When I passed 30 I had a long, hard talk with my mum about not settling down. I’d been single for several years and was starting to not only get used to solitary life but actually enjoy it. I could feel the little lone rituals and pleasures of singleton life becoming ingrained as I gradually shut up shop for a partner. “I might not end up attached mum,” I remember telling her on the phone, “and I am happy if that is the way it ends up.”

But I had not quite given up. And in a fit of personal planning I took a sabbatical from my job in London and spent a half-year at Stockholm School of Economics. I love Sweden. My previous girlfriend had been a fiery knockout from Gothenburg and I figured that, in a pre-Tinder age, Sweden was the only way to increase the odds of finding my match. “You will never meet your wife spending every night drinking in The Windsor Castle,” one of my best mates (the landlord of the Windsor Castle) told me with a confirmatory hug when I gave him the news of my impending departure.

READ MORE: Mark Ritson on brand positioning

I bought a bike (that is another story) and spent a blissful couple of weeks cycling through Northern Europe to my eventual destination of Stockholm. And when I got there I had an amazing time. Sweden is a fantastic country and I spoke enough of the language to get into some serious trouble. But no great romance ensued and seven months later I boarded a plane bound for London, professorial duties and my very single life.

The trip back from Heathrow took me close to my local so I sheepishly stopped by for a quick one at the Windsor. It was deserted. Just me and my Sunday night thoughts. I ordered a pint of Guinness and when the bartender gave me a pint of bitter I looked up to complain. That was it. The future Mrs Ritson, newly arrived from Tasmania, was bored, hostile and not having the best time of it in London. Her co-worker, who we will call Les, spent his days ordering her around and generally making her life miserable. She was about to resign and return Down Under.

I was smitten. Arrows and cupids. The whole nine fluffy yards.

But there was a problem. The future Mrs Ritson had been in London for several months and she had her pick of a number of potential suitors. The slightly crumpled, usually exhausted junior professor was not in pole position in the race for her affections. Being single for so long had left me rusty and my already hopeless chat was now stifled by nerves. In contrast, the main rival for my affections was smoother than silk, richer than sin and, despite a recent divorce, convinced that he was on the verge of a “new conquest” – his words, not mine.

I remember the realisation about three days into my return to London that this was The One but that there was a significant chance that I might end up losing her to a plonker. So I did something that, to this day, I am not proud of but I do not regret. I went after Les.

There is a reticence to call out rivals and openly slight them. That’s a real pity because there are two ways to position a brand.

Every time he served me a beer I sent it back. When he barked orders at others in the bar I rolled my eyes and told him he was had no right to talk to anyone like that. Les took it badly and, quite correctly, called me a four-letter word we say a lot in pubs but don’t write in marketing articles. I told him that he was the four-letter word. It almost got tasty one Friday evening.

And all the time the future Mrs Ritson was there. As I went at Les, her tormentor, she sided with me. The combination of being genuinely nice to her and artificially awful to Les began to work.

Talk to the now Mrs Ritson 20 years later and she will dispute this. She will tell you that she fell at exactly the same moment that I did. But I am certain that the combination of presenting myself in an attractive way to her, and my antagonistic manner towards her main adversary, was a combination that superseded anything my smoother, better-looking rival could muster.

The more jokes he shared with Les, the more attractive I became. A month later he was plying his trade on the new Slovakian replacement. The Tasmanian had resigned and was shacked up with me. We were together and off and running.

Find your nemesis

I think there are two lessons to be taken from this ancient tale. First, and most importantly, don’t underestimate what can happen in your local pub. If you spend enough time there, the world will come to you. Second, and perhaps with more pertinence for marketers, there are two ways to position.

The traditional approach is all about making it clear what you stand for directly to your target customer. But there is an alternative method that calls for playing the angles and positioning against something or someone that the target customer already dislikes. By taking an enemy, a marketer can position very clearly on what they stand for, often in a manner that is quicker to grab attention and more persuasive than trying to state it directly.

Marketers are usually too gentle to countenance such a move. They are more than happy to mine their company’s advantages for positioning fodder, and comfortable trying to understand and then exceed customer needs. But when it comes to competitors, there is a reticence to call out rivals and openly slight them. That’s a real pity because there are two ways to position a brand: ‘about’ and ‘versus’.

READ MORE: Lloyds beware, Noel Edmonds is doing more brand damage than you think

In the about approach we promote the features and, occasionally, the benefits of our brand to target customers. Positioning is all about the ‘company C’, us, and the ‘customer C’, them.

In the versus approach we still focus on what the customer wants. But to communicate the message we pick out a specific competitor and position our brand against them as overtly and aggressively as possible in order to highlight our benefits by way of comparison.

The prototypical example of the versus school of positioning is Avis. When Warren Avis set up his car rental business in the 1940s he did so by focusing on an unusual niche: offering rental cars at airports. Hertz, which had been established three decades earlier at the beginning of the automotive era, had traditionally offered its rental cars within the downtown locations of most cities.

Eventually, as air travel increased, Hertz matched the Avis strategy and infringed on its rival’s airport territory with its own airport locations. The combination of both downtown and airport locations meant that Hertz became the more successful brand, enjoying double the market share of Avis.

That is until one fateful afternoon in 1962 when Avis walked into the New York headquarters of legendary advertising agency Doyle Dane Bernbach. At a loss as to how to position Avis successfully in a market that was dominated by Hertz, the company agreed to run any campaign that DDB recommended.

A young copywriter, Paula Green, came up with the slogan that reversed the traditional logic that bigger was always better. Her line, ‘We Try Harder’, became the most famous slogan in advertising history and, more importantly, enabled Avis to turn an annual loss into a profit the following year.

Over on the other side of town, advertising guru David Ogilvy called it a piece of “diabolical positioning”, and indeed it was. By positioning directly against Hertz and its number one status, Avis had immediately turned the marketing tables on its greatest rivals. Over the next five years the ‘We Try Harder’ campaign saw Avis gradually close the gap on Hertz until the paradoxical moment was reached where the campaign had been so successful it was no longer relevant. Avis became the number one brand in the market.

Don’t be scared to criticise

The versus and the about position are not mutually exclusive. In fact, in my experience they work best in tandem, as a brand positions itself to a customer and also against a competitor as part of a single, holistic attempt to create a clear brand image in the mind of the target customer.

One of the keys to the incredible success of Ryanair over the last two decades has been CEO Michael O’Leary’s brilliant ability to play both the about and versus positions simultaneously. While O’Leary is always quick to push low-cost tactics like charging for wheelchairs or using toilets because it bolsters the brand’s desired cheap image, he is also clever in aggressively positioning against the traditionally dominant national carriers to make the same point in antagonistic fashion.

“[British Airways] have got waterfalls in their head office,” he once told a press conference. “The first thing I’d do if I were in charge of BA is turn off the waterfalls. The only time we have waterfalls in the Ryanair office is when the toilet or the sink leaks.”

Did you see what he just did there? O‘Leary was similarly caustic discussing Lufthansa’s then chief executive Jürgen Weber and his claim that German passengers did not like low fares. “How the fuck does he know?” was O’Leary’s response. “He’s never offered them any. The Germans will crawl bollock-naked over broken glass to get them.”

READ MORE: Marketoonist on brand positioning

Don’t let O’Leary’s colourful turn of phrase or apparent lack of executive gravitas fool you. He remains the single greatest brand-centric CEO on the planet. A master. Aside from his internal strategic capabilities, he applies a perfect positioning lens to his every external move ensuring he is not just the leader of Ryanair, he is also its greatest marketing asset.

The Trinity College Dublin-educated, multimillionaire lawyer is extraordinarily good at making himself and his company look cheap, partly through what he says about his own airline but also through what he says about his enemies.

In a typical five-minute press conference, in this case from Amsterdam in 2015, he manages to hammer Air France, KLM, Lufthansa, Aer Lingus, easyJet and BA. Repeatedly. It’s newsworthy. It’s on-brand. And it is a big part of why Ryanair is now a bigger airline than all of these others, with the exception of Lufthansa. Watch the master at work.

Ten years ago, that combination of both the about and versus approaches to positioning played a much underestimated contributory role in the revitalisation of Apple. Steve Jobs was never a marketer to shy away from deriding competitors, famously mocking the product design of Dell computers and angrily promising to devote all of Apple’s resources to the “thermonuclear destruction” of Korean rival Samsung. No surprise, then, that while much of Apple’s current brand equity derives from positioning what Apple stands for – starting with the 1997 ‘Think Different’ campaign – much of it can also be traced back to one of the most famous ‘versus’ campaigns of all time.

In 2006 the handsome, laconic actor Justin Long walked casually onto a white backdrop and explained that he was a Mac. From the other side of the screen a besuited, bespectacled John Hodgman pompously introduced himself as a PC. What followed over the next four years were 50 different ads in which the Long/Mac character was shown to be not only cool and attractive, but also the exact opposite of the stuffy Hodgman/PC stood next to him. In the UK the roles were played similarly, if with slightly lesser impact, by David Mitchell and Robert Webb of Peep Show fame.

Pick disruption, not conformity

The latest manifestation of the ‘versus’ campaign hit the UK market last week in an aggressive new series of ads from Brewdog.

The Scottish, fiercely independent brewery has spent the last decade building a reputation for craft ales, partly by letting the product do the talking but also ensuring its marketing actively positions Brewdog against everything that the “monolithic breweries” stand for. The approach not only provides ample fodder for brand building, it does so with a glare of publicity so bright that Brewdog has built its international brand with the kind of marketing metabolism rarely seen in the staid, slow-motion world of brewing.

Brewdog co-founder James Watt is open about his desire to “break free from the mundane, risk-averse, colourless templates” taught at business school. He has a point. Too many MBA classes focus on consistency at the expense of disruption and aggression. Watt believes that building a brand and revolutionising the beer industry are impossible if they are restrained by “conformity and compliance”.

Watt seeks out differentiation and conflict. He looks for opportunities to stand opposed to others, not because of simple bloody-mindedness but an entrepreneurial instinct for opportunity.

For example, when Brewdog’s Dead Pony Club IPA was challenged by the industry-funded Portman Group for breaching its Code of Practice, but eventually cleared of all charges, Brewdog did not celebrate the ruling. Instead it created a new beer called Speedball (named after the cocktail of cocaine and heroin that killed John Belushi and River Phoenix) to reignite the debate and give the Portman Group “something worth banning us for”.

The company’s latest campaign uses current scores on review site Ratebeer.com to highlight the difference in taste satisfaction between its traditional competitors Carling, Stella Artois and Budweiser, and its own Punk IPA. Utilising print, digital and outdoor media the campaign, from similarly independent agency Isobel, presents the various scores from the site and embeds the knife of differentiation even deeper by mimicking its rivals traditional taglines as part of the copy.

It’s a brilliant campaign and makes the case for the ‘versus’ approach better than any article. A billboard with just Brewdog’s 97/100 score would have been hardly noticed and would certainly haved sparked significant cynicism about the nature of the rating system. But add your bigger, more famous peers with their witheringly small ratings and everything changes.

Suddenly the scale looks more critical and rigorous. Brewdog’s score now appears impressive in comparison. And the fact that the smaller brewery is comfortable calling out its bigger rivals in such an overt manner adds heft, aggression and several acres of media coverage to the campaign.

Brewdog are building a brand, not despite the presence of the major breweries but because of them, by using the big beer brands to bounce their positioning against.

I don’t know what happened to Les, my old barman from the Windsor Castle. I guess I owe him an apology. My wife disagrees.

We occasionally talk about those strange, drunken days at the beginning of the new century and how the lonely professor off a plane from Sweden met a depressed Tasmanian and convinced her that he was the one for her.

Mrs Ritson will tell you it was fate but I’m always going to tell you it was the combination of about and versus. She always gets the last word so we will have to go with fate.

The post Mark Ritson: Don’t just stand for something, stand against your competitors appeared first on Marketing Week.

For many years, long before I appeared in these fine digital surrounds, I used to write for a rival publication called Marketing, which is no longer around. I spent about 10 years as its branding columnist before some pushy bloke from Marketing Week rang me up and convinced me to jump ship.

When I called the then-editor of Marketing and told him I was off he was quite sanguine about the whole situation. This was a shame because, if he had acted upset and offered me a five fingered counter-argument, I might have stayed put. But he basically said “OK, best of luck” and then just as he was about to put the phone down he asked: “Any recommendations for someone to replace you?”

READ MORE: Mark Ritson: Don’t just stand for something, stand against your competitors

I thought about suggesting the French marketing expert Hugo Fuckyourself for a moment, but the moment passed and I said Helen Edwards. I’d worked with Helen on a couple of jobs. She’d come in to my brand management class at London Business School and talked to my MBA students several times. She had a good brand consulting business and she knew her onions. “Yeah,” I reiterated down the line, “she’d be good.”

And so I headed off to Marketing Week and Helen took over writing a column about brands for Marketing. And then something very disagreeable happened: she started to do a very good job. At first, I thought it was beginner’s luck but each week her column was really very good. Disturbingly so.

At the end of the year I put on the tux and went to the Grosvenor House hotel for the annual PPA Awards where I’d been shortlisted for Business Columnist of the Year. There were eight finalists so you turn up pretty sure you won’t win but happy to be there. But two hours and six litres of relatively good champagne later you are pretty fucking convinced your name is on the trophy. I’d won the thing before, why not again?

When they got to the big award I was basically 100% certain that I was on the way up. “And the winner is,” started Mariella Frostrup, “Helen Edwards.” I clapped but I was super upset.

And then she started doing it every year. I’d get shortlisted with the Nursing Gazette and Trade Union Periodical and figure it was mine to lose this year. Then Edwards (as she was now known in my household) would waft up onto the stage again giving it the old “what a shock” and “thank you judges” while I jabbed a steak knife through my tuxedo trousers into my upper thigh.

Eventually I stopped going to the PPA Awards because, despite what the cast of TOWIE might tell you, there are only so many nights you can spend pissed, feeling like a loser and getting fucked at Grosvenor House.

It got to the point, I have to admit, where I started to take more than a passing interest in Helen’s approach. First, I started to look at the way she would write. Then the topics she covered. Things got darker and I started to let my hair, which is a very similar dark shade to her own, grow towards my shoulders. Then a little perfume – just a dash of Givenchy. Finally, as the need for a PPA victory really took hold, I am not ashamed to say I turned to women’s underwear. I’d write my column, just like Helen, in bra and panties and a nifty little outfit from Chloe or, occasionally, Yves Saint Laurent.

READ MORE: Helen Edwards: The best marketers know how to link theory with practice

Eventually I got the help I needed. The women’s underwear was dispensed with (well most of it) and I went back to being me. But it got weird for a time back there. Really weird.

Be true to your brand

It’s a story the team at Tesco should take to heart because, as ridiculous as it is, they are about to make exactly the same mistake as me in a bra. Next Wednesday, in the sleepy Cambridgeshire town of Chatteris, Tesco’s CEO Dave Lewis will cut the ribbon on a bold new retail experiment. Named Jack’s – in honour of Tesco’s famously frugal founder Jack Cohen – the Chatteris store is likely to be the first of up to 100 that will open up around the UK.

The clue as to why the sleepy Cambridgeshire town has been selected for the first outlet of this new supermarket chain can be found on Bridge Street, barely a two-minute drive from where the gala opening will take place next week. There, housed in what was once the local Co-op, is the fastest growing supermarket in town: Aldi.

You don’t win by beating your competitor at a game they have been playing for decades. You win by playing the game your way with your unfair advantages.

For a decade now both Aldi and Lidl (which is five miles away up the A141) have been making significant inroads into the UK supermarket business. Their growth has come at the cost of all the big British supermarkets but, because of its former dominance, Tesco has suffered the worst at the hands of the German discount giants.

Jack’s is Tesco’s strident attempt to fight back. The stores will be located in Aldi and Lidl strongholds and will mimic the quasi-brand approach of the German pair, which usually relegates household brands to a very minor role in-store. They will offer lower prices and a more limited selection in much smaller stores. In other words, Tesco is about to attempt to beat Aldi at its own game.

But there are two intractable reasons why Jack’s will fail. I am going to summon all my many years of consulting experience and PhD training to make these titanic, incredibly advanced points. The first reason that Jack’s will fail is because Tesco is not very good at being Aldi. The second equally advanced point is that it would fail even if it was good at it, because guess who is even better at being Aldi.

Aldi.

This is a foolish move by Tesco. It has forgotten one of the core principles of branding – to thine own self be true. Tesco has a certain way of doing things. It’s a rather amazing and successful approach that has served the British company very well for many years. But everything in that approach, that culture and that operating model makes it entirely unsuitable to run an Aldi-style discount supermarket. And the lean, ridiculous operating model that makes Aldi so successful will ensure Tesco will struggle to make any money while it fails.

Aldi’s lean operating model

Aldi is a fucking shark. No brain. No personality. No toilets. It’s just a big, lean shark that is all muscle and instinct and success. It swims around being a big shark all day long, not worried about anyone. It is a brand forged in the disastrous, deserted environment of post-World War 2 Germany and it has evolved a way of doing things that somehow matches great quality with incredibly low prices. It does not have an employer brand or strategic planning sessions. It just glides around being Aldi and not giving a fuck about anyone else.

I remember 20 years ago when Walmart decided to enter Germany. Aldi just swam over to it and ate it up. Walmart – the great Walmart – did not just fail in Germany, it got S-M-A-S-H-E-D. The German team ended up closing everything down, running for the airport and essentially promising on the life of their kids they would never set foot in Germany again. It was a massacre.

READ MORE: How Tesco’s new discount chain can compete with Aldi and Lidl

Tesco cannot possibly match Aldi or Lidl. And while it wastes time and resources and people and money on this futile strategy, the focus on Tesco being Tesco will be lost. At exactly the time when you want all the focus of a branded house and a new approach at Tesco, you have divided and distracted your operations with a foolish attempt to beat the Germans at their own game.

Like me wearing earrings and a bra to try and match Helen Edwards, all Tesco is going to achieve with Jack’s is to lose time, lose money and ultimately fail. That’s a shame because, when you’re faced with a really tough competitor, you know the best way to beat them? Play your own game, even better.

You don’t win by beating your competitor at a game they have been playing for decades. You win by playing the game your way with your unfair advantages. Tesco can beat Aldi by being more Tesco-like. It is certainly not easy but it carries a much greater probability of success than its current strategy of trying to be more Aldi than Aldi.

Let Tesco be Tesco. That’s the only way to win. I can maybe beat Helen Edwards to a PPA award by saying fuck a lot and writing articles about sharks. It may not work but it’s better than wearing women’s clothing and trying to be something I am not.

Strategy is not some puzzle where you work out your competitor’s magic number and then use that number to beat them at their own game; if it was that easy we’d all be doing it. Strategy is working out how your existing assets can be used to flip the board and then crushing your rival as a result.

Marketing Week columnists Mark Ritson and Helen Edwards will both be speaking at the Festival of Marketing, which takes place in London on 10 and 11 October. For more details, go to festivalofmarketing.com.

The post Mark Ritson: Tesco’s budget Jack’s stores will fail, because you can’t beat Aldi at being Aldi appeared first on Marketing Week.

Slouched in an exit row on a plane, on the runway, waiting to fly somewhere, I whipped out my iPhone and tried to entertain myself with LinkedIn. As I scrolled through my feed I was almost immediately depressed.

‘The Brand Manager is Dead…Long Live the Brand Activist’ was the title of the post at the top of my feed. Above it there was an image of several young, millennial-aged managers holding placards. I harrumphed into my G&T and swore under my breath.

This was not a surprising article. We marketers are all members of a kamikaze discipline. Whenever a marketing concept is established it takes barely a few days for someone in our industry to declare it dead, redundant or useless.

The CMO role is crucial; no it’s actually outdated. Targeting is a core tenet of marketing; in fact it’s pointless. Net promoter score is the only number you need; turns out it’s totally irrelevant. Pricing is a key marketing challenge; marketers don’t need to do it anymore. On and on it goes.

One marketer tries to instil discipline and order by building marketing fundamentals; the marketer behind takes a sledge hammer to it as soon as she steps away. All we are left with is lots of disparate ideas and contradictions. A discipline without any discipline. A profession that cannot – will not – act professionally.

It is a cut of the very deepest, most serious kind because it comes from within, and high up.

This new act of disciplinary nihilism on LinkedIn was therefore not a surprise. As someone who has taught brand management for 20 years and worked with brand managers for just as long, I was depressed at the column, but with the kind of philosophical, relaxed depression with which you miss the last tube or step in a puddle wearing new shoes. It’s a pity, but you expected nothing less.

But as I read the next part of the post, my mouth dropped open in shock and bewilderment. So sudden was the sensation that I actually rubbed my eyes and concentrated on the text like a cartoon character. Was my jetlagged brain playing tricks on me?

The author of the post was Hanneke Faber. You may not know the name, but you certainly know where she works: Unilever. And she is no junior executive either. Faber is the president of Europe for Unilever. That makes her, in branding circles, a double-VIP.

First, Unilever is one of the great homes for brand management. After arch rival Procter & Gamble, it is probably the next great repository for the people, thinking and practice of branding. And then there is Faber’s seniority. She is literally one of the top five people at the company.

Faber denouncing brand management as “dead” is a bit like Lenin questioning the practicality of socialism. Or the Queen proclaiming a constitutional monarchy irrelevant and archaic in the 21st century. It is a cut of the very deepest, most serious kind because it comes from within, and high up.

Lead by example

Let me address Faber’s post in some detail. Can I first suggest that it is a total failure of leadership. By my personal count Unilever currently employs around 20,000 people globally who carry the title of brand manager. I wonder if Faber gave some thought to these people, their job titles, their professional pride or Unilever’s employer brand when she denounced their current roles as “dead” so publicly and in such a professional place?

I lose track of what the latest trendy management theory tells us is the true definition of leadership. But I am sure declaring a job title dead when you are the president of thousands of people who have that title is the direct opposite of what being a leader is meant to be all about.

Second, her thesis that brands need “both performance and genuine purpose to thrive” is not necessarily false, but it is certainly not universally true either. A clumsy aspect of all the tiresome, purpose-driven marketers that cloud the current airwaves is their totalitarian prescription that you must have a purpose or you will not succeed. Purpose is certainly one of the ways you can add meaning to your brand and thus grow, but it is not the only path to that outcome.

Faber makes the common error of assuming brands used to stand for “performance”, and now “purpose” has arrived to add depth and meaning to their offer. That is simply not an accurate reflection of branding history. For decades, some brands have positioned on performance but some have also communicated benefits to their target customers that are not necessarily purpose-related, but are high-level, cultural meanings beyond a simple product benefit.

Again, I am not completely resisting the potential of purpose to attract and retain customers. But I see purpose not as a pre-requisite for modern branding success like Faber, but rather one of the many alternatives when it comes to how you might position a brand. Put more strongly, brand purpose may well work for some brands, like Ben & Jerrys. But there are hundreds of very successful brands, many of which are currently outgrowing Unilever, that clearly lack any purpose-driven agenda of any kind.

Unilever does not have any brands in the current Interbrand ranking of the world’s most valuable brands. But in that list at number two, growing at 6% a year, you will find a company that recently admitted to developing drone bombing software and which actually removed the words ‘Don’t be evil’ from its set of stated values.

At number five, growing at 29%, is a brand that pays its workers so little that a significant proportion of them are dependent on food stamps to survive. And at number 40, growing at 1%, is a car manufacturer that illegally cheated on emissions testing to enable its cars to emit poisonous toxins into the atmosphere, which were partially responsible for the death or disability of hundreds of people.

My point is not to criticise these brands for their ethics or approach to corporate strategy. My point is that they should not be in the top 100 list if Faber’s point about the essential nature of purpose was true. But they are. So it’s not.

There are hundreds of very successful brands, many of which are currently outgrowing Unilever, that clearly lack any purpose-driven agenda of any kind.

She might argue that time will tell and these brands will falter from a purposeless approach, while Unilever’s star will rise. I will happily offer her a $50,000 bet that in five years’ time these three purpose-free brands will exhibit an average growth rate significantly superior to Unilever’s.

Faber claims: “Unilever’s fastest-growing brands are those with a clear purpose. They grew 47% faster than the rest of the portfolio and delivered 70% of company growth in 2017.” But this is possibly a very bad case of causal misappropriation.

READ MORE: Unilever’s sustainable brands now delivering 70% of its growth

It could well be that the brands in the portfolio with purpose are growing faster than others because of purpose. But it is equally probable that Unilever picked its biggest, highest-potential brands for the purpose makeover first because that’s what companies do when they roll out a new marketing approach. Richard Shotton has already done a splendid job of pulling apart the ropey maths and dodgy calculations that make purpose appear so productive on paper, and his logic applies equally well to Unilever.

Again, I am not saying that brand purpose is not sometimes a significant factor in success and growth. I am saying that the casual causality in Faber’s claim that brands that have purpose always grow faster than those that do not is specious stuff. Any marketer, president or not, that starts coming up with general laws and rules for what will make all brands more successful in all situations is – in my experience – full of it.

The power of purpose depends on alignment with all the usual moving parts of marketing: the target customers, the competitors, the category, the brand origins and all the other annoying micro-variables that ensure the only rule of branding is there are no general rules. No matter how hard or aggressively those in positons of power try to tell us that their approach is the only way to now get branding right, they will always end up with idiosyncratic egg on their faces.

Brand management is bigger than brand purpose

Faber might want “brand activists” to replace brand managers at Unilever. Can I humbly suggest that this is a ridiculous suggestion? Brand management is much bigger than brand purpose. In fact, purpose is a great new addition to the class on positioning that I teach MBA students, within my 12-week class on brand management. But there are other, equally tenable, approaches to brand positioning that are often superior to brand purpose that also need to be taught.

And aside from the task of positioning, brand managers complete a lot of other essential duties too. There is research, tracking, segmentation, new product development, pricing, brand architecture, communications planning and so on. In Faber’s brave new organisational structure filled with “brand activisits”, do they ever put down their placards and do pricing? Is there ever a respite from worthiness to conduct a conjoint analysis?

Faber ends her post with the emotional conclusion that her father, who protested Nixon in the 1970s, would now be “proud” of her efforts with brand purpose. It’s an affecting and effective coda but raises an interesting question: was he not proud when she made and marketed products?

When did leading marketers like Faber decide that satisfying needs, making great products and managing wonderful brands was unworthy? Do we only feel pride for brands that support social causes these days?

When did marketers become ashamed of being marketers? When did brand management become a vocation deserving of the death penalty? When did Unilever become a place where brand managers were deemed unnecessary and brand activists their replacement?

I am proud to work in brand management, proud of the MBAs and executives that I work with who carry the title. I see no dishonour in managing a brand, quite the reverse. I look to the founding thoughts of Neil McElroy in 1931, sat alone at his type writer, hammering out the principles of brand management as the starting point of a wonderful and rewarding profession. A profession that is far from dead.

Mark Ritson will be speaking at the Festival of Marketing, which takes place in London on 10 and 11 October. For more details, go to festivalofmarketing.com.

The post Mark Ritson: When did marketers become so ashamed of managing brands? appeared first on Marketing Week.

There is a wonderful new book coming out next month called ‘Eat Your Greens’. Edited by Wiemer Snijders and published by the Account Planning Group it includes a host of thinkers talking about fact-based approaches in our profession and the distinct advantages of marketing science.

The book features a broad church of marketing perspectives, including your humble columnist (they aren’t paying me so I feel like I can promote it without compromise) through to some of the true greats of the industry like Ogilvy’s Rory Sutherland, Thinbox’s Tess Alps and author Doc Searls.

The content is excellent and I encourage you to invest, but what really tickled my thinking was the idea Snijders used to promote the book. He has asked each author to explain what marketing science has taught him or her about the business of doing marketing.

The answers are as varied as they are intriguing (see box below). For many, science has made them better at analysis and more cautious about their gut. For others it has stoked deeper realisations about profitability, communications and brands. And for a few really awkward fuckers like Bob Hoffman and your humble columnist it has inspired annoyingly tautological answers that refute more than they reinforce the whole premise of a more scientific approach to marketing.

I don’t want to appear completely heretical. I am a huge fan of the empiricism and rigour that we have inherited from the small group of “evidence-based” theorists who emerged in the past decade to prowl the stages of marketing conferences around the world. Their slides weren’t very cool and they lacked a trademark outfit or funky haircut, but they had their impact on marketing nonetheless.

Younger and more naïve marketers might wonder how it is even possible to be a theorist without first amassing evidence to support your thinking. Surely all theory is based on evidence?

Being critical, empirical and generally more suspicious is a very long way from slipping on white coats and declaring marketing to be a science.

Those of you who lived through the last 15 years of marketing know that all it takes to be a “thought leader” in marketing is PowerPoint, an ego the size of a small planet and the craven desire to fill a niche with random buzzwords. The ramshackle army of buffoons who anointed themselves as ‘Millennial Experts’, ‘Brand Whisperers’, ‘Growth Hackers’, ‘Storytellers’ and ‘Bitcoin Gurus’ have taken their toll.

Not that there is anything wrong with a bit of stage craft and personal positioning. But the unending desire to say something new and ear-worthy, combined with an almost total lack of knowledge or respect for the discipline of marketing, produce enormously specious thinking.

The evidence-based thinkers featured in Eat Your Greens have, to some degree, offered respite. These thinkers came along with data, replication and science to puncture many of the helium balloons of horseshit being inflated across the conference stages of the marketing world. They questioned brand love, for example, and found a more realistic, polygamous but still useful concept. They challenged the idea of differentiation and the absurdity of much of the overcooked, incredibly self-aggrandising brand positioning.

In general, evidence-based thinking reminded marketers that brands were not such a big deal after all for consumers. And that recognition of their diminutive scale led to some very big ideas.

Following the rules

But being critical, empirical and generally more suspicious is a very long way from slipping on white coats and declaring marketing to be a science. If horoscopes are midnight on the scientific clock and particle physics is high noon, it’s still only about four in the morning in marketing land. We have a few general principles, but it ain’t Watson and Crick.

Of course, I can see the attraction of rules and formulae and being able to say something is correct or not. I just don’t think we will ever get there. And the reason we won’t get there is because there is no “there” to get to.

A simplistic, undergraduate view of science looks across at biology or chemistry and suggests there should be immutable laws and principles that marketers gradually uncover in a successful quest to reveal the laws of marketing. But that misses the point that marketing is very clearly a social science in which rocks and chemicals and electrons are replaced by that most annoying of focal topic – humans.

And not even humans engaged in high order, important stuff. Humans who eat burgers, watch TV, engage on social media and then get pissed and fall asleep in their underwear with the TV on. Hardly the stuff of cold fusion or particle physics.

Humans are reflexive: they learn and change. We are contextual creatures who alter our behaviour based on our environment. Worst of all, we make meaning and use that meaning to create culture that then sits across natural phenomena and intermediates its impact. As countless scholars in the fields of other social sciences like history, sociology and the rest have already concluded, the social sciences, of which marketing is clearly a part, are not half as hard or law-like as we might wish them to be.

In fact, there are strong philosophical voices that suggest even the natural sciences are much softer and human than many would have you believe. The physicist Max Planck once observed that scientific truth does not “triumph by convincing its opponents and making them see the light” but rather “because its opponent eventually dies, and a new generation grows up that is familiar with it”. To be more blunt, science isn’t actually very scientific at the best of times.

Ian Leslie’s brilliant account of how 20th century nutritional science was dominated by American researchers who convinced the world that eating saturated fat contributed to heart disease and ultimately death, while sugar was nothing to worry about is a perfect example of how the hard sciences are just as political, illogical and personal as most other pursuits. Rather than cold hard logic, scientific consensus depends on interpretation, affiliation and ideology. Despite what “scientific marketers” would have you believe there is more bias, emotion and tribalism going on in marketing science than at a teenage disco.

Marketing is very clearly a social science in which rocks and chemicals and electrons are replaced by that most annoying of focal topic – humans.

My contribution to the collection of quotes on marketing science questions how much marketing is involved in science and reflects this belief.

This is not the first time we marketers have sought a more scientific mantle. In fact, for as long as we have had marketing thinking, there have been marketers attempting to add rigour and scientific structure. The fact they do not get very far tells us much about the merits of the search for marketing science.

When I was a young scholar in America I lived through the end of the “paradigm wars” that erupted between those that claimed a scientific approach to marketing and those that pointed out that that there were many ways to do science. I watched Morris Holbrook battle Shelby Hunt and was electrified by the debate between relativism and positivism.

But my favourite paper of that period, one that every marketer would do well to read now, some 35 years later, was by marketing professors Jerry Olson and J Paul Peter. I knew Olson, he was a superb thinker and not without a sardonic world-weary sense of humour. Their paper published in the Journal of Marketing in 1983 has the single greatest title in the history of marketing publications. Rather than ask whether marketing is science, it asked instead ‘Is science marketing?’.

Marketers can certainly take much from the pursuit of science. But don’t forget just how useful the concepts of marketing are in promoting and selling your scientific theories too.

Mark Ritson will be appearing on Marketing Week’s Strategy Stage and on the Headline Stage alongside Facebook’s VP for Northern Europe Steve Hatch at the Festival of Marketing, which takes place in London on 10 and 11 October. For more details, go to festivalofmarketing.com.

The post Mark Ritson: We’re a very long way from declaring marketing a science appeared first on Marketing Week.

Last week was a busy one for marketers. In addition to the Festival of Marketing, the IPA was running Effectiveness Week, the pinnacle of which is the Effectiveness Awards.

Congratulations is due to all the winners, especially Audi and BBH for taking home the grand prix, but it was the Direct Line Group (which includes the Churchill, Privilege, Green Flag and Direct Line brands) and its gold for ‘best new learning’ that struck me as the most fascinating win of the night.

Reading its submission to the IPA I kept nodding and then nodding more. I certainly appreciated what Direct Line had achieved with its marketing and the way it measured success, but the lessons I took from the business’s journey are useful for all marketers. So here they are – 10 in total.

1. Price premium is often overlooked when it comes to brand building

Most marketers know that brand building delivers manifest rewards. You get lower acquisition costs, familiarity, more loyalty and so on. But in this commoditised age I think we are forgetting that perhaps the biggest and best advantage of brand equity is still that it lowers price sensitivity.

Provided a good marketer is running the brand and holds the line on price, there are significant profit advantages to be had from investing in brand and then reaping the margin-related outcomes that result.

That conclusion usually suggests strong brands deliver very large price premiums for consumers, cue a series of pictures of Chanel handbags and Rolls Royce grills. But it’s clear from DLG’s analysis that it’s more a case of slightly stronger brands delivering relatively small premiums for lots of consumers.

The “small budge” that Churchill’s brand equity gave many customers looking for auto insurance only delivered a price premium in the £10 to £20 range, but measured across tens of thousands of customers, this marginal superiority delivered spectacular profits.

2. Brand image and differentiation still matter

There is a worrying (and growing) trend to favour distinctiveness over differentiation. Clearly the advances in creating and reinforcing distinctive assets that make a brand “look like itself” have proven important and effective. But there is a current fashion among brand managers and account planners to focus on distinctiveness above all else and conclude that differentiation is an ancient myth.

Well, it is a myth if you use an old-fashioned, undergraduate definition of differentiation consisting three parts unique selling proposition and one part love marks. The more complex and realistic view of brand image and the way it can differentiate a brand versus the competition is that a few non-unique but important associations can be claimed by a brand, combined in a gestalt offer, and used to stand out and pull in customers.

That is clear from the DLG case and the company’s use of factor analysis and econometrics to show very clearly the empirical connection between brand associations like “helpful”, “reassuring”, “leader” and “proactive” and the link with driving consideration and then sales.

Clearly you need distinctiveness. Equally clearly you need differentiation too. And there is no reason one needs to come at the cost of the other.

READ MORE: How brands are creating a culture of marketing effectiveness

3. Digital is overrated

Despite marketers’ ongoing love affair with the new and shiny tools of digital and the ever upward snaking line that represents overall marketing spend on digital display and digital video in this country, it is abundantly clear that much of that spend is mistaken.

That is not to say that all digital is pointless or that it should be excised completely from the mix, just that most marketers have been bamboozled by YouTube and Facebook into spending too much with them.

Creativity still counts, probably more than media in most cases.

Between 2013 and 2017, DLG substantially reduced its investment in digital display and programmatic online video. The company did this not because of some burning hatred for digital but because it has the kind of advanced analytics and independent thinking that is sorely lacking from most marketing teams.

Crucially it also has a longer-term horizon upon which it reviews the value of various media; seen from this perspective digital loses out.

“We call ourselves digital conservatives but we are not anti-digital,” DLG concludes in its submission to the IPA. “We could find compelling evidence for both the long-term and short-term effectiveness of media lines such as TV and radio. By contrast, our research did not support continued investment in a number of programmatic digital media lines even on a short-term basis”.

Ouch.

4. TV is not dead, it’s still mighty

It’s a story we see from so many successful marketing companies but one that most marketers seem entirely immune to. TV is still marketing gold.

As price comparison websites, like Compare the Market, became more and more important to British consumers over the past decade most marketers of financial services dialled down the spending on long-term, brand building TV investments and switched their budget to shorter-term digital tools.

DLG did the opposite and kept TV at the heart of its media plan. In fact, in 2017 DLG’s share of TV spend was twice its share of the market – a reflection of the belief and its rival’s ignorance of the value of the big box on the wall.

The company even switched most of its TV budget from the more short-term direct response TV (DRTV) that usually airs during the daytime to brand building TV that doesn’t try and make an immediate sale but builds brand equity instead. DLG has no vested interest in doing down digital or testifying to the power of TV – that makes its observations both eye opening and, I believe, trustworthy.

READ MORE: Mark Ritson – Marketers are clueless about media effectiveness – here’s the proof

5. The long and short of it

I have become a very open and explicit supporter of Peter Field and Les Binet’s work which is, of course, based on a meta-analysis of many years of IPA Effectiveness submissions like the one from DLG.

They postulate an ideal balance for brands of 60% long-term, non-targeted brand building combined with 40% shorter-term, targeted sales activations. More recent research from Field and Binet suggests this 60/40 split varies depending on the nature of the category and the brand being operated, but that most marketers stray far too much to the short-term side of the equation.

You then need to look at where your weak spots are and what drives and diminishes the consumer’s movement from one stage to another.

There is growing push-back from many marketing commentators that Field and Binet’s conclusions are flawed because they come from the self-promoted, selective case collection that is the IPA Effectiveness submissions database. I find these criticisms valid but also petty, like a child at a party who sees another find the last Easter egg and then claims, with a snarl, that they do not even like chocolate.

DLG appear to have independently found a very similar pattern from its own experiences and now ensures that 45% to 50% of its budget is spent on long-term brand building across all its brands.

When you see DLG and other successful exponents of marketing strategy discovering essentially the same balance of the long and short of it, and using it to achieve such clear market accomplishments, it’s apparent that most companies are too short term in their approach and that the balance Field and Binet prescribe is exactly what is missing.

6. Creative still matters, remember?

As the battle for media supremacy becomes ever-more bitter, most marketers are besieged by studies and data proclaiming the superiority of TV/digital/influencers/radio/whatever over all the other alternatives.

In this ongoing gladiatorial contest we tend to forget that media is, quite literally, just the conveyor belt for the message. If that message is powerful and creative and attractive it will clearly work better than a message with none of the above.

And yet the intensity of the media debate in marketing has obscured this fact.

Where once we reviewed different media with the assumed same creative and content strength for the purposes of comparison, we now commission campaigns that are all about the media and treat the creative as almost an afterthought in the effectiveness equation. That is a mistake because creativity and content obviously count. Massively.

Media on its own is not enough or, as David Abbott once told Dave Trott: “Shit that arrives at the speed of light is still shit”.

For all the impressive analysis and even more impressive results, it’s clear from DLG’s submission that without hiring Harvey Keitel and running a long and consistently excellent series of ads for Direct Line none of the outcomes that it is now so justifiably proud of would have transpired.

Creativity still counts, probably more than media in most cases. I read somewhere that 70% of advertising impact is the content and 30% can be accounted for by the media that carries it. I am unsure if that is true, but it feels about right. And it suggests we are wildly overstating the media discussion and wilfully ignoring the power of creativity in our current industry analyses.

READ MORE: How Lloyds put effectiveness at the heart of marketing

7. Ebiquity are awesome

The consultancy does not pay me anything. I do not know or like anyone that works there. But whenever Ebiquity turn up at conferences or, as in this case, work with a client like DLG, it inevitably produces first-class work. I find it to be bullshit free. I find it to be empirically advanced. I find it to be practical. And, in a sea of ridiculous consultants, bent media advice and conference wankers, those traits make it incredibly attractive. If I were you I would work with them.

8. The funnel matters

One of the delights of the DLG submission is the way it is clearly structured around a simple but empirically founded consumer funnel. The DLG team know that awareness leads to consideration, which leads to preference to purchase and then to satisfaction, measured via net promoter score and other metrics. It measures these stages. It looks at what brand attributes and customer experiences increase or decrease the conversion rates between each stage.

There is nothing expert about any of this, well there shouldn’t be, but in a world where everyone wants to declare the funnel dead or try and warp it up with inane digital concepts, it is comforting to see a funnel as the backbone of brand strategy – just like it should be.

If you won’t take it from me, take it from the prize winning work of DLG, you need to build a custom consumer funnel. You need to populate it with data. You then need to look at where your weak spots are and what drives and diminishes the consumer’s movement from one stage to another.

In DLG’s case, for example, its emergency plumber ad featuring Harvey Keitel increased perceptions that Direct Line was a brand that would “do the right thing”. That association drove consideration among non-customers, which increased preference and purchase later on down the funnel. It’s simple but it’s gratifying to see such basic marketing concepts applied so properly and expertly.

9. Brand portfolios require brand skill but then deliver learning

My life in brand consulting is haunted by the companies that could not manage a portfolio of brands. It should be simple: different teams, different strategies, different executions all combine to delivery synergy. But usually the company in question cuts corners or starts to treat all the brands in the same way.

So it’s gratifying to see DLG not only use its data to manage multiple brands well, but also use it to justify why it needs multiple brands in the first place.

The reason more companies do not follow DLG’s example is simple: the marketers and the brand plans they build each year simply are not good enough.

And in an extra twist, because it has multiple brands in the same category it can use these different brands to learn more. Churchill can, for example, test its price premium threshold by offering choices versus Privilege, which the DLG team knows has less brand equity.

“We understand,” explains DLG in its submission, “that while there may be cost advantages to reducing the number of brands we support, we would lose out on the benefits of a ‘diversified portfolio’”. It’s rare to see such clarity or such ability to manage multiple brands. It should not be, but it is.

10. Zero-based budgeting is the highest signal of marketing skill

In my own consulting career I regard setting up zero-based budgeting for several large clients as one of my favourite and most satisfying experiences.

DLG is on exactly the same page. It has dodged the bullet of dumb-as-rocks advertising-to-sales ratios and reached a place where each year its four main brands and eight different products all present their marketing plans and the investment levels that each need for both short- and long-term success.

That’s an amazing advantage over competitors who do not really know what to spend or how to spend it and it sets up the always useful context of internal competition for marketing funds, which, in my experience, invariably leads to better overall marketing and improved effectiveness.

The reason more companies do not follow DLG’s example and also use the zero-based approach is simple: the marketers and the brand plans they build each year simply are not good enough.

So, a hearty congratulations to the Direct Line Group and the superb marketers who work there. Its efforts are exemplary in that DLG represents the very best of brand strategy and, hopefully, it can teach other marketers how to up their game too.

The post Mark Ritson: 10 lessons all marketers should take from Direct Line’s brand strategy appeared first on Marketing Week.

From the moment she was appointed, the word on the street about Carolyn McCall has been positive. The new chief executive of ITV was formerly the boss of easyJet, and her status not just as a senior media executive (previously CEO of Guardian Media Group) but a business leader of proper heft and experience meant expectations ran high from the minute she started the job in January.

And the signals have been good ever since. Everyone, and I mean everyone, rates her highly. Her desire to develop a British SVOD (subscription video on demand) channel for ITV in partnership with the other UK TV channels is further evidence that McCall gets what so many other TV executives are missing: the future. And the speed with which it now approaches.

“I think the window is closing,” McCall told the Guardian on Monday. Asked if ITV and its domestic rivals were in a last chance saloon to develop a British competitor to Netflix she responded: “Of course, which is why I think ITV feel we just want to get on. We know it’s not going to be easy. We know it’s not slam dunk. If we don’t do it [now] we will never do it. We have to take the plunge.”

READ MORE: Carolyn McCall wants to shake off ITV’s ‘cosy’ image as it takes on Amazon and Netflix

To understand why the “plunge” is necessary now you have to understand what I have witnessed around Europe over the past few weeks. I’ve visited many of the major markets for TV and given talks to marketers, agencies and media people. There’s nothing worse than some British wanker turning up in places like Frankfurt, Prague and Bucharest and showing exclusively British data to an audience who don’t know their Bush House from their Benny Hill.

So in advance of my visits, I gathered secondary data from these different markets to help me make my case in each of the countries during my presentation. And while the data helped me connect with the people I met and (I hope) deliver a more engaging talk, it also taught me something important.

In every market the picture is remarkably similar. Linear TV viewing is declining, but gently. And far more gently than the media might have you believe.

But mobile video is not displacing it. Despite what we were told two or three years ago at a crap conference by a bearded, sockless futurist, the growth in video viewing across tablets and smartphones is not the future of advertising. It’s not even the future of mobile.

Even so-called millennials still derive more of their video advertising from a TV and not a phone. TV remains the predominant medium for reach, video and emotion. The future is not quite as futuristic as we were promised.

At this point, if you work for commercial television, it might appear to be time to crack open the bubbly. TV is not dead. Mobile video is not the future. Let’s party like it’s 1989.

Non-traditional TV viewing

Not quite. Across Europe I keep seeing the same chart. A slight decline in time spent watching linear TV at the top of the line graph. At the bottom, bobbing along with relatively little growth, is time spent watching video on smartphones and tablets. But usually, somewhere in the middle of the time spent viewing chart is a third line.

It does not have a consistent name yet. Sometimes it is labelled ‘autre television’, on other occasions it’s called ‘verbundenes Fernsehen’ or is simply referred to as ‘autro’ depending on which country you are in. It’s the line representing all the viewing time that audiences spend watching the TV set, but not watching ‘TV’. It’s Netflix, it’s YouTube, it’s any viewing that happens on a TV that is non-traditional in origin. And it’s growing. Really quickly.

It’s clear that the TV set will remain the central portal for video, and especially video advertising, for many years to come. But it’s becoming equally clear that traditional TV stations are up against global digital companies intent on invading the TV set and taking over.

Buying a new TV is currently a miserable experience, with apps from multiple vendors serving to befuddle a new user.

The future of television with programmatic sales and addressable advertising looks amazingly bright. I’m just not sure many of the commercial TV channels will be around to enjoy it by the time that future arrives. The digital behemoths have turned their gaze from the plundered wrecks of news media and are now planning their raids into television.

Google has YouTube. Amazon is experimenting with broadcasting via Prime. Facebook has Watch. They are coming. The challenge for these amazing digital companies is developing a competence for making and delivering TV.

That might sound simple but just as the BBC would struggle to run an online retail site, the digital giants currently suck at making TV.

READ MORE: Mark Ritson: Even in 2026, most people will watch the World Cup on TV

Amazon’s summer broadcast of the US Open tennis was variously described as “dogshit” and “1975 bad” by disappointed viewers. Google struggled to get more than a tiny fraction of its YouTube viewers to sign up for its TV-like Red channel. And it will probably struggle just as badly now that Red has been rebranded Premium. Facebook Watch is, well, Facebook Watch.

But while digital platforms struggle with becoming TV providers, the TV providers are struggling with digitisation. Take a look at the apps of most European TV stations and it’s clear that they also suck really badly too. Despite the future of all television viewing clearly being the ability to offer an online viewing experience on a smart TV, most TV companies have shit digital apps with poor usability, stuttering content and the regular inability to actually work for longer than five minutes.

A single broadcast app

The reason for this sub-optimal performance is two-fold. First, TV companies are good at TV, not digital development; and second, TV companies are national, independent entities who tend to approach all their tactical challenges accordingly.

Challenged with building an app to encourage digital viewing, each TV company has built its own shitty, local application. Faced with the world’s biggest, most global rivals that are literally a hundred times their size and scale, each national TV company has attempted to build its own local, little application.

What they should have done is link up and develop a single global TV app that each station could skin, use and populate accordingly. Instead of a global wheel each TV company has built a small, shitty wheel of their own. And there is a real danger that Amazon or YouTube or Netflix will roll their giant, global techno-wheel over hundreds of shitty little TV wheels in their ultimate domination of connected TV.

Carolyn McCall is quite correctly in a hurry to build her digital offer and she is keen to do so cooperatively with the other former competitors of ITV, which now must work as partners on delivery and content. On TV, the enemy of my enemy is now my friend. They may even prove a life-saver.

McCall’s urgency is appropriate. Smart, connected TVs are arriving everywhere and consumers are now deluged with digital options. For now, those options are awfully confusing and disappointing.

READ MORE: Mark Ritson: TV and digital are dating, so who’s going to get screwed?

Buying a new TV is currently a miserable experience, with apps from multiple vendors serving to befuddle a new user. Where once a single remote answered the needs of busy British households, the nation now scrabbles around every night looking for the half-dozen little remotes that operate different devices at different times.

That confusion won’t last long. A couple of victors will emerge and dominate the connected TV set of the near future. Both YouTube and Netflix have managed to worm their way onto the remotes of the major TV sets. Their apps are now often pre-loaded on the sets. It’s a smart move because convenience and simplicity will deliver victory to the future dominant players.

ITV should have a significant jump on its digital adversaries because it has home field advantage. But the scale, size and ambition of Amazon and the other digital entrants cannot be ignored.

We used to say that TV is not dying, it’s having babies. Well those babies are growing up fast and only one of them will eventually rule the big smart screen on the living room wall. My money is on Amazon, which, once it gets the hang of it, can produce TV sets and a TV app and the shopping network to supply it with addressable product offers. Carolyn McCall might yet have a say in it but she had better move fast and she had better think bigger than just ITV, or UK broadcasters, if she wants to defend her corner.

I continue to believe TV will be the most powerful advertising medium, I just don’t know who will be on that TV set five or 10 years from now. What’s coming up on the TV next has never been a more interesting or uncertain issue.

The post Mark Ritson: Broadcasters must join forces to beat Amazon and Netflix appeared first on Marketing Week.

The current cause célèbre for American marketers is the threat posed by new direct-to-consumer (DTC) startup brands that aim to wrestle customers away from traditional companies. They’re using direct channels to win and then retain customers from the traditional 20th century behemoths like Procter & Gamble (P&G) and Unilever.

That old guard built their businesses from a tried and tested low-involvement buying model, in which huge ad spend drove share of mind while significant sales force investments delivered equally massive share of shelf. With the brands built and the budgets brimming with cash, anyone then trying to muscle in the action was outspent and sent packing.

In relatively low-innovation, low-involvement markets the ability to achieve top-of-mind awareness and constant availability for repurchase, multiplied by the scale to defend those twin towers of superiority, made the big brands invulnerable for decades. The top two or three brands in most FMCG categories in 1980 look remarkably similar to those that now dominate today.

But the theory of disruption in the digital age posits that all of this is about to change. An army of start-ups are poised to break from the traditional FMCG approach with a new DTC model.

READ MORE: How direct-to-consumer brands are reshaping marketing

Brands such as Harry’s, Hubble and Goby aren’t household names yet. But they aim to be. And rather than get there with a focus on the standard TOFU (top-of-funnel) approach of TV advertising and the typical awareness objectives, these new brands target consumers via digital media and then, having acquired a customer, focus on the BOFU (bottom-of-funnel) opportunities of locking them into to repeat ordering and home delivery.

That approach negates the need for wholesalers or any retail penetration and opens the door to an exclusive post-purchase relationship, in which digital media takes centre stage, competitors are non-existent and profitability is maximised. The prize prototype for this DTC approach is, of course, Dollar Shave Club, which managed to take a significant share from P&G’s formerly impregnable Gillette fortress over the last five years.

You almost certainly know the story. A digital ad mocking the over-engineered and over-priced Gillette offering, featuring the company’s co-founder Michael Dubin, was seen by millions online. The exposure resulted in a sudden and very lucrative surge of interest and then sales for the Dollar Shave Club, which sold direct to consumers via its website and then delivered their razors in regular installments via the mail.

The focus on digital media and DTC delivery exhibited by Dollar Shave Club and now copied by many others has meant these new entrants are also dispensing with the traditional agency relationships that built the brands of P&G and Unilever. Instead they aim to do everything in-house. Internal teams deliver content marketing, influencer marketing and social media and the all-important direct point of contact for orders and service queries.

Consumer proximity means these new brands can control their relationship directly with customers rather than working through all-powerful retail giants, and that direct exposure to consumers also means they get to keep the mountains of precious consumer data generated. The mouth-watering prospect of cutting back on advertising costs and all the margin-hungry distributors that line the value chain is also a big attraction.

The direct-to-consumer appeal

Unilever may have purchased Dollar Shave Club, but the billion-dollar price tag has encouraged private equity firms to start sniffing around the DTC sector in the hope of spotting other potential unicorns in the making.

The combination of a new hot business model, the scent of disruption and the presence of private equity is quickly propelling DTC entrants to the top of the marketing bullshit league table. It’s highly unlikely you will not survive until Christmas without someone (probably the bloke that bought bitcoin) boring you with the reasons why DTC is about to change everything about marketing, forever.

You can see why the new DTC disruptive meme is so attractive. It involves the arrival of hot new startups and their destruction of old incumbent firms. It involves taking marketing in-house – another current buzz topic. The proposed tactical toolkit that these DTC brands depend on consists of content marketing, social media and endorser marketing and claims not to require ‘traditional’ media.

Perhaps best of all, these brands apparently do not need a retail presence, which links in with another popular apocalyptic prediction that retail is dying. You could not invent a more alluring combination of disruptive marketing myths than DTC if you tried to. And probably for that reason, more than any other, prepare for several kilos of bullshit to start flying about these new brands any time soon.

The narrative is certainly already picking up steam. At last month’s ANA conference in Orlando the topic was widely discussed. Terence Kawaja, the chief executive of investment firm LUMA, is the poster boy for DTC, and his reports on the rise of these new challengers and their likely catastrophic impact on big incumbents are generating a lot of attention. His chart of all the emerging DTC brands, shown above, is an accurate summary of the activity going on in that space at the moment.

According to Kawaja the reason big incumbent firms are stumbling is because “marketers and their tactics are old”. In contrast, he thinks DTC marketers are “digitally native” and as result they “take a completely different approach to advertising”, moving from the “spray and pray” approach of traditional advertisers to one with a focus on data, performance marketing and digital media.

The FMCG brands’ resistance

As the incumbent’s incumbent and with dozens of heritage brands in play, it is no surprise that P&G is top of the list of companies that are apparently about to be disrupted by DTC entrants. Kawaja had a slide at his ANA session showing the 45 P&G brands under threat from the new phalanx of DTC players. But the presence of P&G’s chief brand officer Marc Pritchard and the general sense that he knows what he is doing are certainly providing a stabilising rejoinder to all the DTC aggression.

“I’ve lived that slide,” was his cooling retort to Kawaja’s P&G diagram. “It’s not like he’s surprising me.”

Pritchard went out of his way at the ANA conference to point out that P&G is not the old fuddy-duddy that so many seemed to want to portray in their lazy mischaracterisations of old and new. The company has encouraged its teams to create brands, to experiment with direct to consumer channels, to take some marketing in-house and to move significant parts of its tactical spend to new digital channels.

READ MORE: Colin Lewis: The secret of direct-to-consumer success is owning the whole experience

And it all seems, at least for now, to be working. P&G has just posted its best quarterly revenue growth in five years while spending significantly less on marketing. This is the P&G that handled the private-label revolution by the way. The P&G that lead the transition to more transparency in digital media. The company is used to change and it seems to know what it is doing. Especially with Pritchard running the show.

The spanner in the works of this convincing P&G defence is core competence. The much-loved strategic theory that companies are good at some stuff and, as result, not good at other stuff could come back to bite P&G. The fact the company has used a structured model of above-the-line advertising, indirect distribution and retail for almost a century might make it unable to respond and react in the same way as nimble, digital, direct-distribution DTC brands.

Gillette continues to take around two-thirds of the total razor market and its own online razor club is currently outgrowing everyone.

It’s certainly an argument that Kawaja was keen to promote during the ANA. “You think you can be cool and launch your own DTC brands?” he asked marketers during his presentation. “Think about a middle-aged white man trying to dance.” He then showed a GIF of former New Jersey Governor Chris Christie dancing (badly), to make his point that old guys like P&G simply can’t do what the DTC brands are doing and about to do.

But I still side with Pritchard. Too many digital boys have cried about a disruptive wolf only for all of us to wake in the morning and find our chickens safe and plenty of eggs available. That might sound like over-confidence and traditional legacy thinking, but there are only so many times you can worry about the death of TV, traditional advertising, retailers, brands and marketing before you start to see this talk as the sensationalist posturing that it surely is, rather than an accurate prediction of a world that is just around the corner. Maybe it is, but that corner sure is taking its time to arrive.

The disposable razor market – the first to feel the wrath of the DTC revolution with Dollar Shave Club – provides an ideal vantage point to survey the disruption and the actual vulnerabilities of the big incumbents.

Five years after the arrival of Dollar Shave Club the DTC story does appear attractive. From a standing start seven years ago the brand now generates around $200m in the US alone and was the subject of a $1bn acquisition. But dig a little deeper and it’s less persuasive. While Dollar Shave Club enjoys a 50% share of online razor sales in America, Gillette continues to take around two thirds of the total razor market and its own online razor club is currently outgrowing everyone.

If we have learned anything from the last decade in marketing it’s that disruption is rarely as disruptive as conference speakers would have us believe, and incumbents are not quite as secure as they might want us to think. Gillette remains the incredibly dominant global razor brand. Dollar Shave Club and the others that follow it are small, very interesting alternatives. But the idea that DTC brands are about to unseat the undisputed category champs should be treated with the scepticism it deserves.

The post Mark Ritson: The threat of direct-to-consumer disruption is seriously overblown appeared first on Marketing Week.

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.

READ MORE: Mark Ritson: Marketers are clueless about media effectiveness – here’s the proof

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

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.

The killer chart

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

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

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.

The post Mark Ritson: Gary Vaynerchuk is wrong, wrong, wrong, wrong, wrong about media appeared first on Marketing Week.

As you probably know, those crazy kids at BBH Labs are running the World Cup of Advertising this week. It’s a brilliant and entirely pointless bit of fun in which a meta-list of the greatest ever ads are pitted against each other in a Twitter tournament, in which marketers vote for their favourite from a list of alternatives until we arrive at an eventual winner.

Far be it from me to steal BBH’s thunder, but I’ll be very surprised if Apple don’t walk away with the Grand Prix at the end of the tournament for ‘1984’. After all, Apple is the advertising equivalent of the German national squad: consistent, annoyingly unbeatable and admirably superior in almost every respect.

You don’t even need me to even tell you about the 1984 ad or the legendary story behind it. Or that it signaled the coronation of creative director Lee Clow and the arrival of Apple, and elevated Superbowl advertising to the predominant place in the promotional pantheon. It’s a campaign every marketer knows about.

READ MORE: Three-quarters of marketers prioritising short-term tactics over long-term strategy

It’s 35 years since Ridley Scott shouted “action” and watched that iconic red and white figure run into shot with her sledgehammer in hand. But what strikes me about the 1984 ad is that, despite its age, it continues to build brand for Apple. We’ve all seen it but for 99% of us it was not during its original and very limited handful of TV spots all those years ago.

We were shown it in school, or on a TV show, or by a friend, or before the next paragraph in this column, and its message of creativity, individuality and making a difference is as relevant now to Apple as it was three decades ago.

Similarly, despite years – often decades – passing since the last pound was spent on media, many of the ads in the BBH World Cup are still building awareness and communicating brand associations for their sponsors. When you see Nike’s ‘Just Do It’ reel or the Guinness’s ‘Surfer’ for the first time, or for the 50th time, the impact of the ad and benefit to the brand remain significant and valuable. The sight of the Tango man dodging and weaving around that red letterbox one more time immediately reinvigorates the salience and stupendous sense of fun that surrounds the Tango brand.

The impact of great ads

We have been talking a lot in recent months about short-termism in marketing. The words of Les Binet and Peter Field have opened marketers’ eyes to the increasingly short-term, targeted tactics of most big brands. Nothing wrong with that, except that it comes at the cost of the longer-term, mass-targeted and more effective campaigns that accrue their impacts over time.

That longer time period is never defined by anyone. Its longer than a year, less than five, and usually about two or three in scope. That might seem an eternity to today’s CTR-addled digital marketers but it’s not that long a period of time when you really think about it. And my point is that, while it might be hard to plan for that kind of longevity at the outset, it’s clear that many great ads continue to deliver a return many decades later – long after even Field and Binet have stopped counting.

A scan of the BBH World Cup playoffs, above, reveals even longer time frames for effectiveness, which no one ever talks about because it goes beyond the tenure of most agencies and the longevity of even the most loyal marketing director. I am talking about the impact that great advertising occasionally achieves over the long, long term – many decades after the campaign’s inception and execution. Great ads leave a significant impact on consumers that continues to affect their behaviour throughout their consumer lives and that impact often continues each time they are re-encountered years later.

It’s not an unending period of effect. Nothing lasts forever, even in advertising. The great ads of the 18^th and 19^th century have no continued impact on today’s world. That’s partly because the consumers that once remembered them are long gone and because almost all of the brands are also no longer with us.

The World Cup of Ads has its fair share of great ads for brands that are either dead or so different that the impact of a once great ad is now nothing more than a thick slice of nostalgia and a remembrance of purchases past. The Smash ad remains one of the great British commercials, for example, but its brand disappeared aeons ago. No matter how sweet and delightful we find JR Hartley still sitting in his armchair searching for half forgotten books, its unlikely many of us will turn to the Yellow Pages again with gusto as a result.

While it might be hard to plan for at the outset, it’s clear that many great ads continue to deliver a return many decades later.

But for brands that do carve out an enduring and consistent position in the market there is long, long-term effectiveness from the accumulated effect, impact and incredible ROI of ancient ads. Coke’s ‘Teach the World’ spot or Boddington’s ‘Cream’ showreel aren’t just iconic examples of once-great communication, they make me want to buy the brands again. And those ads still get big audiences on a daily basis for free.

I think we underestimate this long, long-term effect of ads. And its not just advertising. Product placement remains, for me, the ultimate slow-burning medium with the longest half-life because, if you can insert your brand – organically – into one of the great works of content, there is a huge initial effect combined with an extended payback that can be multiplied across millions of consumers and scores of years.

Almost no one in Australia, let alone the rest of the world, was even aware that Qantas had never lost a passenger in a plane crash until Dustin Hoffman delivered the news in Rain Man. That association of safety now sits squarely within the brand position of Qantas, not because it was reinforced by Rain Man, but because it was instigated by it. And today, like every other day since that film first aired, thousands of viewers will have the message of safety delivered to them in the most authoritative, attention-grabbing manner possible as they watch the movie.

I can trace my own brand loyalties to that slow burn and long, long-term effect of several product placements. I am writing this column in Calvin Klein boxers for one simple and ridiculous reason: when Marty McFly awoke to the Oedipal nightmare of his own mother hitting on him in Back to the Future she called him Calvin because of his underpants.

That movie is a classic slice of 80s and 50s nostalgia these days but to a 14-year-old boy escaping the rain in West Cumbria in the Gaiety Cinema back in 1985, it was everything that America, modernity and coolness was ever going to be. I made a formative mental note back then that Calvin Klein was what cool people wore and that thought, and those pants, never left me.

I am doubly ashamed to say that I drive a Porsche not because of its handling or associations of clean, efficient German luxury. I drive one because 30 years ago Tom Cruise hammered a metallic grey 928 around the streets of Chicago, evading Guido the killer pimp in Risky Business. That movie, the plot and almost everything about it have faded but not the distinct memory of Cruise pulling up to the sidewalk in that glorious car, flashing his megawatt smile and relaying Porsche’s then popular strapline, ‘There is no substitute’.

Of course, you can argue that many of these placements back then were random acts of cultural significance that must be separated from strategic planning. Sometimes. When I worked in wine and spirits I met the one or two legendary Californians whose job it was to ensure that ‘random’ acts of movie coverage consistently went the way of our brands. The good guy drinks our champagne in a movie moment that fits the brand and its target audience perfectly. The villain drinks the competition and loses.

These placements did not happen because of some crass direction from a brand to change or create a scene. They happened because the placement people were on top of every script and every director in Hollywood and were waiting, poised, for the perfect few seconds in a film where they could propose the right brand for the moment.

And when it pays off the impact is long, long-lived. I continue to believe that Jerry Maguire remains one of the great movies of the 20th century. Before you remonstrate, watch it again and if you hate it I will personally send you the rental fee in the post. It beats the shit out of Braveheart, which won all the Oscars that year. And when Jerry marries Dorothy in that lovely, ill-fated ceremony mid-way through the film you see two bottles of Moët et Chandon on the table after the guests leave.

There those bottles still sit; there for eternity, or as close as we ever get to it in marketing. Untold millions will watch Jerry Maguire marry and that two-second shot of a couple of bottles of empty Moët will weave their magic for decades to come.

A mixture of memory and heritage

I’m acutely conscious that this is a very 80s, very Tom Cruise, very masculine set of examples. That’s not because this is the sweet spot for long, long-term impact but because these effects are inherently biographical. I grew up in the 80s, Cruise was ‘the man’, and therefore these are the long, long-term effects that I now recall.

For other readers the ads, the era and the celebrities will be different but the impact will be the same. Right now, some 10-year-old is watching a Ryan Gosling movie or seeing an ad for Tesla and discovering a brand that they will not be able to afford for decades to come, but one that they will one day own nonetheless.

READ MORE: Efficiency versus effectiveness: Why marketers need to move beyond ROI

The official name for this is ‘positive wastage’ meaning ads that hit a target that is not yet, but will one day, become a consumer. It’s an awful, oxymoronic name for something we should celebrate more openly in marketing. A form of persuasion so enduring that it lasts a lifetime and yet which comes with the greatest ROI of all, because by the time a new generation see an ancient ad or 20th century product placement the cost is literally nothing.

I think Apple’s 1984 ad or Moët’s product placement in Jerry Maguire work on two levels. For old fuckers like me they reinforce and reconnect us with the brands of our youth, and the memories of that time help bolster these brands in our present. When I see those Boddingtons ads from the 90s I wonder at their genius but then I am immediately hurled back to a hundred different pubs and a thousand different occasions when a lovely, thick pint of Boddingtons was the start of a big night out. And I want a six pack for my fridge.

Watching Clive Owen thwang a BMW around a city in its short film ‘The Hire’ reminds me of how I loved those ads and how they made me drive when I lived in America. And my fondness for BMW is bolstered by that far more than by any of its current advertising. We relive an ad we loved and the attraction to the brand is reinvigorated with it.

For younger consumers there are none of these initial memories to conjure and then commercialise. But original recollection is replaced by something perhaps even more powerful in younger consumers – unattainable heritage.

If you weren’t born when 1984 was released you probably gaze at Apple all those years ago and wonder what it was like to buy the first Mac. I wasn’t born when Sean Connery’s Bond starting drinking Dom Perignon but, by God, I still cannot pick up a bottle without a pang of desire for the feline reassurance and ancient cool of Connery from a time so long ago it exists to me as only a technicolour dream.

So, I propose a third vector of the impact for advertising and promotions. The short of it, as we know, is the most popular time frame and usually qualifies as anything with a quarterly deadline or less. The long of it exceeds an annual time frame and throws its net out for two or three years. But let’s add a further period; the long, long of it. These are the ads and placements that handsomely paid back their investment in initial efficiency, then more enduring effectiveness, and finally – long after the media budget has been exhausted and those responsible have moved on – continued to build brand.

Anja Major, the young British athlete that ran into the 1984 ad and threw her Apple sledgehammer into the monochrome screen of conformity is approaching 60 somewhere in south-east England. But a 19-year-old version of Major still sets off on her sprint, sledgehammer in hand, thousands of times a day all over the world, each and every time 1984 is played.

For those who know the ad from the old times it’s a chance to smile wistfully and reconnect with Apple and all it means to them. For those seeing the ad for the first time there is ancient evidence that Apple preceded them and has that most valuable of brand assets – heritage.

In both cases I’d argue that the biggest value of the 1984 ad, the zenith of its effectiveness, came not with the initial buzz of its first or second paid appearance. It came later, across the decades that followed, in which a truly great ad played out and worked its magic across not the short, not the long, but the long, long of it.

The post Mark Ritson: Don’t just look at the long term, look at the long, long term appeared first on Marketing Week.

One hundred and fifty-four years is a long time by any measure. But in the 30-second carousel of images that is advertising, it is close to an eternity. That’s how long J Walter Thompson (JWT) has been running – in one form or another.

The firm can trace its history back to one of the first ever agencies, Carlton and Smith, which opened its doors in New York City in 1864. Just over a decade later its talented book keeper, James Thompson, bought out his employers and eventually renamed the company after himself, abbreviating the James and adding his middle name to make the agency sound less common and more established.

It subsequently became one of the great advertising agencies. Arguably it was the first to offer a true ‘full-service’ model to clients, to truly qualify as a global agency, to build a creative department, and when it was bought by WPP in 1987 it became the biggest early acquisition of what would become the most important advertising company in the world.

READ MORE: Mark Ritson: Don’t just look at the long term, look at the long, long term

But the facts, impressive as they are, don’t do the brand justice. It’s JWT, man! For marketers of a certain age, a job interview with the agency was the ultimate objective. When JWT came in to pitch, more people than usual turned up in the meeting room because it was J Walter Thompson and, you know, a ‘big deal’.

This week’s news that J Walter Thompson is to merge with sister agency Wunderman is also a big deal. Around 10,000 employees from both brands will be conjoined into the new agency – cleverly rebranded as Wunderman Thompson. I say cleverly with tongue poked firmly in cheek. While there is no doubt that WPP, and all the big agency groups, need to embark on a significant bout of brand consolidation, the manner of that consolidation remains somewhat unconvincing.

Agencies’ banal branding

The grand irony of agency land was always that, despite the immense focus these companies placed on client’s brands, their own approach to branding was more prosaic. If three mates wanted to leave their agency and create a new one they invariably went down the pub, moved a few place cards around and went with Mate, Friend and Amigo. Over time and after a thousand pitches, that name was routinely abbreviated into MFA. Over more time, and with acquisition by a big agency network, the name was further extended to MFA BigGroup. Not exactly branding rocket science.

And this barbarian approach to brand creation is now being applied in reverse with the same brutal logic. BigGroup owns MFA and another agency called Green? Let’s smash them together, call it MFA Green – or, if we really want to shake things up, Green MFA – and have a steak dinner to celebrate. Two agencies are now one. I’ll have the filet.

I exaggerate a little. But only a little. WPP has done some more advanced consolidation work in the last year with, for example, the creation of Superunion from the ruins of Brand Union, The Partners, Lambie Nairn, VBAT and Addison Group. But for the most part it’s been the down-the-pub approach in reverse. Iconic PR firm Burson-Marsteller was merged with sister firm Cohn & Wolfe to create Burson Cohn & Wolfe. Legendary agency Y&R was merged with digital shop VML to form the terrifyingly bad Scrabble hand now known as VMLY&R.

VMLY&R.

You see what I mean? There’s no doubting the creative or strategic capabilities of the newly named agency. But the minute the team introduce themselves there will be head scratching, polite laughter and – probably by the now for the 50th tiresome time – a witty client saying something like “I thought you guys were in the branding game”. It’s a bit of a branding mess, which hurts a newly conjoined agency twice. First, because the core competence of any advertising company is partly branding. Second, because it’s a mess.

In the case of Wunderman Thompson the confusion is less of a concern. Genericism should be the issue. No one would argue that J Walter Thompson was not a dusty brand. But smashing into the back end of Wunderman, another fine and less dusty brand, results in the opposite of synergy. WPP have taken two amazing brands and managed to produce 0.75 of a brand as a result.

The history of JWT would confirm that Thompson is a very generic name – even its titular founder thought so – and much has been lost in this new arrangement. Wunderman Thompson sounds, at least initially, like a company that sells telephone directories or a second-tier law practice from Croydon.

The need to consolidate

I am being too hard on WPP. It had to act. The method of its consolidation is less interesting than the rationale behind it. After a long century of creating new agency brands and then, a few years later, creating more, we have very suddenly arrived at a new place where killing and consolidating has become the order of the day. Why?

To some degree this is a result of poor leadership at the formerly independent agencies. While it’s true that JWT was a brand in need of revitalisation, its fortunes were significantly worsened by a two-year law suit alleging serious sexism and racism at the very top of the organisation. The leadership failings have not always been as extreme but many of these once-great brands have not been run as well or independently as they could have been.

But most of the now consolidated agencies are victims of much bigger, broader forces in the world of marketing. Clients are gradually but increasingly becoming global beasts. It’s a trend that has been taking place for two decades but the noose has tightened in the last few years around most local, independent marketing departments operating within multinational companies.

The grand irony of agency land was always that, despite the immense focus these companies placed on client’s brands, their own approach to branding was more prosaic.

The strategy and most of the creative work is now done out of New York, Zug or London these days and then sent out for execution. That process of consolidation demands more agency focus and fewer, bigger agencies. And as clients consolidate their requirements they are being targeted by a much broader range of alternative suppliers.

Even a decade ago a request for proposal was usually sent to your incumbent agency and the two or three other agencies your marketing director had heard good things about. That approach is now as archaic as a smoking room on the fifth floor. Clients today are dividing their brand building affections across consulting firms, digital platforms and publishers as well as exploring the potent opportunity of doing the whole thing in-house. While advertising investment continues to grow globally, the number of different competitors looking to benefit has grown exponentially in the last decade.

When private labels from Tesco and Sainsbury began to make significant inroads into the supermarket categories of the 90s the big FMCG firms like Procter & Gamble and Unilever did a very smart thing. They closed down their number three, four and five brands and focused their resources on the number one and two brands in a category, which could not only defend their turf against Tesco Value but actually prosper in that new competitive context. In the same way, WPP now hopes a smaller cadre of agencies with more horsepower will win the day against Accenture, Google and an in-house team of 300 down the road.

Lack of differentiation

To some degree the agencies have also been the agents of their own downfall. Whisper it quietly around Soho but most of these agencies now all offer the same thing. Everyone offers creative and planning. Everyone can now do above-the-line, promotional and digital. Everyone has an impressive show reel of campaigns and clients from yesteryear. Everyone now targets mid-size firms and the big behemoths. All these agencies bang on about the power of creativity. Each claims a focus on “effectiveness”. They all win a big bag of Lions at Cannes every year.

But, like the long line of superyachts that overlook la Croisette at the Port de Cannes, despite their different names and flags they are all fundamentally the same. And underutilised. And painfully expensive to operate.

Ask agency people over a beer what enabled one firm to win a big account versus other agencies and most will revert back to the ‘back bench’ of five or six star people in each country who could offer the most impressive vision of strategy, media and creative to the client team. The brand of the firm comes a distinct second to the talent, almost as if the agencies themselves – other than as a house for certain people – are basically identical in scope, service and positioning.

That similarity has not been helped by the trend of creating ‘dedicated’ agencies. The practice has been common for many years but it seems to be picking up steam in the current climate of complexity. When DDB won the huge McDonald’s account in 2016 it did so by pitching not only its own services but those of a combined team drawn from people and services from Facebook, Google, The New York Times, Twitter and other agencies like Alba, Burrell, The Marketing Store, and many, many more. The new hybrid agency was eventually named We Are Unlimited.

READ MORE: Barclaycard’s five rules for building an in-house creative agency

When agencies are pitching for work with other agencies in tow and openly blending and mixing their offers they are essentially offering a commoditised, broken down alternative to their own total brand offer. Nothing wrong with that, especially if it wins big accounts like McDonald’s. But dedicated firms also serve to reduce differentiation further and commoditise the once imperious agencies into a single amorphous mass.

If you go to a VW garage and the salesperson suggests you keep the Golf’s steering wheel and chassis but go with a Honda engine and a Toyota transmission you might drive away with a superior vehicle but also the cloying sensation that none of these brands count for anything any more. And that situation is exacerbated when the dedicated agencies stop being dedicated to the client they were created for and start hunting for other business in their newly formed, multiplicitous state. We Are Unlimited is now pitching for other clients.

WPP’s big branding error

And while he has already taken a lot of shit over the last 12 months we also must point the finger at Sir Martin Sorrell and the WPP structure he created all those years ago. Sorrell made an almighty brand architecture blunder in making WPP more famous than it needed to be.

WPP was – is – a house of brands. Its holding company status is meant to be just that: a holding company and nothing more. I’ve worked for other big house-of-brands groups and there is a tremendous amount of time devoted to ensuring independence across the sister brands and ensuring the corporate brand disappears from customer view.

That’s not how WPP has operated in recent years. Sorrell became far more famous in the industry than any of the agency heads he employed. WPP probably got more media mentions in the industry press than any of the agency jewels it owned. Multiply that over many years and the agency brands within the WPP house of brands gradually moved closer and closer together in perceptual terms. JWT stopped being JWT years ago and became WPP Agency number four.

Customers don’t know that Lamborghini is owned by VW. Every client knows that JWT, Ogilvy and Grey are all part of WPP. Not helpful.

Consolidation in advertising land is partly a function of a massive sea change in the industry but also poor strategic management at many of these formerly great agencies. At WPP it now hinges on the successful strategic merger of a lot of formerly precious brands into a much smaller list, and then the successful navigation of a new advertising era by these tighter, more focused firms. Pull this off and WPP will retain a dominant place in the future of marketing communications. Fuck it up and potential extinction awaits.

It also leaves WPP with two remaining powerhouse agencies rather exposed. The glorious agency Grey and the iconic firm Ogilvy now stand out like two unpruned rose bushes – one red and the other dark grey – at the end of a long line that have been dead-headed and weeded ahead of winter. And the temperature is falling.

There is much speculation that Ogilvy and Grey are also about to undergo a merger. And that possibility means another challenging bout of brand consolidation and renaming. The team at Ogilvy are, I am sure, lobbying for a bold new co-branded title: Ogilvey. Meanwhile, over at Grey they must be keeping their fingers crossed that the ancient pub game of agency brand naming and consolidation will put them first in the equation. Greyvy anyone?

The post Mark Ritson: Today’s agencies are like yachts – underused, expensive and all the same appeared first on Marketing Week.

Your boss ushers you into her corner office, smiles and then hands you a two-page document. You scan it. It’s your performance review and annual pay rise.

On page one you are scoring a solid B across all the key metrics. Not bad. On the next page is your new salary for 2019. You were on £32,942 when you walked into the office. You’ll be on £33,300 when you walk out. You’ve won a 1% rise. How do you feel?

Probably a mixture of gratitude and disappointment. It is a rise but one that doesn’t even keep pace with inflation. Compared to others in the office who did get a big increase you’ve been hard done by. But there are several colleagues whose bonus has been cut for 2019; one even got the push.

You could try and make the case for a larger pay rise to your boss. More likely you will smile, shake on it and exit the office. But what you would be very unlikely to do is proclaim your career dead and, in a panic, throw yourself from the nearest window. A 1% increase is, well, the status quo.

And that’s how we should feel about TV’s share of ad spend in 2019 according to GroupM’s new media forecast for the UK. WPP’s media agency network usually gets its numbers right and, if the predictions in its ‘This Year, Next Year’ report are to be believed, TV will once again retain a significant slice of the advertising pie.

READ MORE: Mark Ritson: Gary Vaynerchuk is wrong, wrong, wrong, wrong, wrong about media

We should be clear-headed about TV’s position in the marketing media firmament. A long decade of predictions of TV advertising’s death spiral have come to naught. Once again, the ad spend data suggests that there is life in the old box yet.

As GroupM notes in its report, the reasons for TV advertising’s endurance are clear: “Ad-supported TV remains hands-down the most effective advertising medium. It consistently and convincingly argues for its safety and certainty, with proofs of ROI.” Efficacy multiplied by evidence equals impact.

Business as usual

But it’s far from party time in TV land. There is a big difference between ‘not dead’ and ‘vibrant’. Audiences for TV are falling consistently year on year. All the talk of cord-cutting and mobile video might have been misplaced, but most people are watching less TV than they used to. If these declines continue at the current pace – a big and contentious point in itself – the dynamic behind TV’s position in the media status quo will eventually change.

There are many reasons to invest branding budgets in TV advertising but predominant among them is reach. It can be expensive but no other medium offers the winning blend of creative potential, emotional messaging and spectacular demographic reach. But it has been a long while since TV could claim to be the “giant funnel” that Rosser Reeves once proclaimed he could use to reach every household in the nation.

As relative reach gradually diminishes year on year there is the palpable threat that, in the not too distant future, the flat line of TV ad spending might turn south because the medium no longer provides its trademark scale. The tantalising prospect of addressable TV advertising is not too far away and would eliminate that scalar requirement. But for 2019, it’s business as usual. Again.

And TV is not the only advertising medium scheduled to continue relatively unscathed into 2019. Both outdoor and radio continue to enjoy increases in spend next year.

Again, this is the story that no one wants to talk about because the myth that radio is somehow struggling to maintain its place in the digital world has taken hold of the marketing mindset in too many organisations. Too often articles about radio are accompanied by a monochrome photograph of a 1930s family huddled around an ancient transmitter. In truth, both radio and outdoor are not growing despite the surge in digital media, but because of it.

More metro outdoor advertising now arrives via digital screens than on paper. And mid-way through this year we passed the watershed point where more radio was listened to on a digital device in this country than via broadcast radio. Break it gently to your digital media mate the next time you see him down the pub, but he is going to have to learn all about outdoor and radio because both are now demonstrably more digital than they are traditional.

There is a recurring myth that the rise in digital ad spend has come at the cost of ‘traditional’ media as the old world is replaced by the new.

Of course, the big headline from the GroupM report remains the rise of what me might term totally digital media. Pure-play internet advertising continues to attract ever greater levels of investment. In 2019 spending on internet advertising will grow by just under 9%. That’s another impressive leap but growth has been slowing for several years as digital disruption segues into media maturity.

The biggest narrative from the GroupM data is the same one that has dominated the last 10 years of media charts and been consistently missed by most pundits. There is a recurring myth that the rise in digital ad spend has come at the cost of ‘traditional’ media as the old world is replaced by the new. As this year’s results and next year’s predictions demonstrate, that’s not actually the case.

The growth in digital has come from incremental increases in total ad spend and then, almost exclusively, from the rapid decline in newspaper and magazine advertising. Other so-called traditional media did not have a bad time of it this year, or the ones that preceded it.

For over a decade news brands and magazines have been the source of most of digital’s rampant growth and that will be the case again in 2019. News brand ad revenues are set to drop again by around 9%, with magazines also falling by 6% for consumer titles and 1% for B2B. Just because it’s tough for news media does not mean it will get any easier next year. Capitalism is a brutal business.

Shift to subscription

The only good news for news brands is that advertising is increasingly unimportant to most of them. Make no mistake, their sales teams will still break your arm off for a full page ad or a wraparound. But the hard reality for most titles is they have had to look elsewhere for their money in recent years.

Before the financial crash, when the world was rich and digital media was nothing but a glint in the eye of a young Mark Zuckerberg, a big newspaper would typically derive 70% of its revenues from advertising and just 30% from subscriptions. Today that situation is reversed for most successful news brands, with 70% or more of their revenue derived from subscription and a minority from advertising income.

That’s partly because ad revenues have dwindled so much that subscription became the majority revenue source by default. But it’s also because well run news brands have realised that their future, like that of radio or outdoor, lies in digital editions.

READ MORE: Mark Ritson: Today’s agencies are like yachts – underused, expensive and all the same

Print editions will remain for legacy readers and also as a loss-leading, symbolic reminder of the origins and advantages of newspapers. It’s hard to get emotional or feel any of the romance of news media from a home page, but the paper edition carries with it the great cultural power of journalism. Print editions will become the ‘couture’ offering of the news brands – loss-making but important assets for building and retaining authority and influence over the market.

But the future for news brands is digital and that brings with it new challenges and opportunities. Many great mastheads – starting with The Economist, The New York Times and News Corp’s global stable of titles – have all become masters of marketing funnels and, wait for it, digital marketing.

It’s an impressive transformation. The arrogance and insularity of newspaper executives was once legendary. But it’s amazing what an existential threat to long-term survival does to a business.

These days most good media executives can show you their pipeline of customers with numbers and conversion rates. They know the main drivers that push an occasional visitor across the paywall and into subscription and the subsequent drivers that ensure the all-important renewal after 12 months of subscription. They know the ‘page zero’ that resulted in an initial subscription and which columnists to reward – not because they write good stuff or are liked by the editor but because they drive and retain subscribers better than others. It has been a hard road for news and magazine media but despite the continued decline in ad spend there is a sense that the very worst of it is now over.

In a strange way, 2019 offers a curious kind of stasis for all of the various media companies. For pure-play digital there is growth mingled with a growing realisation that momentum is slowing and maturity awaits. For radio, TV and outdoor there is small but not insignificant growth, with the caveat for TV that its audience continues to slim, albeit from a huge initial base. For news and magazine media there is yet more advertising pain to come but the comfort that comes from better run operations, a new business model and a transformed set of capabilities.

Peace on earth and good will to all media, then.

The post Mark Ritson: The story of digital media disruption has run its course appeared first on Marketing Week.

As we head into the holidays marketers around the world are about to take a well-earned break. There is just time for one more festive tradition. Somewhere between Christmas and the New Year we all get a deluge of predictions, prophetic articles and PowerPoint trend decks. More and more marketers, it seems, don the VR headset of futurology and take time to predict what will change in 2019.

Marketing is a fascinating discipline in that most people who practice it have no idea about its origins and foundations, little clue about how to do the job properly in the present, but unbounded enthusiasm to speculate about the future and what it will bring. If marketers became doctors they would spend their time telling patients not what ailed them, but showing them an article about the future of robotic surgery in the year 2030. If they took over as accountants they would advise clients to forget about their current tax returns because within 50 years income will become obsolete thanks to lasers and 3D printing.

There are probably two good reasons for this obsession with the future over the practical reality of the present. First, marketing has always managed to attract a significant proportion of people who are attracted to the shiny stuff. It should be populated by people who get turned on by customer data and brand strategy, but both groups are eclipsed by an enormous superficial army of glitter seekers who end up in marketing.

Second, ambitious and overstated projections in the future are fantastic at garnering headlines and hits but have the handy advantage of being impossible to fact check. If I wrote a column saying the best way to buy media was with a paper bag on your head, with strings of Christmas lights wrapped around it you could point to the fact that nobody is doing this as the basis for rejecting my point of view. But if I make that prediction for the year ahead I have the safety of time to protect my idiocy.

Can I suggest that you spend the festive period ignoring all the shit about change and trends and what will alter in 2019.

To be fair to most of the marketers engaged in the prediction game, I think they start off with a genuine desire to talk about the year ahead. But midway through a talk or post the tone inevitably changes and the predictions get bolder and the prophetic statements more unlikely. I call it “future porn”.

If your job is to talk about what speech recognition or artificial intelligence will mean for marketing then you have an inherent desire to make it, and you, as important as possible. Marketers take their foot from the brake pedal of reality and put all their pressure on the accelerator of horseshit in order to get noticed, and future predictions provide the ideal place to drive as fast as possible.

Futurology Christmas drinking game

Given it’s the holidays I propose we play a marketing drinking game. Every time you encounter any of the following future porn examples you have to immediately consume an alcoholic beverage. Trust me, this will keep you plastered all the way into January.

The ‘now it’s really going to happen’ prediction 
One of the big challenges for exponents of future porn is that many of them have already blotted their predictive copy book in previous years. The best way round that challenge is to make it clear that your prediction may not be a new one but that this coming year – with no apparent explanation of why now and not on previous occasions – will really, definitely truly prove to be the year that this happens.

The godforsaken bastards still clinging to the idea that VR is about to change marketing, for example, are on their 32nd attempt at futurology and it’s looking just as unlikely as ever that hordes of consumers are about to strap on a headset. But none of that stops them from claiming that 2019 is the point where VR takes over.

The ‘new will kill the old’ trope
Another reliable approach is to double down on your prediction by spuriously suggesting the old is about to be killed by the new and that 2019 is the year these two events will simultaneously occur.

Amazon is going to destroy retail stores is a common prediction for the year ahead for example. But to make that call you have to overstate both sides of the equation. First, that Amazon is much bigger than it is. In 2018, guess what proportion of all retail sales Amazon handled in the UK? 4%. Now, that is still a massive number. But it’s hardly the end of retail as we know it. Tesco does three times the sales that Amazon does in this country but that’s a fact that no-one wants to dwell on given it’s the season for stupid future porn.

It’s a similar story with the “Netflix is killing TV” prediction. Even Netflix’s own data show that its members derive only 8% of their total video from their platform. Given only a third of British households have access to Netflix the idea that it will somehow destroy linear TV in 2019 is hilarious. But these kinds of stats don’t get much play in the New Year predictions because they do not fit the narrative of new destroys old and how 2019 becomes massively different from 2018.

The ‘re-name an important concept and declare it essential for 2019’ prediction
This one is always a winner and requires total ignorance of fundamentals combined with a craven desire for new stuff. You take something like market orientation, creative or customer advocacy. You give it a bogus new name like ‘customer capital’ or ‘content disruption quotient’ or ‘nano influencer recommendation flow’. Then you proclaim that this new, actually always important, concept will now become a big focus for the year ahead.

The ‘I predict the business I am in will be huge’ move
This is probably my favourite. A business executive who runs a specialist firm offering a particular service takes time from their busy schedule to declare that the big growth trend for the year ahead will be whatever they offer the market.

There are legions of influencer marketing agencies, for example, currently peddling the growing power of influencer marketing and the fact that more and more firms will start using the approach in the year ahead. If I predicted middle-aged marketing professors who write a weekly column for marketing titles will be the future of marketing in 2019 I’d get laughed off the stage. But we indulge executives in businesses engaged in AI, Bitcoin and influencer marketing dirtying our social media feed with self-serving bullshit about these aforementioned topics on an hourly basis.

My bold predictions for 2019

So, allow me to jump on the trend deck bandwagon and suggest my own predictions for 2019. I have a very clear vision for the year ahead. I think 2019 is going to look a lot like 2018. No major changes. No sudden alterations in the structure and operation of marketing or consumers. A few things will grow a little, a few things will decrease. But if you truly step back and look at the big picture for 2019 what would probably strike you more than anything else is just how similar things will be from this year to next. Just look at the chart below:

That’s important because rather than glorying in the pornography of change, good marketers should be learning from 2018 to improve their strategy and execution in 2019. When you lose your shit talking nonsense about all the massive, gigantic, tectonic changes, you miss the possibility of making good solid strategic decisions for the year ahead. Things are not going to change that much next year so how can I, a good marketer, benefit from that knowledge and the things I have learned this year?

Jeff Bezos is legitimately held up as an agent of disruption and new business. But when he was recently asked about what was likely to change over the next 10 years his answer was probably not the one most expected. He acknowledged he was frequently asked about change but was never asked to discuss a more pertinent and important topic.

Bezos said: “I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two. Because you can build a business strategy around the things that are stable in time. In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff, I love Amazon; I just wish the prices were a little higher,’ or ‘I love Amazon; I just wish you’d deliver a little more slowly.”

It’s a key point and one missed by all these marketers exciting themselves with the pornography of change, rather than what will almost certainly not. That latter focus might be less sexy, might make for fewer tweets and likes, but it is clearly also more important.

Can I suggest that you spend the festive period ignoring all the shit about change and trends and what will alter in 2019. Instead, take the time to work on something most crap marketers never consider but the good ones obsess about. I would submit to you that the best thing you can do with the next few quiet weeks, other than see loved ones, is get a sheet of A4 paper and draw a line down the middle of it. On one side write down the five or six things you learned this year about your customer, your brand and yourself. Then make the assumption that not much will change for the year ahead and on the other side of the paper write a short to-do list consisting of all the things you will do or do differently based on what you learned last year.

Like all lists, if you have more than two or three things on it the whole thing is pointless, but I’ll bet those few scribbled suggestions to yourself are a lot more useful than all the posts and columns about how the world is about the change.

I end this column for the year as I began it. Beseeching you to put down the sparkly toys of never-never land and take time out to think about strategy. About brands. About marketing. And about peace on Earth and goodwill to all of us. See you in the future. Merry Christmas fuckers.

The post Mark Ritson: Don’t be seduced by the pornography of change appeared first on Marketing Week.

Stay away from logos, pantones and fonts. That’s always been my credo when it comes to the more graphical elements of brand management. It’s also the advice I give to all my clients when it comes to their own personal reputation within the company they work for.

Most senior people in their organisation almost certainly see the word ‘marketer’ as synonymous with ‘muppet’ and regard brand management as being roughly analogous to the colouring-in department. You might get a positive response when you start talking pantones or showing the executive team the powerful new font you want to use. But as soon as you leave the room there is much shaking of heads and polite career-killing hilarity.

Use your agencies or your junior people to talk about the graphical elements of branding; your personal reputation cannot afford to be within 10 yards of a mood board. Stick to the strategic and financial areas of branding at all costs. Brand is ultimately about making enormous amounts of money that would, otherwise, be unachievable. Talk price, gross margin and intangible asset value. Stay away from anything that has you explaining ‘a consistent look and feel’ or the ‘impact of Helvetica’ on consumers.

But occasionally your humble designophobic columnist is so taken with a branding tactic that he is drawn into the debate and forced, against his better judgement, to discuss colours and images and stuff. This is one of those weeks. I speak, of course, of the momentous decision by Mastercard to drop the name from its logo, leaving the famous red and orange circles free of words.

The move has already divided critics and, as is usually the case at the design end of town, sparked more pointless wank than a boarding school at Christmas. It’s become almost de rigueur to smash any attempt to change or adapt logos as being pointless, superficial overspend. That can sometimes be the case. But some of the time, as in the case of Mastercard, the move is actually very savvy and rather impressive.

It’s very true that that brand managers all too often get hung up on the unimportant minutiae of marketing at the expense of the bigger, more practical picture. But it’s also true that the graphical elements of brand do contribute a significant aspect to the overall performance of a business. Especially when it’s the nanosecond, system-one world of payments that Mastercard inhabits.

More than just a logo

All brands have codes; graphical and symbolic devices that are associated with the company or product. A logo is a code. But a well run brand has more than just its logo. It might also have a colour. A pattern. An additional motif. Whatever.

These are the things that loyal customers associate with the brand and immediately on encountering them they recognise the brand in question, even when the logo is yet to appear. Tiffany’s box. Coke’s curve. The panther of Cartier. The serpent of Bulgari. Cadbury purple. Hermès and its horses. You get the idea.

I’d never let a brand have a penny to spend on media until it could show me three codes in the ad in front of me.

These codes are sensationally important to a brand in achieving distinctiveness in the market. Make no mistake, I believe in differentiation. But when I work with brand teams, next to the intangible list of intended brand associations I challenge them also to isolate the codes through which the brand can claim its territory and look like itself to the consumer.

I learned early in my career that too many codes can be just as limiting as too few. I once worked with a 150-year-old luxury brand and encouraged it to list more than 20 distinct codes of the brand. Only much later was I able to circle back with a bit more experience and a greater confidence and slim that list down to four.

The first lesson of brand codes is that history might have dealt you dozens of interesting symbolic devices and patterns but execution demands you play only the strongest, sharpest codes in your tactical work. Start with your logo then find two, three or maybe four codes that belong to you and not the category.

In other cases brands lack enough codes to create the distinctiveness they seek. While Burberry has its logo and its eponymous check, that – in branding terms – is about it. Hence the recent efforts of new creative director Riccardo Tisci and graphic designer Peter Saville to create a new monogram from Thomas Burberry’s initials.

I am unsure if the new code will gain traction with clients, but I can see why Tisci felt the need to add more codification to the house of Burberry. Most of its competitors count half a dozen codes and use them to great tactical advantage.

The next lesson – and this is the tough part – is to apply your codes mercilessly to everything. Packaging. Windows. Uniforms. Advertising. You name it, I recommend you codify the shit out of it.

Remember that codes aren’t necessarily the logo. If you simply plastered that everywhere it would look obvious and slightly repellent. But codes like colours and patterns can be abstracted and applied in a way that is tasteful, fun, engaging but always distinctive. I’d never let a brand have a penny to spend on media until it could show me three codes in the ad in front of me. Even then I would push for more.

The lack of codes in ads

Most marketers aren’t able to do this because they are too clever and creative for their own good. They focus on their ads for months, deliberating on them for ages. That’s the exact opposite manner in which they are encountered and ignored by consumers.

If brand managers realised that they had seconds to make a connection with consumers they would codify like there was no tomorrow. They don’t because they assume the time spent on the storyboard or the choice of models will somehow help consumers connect the ad with the brand behind it. They won’t.

Most ads are a total waste of money, not because the media choice was flawed or the creative was poor but because almost no one knew the ad was from the sponsoring company. They don’t know that because the brand manager behind the ad assumed everyone would wait for the last five seconds or 10cm of the ad to reveal the brand behind the message. Not good enough. Codify everything.

READ MORE: Ben Davis: The sweet spot is where strategy meets design

A word on advertising agencies here. They should be aware of their client’s codes and encourage them to use them – excessively – throughout an ad’s creative. In my experience that rarely happens. If anything, most agencies encourage clients away from strong codes towards generic, trendy approaches that everyone else is using. I advise most of my senior clients that one of the first signals they are getting it right when it comes to codes is that your agency comes to you and tells you that you are “overdoing the green”. Ignore them and double the fuck down – the codification has only just begun.

I once worked with a very well-known global brand that had a distinctive colour as one of its codes. It was, unarguably, one of the most well-known codes in the whole category. And yet when I went to work with the executive team at HQ they all, from the CEO down, wanted to move away from the colour as part of their planning for the year ahead. The team felt they were “overdoing it” and wanted to tone things down.

It was total lunacy and it took me the first morning with the company to work out why they were determined to make such a silly move. Most had worked on the brand for over a decade. Every morning for 3,000 days or more they had gone to work and looked at a mouse pad, a mouse, a screen and products that were all this colour. When they went to events, when they worked on product design, when they created ads, the colour was predominant. And after years of this incessant colouration most of the team had grown sick of it and were certain that their customers felt the same.

And yet if you left the world of the marketer and entered the world of the consumer it would have been immediately apparent how fresh and integral the code was to brand awareness and sales. The two or three times in the year when the consumer found themselves at point of purchase, scanning the options, the brand and its codified colour leapt out from the competitive set and shouted ‘I’m here’. I managed to turn around the team in question and I have used the experience ever since to make a massive point to the clients I work with.

You have to apply your codes with such fervour and frequency that you, and your agency, are convinced you have overdone it. Only then will a small proportion of your customers notice you. Even though you think you are playing the code too much already you must still double, triple, quadruple down on it in all your executions. What you think internally is overkill is noticed by only 12% of your customers, once.

This probably sounds like you end up with crap creative and obvious communications. Nothing could be further from the truth. When you push your codes hard on the creative team you do not limit their aesthetic capabilities, you actually inspire them. One of the few brands to get codes and their application correct is Kenzo.

For over a decade Kenzo has been sticking to its key brand codes of lacquer red, the poppy and Asians in Paris but still producing gorgeous dream-like advertising for its perfumes. The oldest and best challenge for any print ad is to simply put your hand over the logo and ask anyone who the ad is from. You should not need the logo to know the brand.

Finally, after many decades of application, comes the best part. It’s the part that Mastercard is just entering after 50 years of applying and reapplying its codes across everything it does. Once the code is totally established in the market you can start to play with it. It’s a kind of branding magic trick because it allows an ancient brand the chance to be true to its heritage (here is the code you have known all this time) and also infer freshness and modernity at the same time (but we changed it, see?).

When Japanese manga artist Takeshi Morikami was asked to redesign the Louis Vuitton monogram back in 2002 he produced a white, neon abomination of the signature brown and gold code of the house of Vuitton. But that radical redesign did not just sell out in a matter of a few days, it helped Louis Vuitton refresh itself while staying true to its heritage. It was the same, but different. Ancient and modern. Heritage and creativity. All in one go.

Similarly, the start of the revitalization of Burberry began when Kate Moss slipped on a little Burberry check bikini back in 1999. To our eyes today this does not seem much of a surprise, but 20 years ago Burberry was an old dusty mac worn by ancient Japanese businessmen. To see the same check in a very different place worked wonders for the brand.

And it’s a similar story for Dom Perignon, which has spent the last decade owning the night thanks to a series of modern, luminous games it has played with its iconic logo. Dom Perignon does not want to be an icon; an icon might be very precious but it is also cold and unloved and sits for centuries on the wall of a monastery. Dom Perignon wants to be vibrant, attractive and consumed. By playing with its codes the brand was able to stay true to its ancient roots, retain its legendary distinctiveness but also add light and fun and modernity to its appeal. The more modern and minimalist the Dom Perignon look becomes, the more popular the brand is across the nightclubs of the world.

What Mastercard is really doing is not just changing its logo. It is playing with its code in a modern and masterful way. Rather than a rather dull backdrop for the company name, Mastercard has realised that 50 years of prominence now buys it a license to play with its circles (I nearly wrote balls) in a way that will modernise the brand, enable greater creative impact and ensure continued – probably heightened – distinctiveness.

It’s great work. So great it made me talk about logos and codes and all the stuff I normally avoid.

The post Mark Ritson: Mastercard’s wordless logo shows the power of distinctive brand codes appeared first on Marketing Week.

We’re in brand purpose hell again this week. And the flames are burning higher and hotter than usual. 

This week, Gillette decided that what men really need in 2019 is not just a clean shave and an aspirational brand image. Oh no. The brand, owned by Procter & Gamble (P&G), decided that what will keep men buying Gillette is being told they are not good enough and they need to improve. 

First, a couple of important and obvious disclaimers. Toxic masculinity is something that should be addressed wherever it’s encountered. Men must take responsibility for their own behaviour and those of their peers in ensuring it does not continue to afflict society. Terry Crews, who makes a brief cameo in the ad, is a hero of mine not just for what he has put up with but the manner in which he has responded to it. He is the definition of masculinity in my opinion and I stand with him and all those intent on ensuring Me Too has an enduring impact. 

Second, I do not think this is the worst bit of the purpose wank we’ve been exposed to over the past few years. Unlike Heineken trying to solve all society’s ills by asking people to ‘Open Your World’ or Starbucks claiming its mission is to ‘inspire and nurture the human spirit’, you can see what Gillette’s marketing team were thinking. It’s mistaken thinking. But there is an almost logical line running through the mistake that suggest this is an enormous tactical failure rather than a mistake born of strategy.

READ MORE: Gillette brand takes a hit as ‘#metoo’ ad backfires

In fact, if anything, the strategy part makes sense. This is classic brand revitalisation territory. Gillette’s 30-year-old tagline, ‘Gillette, the best a man can get’, is one of the most famous and impactful slogans of recent history. But as with all things it can get old and dusty over time.

When the slogan debuted, the best a man could apparently get was a hot wife, a sports victory and (this is true) a career as a space shuttle pilot. Such were the dreams of the ’80s. Thankfully, much has changed. The retention of the slogan deserves plaudits. And so too does the attempt to link it with a different, more contemporary vision of masculinity. 

This is similar to what Nike and its award-winning Colin Kaepernick ‘Dream Crazy’ campaign did for its ‘Just Do It’ tagline. Gillette is attempting to take an ancient and highly distinctive slogan and revitalise it for a new era. When you pull this off, you achieve a quintuple branding whammy of retaining a billion-dollar asset (the slogan), shedding all its ancient baggage, dressing it in new cultural clothes befitting 2019, attracting a new generation of customers and generating a pile of on-brand publicity to boot.  

But the difference between Nike and Gillette is as glaring as that between night and day. Nike used the authenticity of Kaepernick, the pathos in his voice and the positivity of his message to inspire customers with an aspirational message that attracted them and then propelled them to purchase. Gillette’s ad feels like a tedious, politically correct public health video – the kind of film we were forced to watch in school about road safety before they invented the internet. Never mind making me hate Gillette, it makes me feel bad about pretty much everything. 

READ MORE: Thomas Barta – The first rule of brand purpose is do no harm

This could have been a win for Gillette. A less heavy hand. A less preachy tone. A more inspirational message that real men, the kind who use Gillette, behave better and stand for change.

Feel-bad message

Gillette opted to use Kim Gehrig, one of a new generation of directors showcased by the Free the Bid campaign, which attempts to hire more female directors into advertising. Again, with such paltry female representation across creative departments, Free the Bid is a noble and important venture. But Gehrig stumbles badly here.

Rather than a work of inspiration and aspiration she delivers a short film that feels vindictive and accusatory. We are not being shown the better path, we are being told we are all on the wrong one and must change course immediately. Men are to blame. You, yes you. It’s a poor way to sell razors. Hell, it’s a poor way to sell anything. 

And the proof of that poverty is in the social media pudding. Since the ad was posted yesterday (14 January) on Gillette’s YouTube channel it has received more than two million views. Thus far the like to dislike ratio is running 10 to one against the campaign. More worryingly, the sheer number of dislikes – one in every 10 people who have seen the ad went to the trouble of clicking the thumbs-down button at the time of writing – suggests a vehement dislike unusual for such a big brand with this kind of major campaign.

There is a special place in marketing hell for companies that invest money into things that ultimately make their situation much worse.

I’ve never seen that kind of negative engagement before. “It’s crucial to make the customer feel bad from the outset and then throughout the ad if you intend to sell to them effectively,” as David Ogilvy never wrote.

Despite becoming such a talking point, Kaepernick’s Nike ad enjoyed exactly the opposite social media response with its like to dislike ratio running 10 to one in its favour. And despite its enormous cultural impact, divisive message and four months of air time, Nike’s campaign has only managed to generate a 10th of the dislikes on YouTube that Gillette has achieved in just 24 hours. Trouble.  

The qualitative comments below the ad on YouTube should make for salutary reading for Gillette too. If the team are able to get off their high horse and listen to their target customers for a few seconds they will quickly appreciate that they have a branding crisis on their hands, all of their own making.

“Harry’s razors are cheaper and available at Walmart for the same or a better quality shave…keep politics out of our grooming habits,” was one plaintive response. “Not buying any more. A company making billions from male grooming products trying to shame men for being… men?” was another well-liked retort.  

READ MORE: Meet Harry’s, the shaving startup taking on Gillette

Most people who proclaim they will never buy a brand on social media soon forget their digital sentiment, return to their low involvement heuristic purchases and all is forgotten. But these comments also provide a bellwether for just how badly Gillette has misjudged its campaign and its customers. Scrolling through the bile from Gillette’s proclaimed former customers this week must surely strike a chord of horror among Gillette’s branding team.  

A suicidal move

And those really are Gillette’s customers commenting on YouTube by the way. Again in contrast to Nike, Gillette still has the dominant share of the shaving market. Sure, Dollar Shave Club has made some nice headlines in recent years but Gillette still enjoys, or rather did enjoy until this week, a 50% market share in America and even more in the UK.

Nike knew it would anger some customers with its Kaepernick ad but it also knew these soon-to-be-enraged customers were the ones buying less sportswear, looking much worse in it and possessing far more price sensitivity than the segment it targeted with the ad.

And Nike had nowhere near a 50% share of any of the categories it competed in. From t-shirts to jogging bottoms to running shoes, there was much more to be gained than lost from its risky Kaepernick ad. Gillette, conversely, was sailing a big 50% boat and suddenly decided to rock it, badly. “All you had to do was be quiet and sell razors. RIP Gillette,” as one YouTube comment put it yesterday. 

Of course, that’s the one thing you won’t see much of in Gillette’s new ad: razors. Among all the sanctimonious hectoring and evil masculinity on display in the ad there is very little room for any reference to shaving or Gillette. Nike’s campaign was not just aspirational, it actually showed Nike products in action throughout the two-minute spot.

That initial skateboarder that opens the ad, the refugee playing for Canada’s national football team, the cheerleader who became a linebacker, the best basketball player in the world – they were all shown engaged in sport and, remarkably, all wearing Nike while doing it. Imagine! 

Gillette has plenty of tearful mothers, bullies, disillusioned teens, obnoxious executives and sexist bozos at parties. But with the exception of the retro clip of the original ’80s ad and a half-second at the end of the spot, there are no razors and no mentions of Gillette. Sure, we have lots of men contemplating the error of their ways – presumably in a bathroom mirror. But none pick up a razor and no mention of Gillette is made.

Instead, viewers are directed at the end to Gillette’s website where they can learn more about the cause and revel in the discovery that Gillette, which last year generated in excess of $6bn in sales, will donate $1m to non-profit organisations intent on improving men this year. Wow.   

READ MORE: Stop propping up brand purpose with contrived data and hypocrisy

There are two ways to measure the toll that this dreadful ad will take. The first is the simple opportunity cost of taking Gillette’s American advertising budget and blowing much of it on this purpose-driven piffle at the expense of something more positive, persuasive and actually featuring the product and the brand itself. Usually this opportunity cost is measured in the millions of dollars, but that is usually the end of it. 

But in Gillette’s case there is a bigger price to pay. There is a special place in marketing hell for companies that not only waste their marketing budgets but actually invest that money into things that ultimately make their situation much worse. That’s going to be the cost of this foray into brand purpose for Gillette.

It has spent its own money to make its still excellent commercial situation indelibly less positive at a time when it can ill afford the misstep, given the many alternatives vying for its sales. And for that we should stand back and appreciate what might turn out to be the worst marketing move of the whole year. 

The post Mark Ritson: Gillette’s new ad will trash its sales and be the year’s worst marketing move appeared first on Marketing Week.

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.

READ MORE: Mark Ritson: Gillette’s new ad will trash its sales and be the year’s worst marketing move

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?

READ MORE: Why we can’t give up on the ‘science’ of advertising

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.

The post Mark Ritson: Revenue is a lousy measure of success for most ad campaigns appeared first on Marketing Week.

A big move at Facebook will see the company unify the technical infrastructure behind Facebook Messenger, WhatsApp and Instagram into a single operational platform. The brands will continue to present themselves independently to users but, by early 2020, the platforms will be reconfigured to run from the same operational system.

When Facebook acquired Instagram and WhatsApp both deals were structured in such a way as to indicate that the platforms would continue to operate with significant independence from the Facebook mothership. “We need to [build] on Instagram’s strengths and features, rather than just trying to integrate everything into Facebook,” Mark Zuckerberg announced when he acquired Instagram in 2012.

So what has sparked such a major strategic revision?

When companies acquire brands to sit alongside their existing offers there is usually a grace period and then a prolonged and more painful stage of integration. Facebook has signalled that it still plans to operate as a ‘house of brands’, with each of its platforms appearing as an independent and autonomous brand to users.

That makes total sense given both Instagram and WhatsApp have much more potential than Facebook to grow in the future. In a house of brands the consumer sees different, distinct entities at the front of the house, but in the back office all the revenues eventually culminate on a single, unified balance sheet. Every house of brands shares a similar dual organisational challenge: distinction at the front, singularity at the back.

READ MORE: Asda and Sainsbury’s must balance unity with differentiation to make their merger work

The trick for any house of brands is to work out the optimum point where that distinctiveness turns into singularity. There have to be distinctive logos but there can only be one share price and one CEO. In between there is a grey area and the key issue of whether functions should be run by the group or by the brand. And there is no simple answer to any of these questions.

Should a brand have its own HR team or use the group’s services? Should all the products be manufactured in a group facility or should each brand be allowed to run its own production? One agency or many? Is corporate social responsibility done at the group or brand level?

Back-of-house integration

In my experience of working with companies like this, the secret is to draw the line between front-of-house brands and back-of-house group operations as close to the front as is strategically viable – so as to increase synergy and scale – while not making it so shallow as to undermine the brands and ultimately kill the golden goose of brand equity.

It makes sense that Facebook wants to unite its disparate platforms together at the back of the house. It will allow users to communicate directly with others using alternative platforms without the hassle of jumping from one login to another. This simple compatibility should improve user satisfaction across all three platforms and it also fits broadly within Mark Zuckerberg’s oft-quoted purpose of connecting the world together.

It will also give Zuckerberg far more power over his empire. Having different generals running separate armies on the other side of the hill is a risky way to win the war. There were multiple reports from inside Facebook that the respective founders of both Instagram and WhatsApp struggled with Zuckerberg’s desire to control their operations post-acquisition. These founders have now all left the building and Zuckerberg is free to pull his empire closer together while eliminating any immediate and obvious potential replacements.

Snigger all you want, but if you had built an empire like Facebook and then been threatened so frequently with expulsion, you’d be removing them too. Zuckerberg wants control and he wants it for a very long time.

There are many who argue it’s a matter of time before Instagram becomes the most valuable brand in the Facebook portfolio. Given that potential, why risk its longevity?

Linking the platforms is a gigantic feat but, once complete, it also creates another handy strategic advantage: intractability. There have been increasing calls for the breakup of Facebook given the fact that in many countries Messenger, Instagram and WhatsApp represent a significant slice of the user’s total digital time.

It’s unlikely that a Republican/Trumpian US government would propose any such breakup but with Democrats potentially only two years from the White House it’s easy to see why stitching all the apps together into a single operational unit could prove invaluable in the legislative battles that Facebook might face in the future. Once these digital knots are tied it will be impossible to separate them again – whatever the edict from Washington, DC.

Uniting the platforms together also opens potent opportunities for even more user data. If Facebook can join the dots between what people are messaging about across their platforms, to multiple people, during even more occasions, it could add bucket-loads more information to each user profile. Facebook tried to link data from WhatsApp users to bolster Facebook advertising last year only to have the move blocked by the UK and other European governments based on data privacy concerns. Could this new structure be an attempt to enable this synergy in a manner that evades any government sanctions?

Facebook’s toxic brand

For all the apparent advantages of the integration, this is a very risky move. Facebook is unique both in its global penetration and also its cultural toxicity. Never in the history of capitalism has a brand been so hated and yet so patronised.

You only have to look at the popularity and suspicion surrounding the recent ’10-year challenge’ – where people posted a decade-old photo next to a contemporary one – to get a perfect sense of Facebook’s unique and precarious position within global culture. Is it a harmless meme or a sophisticated way to source facial recognition data to help Facebook’s AI protocols?

Fucked if I know, but the debate provides a perfect window on the massive distrust that surrounds both Mark Zuckerberg and Facebook at the moment. Whatever the explanations for its situation, the one obvious brand management implication would be keeping your current and future acquisitions ring-fenced from Facebook’s toxic brand image.

READ MORE: Government targets Facebook and Google with digital ad tax

Instagram was an astonishing deal. To buy that platform, at that time, for that price, proves that Zuckerberg is a strategic genius. Without Instagram where would the Facebook share price be right now? There are many who argue it’s a matter of time before it becomes the most valuable brand in the Facebook portfolio. Given that potential, why risk its longevity and, thus far, its perception as an independent and separate entity from Facebook with this new decision to move them closer together?

It could be that Zuckerberg believes that he can execute the move perfectly. If he does, by 2020 Facebook will enjoy all the advantages of more data, lesser risk of breakup and total Zuckerberg control, while maintaining the illusion that these brands remain separate and independent entities in users’ eyes.

It’s certainly possible. Consumers agonise over buying an Audi or VW, asssured by the knowledge that these two brands are derived from exactly the same company. Drinkers argue late into the night over the relative merits of Veuve versus Moët, ignorant of their status as part of exactly the same company. Perhaps Instagram and WhatsApp can supply user data to Facebook without compromising their apparently separate standing in the mind of users.

Then again, perhaps Zuckerberg does not care. Facebook is his baby. It always was. If he has to compromise his adopted children to ensure the continued health of his first born then so be it. Sometimes all the data in the world cannot sway a decision that is born from emotion and control. If Zuckerberg has learned anything thus far in his titanic media career it’s that the more data Facebook can amass, at any price, the stronger his business becomes.

The post Mark Ritson: Moving closer to Facebook is dangerous for Instagram’s brand appeared first on Marketing Week.

I swore I would not do it. Told myself for weeks that it would be that most hoary of clichés and that I should not even consider working on such a thing.

So here it is: a column about Super Bowl advertising in the immediate aftermath of Superbowl LIII.

The topic is irresistible, despite its predictability, for one simple reason. Here we are entering 2019 with an ever-increasing emphasis on short-term, personalised, always-on digital communications. And yet, for all that, a 30-second spot on linear TV continues to represent the zenith of advertising execution for most big companies.

And – to make things even more contradictory – along with the usual mega brands like Coke and Budweiser, who have made the Super Bowl their commercial home this time of year, there were a host of digital brands also promoting their wares during Sunday’s game.

READ MORE: Less politics, more female power: What to expect from this year’s Super Bowl ads

The likes of Microsoft and Amazon have long been portrayed as the enemies of traditional linear TV and yet here were both of them, alongside hot new digital brands like Bumble, pumping millions of dollars into a good old TV spot. Even Gary Vaynerchuk, author of ‘Crushing It!’ and a thousand diatribes on the pointlessness of TV ads, was in on the action. His agency VaynerMedia produced a spot for Planters Nuts, in which a giant peanut-shaped car something something with Charlie Sheen something something.

Super Bowl advertising is not just surviving the digital revolution; if anything, it appears to be growing in influence as the technological screw in marketing tightens. The going rate for a 30-second spot this year was $5.3m and CBS sold every single spot long before Sunday’s kick off.  The original ads for the first ever Super Bowl back in 1967 cost just $40,000. Adjusted for inflation that’s about $300,000 in today’s money, or about 6% of the current price.

Jump forward to 2010 and a spot would have cost you only $3.4m in 2019 money. And the cost has kept rising consistently ever since. In the decade that has seen linear TV advertising widely relegated and portrayed as being on its last legs, the spot price for a Super Bowl ad has increased annually by about 5% in real terms.

That inflation makes no sense if you buy into the current narrative of ‘where advertising is going’. It’s digital media that leads the charge now – not old-fashioned linear TV – for starters. And we are meant to be all about the immediate measures of ROI and bottom-of-funnel efficiencies these days, not top-of-funnel brand-building fare – the stuff we get during the game.

And where is the personalisation? Isn’t this meant to be the era of big data, behavioural targeting and micro marketing? Why the fuck are brands spending millions on ads that say the same thing to a hundred million people at the same time? On a TV?

The growth and continued centrality of Super Bowl advertising, despite its apparent inability to conform to the principles of 21st-century media, sends many ‘modern’ marketers into paroxysms of ROI-induced madness.  As regular as a digital clock, they take to social media every Super Bowl weekend to point out the utter wastefulness of blowing your media budget on 30 seconds of Harrison Ford falling out with his dog. Many then follow up with a laundry list of all the ‘smarter’, more digital ways you could have spent your budget for far superior ROI.

A #SuperBowl ad costs the equivalent of 2.6 billion Instagram impressions "and at 2 cents per view, you could get 260 million video views." Check what else you could buy in digital media with $5.2 million: https://t.co/o2jksk1GaQ

— RU Comm Dept (@RUCommDept) January 31, 2018

Would you rather have a $5.2 million Super Bowl ad or featured in eight posts from Selena Gomez? https://t.co/OwE0ItH06s via @digiday

— iLyse Liffreing (@IlyseLiffreing) January 29, 2018

For the cost of a $5.2 million Super Bowl ad, you could buy 357.1 million mobile video ad impressions, which amounts to 17.25 million minutes or 32 years worth of mobile video ads. https://t.co/KAJX6nUAht via @digiday

— Norm Johnston (@ntjohnston) January 29, 2018

Hilariously, these lists usually register the opposite effect to their original intention as the stream of proposed digital alternatives looks, well, lightweight in comparison. As tempting as eight posts from Selena Gomez or 357 million mobile video ad impressions might be, a Super Bowl ad looks like good value in comparison.

And the reasons for that continued superiority don’t just make for an interesting discussion, they serve as an interesting critique of how we build brands in 2019. Don’t see my “SuperList” below as simply a justification for Super Bowl ads, but rather a challenge to how we all think about advertising media in the 20th year of the 21st century.

Ritson’s Super List of seven reasons why Super Bowl advertising still makes sense

1. An accurately measured, massive and unfashionably human audience

The audience for the Super Bowl is properly huge. Best predictions suggest the TV broadcast plus the live stream occurring in parallel on Sunday night will have exceed 110 million people in the US alone. The data comes from Nielsen and will be subject to great debate as usual. But, cutting a long story very short, a smaller sub-set of households (around 40,000) is entirely representative for the whole of America.

If you have basic training in market research, you will know that you don’t need 120 million data points to measure 120 million homes. If you don’t have that training you will scratch your head, and then make an ass of yourself on social media.

Whatever you think of Nielsen’s methodology, one thing that isn’t debated is that its People Meters are connected to actual people. Whether marketers want to admit it or not, the alternative media options to TV continue to be massively compromised by non-human traffic.

Best estimates put the non-human proportion of digital media at around 30% in 2018. Facebook has removed 2.8 billion (that is not a typo) fake accounts from its platform since Q4 2017. The Super Bowl comes with no such concerns. There really are that many eyeballs on the game.

READ MORE: Mark Ritson: The story of digital media disruption has run its course

2. Advertising engagement

The audience might be exclusively human but the downside is that, unlike bots, they have to take a piss every now and again or indulge in a brief bit of leg-wobbling passion with the other half. This is traditionally how consumers have utilised program breaks; only the ad industry sees them as the time when advertising is watched and appreciated.

The target market sees a commercial break as exactly that – a welcome chance to grab a beer/piss/snog/nap. But the Super Bowl has uniquely super-contextual properties. American football is incredibly boring for startlingly long periods of the game (case in point, last night’s one-touchdown snoozefest) and, because audiences have switched on as much for the ads as the game, Super Bowls convert a huge proportion of the programme audience into advertising audience.

Compare a Super Bowl ad with feeble Facebook ads, which were being touted as an alternative this weekend, and you begin to see how TV might just be worth the ridiculous premium. It’s not just 110 million people, it’s 110 million people being served 100% of pixels of the ad, full screen, full volume, to multiple people, who are concentrating on the screen, looking forward to the content, then talking about it afterwards.

3. It has long-term top-of-funnel effects

We live, as agency BBH so rightly notes, in an efficiency bubble in which marketers have become enamoured with immediate metrics and the dangerous, slippery siren song of ROI. This obsession has seen more and more marketing budgets being sent down the funnel, focused on digital media, and in search of immediate effect.

To some degree there is nothing wrong with this approach. But as the money has moved down the funnel and the timelines have shortened, the practice of spending budgets at the top of the funnel on awareness, brand image and other longer-term pursuits has grown rarer and therefore ever more valuable.

The Super Bowl provides the perfect opportunity for brands to temporarily reverse their short-termism and do a bit of mass-reach, emotional brand building. As marketers remain ever more intent on plucking short-term fruit with their marketing tactics, think of the Super Bowl as a rare day when the pickers get the weekend off and the farmer leaves the irrigation on for 48 incredibly refreshing hours.

4. Creative actually counts on Sunday

Because Super Bowl ads attract incredible attention from audiences and experts alike, something rather unusual happens with many of the ads that are created for the big game. Brands that are usually absorbed with programmatic ratios and efficiency tables take time out, think about what they need to do with their expensive $5m spot and then engage world class creative teams from top-tier agencies to produce effective ads.

That’s not how we usually do things these days. The dirty secret of much of our industry is that media now dominates the effectiveness debate so much that we have stopped factoring creativity into the mix. This is despite the recurring evidence that suggests message outperforms media in the effectiveness stakes time after time.

We have become so obsessed with the pipes of advertising, their location (in-house, out-house?) and the speed and cost with which they deliver their payload that we rarely worry about what is actually being pumped through them. The Super Bowl’s extravagant cost and critical spotlight forces brands to be content-led rather than media-obsessed.

Like a magical golden turd in a year of digital diarrhoea, Super Bowl Sunday impels brands to sit down on the pot, strain their creative bowels and produce something of genuine heft for a change. Sorry for the shitty metaphor.

5. It’s signalling at its finest

One of the oldest and most important theories of advertising remains one of the most ignored among modern marketers. Irrespective of what an ad says, the very fact you have spent this much money on buying a Super Bowl slot and are in the company of the likes of Pepsi and Mercedes signals to consumers that you are a ‘big deal’.

Your product is likely to be perceived to be superior, your brand as preferable and your company as more trustworthy. Even if you just spend the 30 seconds of your expensive ad showing your logo glinting in the sun, you will signal something. That may not sound like much. But for many of the brands yesterday it was a big part of the attraction.

Kia gets to suggest it’s a big car brand just by turning up. Fizzy drink brand Bubly (me neither) makes itself look like a big deal in front of distributors, retailers and customers by simply filling the screen with stuff for 30 seconds. You don’t get that kind of response when you buy a summary card, or a million summary cards for that matter, on Twitter.

The common retort when you make the case for TV advertising is that most smaller brands “can’t afford TV”. Exactly, you fuckers. Exactly.

6. It’s cultural imprinting

This is a big one and, again, often missed by all those peddling the idea that a billion Instagram ads would have been better value for Stella Artois than bringing back Carrie Bradshaw and the Dude for a 30-second TV spot. The attraction of so much digital media is that, thanks to behavioural targeting, we don’t buy media anymore but rather opportunities to reach a particular target consumer on their digital path around the interweb.

That has a lot of efficiency advantages but it comes with one huge downside: you reach individuals at different times with different messages in isolation. It’s entirely possible that a hundred different consumers saw a hundred different ads in the spot at the top of the digital edition of the New York Times today.

Provided you assume an audience is simply a lot of individuals this makes perfect sense. One plus one plus one does equal three, after all, and eventually you can reach your whole target market. But, of course, that is not the right way to see things at all.

An audience is a living, plural thing that interacts and responds to itself in real time. Watching a horror movie in a full cinema versus at home on the couch on your own is a completely different experience. The power of others seeing the same thing as you, in the same room and across the world in the same moment, cannot be overstated.

The social psychologist Kevin Simler calls it ‘cultural imprinting’. Ad Contrarian Bob Hoffman thinks it’s the reason that marketers struggle to build brands with exclusively digital media. It’s a huge reason that cinema, radio, outdoor media and TV will all retain their place in the media mix of the 21st century. It’s not enough to know that the Dude is drinking Stella. You have to know that everyone you know also now knows that the Dude is drinking Stella.

The weird maths of audience interaction means that it’s a case of 100 million to the power of 100 million. Audiences are multiplicative not incremental.

7. It’s integrated

And finally, perhaps best of all, Super Bowl ads are not really TV ads at all. They often aren’t even ads. They have been premiered on TV shows, written about in newspapers, voted on by the public. They have been shared and commented on all over social media. They have been referenced about in columns like this. Replayed in bars and playgrounds. And the fact that they encompass so many different media means they enjoy the kind of synergy, salience and effectiveness that exclusive airing on TV could never achieve.

Occasionally a Facebook ad makes it into other media but it’s rare and usually comes with a headline like ‘Now look what those fuckers are doing to our kids’. Positive multimedia synergies are possible with any ad in any format but TV ads, and especially Super Bowl ads, enjoy a significant interaction premium.

In the fragmented house of modern media, television advertising is usually the hallway. Start there and you can often open doors to most of the other media rooms in the house by taking advantage of the content, signalling power and creativity of the 30-second spot.

The fascinating contradictory reality of Super Bowl advertising is that it is not a dinosaur or an outlier in the world of modern media planning. It’s actually a much needed and increasingly valuable addendum to what ails advertising.

In fact, it’s so valuable even the dumbest digital prophet will not venture a prediction of the ‘death’ of Super Bowl ads any time soon. They are so predominant that they avoid even this trope, which haunts almost every other corner of marketing.

READ MORE: Mark Ritson: Gary Vaynerchuk is wrong, wrong, wrong, wrong, wrong about media

The only threat comes not from the demise of TV or advertising, but from the precarious state of the game itself. With an increasing amount of scandal attached to American football, and the tragic roll call of head injuries that afflict a growing proportion of the game’s players, it’s the game not the advertising that’s in danger.

The post Mark Ritson: Even at $5m each, Super Bowl ads make sense – here’s why appeared first on Marketing Week.

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.

READ MORE: Mark Ritson: Marketers are clueless about media effectiveness – here’s the proof

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.

READ MORE: Mark Ritson: Gary Vaynerchuk is wrong, wrong, wrong, wrong, wrong about media

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.

The post Mark Ritson: Think TV is dying? You’re forgetting about the ‘Knopfler Effect’ appeared first on Marketing Week.

The news that the Co-op Bank has disbanded ‘digital marketing’ should come as no surprise.

For several years senior marketers have been wearily signalling that the need to maintain a digital marketing team separate from the rest of the marketing group was disappearing. And the ultimate manifestation of that realignment, the merger of the digital and marketing teams into a single unit, has been happening across marketing departments with increasing frequency over the last 12 months.

The reason for that integration should be obvious. Despite the recurring use of the dreary D prefix it has become harder and harder to isolate exactly what isn’t digital any more.

READ MORE: ‘There’s no such thing as a digital team’ – Co-op Bank rethinks marketing

TV is digitally delivered and increasingly focused on an addressable, highly digital future.

Any decent newspaper in the 21st century – starting with the New York Times – is now making more money and seeing significantly more growth from its digital platform versus its print edition.

Radio in this country is now delivered to more listeners via a digital platform than broadcast.

Outdoor advertising is demonstrably a digital display business – albeit on big screens that consumers don’t own.

Even skywriting is, I am reliably informed, projected using digital technology these days.

The world has become completely digital and – as my fellow Marketing Week columnist Tom Goodwin has noted – just as referring to your computer as an ‘electrical laptop’ would strike everyone as odd, using the D prefix in any marketing in the near future will come across as slightly batty.

We have come full circle and marketing, as it has done so many times in the past, has absorbed and accommodated a new advance and emerged triumphantly changed as a result.

Of course, that does not mean that it’s back to the marketing coal face like it’s 1995 all over again. There are manifest implications of marketing in the ‘post-digital’ age that will affect all of us. Let us make a quick expedition around the main areas where we can expect significant change.

Marketing departments

If you still work in a company that has a demonstrably digital team sitting separately from the marketing department, take a deep breath, a few pictures for posterity and then prepare for a reorg. The Co-op Bank is not an exception and the binary divide between these two teams is about to come crashing down as financial savings, and the realisation that both groups are effectively engaged in the same work, become apparent.

While idiot digerati will be exposed, so too will those who aren’t open to the potential of options that have appeared over the past decade.

As we speak, most senior marketers are making their power play and ensuring that the head of digital is being shifted horizontally towards the nearest window while they unite the two teams under their direct leadership.

Initially that means a lot of sensitivity toward the conjoined team and, given there are no marketing teams being swallowed by the digital group, that means playing lip service to the importance of all things digital during the transition. But quickly normal marketing service will be resumed.

Job titles

Inevitably, the merger of groups will mean that duplication will result in some downsizing. It’s essential that any decent marketer caught up in this integration communicates both sides of the marketing coin.

On the one hand you need to avoid being precious about your digital creds. Signal early you are entirely comfortable losing the D prefix from your title and, for good measure, add something re-assuring like ‘I do not even know what digital means anymore’ or ‘isn’t everything digital now?’.

The merger process means that anyone who is a member of the extreme digerati will be the victim of the new regime. You know the type: obsessed with AI, convinced in the long-term value of VR, boastful that they don’t own a TV. They will be the first to go when the revolution comes.

Digital experience is a prerequisite

But make no mistake, it’s no good proclaiming that digital is wank and it’s time to get back to basics, pull all the money from Facebook and get it back into ‘proper’ media. The post-digital era cuts both ways.

While idiot digerati will be exposed, so too will those who aren’t open to the potential of all the new research and media options that have appeared over the past decade. When Alastair Pegg, the leading marketer at Co-op Bank, noted that that there was “no such thing as digital marketing” he followed up with the corollary that all “all marketing is digital marketing”.

READ MORE: Mark Ritson: Three reasons having a digital prefix will stunt your career

While we might be dropping the D word and returning to calling it marketing, the 2019 version of our discipline looks very different from 20 years ago, when most marketing executives were learning their trade. After the digerati get their pink slips, anyone who refuses to open themselves to the potential of digital tactics in the mix will almost certainly follow.

Integration

Which brings us neatly to the fervent hope that integration will come back to the fore in the post digital age. It is entirely and utterly obvious that the answer to the digital versus traditional question is an unqualified ‘yes’ to both.

You want multiple channels in your mix. They are more than likely to come from all kinds of media and you want to integrate them into a coherent campaign that uses different tools to do different things, at different stages, and sometimes to different consumer segments.

That’s been bloody hard to do over the last decade with alternative, warring factions within client companies and agencies attempting to show their superiority over their rivals. It’s like trying to win the 1940 World Cup with a team built from Nazis and Allies, and an Italian fascist as the coach.

Only the smartest, most independent thinkers were able to hang on to the idea of media neutrality, integrated marketing and 360-degree campaigns. Now we’ve entered a digital armistice, we can only hope that the era of digital campaigns will come to an end and we can get back to integrated marketing in which diversity wins out.

It will start when we stop having silly charts showing the share of digital media that Facebook has versus Google (like this one). We all use this information but carving out digital media into a subcategory is increasingly unhelpful. And things will really start to take off when we stop giving awards for digital marketing and just start rewarding the campaign that achieves the most effectiveness.

It will be tough because there are so few marketers equipped to manage across so many different channels and integrate them properly. But in a post-digital era those who can jump from a meeting with ITV to one with LinkedIn, managing both fluently and with élan, are who we are going to need.

Digital transformation projects

Digital transformation has been a long and lovely gravy train for a huge army of consultants working for all the big audit firms but the work is about to dry up. Either the company in question has digitally transformed itself or it is so behind the times that it will go about that transformation within a cone of silence because it is so embarrassed to have not got its digital ducks lined up by now.

I was around when we all went mental about the Y2K bug and the risk it placed on global systems. You could not get on the Tube for a while without a couple of yuppies banging on about their role in preparing their clients for Y2K. Obviously, that talk died out very quickly once we survived New Year’s Day with nothing worse than a hangover, a mysterious bruise on our left leg and a vague recollection of a traffic cone somewhere in Clapham.

The same will now happen to all those bright young people and huge old firms making billions from digital transformation. The barrel full of fish is running dry.

Agency structure and offer

One area where we might see the D word remain is in the offer of some specialist communications agencies. Just as public relations agencies do a lot more than PR these days but retain the moniker, we may well see digital agencies continue to prevail. But even that looks increasingly unlikely.

Mark Read, the daring new head of WPP, made many things clear during his radical restructure of the holding company late last year, but one of the major insights came in the short shrift he gave digital in his plans for the future of his mega-agency.

“Digital is a word that has been banned from WPP,” Read noted at his investor conference late last year. “That artificial distinction between analogue and digital is not helpful.”

It was more than a soundbite. Read’s new strategy for WPP involves taking demonstrably full-service agencies like JWT and more ‘digitally savvy’ companies like Wunderman and merging them together in an attempt to prepare for the post-digital world ahead.

M&A in advertising

And internal WPP mergers of offline and online entities are only the start. With the realisation that all media are now, essentially, digital we should also see an increasingly competitive and confusing media M&A scene.

Given the growth and cash reserves rest with the digital giants these days, expect some big plays to come from that direction in the coming months.

At the moment most companies labour under the belief that they can only acquire assets in the immediate vicinity of their own operations. A big outdoor advertising firm like JCDecaux buys a smaller one like APN. A big digital giant like Spotify acquires a smaller up-and-coming platform like Gimlet.

But with the digitisation of everything and the integration mandate from clients likely to increase, expect more cross-media acquisition deals. Digital media companies should start to sniff around traditional firms and vice versa.

There is no reason, for example, why Facebook would not want to buy a TV station. Or, for that matter, why LinkedIn would not be well served by starting to buy up outdoor space in specialist B2B locations like airports and train stations.

Given the growth and cash reserves rest with the digital giants these days, expect some big plays to come from that direction in the coming months. Channel 5 is not going to make a move on Google, if you catch my drift.

Training

In a post-digital world we should finally wave a fond farewell to all the specialist courses and training programmes in digital marketing. Sure, there is room for technical skills at the lower end of the training totem pole but the idea that you need to be trained separately in digital marketing should disappear in the near future.

I’ve endured my fair share of these courses over the years. They inevitably start by declaring marketing to be effectively dead or outdated, then re-present the classic marketing syllabus with some digital examples to illustrate how everything has now totally changed. It’s not segmentation any more, oh no, its digital segmentation and here is an example using mobile phone companies to illustrate the point.

Ideally, marketing training will re-surface as an essential input in any marketer’s career path. That sentence should not present itself as radical but unfortunately it almost certainly is. A majority of marketers still believe that training in their craft is a non-essential element in their abilities and one of the prime reasons for that ignorance has been a preference for overtly tactical, second-rate courses in digital marketing.

That said, there should be a renewed pressure on those designing and offering marketing training and degrees to ensure that the syllabus is updated to the post digital age. Separate courses in digital marketing are likely to go the same way as degrees in international marketing. But we must, must, must update the content of marketing degrees to ensure integrated marketing communications is not TV, radio and ‘internet marketing’, a la 1995.

Most marketing undergraduates will take 10 years to make their first strategic decisions – when they start out in the business they are engaged in exclusively tactical occupation. While it’s important we arm them for their strategic careers down the track, it’s essential we give them the up-to-date insights in campaign building.

Longer-term focus

The biggest opportunity I can see in the post-digital age is probably the ability to unite the top and bottom of the funnel together again and remind everyone that these two stages are actually one and the same thing.

READ MORE: Mark Ritson: Marketers are clueless about media effectiveness – here’s the proof

One of the most unfortunate implications of separate digital and marketing teams has been a bifurcation of objectives into longer-term effectiveness goals at the top of the funnel, led by traditional tactical investment, and shorter-term efficiency plays at the bottom using predominantly digital tools.

The great lesson of Peter Field and Les Binet’s work is that we need both long- and short-term objectives. Uniting the marketing department should also mean uniting the two ends of the funnel. It will give marketers a chance to make the case for building awareness and consideration over the long term, and showing that these investments can actually provide a better route to enduring, sustainable profits than simply going after the low-hanging fruit of click-through rates.

There are many reasons for the short-termism afflicting most organisations but the separation of digital and marketing was one of the main ones. Let’s hope it helps lengthen the average trajectory of marketing in the near future.

Renewed focus on the consumer (remember them?)

The irony was that as we wanked on about the superiority of digital media over traditional media, and vice versa, the target consumers carried on as if the whole distinction was totally fucking meaningless. One evening in any household in Britain would have revealed consumers reading magazines, checking Facebook, watching TV, sending emails – almost as if the whole idea of an online versus offline consumer was total cock.

It has become customary to produce charts in which you showcase a consumer’s typical digital media consumption, showing the various minutes in the day a consumer spends on Facebook, YouTube and the like but which ignores all the radio, outdoor and TV these same people are exposed to each day.

Ask Mr and Mrs Smith if they watched TV or checked Facebook last night and they will, of course, say both. All we have to do as an industry is be as adept and media-neutral as the consumers we target.

By dropping the D word I am ever hopeful we will use the C word more often in our day to day interactions. That came out wrong. But you know what I mean.

An end to the paradigm wars

Too many paragraphs have been wasted on why digital media is better. Too many hours have been spent presenting the case for one medium over another. Too many bar charts show how our media is more profitable than yours. None of this helps in the true battle of marketing.

We need to understand our consumers better. We need to build proper brand strategy that is actually fit for purpose. And we need to blend and fuse the different tactical elements of marketing together to achieve the best possible result for our stakeholders.

Let’s hope the newly conjoined marketing departments of the post digital age are now well set to do just that.

The post Mark Ritson: It’s time to shut down digital marketing teams for good appeared first on Marketing Week.

It’s been an awful week for Kraft Heinz. The giant food conglomerate born from the $49bn merger of Kraft Foods and Heinz four years ago is reeling from a disastrous close to 2018. Last week the company posted a net loss of $12.6bn for the final quarter.

That is a huge loss by any corporate standard, even the heady numbers that surround Kraft Heinz. It represents around half of annual net sales of the company, for example. The financial markets reacted immediately to the news, wiping 27% from the company’s share price last Friday.

Success, we have so often been told, has many fathers while failure is an orphan. But there are usually also plenty of people lined up to explain to the lonely child why she lost her parents. That’s certainly true of Kraft Heinz. Since Thursday’s shock announcement several competing explanations for the sudden drop have started to circulate.

The DTC threat becomes real

For many, this is part of the broader narrative of the rise of direct-to-consumer (DTC) brands and their ultimate ability to dethrone the formerly untouchable category giants. By now you know the script: the old rules of marketing and brand building do not apply anymore in traditional categories like beauty and FMCG.

READ MORE: Mark Ritson: The threat of direct-to-consumer disruption is seriously overblown

There is a rising tide of independently-created disruptors that use a new tactical playbook to promote and distribute their products to target consumers and sidestep established brands. These DTC brands largely avoid the channel costs and branding challenges wrapped up with selling through big retail and opt for direct delivery to consumers, which also ensures a repeat buying cycle is created. Most DTC brands also spend heavily on search and digital media while turning their back on the traditional TV approach that built the brands of the 20th century.

Brands like Casper (mattresses), Honest (baby care), Dollar Shave Club (grooming) and Soylent (food) are cited as examples of the DTC revolution. And while there has certainly been a rash of new packaged food startups, especially in America, as yet the jury is still out on how much the DTC revolution is a genuine threat to traditional marketing methods and how much it is overstated bullshit.

Much of that debate focuses on Dollar Shave Club, which is seen as a spectacular example of both the potential and bullshit of DTC. Yes, it built its business from viral digital communications and a DTC model. No, it has not yet made a profit despite its fame and billion-dollar price tag.

The main criticisms of the DTC model are that profitability appears to be singularly difficult to achieve despite the much-touted savings that this business model should deliver. And despite all the claims that these DTC brands approach marketing in new ways, that only appears to be true during the scale-up period.

Once they achieve a specific size, they turn to mass retail and TV to continue their growth. Indeed, for many DTC brands their ultimate acquisition by one of the 20th-century giants they were meant to displace appears to be the ultimate path to riches.

The big retail squeeze

Another potential explanation for the current pain at Kraft Heinz is the tension between it and big, competitive grocery retailers, and the impact that has on both their margins. The supermarket business has always been competitive. But the gradual, python-like squeeze of Aldi and its largely non-branded approach has made things even tighter. Then there is the arrival of Amazon and its growing interest in all things grocery. Finally, there is the constant unwavering focus on pricing and costs from Walmart. 

And it’s not just price that is squeezed by the big bad boys of retail. Private labels have proven to be the ultimate thorn in the side for most big consumer goods companies. In the last two decades private label sales have come to dominate most grocery categories.

That’s partly because big players like Tesco and Carrefour derive around half their total sales revenue from their extensive private label ranges and partly because Aldi’s continued growth is based on a model in which 95% of all sales are private label. Not only are the supermarkets difficult customers to sell to and through, they are also Kraft Heinz’s biggest competitive threat.

It’s certainly a tricky situation for Kraft Heinz to handle. Warren Buffet, the legendary investor who owns 25% of the company, pointed the finger in the direction of retail this week. Lamenting the loss in value that Kraft Heinz has caused for his company Berkshire Hathaway, Buffet made it clear he sees big retail and the “struggle” between private label and brands as the main cause.

“When you have Amazon and Walmart fighting it’s a bit like the elephants fighting: the mice get trampled,” Buffet observed. “I don’t see the retailers’ position getting weaker.”

Not only are the supermarkets difficult customers to sell to and through, they are also Kraft Heinz’s biggest competitive threat.

Buffet is right. But private label has been a constant threat for the past decade and to cite its impact as the explanation for Kraft Heinz’s sudden woes seems a little disingenuous. Plus, there is a handy exception to the private label threat that big brands have always enjoyed.

If you study the impact of private labels in most categories, they tend to destroy the number 3, 4 and 5 manufacturer brands. The top one or two brands in the category aren’t victimised. If anything, the number 1 and 2 brands actually prosper more in a private label-dominated category.

The store brands need a reference price and many consumers still prefer the leading brand over a generic alternative, so plump for the market leader. Heinz ketchup is a potent example of a brand that is better off now than ever before because it is virtually the only branded alternative to store brand ketchup.

Zero-based budgeting

A big target this week has been Kraft Heinz’s application of zero-based budgeting (ZBB) as the central explanation for the company’s sudden decline. The company is also part-owned by investment firm 3G Capital, which is famed for the acquisition and then optimisation of organisations using the ZBB approach. In a scathing editorial in the Wall Street Journal, the newspaper concluded that the share price was clear evidence that the company’s “experiment in radical cost-cutting has failed”.

It’s clear that since the 2015 merger of Kraft with Heinz the combined company has been cutting back. The company has cut its workforce by 20% and overheads by 40%. But these are not unusual numbers for a merger of two large, relatively similar firms. Back-end synergies were a big motivator for the merger and Kraft Heinz has merely been realising them.

As for ZBB, it gets a bad name among those that have not applied it. The zero in the name suggests some kind of pressured attempt to reduce investments to as little as possible. In reality, zero is merely the starting point and ZBB avoids the ridiculous method of using an  arbitrary percentage of forecast sales (pulled directly from the posterior of the CFO) to set marketing budgets.

In truth, done right ZBB can and often does result in increased investment in marketing, albeit with a focus on the brands and opportunities that deliver the best returns. But that does not appear to have been happening in the case of Kraft Heinz. Data from Advertising Age and Kantar Media suggests that in their biggest market of the US, advertising investment levels have dropped annually by 10% since the merged company was created.

While it’s unfair to point the finger at ZBB, it does appear that Kraft Heinz has reduced its investment in communications, which, as we know, can very quickly impact on market share and sales in the consumer goods categories.

Changing consumer tastes

While it’s true that Kraft Heinz represents a collection of some of the world’s best known brands, the portfolio does come with something of a disadvantage too. Big brands like Maxwell House, Heinz Beans, Planters nuts, Kraft cheese and HP Sauce are known and trusted but also sound like the kind of things you would use to decorate the set of Grange Hill back in 1985.

These are iconic brands for sure, but therein lies the problem. While icon status means reverence, trust and a showreel of decades of classic ads, it often also represents a significant barrier to staying contemporary and straddling the consumer tastes of today. All too often brands become successful and then assume that the same tactics and product offer will enable them to remain that way.

READ MORE: Knorr talks sustainability for the first time as it looks to ‘democratise’ nutritious food

The ancient lesson of running brands that have survived for more than three or four decades is that while their fundamental identity and image might remain the same, the core offer has to evolve and alter as markets change and age. What convenience, nutrition and healthy meant to a household in 1979 means something entirely different to the families of 2019.

There is a sea change taking place in family eating in which sugar, tinned food and mass-produced products derived from the hell that is factory farming are steadily being replaced by fresher foods with a cleaner and more transparent provenance. The heritage of the Kraft Heinz portfolio allows them one step forward in terms of consumer share of mind and two steps back in term of core competence and brand image. Everything that enabled Kraft and Heinz to dominate the grocery categories of the mid-20th century now leaves it vulnerable to the changes endemic some 50 years later.

Jorge Paulo Lemann, the Brazilian billionaire behind 3G Capital and the architect of the Kraft Heinz merger, admitted as much last year. “I’ve been living in this cozy world of old brands and big volumes,” Lemann observed at the Milken Institute Global Conference. “We bought brands that we thought could last forever. You could just focus on being very efficient. All of a sudden we are being disrupted.”

The degree to which the disruption in market tastes is affecting Kraft Heinz can be seen in the origin of the company’s gigantic loss for Q4 2018. The company’s operations were actually profitable during the quarter; the $12bn loss comes from a goodwill impairment charge of $15bn.

That’s finance talk for write-downs of intangible assets or, to put it in marketing terms, the company admitting that some of its brands are not worth what they thought they were and adjusting their value accordingly. Specifically, the company has reduced the book value of Kraft and Oscar Mayer – two of its biggest brands in America – to reflect lesser price premium and cost-lowering potential.

The Kraft brand is synonymous with mass-produced dairy products and its iconic dried macaroni and cheese dinner, which provides you with around half your daily intake of salt with a single large serving. Oscar Mayer makes bologna and sausages for Americans – or “mystery meat”, as my old college roommate used to call it. It’s a polite way to refer to a product that comes from a range of ‘mechanically recovered’ meats. Yummy.

Consumers were once happy to eat this sort of stuff and whatever else was put in front of them with a nice logo. But people are increasingly pushing back, questioning where their food comes from and how it has been made. Quality is a notoriously fickle attribute to hang on to and while Kraft and Oscar Mayer continue to manufacture products in the same manner they always have, consumer expectations are moving rapidly.

In many ways, Warren Buffet is the perfect exemplar of Kraft;s issues. The Oracle of Omaha remains one of the great financial minds of this or any other decade. But his dietary tastes were born a lifetime ago and he has, he admits, the food preferences of a six-year-old.

On top of his five regular Cokes a day, Buffet starts every morning with a trip to McDonald’s and a sausage McMuffin with egg and cheese. He avoids vegetables, snacks on candy and consumes what one fellow CEO once referred to as a “snowstorm” of salt every day.

Clearly the diet has done Buffet, now 88 years old, no harm. But while he may pride himself on buying into a company that has some of the world’s leading food brands, one might respectfully argue he has actually bought a slice of a company that an octogenarian regards as having some of the world’s leading brands.

Kraft Heinz may have underinvested in advertising in recent years but the bigger issue is that it appears to have underestimated the degree to which market tastes are changing. Like Coca-Cola and AB InBev, it faces an existential threat from that most fundamental foe – shifting consumer needs.

Too often we forget the prime directive of marketing and its role within any company. Before we get to tactics and communications and the management of brands, good marketing connects the needs of the consumer with the company servicing them. Something has gone wrong at the most basic marketing level for Kraft Heinz. Its portfolio is increasingly not what its target consumers want.

Whodunnit?

Despite the search for a single culprit, the reality is that a combination of many factors has combined to afflict Kraft Heinz. It certainly seems to have underinvested in its brands and enjoyed a short-term hit to profitability as a result, followed by the start of the prolonged hangover that always comes after.

READ MORE: Interest in direct-to-consumer brands lags big rivals – but maybe not for long

That short-termism has also blinded it to the rapid ageing of its brands and product portfolio, leaving it vulnerable to newer, more nimble entrants that – because they were created for a 21st-century target consumer, not one from 1950 – naturally exhibit the features, benefits and associations increasingly sought out by modern shoppers. That vulnerability and fading appeal will leave Kraft Heinz increasingly vulnerable to the big retailers it sells through and competes with too.

Like a bad Agatha Christie novel set on a train, we should not point the finger at any one suspect but, rather [insert a very long pause and twitch of the moustache for supreme dramatic effect], point the finger at all of the suspects. Kraft Heinz is a company beset by short-termism, underinvestment, disruption, ageing brands and the perpetual challenge of changing consumer tastes. It will take quite the strategy to fix the portfolio, the brands and the management system that surround it.

The post Mark Ritson: Kraft Heinz is in 57 varieties of trouble appeared first on Marketing Week.