with the distinct impression that no-one knows which media is best so it’s good enough to go with the flow.
“Sure,” they will say, “those are some interesting tables. But I’ve seen similar from Facebook and Google. We’re good.”
They are also, alas, obsessed with new things and tech. When you suggest print media might be a viable option for their brand they look at you like you have just proposed a deeply offensive sex act. Give me a VR headset with machine learning to go. Newspapers? What planet are you on, grandad? To summarise, they don’t care what the data says.
Second, there is a significant bias within media agencies towards digital media and against so-called traditional alternatives. If you look at the amount of money that can be made in fees and rebates from digital media it is often a factor of three or four times more profitable to recommend digital video over TV or radio.
With those kinds of incentives and the current financial struggles of many advertising groups, there is little if any chance that agencies will lead their clients back to radio or news media in big numbers based on this or any other data. It just does not pay well enough.
Does that mean every agency is putting their own interests before their clients? No. Are many of them doing it? You bet. There’s nothing illegal in pushing your more profitable merchandise, I might add.
But the main reason that this report will fail to have any impact is contained within its very pages. Side by side, we see how the each medium actually performs on various attributes and then next to it the perceptions of marketers and advertisers. Clearly there are big gaps between reality and perception, which need to be removed.
But it turns out that perception creates the reality for most marketers. If you have the word ‘digital’ in your job title you automatically bend reality to ensure that all things technological end up looking better than those things that are ‘traditional’.
If, like most British marketers, you are now committing more than half your marketing budget to digital tactics, it is very hard to step back and acknowledge you might have made an error. Instead, your behaviour drives your perception which structures your reality. The table on the right – perceptions – is far more important than the one on the left – reality.
The psychologist Jonathan Haidt claims that the conscious brain thinks it is in the Oval Office in charge of all the decisions when, in reality, it is actually the press office just rationalising those decisions long after they have been pre-consciously made. It’s a brilliant metaphor, but it also goes a long way to demonstrating the problem with the Ebiquity data.
I have no doubt that the league table scores of the various media are accurate, but the only ranking that matters is the perceptual one next to it. Marketers can always justify their media choices and make such a good argument they fool the most critical audience of all – themselves.
For the few marketers prepared to revise their thinking and take in the ebiquity data, there are genuine competitive advantages to be gleaned from this report. I do not believe that its findings will result in a big swing away from digital options towards radio or news media or magazines. But that is good news for you.
If those media fit your budget, target segments, brand position and objectives then there are bargains to be had out there in media land. Perhaps that is the ultimate implication of this wonderful and confronting report.
Professor Mark Ritson will be teaching the next Marketing Week Mini MBA course from 24 April 2018. To book your place, sign up here.
No one knows if the Philistines actually existed. They turn up in the Old Testament being a bunch of wankers to the Israelites and then promptly vanish from history.
But something about their general wankery and disrespect for culture and learning kept them in the frame long enough for them to reappear in 19th-century German literature. From there it was a short jump to modern thinking and their current position as a very particular reference point for anti-intellectualism and immediacy.
To be a philistine today means to be ignorant and lacking in cultural appreciation and respect for learning. Philistines are doers, not thinkers, and their doing is always ultimately undermined by their lack of appreciation for learning and a broader perspective. It’s a key concept these days for our own discipline because we are surrounded by marketing philistines.
You know the sort. They actively deride contemplation as being a pointless waste of time. They know what they know and the idea that data or debate might sway them is ridiculed. They are all about artificial intelligence, not the real stuff. The whole idea that one might study marketing is met with open hostility. Not only do these people not have time for study, they think the study itself might damage their marketing savvy.
These people are all around us. I was reminded of the fact this week on social media. I tweeted an article, which was in fairness behind a paywall, about the fact that several studies are showing that, rather than reducing the time people spend watching television, the growth in digital video appears to be increasing the importance of the television set to viewers.
I’d barely pressed send when an instant response came back: “It’s a bit hard to comment without more data and I can’t read the article because I don’t have a subscription but frankly I don’t buy it.”
I’ve had some pretty incendiary comments and messages on Twitter over the years, I can tell you. This was certainly not one of them. But something about the comment perfectly captured the mood of modern marketing. Here was a senior marketer essentially saying ‘I have no idea what your data is or what your argument might be, but I have already decided that I disagree with it’. Perfect marketing philistinism.
The reason the message struck a chord with me was that barely a few hours earlier I’d bumped into the latest message from the world’s most famous marketer, Gary Vaynerchuk. He had just posted an interview he’d had with Larry King to his 1.7 million followers on LinkedIn.
In the video, Vaynerchuk explains that he did not fail at school, “school failed him” and then goes on to bemoan the wasted time entrepreneurs spend at school. “I am stunned by the amount of people that would rather read a book than watch the behavior [sic] of people that are winning.”
There it is again. Did you spot it? The arch disrespect for any formal learning and the prioritisation of immediate brute experience over any kind of study. Better to get out there and do it than spend a moment thinking and learning. Marketing philistinism.
I saw the same thing last year when the increasingly famous, highly impressive Steven Bartlett was interviewed by Econsultancy’s Ben Davis about the success of his media business Social Chain. When asked whether marketing degrees were teaching the right skills to students Bartlett was openly dismissive.
“In terms of how marketing is taught,” he explained to Davis, “I wouldn’t know, because I never studied it. In terms of school in general, I don’t believe schools are doing a lot to teach people about social media and social media marketing, and all the opportunities that exist on social media.”
He later explains that knowing what works comes with “experience and trying and failing”, and that no book can be published on the topic, as by the time it is printed “it will have expired”.
And there it is again. Did you catch it? That sudden, unmistakable aura of philistine thinking? If you listen to many of the most influential current marketing leaders it seems that books and studying in marketing are out, completely out. Training is not essential for marketing success.
Rising disrespect for knowledge
It’s appropriate around now for those who don’t have any formal training in marketing to start getting defensive about why not being trained is entirely acceptable. While they expect their accountants, dentists, undertakers and engineers to be fully trained the marketing philistines make a small exception when it comes to marketing, which is ‘creative’ and ‘common sense’. It’s neither of these two things but, and here is the catch, you need a bit of training in marketing to know that in the first place.
Let me go out on a limb at this point and make an outrageous statement. Ready? I believe that training in marketing makes marketers better at their job. I really do. So much so, I am going to say it again. Training in marketing makes marketers better.
Which other profession would come out so strongly against education as a path to improvement?
I think learning from case studies and theories and concepts and the long and rich history of marketing which stretches out across a wonderful century of application is worthy of all of us. I think knowing about Al Ries and Ted Levitt and Christine Moorman and all the other great marketers makes us better at our job. And I think that anyone that actually tries to argue that studying marketing is a waste of time is, well, a philistine.
But let me also accept that this is a minority viewpoint. Two years ago, Marketing Week asked its readers if a qualification in marketing was necessary to be a good marketer. Only 43% of readers agreed and the rest sided with self-taught, work it out from the field approaches. I continue to think that is extraordinary. I wonder which other profession – and we do claim to be professional and search for our place among the other professions, do we not? – would come out so strongly against education as a path to improvement.
My argument is somewhat weakened by the state of marketing training and education today; a point, to be fair to the irrepressible Vaynerchuck, that he has made on several occasions. I accept that there are plenty of marketing training programmes that are not up to practical scratch.
I recall one particularly painful evening at a top university where I and the head of training for one of the world’s biggest luxury brands listened in horror as the marketing academics meeting with us debated whether it was even appropriate for marketing professors to work with corporations on consulting projects. I got so angry I literally nearly broke the wine glass I was squeezing in my hand.
It is crucial that marketing educators offer proper, applied marketing training. Note that I am not listening to the ill-informed bozos that claim universities cannot keep up with the vast changes in social media and digital media. That is the argument of the philistines that miss the larger, non-tactical nature of the marketing discipline.
But it is true that too many marketing students, both undergraduates and executive, are taught pricing by a man who has never set a price in his life, or brand management by a woman who has yet to manage anything other than her academic duties. It’s hard to make a case for marketing training when so much of it is so utterly, utterly shit.
But I want to make a strong case to those who will listen for the power and importance of being trained in marketing; whether that training takes place through your employer, in some form of structured corporate learning, or at a university or business school. For those marketers who desire to be better, you should read books and you should open your mind to research and other points of view.
Bastions of marketing training
I remember turning up at Wharton business school in America as a fresh faced 26-year-old and being blown away by the sheer size, impact and knowledge of the marketing professors I encountered. I could literally feel my brain growing. And I want that feeling for other marketers who want to get better and who know that it takes more than watching ‘winners’ ‘winning’. FFS.
I appreciate I have a dog in this hunt with the (highly rated) Marketing Week Mini MBA in Marketing. So, I will avoid any accusations of self-promotion by going out of my way to promote the competition. I would tell anyone that does not know about the Chartered Institute of Marketing (CIM) that this must be the first place they look when they want to improve their skills and knowledge in marketing. For over a century the CIM, in its various formats, has been providing cutting-edge and practical training for those intent on improving their marketing skills.
For those marketers who desire to be better, you should read books and you should open your mind to research and other points of view.
Then there is the IPA – the Institute of Practitioners in Advertising – another century-old operation. Is there a better place to learn the art of advertising anywhere on the planet than Belgrave Square?
If you work in communications, then the chance to complete the IPA’s Eff Test or the Excellence Diploma will set you up for a senior career in advertising or more broadly in marketing. More importantly, it is a place to stand on the shoulders of advertising giants and learn from those who went before you.
And finally there are the great business schools of this country, where marketing is taught by academics who also have extensive experience in the field. The place in the UK is London Business School and, aside from its world famous MBA, the school runs a series of short courses in branding and marketing strategy that offer a chance to learn from some of the great thinkers in our field like Rajesh Chandy or Nader Tavassoli.
Similar programs can be accessed up at Manchester University and my own beloved Lancaster University. We have thousands of marketers but only handfuls ever sign up to learn more at these places.
The research giants Peter Field and Les Binet have created a single, very scary line chart for the IPA. It shows the overall effectiveness of British marketing campaigns over almost 20 years. Over the past five years, for the first time, the effectiveness of British campaigns – measured in terms of market share, profit and penetration – has started to recede. The authors argue that this is a combination of short-termism, overly tight targeting and an obsession with tactical activation.
But I smell a lurking variable. The reason these sins are being committed where once they were largely avoided is surely also a function of a lack of proper marketing training. The philistines are winning. Marketing is seen as being common sense and the subsequent results are there for all to see.
The only silver lining in all this depressing ignorance can be found in the ancient and enduring concept of differentiation. The more the marketers around you think that ‘side hustle’ and ‘street smarts’ outweigh proper marketing training, the more you can stand out by getting yourself a decent marketing education.
I remain in the minority who believe that marketing training makes you a better marketer; why not join me there? It’s a place of books, crazy thinkers, case studies and amazing articles from the Harvard Business Review. It’s a refuge from the marketing philistines who don’t want to invest in training and desperately don’t want you to do it either. It’s the way we all improve and ultimately move the discipline of marketing forward.
Mark Ritson is a Marketing Week columnist, consultant and adjunct professor at Melbourne Business School.
Cambridge Analytica whistleblower Christopher Wylie testifying to the House of Commons DCMS committee on 27 March
It’s ironic, is it not. We marketers spend our lives trying to get the public’s attention. Finally, a story comes along – in the shape of the Cambridge Analytica saga – that propels marketing, advertising and consumer behaviour onto the front pages of the world’s media for two weeks. And yet, despite this global popularity, marketers appear reticent to take a stand.
It has not been unusual this past fortnight to see the Cambridge Analytica story and its links to Donald Trump, Facebook and Brexit simultaneously dominate the news reporting of The Guardian, the Financial Times, The New York Times, ITV, the BBC, Channels 4 and 5, and Sky News. But turn to the marketing and advertising press and the whole Cambridge Analytica saga is being treated like any other minor story. Like a 40-year-old virgin who suddenly finds himself with a certain night of hot passion and demurs at the last minute because he has a bus to catch, we marketers seem to be stepping away from the story just as it heads for centre stage. Why is that?
The answer is complex. But if you look across the various tribes and factions that make up modern marketing, no one has anything to gain from the downfall of Cambridge Analytica. In fact, the longer you examine this ever-unravelling story the more apparent it becomes that most marketers really have no option but keep their disciplinary traps shut.
The traditionalists
A significant proportion of marketers have expressed concerns in the past that digital communications is not all it is cracked up to be. They point to bots, ad fraud, strange unexplained payment structures and the general shadiness behind the big walled gardens of Facebook and Google, and shake their heads suspiciously.
I’d put myself at least one foot into this camp, believing that new advertising tools have added much to the tactical party but not half as much as many ‘digital marketers’ would have you believe. For even more staunch traditionalists, there is almost no value to be had in the digital swings and roundabouts of Instagram and programmatic.
One might imagine that these traditionalist marketers are now enjoying open season as scandal after scandal dogs Facebook, Cambridge Analytica and a host of other digital players. But, of course, there is a catch here. You can’t spend the last seven years bemoaning the overstatement of digital media’s impact on consumers and now – suddenly – proclaim the same tools to be possible to swinging the White House into Trump’s grasp or pushing the UK out of Europe. Last year, you were busy explaining to your mates in the pub what a waste of money digital was for a toothpaste company; now it’s responsible for the end of the democratic status of Western economies. Surely not.
The digital natives
And the reverse applies to the long-standing enemy of the traditionalists: the digerati, who have openly dismissed the value of traditional media and predicted its demise as the rise of the tablet and the smartphone take hold of consumer attention. For digital natives, the actual audience data is less important than the obvious observation that they, and all their friends, don’t watch TV but do spend hundreds of hours on their phones.
But that open support for the power of digital media in all its forms now represents a bit of a barrier. If digital natives spring to the defence of Cambridge Analytica and Facebook too quickly or with too much vehemence they face the genuine risk of being associated with all the things – Trump, Russia, dark closed systems for thought control, right wing politics – that most of these bright young people should be opposed to. Better to stay quiet, see out the storm and, ironically, stand over in the silent corner next to the traditionalists in their cardigans saying nothing about the whole saga until the heat dies down.
The Ehrenberg Bass apostles
Small but influential, Professor Byron Sharp and his long tail of advocates have made quite the reputation for themselves in recent years, discounting the value of targeting and promoting the more complex idea of ‘sophisticated mass marketing’. To be fair to Sharp, he is often misquoted as being in favour of simply targeting everyone in the category with the same approach. His more nuanced argument posits that should there be meaningful differences between segments but then all should be targeted, albeit with different, appropriate positioning. It is not mass marketing, it is more sophisticated than that.
But the problem here is that Cambridge Analytica did not just employ sophisticated mass marketing, it went the whole hog and ran very specific targeted marketing campaigns for Trump while an allegedly linked Canadian company used the same technology on behalf of the Vote Leave campaign during the EU Referendum.
In the past two weeks I’ve had the same conversation with several senior marketers. The marketer inevitably says with a sheepish grin: ‘We’ve been doing this shit for years’.
Talking yesterday (27 March) to the Digital, Culture, Media and Sport committee at the House of Commons, Cambridge Analytica whistleblower Christopher Wylie made headlines with his testimony that the Leave campaign had used a company called Aggregate IQ, which he suggested had direct access to Cambridge Analytica’s databases. Wylie suggested that it was “completely reasonable” to say that the referendum would have had a different outcome without the data and marketing tactics that Aggregate IQ sanctioned.
More important for marketers, however, was Wylie’s testimony that between “five and seven million” people were targeted by the Leave campaign. To a traditional marketer, such an approach makes perfect sense. Identifying which voters could be swayed in their decision-making, and then focusing on this smaller group at the expense of the broader electorate, is basic strategy. Except if you are worshipping at the Church of Byron Sharp, in which case there has to be a specific and extremely complicated reason why either the Brexit campaigners were in actual fact targeting everyone or this campaign clearly did not work, despite what everyone is starting to suggest.
Facebook’s defence
The five days it took Facebook to make any official comment on the Cambridge Analytica saga speaks volumes about the company’s reticence to say anything other than ‘sorry, we will do better’ at this stage. Believe it or not, I have some sympathy for Facebook in all of this. It really has not done that much wrong.
At the very worst some of the executives may have been economical with the truth and some of their corporate affairs people really could learn how to deal with governments in a more respectful way. But for all the headlines demonising Mark Zuckerberg and demanding that users #DeleteFacebook, there is a significant absence of any major crimes of which to accuse the company.
That might lead you to expect Facebook to leap forward and defend its corporate reputation, to assuage its declining share price and general corporate reputation. But it, too, is trapped here. Facebook might have done very little wrong, but the fact that much of what is being reported is permissible according to Facebook’s user agreement does create something of a crisis for the social media giant.
As users discover that their phone calls and SMS messages may have been collected by Facebook for many years, or that their own data could have been accessed by Facebook via one of their friends on the social media platform, there is a growing sense of shock. But as several Facebook’s executives have pointed out, all of this is clearly stated in the terms and conditions which every user is presented with before they join Facebook.
“People are expressly asked if they want to give permission to upload their contacts from their phone – it’s explained right there in the apps when you get started,” Facebook pointed out in a terse statement earlier this week.
While normally we might expect Facebook to present its case more strongly, it too is opting for a quieter, more conservative stance because the more it makes a legitimate defence of its systems the less sympathetic it becomes, and the more negative PR about the company and its unparalleled data it generates.
CMOs keep quiet
Usually it’s the big advertisers that make the big headlines when it comes to digital marketing. The last few years have seen a string of top CMOs step onto conference stages and demand better this or lesser that. But they, too, have been curiously quiet thus far on the topic.
The reason for their reticence is simple. Not only are most of them acutely aware of the extended data services that exist for most customers who use social media, they have been using that data for their own commercial tactics for several years now – and not just Facebook data. Every major digital channel presents clients with significantly more information on their target consumers than those consumers realise.
It is not just digital channels either; consumers are completely unaware of the degree to which their own behaviours and activities have been recorded, sold and used to market to them. Most consumers in this country continue to believe that when they whip out their supermarket ‘loyalty’ card it is to get a reward for shopping there. The idea that the card allows the supermarket to scan the shopper, just like the tin of beans and bag of chips in their trolley, and add their name and address and buying history to the data record is lost on all but the most savvy of shoppers.
In the past two weeks I’ve had the same uncomfortable conversation with several senior marketers. We start with a quick summary of what is going on in the Cambridge Analytica saga. We shift to what this might mean for Facebook, digital media and general marketing. And then, after a pause, the marketer inevitably says with a sheepish grin: ‘We’ve been doing this shit for years.’
There is nothing illegal in building complex CRM systems that profile the customer market. The snag is that the consumers in question don’t realise that it has been going on. That those boxes they tick and the cards they swipe have been feeding advanced customer analysis tools for two decades. And no one out there in big brand land wants to stick their head over the media parapet and decry the current scandal because, quite frankly, there is something relatively similar going on at many big corporations.
The end result is a peculiar stand-off in which none of the industry’s constituent groups really want to say anything about the biggest marketing story in a lifetime. It makes no sense for anyone to start writing long columns about what is going on or why no one in marketing wants to talk about it. Best to keep quiet and let the storm pass.
Oops.
Professor Mark Ritson will be teaching the next Marketing Week Mini MBA course from 24 April 2018. To book your place, sign up here.
Forty. Bloody hell! It’s an interesting milestone. Unlike other anniversaries such as your 18th or 21st that are largely ceremonial, you feel your 40th marching up the hill about six months before it arrives. It’s a proper thing. A line in the sand.
For Marketing Week it is a very important achievement. The world of marketing has changed so much in the past four decades that any brand that was created in 1978 to serve marketers and is still standing deserves a pat on the back, and then probably a sit down and a mug of cocoa.
If you look at the ancient editions of Marketing Week you get a glimpse into the glorious (and not-so-glorious) history of British marketing. The first impression of our older editions is that the world of marketing has changed massively.
Where once the battle was TV versus print, today it is digital against traditional. Credit cards were once the hot new technology for monitoring customers; now we have little spy robots perched on our mantelpieces that we talk to while they listen to us. We used to worry about the relationships between clients and agencies; now the digital duopoly is bigger than any agency, and every client.
But scratch a little deeper and, actually, the main themes of marketing remain the same today as they were in 1978. The search for differentiation. The need to understand a changing customer. The battle for brand supremacy against your fellow marketer. The need to stay ahead.
In truth, marketers should review the past 40 years in three very different sections, each with its own metabolism. Seen this way, I think the last four decades of marketing – and the whole life of Marketing Week – makes a lot more sense and seems a lot less transitory.
I see marketing as a spinning wheel with three bands. On the outer ring is the tactical band spinning at a dizzying rate of change. In the middle ring, spinning at a much more sedentary pace, is the strategic band. Finally, at the centre of the wheel, is the bullseye, hardly moving at all – the need for market orientation.
The tactical band is, of course, the one we all love to talk about and the one that, as the decades have unfolded, has become more and more the focus for marketers. I call it ‘tactification’ and it is there for all to see. Most marketers think marketing is just the way we communicate with customers and they obsess about outbound marketing, content and social media as if they are the only things that matter. While this stuff is all part of our discipline, it is tangential stuff and merely the execution of strategy.
But it is constantly changing. And if you believe marketing is just the technology of promotion then it is easy to see how the past, with its paper-based view of the world and ‘broadcast’ model taken from an ancient farming metaphor, is so quickly dismissed by young, untrained marketers. Forty years ago we were worrying about how to write newspaper ad copy; today we work on VR headsets as if our lives depend upon it. The two activities are so different, it would be hard not to conclude marketing has clearly changed. And changed completely.
But move further towards the centre of the wheel, to the strategy band, and it is quickly apparent that things are actually not that different now compared to 1978. We still face the eternal challenge of segmenting our markets into smaller, more actionable groups of consumers. Then, like now, the debate about mass marketing and targeted marketing rages on. We still have to select segments through targeting and we still need to position those targets. The holy trinity of marketing – segment, target and position – was well entrenched in 1978 and it remains that way today. At least for those who know what they are doing.
As soon as you step back from the tactical ‘Sturm und Drang’ and look at the strategic challenge that marketers face, it’s readily apparent that while the nature of the challenge might have shifted, the fundamental strategic marketing questions of who we want to target and how we want to position to these targets remain just as big now as they were back in 1978.
And then to the centre of the wheel of marketing. No matter what they might tell you at conferences, the bullseye is not tech or digital or content marketing. The centre of our wheel is the customer, just as it was in 1978. The biggest challenge and ultimately the biggest contribution we marketers can make to our organisations is becoming the link between the firm and the market. No one else does that in a company, and that makes understanding customers and bringing that understanding into the decision-making process of our employers the prime directive.
Of course, that customer has changed a lot in 40 years. But not quite as much as many would have you believe.It might be cool to think that millennials are a tribe somehow distinct from anything that has come our way before, but the reality is that younger demographics have been with us since the invention of marketing. Most, if not all, of their traits are attributable not to some incredible new theme in society but rather the more eternal and reassuring phenomenon known as ‘youth’.
But my bigger point is that, while customers are always changing, always surprising us, the USP of our profession, our centre point, is understanding these customers; not speaking for them or assuming their opinion but going out, getting their perspective and using it as a means to help drive our companies forward. That part – the bit where we have to work out what makes the customer tick – remains our biggest challenge and usually our most misunderstood mission.
Here’s to lots of coverage about how much marketing has changed with accompanying shots of marketers in flares, dodgy facial hair and bright Laura Ashley frocks. But here’s also to acknowledging how much of the professional challenge of marketing remains the same now as it was back then. Understand the customer. Develop a strategy. Pick the right tactics.
So happy birthday, Marketing Week. It is a hell of a thing to make it to 40. I had my introduction to you when I was a marketing student in the 1980s, my orientation when I was a marketer in the 1990s, knew you as a competitor when I was writing for rival title Marketing in the 2000s, and now – and for the last 10 years almost – you are my home.
Mark Ritson debates Byron Sharp on mass marketing versus targeting at the Festival of Marketing 2017
The ads for this year’s Festival of Marketing have sparked happy memories of last year’s event. The organisers asked me and my old arch nemesis Professor Byron Sharp from the Ehrenberg Bass Institute to close the conference with an animated debate about Sharp’s seismic impact on the field of marketing and, specifically, some of his more contentious evidence-based claims that I had taken exception to.
In the months preceding the event I planned to take some time out to review Sharp’s impressive corpus of work and build an impressive empirical case with key points and perhaps a few dress rehearsals. In the end I ran out of time, got massively pissed the night before the debate and ended up in Waterstones four hours before the debate with a gigantic hangover and an urgent need to speed-read both editions of How Brands Grow and write down my bullet points on the back of my Tube pass.
A short read and then a long Tube trip across London and, before I knew it, there was Byron and off we went into a massive conference hall featuring two lecterns and 3,000 assembled marketers. It might have been my imagination but even Professor Sharp’s infamously ice cold demeanour moistened for just a second as we entered the cavernous room.
I made sure I started by explaining just how good and how influential How Brands Grow is, and how much I agreed with so much of it. It is one of the great works of our marketing generation and has done much to pull the marketing discipline back to reality, towards empiricism and away from the corporate wankery that passes for branding so much of the time these days.
“But,” I observed half way through my speech, “you did not come to hear me make sweet academic love to Byron. You came here for blood.” The audience stiffened. My critique centered on the most contentious and debated conclusion from How Brands Grow – the focus on ‘sophisticated mass marketing’.
What segmentation really means
Sharp has been misquoted and misrepresented frequently on this point in the past. He is not necessarily opposed to segmentation and targeting but unfortunately his work has been used to make the case for ignoring segments and targeting everyone. That is not quite what Sharp says; what he actually claims – and I quote – is as follows.
“Sophisticated mass marketing doesn’t mean targeting everyone, nor does it mean treating everyone the same. It means understanding the heterogeneity in your market, and then catering for only the differences that matter in order to maximise reach while not eliminating the benefits of scale. This is hugely different from deciding that your brand can’t appeal to a large part of the market – a surprisingly defeatist strategy that hides under the title of ‘target marketing’, and results in many marketing briefs telling media agencies that the brand’s target audience is less than a fifth of the people who actually buy the brand and category.”
I disagree and agree with this point. It’s true that so much segmentation is arbitrary and built on differences that do not “matter”. The popular target segment of millennials is a case in point of a segment that fails almost every test of meaningful behavioural or attitudinal relevance.
But when segmentation is done well – with data and skill – it can and does reveal very different customer segments who want different things and see the world and your brand in different ways. Too often Sharp, willingly or not, has been used to argue down the classic and effective strategy of target marketing.
A great brand plan will deliver short-term results within the year and set up longer-term advantage from stronger brand equity.
I believe in segmentation. I believe in targeting some of the market. And I have – for many clients – built successful positioning strategies to specific segments that have worked to tremendous fiscal effect. When you target correctly you can and do make often limited resources return a much greater amount. In our debate I used Apple – a company that currently enjoys 87% of all the profits of the smartphone category despite only securing 18% of the total unit sales – as proof that going after fewer customers is not only possible, it is often preferable to mass marketing.
Sharp, as you might imagine, defended his thinking eloquently and with immense heft. He always does. He had the disadvantage of being on the back foot so I had emailed him a precis of the points I would make and he was quick and adept at refuting all my arguments.
And then, the audience voted. Modesty forbids me from telling you the outcome (I won) but it was a great way to end a fantastic conference.
The disparity of votes, which I don’t think it’s appropriate to crow about here (59% voted for me, 27% for Byron) reflect both the impact that Byron has had in changing the marketing mindset but also the reticence of many marketers to give up on the ‘holy trinity’ of marketing: segment, target and position.
Who is correct? Ritson or Sharp. Holy trinity? Or sophisticated mass marketing? Almost a year on from our debate and with a bit of retrospection I think I now know the correct answer. I think in the ultimate debate between Ritson and Sharp, the winner is…Field and Binet.
In their increasingly seminal book, The Long and the Short of It, Peter Field and Les Binet make a convincing, evidence-based argument that there is a decline in marketing effectiveness. Ignore all the cock at conferences about ‘marketing math’, AI, programmatic and the evolution of marketing science. The simple, unavoidable truth is that our marketing is less effective than it used to be.
Looking at thousands of campaigns over many years has enabled Field and Binet to conclude why this is the case. Marketers are increasingly short-term in their focus. They spend money on immediate activation rather than longer term brand building. They opt for bottom-of-the-funnel tactics because in a one-year time period that will always pay better.
But in the most important chart in this most influential of books, Field and Binet demonstrate that over the longer term this short-termism blunts the overall impact of marketing. Too much time spent picking the low-hanging fruit means less time watering the tree. Eventually the tree stops growing.
How does this insight make Field and Binet the ultimate winners of the targeting question? Unlike my binary debate with Sharp, Field and Binet hedge their tactical bets. They advise a 60/40 split for optimum impact. Across many different categories (and therefore there may be variance in this calculation from brand to brand, so take care) you want 60% of your budget invested in long-term brand building and 40% on more immediate activation.
What’s more, Field and Binet observe that when you embark on the 60% “long of it”, you should target everyone in the category for long-term impact. Their research indicates that this mass marketing approach garners a superior return. So, one nil to Byron. But they also observe that for the 40% “short” stuff the activation executions work best if you target specific groups of consumers. Ritson equalises in the second half with a half volley from the edge of the area.
The balance between long and short term
In my experience there are often two equally flawed senior marketers running most of the big brands in the UK. Long-term Leslie has a focus on brand and customer satisfaction and improving the overall perception of her product or service, and likes hanging out with agencies. Typically, she spends big on old-school above-the-line channels like TV and outdoor.
Then there is short-term Stuart who is a bottom-funnel feeder. He goes after immediate sales from specific sub-groups of customers, usually with very granular, digital campaigns, and likes his free trips to California. Leslie is usually fired within two years. Stuart gets his marching orders a year later. Both aren’t very good.
A great brand plan will deliver short-term results within the year and set up longer-term, enduring advantage from stronger brand equity and improved funnel conversions. A great brand plan manages to hit short-term sales targets while also funding longer-term brand objectives that focus on brand health metrics.
It will combine a mix of channels. Not just because there is clear evidence that the more channels we use the better the ROI. But also because my short-term activation works best with more targeted, immediate activation tools like sponsored posts on LinkedIn, while my longer-term objectives are usually better served with mass, atomic bomb-style media buying with radio, outdoor and TV.
Crucially, your plan will always have clear and SMART (specific, measurable, achievable, relevant and time-bound) objectives. But some will be short-term and based on a very specific segment and a very specific financial outcome. While others will go after all the consumers in the category with brand-based objectives that are measured with attribute metrics and funnel data from your brand tracking at the end of the year.
The short-term, targeted objectives will change from year to year. The longer-term brand objectives will be measured annually but likely remain in place for many years. Ideally 10. It’s an approach I am not just in favour of but which I am now using with several large client brands. Brand plans that allow targeted segments and mass marketing appear, at least at an early stage, to work very well.
And why wouldn’t they? It’s the best of both worlds. The long and the short. The targeted and the mass. The top and the bottom. Digital and traditional. Sharp and Ritson. Binet and Field. Over and out.
You can feel it in the morning. An auburn tinge in the sunrise, an impatience in the leaves above, and a distinct nip in the air before you close the door at night. Autumn is on the way. Perhaps not down south, where summer bumbles on. But it was 17 degrees yesterday in Carlisle. Summer is winding down.
Soon it will be autumn, then winter and before you know it, March will usher in spring 2019. And spring won’t be the only thing happening in a few months. At the end of March, between the quarter finals of the FA Cup and the Grand National a few weeks later, the UK will leave the European Union.
The official date is 29 March 2019. Just over 30 weeks away. That’s when the UK will enter the ‘transition period’, which starts an exit process that will conclude at the end of 2020. Whether it’s going to be hard or soft, we are only a few months away from it happening.
I am not sure of your own personal proclivities and how you regard Brexit. As someone married to a foreigner, who spent much of his European working life on Eurostar, you can probably guess the way I voted. Many years ago when someone asked me at my London Business School leaving party what I would miss most about London, I answered “Italy”. Enough said.
But as marketers, how should we feel about Brexit?
In many ways, the marketing part of our DNA should support the move. We are, after all, market-orientated. We believe in finding out what customers want and then delivering that to them. And in a rare and rather egalitarian move, the British Government did just that in 2016. More than 30 million people voted and 52% of them wanted to leave the EU. No matter what your personal take on the matter, the marketer inside should accept and even embrace the outcome and the way we reached it.
Then there is the way that the vote for Brexit was secured. If you look at the data prior to 2016 it’s clear that British people were critical of EU membership but also committed to remaining within the Union for the coming decade. And yet somehow the Leave campaign triumphed on that dramatic day in 2016.
The brilliance of Leave’s strategy and execution
The reason for the triumph should be apparent: from the outset of the referendum, the team behind Vote Leave were simply better at marketing. They ran rings around the Remain campaign in terms of research, strategy and tactical execution.
In terms of research, one of the biggest disadvantages that the Vote Leave team faced was that all the major political parties sided with Remain. That meant not only facing significant political opposition but also an abject lack of data compared to a Remain team that enjoyed access to all the political parties and their treasure trove of electoral research.
But what started as a weakness became a strength, as Vote Leave campaign director Dominic Cummings and operations director Victoria Woodcock built a completely new segmentation map of the British electorate from hybrid data that included social media, direct mail data, the electoral roll and a host of other third-party inputs. The marketer with the best map invariably makes it to the finish line first, and Vote Leave built a segmentation model that was not only more accurate and specific to the Brexit cause, but one that could zoom in to street level and identify what kind of voters were likely to live there and what approach would ensure the right response.
In terms of strategy, Vote Leave was again streets ahead. Its superior segmentation model enabled the campaign to target voters very specifically, with micro-messages built around clear psychographic drivers.
We’ve known for decades that psychographics represent a brilliant source for meaningful positioning. If you know the inherent motivations of a target consumer you are in the driving seat of persuasion. But we’ve also acknowledged that delivering specific messages to the right psychographic targets was all but impossible.
Did the illegal 6.4% overspend enable Vote Leave to win the day? Only marketers can work this out.
We might know 12% of the population are ‘conservative, status quo-driven technocrats’ and the message we want to send to them, but we could not identify them out there in the market. Granular segmentation and digital media finally enabled psychographics to match its meaningfulness with newly found actionability, and the world changed as a result.
In addition to the micro-targeted communications, the overall Leave message, which centered on the threat from foreign immigration and the loss of British sovereignty, might not have appealed to most of the tolerant, liberal citizens that make up marketing departments. But that is not the point. We were never the target. That message did resonate with those who wanted to vote Leave or who were considering it.
More importantly, in a referendum where turnout was always going to be pivotal, immigration was far more motivating on the day than Remain’s tepid message of economic prosperity. Put more simply, Leave had a better, more powerful and significantly more emotional position than Remain. And they could bolster that overall message with micro-targeted campaigns in a 10-week tactical campaign that was timed to perfection.
The impact of Facebook targeting
Vote Leave was also brilliant at tactical execution. It served one billion targeted digital ads, mostly via Facebook, which proved an essential and influential medium for the Leave campaign. Regular readers of this column might raise an eyebrow at my salutary praise for Facebook in this instance given my rabid insistence that Facebook’s impact, and that of digital marketing in general, is often wildly overstated by marketers.
While that remains true, it turns out that if you started from scratch you would struggle to create a better communications medium for elections than Facebook. It’s granular, hyper-targeted audience data allows you to break down the voting population into very precise sub-groups. Its reach ensures you can deliver messages at a remarkable scale only bettered by TV. What’s more you can then target those sub-groups with very different messages based on their psychographic drivers.
Those messages are also hidden from the view of rivals and regulators because, unlike traditional above-the-line media, which is extraordinarily regulated during elections, Facebook messages can be delivered entirely legally with very little limitation or oversight. It’s perfect for election campaigns.
Vote Leave was also smart enough to engage a good agency to help it in its tactical campaigning. The campaign invested almost 40% of its £6.8m electoral budget on a small digital company based in Canada called AggregateIQ. “Without a doubt, the Vote Leave campaign owes a great deal of its success to the work of AggregateIQ,” Dominic Cummings concluded in 2017. “We couldn’t have done it without them.” AggregateIQ brought the digital smarts to the campaign refining the segmentation and testing, and retesting messaging with logarithmic obsession.
Yes, there may well be links between AggregateIQ and the infamous and now disbanded research firm Cambridge Analytica. Yes, there is also still a significant possibility that a long red dotted line can be drawn between Brexit and Russian interference and investment. Both these issues are still the subject of investigation and speculation, but I believe them to be distractions.
As marketers, irrespective of our personal leanings and the ongoing mystery that surrounds the Leave campaign, we must step back and admire what Cummings and his team achieved in the heady summer days of 2016. There is no doubt – no doubt at all – that this is the greatest British communication campaign of the last 50 years.
Look at the snaking lines of public opinion many months before or after the Brexit campaign and it is clear most British people wanted to remain. But in the all-important months – weeks, even – around the referendum date, the Vote Leave team did what we marketers are supposed to do. They changed attitudes and behaviour to the advantage of their organisation. And Britain will be changed forever as a result.
Rail against the result, but step back and admire the incredible marketing that enabled it to occur. Better research, better segmentation, better targeting, better positioning, better tactical execution all combined to win the day. Ignore rumours of Russians, fumbling apologies from Facebook and even the posh but perverted fingerprints of Cambridge Analytica. None of this is any excuse to question the will of the British people or the manner in which it was achieved.
What difference did money make?
But there is one issue that marketers should object to. In fact, it is an area where they might yet have a significant impact on whether a second referendum is ultimately required. Vote Leave was not the only operation working toward an EU exit back in 2016. Another campaign group, called BeLeave, was also working directly with AggregateIQ and was also spending large sums to persuade the British population to vote for an exit from the European Union.
Last month the Electoral Commission found “clear and substantial evidence” that, rather than being a separate and independent entity, BeLeave was essentially a direct extension of the Vote Leave campaign working under a common plan and, crucially, from the same funding sources. BeLeave spent £675,000 on digital marketing during the campaign. Most of that money, according to the Electoral Commission, was essentially sourced from Vote Leave and spent on a “common plan” and not a separate organisational agenda.
Simply put, Vote Leave was limited to a £7m campaign budget by election law in this country. Thanks to covert arrangements with BeLeave, the Electoral Commission says they were actually able to spend a total of £7,449,079.34 on their campaign. That finding is now official and representatives from both Vote Leave and BeLeave have been fined and referred to the Metropolitan Police as a result.
We know that Vote Leave broke the rules. We also know that they did it by funnelling extra resources through an associated political organisation. We know that this enabled the Leave campaign to add an almost half a million pounds or 6.4% to their ultimate marketing spend on their campaign. But the big question, the one that I would argue only marketers can answer, is whether that illegal additional investment was enough to swing the vote in their favour two years ago?
At first sight a 6.4% overspend would appear to be a minor issue. That is until you look at the margin of victory that Vote Leave enjoyed: it was less than 4%.
Two years ago, on 23 June, 17.4 million people voted Leave and 16.1 million people voted Remain. The difference was 3.8% of the total vote. If we take away that illegal additional spend would Vote Leave have triumphed? It’s not as simple as pointing to a larger overspend of 6.4% and a smaller differential of 3.8% of the vote and saying yes. Political marketing, no matter how well done, does not have a direct and total influence over all voters. But from my long and contradictory experiences of blowing marketing budgets on big campaigns, I think it could well have made the difference.
Did the illegal 6.4% overspend enable Vote Leave to win the day? What marketers – or rather, what a particular marketer with advanced analytics training and nothing better to do for the next few days – need to do urgently is answer this question. Use econometrics. Use regression Use stochastic modelling with a Bayesian trumpet chart. But work it out. Only marketers can do this. We might save the day.
I ask not because I am against Brexit in principle or because I do not admire the way that Vote Leave ran its campaign. I ask because I think everyone is missing the point. In all the investigations into Russia and accusations aimed at Zuckerberg the real issue is much more straightforward. According to the Election Commission, there were “serious breaches of the laws put in place by Parliament to ensure fairness and transparency at elections and referendums”. The responsible parties have been fined but what about the ultimate impact of the offences on the future of this country?
We must respect the will of the British people. But we must first respect the requirements of a fair and transparent referendum. Dominic Cummings, who is in my opinion a genius, has been clear on the pivotal role that advanced analytics and electoral strategy played in securing Brexit. Surely a marketer or media planner out there can use those same components to settle, once and for all, the real Brexit question.
Did an overspend of £449,079.34 result in the UK voting to leave the UK?
If you have a response to Mark’s challenge and can show your working, please email michael.barnett@centaurmedia.com.
Every advertising era has its guru. From Thomas Barratt and the advent of modern outdoor advertising to David Ogilvy and the creation of effective print ads, Rosser Reeves and the emergence of TV commercials to Lester Wunderman and the turn toward direct marketing.
Media changes with the decades and so do the thought leaders that represent and promote them to marketers. Interestingly, each medium seems to also reflect its guru’s own personal positioning.
Barratt applied the flair for controversy that he prescribed for successful advertising to his own reputation. Wunderman’s clinical approach to media was reflected in the way he promoted himself and his firm. Ogilvy made his own personal narrative as absorbing as anything he prescribed for effective print advertising.
It’s therefore highly appropriate that, in this age of Facebook and social media, the most influential media thinker of our current age is Gary Vaynerchuk. Some marketers might bristle at my elevation of Vaynerchuk to such a vaunted role but his social media statistics, if they are to be believed, speak volumes. His millions of followers across LinkedIn, Twitter, Facebook, YouTube and Instagram – where he is known as Gary Vee – mean that more people learn from Vaynerchuk on a typical day than the combined total of students who settle down for a marketing lecture at the universities across the planet.
And that troubles me deeply. Not because Vaynerchuk is undeserving of his fame. No-one has worked harder or proven more adept in building a personal brand and public company. And lest this column appear to be a personal attack, let me also make it clear that Vaynerchuk himself appears at all times to be a personable and genuinely appealing individual. Despite his fame and fortune he has kept it real and passed a test that many, of lesser humility and character, have failed.
But it’s not his work rate or personality that worries me. It’s the fact that he is so frequently wrong. And that fallibility multiplied by the fame he now enjoys means that his wrongness echoes around marketing and media circles like a giant, ongoing thunderstorm of bullshit. Truly, he is an appropriate media guru for our post-modern, post-truth times.
Here is an overview of the main places where Vaynerchuk is wrong. Note I will not take issue with the personal brand or motivational aspects of Vaynerchuk’s content. That is for others, with expertise on these topics, to comment on. It is the media nonsense that I focus on here
In a move that will totally bamboozle Gary himself, I do not rely on my recent experiences on my couch or “simple common sense”, but rather use a chart featuring data from a representative sample of consumers to demonstrate the utter wrongness of his point.
Gary Vaynerchuk is wrong about Facebook and Instagram
Gary saying it (2:02-2:29)
Gary’s argument
Over and over again Vaynerchuk has the same prescription for brands and entrepreneurs. It does not matter who he speaks to. It does not matter where he is speaking. Irrespective of brand, target audience or objective Vaynerchuk has three go-to marketing “strategies”. They aren’t strategies, of course. Like most of the digital marketing industry, Vaynerchuk confuses communications and tactics with proper brand strategy.
His first recommendation is Super Bowl advertising. This might come as something of a shock given his general antipathy for TV advertising but in the binary world of Gary Vaynerchuk the Super Bowl is different from all other TV commercials because, I assume based on his own annual experiences every January, he believes that people watch ads during the Super Bowl but never at any other time of the year. Having acknowledged this one, extremely expensive outlier he then moves to his main two prescribed “strategies”: Facebook and Instagram.
To be clear, his recommendation is not to include Facebook and Instagram in the mix. No such mix is even countenanced. This is a recommendation to absolutely spend all your marketing budget (aside from your Super Bowl ad of course) on these two channels and on nothing else.
Why he is wrong
There is nothing wrong with investing some of your marketing budget on Facebook and Instagram. You’d be hard pushed to find a large company that does not do this, or anyone that would suggest the move was mistaken. But the idea that this would “literally be your entire spend” is hilariously wrong-headed.
It’s wrong because to instantly prescribe any tactical solution without first pausing to consider the strategic requirements that precede the media decision is dumbness personified.
What if the brand is positioned around privacy and supreme secrecy? Facebook for that? Does Vaynerchuk’s approach work if the target audience is made up of 70-year old high-rollers who use the internet but don’t touch Instagram? How about if the brand has the single objective for 2019 of increasing awareness from 12% to 25%? Why prescribe bottom-of-funnel tools for a top-of-funnel objective?
But it’s mostly wrong because it sets a very simplistic, limiting goal for channel selection. If Vaynerchuk has the budget he would choose just three channels and then double or triple down on them with his media investment. But that approach flies in the face of all the evidence that, rather than investing heavily in a few ‘superior’ channels, the prudent approach is to invest across as many channels as your budget will allow.
If Vaynerchuk’s advice were correct we would see a slew of effectiveness awards for campaigns just featuring Facebook and Instagram. We don’t. We see a lot of awards for campaigns that use Facebook and Instagram but also integrate those channels with TV, outdoor, radio and others.
In fact, there appears to be a clear correlation between more channels and more effectiveness in most cases. Even Facebook makes the point that its advertising works well with TV advertising, for goodness sake.
The killer chart
Graph: Facebook; Source: Nielsen TBE + CE meta analysis, commissioned by Facebook, November 2017
A Nielsen meta-analysis of 29 campaigns across TV and Facebook showed that dual exposure using both TV and Facebook leads to a higher lift in ad recall than TV-only or Facebook-only campaigns. To be clear, this data does not show that TV is better than Facebook, or Facebook better than TV. It shows that TV and Facebook combined produce a better result than one or the other on its own. It also shows that Vaynerchuk has no clue what he is talking about.
Gary Vaynerchuk is wrong that nobody watches TV
Gary saying it (24:38-26:08)
Gary’s argument
If Vaynerchuk remains intrinsically focused on promoting Facebook and Instagram as the ideal channel mix, he takes the opposite view of TV as an advertising medium. With the notable and bizarre exception of the Super Bowl, Vaynerchuk is convinced that literally no one is watching TV anymore.
As usual, Vaynerchuk is bereft of any data and relies initially on his own media consumption for empirical proof. But in recent years his stage show has usually included a section in which he uses his audience and a show of hands to demonstrate the fallacy of TV advertising.
Vaynerchuk shows that nobody, and he means nobody, watches traditional network TV anymore and that most have shifted their viewing to VOD options like YouTube and Netflix. As a result, he concludes that “70% or 80%” of the population don’t even have the chance to see a TV ad and that, as a result, the $80bn spent this year in America is wasted.
Why he is wrong
Too many marketers over the past decade have made the same mistake and used their own viewing behaviour and that of their industry friends to make media decisions and predictions that wildly underestimate the reach, impact and longevity of TV advertising.
Even if the sample of people in the theatre were big enough (it isn’t), even if their selection was done using a non-biased approach (it wasn’t), the context of being asked what you do at home by one of the world’s most famous denouncers of TV while surrounded by his baying digital exponents makes this already flawed insight even more ropey.
Ignoring the amateur hour that goes on at every Gary Vaynerchuk event for a second, we have a mountain of data to show that marketers are far more digital and social while far less likely to go home and turn on a TV than the average consumer. But marketers are not the market. And they are meant to know that.
In most countries, there is an ongoing representative sample of households (the UK’s has 12,000 panel members) who use increasingly advanced meters to measure not just what they say they are watching but what they actually do watch. Once you add proper data like that to the picture Vaynerchuk’s argument is not just disproved, it’s shown to be ridiculous. TV remains the dominant source of video for British people of all demographics, accounting for 71% of our video consumption and a whopping 95% of ad viewing time last year.
I’ve met marketers who have not only made the point that TV is not being watched but, on being presented with the data to disprove their claim, have disputed this data as being somehow inaccurate or biased. They drop shadowy hints that something is going on with measurement bias.
Let’s be clear what that would require. It would mean Ipsos Mori, BARB, Nielsen, Channels 4 and 5, ITV, BBC, Sky, the IPA and a host of similar organisations around the world are all in on a global data conspiracy; and that only Vaynerchuk and Facebook, those paragons of empirical accuracy, can be trusted.
If you take BARB data and combine it with comScore data, IPA Touchpoints and Rentrak box office data you can arrive at an accurate picture of where British people are getting their daily video from. Clearly the new generation of video on-demand (VOD) options are increasingly popular but TV in both its live and playback formats remains dominant for most British people.
Even the so-called millennials spend more time watching video on TV in 2017 than they did on the of YouTube, Facebook and all the subscription VOD players like Netflix combined. None of this fits with my personal behaviour. I hardly watch any TV of any kind. But I am able, unlike Vaynerchuk, to read a pie chart and appreciate that my own personal viewing is not representative of the world.
Gary Vaynerchuk is wrong about multiscreening
Gary saying it (7:43-9:14)
Gary’s argument
Vaynerchuk “day trades attention”. Hence his love for Super Bowl ads, which he believes everybody watches. But for all other TV programmes Vaynerchuk maintains that even when the tiny audience for network TV does tune in, as soon as the ad break occurs the whole audience reaches for their phone and tunes out from the commercial messages targeting them.
Vaynerchuk’s evidence for this is, as you might expect, is based on his own personal experiences and an occasional vox-pop at a mid-tier theatre complex populated by a few hundred digital entrepreneurs.
Why he is wrong
Vaynerchuk’s first error is to overstate the prevalence of multiscreening. Since advertising began almost everyone has claimed to avoid its impact. If you had stopped an ancient Greek on the streets of Athens in 800 BC he would have claimed to look away as he passed the posters that surrounded the temple.
Today, when you simply ask consumers if they turn to other screens like their smartphone during the ad break most will agree. Around 80% of British adults claim to multiscreen and we have no reason to doubt them. If you asked me if I have sex with my wife I would agree with that too. But that does not mean we are at it every evening, non-stop.
Observational data (of multiscreening during ad breaks, not me and the missus going at it) from the IPA confirms that only around 20% of total TV watching coincides with online use. That’s still significant and clearly likely to increase during ad breaks – research from Nielsen suggests multiscreen use doubles during the breaks while Facebook estimates that between 49% and 57% of ads are watched with a second screen in America. But none of this is the end-of-days scenario painted by Vaynerchuk.
His next mistake is using the undergraduate assumption that the only attention that matters is active, eyes-on-screen audience behaviour. That’s certainly an arousing advertising prospect, but rarely the reality of even the most effective campaign.
Advertising is a low-involvement medium. It is unwelcomed, unwanted and it interrupts the high-involvement content we chose to consume. That makes advertising often partially seen, actively avoided or only aurally consumed. TV advertising works from the cracks of quotidian existence, somewhere between making a coffee and an argument with your dad about the cat.
Vaynerchuk assumes attention is a binary on or off switch. That’s an over-simplistic notion and one that leads to his next fundamental error – assuming that a multiscreening viewer belongs to one screen and not to both. As the name suggests, simply picking up a smartphone does not signify a total lack of exposure to the big screen in the background. Far from it.
When viewers do, as Vaynerchuk suggests, whip out their phone during the ad breaks guess what they don’t do? Leave the room. Talk to their spouse. Fast forward through the ads. Mute the TV. Go for a piss.
Multi-screening viewers might turn their attention to the small screen in their hand, but they stay in the room with the ads playing (in the background) for significantly longer periods of time than many other viewers. That extended, albeit partial, exposure to TV advertising means that a multiscreen viewer is actually a more receptive target than the much of the potential audience for TV ads.
Several studies have demonstrated that when a viewer multiscreens, their ability to recall both ad campaigns and the brands featured in those campaigns significantly improves over the average viewer, who is more likely to engage in a host of other non-viewing practices.
And by the way, why would you not want viewers turning to a source of more information and even purchase in response to a TV ad? Multiscreening is not the arch enemy of TV advertising; it’s her sidekick.
The killer chart
Graph: Thinkbox; Source: Craft, SL3, mobile field test (7pm-11pm), August 2014
Screen Life 3 was a groundbreaking piece of audience research that combined a video ethnography of 18 households with mobile viewing diaries of 800 British consumers to answer many of the more complex questions about audience behaviours during advertising exposure.
The research revealed multiscreening occurs at approximately the same levels irrespective of whether the audience is watching live TV, VOD or recorded TV. Importantly, multiscreeners exhibit slightly higher ad recall than viewers who engage in other advertising avoidance activities.
What the second screen removes in terms of attention, it often returns in physical proximity and aural availability. Ideally, a viewer would sit transfixed through every ad but that rarely happens. In reality, however, picking up a smartphone is not the end of effectiveness as Vaynerchuk portrays it.
Gary Vaynerchuk is wrong that TV companies are ‘gone’
Gary saying it (11:53-13:19)
Gary’s argument
It’s perhaps no surprise, given he thinks no-one is watching network TV and that even when they do occasionally (presumably accidentally) encounter a TV ad they shift 100% of their attention to their smartphone, Vaynerchuk is certain that the TV companies “are all dead” and it’s “only a matter of time” before they disappear.
Why he is wrong
In Vaynerchuk’s world there has to be a paradigm shift in which streaming companies use their digital skills to take over from the traditional TV companies and their broadcast model. While that scenario is possible it is highly unlikely.
Despite claiming to be a “historian” Vaynerchuk is missing the traditional manner in which new media enter the world of the viewer and the advertiser. Rarely are incumbent media like radio (despite his claim above) or cinema completely destroyed and replaced by a new medium.
Back in the early 80s there were a lot of Gary Vaynerchuks predicting the certain death of cinema given the arrival of VHS movie rentals. Why would anyone pay triple the price to drive to a cinema to see a movie you could watch for less, in the comfort of your own home, when and how you wanted to?
The answer was that it was a lot more complicated than that. Thirty years on from the arrival of VHS, then DVD and now VOD, cinema has not only survived the invasion but prospered in terms of both attendances and box office revenues.
While it’s true that TV companies now face a major commercial threat from alternatives like Amazon and Netflix, it’s also true that most of these digital companies are struggling with the practicalities of actually making good TV. Netflix is the exception but given the company has never made a profit and currently owes more than $8bn in long-term debt options, I would suggest the prediction that TV companies are the ones that will be “gone” very soon might be a case of right prediction, wrong company.
One other potent reason for the continued survival of TV is that its advertising revenues continue to hold up relatively well in the face of repeated predictions from the likes of Vaynerchuk that they are about to fall off a cliff. One of the main reasons for that continued commercial success is the dramatic growth in one particular sector of the market for TV advertising – digital companies.
Keen to use the power of TV advertising to build their brands and recruit more consumers, the likes of Google and Apple have spent big in recent years. In the UK, online companies spent more than £600m last year on TV ads and are the fastest growing sector for TV advertising.
That growth proves Vaynerchuk wrong twice. First, if TV ads are such a waste of money why would the likes of Google and Amazon need to spend so much on them? Second, with so much growing revenue from such a huge sector of the industry, is he really sure TV companies are about to become extinct?
The killer chart
Graph: The Global TV Group; Source: Nielsen Ad Intel (US)
In the five years between 2011 and 2016 the big digital firms like Amazon and Apple have steadily increased their investments in TV advertising. According to Nielsen, the five major digital media companies upped their annual TV spend by around $800m in half a decade.
More recent expenditure reports suggest that these double-digit annual increases in TV ad spend have continued in 2017 and 2018, prompting the question: if digital advertising is so good and, presumably, free for most of these companies, why bother with TV advertising at all? It’s almost as if what they say about TV advertising to clients is entirely different from what they do inside their own businesses. Imagine that.
Gary Vaynerchuk is wrong that social media companies are about to boom big
Gary saying it (21:49-26:46)
Gary’s argument
Probably the biggest evidence that some, perhaps most, of Vaynerchuk’s content has a worrying degree of scam attached to it is his argument that if entrepreneurs do not follow his advice and go “all in” now they will miss out completely on the opportunity. He’s like a market trader hurriedly telling shoppers that there are only three Taiwanese toasters left.
His argument is that as more big businesses become aware of the true power of social media they will move most of their marketing money that way from outdoor, sponsorship and TV advertising. Because these social media sites are advertising marketplaces this means that over the next three years the CPMs will go up and smaller players will be unable to compete as they do today.
Why he is wrong
First, there is no evidence that media like outdoor are losing out to social media. In fact, in most countries outdoor advertising, which is itself increasingly digital in nature, is currently outgrowing social media advertising. While social media continues to grow, the prognosis that channels like Facebook and Instagram will suck all the dollars from other media channels in the near future appears highly unlikely.
The companies Vaynerchuk claims will be moving most of their media spend to social media – Coca-Cola, Budweiser and Mercedes Benz – don’t appear to have received the memo either. Coke’s senior insights manager for Western Europe, Adam Palenicek, told Marketing Week last year that his employer was “not particularly doing that brilliantly at the moment” in transforming its content for digital.
Mercedes Benz recently doubled down on a major new TV campaign in America called ‘What Makes Us’, in which six 30-second TV spots show off the different Benz models with each highlighting one of the company’s brand values.
Meanwhile Budweiser’s parent company AB InBev appears unlikely to move its budget from sponsorship in the near future. It recently announced impressive global revenue growth and Jason Warner, the company’s president for Northern Europe, was quick to credit Bud’s World Cup sponsorship as one of the main factors in this success.
“As the official beer of the FIFA World Cup, Budweiser lit up the globe’s biggest sporting event with our most ambitious campaign to date,” Warner explained. “Even post-tournament, Budweiser remained the number one contributor to volume and value growth across total trade.” That does not sound like a man about to turn his back on sponsorship or TV and move his money to Facebook and Instagram.
Vaynerchuk is wrong in predicting that companies will shift most of their remaining media budgets across to digital in the next two or three years. It makes no sense.
The killer chart
In a study commissioned by Thinkbox, Ebiquity and Gain Theory used their databanks of existing, client-funded data and analysed over 2,000 advertising campaigns across 11 categories to uncover the impact of different forms of advertising on both short and long-term profit.
The results suggest Vaynerchuk’s predicted shift in client spending from TV to digital media is unlikely to transpire for two reasons. First, online video and display simply do not perform well enough to deserve greater investment levels. Second, TV advertising’s place in generating the best ROI and providing the most substantial contribution to profitability is unequalled.
If there is a major shift in budgets coming in the next few years it will be despite, not because of, the effectiveness and efficiency of TV.
None of this matters anyway
I am well aware that my opening paragraph makes this whole column redundant. I have but a tiny fraction of the following and fame of Vaynerchuk. My influence on marketing is minor compared to the giant dark shadow he casts over our discipline.
Twitter provides a suitable comparison point. For every marketer I reach with a tweet, Vaynerchuk will connect with 50 times that number.
One can make an ignoble argument that quality might trump quantity in our respective followings. Indeed, one of the great services that Vaynerchuk performs is as an idiot magnet for marketers. Make no mistake: Vaynerchuk himself is anything but an idiot. But whenever I encounter a marketer who asks what I think of his latest content I know I am in the presence of the vocal majority in our discipline who cannot find their ass with either hand.
But sheer numbers and global influence mean that, optimistically, I have less than a percentage point of Vaynerchuk’s impact on marketing and media. I’ve tried in the past to suggest a public debate but my requests have been met with (amiable and respectful) rejection and the suggestion instead of a pleasant glass of wine. Tempting but pointless.
Perhaps now that I have committed my critique to paper the great Gary Vaynerchuk will reply with a rejoinder to the five points above. I very much doubt it. How do you counter empirical data with personal anecdote? Is course correction possible or even preferable when you are making so much money talking nonsense?
The likely option – the only option – is to carry on being Gary Vaynerchuk and being wrong, wrong, wrong, wrong, wrong about media. We get the gurus we deserve after all, and you could not invent a more suitable spokesperson for social media.
This year has begun pretty much the way 2018 ended, with a spate of big advertising campaigns that have divided the marketing community. Kaepernick for Nike. Elton John for John Lewis. Not to mention a certain razor commercial/public health broadcast for you know who.
Time and again the marketing community is split, apparently down the middle, about the commercial efficacy of the campaign in question. We discuss, we debate and then agree to wait until the sales figures are announced.
At face value, using the future fiscal performance of a brand as the ultimate measure for whether an ad is good or not does make sense. Aren’t we here, ultimately, to increase the revenues and profits of the brands we market? What better measure could there be than sales?
While it’s true that marketing’s mission should always ultimately be to find customers, increase revenue and generate more profit, there are some significant issues with using sales as a measure for advertising success.
The quarterback exception
Patrick Mahomes may not be a name you are familiar with, but over in America at the moment he is among the most famous athletes in the country. Mahomes is the quarterback for the Kansas City Chiefs American football team. Last weekend the 23-year-old displayed composure and capability beyond his years to produce a sparkling performance in the AFC Championship game – the qualifying match to see who will make it to the Super Bowl
Mahomes threw the ball for a total of 295 yards during the game, with more than half his passes caught by his team mates. That spectacular performance, under the intense pressure of a big playoff game, earned him a quarterback rating of 117. The average last season among his fellow quarterbacks was 88, giving you some sense of just how well he played.
But the Chiefs lost and will not be going to Super Bowl LIII. Despite Mahomes stellar offensive plays, the Chiefs’ defensive unit played relatively poorly during the game, allowing their opponents to score a whopping 37 points against them including an all-important final touchdown to clinch the game in overtime.
You may have no interest in American football but the story is a perfect metaphor for marketing. Turn Mahomes into advertising and make revenues the equivalent of the final score in the game. The young quarterback played out of his skin, but his defensive teammates weren’t performing at anywhere near his level.
Revenues don’t belong to you, they come from a competitive tussle in the market that depends as much on rivals as it does your advertising.
Advertising, like a quarterback, is a very important contributor to any ultimate commercial success but it’s not the only variable in the calculation. If a company’s price is set too high, for example, or the product has fundamental quality issues or design flaws, no amount of great advertising will save the day. It might even speed it’s decline.
One of the givens of the Kaepernick campaign was that Nike had a great array of products, distribution and pricing to enable enthused customers to go out and buy stuff with a swoosh. It’s an obvious point but, all too often, when communications burns brightly, other aspects of a brand’s offer rarely achieve the same levels. Revenues don’t grow the ad is blamed for the miss when its performance was one of the few elements of the marketing mix that was done well.
The competitive context complication
There was another reason the Chiefs lost last weekend. It’s called Tom Brady. He is the quarterback of the New England Patriots, who outplayed the Chiefs in a thrilling and ultimately overpowering manner on Sunday. One might even argue that while the Chiefs played well, the Patriots simply played better.
In the same way, another confounding issue in using revenues to assess advertising is that even when an ad performs brilliantly, the subsequent sales numbers are as much a function of competitor activity as your own marketing tactics. Elton John could have pulled every heart string in Britain in December, but if Amazon had outspent John Lewis in advertising terms the impact of the John Lewis ad would have been significantly lessened. Not because the campaign was poor but because a competitor outmatched the spend or creative, or both.
And it does not always have to be a superior competitor that robs advertising and marketing of its expected glory. One of the best marketing campaigns I ever worked on was scuppered because our idiot competitor responded to our initial success by dropping its pants on price to a ridiculous level.
That tactic had three ultimate effects. First, our foolish rival took almost all the market growth. Second, it did so at a price that was unsustainable and eventually forced it out of the category in our country. Third, its foolhardy efforts made my client look – at least from a superficial point of view – even dumber than the idiot competitor, which now had three times our market share.
Whether they are geniuses, foolish or something in between, competitors have a very annoying habit of doing stuff while you’re doing stuff. And that stuff tends to impact revenues just as much as – sometimes more than – your own strategy and executions.
The fancy word for this is exogeneity. The simpler version is that revenues don’t belong to you, they come from a competitive tussle in the market that depends as much on rivals as it does your advertising.
The dreaded ‘T value’
Another manifest issue of using revenue as the benchmark of advertising impact is the always slippery issue of time horizons. When exactly are we going to start counting the revenue impact of the campaign? And when do you propose that we stop?
Researchers Peter Field and Les Binet make a very strong case that many of the major effects of advertising can only be assessed two or three years after the execution has been aired. That makes revenue estimates doubly problematic. First, because you have to be sure that some of the revenue bump you want to claim is not a causal hangover from a previous campaign. Second, depending on the category you operate within, it could well be a matter of years before you can make a proper estimate of your total revenue impact.
Timing is a particularly problematic issue for Gillette’s new campaign, ‘The Best Men Can Be’. It’s entirely plausible that the initial effect of the campaign and its broad coverage, salience and sudden support from women and other engaged consumers could send sales up in the short term.
As the initial bump fades, however, there is an equally plausible argument that disaffected Gillette consumers will jump ship when they next need new blades and this could result in the brand losing share in the medium term.
Then, as younger consumers join the category, the modern version of ‘The Best A Man Can Get’ begins to restore share and ultimately grow the brand’s revenues. Another equally plausible scenario has Gillette losing 4% share in 2019 and an army of haters proclaiming this ‘toxic masculinity’ campaign a total disaster. In truth, Gillette has been losing this share annually in America for the past half-decade.
Whatever the strategic objective, that goal must also become the measure of success.
The moment when you actually make the assessment of revenue impact is almost as important as the campaign itself. I once went on a massive flashing bender in Manhattan with the boss of a very high-end luxury brand who told me, during a very indiscreet cigarette mid-way through our session, that we could literally stand there on 5th Avenue chain smoking for the next 12 months and we’d still look like geniuses to all and sundry.
My wily boss had worked out that a combination of newly restored economic growth, a very good slow-burning marketing effort by his predecessor, combined with rapid restocking by our wholesalers, meant that sales were bound to grow in double digits and we were certain to get all the credit irrespective of what we did with our marketing budget for the year.
All too often we look at the moment an ad was launched and take that as the starting point for the trajectory of the brand’s revenue. In truth, advertising is usually the corporate equivalent of a match strike: gone in a brief and tiny puff of smoke.
It takes a rare and enormous outlier of a campaign to independently and immediately move the revenue needle into the black or red. That can occasionally happen. But more often, bigger lurking variables precede the campaign and provide the real explanations for revenue growth or decline.
What’s to be done?
If revenue is such a fallible metric, how are we meant to asses an ad’s impact and effectiveness? Ultimately our goal might be revenue but to achieve that goal most campaigns rarely set out simply to sell more stuff to more people.
Bottom-of-funnel, short-term campaigns might have exactly that purpose and in those cases immediate sales jumps can and should be used. But more usually a campaign identifies the correct strategic levers to be pulled to eventually drive revenue and profit growth. It might be an increase in consideration, a decrease in price sensitivity, or an attempt to generate better levels of brand preference.
Whatever the strategic objective, that goal must also become the measure of success. If you created an ad to change the perception of the brand and eventually increase sales, then set the perceptual shift as the measure of your campaign’s success.
That means three very important things. First, you need decent pre-campaign benchmarks to show the target levels of consideration or preference your brand enjoyed prior to your campaign, to demonstrate (hopefully) a shift in that metric post-campaign. You don’t get a time machine as part of your marketing tool kit. It’s no good getting excited over 35% consideration among the target segment if you don’t know what it was before you ran your ad. It might have gone down.
Second, you have to be incredibly clear what level you aim to achieve for your chosen benchmark. Simply aiming to increase brand awareness will not do. What did you explicitly mark as the success level you wanted to achieve for your marketing investment?
Finally, you have to add the ‘T’ variable and specify the time period when your objective will be achieved. It might be Q1, mid-year or at the end of the financial year. But when is this result going to be achieved and when will you re-measure to prove the progress?
It’s not rocket science but a well-run campaign is clear on the strategy and the goals that it has set itself. It has benchmarks to prove the problem and also to set the context for any post-campaign improvement.
Yes, it is ultimately all about revenue. But this is a lousy measure of performance for most ad campaigns and an even worse diagnostic for post-campaign assessment.
Advertising is not the only variable to drive revenues. Competitors have a big impact on your market performance. And time can make revenue returns very hard to isolate and predict for even the best campaign.
Measure the success of a campaign on its ability to deliver on the strategic objectives you set out to achieve when you created it. The only way to assess whether Elton sang the blues over Christmas or ended up being a rocket man for the brand is to ask John Lewis to outline the strategic objectives for the campaign and whether those objectives were achieved on the appointed date, versus the pre-Elton levels from October.
While there is a brutal logic in linking ads to immediate revenue changes, it’s the wrong approach to apply.
Alas, I am old. I can remember glimpsing the initial efforts of MTV on American TV screens and then, a little later, on the sets back in the UK. And I can recall the videos that dominated those early years of the nascent music channel too. There was a lot of Billy Ocean, way too much Def Leppard, and a whole series of dodgy Whitesnake videos (ask your dad).
But more than anything I remember MTV as essentially a promotional channel for Dire Straits. You couldn’t make it through even the briefest visit to the channel without Mark Knopfler and his band of middle-aged musos turning up on rotation and rocking out.
I hated it. Knopfler’s “bee-bop-a-lula baby what I say” lyrics. His stupid red headband. The obvious lack of cool. The unending guitar solos. It was everything a teenager was meant to hate. The opposite of what Frankie was saying and Morrissey was doing. So I hated it.
Time passed and I, to my total surprise, became old. And a strange thing happened. It occurred so slowly that the change was all but imperceptible. The odd foot tap. A twist of the dial every now and again. A brief smile when ‘Sultans of Swing’ started to play in a bar. The gradual addition of Knopfler’s songs to my Spotify playlist. A genuine love for ‘Sailing to Philadelphia’. I began to like Mark Knopfler.
It took 20 years but the very same songs I once winced at became acceptable, enjoyable even. If Knopfler toured anywhere within a 50 mile radius of me right now, I would go.
Something hated becomes loved over time. Call it the ‘Knopfler effect’. Ageing, lifestyle and the general passage of time mean that our tastes and behaviours evolve in relatively predictable ways. We encounter unavoidable demographic gateways along life’s winding road and they push us in different trajectories.
You pass 30 and suddenly find yourself magnetically attracted to the windows of real estate agents. You hit 40 and start gardening. You reach 50 and become enraged by the abject lack of quality in the music of today versus songs of yesteryear. And spend time bemoaning this fact to anyone you encounter.
There’s stuff you don’t think you will do when you get older. But you do. The Knopfler Effect is, to some degree, unavoidable. And it is suddenly at the heart of a huge debate currently engulfing television advertising and its ongoing centrality to marketers.
Up until now it would have been easy to assume that the relationship between TV broadcasters and Ebiquity, the marketing and media consulting firm, was extremely chummy. TV affiliates, like Thinkbox, quote Ebiquity research as the gold standard when making the case for TV advertising. Every time Ebiquity runs a big analysis comparing different advertising media, TV invariably comes out on top.
The reason Ebiquity is so attractive to TV marketers is that in the cacophony of bias and vested interests that is the modern world of media effectiveness, the company provides an expert and properly independent voice.
Ageing, lifestyle and the general passage of time mean that our tastes and behaviours evolve in relatively predictable ways.
Ebiquity runs the numbers and report the outcomes without any concern for any of the players in the media game. They are cold-hearted reporters of fact and when they do their gardening there is not a wall in sight. The name might suck – badly – but Ebiquity has come to stand for something that we rarely encounter these days in media: truth.
Its objectivity and influence mean that its new report, ‘TV At The Tipping Point’, has caused a significant amount of consternation in TV land. Ebiquity continues to cite TV advertising as the superior advertising medium for reach, ROI and long-term profitability. But its analysts are less certain that this superiority can be sustained beyond the next five years.
Specifically, Ebiquity thinks the current data from the UK suggests we are approaching a “tipping point” in which the gradual reduction in the reach of linear TV will have a demonstrable impact on its value and utilisation as an advertising medium.
TV’s uncertain future
This is not the ‘death of TV’, as predicted for the past decade. But it is an evidence-based analysis of tectonic changes in the current landscape of media planning. And it hinges on the existence or absence of the Knopfler Effect.
Let’s explore these complex points via a series of charts.
Despite significant changes in the media environment – specifically the emergence of subscription and ad-funded video-on-demand (VOD) options like Netflix and YouTube, respectively – TV’s reach and the time spent with the medium by the total audience have held up remarkably well thus far.
Marketers who tend to be single, urban and more digitally obsessed have looked at their own lack of TV viewing, extrapolated it to the general population, and concluded that linear TV viewing is already in terminal decline. The data from this country and elsewhere has plainly shown that to be untrue.
The combination of reaching so many people with great relative audience involvement and such an emotional medium has resulted in TV continuing to claim the crown as the most effective advertising medium. Clearly you have to possess the existing scale and distribution to justify TV’s big budget demands. But with those caveats acknowledged it is inarguable that TV ads are an important option for most big brands as they build their media mix.
Ebiquity has been at the forefront of the research to make this case. Its most famous assessment of different media concluded that even in the short term – and this data point will be important later – TV will generate returns superior to other media. Investing a quid in TV advertising will, all things being equal, likely generate a return that is 40% greater than any other alternative.
But all is not well in the world of TV. Older viewers (aged over 65) in the UK have continued to watch linear TV at the same significant levels as 10 years ago. But there is a direct correlation between audience age and reduced and reducing levels of linear TV watching.
Reduced, in the sense that younger people watch less TV. Reducing, in the sense that the younger the audience group, the steeper the decline appears to be occurring year to year.
There is a significant danger that younger demographic groups are not only watching less TV but continuing to watch less as time goes on. Obviously, it’s possible to extrapolate this data to a place where the 25-year-olds of today become the 65-year-olds of tomorrow, and ultimately predict a time when TV becomes an irrelevant medium for the 21st century.
This, of course, is the prevailing ‘death hypothesis’ so beloved by those who work in many corners of the digital world. But that might be an oversimplification – cue Dire Straits.
The counter argument to this death hypothesis is that young people eventually grow older. As they age they don’t necessarily continue to exhibit the same audience behaviours. The Knopfler Effect suggests that when and where they watch TV – and what they watch on it – might change in a manner that gradually replicates their older peers.
We become the boring, middle-aged fuckers we despised back in secondary school and our TV viewing eventually reflects this too. Younger demographics have always watched less TV simply because they have more fun and less reason to be at home.
They play sport. They go out in the evenings. They do a lot of fucking and even more looking around for people to fuck. Nobody ever got laid watching Bergerac (again, ask your Dad).
With the advent of ageing, kids, work pressures and the container-load of shit that middle age dumps onto most people from a great height, these once super-active 20-somethings eventually become exhausted 40-year-olds who flop onto their sofa at 7pm and reach for the remote.
They will probably not do it as much as their parents did in the 90s and noughties, but their TV watching should ramp up as the heady middle-aged cocktail of gentrification and exhaustion takes hold. That is certainly what the data in the chart above appears to show.
I say “appears” because this data from IPA’s Touchpoints database is comparative, not longitudinal. That’s critical because although it’s looks as if someone increases their TV viewing as they move through the two decades from late teenage years (the blue bar) to middle age (the green bar), that’s not what this data actually shows.
This is not the same person being measured across two decades; instead it’s different people of different ages being measured in the same year. It therefore assumes the Knopfler Effect, rather than empirically proving it exists.
The chart’s value hinges on the assumption that the 16-year-old of today turns into the 35-year-old of tomorrow. Twenty years from now, if we interview the teenagers that provided the data shown in that blue bar above, would we discover that their TV viewing now matches the current generation of 30-year-olds shown in the green bar? That’s what statisticians call a ‘big fucking question’.
According to Ebiquity there is growing evidence that if we were to stick around for two decades, or even half that time, and re-interview the teenagers of 2018 we would likely encounter an entirely different picture of TV viewing than the one we might expect from past generations.
Rather than assuming a Knopfler Effect in which younger viewers increase their TV viewing as they age, Ebiquity posits that these younger audience groups continue to reduce their TV viewing. Ebiquity suggests that the “inflection point” when the impact of this rapidly decreasing audience for TV begins to have a meaningful effect on the economics of TV advertising is approaching fast. It might be less than five years away.
As the 65+ group inevitably shuffle off to the great TV gameshow in the sky, as younger viewers with lower TV viewing habits replace them, and as their viewing continues to decline, the combination of these demographic changes begin to take their toll on TV advertising’s most precious advantage: reach.
If these significant declines in reach are accurate – like all projections, they are open to debate – they will have a dramatic impact on the cost of effective TV in the near future. TV ads are sold using the individual spot price but they are valued and selected by advertisers on their ability to reach a certain proportion of the audience – a cost per thousand (CPM).
As the number of ads needed to reach that notional thousand viewers goes up so too will the relative cost of TV advertising – especially among the younger demographic groups so prized by advertisers.
The equivalent cost to reach a target audience with TV ads has already increased dramatically (see the table above). According to Ebiquity, that cost will continue to rise and by 2022 become prohibitive.
The cost to reach 16- to 34-year-olds will rise by at least 70% over the next four years, it says. The cost to reach households with children will go up by around 50%.
Those numbers are problematic because advertisers are unlikely to pay the same price for a 30-second spot in the future, given it reaches such a significantly smaller audience and because they now need so many more ads to reach the same audience size.
If you recall, according to Ebiquity the current ROI superiority of TV advertising is around 40%. Should costs rise by 50% the increased investment necessary to achieve the same return essentially wipes out TV advertising’s long-held supremacy.
Before we all jump out of the nearest window screaming, a few caveats. As the TV lobby has already noted, it would be unfair to just use the numbers from linear TV as the basis for all the extrapolations. Broadcast VOD is a real thing and the latest data suggests that one of the major reasons that younger demographics are not be watching as much linear TV is because they now access it on other screens in a non-linear manner.
And while we are on the topic of watching TV on other screens, don’t ignore the even bigger point that people increasingly use their TV set to watch non-television content. Everyone from YouTube to Netflix to Disney has only one major goal in the year ahead: get their app and their content onto the TV screens of the world, ASAP.
The traditional TV companies and linear content are only one small part of the Venn diagram of 21st-century television viewing. Add to that the major changes in addressable TV that are around the corner and it’s clear that Ebiquity is, as it points out in its paper, presenting a worst-case scenario.
But the key limitation of the Ebiquity data in this new paper is that the Knopfler Effect has not been disproved, it has just been ignored in the calculations. The company’s extrapolations assume no Knopfler impact at all: teenagers will watch TV like a teenager even when they are in their 40s, it says.
That seems wrong. Even the most perky 20-something is going to age, have kids and get knackered eventually. And like millions before them they will turn on their TV for respite, rescue, recreation and Ready Steady Cook as their lives unfold.
As usual the correct prediction of future TV audience sizes probably exists somewhere in the middle. Between the perky flat line that the television companies promote and the scary rollercoaster declines contained in Ebiquity’s latest estimates, we will probably find accuracy. The killer point is that no one has longitudinal data for the past five years, and they certainly have not got it for the next five years that will follow.
Today’s 20-year-old will clearly not behave exactly like today’s 35-year-old when it comes to TV consumption. But they are equally unlikely to behave the same way as they do now with respect to TV 20 years from now. How much they will differ – the degree of the Knopfler Effect – remains a known unknown. All quantitative bets are therefore just that: bets. The race is yet to run.
What is clear is that the glory days of TV simply taking the biggest, easiest share of big branding budgets in this country is officially over. One contemporary urban poet described this era as a time when the TV stations earned their “money for nothing” and their media “cheques for free”. He was spot on.
A tougher decade awaits. That does not mean that TV advertising is dead or that its manifest advantages are now at an end. But it prompts a huge strategic question.
Given the digital duopoly of Facebook and Google made such huge inroads into TV’s share of marketing budgets during the last 10 years – a decade in which TV held most of the reach and effectiveness advantages – imagine what they will achieve in the years ahead as those advantages start to diminish.
When Bill Murray meets people who tell him they want to be rich and famous the actor always dispenses the same advice. “I tell them to try being rich first,” he told The Guardian in 2003, “and see if that doesn’t cover most of it.”
Murray’s point, of which he is more aware than most, is that fame brings its own challenges. And it’s a realisation that must also have struck home for the ‘godfathers of effectiveness’, Les Binet and Peter Field.
It would be unfair to portray these two ad men as anonymous in the 1990s and 2000s. If you were involved in advertising and marketing back then, both were well-respected experts. But over the last two years their work, which has been chugging along in one form or another for more than two decades, is suddenly garnering global attention and – even more impressively – being actively cited and used by hundreds of marketers.
I should declare an early interest. I was one of those people that read their work back in the ‘old days’ and am now one of their staunchest fans. It’s rare I get through a client meeting or a class without at least one quick side journey into their treasure trove of charts and models.
At the centre of their contribution, at least as I see it, are three distinct but connected observations. First, that there are the two undulating lines of growth representing short-term, performance marketing and longer-term, incremental brand building.
The fact that these two different paths to growth are not mutually exclusive and that they operate with very different dynamic implications is at the heart of the ‘long and short’ approach to marketing planning. Indeed, the most famous element of Binet and Field’s work is the general prescription of a 60:40 ratio of long- and short-term investments for maximum effectiveness.
This big messy world of advertising, with all its varied and contradictory inputs, does not easily correlate with the equally untidy world of corporate performance and marketing effectiveness.
The second observation is that marketing is simultaneously becoming less effective and more short-term in its focus. Look at the two undulating lines of the long and short from within a six-month window and shorter, performance-based marketing always looks like it delivers a much better return. It’s only when you take in a longer multi-year perspective that the fallacy of ignoring brand becomes apparent.
Finally, and with least exploration and application so far, is the implication of Binet and Field’s work for targeting. In recent years the impact of the Ehrenberg Bass Institute and its promotion of “sophisticated mass marketing” has broken one of our discipline’s most cherished principles – that you must segment and target in order to have the greatest marketing impact.
It’s becoming increasingly common to encounter senior marketers who happily admit to targeting “everyone in the category” or develop advanced marketing campaigns that openly attempt to reach every single consumer on the planet.
For many marketers that has been a tricky concept. The benefits of targeted marketing have been apparent for decades and yet the empirical power of Ehrenberg Bass is hard to resist. In that light, Binet and Field’s work provides a fascinating and attractive middle path.
Their work demonstrates that when you are adopting a long-term brand building path it pays to target the whole category and eschew any form of segmentation. But it also shows that when you are playing the shorter, performance game it makes more sense to target existing consumer segments to get the best return. Put more simply, you do not just want the long and the short of it, you also want some mass and some targeted marketing within that approach.
But as awareness of Binet and Field and their work has grown, so too has the sniping and counter-argument. In any discipline the rise of prevailing theories should lead to a series of countervailing concepts that attempt to disprove or qualify them. There is – it would seem – an almost perfect correlation between how much marketing thinking is venerated and how much it is immediately undermined. In the case of Binet and Field the work has been challenged on three fronts:
1. Bias
This is the least credible of the three critiques and will therefore occupy us the least, but there have been suggestions over the past two years that the work of Binet and Field, and indeed the operation of the Institute of Practitioners in Advertising (IPA) that sponsors much of the author’s work, has an inherent bias in favour of television.
The criticism appears to spring from two places. First, the IPA has accepted sponsorship money from Thinkbox, the British organisation that represents TV broadcasters in the UK. But the criticism ignores the raft of other sponsors, starting with Google, Facebook, Radiocentre and Newsworks, that have also worked directly and indirectly to fund both the IPA and Binet and Field in the past.
“We only accept sponsors who give us complete freedom,” Binet recently explained. “Our recent work has been jointly sponsored by Google and Thinkbox. There were findings that were uncomfortable for each but we published regardless.”
There appears to be an unsavoury connection being made between the general findings of Binet and Field’s work and TV industry funding. It’s true that over the past decade the authors’ staunch defence of TV and its effectiveness has stood out in a marketing discipline intent on portraying the death of TV as an advertising medium at every possible moment.
But the contrast between Binet and Field’s positive view of TV and the industry’s negative one is not a function of trade funding or bias, but rather an empirical versus non-empirical perspective. TV remains a fabulously effective medium, not because the TV industry is paying for it to be said, but because the effectiveness data supports that fact.
2. The ‘winners’ circle’ sample
Another recurring concern with Binet and Field’s work stems not from their funding but their sample. Since 1980 the IPA has run its Effectiveness Awards and that growing database has been the basis for all of Binet and Field’s results.
There is a recurring argument that this subset of campaigns fails the test of representation when compared against the total set of marketing endeavours. Specifically, the 1,000+ cases that have been submitted for an IPA Effectiveness Award are flawed on three levels.
First, they are all British and therefore tarred with the same dirty brush of being from just one (very peculiar) market. Second, they are more likely to be big campaigns because the IPA draws a disproportionate amount of attention from the big brand/big agency crowd and not from the smaller side of town. Finally, and most challengingly, these campaigns were already part of the winners’ circle – or at least their submitters thought they were. Why else submit them for an effectiveness award?
To be fair to Binet and Field they do not just look at the winners of Effectiveness Awards. By looking at all submissions for an award the authors have never suggested they are looking at a completely representative sample of all campaigns but that by looking at what does, and does not, generate effectiveness, there is the ability to see what enables campaigns to move from “good to great”.
The analogy Binet uses is football. He acknowledges his work only looks at the professional game but that in comparing the wide variety of performance at that level, any player could learn more about how to improve their own game.
Given the data set, this is a limitation that is impossible to avoid. It certainly makes some of the claims from Binet and Field’s work less applicable – for example the typical campaign duration might be shortening but with the caveat that this is only among IPA submitted campaigns. But when it comes to excellence and what makes for superior impact, is basing the insight on only the big and the best a confounding factor? Limiting, yes. Confounding, no.
3. Self-reported effects
One of the more recent concerns about Field and Binet’s output is that the source of much of their effectiveness reporting comes from those submitting the case for review. Once a case has been submitted to the IPA the submitter is sent a confidential questionnaire that asks them to assess the scale of the effect of their campaign across sales, market share and a total of seven different effectiveness metrics. These results are kept confidential but used by Field and Binet to assess effectiveness, given output metrics are usually disguised or hidden in public cases.
Quite correctly, several critics have questioned the validity of research that uses these self-reported effects as a basis for overall effectiveness. Ideally the actual sales surge or market share increase would be reported and correlated to. But this kind of openness and cross-comparison is all but impossible to get hold of on such a large scale. Does that make the use of self-reported effectiveness a weakness of the research?
Source: Les Binet and Peter Field, ‘The Long and Short of It’
It might, were it not for the fact that Binet and Field have repeatedly shown that where they do have external effectiveness data, there is a strong correlation between these effects and the self-reported large effects that they use for their usual analysis.
For example, those submissions that reported at least one very large business effect demonstrated almost three times the market share growth of those submissions that reported no large effects. Similarly, those submissions that self-reported more very large business effects were also more likely to enjoy significant ‘excess share of voice’ (ESOV) superiority – another commonly used external measure of campaign effectiveness – than those that did not.
In other words, asking marketers to report the size and scale of their effects is a limitation but it does appear a suitable proxy for actual effectiveness, and an efficient way to get round the issue of asking hundreds of companies to report incredibly sensitive business metrics each year.
Much of this debate centres on the imperfection of all data in proving marketing theory.
In an ideal world we would have this data, but the world is not ideal and we’ve known ever since Schrödinger opened that box that empirical research must make epistemological bargains with reality. The question isn’t whether bargains have been made but whether they invalidate the work.
In the case of Binet and Field the bargains are there for all to see. Clearly the work is based on a small subset of total marketing campaigns and depends, for much of its insight, on self-declared reporting from marketers who have a vested interest in making everything as impressive as possible. But even with these sizeable caveats the work transcends these limitations, from my perspective.
That will not and should not prevent others from attempting to prove or disprove the findings. Indeed, many of us are already exploring (with much smaller data sets) whether some of the key contentions are accurate.
General criticisms of Binet and Field are likely to increase as their fame and influence grows. Much of that criticism is warranted and is an essential part of the disciplinary maturity of marketing. In truth, much of this debate centres on the imperfection of all data in proving marketing theory. We do not study rocks or gravity or the rotation of the earth.
This big messy world of advertising, with all its varied and contradictory inputs, does not easily correlate with the equally untidy world of corporate performance and marketing effectiveness. In fact, you would struggle to find a more cat-like bunch of statistics to wrangle. Developing any knowledge from this changing, reflexive mess deserves enormous effort and expertise and, for all their limitations, I thank Binet and Field for making some sense of it all.
Well that’s Cannes over for another year. I don’t know about you, but I am exhausted.
Fortunately, I applied my tried and tested three-point plan for getting the most out of the Cannes Lions Festival to ensure that it was a productive week. The first part of my approach is to rise early, ideally before 7am each day.
Second, try and cram as much into each day as possible. And third, and most important, get as far away from Cannes and France as you can and get some work done instead.
Saving on air fare and spending time on actual work does not preclude you from partaking of the insights that come from the French Riviera of course. They are impossible to avoid. By Monday thousands of tweets, blogs and columns summarised the main themes from the festival for the unwashed, unfortunate and unimportant marketers who could not attend in person.
My favourite summary was from Digiday, which did a splendid job of summarising the bullshit from last year’s event and contrasting it with the (equally nonsensical) replacements on show last week. If 2018 was all about Facebook discussing disinformation, then this year was all about Facebook discussing equality.
Last year’s all-male ad tech panels were replaced with this year’s version, which included one woman. But most notable on the list was that “bullshitting about blockchain”, which was the theme of 2018, had been replaced by “bullshitting about 5G” instead. Spot on.
5G nonsense
It was hard to find an account of the big event that did not dip into 5G for a few suitably vague, hyperbolic sentences of total balls. There was Verizon’s CMO Diego Scotti telling Fox Business News that his company’s first device on 5G was likely to usher in a new era for everyone.
“When you think about the changes that 5G will enable in society, all the way from how we’ll change healthcare, for example, with things like remote surgeries or smart cities,” he explained to a slightly bemused Maria Bartiromo, “well now with 5G it will be possible when you have cars talking to cell phones, cell phones talking to buildings, and really realising the smart city dream.”
There was similar revolutionary talk from Street Fight’s Julie Bernard in her Cannes roundup. Her summary of the much-discussed conference conversation between Accenture Interactive CEO Brian Whipple and S4 Capital founder Sir Martin Sorrell was that “traditional models will lose business”.
Bernard predicted that if marketers did not pour (her word, not mine) their budgets into AR, VR and AI, and “leverage the massive speed and capacity of 5G when it rolls out”, their businesses would probably not survive the decade.
No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else.
The Drum was drawing very similar conclusions ahead of its trip to Cannes. People, it claimed, were soon likely to identify more with their home city and less so with the country of their birth because of the future and stuff. And all of this will accelerate as a result of 5G communications because, well, it’s 5G and everything is going to be different and faster after 5G takes over.
But there was bad news over in France for the 5G early adopters. A shadow was rising in the East. Su Xin, head of 5G technology for the Chinese government, was not in Cannes last week but was in his lab in Beijing, and his focus was on anything other than 5G. Xin had a big surprise for everyone because China is already focusing on…6G.
That’s right fuckers. We still don’t have 5G, and most people (especially those on stage in Cannes) have no idea what it really is, but the Chinese are already making it obsolete.
For almost 12 months a Chinese team has been working on a secret new 6G technology likely to render 5G redundant. Xin has been extremely guarded on exactly what his new infrastructure will be capable of but he did tell one Chinese news agency that his new technology will be “the G to end all Gs”.
Well I have some bad news for the Chinese and all those pasty laggards still sobering up after Cannes. I was keeping this development secret, however Su Xin’s fighting talk leaves me with no option but to reveal my hand significantly ahead of schedule.
Ritson’s new 9G device
Mark Ritson’s new 9G infrastructure
For the last few weeks I have been dividing my time between professorial duties, writing the odd column and creating a new technological infrastructure that I am tentatively calling 9G. I admit that, at first, I intended to christen my new technology a 6G system but then I read about the advances in Beijing and decided to be even more agile and disruptive.
Even then, I was halfway through writing 7G on the side of my new prototype (shown above in exclusive early test photos) when it suddenly dawned on me that this was exactly what the Chinese were expecting me to do. With a Machiavellian swipe of my Sharpie I changed the 7 to a 9 and stood back to enjoy my handiwork.
“Ritson, you marvellous bastard,” I said to myself with an evil chuckle, “you’ve cracked it.”
I want to use this column to announce that I am officially working on a 9G communications technology that will change everything, completely, forever. Its new components and incredible new speeds mean that it will be at least 30% better than whatever the Chinese come up with and even more superior to the crappy, old-fashioned 5G stuff they were talking about in Cannes last week.
9G is going to fix space travel, healthcare, parking meters and match all the socks in your top drawer. Seamlessly. It will enable buildings to communicate with cars, cats to chat with dogs and – the killer – people to talk to other people almost as if they were in the same room as each other.
Critics might scoff and point out that my new 9G system is nothing more than a second-hand modem bought on eBay, wrapped in tin foil and connected to the old microwave that we kept in the garage. I would expect nothing less from those Luddites living with the ancient, traditional media systems of 5G. You won’t scoff when my device finally becomes operational.
I cannot comment at this stage when that will be, or on any of the secret technology that enables my 9G system to supersede everything before it. But as a marketer I can promise you that this is the future tech you have been looking for, to talk about in your next keynote/article/podcast.
The next time anyone mentions 5G, snort in their general direction and then, with a dismissive tone, drop the immortal, argument-winning words: “What about Ritson and 9G?” Game over.
And, to be fair, is my new invention really so stupid? No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else. I freely admit that my device is a massive load of bollocks but so is 99% of the discussion about 5G that is currently going on among marketers.
What’s more, these bullshit discussions get completely in the way of the actual, very real challenges of marketing that no one seems interested in concentrating on. Bollocks to 5G. Let’s talk about customers, about brands, about effectiveness. About real marketing rather than bullshit tech.
You can draw a thick, brown bullshitty line from 3D printing to artificial intelligence, to virtual reality, to blockchain, to 5G, to 9G and whatever inane techno-porn that will arrive next to distract marketers from their true challenge.
The only value that 5G offers – like millennials and agility and the walking, super yacht-renting anachronism who is Gary Vaynerchuk – is as a bullshit magnet that attracts and identifies those who do not understand marketing but masquerade as experts among us nonetheless.
When I was a young, beautiful marketing professor in the late 20th century, it was customary to show the amount of advertising money spent across the various channels in pie chart form. You’d have a big blue chunk for TV, another giant red one for print and then a bunch of smaller multicoloured slices for outdoor, radio and the rest.
The choice of a pie chart was telling. Because although there were small variances from year to year, in general the carve up of advertising budgets rarely changed very much. Hell, in 1997 you could use a transparency on an overhead projector (we did that back then) with a pie chart from 1989 and feel relatively comfortable that the proportions were still relevant seven or eight years later.
And then the internet came. And after that social media. Followed by digital. And the pie charts quickly turned into line graphs because shit was changing at the speed of light. Every year told a different dynamic story of the fall of some media and the rise of others. In less than a decade the whole media map changed. New kings were crowned, old emperors diminished.
The dynamics of advertising spend continue to surprise. Most notably there is a clear battle for eyeballs opening up between digital video delivered through Facebook, YouTube and subscription video on demand (SVOD) services like Netflix, and the traditional TV broadcasters with their recent VOD additions. The streaming wars of the 2020s promise to be a bloodbath as too many competing platforms spend too much money on too many shows and charge far too little for it.
But the major dynamic of the last decade, the rise of internet advertising, is finally slowing. That was the message from Zenith’s new Advertising Expenditure Forecast released this month. While spending on internet advertising grew by 17% in 2018, it is forecast to grow by just 12% this year and that global growth rate will fall to 9% by 2021.
The biggest and oldest screen of them all, which has changed little in the past century, has become more powerful than ever.
It’s worth acknowledging that only in digital marketing would a 9% annual growth rate be seen as some kind of failure and, while Zenith predicts a slow-down, internet advertising will still absorb more than 50% of global budgets for the first time by 2021.
But the growth in digital investment is slowing – as it had to. And that means two things. First, if you thought the media industry was competitive over the past decade just wait for the decade to come. The ‘digital duopoly’ of Facebook and Google must now turn on each other, on TV and – to some degree – the media agencies they supply, to ensure the growth fix they have become accustomed to throughout their short but astonishing trajectories.
Cinema meets brands’ key needs
But this also makes for some surprising side stories too. The slowing of investment growth for internet advertising means that, for the first time in many marketers’ professional memories, the fastest-growing channel for ad spend next year will be a non-digital one.
Cinema, that ancient old fucker, is hot again. Zenith estimates a 12% increase in ad spend in 2020.
It’s a surprising champion for only as long you don’t think about the trends currently obsessing our industry. If one were to list the key requirements of advertisers we would probably focus on five major ones.
First, they are seeking brand safety and the certainty of knowing what media their marketing material will and won’t appear next to.
Second, there is a continued sense that a viewer may not actually be a viewer and, despite paying for eyeballs, many advertisers are paying for bots, Chinese click farms or the bottom of a web page that no one ever gets to.
Third, advertisers have tired of the idea of the small screen being the future. Big screens that demand attention and enable social viewing remain the golden receptive moment.
Despite that desire, the precipitous decline of TV viewing among younger consumers makes advertisers’ fourth requirement a growing need to reach youth audiences, who spend less time than their 20th-century peers in front of the box.
And finally there is ‘the long of it’. Every well trained marketer knows about Peter Field and Les Binet, understands their 60/40 recommended split between long- and short-term spend, but fails miserably to get anywhere near it. The fifth objective is to swing more money against big, emotional, brand-building fare.
And with those five precepts in sight it starts to become clear why cinema can project such a rosy future for advertising investment. Here is an advertising medium that over-indexes toward younger segments who literally pay to see your media, who stare at a screen the size of a building inside a darkened room. It’s a medium where advertisers can be certain of the surrounding media context and which ultimately is the most social, emotional, long-range dream builder of them all.
And let’s add one more factor – audience growth. Despite an endless array of sockless aficionados holding up their smartphones and predicting that the little thing in their hand was the future of video; despite the push toward programmatic and real-time media buying; despite the triumph of granular targeting and personalisation; through all of this, cinema has been growing its audience. The biggest and oldest screen of them all, which has changed little in the past century, has become more powerful than ever.
More than 177 million people went to the cinema in this country last year and – with a suite of movies that include The Lion King, Toy Story 4 and the biggest movie of all time, Avengers Endgame – there is every chance this year could be just as good. In fact, cinema admissions have been gradually increasing since the 1980s. Despite the arrival of TV, VCRs, DVDs, digital video and now streaming services, cinema has maintained its hold on audiences.
Advertisers would be silly not to catch on. It’s famous for the highest CPM in the business, with a 30-second spot costing somewhere in the region of £40 per thousand adults reached. That’s more than five times more expensive than TV or Facebook but, again, consider cinema’s advantages along with its premium price.
In an age of dodgy data, inattentive audiences and tiny screens, there might never have been a better time to spend a little on the biggest screen of all.
Before Will Smith got hold of it and turned it into total pants, I Am Legend was a remarkably disturbing novella from science fiction author Richard Matheson. In the book Matheson’s hero Robert Neville is the last man left alive after a zombie plague infects the rest of the human race. He spends years avoiding the undead and trying to make sense of the strange place the world has become.
Last Thursday I found myself addressing about a thousand marketers. I was one of four speakers debating the motion ‘Digital Metrics are Bullshit’ at Australia’s biggest marketing conference Mumbrella360. My teammate, a senior figure from news media, and my good self were designated to go first. Then our opponents, two big hitters from the world of digital media, would present the case against the motion.
Nothing is ever completely straightforward with advertising but the latest turn of events at KFC is odd even by ad land’s standards. The story so far…
If you’ve been a marketer for the past five years you have almost certainly been sucked into the ongoing debate about the death of TV as a channel and as an advertising medium, and its imminent replacement by digital video, ostensibly from YouTube and Facebook, aka the digital duopoly.
It’s now clear that TV will not simply be replaced by digital video. If anything, the last 12 months have seen a reaffirmation of the power of TV ads to drive the “long game”, as ad effectiveness experts Peter Field and Les Binet would call it, and build distinctiveness and brand image. Faced with this more durable foe and its stubbornly flat share of advertising, digital players are clearly opting for a new approach.
The recent surge in attention being paid to the Russian influence on American society via its use of social media has produced a stream of ever more amazing insights.
Being sent new research or industry reports is a common experience for columnists. I’ve been writing for Marketing Week for a long time and rarely does a fortnight pass without an approach from an entirely delightful PR person or corporate marketer wanting to share the results of the latest wah-wah about blah-blah arriving at my door.
It’s perhaps no surprise that direct mail (the legacy medium for micro-targeting) and social media (the digital entrant most famous for its ability to reach very specific audiences on a personal level), feature at the very top of the perception chart for targeting. It has been drummed into every marketer that the personalisation of LinkedIn or Facebook makes for dramatically different marketing opportunities.
No one knows if the Philistines actually existed. They turn up in the Old Testament being a bunch of wankers to the Israelites and then promptly vanish from history.
You can feel it in the morning. An auburn tinge in the sunrise, an impatience in the leaves above, and a distinct nip in the air before you close the door at night. Autumn is on the way. Perhaps not down south, where summer bumbles on. But it was 17 degrees yesterday in Carlisle. Summer is winding down.
This year has begun pretty much the way 2018 ended, with a spate of big advertising campaigns that have divided the marketing community. Kaepernick for Nike. Elton John for John Lewis. Not to mention a certain razor commercial/public health broadcast for you know who.
When Bill Murray meets people who tell him they want to be rich and famous the actor always dispenses the same advice. “I tell them to try being rich first,” he told The Guardian in 2003, “and see if that doesn’t cover most of it.”
Well that’s Cannes over for another year. I don’t know about you, but I am exhausted.
When I was a young, beautiful marketing professor in the late 20th century, it was customary to show the amount of advertising money spent across the various channels in pie chart form. You’d have a big blue chunk for TV, another giant red one for print and then a bunch of smaller multicoloured slices for outdoor, radio and the rest.