There is so much to like about Elon Musk. So much. The ball-busting media interviews in which declares himself “bored” with Earth and intent on moving to Mars.

His occasional acts of supreme market orientation, in which he listens to customers, changes his business model and responds back to the customers to confirm the fix – all in a few short hours.

And then there are the moments of Barnum-like promotional alacrity in which Musk decides, apparently on a whim, to do something ‘big’. Like sending his own car into space.

I loved that last one especially. I followed ‘Starman’ and his journey into space more keenly than any other PR stunt I’ve ever encountered. Something about the real-time images of a Tesla Roadster leaving Earth’s orbit and shooting past Mars at 44,500mph playing Bowie on the radio got to me. The images were dream-like. The idea that the car is now 226 million miles from Earth on the other side of the solar system still blows my mind.

And it started to work. At least on me. The sudden surge of interest in Starman led to an equal interest in the Tesla Roadster. I started reading about the car. I switched to exploring the cost of buying a second-hand one.

Then I learned a new Tesla Roadster was being readied for launch. I looked up the specs. I considered the deposit. I prepared for the discussion with my wife when I drove it home for the first time. I spent lot of time working on that last one, actually.

Tesla was still top of my mind a week later when I went to service my Porsche at the local dealership. While I was waiting I found George, the man who had sold it to me a few years earlier, and told him about my new-found desire for a Tesla.

He agreed but then showed me the confidential specs for a new, totally electric Porsche codenamed Mission E. It would launch in 2020 and George had two he could pre-sell (I know, I know).

We looked at pictures, we looked at specs, he raised his eyebrows suggestively, I blew the occasional impressed whistle. Two hours later I’d put down a deposit for what would eventually be named the Porsche Taycan and which will arrive on my driveway at the end of next year. Which still gives me loads of time to work out what I am going to say to Mrs R.

It’s a classic bait and switch story. One company gets you through the top of the funnel only to lose you in the lower reaches of the funnel to a bigger, better-run operator who steals away the sale.

Private labels have been doing it for decades to manufacturer brands. Heinz spends a small fortune convincing you that beans are a healthy, versatile meal for the whole family and ensuring the brand has the requisite level of salience to close the deal. Then, with every stage of the funnel from awareness to preference paid for and established by Heinz, it loses out in the last six inches of the sale, somewhere between preference and purchase, to a private label.

As your hand reaches for the Heinz beans you spot the baked beans from Sainsbury’s in a similar blue livery but less than half the price. And it’s over. That price differential is only possible because a big part of the cost of goods for Heinz are all the advertising investments and promotional costs that a private label can not only avoid, but parasitically feed off.

I used to call this ‘cuckoo marketing’ after the eponymous bird. The cuckoo is an amazing animal. It often can’t be bothered with motherhood so flies into someone else’s nest, kicks out the existing tenants, drops her future progeny off in the newly vacated spot, and then fucks off on a cuckoo 18-30 holiday and drinks heavily for a fortnight boasting about what she has just pulled off.

The power of physical retail

Aside from cuckoo marketing, my Tesla story – correction, my Porsche story – also illustrates the power of distribution. Yes, it’s the place where we buy stuff. But it’s also the place where we meet the brand and, to use Scott Galloway’s accurate and arousing analogy, have sex with it for the first time.

Yes, the internet pornography of online shopping and ‘social selling’ exists. But for a lot of purchases we need more than a virtual hand job to get us down the aisle. The real relationship can only be consummated with an initial, and sometimes repeated, bout of physical intimacy at point of sale.

READ MORE: Why future success on the high street could mean collaborating with ‘frenemies’

That’s a crucial point for Tesla because last week the company announced it is closing its whole distributor network. The company had 378 stores and service facilities worldwide with 23 of them in the UK and Ireland. A few large showrooms will apparently remain but servicing and sales will now be conducted for the most part via smartphones.

The company claims that you can now buy a Tesla on your phone in “about one minute”. “We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn’t needed,” according to Tesla.

It’s easy to read about the decision and immediately jump to the ‘shopping apocalypse’ theory beloved of every disruptive marketer on the planet. You know the story by now: high street retailers are closing down because the future is clicks not bricks. In an Amazon/Google world of ‘online consumers’, physical stores are an unnecessary cost and strategic complication.

By 2025 the techno-porn fantasy of drones/artificial intelligence/online everything will render shops obsolete. Toys R Us did not close because it was shit, it closed because the future is totally different from the present. Also, bitcoin, blockchain, wearables, millennials and TikTok.

Except, as usual, this simplistic narrative does not hold up to even three minutes of scrutiny. It’s true that many stores are closing but that’s been happening since biblical times. It was Moses, I believe, in Deuteronomy who first observed that: “The shiteth merchant will inherit shiteth results and then the wind.”

Bad stores are closing, but good ones are also opening. Payless Shoes closed 408 doors last year in America and spawned a hundred articles about the end of retail stores as we know it. Dollar General opened 900 new shops in America and no-one mentioned it. The retail apocalypse is not quite the end of days that was predicted.

While most ‘modern’ marketers get lathered up about the growth of online shopping and Amazon’s steely grip on all of us, the hard statistics confirm that more than 90% of all shopping continues to happen in stores, not online. Which is not to say that that Amazon is not an amazing retailer or that it does not have a spectacular share of online shopping. Almost half of all online sales in America and a third in the UK are made via Amazon’s site.

That still makes Amazon significantly smaller in the UK than retailers like Tesco and Sainsbury and also prompts the question why such online domination would warrant a move to offline stores? In acquiring Whole Foods and opening physical bookstores Amazon appears intent on expanding into bricks-and-mortar retailing at the very time we are being told that the retail apocalypse renders the move foolish.

Amazon’s intransigence is relatively simple to understand. Despite what we are told at conferences, the online consumer does not exist. She inhabits her own world and manages, amazingly easily, to traverse online and the offline as if they were part of the same thing.

Smart organisations are replicating this fluidity through omnichannel retailing. Whether you visit in store, or online, or a bit of both, you can rely on the same prices, same loyalty card, same service model and even the ability to pick up your abandoned basket wherever you shop.

In truth, most brands enjoy top- and bottom-of-funnel effects from online retailing but also enjoy significant impact from physical interactions in stores for the middle of the journey. Omnichannel brands like Apple want the immediacy and efficiency of online e-tailing but also the experiential wow and prescriptive capabilities of physical stores too. And there is no reason, other than fallacy or funding, why both cannot be utilised accordingly.

While most ‘modern’ marketers get lathered up about the growth of online shopping, the hard statistics confirm that more than 90% of all shopping continues to happen in stores.

To be more prosaic, you clearly need a fully commercial online presence. But you also need George in the Porsche showroom, drinking his flat white, ready to spring into action when he sees me wander past his desk.

It’s not flash and we do not write many marketing articles about it. But do not mistake the power of physical retail presence. It might be costly, but it endures. Take my own car purchase as an exemplar. George beat Elon Musk, David Bowie, a rocket ship to Mars and a car navigating the solar system to win my business. Not bad, eh?

Surely Tesla understands this? It set up its 378-location retail footprint for exactly this reason. Why suddenly close everything down and move to an exclusively online model?

Short-term v long-term profit

Its shift has nothing to do with a retail apocalypse and a lot more to do with cash flow. On paper Tesla is now impressively profitable and incredibly cash rich. Its Q4 gross margins of 24% are enough to make most other auto makers green. And, as a result, Tesla has now amassed an impressive cash mountain of $3.7bn.

But Tesla is not your normal, established car company. Elon Musk has wonderful dreams but they come with nightmarish cost implications. He needs to build a Chinese production facility, a solar tile capability and a global super-charging network to keep his growing fleet of cars on the road, and he needs to start manufacturing the all-important Model 3 in gigantic numbers to match demand.

READ MORE: Mark Ritson: It’s time to shut down digital marketing teams for good

To finance the Tesla journey Musk has already borrowed big. On Friday a massive repayment of convertible debt was due. If Tesla’s share price had been trading at or above $359.87 the company could have repaid that debt with stock. But it wasn’t. And the whole $920m – about a quarter of Tesla’s reserves – will need to be paid in cash instead. More debts are ultimately due down the track – about $10bn in total. Liquidity has suddenly become a Tesla priority.

And while the Model 3 is the car that was always meant to transform Tesla into an established automotive giant it comes with its own significant problem: profitability. The Model 3 was never intended to be an exclusive vehicle. Musk needs to sell around half a million of these cars every year to reach the kind of scale he now needs. All of Tesla’s previous cars, from the Roadster to the Model S, were premium line extensions designed to build Tesla’s brand associations of being high-end and superior, so it could then launch the Model 3 and clean up the mass market with an affordable sub-brand.

To achieve that mass market penetration Musk promised to set the Model 3 price at $35,000 (£26,400). That makes it less expensive than a Toyota RAV4. And while that price will certainly drive enormous interest and probably deliver the half a million-unit sales, it also means that operating costs must be clipped to retain the margins.

Musk himself admits that it is proving “excruciatingly difficult” to make a profit from the Model 3 at this price. Killing the tremendous fixed costs associated with showrooms, sales staff and their associated operating expenses is the only way he can sell the Model 3 at this price and make enough profit.

And while Musk has tried to dress the decision as one consistent with the modern Tesla approach, his ultimate trait of unfailing honesty reveals a CEO ill at ease with the decision. “I wish there was some other way,” he admitted last week. “Unfortunately, it will entail a reduction in force on the retail side. There’s no way around it.”

Rather than another example of the retail apocalypse and the shift to exclusively online sales, Tesla’s move should be seen as an illustration of the more mundane corporate agenda to generate profits and cash flow to fund growth. Dress it up in 21st-century language all you want, but this is the story of a company making a decision to drive short-term profitability at the expense of the long-term health and prospects of the brand.

Sometimes such moves are unavoidable and Musk, who gets long-term better than anyone, surely appreciates the trade-off he has just made. It’s easy to be precious about such moves. But there is no long term if the short term cannot be delivered and it’s time to pay the fiscal piper.

Tesla sits finely poised between becoming either a century-shredding saga of future greatness or a cautionary tale of entrepreneurial folly from the pioneering early days of the solar revolution. No-one, including Musk I suspect, knows how it ends yet.

As strong as the Tesla brand is, and as impressive and enigmatic as Musk continues to be, omnichannel beats either an exclusive focus on offline retailing or an exclusive move to online sales. According to Musk 78% of Model 3 sales were already conducted online and 82% secured without a test drive. But that’s a clumsy example of last-click attribution if I ever I saw it and beneath the Musk I have grown to admire. How many of those sales were sparked or secured by a visit to a showroom?

Maybe most of his existing Tesla fans bought without a test drive but he is now penetrating the mass market. A test drive is a crucial moment of truth – especially when its your first electric vehicle, let alone your first Tesla.

In automotive marketing you need a physical network. It’s costly but it’s essential. You need test drive options. You need stuff explained. You need to open the doors. To close the boot. To sit in the seat. To “squeeze your bananas” before the sale, as one retailer once explained it to me.

You need George, sipping on his flat white. Waiting.

The post Mark Ritson: Tesla’s online-only move doesn’t herald the retail apocalypse appeared first on Marketing Week.

When it comes to digital marketing, the name Elizabeth Warren might not be the first one that springs to mind. The US senator is one of the dozen or so Democrats running for President in 2020. Last weekend Warren announced via a post on Medium that, once elected, she would break up the three big tech companies: Amazon, Facebook and Alphabet, the parent company of Google.

Specifically, Warren would designate any company generating more than $25bn in global revenue and offering an online marketplace, exchange or platform as a “platform utility”. These companies would then be prohibited from owning both the platform and any business operating on that platform. Google, for example, could continue to run its search engine but would be required to spin off its ad exchange. Facebook could no longer sell Facebook ads.

“Today’s big tech companies have too much power – too much power over our economy, our society, and our democracy,” the Senator announced on Saturday. “They’ve bulldozed competition, used our private information for profit and tilted the playing field against everyone else.”

READ MORE: Facebook at 15: An advertising titan that needs to grow up

A big breakup is not without precedent. Back in 1982, AT&T was forced by the US Government to divest the Bell Operating Companies that had provided the local telephone services across America and Canada up until that point. The move saw 70% of AT&T’s book value lost in the spin-off. The seven ‘Baby Bells’ went their separate geographic ways, successfully ushering in a new era of competition and innovation that even resulted in one of the babies, SBC, ultimately acquiring its original parent company AT&T.

Warren is using the ‘break up big tech’ idea as a key platform in her run for the Presidency. Over the weekend she was promoting it heavily across social media and with paid political advertising, including a series of Facebook ads. In a move of uncalculated stupidity Facebook pulled the ads claiming they violated its policies against the use of their corporate logo.

This was doubly idiotic. Firstly, because the ads in question did not actually feature the Facebook logo. Secondly, the act of political censorship made Warren’s point for her and generated a shit ton of publicity.

Facebook needs to hang onto its marbles a bit better than this. Warren is a very long shot for the White House. Current betting gives her just over 2% chance of becoming the 46th President on 3 November next year. But she is influential and popular. For the first time there is a legitimate, if unlikely, threat being posed to the long-term prospects of three of the biggest tech firms on the planet. They are simply not used to that kind of thing.

Big tech’s accountability issues

Over the last few years it has become readily apparent that these big firms are, to all intents and purposes, above the law and out of the legislative reach of any nation state. It’s all very well for the British Government’s select committee to conclude that Facebook deliberately broke both privacy and competition laws and to call the firm “digital gangsters”. But the response from Facebook, which continually demonstrated “contempt for parliamentary democracy” throughout the process, was in essence: “Meh.”

Similarly, Australian competition chiefs have been skewering all three big tech firms down under. The Australian Competition and Consumer Commission’s inquiry into digital platforms recently recommended an independent body be set up to monitor the algorithms of the big tech giants because they had accumulated too much market power.

Until now the threat of breakup has appeared unlikely because of the parlous state of American lawmaking. But all that could change with a Democrat in the White House.

Both Facebook and Google pushed back. Google’s Aussie boss somehow kept a straight face while refuting the idea that Google had too much market power in search. It was a “mistaken premise” she claimed. That’s a tough argument to make given Google enjoyed a whopping 94% share of the Australian search market last year.

In Singapore, Facebook’s Simon Milner infamously told the select committee on online falsehoods that his time was not being well spent by appearing in front of them given the “inappropriate” nature of their questions. He quickly found himself in ‘kena sai’ – Singaporean for ‘deep shit’ – and got the politest ass kicking I have ever seen. But he, and Facebook, walked out of the room that day with heads held high and business as usual.

In all three cases, and others around the world, its apparent that none of the big tech firms are even remotely concerned with national laws or government sanction. For all their global trade and international services these are businesses run squarely from their American HQs.

Spend any time with any relatively senior platform executive in any market other than the US, inject four pints and it becomes apparent just how little say, knowledge or influence any of them actually have. They are little more than regional agents and everything – and I mean everything – is done out of California.

Up until now the threat of sanction or breakup has appeared unlikely because of the parlous state of American government lawmaking (they literally cannot get anything done) and because a free-market, Trumpian Government is hugely unlikely to countenance any form of market interference for fear of being labelled ‘socialist’.

But all that could change with a Democrat in the White House. It might not end up being Warren, but any one of her rivals might pick up the breakup baton and make it a central plank of an ultimately successful tilt at the White House.

READ MORE: Marketing Week Meets… Facebook EMEA chief Nicola Mendelsohn

That assumes, of course, that the tech giants allow such things to occur. It’s no coincidence that Google, Facebook, Alphabet, Microsoft and Apple spent a combined total of $48m on lobbying last year in America. With the exception of Apple, all the tech firms increased their lobbying spending significantly.

And the bonanza will only continue into this year and next. As we speak, corporate money will be flowing to the more ‘tech-friendly’ candidates on the Democratic side of the 2020 election. Joe Biden, ever the pragmatist, is likely to be the biggest beneficiary.

Put more simply, the giant tech firms probably are so big and so dominant that they should be broken up. But we have not seen size like this before. Their dominance is global. Their power almost complete. Their influence unending. And they have become so enormous that anyone proposing their reduction is almost guaranteed defeat.

If Elizabeth Warren was a long shot last week before she started promoting her big tech breakup platform, her odds are really shitty now.

The post Mark Ritson: For the first time big tech faces a credible threat of breakup appeared first on Marketing Week.

I was at a conference in Stockholm this week. One of the attendees asked me over coffee about Verizon’s new brand purpose and what the statement actually meant. I confessed my ignorance of Verizon’s new brand work and then my surprise that a Swede needed any help with a translation. In my experience their English vocabulary invariably exceeds that of your average Brit.

“Humanability,” the Swede said. “Excuse me?” I replied spluttering into my coffee.

“Humanability,” the woman repeated as I looked at her blankly. This, it turns out, is the new stated purpose for Verizon, one of the world’s largest mobile phone operators. No longer satisfied with combining the usual beige mix of verbs and nouns beloved of purpose agents, Verizon has pushed the boundaries of bullshit even further by making up a stupid word and then putting it at the centre of its brand strategy.

“It means they don’t know what the fuck they are doing,” I finally informed the curious Swede, who pondered my answer for a moment and then nodded in thoughtful agreement.

Intelligent asphalt, tinkling pianos and humanability. Welcome to branding in 2019. But in retrospect I am starting to think Verizon may be on to something. I’m clearly not going to defend the company’s idiotic brand purpose but it does have one valuable advantage. Because its purpose is, quite literally, nonsense there is no way that anyone can accuse Verizon of being inconsistent to it in the future.

How do you not deliver on humanability? It’s like accusing my daughter’s imaginary friend of being ugly or getting angry because the way the dragons fly in Game of Thrones is unrealistic. When you make stuff up, you can’t be held accountable.

But for other purposeful brands who have opted for actual words over nonsense there is the very real risk of falling foul of the ancient error of brand inconsistency. In the barrage of conference speeches and impassioned articles about brand purpose there has been little discussion of the ability of brands to actually deliver on their stated purpose.

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

Sure, they might have a sexy new purpose to point to and glitzy ads to promote their new-found societal co-ordinates to customers, but we learned long ago that it takes more than advertising and statements to build a brand.

What a brand says is less important than what it actually does. Is the positioning driving every aspect of the company’s activities? Purpose, like any other attempt at positioning, should align absolutely with how a brand operates.

Time and again we encounter the lofty, admirable sheen of brand purpose only to discover it flakes off with even the slightest scratch to reveal a darker, more commercial sub-surface beneath. Starbucks’ famous mission ‘to inspire and nurture the human spirit — one person, one cup and one neighbourhood at a time’ is about as lofty as it gets. But it contradicts mightily the company’s abject inability to align its tax responsibilities accordingly.

For its first 14 years of operation in the UK Starbucks averaged just over £600,000 a year in tax on £3bn of cumulative revenue, according to a Reuters investigation in 2012. For the most recent tax year, the Financial Times estimated the effective tax rate paid by Starbucks’ European operations, based in the UK, was still around half the level of corporate tax paid by most British businesses.

Profit contradicts purpose

My point is not to accuse Starbucks of doing anything illegal – tax minimisation is one of the most efficient and legitimate ways to increase operating profit. But a brand that is talking about “nurturing” communities should have paused and realised that its purpose precluded the pursuit of tax minimisation; not just because such a thing would be inconsistent but directly contradictory on every level to Starbucks’ community purpose.

The fact that Starbucks did no such thing illustrates the recurring fallacy of any business that purports to purpose: the ultimate objective of profit usually gets in the way.

It’s a similar explanation for Gillette’s apparent case of gender inconsistency. While the razor blade brand is entirely comfortable lecturing its customers on how to improve their behaviour around women, the company sees no issue in charging those same women 25% more for ostensibly the same five-bladed razor blade than men have to pay.

I get that pricing is more than just manufacturing cost and can be driven higher by demand scale, customer perceptions and competitive context. But not when your purpose is levelling the unfair asymmetries of gender.

Rather than hide your ‘pink tax’ on women by selling them blades in three packs versus the male option of four packs, Gillette should offer the same blade price irrespective of gender. Why doesn’t Gillette do that? Because losing 70p of margin for every woman’s blade sold in the UK would cost them, based on my maths, around £5m a year.

It’s also why State Street was able to erect the Fearless Girl statue on Wall Street to protest the marginalisation of women in finance and yet, according to the US Department of Labor, pay its own female executives significantly less than its male ones – an accusation it still denied when settling with the Government.

Do as we tell you, not as we ourselves behave. It should be the rallying cry for all those enamoured with brand purpose. In fact, purpose is probably the wrong word for it. I’d recommend we call it ‘inconsistabilification’ from now on. Hey if it works for Verizon, it works for me too.

The latest case of inconsistabilification is the most serious and the most tragic exemplar yet to emerge. The oldest and most established brand purpose of all time is inarguably found at Johnson & Johnson (J&J). The personal care manufacturer established its famed ‘credo’ back in 1943. Then-chairman Robert Wood Johnson sat down and articulated how his company would always operate in a manner that balanced a decent return for shareholders with a prime focus on the wellbeing of its customers.

The credo states in simple terms that J&J “believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services”. And you can’t miss it. Every J&J person I have ever worked with makes mention of it. It’s literally chiselled into the walls of the company’s New Jersey HQ.

But that credo is now being shown to be little more than a bit of promotional spin. The company’s most iconic product, baby powder, is at the heart of a major scandal in America.

Talc is mined from metamorphic rocks in certain parts of North America and Europe. But so is asbestos and, according to reporting from Reuters, as early as 1971 J&J became aware that some of its talc products also contained small doses of the deadly substance, which can cause mesothelioma cancers among those who are exposed to it. The idea of rubbing it into the skin of babies and women on a daily basis takes on a horrific and frightening aspect.

Now a series of court cases have been brought against J&J by women who claim they have been diagnosed with cancer as a result of using the company’s talc. Last week saw the latest case in which Terry Leavitt successfully argued that her repeated use of J&J’s baby powder resulted in a 2017 diagnosis for mesothelioma. A Californian jury agreed and awarded her $29m dollars in damages.

The Leavitt verdict is the third successful prosecution of J&J. The total damages now add up to $5bn. J&J is appealing all of the verdicts – hardly surprising given the enormous existing bill and the fact that there are still 13,000 more cases in American courts. The US Department of Justice is now also investigating the company, and its share price is bouncing around like a kite on a stormy day as investors try to assess what this potential liability might mean for J&J’s commercial prospects.

It’s a potentially existential threat that, once again, illustrates the fallacy of companies that claim to be driven by a higher purpose but fall foul of it once they are expected to make commercial sacrifices to deliver on their much-touted purpose.

J&J’s problems and the reason the company could eventually be litigated out of existence stem not from the tragic proximity of asbestos and talc in the mines of northern Italy, but from the company’s alleged inability to admit that it knew about the problem for decades or to do something about it. If true, this is not just a morally bankrupt decision, but one in exact opposition to the words carved into the wall of its headquarters.

The problems with a profit motive

But like Gillette, with its multimillion-dollar profits from women’s razors, or State Street’s significantly reduced payroll, J&J was apparently unprepared to put its purpose into practice given the gigantic financial implications of such a move. The financial rationale for introducing a brand purpose to the market also precluded each company from walking the walk when it encountered a meaningful inconsistency within its business. The bottom line is still the bottom line. Still a company’s ultimate purpose.

There is a conceptually flawed argument built on highly specious data that says brand purpose and profit are perfect bedfellows because the presence of the former results in more of the latter. But the problem is two-fold.

It’s crucial we draw a line between businesses that were founded from purpose and those that originated with a profit agenda and applied purpose to secure more of it.

First, if my rationale for purpose is profit, then I am not purposeful at all. The minute I can show you that inappropriate business practices can make you even more money you would, based on the profit rationale, drop everything to pursue this dodgier and more lucrative path.

Second, it’s simply not true that purpose always delivers profit. In all of the cases above the companies would have had to lose millions, perhaps billions, to do the right thing. And for businesses built on traditional corporate reporting standards, such things are inconceivable.

That was the point that Patagonia’s marketing director Alex Weller made to Marketing Week last year when he talked about his brand’s approach to purpose. Unlike corporate brands that are based on an entirely fiscal agenda and use purpose as a marketing device, Patagonia is the real deal. It was founded by Yvon Chouinard to make products but also to support environmental causes.

READ MORE: Patagonia on why brands ‘can’t reverse into purpose’ through marketing

That purpose, forged within Patagonia’s DNA, means the company does not see a contradiction between commercial profits and corporate mission. Mission comes first. “It’s the will of the ownership and it’s the will of the organisation to use this important platform as a brand to do more than generate profit,” Weller explained.

That’s why the company has always dedicated a significant slice of its profits to good causes. It’s why, in direct contrast to Starbucks, when it was handed a massive tax break under new Trumpian tax codes, the company gave all the money away to environmental charities.

It’s also why it refuses to take part in Black Friday and the orgy of over-consumption that occurs in that commercial frenzy during Thanksgiving. The company does not drop its prices on Black Friday. Instead, it maintains them and then donates every dollar of profit it earns during that day to environmental charities.

And as Weller observes, it is also the reason why so many big brands that have suddenly jumped on the purpose brand-wagon are struggling when it comes to authenticity and consistency.

“You can’t reverse into a mission and values through marketing,” he said. “The organisations that are struggling with this are probably the ones that are thinking about marketing first. The role of marketing is to authentically elevate that mission and purpose and engage people in it, but the purpose needs to be the business.”

There is no way to avoid brand purpose for the next few years. Like passing fancies such as millennials, return on investment or agility it has become the latest fashionable chimera to hunt in the marketing jungle. But it’s crucial we draw a thick red line between businesses like Patagonia that were founded from purpose and those that originated with a pure profit agenda and then applied brand purpose to secure more of it.

And then there is the darkest part. What if many of the firms proclaiming purpose and falling foul of inconsistencies are not failing to execute their strategy, but actually succeeding? Is the reason BP goes on about recycling so much in its ads to make up for the fact it pollutes the planet so badly? Does Facebook keep promoting trust and community in its messaging because it knows, fundamentally, it cannot be trusted and that it has a deleterious influence on society?

Are some of the unfortunate contradictions between stated brand purpose and actual corporate activity really that unfortunate? What if they were meant to be misdirection all along.

The post Mark Ritson: A true brand purpose doesn’t boost profit, it sacrifices it appeared first on Marketing Week.

Tom Roach and his team of effectiveness monkeys have been at it again at BBH London. Every now and again they sit down and stitch together a bunch of separate slides, charts and other marketing ephemera to create a pithy but powerful statement on key topics in advertising and marketing.

Roach’s latest theme is ‘The stupidity of sameness and the value of difference’. That might strike you as a rather obvious target. After all, aren’t we all determined to differentiate? Well not anymore. In recent years the question of whether differentiation is even possible, never mind how to achieve it, is rarely far from the surface among evidence-based marketers.

The story of differentiation and its more superficial, extrovert cousin called distinctiveness is one of the most interesting and important in branding right now.

So, let’s tell the story in three very discrete chapters.

Chapter 1 – The difference is difference

From the outset of brand management we were all told to “differentiate or die”. Roach goes back as far as Edward Chamberlain’s book ‘The Theory of Monopolistic Competition’ in 1933 for the origins of differentiation.

But it was really Rosser Reeves, from the Ted Bates agency, that got the ball rolling in the early 1960s with the unique selling proposition. Reeves was certain that advertising worked best when it proposed a unique brand benefit that competitors simply could not match. The prototypical USP was M&M’s, which who used a patented sugar coating to justify the claim that its chocolate “melts in your mouth, not in your hand”.

Reeves might have been a pioneer but he was certainly not an outlier. It really did not matter which guru you followed, each pushed the idea of differentiating on a unique benefit as the basis for brand success.

Bill Bernbach made it clear that “if you stand for something, you will always find some people for you and some against you”, but that in standing for nothing “you will find nobody against you, and nobody for you”.

My biggest hero was Harvard’s Ted Levitt and he was of similar mind when it came to brand strategy. “Differentiation is one of the most important strategic and tactical activities in which companies must constantly engage,” he would regularly tell his MBA students.

By the start of the 1970s Al Ries and Jack Trout had revolutionised branding with their concept of positioning. And at the heart of this new approach was the search for a single attribute or association that a brand could own in the mind of the target consumer. It was one step down from the uniqueness sought by Rosser Reeves a decade earlier but it was still about finding a singular focus and taking control of it in the mind of the market to the exclusion of all other competitors.  Volvo positioned on safety, FedEx positioned itself around ‘overnight’. According to Ries and Trout a brand won when it owned the most important potential benefit in the mind of the prospect.

By the time most of us walked into our first marketing lecture the power of differentiation was already set well into stone. The brands that succeeded were the ones that zigged, rather than zagged. They stood for things that other brands did not. They owned associations that other brands could not claim. They differentiated themselves in the market and were triumphant as a result.

Chapter 2 – The distinctive truth

But there was a snag. Whenever marketers left the conference circuit or classroom and actually tried to do the differentiation thing it rarely worked. When they actually looked at data it rarely showed a brand as radically different from the other competitors in the market. In fact, more often than not, the perceptions were incredibly similar.

It was at this point that that the scholars at Ehrenberg-Bass made a vital and ultimately discipline-shredding intervention. Led by the dark lord of penetration himself, Professor Byron Sharp, Ehrenberg-Bass began to challenge the power of differentiation. Using data from a range of different markets these scholars showed a distinct lack of perceptual differences between brands and queried whether differentiation really was such a golden branding objective.

They went further and posited that rather than differentiated image being the driving force behind the success or failure of a brand, it was distinctiveness that was the real driver. Marketers continue to confuse these two terms but, in essence, the two concepts are simple to separate. When a brand is distinctive it looks like itself and “jumps out” at the consumer when they encounter it or consider a purchase. When a brand is differentiated it successfully convinces consumers that its offer is significantly different to those of the competition on a range of intended associations or attributes. Coke is red and round and always there when you are thirsty, Pepsi is the taste of a new generation.

I do not believe in USPs – they are usually bullshit and even when they are not, they can be quickly replicated.

While Ehrenberg-Bass acknowledged that differentiation did exist it was a weak form of the condition. In Sharp’s famed book ‘How Brands Grow’ he acknowledges differentiation must exist because brands have different names and elicit different thoughts like “is the red one” or “has my size available”. Compared to the titanic earlier ambitions of Reeves and Bernbach this all felt a bit of a let down but there was a mountain of evidence to suggest that distinctiveness did drive brand growth and differentiation rarely mattered.

And it has spawned a serious anti-differentiation dogma among those that follow the teachings of Ehrenberg-Bass. I’ve had a number of conversations with perfectly intelligent marketers who have told me, without a flinch of uncertainty, that if you survey any market about any sub-set of brands and control for size they will all be perceived exactly the same on all the main attributes. This is patent nonsense but is, trust me, an increasingly common claim among evidence-based marketers.

And it does make for a rather odd situation when it comes to brand positioning. In the red corner you have the monochrome world of those that follow Ehrenberg-Bass who focus on distinctive assets like colours, shapes and buying cues and care very little for what meanings the brand actually tries to stand for. In the blue corner are the increasingly addled marketers who smoke the crack pipe of brand purpose and who have largely ignored the category completely and believe their brand is there to save communities, inspire peace, create harmony, insert nonsense here.

READ MORE: Mark Ritson – a true brand purpose doesn’t boost profit, it sacrifices it

Chapter 3 – Cake eaters of the world unite

By now you have probably worked out where I, and Tom Roach, are heading. Before we get there, however, I want to make sure I do not sound too anti-Ehrenberg-Bass. If you look at just how addled we all were about differentiation and the need to be unique you must acknowledge the massive, heroic impact that Sharp et al have had on brand management over the past decade on this one key topic.

Traditionally we saw brand awareness as simply a gateway variable and then spent all our time worrying about brand image. By putting their empirical fingers on the scales and re-weighting the value of awareness and the power of salience Ehrenberg-Bass has changed branding theory forever. While I am convinced they have gone too far in belittling differentiation to promote the power of distinctiveness, the power of distinctiveness cannot be denied.

As a crude estimate I would suggest we used to think it was 20% awareness and 80% image, these days anyone with a brain has generally reversed those ratios. I accept that most of the battle for brand supremacy comes from creating and maintaining salience in the market, even in the most emotional and high involvement categories.
But it’s clear that brands really can have their cake and eat it too. Distinctiveness need not come at the cost of differentiation.

I’ve spent my career, at least the past 20 years, working with very big brands on brand positioning. I have pushed these brands to work on a tight brand position to articulate how they want to differentiate themselves in the market and a set of codes through which they could make their brand distinctive. I see both as integral to brand success and do not believe there need be a trade-off between the two. Indeed, in many cases, such as my work on Donna Karan, the source of the differentiated association (New York is the centre of the world) and distinctive codes (yellow cabs) were directly linked together.

But in order for this dual approach to work there needs to be a huge amount of realism when it comes to what differentiation actually means. I do not believe in USPs – they are usually bullshit and even when they are not, they can be quickly replicated. I do not think a brand can own an attribute or association either. The perceptual map never reveals a special place where only one brand can covet a particular association. But a brand can differentiate itself by being more of one thing than its competitors. And in combining the right associations with the right execution, ideally powered by the distinctiveness that comes from clear and well applied brand codes, a brand can present itself differently to the market from its competitors.

But that more realistic view of differentiation requires parsimony and focus. For a long time I have looked at these complex brand pyramids and 20-page brand books as little more than branding masturbation. They make you feel great but do nothing for anyone else except make a mess. If you really want to position a brand you must focus on a realistic and relatively short set of associations or attributes. Assume you have achieved brand salience, what do you want the consumer to think when they think about your brand? Write it down. There is your brand positioning.

In short, I think the work on distinctiveness is a revelation and an important course correction for those of us who were sold on the dreams of USPs and attribute ownership. But a smart marketer can also enjoy the benefits of a distinctive brand and a realistically differentiated one too. The challenge comes down to making choices and being clear on what you want to position a brand on and which codes you intended to make distinctively yours. As usual, if you need more than a page to articulate this combined strategy something has gone very, very wrong.

The post Mark Ritson: Distinctiveness doesn’t need to come at the cost of differentiation appeared first on Marketing Week.

There is an epic saga taking place over at Superdry, the ailing British fashion brand. It’s a tale of brands and founders, of growth and decline, and it is best told in six very different chapters.

Our first chapter opens in a bucolic Cheltenham setting almost 40 years ago. A young Julian Dunkerton opens a letter, scans its contents and then throws it away in disgust. The dismal A Level results are nowhere near good enough to enable him to study medicine.

Instead, armed with a loan from his dad and an Enterprise Allowance Scheme from the Government, Dunkerton opens a clothing stall in the local indoor market. He has noticed that most of his mates do not have the access to the fashionable gear that Dunkerton, a Londoner who only moved to the West Country five years earlier, can usually get his hands on.

With entrepreneurial zeal and an eye for fashion, 19-year-old Dunkerton begins to make the two-hour trip to London. He visits the vintage clothing stores he knows from his youth, but buys in bulk and returns each week with bin-loads full of stock. His stall becomes the first of a dozen branches of Cult Clothing and, with business partner Ian Hibbs, over the next 15 years the network of shops becomes a big success.

READ MORE: Mark Ritson: Distinctiveness doesn’t need to come at the cost of differentiation 

Chapter two opens in a street market in Tokyo. It is 2003. Dunkerton and one of the suppliers to Cult Clothing, James Holder, are trendspotting in Japan and looking for merchandise. Both are taken with the Japanese obsession with clothes carrying bold, often nonsensical messages emblazoned across the front of them.

Adopting the style, Dunkerton develops Superdry as a strange hybrid of British tailoring, Japanese streetwear and vintage American style. It might sound like a mess on paper, but in conception the clothing strikes an immediate chord with a new generation of globally oriented consumers who are looking for something different.

The brand is soon being worn by the likes of David Beckham and Idris Elba. By the time the company floats in 2010 on the London Stock Exchange, raising £400m, it has 500 stores across 40 different countries.

Downturn in fortunes

Chapter three is set in Cheltenham on the unlikely industrial estate where Superdry’s head office sits. It’s March 2018 and Julian Dunkerton drives forlornly away from the business he started some 15 years earlier.

He has already stepped down from the CEO role in 2014 to focus his energies around brand and product challenges at Superdry, so this new move appears to make sense. Despite still holding 18% of the company’s stock he is now a very rich man and has other investments to maintain.

“I am immensely proud of everything achieved at Superdry over the past 15 years,” Dunkerton tells the newspapers. “With other demands on my time it is the right point for me to transition my focus and responsibilities.”

In private, however, Dunkerton is furious. He feels his voice is being ignored by the rest of the board. Dunkerton questions Superdry’s new strategy.

He rankles at the longer lead times that reduce the fast fashion credentials and innovation approach. He hates the “consultant-led business model” that he believes has shifted the focus of the business away from fashion and creativity. He abhors the idea of Superdry launching a kid’s range – how is that even possible? And he cannot stand the discounting that sees Superdry clothing, once famed for holding the line on price, frequently on sale.

His complaints are ignored, so he departs.

And Dunkerton appears to be right. As Chapter 4 opens Superdry’s leadership team are in crisis mode. Seemingly the moment Dunkerton headed for the exit, things started to fall apart. Sales are in decline and profits have halved. Inventory is not moving and Superdry clothing has been sold at a discount for 48 of the last 52 weeks.

The company blames “unseasonably hot weather” for its troubles. But that old chestnut will not work. As one analyst puts it: “You have to question a strategy which leaves the company so at the mercy of fluctuations in the weather.” A year on from Dunkerton’s departure, the stock market has wiped 70% from Superdry’s valuation. A major push is announced to cull 200 jobs and save £50m.

Which takes us to Chapter five, almost present day. We see Dunkerton sat at his computer typing. The three-page letter he is working on is addressed to fellow shareholders and asks them to agree two extraordinary requests.

He has, he explains, tried to reason with the board since his departure but all to no avail. He wants a place back on the company’s board along with fashion retailer and ally Peter Williams. Dunkerton’s sole objective, he writes, is to “revive Superdry”.

He directs the shareholders to a website he has created called SaveSuperdry.com, which contains his master plan to revive the fortunes of his beloved brand. Superdry’s board are outraged by the interference. They advise shareholders to reject the request and threaten to resign en masse if Dunkerton is allowed to return.

No-one knows which way it will go at the EGM.

Chapter 6 starts with a close up on an iPhone. Suddenly it springs to life and Julian Dunkerton reaches across with a deep breath and answers it. His face lights up. He has squeaked in by a margin of 51% to 49% votes cast. Within hours the nine-member Superdry board resigns. Dunkerton is back and…

…and that is the story so far. You are all caught up and now, dear reader, we must enter the world of fiction, speculation and punditry to reach our dénouement.

What comes next?

But before we do that, a few words on founders, brands and business. I’ve been lucky in my career. About a dozen times in my consulting life I have been shipped in by one large conglomerate or another to work with newly acquired brands and their suddenly suspicious founders.

I’ve worked in fashion, in retail, in beauty, in jewellery and in wine for brands that were acquired for eight-figure sums and went on to make even more down the track. Each time the brands and founders were very different, but each time the dynamic was remarkably similar. And there are a few enduring lessons I have taken from my time trapped between a founding rock and an acquiring hard place.

First, you don’t fuck with founders. They are always tough – they needed to be to get from where they started to where they currently sit. And they have power – so much power. The loyal employees regard them as demi-gods. The financial markets see them as the talismanic origin of all profits. And all too often customers still regard their presence as a signal of continued attractiveness.

READ MORE: Mark Ritson: A true brand purpose doesn’t boost profit, it sacrifices it

They also have stupendous power to disrupt an organisation if they feel it is going in the wrong direction. But most importantly, you don’t ever want to go against founders because they get the brand. It runs through their veins. They are invariably right about most things to do with brand because the brand was, is and always will be theirs.

You can see all of this in just about every single recent photograph of Dunkerton in the media. He dresses with a certain boho-chic and smiles with a pleasant but vacant look that says ‘don’t fuck with me’.

There is a snag to this ‘founder as font of all things positive’ theory, however. Most founders, even the inestimable Mr Dunkerton, get old and change. Money, power and the ticking of a clock inevitably mean that the young, brazen founder that wandered the streets of Tokyo with a glazed look on his face is not the same as the 50-something multimillionaire who now divides his time between hotel, cider and fashion businesses.

That’s an issue because all too often the founder still thinks they have the fashion eye for what needs to be done next. Invariably they don’t and if you are not super-careful the brand can falter because the founder will not allow it to evolve.

The trick is to use the founder as data. Along with the loyalist research, the quant survey and the merchandise reports there has to be a major bit of historical analysis of the brand – even for one as young as Superdry. You must use Dunkerton not to tell you what to do now, but to describe what he did back then.

Work out what made the brand so special and then – the tricky bit – ask what that specialness looks like in 2020. Because the teenagers of 2003 are 30-something now. They are mums and dads. While the Superdry brand does not need to change its DNA, it does need to realise that what that DNA means to a kid in 2020 means something very different to one born 15 years earlier.

I have worked on brands with dead founders and ones with founders who were very much alive. I much prefer the former situation.

With dead founders we can interpret them as we will, perhaps applying a little bit of strategic mythology in the process. With live ones you have the unenviable task of gaining their trust, asking for their help but also moving the brand forward and away from its origin story.

Some founders take to this evolutionary approach. They see the sense and the dollar signs and recognise that I, and the big business behind me, know what we are doing. Others fight it. They refuse to become data; to be a ceremonial cherry on a cake of their making. Those situations are more difficult.

But with the caveat that the tactical and product application of the DNA might need to change, the return of a founder to refocus strategic principles and restore appreciation for the brand position is a recurring story in business. Howard Schultz famously returned to Starbucks and turned things around. And, of course, there was that little story about Steve Jobs and his resurrection of Apple.

I would have concerns if Dunkerton takes up the design role again, but I would trust him to be the CEO in a heartbeat. He is, after all, a retailer not a fashion designer, and his three decades of consumer proximity and speedy decision making will be essential for the months ahead.

Everything in his manifesto for fixing Superdry appears spot-on. He wants to stop being so market-oriented and return to Superdry’s design-led routes. He wants to scrap the kids wear range that his predecessors introduced because it will damage the credibility of a street brand like Superdry and distract the company from the revitalisation mission ahead. He wants to speed up product turnaround to a 12-week period from sketch to sale.

This will improve the agility of the design teams and reduce the need to hold stock. He also wants to reduce discounting and will focus on gross retail margin, not revenue, as the bellwether of his initial success. Smart. And he wants a bigger investment in communications, and specifically social media, to reach the 16- to 24-year-old consumer.

Chapter 6 continues with Dunkerton walking purposefully through the industrial estate in Cheltenham to the HQ of Superdry, the keys jingling in his pocket. He pauses as he passes the Bosch service plant next door and smiles as he looks over at the small engineering company at the bottom of the road. It is an unlikely place to build a fashion empire. But not, he thinks to himself with a smile, an unlikely place to resurrect one.

The post Mark Ritson: Superdry’s returning founder can restore the brand’s DNA appeared first on Marketing Week.

Attend enough marketing conferences and all of them start to feel essentially the same.

A slightly greying creative director in black jeans shares his stories of big agency success. A perky CMO from overseas tells you about the power of purpose and how she harnessed it to generate 900% something something. Then a big keynote from someone you have never heard of, but assume you are supposed to, involves him sharing his ads and proves empty to the point of tedium.

A session on media disruption follows and then we reach the lowest circle of marketing conference hell, the industry panel. Four usual suspects balance on high chairs, look respectfully at whoever is speaking and give inanely shit answers to cliched questions like: ‘Should you trust your gut or go with data?’, ‘Just how important is creativity?’ and ‘How do we stop CFOs from making us short-termist?’.

The answers are: Data. Very. That’s bollocks.

You’re welcome. Can we kill panels forever now?

And among all the identikit conference planning there is one particular old advertising chestnut that always comes up. Always. As sure as the fact that the most interesting conference debate is outside by the bins among the smokers, or that the one marketer you really wanted to meet is a last minute no-show. At some point at every marketing conference you’ve ever been to someone gets up on stage and declares (drum roll, please):

“People don’t hate advertising. They hate bad advertising.”

I shall not name or shame the illustrious industry leaders who have made this pronouncement over the years at one event or another. Suffice to say there are dozens and that old bastard Google will immediately assist you if you care to look.

Deal with the reality. Welcome it. Plan for it. Say it at conferences. Accept the shitness of what you do. It will make you a better marketer.

My point is that this is patently not true. I understand why people in marketing want to think this. I appreciate the outlook for those marketers who have spent, or are about to spend, their lives working on stuff that is ignored at best and abhorred at worst is pretty grim. You want to tell yourself – against everything you observed as a child and before your life as a marketer – that people actually love ads. A lot.

READ MORE: Ad saturation and over-targeting damaging people’s trust in brands

They hate bad ads, of course, why wouldn’t they? But fortunately, the marketer tells herself as she starts her car each morning, I don’t make that kind of advertising. I make the other kind. The good kind. The kind people like. The kind that roots them to the spot; that causes them to laugh a deep, genuine belly laugh of delight and then reach out, eyes streaming with tears, to friends and family and laugh even more.

Or ads that make people think, earnestly, about stuff and learn important life lessons. Yes, that is the kind of advertising I work on, she says as she overtakes a Fiat on the M2.

Advertising fallacies

For reassurance most marketers cite the fact that every consumer has a personal favourite ad that they treasure. That’s certainly true of most people.  Mine is for Tennent’s lager. It was made in 1991 and features a lad from Up North who can’t stand his job in London and packs it in on whim, gets on the train home and gets back to Edinburgh in time for a piss-up with his mates in the local.

It doesn’t take a neuroscientist to work out why it remains my beloved commercial. I was marketing cash machines in London and generally hating every fucking moment. Even though I’m from 20 miles south of the Scottish border, that Tennent’s ad made me weep every time it appeared.

But the key point is that my favourite ad, and probably yours too, was experienced half a lifetime ago. If we believe the (almost certainly incorrect) estimates then, in the interval between seeing that wonderful paean to northern booze and now, I have been exposed to just over 50 million further ads. And most of them were total shit. And I hated almost all of them.

Arguing that a single favourite ad proves people like advertising is like suggesting that because you once briefly tapped your foot to ‘Baby’ you think that Justin Bieber and his whole back catalogue is fantastic. A stopped clock gives you the right time twice a day. A fucked-up, unpopular medium produces a likable ad every 20 years or so.

And before you spring to some rational defense of advertising and its place in the bosom of most people’s hearts, allow me to introduce the ace card that all those conference speakers were missing: evidence. Not only do the conference speakers always tell you that “people like ads” they always say it with the exact same evidence: their own subjective experience. So read the chart below and weep.

A representative sample of consumers in key countries was recently asked by Kantar how they feel about advertising. They were asked which staement they agree with: they dislike it generally; it does not bother them; or they like it generally, it can be enjoyable. In the UK a grand total of 11% of the population surveyed said that they liked advertising. The other 89% either said they didn’t give a toss or they disliked it.

And I even query the paltry 11% who professed a positive attitude to ads. Asking them if they like ads generally and then adding ‘it can be enjoyable’ is a lousy question Kantar, sorry. Being kicked in the balls can be enjoyable if its being done by the right person, at the right velocity and as a prelude to something seriously enjoyable down the track. Let’s move on.

I’ll bet if we had kept the option as just ‘I like ads generally’ the proportion agreeing would have plummeted to single digits.

Accept reality and you’ll make better ads

But why is any of this important? Can’t we leave marketers and agency folk alone in their gilded arse-shaped bubble of positivity? If telling themselves they are creating popular works of culture helps them get through the day, isn’t that ok?

Alas, it is not. Because when you start believing advertising is liked you start making ineffective ones as a result. If you understand your ads are hated, ignored, despised and avoided you create ones that work within those limitations to do what they must do. If you think you are making welcomed pieces of content then your output becomes as addled and mushy as your mindset.

The Ehrenberg Bass Institute did an amazing bit of research a couple of years ago showing that the average consumer could both remember and then correctly attribute only 16% of the TV ads they had been exposed to the previous day. Why so low? Because the way ads are created – over months, with great attention and an overriding belief that the message will be welcomed by the audience – is diametrically opposed to the fleeting few seconds of partial attention and antipathy that constitutes how they are actually consumed.

READ MORE: Mark Ritson: Revenue is a lousy measure of success for most ad campaigns

Accepting that people dislike advertising is not a negative thought. It’s a realistic one. And once you embrace realism – like any aspect of actual market orientation – your advertising improves.

It’s like the legion of brand managers and CMOs who think their brands play a big part in people’s lives. Fuck off. You have mistaken your intense obsession with career progression for your target market’s almost complete lack of interest in your brand.

Addled brand managers want to promote a brand purpose of relieving societal friction; consumers just want to stop the buttock-chafing when they go to the gym. Brands are little, little things. Realism is the route to better brand management and more success.

And the same goes for advertising. People hate it. Good ads. Bad ads. All ads.

Maybe, if you are lucky, they don’t give a fuck about your advertising. Like a turd on the footpath that people avoid in order to get on with their day. Deal with that reality. Welcome it. Plan for it. Say it at conferences. Accept the shitness of what you do. It will make you a better marketer. It will enable you to make better ads.

And people still won’t notice. Or care.

The post Mark Ritson: Accept it, people hate ads – yes, all of them appeared first on Marketing Week.

It started innocuously enough at the beginning of the month. Organic tweets about Carlsberg beer were being picked up and promoted by the Danish brewing company. Nothing special there; more than one marketing genius has attempted to blend the authenticity of organic social media posts with the reach of digital by combining them into a single hybrid campaign.

But it was the tenor of the tweets that Carlsberg selected that struck more than a few people as, well, strange. Rather than promoting the overall wonderfulness of Carlsberg, the brewer seemed intent on finding the very worst comments about its beer and then promoting these messages to all and sundry.

When Jamayal Khan took to Twitter to inform 600 followers in and around Huddersfield that Carlsberg tasted like “naan bread” he was not being complimentary. And he was probably not expecting the brewer to turn up five years later and start promoting his tweet nationally.

Meanwhile, down in Plymouth, Harleigh must have been surprised when her old tweet from a year ago about Carlsberg tasting “like stale bread-sticks” was picked up by the brewer.

Similarly, Roy’s tweet describing the beer as like “drinking the bath water that your Nan died in” was an unlikely one to be promoted. As was that of Afterglow85, who likened the beer to the “rancid piss of Satan”, making the approach by the brewer asking for her permission to re-use the ‘endorsement’ all the more bemusing.

The tactic quickly attracted the attention of social media. Many speculated the unlikely promotional strategy was the action of a disaffected ex-marketer or perhaps a new AI system gone wrong. But it became apparent this week that Carlsberg knew exactly what it was doing.

For 40 years Carlsberg promoted itself as ‘Probably the best lager in the world’. The killer strapline emerged during the evening before a pitch by boutique advertising agency KMP. Agency executive Tony Bodinetz had created some draft scripts to present to Carlsberg’s UK marketing team. But in the hotel the night before the big meeting his business partner David McLaren was unconvinced.

He was worried Bodinetz had gone too far with the slogan ‘The best lager in the world’ and told him so. They argued, went to bed and the next morning Bodinetz appended the word ‘Probably’ to the front of the slogan to appease McLaren.

The rest, as they say in ad land, is history. Carlsberg loved the offbeat wording and eventually employed Orson Welles to deliver a voiceover that became as famous as the slogan itself. Carlsberg’s ads defined premium beer drinking for a generation.

But there was one bijou problem with positioning Carlsberg as probably the best on the planet. The idea might have appealed to consumers. It might also have differentiated the brand from its competitors. But the brewery singularly failed to deliver on this promise, especially in more recent years.

As the beer category premiumised in this country, and as smaller, independent breweries produced a growing number of fantastic lagers and ales, Carlsberg and its outdated claims of superiority became increasingly unlikely and the beer steadily less popular.

READ MORE: Carlsberg admits it probably isn’t the best beer in the world as it overhauls the brand and the brew

Eventually the brewer dropped the slogan and came up with the anemic, but painless ‘That calls for a Carlsberg’. But, as is almost always the case, the brand and its heritage were intertwined far too closely in the consumer consciousness for such blunt acts of repositioning to actually work.

As so many brands have discovered over the years, the ancient tactics of yesteryear – and the hundreds of millions of pounds of investment that have gone into them since their inception – mean heritage is an invaluable asset that should not be changed or underestimated.

So Carlsberg is taking a chance. It is tipping its hat to a heritage that everybody recognises and then riffing on it to reflect the fact that Carlsberg has moved upmarket and, allegedly, improved the taste of its beer. It is now admitting it is ‘Probably not the best beer in the world‘.

That’s a hell of a tweet. #newbrew pic.twitter.com/ALC2Kcds6H

— Carlsberg UK (@CarlsbergUK) April 17, 2019

The next phase of the campaign features Carlsberg employees reading reviews from customers lambasting the taste of the beer. Alongside that digital campaign comes the new product campaign explaining how and why the Carlsberg team have radically improved the brewery’s best selling pilsner from “head to hop”.

One assumes the brewery will continue to open the throttle in the weeks ahead with more channels and more support for a new, rebrewed Carlsberg. Could there be some TV in the pipes? Methinks so.

Who knows whether it will work, but credit must be given to the Carlsberg marketing team. This feels like a great campaign in its early, formative stages. For starters its clearly an approach that has been born from insight and then honed with solid strategic thinking.

The Carlsberg team were caught in an unlikely pincer trap of a strapline that boasts superiority for a beer that desperately needed to improve itself. It’s a quietly brilliant move to make that misplaced superiority the basis for the new campaign and product refresh.

On a simpler level the engagement the campaign has already achieved is sensational. That will translate into talk down the pub and all-important trial from customers that have not had a Carlsberg since their nan passed.

Whether the beer will actually pass muster is another question, but over the Easter weekend (Christ is risen, let’s get down the Dog and Duck for a lock-in) there will be an army of semi-arseholed punters pontificating over the merits of the campaign, the old taste of the famed Danish beer and its new formulation. Saliency combined with on-brand discussions in other words. Marketing nirvana.

READ MORE: ‘Tastes like stale breadsticks’: Carlsberg’s ‘disruptive’ Twitter campaign tackles criticism of its beer head on

And I will add something else to the rationale for suspecting this might be a great new campaign. It’s brave.

I don’t mean brave in the usual brand purpose ‘cleaning the world’s toilets one bowl at a time for the children’ way. In the purpose-addled, fake-humble world of marketing these days the only brave people are the ones pointing out what a load of bollocks brand purpose actually is.

I mean that Carlsberg is brave because it has risked everything and gone large on this campaign. Making fun of yourself and then using that platform to revitalise the brand is a hugely risky move.

And yet it has to be bold and risky to have a chance of working. I have been working in America with the Effies organisation on something special for its 50th anniversary later this year, and one of the recurring themes that jumps out of half a century of great advertising is that it has to be brave to work. Bravery does not guarantee success, but without it you might as well go home and burn your marketing budget on the stove.

Carlsberg could have got some moronic marketer to bang on about ‘bringing people together through the miracle of shared occasions’. Or they could have launched some inane product campaign talking about Peruvian hops and crystal streams of Scandic water. And in both instances, and a hundred others, the campaign would have wasted its effort.

Instead, Carlsberg has caused a fuss and it deserves credit because, like all sudden marketing events, it has been long in the planning.

Of course, the new beer might be old bath piss bad too. In which case the success of this campaign will merely speed the decline of Carlsberg. But let’s assume for one golden, optimistic moment that Carlsberg really has made a better beer. It might also have a great bit of marketing on its hands too. Probably the best new ad campaign of the year I’d say.

The post Mark Ritson: Will Carlsberg’s brave new strategy succeed? Probably appeared first on Marketing Week.

About four times a year I jet over to the United States to do a bit of consulting work and generally avail myself of all things America. There is nowhere quite like the place in terms of the quality and scale of the brands you can work with, the positivity towards marketing that you always encounter and the general excitement of hanging out there.

But I must confess that my latest trip, and indeed this column, comes to you from a more chilled, reflective place than usual. It would seem that since my last visit many parts of the US have fully embraced legalised marijuana and it has become widely and freely available.

In 2018, 10 American states, along with Canada, legalised recreational pot and, faster than you can say “Zebedee is sitting on the Magic Roundabout” (ask your dad), North American culture improved overnight.

Suddenly, thanks to the new-found freedoms, American food seems better, the TV much improved and – my goodness – being locked up alone in a hotel room over a long weekend has been transformed into something of an adventure sport. A cross between It’s a Knockout and Fast Times at Ridgemont High.

Clearly, I support this wonderful new development. It has provided me with an entirely new recreational pursuit during the long, lonely evenings after the branding work is done for the day. In fact, other than a particularly solid bank holiday weekend in Bristol about 20 years ago I have never been this high, for this long.

And what makes the situation all the more delightful, other than the obvious fact that I am fantastically off my box about 18 hours of the day, is that there is also a newly minted set of brands to get to grips with. The last time I smoked weed the only brand available was ‘Tony from the caravan park’. Suddenly there is a panoply of logos, packaging and back stories appearing and disappearing through the haze.

Get to the top of the mountain in the next few years of frenzied competition and your advertising will work better for you because your scale will enable it.

My advice is to start your Saturday morning with Caviar Gold and then, once your facial muscles start working again, take a couple of the Elevate tablets from edible pot brand Level and head off to the shopping mall, cinema, or indeed an empty car park. Given the amount of THCV that they pack into these bad boys you could amuse yourself for hours in a phone booth.

Then it’s back to the hotel room for Ben & Jerry’s, a shit-but-now-suddenly-amazing cable movie and a couple of pre-rolled joints from THC Design. Hello Sunday.

During occasional, fleeting moments of clarity there is also a genuinely interesting branding battle to ponder too. While it’s still early days for recreational pot, history and advertising effectiveness research both teach us that these formative few years will prove crucial.

Only three or four national pot brands are likely to dominate the future American marijuana market – one that is already estimated to be worth billions of dollars. In these next few years the winners will emerge and the losers will go up in smoke.

The reason for that urgency is the fundamental unfairness of marketing. While we pride ourselves on the battle of small things against big, the reality of branded competition is that it is a casino that gives its high rollers incredibly better odds than the small punters.

READ MORE: One marketer on the challenges of building a cannabis brand

It’s important to have the right position, the optimal media mix and of course the right creative in order to have advertising effectiveness. But when you actually look at what drives advertising impact more than anything else it’s a lot to do with the sheer bloody scale of the brand behind the campaign.

Thirty years ago, the brilliant advertising professor John Philip Jones observed in the Harvard Business Review that sales volume and advertising budgets tended to move in lockstep. But when Jones examined more than 600 brands and the relationship between their share of market and share of voice he found the relationship between these two variables varied by size.

Bigger brands were able to grow or hold share despite consistently lesser share of voice than their share of market. On average, for example, Jones observed that a smaller brand with 10% market share required 14% share of voice to retain that level of sales.

In contrast, a big brand with 25% of the market only required 20% share of voice to retain that strong position. “For such brands,” Jones concluded, “advertising works harder, dollar for dollar, than it does for most smaller brands – a clear economy of scale.”

It’s a phenomenon also observed by the wonderfully knowledgeable Paul Dyson, who founded media consulting firm Data2Decisions. Dyson has published a couple of big studies, most recently an ROI effectiveness study of 1,500 different campaigns. He looks at the factors that deliver the best profit multiplier from an advertising campaign.

Dyson confirms that the right creative, utilising multiple channels and optimal brand architecture all play important roles. But the biggest and most important factor, with a multiplier effect of 18x, is the pre-existing annual revenue of the company doing the advertising. The bigger the brand’s annual revenues, the better the return it gets from its advertising.

Dyson explained the effect to me recently. “Bigger brands with greater annual revenue get higher ROIs – they are more well known, a safer bet when people switch, more available and likely to be selling at a price premium. Or they might simply be operating in a high value market.

“All these factors contribute to a bigger return from advertising and a higher ROI. Marketers need to understand this relationship to help them allocate budgets, set realistic targets for their brands and understand the longer-term value of growing their brands.”

That last bit, about the “longer-term value of growing brands” is crucial. You want to build a stronger brand because it begets all kinds of business advantages. But one of the best is that a strong brand begets more effective marketing, which begets a stronger brand – a wondrous, virtuous branding circle.

The clear lesson for the hundred-and-something marijuana brands that are currently doubling sales volumes each month is that they must over-invest in marketing now in order to grow larger and faster than their rival brands. Get to the top of the mountain in the next few years of frenzied competition and your advertising will work better for you because your scale will enable it.

The billions and billions that will come later are mostly earned in the next few feverish years of competition.

And the bonus down the track is that once that supremacy is achieved it becomes much easier to defend. If one of your pesky smaller competitors challenges you and ups their ad spend in an attempt to also grow their share, you can dig deeper into your larger pockets and restore the share of voice proportions and your brand’s scalar advantage.

It’s the reason why, in stable grocery categories that have been around for decades, most of the big brands from the 70s are still the top two or three brands today. Take a look at 40-year-old photos from the supermarket aisles of yesteryear and, aside from updated logos, it’s likely that most of the soft drinks, chocolate, dog food and toilet paper brands you see there are the ones awaiting you on your next weekly shop.

Once you’ve built a Cadbury’s or an Andrex it’s bloody difficult for anyone else to match your scale and all the marketing efficiencies that come with it. The virtuous branding circle becomes a virtuous wall that most rivals cannot overcome.

We talk too much about disruption in marketing. We focus on the shiny new brands and assume that the barriers to entry are low and that the cauldron of competition causes brands to constantly bubble up and crack the turgid oligopoly. That turns out to be inaccurate. In new categories like electric vehicles or home automation it might apply. But in most mature categories the story of brand supremacy is an incredibly boring one.

READ MORE: A true brand purpose doesn’t boost profit, it sacrifices it

We forget that the game of branding is – for the most part – a concerto played in two very different movements. The first a short, intense piece played allegro and featuring a lot of horns and timpani. The second a much longer, slower piece for strings that runs three hours and is played larghissimo.

That first movement is particularly intense for America’s recreational pot brands right now because only a handful of states have legalised the drug. Furthermore, most pot brands are still geographically limited to one or two states.

As more states legalise pot, as regional brands expand to a national footprint, and as the North America approach to pot spreads around the world, the race to build the few great global pot brands will accelerate and intensify. But the point is that the billions and billions that will come later are mostly earned in the next few feverish years of competition.

It’s a frenetic time to be building a pot brand, that’s for sure. The pressures and the potential rewards could not be greater. Even writing about it stresses me out. If only there was a quick and pleasant way to ease my troubled mind and relax a little.

The post Mark Ritson investigates: Recreational marijuana appeared first on Marketing Week.

There are many wonderful things to celebrate about The Guardian. In a few moments, about 12 paragraphs from here, I am going to accuse it of drastically and repeatedly damaging the future of quality newspapers in this country. But before I do that I want to sing its praises.

For starters, it is a fabulous product. Its online edition is constantly updated by a team of talented, proper journalists and columnists that readers seek out on a regular basis. Rarely will I make it through the day without several trips to The Guardian on my iPhone or laptop. It is my go-to place for football reporting, political reporting about the imminent immolation of British parliament, and reporting on the state of the world in general. I simply do not think there is a better paper.

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

And, as we learned earlier this week, it is a paper that is finally making money again after decades of pain. Its financial performance was, until this year, enough to induce heart failure in even the most robust CFO. In the last decade The Guardian has posted annual losses of £26m, £22m, £37m, £28m, £23m, £34m, £57m, £38m, and £19m.

But those losses have come to an end with a profit of £800,000 for the current year. It’s not a huge amount when set next to the size of The Guardian and its accumulated losses over the last 20 years. And a more churlish critic might point out that without the £25m the paper received from its charitable ownership structure the Scott Trust, it would still be in the red. But with these caveats aside, The Guardian has clearly turned a massive corner in becoming profitable again.

Digital renaissance

And it gets even better when you see where those profits are being generated. Last year The Guardian derived 55% of its revenues from digital editions. As much as many might want to portray newspapers like The Guardian as exemplars of ‘traditional media’, the new reality of the news media business, at least for those that survived the deadly digital decade just passed, is that they now operate ostensibly like any other online business.

Print editions will remain of course. For a decreasing but stubborn minority they remain the preferred form of news coverage. And the print version remains the premium line extension of any newspaper business.

Just as the great fashion houses keep producing couture – despite seven figure losses – because of the beautiful halo it projects across all their other businesses, newspapers need a physical daily edition to ensure they are not confused with accursed digital-only entrants of the new century like Buzzfeed and the Huffington Post. While most of the revenues and almost all of the profits now come from digital editions, a printed newspaper remains an important symbolic link to proper journalism and authentic mastheads.

No matter how good the digital versions of The Times or Telegraph might be they cannot compete with a product that is literally being given away every day.

The focus on digital at The Guardian means something else too. The newspaper now derives only 8% of its revenue from print advertising. Where once a national newspaper might have expected up to two thirds of its revenue to come from this source, today the only tenable survival path leads away from the once abundant ancient rivers of cash that came from classified and big brand advertising.

Like other suddenly profitable global news media brands – like The New York Times, The Washington Post and The Australian – The Guardian has realised that digital subscriptions are the only way to make its business work. That has meant radical restructuring, cost cutting and an awful decade of transition but The Guardian appears to be moving in the right direction.

Last year some 655,000 people subscribed to either the digital or print edition of the paper. And an additional 300,000 made a one-time donation. As you know if you have visited The Guardian’s site, it has avoided the traditional paywall approach beloved by most other newspapers and instead still offers its content for free. But it encourages readers to appreciate that it is “doing something different”, asking them to either pay a monthly subscription or a one time donation.

And this more nuanced, honest approach appears to be working for The Guardian. But my point, and here comes the downside, is that it is taking a massive and unavoidable crap all over most other quality newspapers as a result.

Competing with a free product

Although almost a million people pay to read The Guardian these days, the paper is consumed by more than five times that number in this country. According the industry body Newsworks, The Guardian is read by 3.3 million people on mobile, 1.5 million on a PC or laptop and 740,000 in print form.

Some of that latter group is also subject to the readership multiple that newspapers have always enjoyed. Mum might be the one who buys the paper, but everyone else in the house has a look. But the giant disparity between paying readers and all of those who access the paper for free is mostly a function of The Guardian’s aversion to a paywall.

READ MORE: The Guardian on its journey to become a supporter-led organisation

And while a paywall might have worked for The Guardian, not having one has had a crucifying effect on all the other national and local newspapers in this country who did erect one, but who are struggling to make a profit. Why would anyone pay for access to a newspaper when they can download The Guardian’s app and read all its content for free, and – with the exception of the little yellow annoyance at the bottom asking for their money – essentially get an amazing product at no cost at all?

No matter how good the digital versions of The Times or Telegraph might be they cannot compete with a product that is literally being given away every day. Even Apple would struggle to make a profit if Samsung started gifting its smartphones to everyone with a grovelling request to perhaps drop off a few quid later on if, you know, they like their free phone.

Twenty years ago most national newspapers made a massively stupid mistake and gave their product away online for free. The single biggest agents of the destruction of newspaper profits were the newspapers themselves, who convinced a generation of readers that they could get, and indeed should expect, a quality newspaper for no charge every day. To this day people under 30 continually complain about ‘stupid paywalls’ with the vehemence of someone who simply does not realise that, without them, all newspapers would disappear and journalism with it.

The Guardian should feel very proud of its fantastic product and its newly earned status as a profitable enterprise. But the cost of its success comes in the massive damage it has done to the rest of the newspaper industry.

The post Mark Ritson: The Guardian may be profitable but its model damages journalism appeared first on Marketing Week.

The quest to transform Liverpool FC into a world-beating side really only began in the 1960s. Prior to that Liverpool played in the shadow of their Evertonian rivals across town. But with the appointment of legendary manager Bill Shankly the fortunes of the club changed radically in the space of a few short years.

Shankly brought many things to Liverpool but high up on that list of transformational introductions was Ron Yeats. The Scottish schoolboy international had forged a formidable reputation at Dundee United, but when Shankly brought Yeats south of the border in 1961 for the unearthly sum of £20,000 he immediately installed him as team captain.

Yeats was an incredible centre-half and he quickly earned the nickname ‘The Colossus’. He was first to the ball, tough and – in the parlance of the day – built ‘like a brick shithouse’. Shankly was so impressed with the sheer physical presence of his new captain that after he signed him the manager insisted that the waiting press corps go into the dressing room and physically inspect his newest player. “The man is a mountain,” he told local journalists. “Go into the dressing room and walk around him.”

Yeats’ most famous moment for Liverpool was related to his heft but did not happen on the field of play. Three years into his tenure as captain, Shankly approached Yeats in the dressing room and threw him a pair of red shorts. “Get into those and let’s see how you look,” Shankly barked, according to the account of Ian St John, Liverpool’s ace forward.

Traditionally Liverpool had played in red shirts with white shorts and socks. Shankly – who would try anything to beat his opponents – believed that red shorts would increase the intimidation factor of his rapidly improving side. And, bananas as it sounds, 30 years later quantitative research would actually confirm that teams playing in red were indeed more successful.

READ MORE: How Liverpool FC looks to ‘compete at the highest level’ both on and off the pitch

Yeats slipped on the red shorts to match his red shirt and stood up. “Christ Ronnie,” exclaimed Shankly with an appreciative smile. “You look awesome, terrifying. You look seven feet tall.”

But St John, who was watching this play out in the changing rooms, had an additional suggestion. “Why not wear red socks too? Let’s go all out in red.” Shankly agreed and Liverpool’s iconic red strip was born.

It’s a moment from half a century ago but, as Liverpool continue their most important week of fixtures for many decades, one that could not be more appropriate to relive. And Carlsberg – fresh from admitting in a bold branding move that it is not the best beer in the world – is making the most of the opportunity.

Playing with codes

The Danish brand has been a sponsor of Liverpool FC for a quarter of a century – the longest-standing commercial partnership in the Premier League. To celebrate an incredible season and its 26-year connection with the club, Carlsberg’s familiar green logo has been turned Anfield red. So has the bottle containing the pilsner. And, uniquely, so has the beer.

The brewer has used the outer shell of the red barley variant to give its special edition beer a natural red colour. The hops for the beer were grown in soil from Anfield and were played videos of some of Liverpool’s great games on a loop as they grew to instill as much of the great club’s DNA into the beer as possible. It’s mental. But its Scouse mental.

Clearly this is a brilliant move by Carlsberg. First, it is celebrating a partnership that defines it in the UK. But Liverpool’s influence, as one of the world’s most supported teams, spreads much wider than Merseyside. This is a promotion that will delight millions of football fans all over the planet.

And there is a further, more strategic rationale for what appears – at first – to be just a short promotional tactic. Just as red is a very particular code for Liverpool FC, dark green – or hex #00321E to give it its proper name – is the dominant code for Carlsberg.

I call them codes because I grew up working for French luxury brands (yes, I know you cannot tell) while the inestimable marketing professor Jenni Romaniuk (who literally wrote the book on the subject) calls them distinctive assets. Either way they are the identifiers of the brand. The way a brand stands out. Shows itself. Makes itself noticed on shelf, in an ad, or across any of the other myriad moments of saliency when a brand wants to be first to mind.

Could it be that a big brand in the UK has a team of brand managers in charge who know what they are doing? Surely not.

A logo is a code. But well-run brands have created a broader shortlist of distinctive, ownable symbols that can be used to ensure consumers instantly connect with a brand in all kinds of commercial situations. When I work with brands we spend just as much time on the codes as we do on the position of the brand. If there is any topic that splits marketers at the moment it is the presence or absence of differentiation.

I am certain it exists (albeit not in the amount suggested by the text books) so I think positioning is a key challenge. But I believe equally, if not more, in distinctiveness, and for that you need codes. And Carlsberg has been using its codes – the white logo, the red and gold crown, the hop leaf device that sits above the ‘r’ in its name, 1847 Copenhagen, and the dark green colour – for a lifetime and more.

Revitalising a middle-aged brand

Usually we talk about how codes are used to improve a brand’s salience. All true. But they also play a deeper, more valuable symbolic role for brands of a certain age. There is a very handy bit of synchronicity that works for older brands. Once a brand passes the middle age mark of about 40, at least in my experience, two things often happen. One of them is a problem, the other its partial solution.

First, the brand starts to struggle with revitalisation. When it was a young brand it was automatically hot and naturally aligned with the first target consumers it was designed for. But as the decades pass every brand eventually experiences the tricky moment when it has become older than the consumers that it targets. Markets change, culture evolves and the paradox of time means that to stay true to its position it must change its execution.

Mark Ritson: Will Carlsberg’s brave new strategy succeed? Probably

In order to stay attractive, the brand wants to follow new consumers into new territories. But with half a century or more of history and heritage, moving too far away from its origins would abandon everything that made it special in the first place. There is a balance to be struck. Too much innovation and new consumer focus and all is lost in a violent moment of rupture. Too much heritage and tradition and all is also lost in a coating of dust.

A second trait of middle-aged brands, if they have been run well, can help the resolve the revitalisation issue. Because if a brand has been applying its codes consistently and assiduously for a half century or more it now has an opportunity to play with those codes to signal freshness. It’s a semiotic magic trick. By tweaking or inverting or reversing a brand code it is possible to achieve a double victory: to look fresh and creative while remaining linked to heritage and history.

In the Carlsberg instance turning its beer and brand red achieves something fun, different and new. But the iconic nature of the dark green means that the redder it makes its beer, the more powerful the recognition that the dark green is missing and the more redolent the realisation that this is still Carlsberg. Its marketers have refreshed their brand and reinforced it at the same time while delighting millions of football fans and generating acres of publicity.

It is, for me, one of the epitomes of great brand management to play with codes. That’s because it first requires decades of diligent application to build such salience and recognition in the first place. Then it requires branding bravery to burn the brand book and reverse decades of consistency with a moment of creative dissonance that weak-minded marketers always assume will damage the brand.

Weeks after I was writing how much I admire Carlsberg’s new campaign to position the beer as probably not the best beer in the world I find myself in the embarrassing and unheralded position of embracing its marketing team for a second time. I swear they are not paying me. Could it be that a big brand in the UK has a team of brand managers in charge who know what they are doing? Surely not.

But as surely as Bill Shankly knew all red was the route to a better team, so too Carlsberg has realised that an occasional deviation from dark green can serve it well. Let’s hope some of that ambition rubs off on Liverpool this week. How dearly would I, and big Ron Yeats, like to see them squeak past Man City at the weekend. It appears almost impossible but, as we have all come to realise, there is magic in the all-red. Walk on.

The post Mark Ritson: Turning Carlsberg Liverpool-red is a branding masterstroke appeared first on Marketing Week.

One of the greatest moments of the very great comedy series The League of Gentlemen takes place when a policeman visits the home of snub-nosed serial killers Edward and Tubs. The policeman asks politely if either of the pair have seen a missing backpacker. After a careful pause of about three seconds Tubs blurts out “we didn’t burn him” and the episode descends quickly into horrific madness.

And it’s rather a similar story for Thomas Cook. The 178-year old travel agency should be talking about holidays and sunshine this time of year but its current financial crisis means it has to respond to the ugly rumours that are now circulating around its longevity, or lack thereof. And every time the company attempts to reassure customers that it “has the support of our lending banks” or that people “can have complete confidence in booking their holiday with us” it has the exact opposite effect from the one that was intended.

Changing market conditions have led to significant losses and write-downs at Thomas Cook in the last year. The company has been shutting things down and selling assets with an apparently rapacious desire to offload. Most recently the company sought bids for its fleet of 105 jets.

It was this fire sale and the fact that much of Thomas Cook’s newest bank loan is secured against these planes that prompted auditor EY to issue a rare warning on Thursday. That warning prompted Citigroup analysts to then conclude that the company’s shares were essentially worthless a day later.

READ MORE: KFC’s marketers turned a chicken crisis into a brand triumph

That headline, reported first in the business press and then the popular titles, sparked a sudden surge in consumer concern. The company still sends 20 million people a year on holiday and many of these trips are the packaged kind that a family pays for well in advance – hence the panic that engulfed Thomas Cook over the weekend.

Committed customers awaiting their holiday took to social media to check that they would not lose their upcoming trip. But, once again, no matter how many times the company tries to sound calm and reassuring to customers on Twitter, it still feels suspiciously and increasingly like “we didn’t burn him”.

We’ve seen this kind of commodifying panic before, in which perceptions of decline become a self-fulfilling prophecy. The media starts covering a brand suggesting that it is over-priced, or in trouble, or no longer cool and consumers absorb the message and turn it into reality.

Maybe Thomas Cook was already in financial trouble, maybe not. But by the time the story reached the market last weekend the perception of trouble had become something far more concerning than the trouble itself.

This has to be the endgame for Thomas Cook – not because it is struggling to stay in business, but because it is perceived to be.

It was Franklin Delano Roosevelt who famously told the destitute crowds emerging from the Great Depression, who had gathered for his inaugural address, that the only thing Americans now had to fear was fear itself. And it’s somewhat similar for brands. The only thing brands really have to fear is the spectre of losing their branded status in the mind of the consumers.

When a brand is strong, magical things happen to the organisation that owns it. Consumers perceive the size and pre-existing stability of a brand as a signal that this is a company that has more to lose than them if something goes wrong, and they take that risk as a signal of safety.

That safety leads to trust and then to repurchase. It ensures better terms from suppliers. Attracts better employees. Creates familiarity and the potential for loyalty. On and on it goes.

Branding’s virtuous circle

In fact, if you step back and look at it from afar, the branding process is a brilliant, circular money-making wheel. You know the brand and know it is big. So, you buy more and pay more for the privilege. The brand then gets bigger. More people get to know it and know it is big and they want to buy from it too. And the branding wheel keeps turning.

But the wheel occasionally turns in the opposite direction, as it has started to do for Thomas Cook. The company’s CEO Peter Fankhauser has gone to great lengths this week to reassure everyone that his company has a clear plan and has plenty of money to pull through the current crisis. But he is either missing the fatal point or choosing to ignore it in public.

Even if Thomas Cook had been in a position to survive its current tough times, those times have become immeasurably tougher since Friday. Fankhauser had a financial crisis to handle last week; that crisis remains but now he has a massive brand crisis to manage too.

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

After a significant century and a half of brand power, Thomas Cook is haemorrhaging trust. And like air or Elvis or the ability to get an erection, you only notice something like that once it has gone.

While the company may well get Derek and Tracy to Magaluf next Friday and back home a week later, there aren’t going to be as many bookings in the future. Of all the perceptions a travel agency can get lumbered with, the one brand association that will kill you faster than a billion-dollar deficit is “not likely to be in business when my plane takes off”.

It’s very sad, but this has to be the endgame for Thomas Cook – not because it is struggling to stay in business, but because it is perceived to be struggling to stay in business. Perception really is more important than reality in this case. In fact, perception is about to become reality.

I think as marketers we underestimate the importance of trust in our approach to brand management. And I don’t mean the over-intellectualised, anthropomorphic version of trust that everyone cocks on about at marketing conferences. I’m talking about a deeper, more primeval version of the word that simply means it won’t do me any harm if I choose this brand over other options.

We have had brands for thousands of years. They pre-date food standards and the effective rule of law by centuries. If you found yourself in the ancient world in need of lunch or a catapult or a carriage, you had really only one recourse – the name of the company behind the product – to reassure you that this mystery object was not going to kill or maim or take your money and not materialise.

Many years ago I travelled with the ‘Barmy Army’ to Sri Lanka to watch the English cricket team get another mighty thumping in a test series. During our travels to Kandy for one of the matches we discovered there had been an influx of counterfeit alcohol into the local bars and booze was, quite literally, killing and blinding local drinkers.

This created something of an existential crisis for my travelling party and myself, because the idea of test match cricket without a massive flaming piss-up each evening was something none of us could countenance.

It’s easy to forget that for the first five thousand years of branding it was trust in a company not to collapse or make a product that would kill me that probably represented 99% of brand equity.

At stumps on the first day of the test we retired to a nearby recreational location and nervously circled the bar. In the end the only beer any of us had heard of was Lion so we took our chances for the rest of the evening with Lion lager and lived to tell the tale.

I still remember the very odd consumer decision-making process, in which we debated which booze was least likely to kill us, and the distinct feeling that my ancient ancestors had been doing exactly the same thing generations before me.

In a modern branding world, in which we focus almost exclusively on emotional benefits and brand purpose, it’s easy to forget that for the first five thousand years of branding it was trust in a company not to collapse or make a product that would kill me that probably represented 99% of brand equity. Without that trust, all other higher-order branding benefits are immediately negated.

And that is very bad news for Thomas Cook. They are in a no-win, no-survive situation. Say nothing about the crisis and brand equity will disappear – and, with it, most of the company’s future sales volumes. Address the concerns head on and reassure your customer base that the company will survive, and that reassurance fans the flames of a commodification crisis that ensures your sales disappear just as badly.

Whatever the great and very good associations that Thomas Cook has built up over its long and amazing history, when the floor of trust begins to fall away everything above it comes crashing down too. Whether this company could have survived its financial crisis is now immaterial. Its branding woes will do for it long before anything else.

The post Mark Ritson: Talk of crisis could be a death spiral for Thomas Cook appeared first on Marketing Week.

The quest to make marketing a science is ongoing. It’s a quest that might ultimately prove to be successful or (my vote) a noble but flawed venture.

Either way, its nobility is assured because the most important concept in the modern marketing lexicon – ‘evidence-based’ – has emerged as a crucial side-product of the scientific quest.

For too long marketers have based their strategies on concepts and theories that have little if any empirical substance. Millennial marketing, brand love, storytelling and a host of other impressively nonsensical concepts serve to obfuscate and obscure the real road to effectiveness.

Fortunately, marketers are finally turning to more empirical data on marketing and advertising effectiveness to guide their approaches. And it is with that evidence-based turn in mind that the power of effectiveness awards and case studies become truly apparent.

In the UK, our own Marketing Week Masters and The IPA Effectiveness Awards are two of several essential evidence-based touchstones that show marketers what does and does not deliver effective campaigns. They have never been more important than now.

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

Over in the US this week, the granddaddy of  effectiveness awards was handing out prizes for the best American campaigns of the year. For fifty years  brands have been submitting their finest work for the chance of winning an Effie

Hundreds apply, but only a handful are awarded each year – not to the biggest companies or the most creative executions but to the campaigns that have proven to be the most effective. The ones that worked.

Strategy plus creativity

Last night in Manhattan it was the team from Procter & Gamble who manage Tide that claimed the honour of the ultimate prize – the American Grand Effie – for their ‘It’s a Tide Ad’ Superbowl campaign. It’s a wonderful example of clear insight, strategic thinking and tremendous execution from Saatchi & Saatchi New York, their agency partner.

Tide’s win comes at a crucial time for marketers. For the past decade we have become an industry obsessed with media at the expense of creativity.

Scan the pages of most marketing content and there are dozens of discussions about programmatic, brand safety and other media related issues. But this focus has come at the expense of creativity and the realisation that what we send down the advertising tubes is at least as important as the design of the tubes themselves.

The story of Tide’s campaign is an eternal one of client insight and strategic focus matched with a properly creative agency response. The P&G team running Tide had identified that the detergents category had become obsessed with the removal of dirt and stains.

That might seem an obvious approach if you are selling soap powder but Tide’s team realised that, while removing dirt might be an important product feature, it was associated with all the brands in the category and, crucially, lower down the benefit ladder than the customer benefit of perfectly clean clothes.

That insight was then briefed to Saatchi & Saatchi, which brainstormed around the idea. At this point there is a black box that defies exposition or analysis.

I’d love to set out a model or equation that explains how the creative team at the agency went from the brief of “talk about clean” to the idea that every ad on TV features people in perfectly clean clothes and is therefore a Tide ad. But the honest reality is that you can’t explain this creative process or the steps through which this amazing leap of imagination was achieved.

Playing to a brand’s strengths

All you can really say is that Saatchi & Saatchi has amazing creative people, and that P&G knows how to brief, and to step back and let its agency work. And perhaps one more thing. When Saatchi & Saatchi came back to P&G with multiple initial ideas, the client immediately saw the potential of ‘It’s a Tide Ad’ and told the agency to drop every other idea and focus all their energy on this one.

I’ve seen this interaction before at luxury brands in the daily dance between a CEO and a creative director. The CEO picks their creative director and then empowers them and steps back. But they also step in and help focus the creative choices when the moment requires it. Kudos to P&G for picking Saatchi & Saatchi, for allowing it to work and then knowing when to direct it.

Nothing trumps a big brand run by smart marketers with a great agency at their side.

Tide’s victory also demonstrates the potential for existing legacy brands in traditional categories to fight back against hot new entrants. We’ve heard a lot in the past year about the rise of direct-to-consumer (DTC) brands and their ability to take out the industry incumbents. It doesn’t get much more incumbent than P&G, soap powder, Tide and a TV-based campaign.

Furthermore, Tide’s marketing objectives for its campaign were not to grow share or increase revenues. Like the vast majority of marketing investment this was a campaign designed to defend a huge price premium and maintain a massive market share in one of the most lucrative categories in America.

READ MORE: Mark Ritson – Accept it, people hate ads – yes, all of them

The fact that the campaign did just that is evidence that despite the desire of most marketers to favour the new over the old and the disruptive over the dominant, nothing trumps a big brand run by smart marketers with a great agency at their side. It must have been tempting for Tide to attempt to adopt the agile and disruptive aggression of the DTC entrants that P&G are now facing across their business.

Certainly, this new competitive context has forced the Cincinnati giant to push harder than ever before. But the essence of smart corporate strategy is to play to your strengths not to those of your competitor.

Tide is the biggest brand in one of the biggest, most ancient categories on the planet. ‘It’s A Tide Ad’ deserves its Effie because not only has it reinforced and strengthened Tide’s market position, it is a campaign that uses the size and scale and power of the brand to its advantage.

And it’s a campaign that will kick off a special series of Effie case studies that I will present over the summer here at Marketing Week. I was invited by the Effie organisation in America to analyse 50 years of case studies and to pick my top 10 of all time to exemplify marketing effectiveness.

Each Monday we will launch a new 10-minute case study here at Marketing Week, in which I look at one of the great cases and what they teach marketers. You’ll be able to watch them here. What better way to learn about marketing than from the evidence from those that have gone before and been successful? We will look at Apple, Gillette, Lidl and others as we examine what makes marketing more effective.

Watch: Ritson on the effectiveness of Tide’s 2018 Super Bowl ad

But we kick off the series with the Grand Effie winner for 2019, Tide, hot off the press. You can access the case study here and learn more about how a wonderful insight drove a brilliant strategy and a breathtaking creative execution. It’s a brilliant lesson in the power of creativity in driving effectiveness and a fantastic way to kick off this important new series.

The post Mark Ritson: Tide’s award-winning Super Bowl ad is the best of marketing and creativity appeared first on Marketing Week.

When Bill Murray meets people who tell him they want to be rich and famous the actor always dispenses the same advice. “I tell them to try being rich first,” he told The Guardian in 2003, “and see if that doesn’t cover most of it.”

Murray’s point, of which he is more aware than most, is that fame brings its own challenges. And it’s a realisation that must also have struck home for the ‘godfathers of effectiveness’, Les Binet and Peter Field.

It would be unfair to portray these two ad men as anonymous in the 1990s and 2000s. If you were involved in advertising and marketing back then, both were well-respected experts. But over the last two years their work, which has been chugging along in one form or another for more than two decades, is suddenly garnering global attention and – even more impressively – being actively cited and used by hundreds of marketers.

READ MORE: Why B2B brands need to invest in brand marketing

I should declare an early interest. I was one of those people that read their work back in the ‘old days’ and am now one of their staunchest fans. It’s rare I get through a client meeting or a class without at least one quick side journey into their treasure trove of charts and models.

At the centre of their contribution, at least as I see it, are three distinct but connected observations. First, that there are the two undulating lines of growth representing short-term, performance marketing and longer-term, incremental brand building.

The fact that these two different paths to growth are not mutually exclusive and that they operate with very different dynamic implications is at the heart of the ‘long and short’ approach to marketing planning. Indeed, the most famous element of Binet and Field’s work is the general prescription of a 60:40 ratio of long- and short-term investments for maximum effectiveness.

This big messy world of advertising, with all its varied and contradictory inputs, does not easily correlate with the equally untidy world of corporate performance and marketing effectiveness.

The second observation is that marketing is simultaneously becoming less effective and more short-term in its focus. Look at the two undulating lines of the long and short from within a six-month window and shorter, performance-based marketing always looks like it delivers a much better return. It’s only when you take in a longer multi-year perspective that the fallacy of ignoring brand becomes apparent.

Finally, and with least exploration and application so far, is the implication of Binet and Field’s work for targeting. In recent years the impact of the Ehrenberg Bass Institute and its promotion of “sophisticated mass marketing” has broken one of our discipline’s most cherished principles – that you must segment and target in order to have the greatest marketing impact.

It’s becoming increasingly common to encounter senior marketers who happily admit to targeting “everyone in the category” or develop advanced marketing campaigns that openly attempt to reach every single consumer on the planet.

For many marketers that has been a tricky concept. The benefits of targeted marketing have been apparent for decades and yet the empirical power of Ehrenberg Bass is hard to resist. In that light, Binet and Field’s work provides a fascinating and attractive middle path.

Their work demonstrates that when you are adopting a long-term brand building path it pays to target the whole category and eschew any form of segmentation. But it also shows that when you are playing the shorter, performance game it makes more sense to target existing consumer segments to get the best return. Put more simply, you do not just want the long and the short of it, you also want some mass and some targeted marketing within that approach.

But as awareness of Binet and Field and their work has grown, so too has the sniping and counter-argument. In any discipline the rise of prevailing theories should lead to a series of countervailing concepts that attempt to disprove or qualify them. There is – it would seem – an almost perfect correlation between how much marketing thinking is venerated and how much it is immediately undermined. In the case of Binet and Field the work has been challenged on three fronts:

1. Bias

This is the least credible of the three critiques and will therefore occupy us the least, but there have been suggestions over the past two years that the work of Binet and Field, and indeed the operation of the Institute of Practitioners in Advertising (IPA) that sponsors much of the author’s work, has an inherent bias in favour of television.

The criticism appears to spring from two places. First, the IPA has accepted sponsorship money from Thinkbox, the British organisation that represents TV broadcasters in the UK. But the criticism ignores the raft of other sponsors, starting with Google, Facebook, Radiocentre and Newsworks, that have also worked directly and indirectly to fund both the IPA and Binet and Field in the past.

“We only accept sponsors who give us complete freedom,” Binet recently explained. “Our recent work has been jointly sponsored by Google and Thinkbox. There were findings that were uncomfortable for each but we published regardless.”

There appears to be an unsavoury connection being made between the general findings of Binet and Field’s work and TV industry funding. It’s true that over the past decade the authors’ staunch defence of TV and its effectiveness has stood out in a marketing discipline intent on portraying the death of TV as an advertising medium at every possible moment.

But the contrast between Binet and Field’s positive view of TV and the industry’s negative one is not a function of trade funding or bias, but rather an empirical versus non-empirical perspective. TV remains a fabulously effective medium, not because the TV industry is paying for it to be said, but because the effectiveness data supports that fact.

2. The ‘winners’ circle’ sample

Another recurring concern with Binet and Field’s work stems not from their funding but their sample. Since 1980 the IPA has run its Effectiveness Awards and that growing database has been the basis for all of Binet and Field’s results.

There is a recurring argument that this subset of campaigns fails the test of representation when compared against the total set of marketing endeavours. Specifically, the 1,000+ cases that have been submitted for an IPA Effectiveness Award are flawed on three levels.

First, they are all British and therefore tarred with the same dirty brush of being from just one (very peculiar) market. Second, they are more likely to be big campaigns because the IPA draws a disproportionate amount of attention from the big brand/big agency crowd and not from the smaller side of town. Finally, and most challengingly, these campaigns were already part of the winners’ circle – or at least their submitters thought they were. Why else submit them for an effectiveness award?

To be fair to Binet and Field they do not just look at the winners of Effectiveness Awards. By looking at all submissions for an award the authors have never suggested they are looking at a completely representative sample of all campaigns but that by looking at what does, and does not, generate effectiveness, there is the ability to see what enables campaigns to move from “good to great”.

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

The analogy Binet uses is football. He acknowledges his work only looks at the professional game but that in comparing the wide variety of performance at that level, any player could learn more about how to improve their own game.

Given the data set, this is a limitation that is impossible to avoid. It certainly makes some of the claims from Binet and Field’s work less applicable – for example the typical campaign duration might be shortening but with the caveat that this is only among IPA submitted campaigns. But when it comes to excellence and what makes for superior impact, is basing the insight on only the big and the best a confounding factor? Limiting, yes. Confounding, no.

3. Self-reported effects

One of the more recent concerns about Field and Binet’s output is that the source of much of their effectiveness reporting comes from those submitting the case for review. Once a case has been submitted to the IPA the submitter is sent a confidential questionnaire that asks them to assess the scale of the effect of their campaign across sales, market share and a total of seven different effectiveness metrics. These results are kept confidential but used by Field and Binet to assess effectiveness, given output metrics are usually disguised or hidden in public cases.

Quite correctly, several critics have questioned the validity of research that uses these self-reported effects as a basis for overall effectiveness. Ideally the actual sales surge or market share increase would be reported and correlated to. But this kind of openness and cross-comparison is all but impossible to get hold of on such a large scale. Does that make the use of self-reported effectiveness a weakness of the research?

It might, were it not for the fact that Binet and Field have repeatedly shown that where they do have external effectiveness data, there is a strong correlation between these effects and the self-reported large effects that they use for their usual analysis.

For example, those submissions that reported at least one very large business effect demonstrated almost three times the market share growth of those submissions that reported no large effects. Similarly, those submissions that self-reported more very large business effects were also more likely to enjoy significant ‘excess share of voice’ (ESOV) superiority – another commonly used external measure of campaign effectiveness – than those that did not.

In other words, asking marketers to report the size and scale of their effects is a limitation but it does appear a suitable proxy for actual effectiveness, and an efficient way to get round the issue of asking hundreds of companies to report incredibly sensitive business metrics each year.

Much of this debate centres on the imperfection of all data in proving marketing theory.

In an ideal world we would have this data, but the world is not ideal and we’ve known ever since Schrödinger opened that box that empirical research must make epistemological bargains with reality. The question isn’t whether bargains have been made but whether they invalidate the work.

In the case of Binet and Field the bargains are there for all to see. Clearly the work is based on a small subset of total marketing campaigns and depends, for much of its insight, on self-declared reporting from marketers who have a vested interest in making everything as impressive as possible. But even with these sizeable caveats the work transcends these limitations, from my perspective.

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

That will not and should not prevent others from attempting to prove or disprove the findings. Indeed, many of us are already exploring (with much smaller data sets) whether some of the key contentions are accurate.

General criticisms of Binet and Field are likely to increase as their fame and influence grows. Much of that criticism is warranted and is an essential part of the disciplinary maturity of marketing. In truth, much of this debate centres on the imperfection of all data in proving marketing theory. We do not study rocks or gravity or the rotation of the earth.

This big messy world of advertising, with all its varied and contradictory inputs, does not easily correlate with the equally untidy world of corporate performance and marketing effectiveness. In fact, you would struggle to find a more cat-like bunch of statistics to wrangle. Developing any knowledge from this changing, reflexive mess deserves enormous effort and expertise and, for all their limitations, I thank Binet and Field for making some sense of it all.

The post Mark Ritson: Binet and Field’s research may not be perfect but that doesn’t make it wrong appeared first on Marketing Week.

In 2011, Procter and Gamble’s Febreze reached an important milestone – $1bn (£786,000) in global sales and a place in P&G’s brand hall of fame.

Despite this apparent success, there was concern. Sales were softening and main rivals Glade and Airwick were catching up by expanding their own lines and replicating many of the same messages in their ads as Febreze had around odour elimination.

Rivals began to own its point of difference, the category became commodotised and the advertising generic. As the brand with the premium price, Febreze had the most to lose.
In this video, Marketing Week columnist Mark Ritson explains how P&G tackled the problem – by going back to the beginning.

Ritson explains how the marketers at the brand used a mix of qualitative and quantative research to diagnose and understand the market, competition, category and brand. The results confirmed that customers saw the category as generic and were suspicious of the product benefits being claimed. Worse,  Febreze no longer owned its key attribute – odour elimination.

The resulting integrated campaign targeted 25- to 65-year-old mums with a key message: Febreze makes the filthiest place smell nice. Activity included a TV spot showing blindfolded women taken to an unattractive and apparently dirty room and asked to sit on a sofa sprayed with Febreze. They were asked to describe what they smelt – the smell of Febreze – and then we see their shock at where they are when the blindfolds are removed.

The brand also sponsored a series of events to underline the message that it could make even the smelliest of situations smell nice, including the Gilroy Garlic Festival, held in California every summer.

The results exceeded expectations – outstripping sales increase and brand attribution targets. More than 80% of those that recalled the ads attributed odour elimination with Febreze.

READ MORE: Watch – Ritson on the effectiveness of Tide’s 2018 Super Bowl ad

This video is the second in a series where Ritson will reveal the stories behind some of the most effective campaigns ever based upon case studies from 50 years of the Effies, including Apple, Gillette and Lidl, as we examine what makes marketing more effective.

You’ll be able to see more in the series on our dedicated marketing effectiveness page.

Mark Ritson teaches the Mini MBA in Marketing. For more information go to https://mba.marketingweek.com/

The post Watch: Ritson on how Febreze used consumer insights to drive effectiveness appeared first on Marketing Week.

I’ve always liked those ads that show grey-haired executives whizzing around the planet.

You know the ones. They are shaking hands with a client in Japan; sitting in the back of a car in Frankfurt, looking at the streetlights; striding through the airport somewhere in the US with a purposeful look on their tanned face; and then landing back home to be met by their loving spouse and two kids, who charge across the arrivals hall to squeeze their long-lost champion.

It’s all cock of course. The ads that are meant to target this crumpled army of corporate travelers are a massive joke.

READ MORE: Binet and Field’s research may not be perfect but that doesn’t make it wrong

We just don’t look like that. To travel internationally means to be grey. You wake in hotel rooms and pause while clarity slowly emerges from the dark.

‘Where am I?’ your brain asks, and you stare up at the ceiling and wait – wait for the jet lag and weariness to part, and for your location and reason for being there to become apparent. As you age it can take several minutes.

To properly business-travel is to be tired in your bones. Foreign hangovers, 4am wake-up calls and the eroding effect of air travel take their toll.

The whole company is missing the ‘simple stick’ that their founder once beat them with on a daily basis.

We don’t sit in the back of cars looking at the lights, we doze off holding our smartphones to our faces. We sleepwalk through airports like zombies. The minute the wheels are up, the bed is down and we are gone.

And when we get home nobody meets us at the airport. That only happens when you travel once a year or are having an affair. Your arrival is unheralded. You wander to belt six, pick up your bag and prepare for imminent abuse because you were away for a whole week and your family needed you.

And through all of this your best mate is your bag. Only fellow bazillion-mile travellers will understand what I am saying.

Your bag is permanently on the road with you. It’s the first thing you look for in the morning, to make sure the laptop and phone are there. It’s the last thing you push, tenderly, into the overhead compartment before you collapse into the bed below.

A plethora of cables

I’ve had four great bags in my life. Roughly one for every five years I’ve spent doing this shitty long-distance travel thing. A great Vuitton shoulder bag that someone stole from me in a bar in north London.

A Samsonite beauty that was almost indestructible, but lost the fight on a particularly fraught trip to Seoul when things got very, very out of hand.

A beautiful Berluti weekender that, like anything French, got better-looking as it aged but then, also like anything French, fell apart on me surprisingly quickly.

And now I have a very sexy Loewe. No, not a telly. Loewe is an amazing leather goods brand from Madrid that I worked with for a while.

It brought in the super-sexy designer JW Anderson and I bought one of his collection bags – a beautiful green thing with a lovely orange interior, which has this weird ability to look really cheap despite costing more than a small car. Let me show you a picture of it.

You will note several things from this photo (which has not been styled). First there is a pair of underpants in there and a small toiletries bag. Somewhere further within sits a pair of dirty socks too. For overnight trips I can survive with just this bag, which makes travel much easier.

What you cannot see here is the little MacBook that lives inside. It’s the smallest one. Thirteen inches of upgraded power that has never let me down. But what you can definitely see is the thing that makes my life miserable: the cables that go with my MacBook. I counted them after I took the photograph above. I have twelve. TWELVE. A dozen different wires, connectors and adaptors for one little laptop.

I have that many because the only port on my MacBook is a USB C. When I bought my new laptop I actually loved the simplicity of a single hole. But I was not factoring in the various things I would need to do to that single hole and how complex things would get once I started to try and actually utilise it.

You see, that single USB C port has to connect to HDMI (or VGA in B2B companies) and to power, and to a USB stick – and those usually come in only the bigger 2.0 format. And it turns out some USB C cables do charge my laptop while others just carry data.

READ MORE: Mark Ritson: Talk of crisis could be a death spiral for Thomas Cook

With the introduction of Thunderbolt 3, which is not the same as USB C but looks exactly the same, things have become worse. There are instructional videos about this somewhere but I have not yet accessed them. You can use Thunderbolt 3 cables in a USB C port, unlike Thunderbolt 2, but you cannot use USB C cables in the Thunderbolt port. Or something.

And then there are the phone connections to worry about. Originally a single cable charged my iPhone from my laptop. I keep buying either a USB 2.0 cable with a Lightning connector (no good because of my single hole); or I get the right USB C cable, however it ends not in a lightning connector but a Mini B, which looks similar to Lightning but won’t work in your iPhone no matter. How. Hard. You. Push. The. Little. Fucker. In.

You can get round a lot of this by purchasing a little adapter but even that, if it does not end in the USB C, is also useless and comes in about 25 different variants that all look white and the same. And don’t event start me on plugs that come ready to power a USB 2.0 but not USB C.

Add all this up, then get yourself in a hurry in an airport, and I defy you not to end up with as much cable as a dodgy electrician. And all of it sits there in your bag strangling everything else.

Every trip to your bag is a simple moment of beauty as you lift your smooth, tiny Macbook into your lap. And then it turns into a Tarantino movie as you fight through the dark jungle of cables to find the connection for the dingus.

Apple’s lost its cool

For any other brand this kind of crappy consumer experience would probably not prove fatal. If I had bought an Asus or HP I would have expected – probably welcomed – a sea of stupid cables that got in the way of things working properly. But I paid top dollar for Apple partly because it is the simple machine.

When Steve Jobs starting fashioning Apple into the big, gleaming bastard of the 21st century, he did it with an alarmingly obvious position: humanity, creativity and simplicity.

There weren’t any brand triangles brimming with adjectives or six-slide presentations capturing the brand essence, purpose and attributes for our Steve, oh no. He mercilessly drove his organisation to be the anti-Microsoft with three simple tenets. Be creative. Be human. And keep it simple.

He would hit his design teams over and over again with what they called the “simple stick”, and demand more creativity and a less complex outcome. His creative henchman Jonathan Ive spoke elegantly and consistently about the beauty of this approach. “Our goal is simple objects,” he once told the Evening Standard. “Objects that you can’t imagine any other way”.

I caught myself admiring a Microsoft ad last week. It was a good few seconds before I shook myself out of my avaricious stare and talked myself round.

And Apple executed the shit out of this position. It took a knife and several semi-serious hand wounds to open a Microsoft box during the noughties. Apple’s gear opened with a tiny pull on a plastic tab.

In an age when Dell boasted 400 million possible PC configurations, Apple had three. Apple’s stores were cathedrals of glass and little else. Simplicity in physical form. And Apple’s advertising was the cherry on a cake baked from simple.

A single black-and-white photo and two words: ‘Think different.’ Or the famous ‘Get a Mac’ series in which a casually dressed Robert Webb was the cool creative one who kept it simple and represented Apple. David Mitchell was the officious, over-complicated nerd who represented Microsoft.

But the sword of brand equity cuts both ways. If you build expectations of simplicity you attract the kind of people who like that kind of thing. And they turn up assuming you will deliver it.

An average tech company would be struggling right now if it had the kind of cable complexity that is engulfing Apple. But for Apple, a company that literally built a brand on less not more, every rummage through the half-kilometre of plastic in my bag is another nail in its perceptual coffin.

And once you emerge from the bag you look around at an Apple that seems so very – well, complicated. There are all those pointless fucking apps from the noughties that you have to delete on your phone or your new Macbook. Apple Mail anyone? Contacts?

And then there is the seemingly endless array of products now engulfing the company. Steve created the iPhone. And when he was ready to improve he deleted it and brought out the next one.

At the moment you can buy an iPhone XR, iPhone XS, iPhone XS Max or iPhone 8. Or you could go with the 7 if you prefer. The whole company is missing the ‘simple stick’ that their founder once beat them with on a daily basis.

I caught myself admiring a Microsoft ad last week. Some sleek, handsome Asian dude is slipping a Surface into his little man bag. He is dressed sparingly. He looks amazing. He is quite clearly enjoying his Surface. And equally importantly, he is clearly not opening his bag to 8,000 cables and a half-kilo of adapters.

It was a good few seconds before I shook myself out of my avaricious stare and talked myself round. But I felt something that had not stirred in two decades: the pull of Microsoft.

The coolness of their products. The sleekness of their look. The simplicity of their approach. The total lack of fucking cables.

The post Mark Ritson: Apple’s confusing product portfolio makes Microsoft look sleek appeared first on Marketing Week.

Well that’s Cannes over for another year. I don’t know about you, but I am exhausted.

Fortunately, I applied my tried and tested three-point plan for getting the most out of the Cannes Lions Festival to ensure that it was a productive week. The first part of my approach is to rise early, ideally before 7am each day.

Second, try and cram as much into each day as possible. And third, and most important, get as far away from Cannes and France as you can and get some work done instead.

READ MORE: Mark Ritson: Apple’s confusing product portfolio makes Microsoft look sleek

Saving on air fare and spending time on actual work does not preclude you from partaking of the insights that come from the French Riviera of course. They are impossible to avoid. By Monday thousands of tweets, blogs and columns summarised the main themes from the festival for the unwashed, unfortunate and unimportant marketers who could not attend in person.

My favourite summary was from Digiday, which did a splendid job of summarising the bullshit from last year’s event and contrasting it with the (equally nonsensical) replacements on show last week. If 2018 was all about Facebook discussing disinformation, then this year was all about Facebook discussing equality.

Last year’s all-male ad tech panels were replaced with this year’s version, which included one woman. But most notable on the list was that “bullshitting about blockchain”, which was the theme of 2018, had been replaced by “bullshitting about 5G” instead. Spot on.

5G nonsense

It was hard to find an account of the big event that did not dip into 5G for a few suitably vague, hyperbolic sentences of total balls. There was Verizon’s CMO Diego Scotti telling Fox Business News that his company’s first device on 5G was likely to usher in a new era for everyone.

“When you think about the changes that 5G will enable in society, all the way from how we’ll change healthcare, for example, with things like remote surgeries or smart cities,” he explained to a slightly bemused Maria Bartiromo, “well now with 5G it will be possible when you have cars talking to cell phones, cell phones talking to buildings, and really realising the smart city dream.”

There was similar revolutionary talk from Street Fight’s Julie Bernard in her Cannes roundup. Her summary of the much-discussed conference conversation between Accenture Interactive CEO Brian Whipple and S4 Capital founder Sir Martin Sorrell was that “traditional models will lose business”.

Bernard predicted that if marketers did not pour (her word, not mine) their budgets into AR, VR and AI, and “leverage the massive speed and capacity of 5G when it rolls out”, their businesses would probably not survive the decade.

No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else.

The Drum was drawing very similar conclusions ahead of its trip to Cannes. People, it claimed, were soon likely to identify more with their home city and less so with the country of their birth because of the future and stuff. And all of this will accelerate as a result of 5G communications because, well, it’s 5G and everything is going to be different and faster after 5G takes over.

But there was bad news over in France for the 5G early adopters. A shadow was rising in the East. Su Xin, head of 5G technology for the Chinese government, was not in Cannes last week but was in his lab in Beijing, and his focus was on anything other than 5G. Xin had a big surprise for everyone because China is already focusing on…6G.

That’s right fuckers. We still don’t have 5G, and most people (especially those on stage in Cannes) have no idea what it really is, but the Chinese are already making it obsolete.

For almost 12 months a Chinese team has been working on a secret new 6G technology likely to render 5G redundant. Xin has been extremely guarded on exactly what his new infrastructure will be capable of but he did tell one Chinese news agency that his new technology will be “the G to end all Gs”.

Well I have some bad news for the Chinese and all those pasty laggards still sobering up after Cannes. I was keeping this development secret, however Su Xin’s fighting talk leaves me with no option but to reveal my hand significantly ahead of schedule.

Ritson’s new 9G device

For the last few weeks I have been dividing my time between professorial duties, writing the odd column and creating a new technological infrastructure that I am tentatively calling 9G. I admit that, at first, I intended to christen my new technology a 6G system but then I read about the advances in Beijing and decided to be even more agile and disruptive.

Even then, I was halfway through writing 7G on the side of my new prototype (shown above in exclusive early test photos) when it suddenly dawned on me that this was exactly what the Chinese were expecting me to do. With a Machiavellian swipe of my Sharpie I changed the 7 to a 9 and stood back to enjoy my handiwork.

“Ritson, you marvellous bastard,” I said to myself with an evil chuckle, “you’ve cracked it.”

READ MORE: 5G poses ‘dramatic challenges’ to privacy and personal data

I want to use this column to announce that I am officially working on a 9G communications technology that will change everything, completely, forever. Its new components and incredible new speeds mean that it will be at least 30% better than whatever the Chinese come up with and even more superior to the crappy, old-fashioned 5G stuff they were talking about in Cannes last week.

9G is going to fix space travel, healthcare, parking meters and match all the socks in your top drawer. Seamlessly. It will enable buildings to communicate with cars, cats to chat with dogs and – the killer – people to talk to other people almost as if they were in the same room as each other.

Critics might scoff and point out that my new 9G system is nothing more than a second-hand modem bought on eBay, wrapped in tin foil and connected to the old microwave that we kept in the garage. I would expect nothing less from those Luddites living with the ancient, traditional media systems of 5G. You won’t scoff when my device finally becomes operational.

I cannot comment at this stage when that will be, or on any of the secret technology that enables my 9G system to supersede everything before it. But as a marketer I can promise you that this is the future tech you have been looking for, to talk about in your next keynote/article/podcast.

The next time anyone mentions 5G, snort in their general direction and then, with a dismissive tone, drop the immortal, argument-winning words: “What about Ritson and 9G?” Game over.

And, to be fair, is my new invention really so stupid? No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else. I freely admit that my device is a massive load of bollocks but so is 99% of the discussion about 5G that is currently going on among marketers.

What’s more, these bullshit discussions get completely in the way of the actual, very real challenges of marketing that no one seems interested in concentrating on. Bollocks to 5G. Let’s talk about customers, about brands, about effectiveness. About real marketing rather than bullshit tech.

You can draw a thick, brown bullshitty line from 3D printing to artificial intelligence, to virtual reality, to blockchain, to 5G, to 9G and whatever inane techno-porn that will arrive next to distract marketers from their true challenge.

The only value that 5G offers – like millennials and agility and the walking, super yacht-renting anachronism who is Gary Vaynerchuk – is as a bullshit magnet that attracts and identifies those who do not understand marketing but masquerade as experts among us nonetheless.

The post Mark Ritson: 5G is the latest hot topic on the bullsh*t roadshow appeared first on Marketing Week.

Well that’s Cannes over for another year. I don’t know about you, but I am exhausted.

Fortunately, I applied my tried and tested three-point plan for getting the most out of the Cannes Lions Festival to ensure that it was a productive week. The first part of my approach is to rise early, ideally before 7am each day.

Second, try and cram as much into each day as possible. And third, and most important, get as far away from Cannes and France as you can and get some work done instead.

Mark Ritson: Apple’s confusing product portfolio makes Microsoft look sleek

Saving on air fare and spending time on actual work does not preclude you from partaking of the insights that come from the French Riviera of course. They are impossible to avoid. By Monday thousands of tweets, blogs and columns summarised the main themes from the festival for the unwashed, unfortunate and unimportant marketers who could not attend in person.

My favourite summary was from Digiday, which did a splendid job of summarising the bullshit from last year’s event and contrasting it with the (equally nonsensical) replacements on show last week. If 2018 was all about Facebook discussing disinformation, then this year was all about Facebook discussing equality.

Last year’s all-male ad tech panels were replaced with this year’s version, which included one woman. But most notable on the list was that “bullshitting about blockchain”, which was the theme of 2018, had been replaced by “bullshitting about 5G” instead. Spot on.

5G nonsense

It was hard to find an account of the big event that did not dip into 5G for a few suitably vague, hyperbolic sentences of total balls. There was Verizon’s CMO Diego Scotti telling Fox Business News that his company’s first device on 5G was likely to usher in a new era for everyone.

“When you think about the changes that 5G will enable in society, all the way from how we’ll change healthcare, for example, with things like remote surgeries or smart cities,” he explained to a slightly bemused Maria Bartiromo, “well now with 5G it will be possible when you have cars talking to cell phones, cell phones talking to buildings, and really realising the smart city dream.”

There was similar revolutionary talk from Street Fight’s Julie Bernard in her Cannes roundup. Her summary of the much-discussed conference conversation between Accenture Interactive CEO Brian Whipple and S4 Capital founder Sir Martin Sorrell was that “traditional models will lose business”.

Bernard predicted that if marketers did not pour (her word, not mine) their budgets into AR, VR and AI, and “leverage the massive speed and capacity of 5G when it rolls out”, their businesses would probably not survive the decade.

No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else.

The Drum was drawing very similar conclusions ahead of its trip to Cannes. People, it claimed, were soon likely to identify more with their home city and less so with the country of their birth because of the future and stuff. And all of this will accelerate as a result of 5G communications because, well, it’s 5G and everything is going to be different and faster after 5G takes over.

But there was bad news over in France for the 5G early adopters. A shadow was rising in the East. Su Xin, head of 5G technology for the Chinese government, was not in Cannes last week but was in his lab in Beijing, and his focus was on anything other than 5G. Xin had a big surprise for everyone because China is already focusing on…6G.

That’s right fuckers. We still don’t have 5G, and most people (especially those on stage in Cannes) have no idea what it really is, but the Chinese are already making it obsolete.

For almost 12 months a Chinese team has been working on a secret new 6G technology likely to render 5G redundant. Xin has been extremely guarded on exactly what his new infrastructure will be capable of but he did tell one Chinese news agency that his new technology will be “the G to end all Gs”.

Well I have some bad news for the Chinese and all those pasty laggards still sobering up after Cannes. I was keeping this development secret, however Su Xin’s fighting talk leaves me with no option but to reveal my hand significantly ahead of schedule.

Ritson’s new 9G device

For the last few weeks I have been dividing my time between professorial duties, writing the odd column and creating a new technological infrastructure that I am tentatively calling 9G. I admit that, at first, I intended to christen my new technology a 6G system but then I read about the advances in Beijing and decided to be even more agile and disruptive.

Even then, I was halfway through writing 7G on the side of my new prototype (shown above in exclusive early test photos) when it suddenly dawned on me that this was exactly what the Chinese were expecting me to do. With a Machiavellian swipe of my Sharpie I changed the 7 to a 9 and stood back to enjoy my handiwork.

“Ritson, you marvellous bastard,” I said to myself with an evil chuckle, “you’ve cracked it.”

5G poses ‘dramatic challenges’ to privacy and personal data

I want to use this column to announce that I am officially working on a 9G communications technology that will change everything, completely, forever. Its new components and incredible new speeds mean that it will be at least 30% better than whatever the Chinese come up with and even more superior to the crappy, old-fashioned 5G stuff they were talking about in Cannes last week.

9G is going to fix space travel, healthcare, parking meters and match all the socks in your top drawer. Seamlessly. It will enable buildings to communicate with cars, cats to chat with dogs and – the killer – people to talk to other people almost as if they were in the same room as each other.

Critics might scoff and point out that my new 9G system is nothing more than a second-hand modem bought on eBay, wrapped in tin foil and connected to the old microwave that we kept in the garage. I would expect nothing less from those Luddites living with the ancient, traditional media systems of 5G. You won’t scoff when my device finally becomes operational.

I cannot comment at this stage when that will be, or on any of the secret technology that enables my 9G system to supersede everything before it. But as a marketer I can promise you that this is the future tech you have been looking for, to talk about in your next keynote/article/podcast.

The next time anyone mentions 5G, snort in their general direction and then, with a dismissive tone, drop the immortal, argument-winning words: “What about Ritson and 9G?” Game over.

And, to be fair, is my new invention really so stupid? No one in marketing actually knows what 5G is or how it works or what difference it will make to society, business or anything else. I freely admit that my device is a massive load of bollocks but so is 99% of the discussion about 5G that is currently going on among marketers.

What’s more, these bullshit discussions get completely in the way of the actual, very real challenges of marketing that no one seems interested in concentrating on. Bollocks to 5G. Let’s talk about customers, about brands, about effectiveness. About real marketing rather than bullshit tech.

You can draw a thick, brown bullshitty line from 3D printing to artificial intelligence, to virtual reality, to blockchain, to 5G, to 9G and whatever inane techno-porn that will arrive next to distract marketers from their true challenge.

The only value that 5G offers – like millennials and agility and the walking, super yacht-renting anachronism who is Gary Vaynerchuk – is as a bullshit magnet that attracts and identifies those who do not understand marketing but masquerade as experts among us nonetheless.

The post 5G is the latest hot topic on the bullsh*t roadshow appeared first on Marketing Week.

“Who is Miguel Patricio,” asked AdAge last week, “and what is he getting himself into?”

There are two short answers to that double-barrelled question: he’s a bit of a marketing legend and, potentially, a giant box of shit.

Patricio is the new CEO at Kraft Heinz and whether the Portuguese native can navigate his way out of the aforementioned shit box will come down to just how good a marketer he really is. In the press the former AB InBev CMO comes across as brilliant and engaging but this has to be one of the biggest and toughest jobs in marketing. Can he pull it off?

By now you already know the back story. Kraft and Heinz mega-merged in 2015 with the backing of Warren Buffet and legendary private equity player 3G Capital. The deal appeared to be golden with the classic PE model of squeezing costs and driving profitability resulting in spectacular returns in 2017 and an audacious, though ultimately unsuccessful, bid for Unilever that same year.

But by the beginning of 2019 there was dramatically bad news. The company admitted that two of its marquee brands, Kraft and Oscar Meyer, were not worth what had they had valued them for only four years earlier. The $15bn write down, one of the largest in commercial history, spooked the market. As did the subsequent news that revenues were down and costs up. Kraft Heinz’s stock has halved in value in that past 12 months, a performance that saw former CEO, Bernardo Hees, fall on his sword.

Mark Ritson: Kraft Heinz is in 57 varieties of trouble

Aside from the leadership of Hees, much of the finger-pointing has also been in marketing’s direction. At a consumer packaged goods business like Kraft Heinz where 30% or 40% of the company’s total market capitalisation is usually tied up in brand equity, a flawed approach to marketing is a financial meltdown waiting to happen. Not only do badly managed brands reduce demand, they also leave Kraft Heinz vulnerable to private labels.

We are old timers in this country when it comes to store brands given they take almost exactly half of the total spend on groceries in the UK. But America was always way behind us in private label terms and only now, as the penetration of store brands approaches 20% of total grocery sales, are the screws tightening on second-rate grocery brands over there. The weaker your brand, suddenly the more vulnerable you are to paying for the privilege of remaining on the supermarket shelf.

Names like Shake ‘n Bake, Sure-Jell and Stove Top immediately signal how ancient and knife-worthy much of the Kraft Heinz portfolio is.

Mark Ritson

Putting a noted marketer like Patricio into the big seat signals that Kraft Heinz accepts much of the criticism that has been aimed at the company over its negligent approach to brand management. His first input to long-term marketing-led growth will ironically be the kill-list.

The company has around 70-something global brands (tellingly, it’s hard to be exact) and while that looks great on the corporate website under the title ‘Beloved Global Brands’, it spells strategic disaster for the company. Different brands in different countries, cannibalisation, lack of focus, and inertia are just some of the many problems of an over-populated brand portfolio and unclear brand architecture.

When I was a young marketing student the big global food companies owned and operated hundreds, sometimes thousands, of brands across the world. Today, most of them, led by Procter & Gamble (P&G) and Unilever, have winnowed that portfolio down to double digits with usually around 20 core brands as the focus for global operations and investment.

With a total portfolio of 70-something brands it’s not that Kraft Heinz has too many brands. But there appears to be a lack of clarity about which brands are the core global brands. And there is the sinking feeling that after Heinz and…er… [scans the list of brands again in increasing panic] this is very much a list of 20^th century brands whose best days are behind, not in front.

Is your brand portfolio fit for purpose?

A different kind of CEO

Patricio has already signalled that his experience makes him a very different kind of CEO from his predecessor. “My profile can help the future,” he recently explained. “It’s not about liking what happened, it’s about understanding the future. We need to lead, not follow”. That’s all well and good.

But, no matter how skilled the turnaround artists in charge, does he even have a portfolio that can be pointed in the right direction?

Patricio has also made much of the fact his new employer owns the number one or number two brands in about 50 categories. True. But, with the exception of a few mega categories like ketchup, winning in areas like fruit pectin, stuffing and seasoned bakery coating must feel a lot like losing. Names like Shake ‘n Bake, Sure-Jell and Stove Top immediately signal how ancient and knife-worthy much of the Kraft Heinz portfolio is.

Looking at the portfolio Patricio has inherited, the new CEO could easily off-load half the portfolio and still find himself running a second-tier operation. As CEO it will be his job to sanction which brands should go, and which should remain and receive major refocus and reinvestment. Apparently, brands like Breakstone and Maxwell House are already on the front step of the divestment department, but many more will need to follow.

The whole scenario reminds me of a bigger, American version of our own Premier Foods. A decade ago I started writing extremely unhelpful columns suggesting that while its new “star brand” strategy in which the company doubled down on its top brands made sense, the flaw in this approach was the company did not actually have any star brands.

I got an amazing response from investors who accused me of being a “muppet”. Later, when the company’s share price dropped by more than 99% in value, I took absolutely no pleasure.

Kraft Heinz is no Premier Foods, however. Instead of Mr Kipling we have Kraft. Millions of pounds become billions of dollars. But there is that same abject feeling that for all its heft, this is a company that simply does not have the brands to prosper when it comes to brand management.

I don’t doubt Patricio or the logic of putting a marketer in charge. No matter how good the new CEO turns out to be, the raw materials he is chartered with transforming appear limited.

Nothing stunts a brand’s future more than an amazingly successful past.

Mark Ritson

Ironically, just as he is completing his kill list it is likely Patricio will also be heavily involved in acquisitions too.

One of the major advantages of brand consolidation is that it also reveals categories and customer segments where growth is possible but where no existing Kraft Heinz brand currently operates. Patricio will need to use a marketer’s eye to spot the right brands in the right categories at the right price to ensure the correct deals are struck.

That’s not to say the existing, surviving brands will be left alone. The start of the problem for Kraft Heinz was the realisation that two of its biggest brands were not what they once were.

It’s the oldest story in branding. A hot new brand rises on a tide of innovation, it scales up and becomes an icon. Consumers age. Time passes. Tastes change. New competitors arrive. The market evolves. But the brand remains consistent to its traditional formulas and operations and loses step with its target consumers.

The very things that once made brands like Kool-Aid, Miracle Whip and HP Sauce so successful start to work against the brand. They remain icons with long and impressive brand heritage.

But we put icons up on the walls of monasteries, we don’t put them on the table at tea time and consume them with vigour. If I wanted to dress a movie set in the 1970s Kraft Heinz has everything I need. If I want to make dinner for my family tonight, not so much.

Kraft Heinz UK CMO on bringing ‘the magic’ back to marketing

Patricio claims his two watchwords in his new role are curiosity and speed. He is spot on. If Kraft Heinz had exhibited these traits earlier things might not now have become so precarious.

Curiosity forces even the biggest companies to keep asking the hard questions of themselves and their market. Speed ensures the metabolism of a brand does not slow to a funereal pace. Nothing stunts a brand’s future more than an amazingly successful past. The trick for Patricio is to dare to challenge and change some of the icons in his portfolio before they get any dustier and more vulnerable.

There is the urgent requirement for creativity – a Patricio speciality. If you’ve spent the summer studying thousands of Effie cases, as I have, it becomes apparent that effectiveness has many parents. But the Big Daddy and Top Momma are scale and creativity.

Big brands get all the benefits of excess share of voice, existing infrastructure and the deep pockets to guarantee scale efficiencies. Creative brands enjoy an enormous maximiser effect across all their investments as ideas impact the market.

Kraft Heinz has the scale but very little of the creativity. Sure, the new Ed Sheeran ad for Heinz Ketchup is a breath of fresh creative air. But it’s almost as meat and potatoes as the stuff our Ed splashes his sauce on in the ad.

The fact the whole idea came from the singer (over Instagram) and not the company’s marketing team speaks volumes.

Patricio will shake things up dramatically just as he did in the previously stale world of beer. But he needs to move fast to encourage his teams to take risks and push hard in terms of product, advertising and all the other touchpoints.

In truth, by simply walking through the door of the company’s Illinois HQ and taking his seat at the head of the company, Patricio has already made his biggest impact on his new employer. The mega-write down sparked a hundred columns eager to portray the short-termism of 3G and the out of touch sensibilities of Warren Buffet. Kraft Heinz was, most columns concluded, not a place where marketing and brand building were the big focus any more.

By recruiting one of the most high-profile marketers in America, famed as much for his “Dilly Dilly” advertising as his consistent ability to grow sales at AB InBev, Kraft Heinz has sent a signal that they take marketing seriously and are prepared to invest in the best to get it right. This message buys time with investors and re-assures marketing talent that Kraft Heinz is a place to practice the dark art.

Now all Patricio has to do is to justify the hype and pull this giant mission off.

The post Kraft Heinz’s new CEO needs to deliver a much-needed dose of tough love appeared first on Marketing Week.

It was one of those little moments on Twitter that makes you glad to be a user. A noted marketer produces an apparently innocuous tweet. Another noted marketer smashes it to pieces. And, before you can reach for the eating popcorn GIF, marketer number one is back and packing the heavy artillery. Others join in. The temperature rises and it’s on.

So it was at the start of this week, when CMO Everard Hunder took to Twitter to profess his love for the good old fashioned focus group. Hunder waxed lyrical about the “free flowing conversations”, “changes of conversational direction” and “unscripted questions” that all generate marketing gold. Why are they so out of fashion wondered Hunder when “no other method creates these moments”?

Not a minute had passed before Doug “Atomic Ad Man” Garnett entered the ring to profess his admiration for Hunder and his own similar-sized passion for focus groups. Hunder’s comments were “incredibly true”, tweeted Garnett, who went on to postulate that focus groups were out of favour because companies misunderstood their role in exploring rather than testing for the truth.

Suddenly there was a disturbance in The Force. If you listened carefully the sound of Wagner and the insidious beating of large drums grew louder. The Dark Lord of Penetration, Professor Byron Sharp, had been summoned from the depths and, as usual, he was in no mood for platitudes.

Watch: Ritson on the power of Apple’s brand positioning

“Do in-depth interviews instead,” he boomed. “Get out of your offices and go into shops/homes.” And, almost as soon as he had emerged, he was gone again, save for a giant ripple across the dark water and a sudden blast of cold wind.

It was Garnett who responded first. You imagined several people gripping his arm and saying: “Doug, for fucks sake, leave it, LEAVE IT!” But he was back at his keyboard contradicting the Dark Lord directly.

“There are many ways to explore. It all depends on the situation,” Garnett responded. “Groups offer a psychological advantage helping uncover that which they wouldn’t discover individually – in shops and homes.”

It was at this point, mid-way through a fine cup of coffee, I paused my typing to focus exclusively on Twitter. “Hmm,” I pronounced to no one in particular, “it’s game-the-fuck-on here.” I swivelled back on my chair and, taking my phone in both hands, waited for the next installment from the Depths. I was not to be disappointed.

“???” Professor Sharp replied. “In a group you get a few minutes’ talk per person cf. hours in-home. It’s an artificial environment. And weird sample… Ignoring these biases reminds me of how people like astrology, i.e. cos it feels good/right/insightful.”

It is almost always more useful to engage with the customer in their own environment.

Those familiar with the various ancient books of the Dark Lord will know that shibboleth-tossing is one of his most effective techniques. Opponents are reduced to leech users, flat-earthers and witches to make the point: that there is ‘science’ and then there are a bunch of other medieval paths that all lead to horseshitville.

Even by the Dark Lord’s standards he had started tossing early, however. The online debate was barely 20 minutes old and he was already whipping out the zodiac critique.

“Hang on Prof,” replied Everard. “I’m not suggesting you then go forth from focus group chit chat and do stuff; there is clearly a validation stage. But for fresh ideas, draft insights and a wealth of other business information I think they have a really useful place.”

The debate continued for a while. Garnett became upset with the Dark Lord, who, he claimed, appeared happy to accuse him of “medieval medicine” without knowing what he did for a living. Sharp apologised (not really) and suggested his comments were “mild” by his standards (not exaggerating here) and also “factual”. There was, he concluded sternly, “no cause for offence”.

His two opponents disagreed and continued to throw spears at the Dark Lord for quite some time until Sharp, once again, seemed to grow bored and slipped back into the depths. If you want the whole discussion – which remained civil to the bitter end – it’s all here.

The value of focus groups

So who is right and who is wrong? It’s traditional in these kinds of situations to try to find a way to make everybody look stupid and find a third superior vantage point from which you can emerge triumphant. Disappointingly in this case, however, everybody in the three-way debate was on the money.

Hunder is correct that focus groups can be gold. They are much abused in modern marketing settings but they are a method that has several significant advantages.

First, they are fast and cheap. I can hear the Dark Lord already muttering from below, but it can takes less than 48 hours to arrange for six or seven target customers to troop in behind a one-way glass and dispense their point of view, and the value of these sessions can be stupendous.

Personally, I like to avoid moderators and do the sessions myself. That sparks a chorus of “that will bias the group” comments from people who have never been to a focus group and don’t understand the epistemological differences between qual and quant.

How Coca-Cola, Lego and Gillette tapped into the wisdom of crowds

Try biasing a focus group and twisting what they say – it never ends well. In truth, personal moderation enables you to mainline the insights and move much faster with the consumers. And anyone filtering the insights from consumers to marketer is a barrier in my book.

I also prefer focus groups mid-way through the marketing process, not at the start. I use other qual methods for initial discovery and then feed those insights into proper quant. But once segmentation has been done, positioning completed and some draft tactical ideas are on the whiteboard, it is time to call the focus group facility.

Being able to recruit two or three groups from a specific target segment at this stage is invaluable. You can check your portrait, explore what the drivers are, check the value of the positioning, and get some soft but useful feedback on the tactics being proposed from those that will soon be targeted with them. I know of no more valuable 80 minutes in the marketing year.

But before we turn this into (another) anti-Sharp session, his central contention about groups is also valid. They work best as a quick, high-volume approach to insight. It is almost always more useful to engage with the customer in their own environment where the buying, consuming and disposing of the product is actually done.

Focus groups have their place and aren’t as astrologically bad as Sharp suggests.

After all, if the point of research is for the marketer to understand the consumer, why are we asking them to come to us? As the great marketer and CEO AG Lafley used to say to all his new Procter & Gamble marketers, if you want to study a lion don’t go to the zoo, head off to the jungle.

I’m biased, of course, I did my marketing PhD using ethnography. Influenced by Holbrook, Hirschman, Sherry and a posse of sexy American marketing gurus who straddled the 80s like rock gods, there was only one method for me when my data collection year began.

I worked as a teaching volunteer in five large comprehensive schools to study not how advertising used kids, but how kids used advertising in their daily lives at school. A juicy publication and some 15 years later, I then supervised my own doctoral student, Laknath Jayasinghe, as he watched people watching TV ads (they knew he was there) for his own PhD.

Ethnography can be a precious profession. Anthropologists espouse a lot of complex bollocks about emic and etic perspectives and the Lebenswelt. In truth, and in accordance with Sharp’s comment, it mostly just means get your ass out the office and hang out with consumers.

It takes a bit of time; you need a ‘back-stage pass’ and people are often freaked out at first. But the insightful ends justify the labour-intensive means and it almost never fails to change your approach.

And for B2B customers who can’t or won’t come into the office and hang out with other customers (try doing a focus group with rival surgeons) it’s the best approach of all. You make an appointment, you visit them, ask dumb questions, beg them to explain how things really work and – three hours later – you realise almost everything they think back at head office is not just incorrect, it’s completely nonsense.

So I think everyone in this Twitter discussion has a point this week. Ethnography, the use of observation and in-situ long interviews are an amazing approach for all marketers. But I also think focus groups have their place and aren’t as astrologically bad as Sharp suggests.

Mind you, I’m a Sagittarius and you know how we feel about conflict.

The post Mark Ritson: Ethnography beats focus groups hands-down, but they still serve a purpose appeared first on Marketing Week.

You can feel it in the morning. An auburn tinge in the sunrise, an impatience in the leaves above, and a distinct nip in the air before you close the door at night. Autumn is on the way. Perhaps not down south, where summer bumbles on. But it was 17 degrees yesterday in Carlisle. Summer is winding down.

Soon it will be autumn, then winter and before you know it, March will usher in spring 2019. And spring won’t be the only thing happening in a few months. At the end of March, between the quarter finals of the FA Cup and the Grand National a few weeks later, the UK will leave the European Union.

The official date is 29 March 2019. Just over 30 weeks away. That’s when the UK will enter the ‘transition period’, which starts an exit process that will conclude at the end of 2020. Whether it’s going to be hard or soft, we are only a few months away from it happening.

I am not sure of your own personal proclivities and how you regard Brexit. As someone married to a foreigner, who spent much of his European working life on Eurostar, you can probably guess the way I voted. Many years ago when someone asked me at my London Business School leaving party what I would miss most about London, I answered “Italy”. Enough said.

But as marketers, how should we feel about Brexit?

READ MORE: Two-thirds of EU marketers considering leaving the UK because of Brexit

In many ways, the marketing part of our DNA should support the move. We are, after all, market-orientated. We believe in finding out what customers want and then delivering that to them. And in a rare and rather egalitarian move, the British Government did just that in 2016. More than 30 million people voted and 52% of them wanted to leave the EU. No matter what your personal take on the matter, the marketer inside should accept and even embrace the outcome and the way we reached it.

Then there is the way that the vote for Brexit was secured. If you look at the data prior to 2016 it’s clear that British people were critical of EU membership but also committed to remaining within the Union for the coming decade. And yet somehow the Leave campaign triumphed on that dramatic day in 2016.

The brilliance of Leave’s strategy and execution

The reason for the triumph should be apparent: from the outset of the referendum, the team behind Vote Leave were simply better at marketing. They ran rings around the Remain campaign in terms of research, strategy and tactical execution.

In terms of research, one of the biggest disadvantages that the Vote Leave team faced was that all the major political parties sided with Remain. That meant not only facing significant political opposition but also an abject lack of data compared to a Remain team that enjoyed access to all the political parties and their treasure trove of electoral research.

But what started as a weakness became a strength, as  Vote Leave campaign director Dominic Cummings and operations director Victoria Woodcock built a completely new segmentation map of the British electorate from hybrid data that included social media, direct mail data, the electoral roll and a host of other third-party inputs. The marketer with the best map invariably makes it to the finish line first, and Vote Leave built a segmentation model that was not only more accurate and specific to the Brexit cause, but one that could zoom in to street level and identify what kind of voters were likely to live there and what approach would ensure the right response.

READ MORE: ‘Nagging uncertainty’ over Brexit puts consumers in a ‘volatile’ mood

In terms of strategy, Vote Leave was again streets ahead. Its superior segmentation model enabled the campaign to target voters very specifically, with micro-messages built around clear psychographic drivers.

We’ve known for decades that psychographics represent a brilliant source for meaningful positioning. If you know the inherent motivations of a target consumer you are in the driving seat of persuasion. But we’ve also acknowledged that delivering specific messages to the right psychographic targets was all but impossible.

Did the illegal 6.4% overspend enable Vote Leave to win the day? Only marketers can work this out.

We might know 12% of the population are ‘conservative, status quo-driven technocrats’ and the message we want to send to them, but we could not identify them out there in the market. Granular segmentation and digital media finally enabled psychographics to match its meaningfulness with newly found actionability, and the world changed as a result.

In addition to the micro-targeted communications, the overall Leave message, which centered on the threat from foreign immigration and the loss of British sovereignty, might not have appealed to most of the tolerant, liberal citizens that make up marketing departments. But that is not the point. We were never the target. That message did resonate with those who wanted to vote Leave or who were considering it.

More importantly, in a referendum where turnout was always going to be pivotal, immigration was far more motivating on the day than Remain’s tepid message of economic prosperity. Put more simply, Leave had a better, more powerful and significantly more emotional position than Remain. And they could bolster that overall message with micro-targeted campaigns in a 10-week tactical campaign that was timed to perfection.

The impact of Facebook targeting

Vote Leave was also brilliant at tactical execution. It served one billion targeted digital ads, mostly via Facebook, which proved an essential and influential medium for the Leave campaign. Regular readers of this column might raise an eyebrow at my salutary praise for Facebook in this instance given my rabid insistence that Facebook’s impact, and that of digital marketing in general, is often wildly overstated by marketers.

While that remains true, it turns out that if you started from scratch you would struggle to create a better communications medium for elections than Facebook. It’s granular, hyper-targeted audience data allows you to break down the voting population into very precise sub-groups. Its reach ensures you can deliver messages at a remarkable scale only bettered by TV. What’s more you can then target those sub-groups with very different messages based on their psychographic drivers.

Those messages are also hidden from the view of rivals and regulators because, unlike traditional above-the-line media, which is extraordinarily regulated during elections, Facebook messages can be delivered entirely legally with very little limitation or oversight. It’s perfect for election campaigns.

Vote Leave was also smart enough to engage a good agency to help it in its tactical campaigning. The campaign invested almost 40% of its £6.8m electoral budget on a small digital company based in Canada called AggregateIQ. “Without a doubt, the Vote Leave campaign owes a great deal of its success to the work of AggregateIQ,” Dominic Cummings concluded in 2017. “We couldn’t have done it without them.” AggregateIQ brought the digital smarts to the campaign refining the segmentation and testing, and retesting messaging with logarithmic obsession.

Yes, there may well be links between AggregateIQ and the infamous and now disbanded research firm Cambridge Analytica. Yes, there is also still a significant possibility that a long red dotted line can be drawn between Brexit and Russian interference and investment. Both these issues are still the subject of investigation and speculation, but I believe them to be distractions.

As marketers, irrespective of our personal leanings and the ongoing mystery that surrounds the Leave campaign, we must step back and admire what Cummings and his team achieved in the heady summer days of 2016. There is no doubt – no doubt at all – that this is the greatest British communication campaign of the last 50 years.

Look at the snaking lines of public opinion many months before or after the Brexit campaign and it is clear most British people wanted to remain. But in the all-important months – weeks, even – around the referendum date, the Vote Leave team did what we marketers are supposed to do. They changed attitudes and behaviour to the advantage of their organisation. And Britain will be changed forever as a result.

Rail against the result, but step back and admire the incredible marketing that enabled it to occur. Better research, better segmentation, better targeting, better positioning, better tactical execution all combined to win the day. Ignore rumours of Russians, fumbling apologies from Facebook and even the posh but perverted fingerprints of Cambridge Analytica. None of this is any excuse to question the will of the British people or the manner in which it was achieved.

What difference did money make?

But there is one issue that marketers should object to. In fact, it is an area where they might yet have a significant impact on whether a second referendum is ultimately required. Vote Leave was not the only operation working toward an EU exit back in 2016. Another campaign group, called BeLeave, was also working directly with AggregateIQ and was also spending large sums to persuade the British population to vote for an exit from the European Union.

Last month the Electoral Commission found “clear and substantial evidence” that, rather than being a separate and independent entity, BeLeave was essentially a direct extension of the Vote Leave campaign working under a common plan and, crucially, from the same funding sources. BeLeave spent £675,000 on digital marketing during the campaign. Most of that money, according to the Electoral Commission, was essentially sourced from Vote Leave and spent on a “common plan” and not a separate organisational agenda.

Simply put, Vote Leave was limited to a £7m campaign budget by election law in this country. Thanks to covert arrangements with BeLeave, the Electoral Commission says they were actually able to spend a total of £7,449,079.34 on their campaign. That finding is now official and representatives from both Vote Leave and BeLeave have been fined and referred to the Metropolitan Police as a result.

We know that Vote Leave broke the rules. We also know that they did it by funnelling extra resources through an associated political organisation. We know that this enabled the Leave campaign to add an almost half a million pounds or 6.4% to their ultimate marketing spend on their campaign. But the big question, the one that I would argue only marketers can answer, is whether that illegal additional investment was enough to swing the vote in their favour two years ago?

At first sight a 6.4% overspend would appear to be a minor issue. That is until you look at the margin of victory that Vote Leave enjoyed: it was less than 4%.

Two years ago, on 23 June, 17.4 million people voted Leave and 16.1 million people voted Remain. The difference was 3.8% of the total vote. If we take away that illegal additional spend would Vote Leave have triumphed? It’s not as simple as pointing to a larger overspend of 6.4% and a smaller differential of 3.8% of the vote and saying yes. Political marketing, no matter how well done, does not have a direct and total influence over all voters. But from my long and contradictory experiences of blowing marketing budgets on big campaigns, I think it could well have made the difference.

Did the illegal 6.4% overspend enable Vote Leave to win the day? What marketers – or rather, what a particular marketer with advanced analytics training and nothing better to do for the next few days – need to do urgently is answer this question. Use econometrics. Use regression Use stochastic modelling with a Bayesian trumpet chart. But work it out. Only marketers can do this. We might save the day.

I ask not because I am against Brexit in principle or because I do not admire the way that Vote Leave ran its campaign. I ask because I think everyone is missing the point. In all the investigations into Russia and accusations aimed at Zuckerberg the real issue is much more straightforward. According to the Election Commission, there were “serious breaches of the laws put in place by Parliament to ensure fairness and transparency at elections and referendums”. The responsible parties have been fined but what about the ultimate impact of the offences on the future of this country?

We must respect the will of the British people. But we must first respect the requirements of a fair and transparent referendum. Dominic Cummings, who is in my opinion a genius, has been clear on the pivotal role that advanced analytics and electoral strategy played in securing Brexit. Surely a marketer or media planner out there can use those same components to settle, once and for all, the real Brexit question.

Did an overspend of £449,079.34 result in the UK voting to leave the UK?

If you have a response to Mark’s challenge and can show your working, please email michael.barnett@centaurmedia.com.

The post Calling all marketers – it’s up to you to prove if Vote Leave’s overspend swung Brexit appeared first on Marketing Week.