Megan Lally | CEO, Highdive | What Your Agency Wants to Tell You But Won't

0:00Megan Lally:The CMO Confidential podcast is a proud member of the I Hear Everything podcast network. Looking to launch or scale your podcast? I Hear Everything delivers podcast production, growth, and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit IHearEverything.com. Welcome to CMO Confidential, the podcast that takes you inside the drama, decisions, and choices that go with being the head of marketing. Hosted by five-time CMO Mike Linton. When is the last time you researched something on a website? If you're like most people, AI did that work for you.

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1:28For our listeners, Scrunch is providing a free website audit that uncovers how AI sees your site and how you're showing up in AI versus the competition. Run your site through it at scrunch.com slash CMO. Welcome marketers, advertisers, and those who love them to Chief Marketing Officer Confidential. CMO Confidential is a program that takes you inside the drama, the decisions, and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former chief marketing officer of Best Buy, eBay, Farmers Insurance, and Ancestry.com.

2:10I'm here today with my guest, Megan Lally. Today's topic, what your agency wants to tell you but won't. Now, Megan is the CEO and co-owner of High Dive, an independent creative agency known for delivering breakthrough creative, including quite a few Super Bowl ads, which we'll talk about later in the show. She's been at High Dive for nearly nine years and was previously a VP at Leo Burnett and account super at DDB. Welcome, Megan. Thanks for having me, Mike. Oh, it's great to have you on the show. And I want to start, we'll start large, which is everyone, including, of course, CMO Confidential has been talking about AI.

2:51And it feels like the concepts of brand building and creative marketing have taken a backseat to AI and performance marketing and big data and everything else. What's your thoughts on what I just said there and how people should be thinking about it? Yeah, Mike, I think there's two answers to that. And thank you, by the way, for talking about AI. I've been listening to a lot of the recent episodes, and it's super helpful to just hear different perspectives and what people are dealing with because there's so much talk about doomsday scenarios of AI. And so I appreciate the practical applications that some of your other guests have shared.

3:33I think first and foremost, I would say instead of separating them, like there's AI and then there's brand building, I think that we should consider how AI can help in building brands. And so I'll give an example on that. So I don't necessarily think they need to be separate. And that's how we're viewing that at High Dive. The other piece is just the fundamentals of brand building haven't changed. So one of the things that we see now is just I think everyone's trying to do everything. And strategy is fundamentally about decision making. So we're, I think, getting caught up in so many different options and so many different things we have to say to so many different people.

4:16and my request, I guess, would be while we have some really fun tools to use with AI, how can we also help simplify to the things that we need to tell audiences that are going to actually move our brands forward? Hey, if I parse that, what I hear you saying is people are leaping over the strategy and some other things because there's so much execution and there's so much measurement in the execution. Is that right? I think so. I think there's also risk in making a decision and not saying the 20 things that our product or service does at all times. So I think we're losing the plot a little bit and making things more complicated than they need to be.

5:05Okay. So what you're saying is there are a bunch of people putting creative in the back seat and strategy in the back seat with it because they're optimizing the interface. And I want to talk a little bit about now what a building on that. You said AI shouldn't replace creatives and it isn't replacing creatives. It should amplify creatives. Tell us what you mean by this, how it works in practice, and then why so many people appear not to be doing it. Yeah. So the example I want to talk about is Jeep is one of our clients. We've been working with them since we basically started High Dive. And we are, as you said, you know, we're embracing AI in terms of saving ideas instead of, I think a lot of the narrative around AI, especially related to creative has been that it's going to replace all humans and all creativity and we don't need it anymore.

6:03We're far off from that. Before you go on, what do you mean by saving ideas? Oh, so here, let me tell you. So we were charged with helping launch the new Jeep Grand Cherokee model. And as everybody, Jeep is an iconic brand known for adventure and, you know, based on its capabilities of going off road. It's one with nature in a way. So we had this idea for the new Jeep Grand Cherokee to have animals critiquing the vehicle. So they're showing off the three row seating and the headroom and the luxurious interior. And so the idea was that animals were reviewing the vehicle because that is on brand for Jeep.

6:53It would have been, well, unless anyone knows any talking animals, I don't. um it would have been he's not a real talking animal but it's so expensive so it would have been super um well super impossible because animals don't talk duh um also expensive and time consuming to do all of that in cg so um what we were able to do was was use ai to have these animals that look super real talking about the jeep we also um developed this thing that we're calling Digit. It's based on deep learning infrastructure. I'd have to bring my super smart AI folks in terms of how it all works into the call. But we developed these models based off of any product that we're selling.

7:39So we have a digit of a Jeep basically where we can put it in all these different environments. So we've got a Jeep with animals in it talking to it. Squirrels are inside of it dancing to the music. A moose is inside of it talking about the headroom. So that idea would have died because of the cost and the time. And instead, AI saved that idea. And it was building the brand. So they all go together. I don't think they need to be separate at all. Okay. And I fundamentally totally agree with you about this. And we've done a bunch of shows on the power of brands, the empirical evidence of a brand in stock price and valuations of companies.

8:22Yet, yes, and yet so many companies out there still see all the marketing users talked about as a cost versus an investment. What is that happening? Why is that happening? And how much are marketers and agencies to blame for that happening because they focus solely on the creative and don't attach it to results. Yeah. Well, I think when creative and marketing is done well, it's a force multiplier for business. And like you said, there's empirical evidence on that. When we have creative that resonates with people and not just win industry awards, that's when it's really effective and it's an investment.

9:09It's not a cost. Unfortunately, there's a lot of work out there and creative out there that isn't so good. And I think that is when it's a cost. And so if you're not doing it well, and you're, by the way, not tracking the effectiveness of it, which there are different ways to track depending on what your objective is. But if you're not tracking the return on investment, it's difficult to make an argument for that. I wanted to talk about our work with State Farm. We did a Bateman Batman campaign last year that launched during March Madness. And one of the metrics that I love in terms of just penetrating pop culture and random people who don't even know that I worked on it, come up to me and say it's some of their favorite work.

9:50That didn't win anything at the Fancy Industry Awards. Which is shocking because at Cannes, there's over a thousand awards. Yes, I know. I think we were robbed, but that's a different podcast. But one of the things that we can point to in terms of those kinds of campaigns over time lead us to seeing things like on Times 2025 World's Best Brands, which is based on consumer surveys, okay? Not fancy holding company people in France judging, not, you know, whomever else writing a poll on top 10 stuff, but consumers, who are the world's best brands based on consumers? State Farm was number one in 2025.

10:36They scored above Geico and Progressive, who significantly outspend State Farm. So those are the kinds of things, especially at a brand level, where you have powerful, breakthrough, memorable, effective, creative. There's certainly other ways to measure that too, but looking at our, I just happen to love the personal anecdotes of people noticing it, like real people, not advertising people. But also when you see those standings based on consumers of how they are seeing our brands, you know it's working. And I think that we can do a better job sharing that with some of our partners who aren't at the marketing table so that we can help demonstrate the power of the return on investment when it's done well.

11:22I always use a lot of trackers and then would, over time, track consumer input to sales. You know, because the company doesn't care really that much about anything but sales profits and maybe retention. So I think it's a good call out. And Mike, I think it depends on the product or service that you're selling to. You know, State Farm has a bit of a, it could have a bit of a longer lead time, a car, certainly a Jeep. Yeah, because the purchase cycle is so long. Exactly. But something like Lays, which we did a Super Bowl ad for this year in a Super Bowl campaign. You have been great at getting all your clients in so far.

11:58Oh, good. Well, you know, I'm training examples. So well, but that's a quicker purchase decision, right? You can go to the grocery store today and pick up Lays, which everyone should. There we go. A breakthrough, because we just talked about breakthrough and everything. You know, I would like to talk about the Super Bowl ads. I know you've done quite a few and, but I would really like your opinion on which brands really benefit the most from Super Bowl advertising and why? Yeah. And then which brands by definition then shouldn't be playing around in the Super Bowl? You know, just give us your thoughts.

12:37Right. I think the top answer in terms of when is Super Bowl a strategic tool in terms of that return on investment that we're talking about is if you need mass awareness of something in a short amount of time. So to reach over 100 million people on one day, if you look at it that way, it's a pretty effective buy. So last year, as an example, we introduced MSC Cruises, which is a European cruise line to America with the Super Bowl. It was a great immediate hit where suddenly awareness skyrocketed on MSC. And actually, the Super Bowl buy kind of crashed their site for a hot minute. This year, we are continuing that campaign, but they didn't need the investment for Super Bowl because they had kind of hit that big mass awareness moment.

13:29So I think that's the number one reason is you want a quick awareness driver. I think if you're already well-known, if you don't have new news, if you're not trying to change perception, grow a certain audience, get that mass reach all in one day, I think you should seriously question whether or not you need to make that kind of investment on the Super Bowl. How about a lot of the B2B companies doing this? Because we just talked about reach. And now we're talking about reach for some products where the buying universe is much smaller than the audience. Tell us what's going on with the B2B players, wins and losses in your head of which brand should be there.

14:13Yeah, you know, I get a lot of cold emails, a lot of cold emails. And I think that some B2B companies are using Super Bowl for an element of swagger and to stand out. I think the B2C marketing rules apply to B2B. so while they're not going to be speaking directly to everyone there is an element of whoa they must really know what they're doing legitimacy of a b2b at um b2b brand running in the super bowl so i i'm assuming that that's kind of the play that they're um that they're using that was great to watch the uh ai food fight going on super bowl definitely yeah great Right. My parents had no idea what was going on, but I enjoyed it.

15:00I especially really liked the Claude ad. Yes, there we go. Hey, you know, we all know, and no one will deny this, that relationships matter between the agency and the client. And we all know a good relationship has a much better opportunity to produce breakthrough work. But when you talk to people, There's an awful lot of people that don't have that relationship and neither side is what I'm going to call truly happy about it. When you look at the biggest mistakes, trust busters that clients and agencies make with each other, what are they? We are going to take a short break for a word from our sponsor, Scrunch.

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16:40Now back to our discussion with Megan Lally. Yeah. Well, I think everyone talks about having a good relationship, but not everyone has. Yeah, look, everyone, there's no one that says, I'm a terrible collaborator, I hate collaboration, or I'm against it. But, you know, everyone thinks they're a good collaborator. Anyone thinks they have an open door policy. But tell me why there's so few real good relationships. Yeah, I think in practice, it's just uncomfortable. You know, we're all working on different things. We're not always on the same room. We might see things a different way. And it is uncomfortable to bring up something that you think you're going to be rejected or met with disagreement or any of those things.

17:26And actually, those conversations are where healthy relationships are built. So, and that is what's required to, back to the kind of, what are the bus related to that, right? Those healthy relationships built with trust and openness and honesty and integrity of, I'm going to tell you something, even if it's not what you want to hear, but it's what you need to hear. That's what is required to do the kind of great breakthrough work that we need that proves that marketing is an investment and not a cost. So Mike, have you ever been planning for a party and you ask somebody like, what's everyone going to be wearing?

18:08Yeah. So you do that. All the time, yeah. I don't have anything in my closet. Right. But you want to know what everybody else is wearing so that you don't like stand out like a sore thumb, right? Yes. But when it comes to advertising, we have to break through all of that. But it's uncomfortable. You want to know what everyone else is wearing. You want to know what the competitors are doing so that we, you know, it's not too risky. But to blend in with everyone from a marketing perspective, that's what makes it costly and not an investment. So I think there's just a lot of discomfort when it comes into practice of healthy relationships, doing breakthrough work.

18:49I think it's easier to kind of try to keep things status quo. problem. Hey, so all the clients say they want to hear the truth, but a lot of times, if you tell them the truth, they can get pissed.

19:04And then they will say, I'm really sorry I got pissed. I shouldn't have done that. Or if you tell the creatives, look, I don't think anything here is working. And they're like, did we love this one? And how do you get by that initial reaction to the truth when I say what you're wearing to the party really sucks?

19:28I think it's important to know where the intent is coming from. So it's, you know, the conversations that you're having aren't just, I don't like this, but I don't like this because of X, or we're worried that this is going to blend in with what everyone else is doing. And then we're not going to achieve the goals that we want to hit. So I think it's, yes, there's an open and there's a kind of radical candor that I'm encouraging here, but it needs to be rooted in why is this important for the goals that we are trying to reach together? And then you can agree to disagree and move on, but it's all in the service of the outcome.

20:09Hey, when you're on the side of the pitch when you're pitching for the business, do you test out the client by asking a bunch of hard questions early in the process to get a feel for this? Yeah. I mean, when we get invited to a pitch, it's a two-way street because there has to be chemistry there. I mean, we talk about healthy relationships and there's plenty of fish in the sea. Like we might, high dive might not be the agency for everybody. And so we are also evaluating the potential relationship. So we, whether it's questions or through case studies that we're bringing to a meeting, we're kind of testing out where there might be heat or resistance or contradictions, things like that.

20:55So we're in a meeting, I was just in a meeting yesterday where we brought some work that we thought would make the room uncomfortable and we wanted to see how they would react. And what was great is it led to a question of the CMO asking, wow, I'm assuming you guys, you really had to go on a limb for this work. How did you push your clients to get there? And I love that it brought that question instead of another reaction could have been, I don't get it. I hate it. Why did you do that? We would never do anything like that. um so how you get that do you go around and back channel this after the meeting and say hey this isn't helpful or do you just let it sit or is it really dependent on the players I think you know everything is a case by case but if we have a kind of a lukewarm initial chemistry creds meeting it's like a first date with anyone it's kind of you both probably don't feel like it went well.

21:55So we had, we had a meeting like that, maybe, I don't know, within the last six months. And it's hard to because everyone's in a conference room joining, you can't always see everybody's faces and everything like that. But we just got this feeling of, do they want to work with us? So I did, I did pick up the phone and I called the CMO. And I just said, why are we, why are we still, why are we still in this? Like, why are you inviting us to the next date? And he just started cracking up and I thought that was so endearing. He's like, I had no idea that's how we were showing up. So, you know, I had to go out on a limb a little bit and there, that conversation could have gone a completely different way, but it really brought us closer together.

22:41But you would recommend everybody go out on the limb and give it a try versus let it sit. I think you don't want to have any regrets. Just put it out there. Since we're on the topic of pitches, one of your theories is clients should skip the pitch. Yes, please. Tell me why. So pitches are, I should say pitches are fun. I like the kind of blue sky. What would we do with this new brand? There's a lot of excitement around it. It's competitive. So there's certainly something to that that many of us are drawn to, I don't think it's a good use of time and investment on behalf of the client or the agency.

23:23They're very time consuming. I mean, the amount of meetings and presentations that the brands have to sit in to sift through. Then the reason, and I'm saying avoid a traditional pitch process because it's, in addition to it being long and expensive, it's kind of fake. You go in blind. We like to build campaigns with our clients. So when we get an assignment to develop a campaign and we go away and we work on it, we're coming to you with what we think is the, you know, the best, the best foot forward, but it's kind of only half the information. So it's this kind of fake, I guess, theater environment, and then you're kind of picking based on that instead of what it's actually like to work together.

24:10So my recommendation on a better approach would be to find agencies through references or research. AI is awesome at this now, obviously. Conduct some chemistry meetings and review relevant case studies for your business situation. So give them enough information to come back to you and say, hey, give me give me an example of where you've dealt with something like this before. And then if you like what you see, give them a project, pay for it fairly and evaluate from there. But that's where you're actually going to get a test run of what it's like to work with an agency instead of a bottled up kind of theater approach to what the what the pitch is.

24:51How about, you know, you have all these agency search consultants or agency search groups. Are those helpful or not really? I think it depends on who you're talking, who you're referencing. I think what the search consultants do very well is that they're looking for those matchmaking. They're matchmakers. They're looking for the right kind of agency for what the client needs. So I think they're very helpful in that regard where they're trying to find the perfect match. the ones that facilitate the most real life, you know, like real working scenario, like I'm proposing are the ones that, that are the best because you're going to set that up for success.

25:27It's like an arranged marriage. The more time the couple spending together, the better chances of success are. So I, we've worked with, we've worked with consultants who have done that. We've worked with consultants who kind of gatekeep the whole process. They keep the client and agency apart and everything is very mechanical. And I think that the chances of success there are lower. And at the end of the day, if you want. Yeah, the culture, you don't want to hide the cultural connection. Not at all. And it's just, again, it goes back to, it's so foundational for us. We just believe you need that to make great work.

26:03To remove that from the process, I think is a mistake. Hey, so before we get to our traditional last question. Yeah. No matter how good your relationship is with your agency or your agency relationship is with your client, give our listeners one thing they should do in the back half of this year to make it better. Yeah. I would like to ask the marketers to think about your one thing. Back to the, you know, there's AI and there's all these channels and there's all these customers, there's all these things that we want to say, but is there a part of your marketing plan where you can really think about the one thing?

26:41Like what's the one thing? I feel like we're in city slickers and it's just the one thing. That's probably a movie, a little too old for a lot of people, but yeah. But just what's the one thing? Make a decision, make some sacrifice. But if people aren't choosing your brand, why aren't they? Can you give me an example of one thing? Yes. Sanitize it or whatever you want, but. So, okay. So Lays, we just, we just had a great Superbowl run with them a few days ago. And our one thing with the Lays spot, which for, for anyone who didn't see it was about, it was a story on a multi-generational family farm because that's where Lays are grown.

27:22and the farmer passed down the farm to his daughter who was also farming with him. And our one thing there was made from real potatoes. And Lay's could say so much stuff. They're always innovating. They have a ton of flavors. They have more flavors than any of it. They do have a lot of flavors, yeah. There's so many different ways they can go. But for Super Bowl, we boiled it down to boiled. They're not boiled, but we boiled it down to made from real potatoes. I'm glad you corrected that because I'm certain a ton of our listeners were thinking, I bet they're boiling those potatoes. Well, I will get a phone call from Lace.

28:02They're not boiled, but simple ingredients, fresh, all of that came out of the messaging. But we said our one thing is made from real potatoes. And that led to really great work. And so it's just the simplicity of it. And consumers are, they're seeing so many ads and so many messages and everybody's busy and all that stuff. You just got to, you got to pick the one thing. And there's so many brands that pick the four or five things. And I think that makes it really hard on creatives, right? I just, it makes it hard on creatives. It makes it hard on the consumer. Consumers are not going to remember five things.