Transcript:
Please welcome Russell.
Thank you. After that positive, uplifting, and very generous welcome, it’s my job to bum you all out with that as our subject, almost existential philosophical subject, for the evening. If I could just firstly ask you all to stand up, we’re going to do a bit of a… I’m joking, sit down. It’s not that kind sir. Phew hey. Okay, I’m going to assume a certain base knowledge of what marketing week is. I’m not going to bore you with facts and figures. Joe’s already given me information that I’m the seventh editor this evening. If you want to know anything else about marketing, we can talk about it afterwards. I’ve been editor for, well it’ll be six years in January, but I’ve been at marketing week for 10. There are much worse gigs out there and believe me, I’ve done most of them in journalism. I think I just cut my teeth in journalism writing about very esoteric financial instruments, writing about the regulation and compliance involved in those financial instruments.
So marketing and marketing week, believe me, is an absolute blessing. A few disclaimers before I go any further. I’m a journalist, I’m not a marketer. I’m not a practitioner. Now I just say that because clearly I’m a massive fraud. You lot know what you’re talking about, all I know is what I see and that’s basically what I’m going to be talking about this evening. So if you lose the will to live or you think I’m talking absolute nonsense, then you know, catch up on your emails, do whatever it is that you want to do. But I just thought I’d let you know that as a disclaimer. I also, given the very nature of marketing week, our model generally was to talk about big brands and generally senior markagers of those brands. And that’s the majority of the contacts I have and the majority I spend talking to marketers is with those people.
I generally see the world through the upper echelons of marketing. I appreciate probably a lot of you in the room this evening work for small to midsize brands and maybe in intermediaries or service providers, so I’m not necessarily talking from your perspective, but this is just the one that I know. So again, if you can find anything else to occupy your time and make it more practical, please crack on. Now, my final disclaimer is that I have many skills in life, but PowerPoint is not one of them. So if I have set the bar low enough, and I think I probably just about have, I’ll crack on. As I say, I’ve been at market week for about 10 years, so before we get into the real meat of this question, I thought I’d perhaps talk a little bit about some of the key moments and how they’ve shaped marketing as I’ve seen it.
Now this dates back to I think the autumn of 2008, and I suspect you all remember it, the collapse of Lehman Brothers, which obviously set off a whole string, which led to the near collapse of the entire financial system. I think if I was to identify one single thing, and that’s why I begun with the financial crash that has perhaps defined the landscape in marketing within the time that I have been reporting and analyzing it, it would be that collapse. I think UK PLC has been pretty much in a perpetual state of uncertainty. I have a sense, I’m not a geopolitical expert or indeed much of an expert in anything other than perhaps marketing, but you know it led to austerity.
Some would perhaps draw the line between that and the Brexit referendum or the election of Trump. That’s not what we’re going to get into. It’s not that kind of evening they’re saying, but it’s a toxic brew. Now I’m sure the crash definitely had a long lasting effect on business marketing, being a significant spender of cash that will otherwise return to shareholders or partners and a conduit for customer sentiment in an organization, has been or was on the back of that spun around. The appetite for risk and the relationship a marketer has with its peers became very different. And let me explain why. Firstly, it led to diminishing trust. Now you might have seen this stat, it’s probably the most famous, but there’s countless others that are similar and speak to the same thing. So Fonrey’s marketing group back in 2012 did a study, which found, well you can read, I don’t need to read it out to you, but it’s an indication that from, and there’s one of many, numerous sources that there was a lack of trust in the value of marketers from the C-suite.
It’s perhaps the starkest and it’s probably the most famous and the reason that was given that the marketers are too disconnected from short, medium and long-term realities of their companies. That was essentially the reason. And then just a couple of years after that, we did a study of our own and we asked finance directors, and we found the majority of those were on it said that marketers were unable to quantify the return on investment that their organization receives from its marketing spend. The message, I suppose, was that you’re not showing us what you need or what we need and you’re not showing us what you do and why you need the investment that you’re calling for. And perhaps as a result there’s a greater demand for accountability.
This is not going to be a lesson in zero-based budgeting, but that’s just one example of this quest and this demand for greater accountability. If nobody knows what was ZBB is, forgive the elementary lesson, but it means essentially that all marketing spend needs to be justified before budgets are allocated, and that’s on the rise. This is just two example and there are countless more from big organizations that are moving to this. More efficiency and indeed more accountability has been demanded of marketers and this is just one example.
Now the third impact of the financial crash is short-termism, and in these straightened times it’s become a particular apparent. You can see from this chart on the left, that short term thinking as being on the rise. This is a, does everybody know the work of Les Binet and Peter Field? That’s one chart of many that they’ve produced which shows that short term thinking and short-termism has been on the rise, and as you can see you can sort of chokes it back, and it becomes very stark and very precipitous from the financial crash onwards. Short-termism, I suppose, is ROI based bottom of the funnel activity demonstrating in a much more amusing and palatable way from the great Tom Fishburne, the Marketoonist, on the right hand side in his own inimitable fashion. Brand-building, essentially what both of these things are demonstrating, it’s been side-lined in favor of performance. As people search for the cost efficient at scale solutions and this has been hastened by digital and the ability to extensively attribute an attribute relatively quickly and straightforwardly to reach people in more efficient ways, but not necessarily effective ones.
Now that brings me on to two of the other things that have perhaps defined my 10 years at marketing week. The rise of digital, and I suppose I mean the use of digital media in particular. This is just a snapshot, but you could take these snapshots at any given year over that period and you would find the same thing. I mean, the headline essentially is digital. It’s growing really quickly and it’s growing as well at the expense of other channels. Just take a moment to dwell on that. Might be a statement of the screaming obvious, but you know, we’re looking at for a moment.
I mean, digital media channels are indeed propelling the growth in advertising, as you can see from these stats and as you can see from here as well. Just ignore this by the way. This was me having no clue whatsoever. I was telling Joe earlier on, I was doing this on Sunday at home and my daughter, who’s eight years old, jumped on my laptop after me and said, “Can I do a PowerPoint presentation?” And she was doing one about her family and started to pull out PowerPoint animation and all of these wonderful things, and I was just quietly weeping in the corner at my inadequacy. Anyway, so you can see from here we’re almost at a tipping point from traditional to digital media channels.
I mean this is not me bashing digital. And indeed you can build brands on platforms and channels other than traditional media, but at the same time, obviously, when you are operating at the bottom of that funnel you are operating almost exclusively on tactical execution stuff, display, paid search, et cetera. And that’s at the expense of anything more strategic, anything more long term then you’ve got a problem, you’ve got a problem of effectiveness there. Now the third thing which has certainly been a major topic and a continuing topic since I joined marketing week, is data. I think it began as big and then it got smart and then it got intelligent and there’s probably further iterations that I’m not aware of that data clearly, or the omniscient and the panoply at different data points that are available, is as a result of digital media and many other things, but primarily that. And people got very excited, very giddy with possibility.
There is a billion data points, but I suppose the question I’m asking now is whether or not there’s any more insight than there used to be. There is no shortage of detractors perhaps when it comes to data, but it’s worth listing to some of these people, whether or not it be Mark, who’s obviously a colleague of mine, or people like Sir John Haggerty. There is a question over whether or not data and digital have been or become colossal distractions. Just take a moment to dwell on some of that. If not for any other reason other than to marvel at Mark’s brilliant world playing, creating the spreadsheet jockeys as an actual job. Now there’s a slight causation correlation thing going on in terms of my theory here, but there’s no doubt, or at least if you’re going to take the Binet and Field’s research as read, that we are looking at effectiveness becoming the consequence of both short term thinking, but also perhaps playing at instant returns and instant wins. And there is a question mark over whether or not data and digital is at the root of that.
And again, further illustration here. Short-termism boosts return on marketing investment, but not profit growth. All of these charts are available I think via the IPA. I think I just copied and pasted them off there, but there’s more coherent and cogent ways to adapt. So, before I go onto these, I mean does all of this speak to a department lacking the trust of the board or those in control of the purse strings? I think these are all questions that we ask a lot on marketing week. Is this the failure of marketers to communicate their worth and their value? Or is it the fault of ignorant colleagues who fail to understand and paint marketers into a corner in terms of what they do and what they can contribute? Is the game of marketing rigged to legacy perceptions of markets being the last in line? The legacy perception of them being executor’s of other people’s strategy still live on. It’s a cliche, but I hear it all the time; is marketing still the coloring in department, or has the promise of data and digital channels inadvertently pushed marketers into a data-driven ghetto where short-termism pervades?
I think the answer is probably a little bit of everything. What is clear though is that something does need to be done. And the good news, or at least my analysis anyway, is that there’s plenty that can be done. So I’ll just take a moment to talk about some of those things that you can do or that others are doing by means that best practice to address some of these challenges. Now, the first thing is don’t panic. Stop predicting Armageddon. We’re as guilty as any other marketing title of giving people the platform to say that everything that you’ve known or ever known is totally wrong, and if you don’t rip up your entire guidelines towards how to do marketing, then somehow you’re in dereliction of duty.
There’s a sort of constant, certainly amongst the senior marketers at large companies, almost a perpetual state. I talked about uncertainty at this perpetual state of anxiety in marketing that you’re at risk of disruption. Any minute, your entire way of doing business can be totally disrupted and totally halted at any given moment, and I think this kind of does lead to this sort of sense that a panic and anxiety that some of these headlines do illustrate. Everything’s changing. The pace of change is only going to get faster and you have to constantly keep running just to keep up. We’ve got this weird obsession with everything is dead. I mean you can see here and again, we’re as guilty as anybody here of giving people the platform and giving people the oxygen to say that everything is dead.
And of course, if I’m being particularly skeptical as is my right as a journalist, then clearly there’s a lot of vested interest in saying that everything is wrong with everything you’ve ever done. And here we have a silver bullet solution to make it all better, thank you very much. But at the same time, as there is a million new service providers to offer that to the silver bullet solution. There’s no shortage of respected marketing commentators and marketing practitioners who are very keen on telling you everything is dead. Now, it’s not quite as dark as this, but I suppose what I would probably say is, “There isn’t as much change in marketing as people often would lead you to believe.” I mean the tools of execution are definitely change, that much is apparent. The way that you operate, particularly digitally, is a million miles from what you might have imagined 10 years ago. In terms of some of the platforms that you probably using to great effect now, they wouldn’t have even existed five years ago.
But have the fundamental tenants of marketing changed that much? I would argue not; I don’t think that they have. The means to orientate around customers and market or the necessity to set strategic objectives in line with business goals, it’s probably the same as it ever was. There’s very little difference. So that in mind, it’s probably time to remind myself what we’re going to deal with next. Get back to basics. That’s the one. As I said a moment ago, the business finding about your customer and about where you stand and place yourself in the market, delivering a compelling positioning, the job of segmenting and targeting, communication and media and great creative and indeed selling stuff. I mean it’s not a million miles away from it ever was, it’s just that there are many more ways to reach and engage with people than have been before.
There’s also this sort of constant need to rebrand and reimagine and reimagine the basics as well, and indeed reimagine the job of marketing itself. So customer focus has become customer centricity, and forgive anybody who puts customer centricity on their LinkedIn profile as a virtue. And I’m sorry in advance about what I’m going to say, but it also, it just instantly leaves me sort of rolling my eyes and thinking, “Well, if you weren’t customer centric before, then what the hell were you doing as a marketer?” It’s not a new thing, or it shouldn’t be a new thing. Positioning has become purpose or being meaningfully different in a world where people demand you to be more than just a product with a function and a service. Amorphous masses of demographics based target marketing, sorry, based target markets are used instead of tight targets as well, Millennial, Gen Z, you all know the list.
And meanwhile we’re putting communication before we considered any kind of strategic imperative. None of this is anything other than basics, but in the work of the financial crashes as we discussed, or as I talked about, and the subsequent increase in demands from colleagues and internal stakeholders, the explosion of data and the giddy sense of the possibility. It’s time, I would argue, to go back to the future. And marketing hasn’t changed, but I believe marketers have and their perception of it has as well, and therefore the perception of stakeholders and colleagues has along with it.
Let me just show you the quote that I gave you a little hint of a moment ago. I mean this was written in 1967. I had the great pleasure of interviewing Philip Kotler just probably only about five or six weeks ago, and for a man of his age, which is probably very ageist of me to even make that acknowledgement, he’s ridiculously cogent. He’s not stuck in the mud all. But this is what he wrote in I think it is the first edition of Marketing Management, I think it was 1967. Now I don’t believe, I mean again, back to my disclaimer at the beginning, I’m not a practitioner, but is that any different to what you do now? But there would be many in marketing, many people perhaps as I say, with vested interests that would suggest to you that this is no longer fit for purpose. But it seems to me to be a pretty coherent guideline and as a starting point for marketing.
I keep wanting to go back here, so have the right conversations. I mean this one’s key. And I think this comes down to the way that success has been framed or should be framed. ROI, or return on marketing investment, is a way and can be a sensible way to measure success, but it shouldn’t be the only way that you do so. If it is then it will invariably push you down a short term pursuit of attribution, which might be tempting way to receive instant gratification and to demonstrate to your boss very easily and quickly that you’re doing the right thing, but it might not be the right thing ultimately and in the long-term to do. Neither though should you move too far away from hard metrics, and you shouldn’t talk too much about brand love or equity or any equally other esoteric and insulin measures of success.
Smart companies such as Diageo for example, have successfully framed the conversation. They recognize ROI as one measure of importance in service to driving gross profit in particular. But they have switched the conversation to the outcome of marketers and their marketers are asked to think about four or five measures that really matter to the business and to their brands in driving that performance. I mentioned it earlier on, but it’s about determining what your business goals are then conceiving strategic objectives for your marketing activity that are in line with those business goals. You also need to think about objective and not process. The explosion in marketing technology vendors, and again, apologies if anybody works in Mar Tech here. It’s a necessary addition in many ways in terms of data management and making sense of that in this new age that we live in, but in so many ways it complicates matters as well.
If you think objective and not process and don’t get bogged down in technology, the Mar tech maze, as it’s been described to me recently in managing data, you’ve got to first ask, “What am I trying to achieve?”, not about how I’m going to get there, but what I’m actually trying to achieve. And that’s what I mean about having the right conversations. If you think back to the statistic, and I’ve seen many more recently that I showed you earlier on that speak to the same thing about mistrust and diminishing trust in marketers, it’s because we’re not framing marketing in the right way. And it’s as a result of that things still dog marketing in regards to perceptions of being communicators, of being coloring in departments, as we talked about earlier when everybody had a little laugh out, but it’s still there. Believe me, it’s still there.
Now, I said “Focus on reality, not perception.” I don’t know about you, I moved down from Leeds Dick Whittington style almost 20 years ago, and fully immerse myself in the wonderful metropolitan bubble that London is, and I’m in no hurry to go back to the provinces. I’ve been there, I don’t need to go back again. However, how many people live in London here? Most of you. Okay. I suppose I just asked that question because there’s clearly a massive disconnect between the perception of what customers do, how they think, how they feel and what they actually do. And I don’t know if it’s confined just to London. I think it’s probably seen and echoed elsewhere in the country and this isn’t necessarily just the problem of agencies, but I think it’s particularly key in media agencies, those that plan and buy media.
There was a study, which I will put up a sample of, done by Ebiquity where they asked 68 marketing leaders and 48 agency executives to rank what they thought were the most effective media against several measures. Salience emotion targeting and ROI, just to name a few of them. And then they source data from a variety of sources to check what the actual effectiveness is across the same. And it just shows how wrong people can be and how they’re prejudice in terms of their customer orientation is perhaps limited to what their mates are doing, or what the people that they work next to in the office are doing and using. You can see how many digital channels in particular appear high on the right, but not necessarily on the left. I mean it turns out everybody’s not sort of spending all of their time on TickTock or whatever else is the zeitgeist.
I mean just finally, I think the final to do list was to be proud of what you do. I think, going back to where I began at the beginning, talking about the financial crisis, it had a huge impact on this call between efficiency and effectiveness that I talked about, but I’m hoping it also had a sort of slightly and very unexpected impact and it almost gave rise I think to brand purpose. Now I’m not as eloquent or as mean about brand purpose as some of my contributors, particularly Mark Ritson. I think there is definitely when it’s authentic and it’s definitely built into what you actually do not know what you actually say about what you do. It’s perfectly legitimate and absolutely core to what you do. But at the same time as there’s been this necessary belt tightening and this over eagerness to demonstrate efficiency, certainly with big brands, there’s been this kind of splurging of money on activity that is almost kind of the antithesis of that belt tightening.
And I think it does strangely go back to the financial crash. When I was preparing this the other day, I was trying to think about, because I worked in the city of London, does anybody remember the occupy movement that took over the city? And then about the same time there was an organization called UK on Curt, which would hold up at places like Vodafone and call them out for not paying the requisite and proper amount of corporation tax that they should have. Now they themselves, I don’t think, had any lasting impact despite the fact that there is general greater awareness about these things. But I think a lot of people, particularly in marketing, sort of looked at those movements, felt that sentiment and decided to be almost apologetic about what they do, that somehow marketing wasn’t about generating demand and satisfying that demand, AKA selling stuff. You had to be a little bit more than selling stuff as well. And you know, as I said to you at the beginning, when I started to talk about this, it’s fine to have a purpose, but you also need to have a profit as well.
I was at a recent conference and this was a major conference, not the festival marketing that we run, but another one. And there was a line of senior marketers talking about their brand purpose and somebody at the back, who I assume also because of the nature of the conference, it was the WFA, the world Federation of advertisers, so we’re talking big hitters here, sort of meekly put their hand up, and I don’t think that they were taking the piss, they just said, “It’s okay that we still sell stuff to people, isn’t it?” And they almost all looked at each other aghast that there was a mere suggestion that they were supposed to be in the business of selling stuff.
Byron sharp is a bit of a Marmite figure, but I’ve always loved this as illustration of what I just said. I mean I would interpret what he’s saying basically as what I headlined this subsection as be proud of what you do. You don’t need to run away from it, and if you do so, then that’s going to be at the expense of those key relationships that you have internally as well. And it’s been all over the place this year, this almost kind of self-loathing, particularly in advertising. I don’t know if anybody saw the or noted the, well, there’s two great examples this year, the Oasis, not the mid-nineties Mancunian pop group, but the Coca-Cola owned soft drink ran a huge campaign over the summer where they essentially declared, “We know you hate advertising and we know that you do so much that we’re going to stop advertising as long as you buy enough Oasis”, and it’s ridiculous and it’s totally flawed.
And of course they’re going to continue to advertise and make some other ridiculous claim, but it’s almost like they’re saying, “We don’t like what we do. We know you don’t like what we do.” So, you know, nudge, nudge, wink, wink, and it’s just this horrible creeping self-loathing that I think needs to disappear and I think it’s a quote from Byron Sharp, it’s perfectly illustrative of that. So anyway, that’s pretty much all that I wanted to say. I painted a rather gloomy picture, but there’s plenty of challenges, of course there are. But there is plenty of ways that marketing and marketers can be more effective. And despite all of that, my 10 years has been an absolute blessing, and I’ve really enjoyed working, reporting and analyzing marketing. So you know, in the way that they might have concluded Crime Watch, “Don’t have nightmares.” Thank you very much. That’s everything.