Mark Ritson on Why the Fundamentals Still Win

0:00I think the tragedy of modern marketing is more than 90 % of marketers never have a strategic day in their lives. They live in the tactical bushfires that surround them and they don't even know what they're missing. Learn strategy. Learn to have the discipline to have a strategic plan, which really is only about targeting, positioning and objectives. That's really what it means. Have those done before you even touch communications or product development or distribution. What is your strategy? The fundamentals matter. Strategy before tactics.

0:36Let's start with a simple test. What does your brand stand for? Can you articulate it in four words or less without using purpose, innovative or unique? I'm pretty sure many CMOs would struggle with this simple exercise. And here's the problem. We're entering an era where AI could execute faster than ever. But if you don't know where or why you're going, speed just gets you lost faster. Today's guest has built a career calling that tension out. Mark Ritson has worked inside the high-stake boardrooms of some of the world's biggest brands, such as LVMH and Donna Karan. And when he's not advising top-tier companies, he's training the next generation of marketers through his mini-MBA.

1:18His message is clear. It's time to get back to the fundamentals of marketing. If you're trying to build something that lasts, not just something that performs in the moment, this is your reset. Grab a notebook. Today, we're going back to school. Here's my conversation with Mark.

1:39Mark, we're here in London. We have the red bus to prove it. Welcome to Frontier CMO. Thrilled to be talking with you. You're an outsider insider of the marketing community. Just give me a sense. What's the state of marketing today? And answer any which way you will. It's a perfect time for me to answer the question. The reason I'm in London is I partnered with Ipsos to do a very interesting piece of research. We surveyed a representative sample of marketers in the US, UK, Canada, Australia. And Ipsos asked them a bunch of questions about how they felt about AI and other stuff. and I slipped in 10 questions that are basically sub-undergraduate knowledge questions about marketing with a single hypothesis which is I don't think many marketers know much about marketing and so sure enough what we discovered and I'm telling you these are the world's most obvious questions what does positioning mean what are the four p's you know what does above the line mean so you know we really are talking about I know two of those well that's good that's good that's good.

2:47We found that, yeah, 70 % of marketers can't pass a basic test of marketing. So, you know, only about, I think it was only about 50 % of them knew what above the line meant or what positioning was. And it's not, you know, do you believe in positioning? It's just, what is it? You know? So I then looked at the data and said, why is it so bad? And the answer is dead simple. We checked every variable, B2B, B2C, size of company, gender, age, seniority, none of them are significant. The significant explanatory variable is, do you have any training in marketing? Yes or no? And if you have training in marketing in America, you're six times more likely to know the answers.

3:29And of course, this is screamingly obvious, except to marketers who have built a propaganda that says you don't need marketing training to work in marketing. And what we've created successfully, I think over the last 20 years, is the least trained profession in the professional world. And an army of marketers who don't know anything about the thing that they do. And I really feel like we're on the cusp, especially with AI, of a marketing apocalypse, because the levels of knowledge are getting so poor. You know, why do they think when we're not very smart? I think the main answer is because we're not very smart, at least when it comes to our own discipline.

4:07So there were audible gasps when we presented it in America. And today in London, we had a similar response. It's a disciplinary shitshow of the highest order. And the results, so you've been pretty tough on America having lost its way. Is it worse in your data than the UK? Disappointingly, no. So I was really looking forward to the idea that American marketers, who at least anecdotally are really off the pace now, They are just as bad as the British. But I have to say, I grew up in America in terms of marketing, and I was trained out there, and I worked there for about 10 years. When I was there, which is literally 30 years ago, they were so far ahead, and they set the pace.

4:53It was incredible to go there and see the difference. Can you just define what that is? What was happening in America 10, 20 years ago that was setting the pace, and what is not happening now? I'll give you a good example. And it's certainly not, I don't want to give them a hard time. University of Chicago, possibly one of the top five universities, certainly schools of business. If you look at their faculty, not only do they not have anyone that works in marketing anymore, they have people that have no qualifications in marketing, teaching marketing. And it's not good enough. It's great you're an economist or you're a mathematician or a modeler, but you can't be teaching MBAs because you don't know anything yourself about the discipline.

5:37So that wasn't there 30 years ago. You went to Wharton because the professors teaching marketing knew more about marketing than anyone on the planet. There is sort of the marketing theory, which I try to keep abreast of. And one of the things we've uncovered and learned is the, what we call the two voice model, right? This notion of use creators when creators represent your brand in their authentic voice, really powerful. When we run those creator led fronted ads with our own traditional classic ads, much higher performance. From the creators. Both, both sides. They work together in concert. Interesting.

6:10When you just run creator ads or you just run your regular ads, or when you run both together, they amplify each other. Can we talk about that? Because that's super important. It's super really interesting. But the challenge is, we learned that on our own right yeah we didn't have a marketing professor or some and a lot of the theory tends to be up here totally agree so that two voice model has really worked anyone can use it and we validate it with other customers first of all the thing you're talking about for me the synergy of different channels is at the heart of something we often miss you know it's happening right now with creators i've always talked about it as a times b is greater than 2a or 2b if you take any two channels, and I mean any two, you know, we know from the old TV debate that, and YouTube made this point very, very successfully.

6:58If you take a bit of your money out of TV and you put it into YouTube, not all of it, but you put them running together, it will invariably be more effective. Yeah. And I've seen it in almost any combination of anything, which runs against sort of scale economics. So first of all, you're right. And that's a key point, by the way, about media neutrality, diversity, integration, synergy effects. And my God, we need it right now. I mean, you know, the CEO of Unilever, who I'm still bemused by, you know, so as the CEO of an, you know, one of the big marketing companies to come in and say, big brand advertising is dead.

7:35This literal quote, it's now all about creators. It's to completely and utterly miss this thing you're talking about and this concept of integrated marketing communications that we've had for 25 years diversity isn't just a work concept it works right so for me we had this exact conversation this morning we keep rediscovering this point because we don't have the knowledge of marketing and history that would have told you back in the days of tv and radio you could have been sat there smoking a cigarette with your suit on you would have made the same point you know what i mean We made the same point when, you know, YouTube came along with TV.

8:17Yeah. So it's a great discovery. But I would still say to you, if the theorists of advertising and marketing had made their stuff more democratic, you would have spotted it. It's not your fault. It is absolutely the fault of the institutions that have, yeah, overcomplicated things and stayed too high. I totally agree. So the CEO of Unilever, he made that pronouncement. Yes. The hiring of their new CMO. and I read you wrote an article on it and there is one counter thought here which is leadership is about sort of focus and repetition yeah and I took it as when the CEO says we're all about influencers now he wasn't saying all about credit now he wasn't just saying that's it and nothing else but he has to say it loudly he has to say it declaratively just move the pendulum because otherwise it's like every level from CEO to CMO to you know VP to person making decision on an individual campaign you kind of lose like 50 percent of your sort of ability to influence things i think that's fair if if it wasn't that unilever have form here right yeah this podcast is called frontier cmo yes give me in a couple of sentences if you are aspiring to be a cmo in the audience right now or if you are an actual cmo what are the one two or three things that you absolutely should be getting up to in the morning and doing or make sure you're really doing?

9:37There's really only two, I think. The first is practicing market orientation. Most important concept in marketing, most important thing a CMO does, they remember that ultimately it's not what you think or your team thinks or your CEO thinks. All power and all money comes from the consumer. And your superpower as a CMO is knowing who they are, knowing what they think and knowing what they do. It's bringing the voice of the consumer in. So the first thing is walk the streets, use the data, get dirty in the market. Every day you spend in head office, you learn less and less about your brand and your company.

10:15And then the second one is strategy before tactics. I would say nine times out of 10, what lets a senior marketer down is they jumped to tactics and they never had a strategy. And I think the tragedy of modern marketing is more than 90 % of marketers never have a strategic day in their lives. They live in the tactical bushfires that surround them and they don't even know what they're missing. Learn strategy. Learn to have the discipline to have a strategic plan, which really is only about targeting, positioning and objectives. That's really what it means. Have those done before you even touch communications or product development or distribution.

10:53What is your strategy? The fundamentals matter. Strategy before tactics. I do see out in the world people using media, consuming things in such new ways. And I just wonder, at a certain point, does the stretching of how people behave actually break any of the fundamentals? Or are they immutable? It's really interesting. I think at the strategic level, the answer is no. So even in an AI world? We still have to ask the same three questions, which is, where am I going to play? Targeting. What do I want to do? Positioning. And what is my plan here? what are my objectives? So I can't envisage a world where that isn't still the dominant framework for strategy.

11:34Where I think it does get a bit more spaghetti-ish is in the tactical world because that's spinning at such a rate. The only thing I would say to younger marketers who are convinced this is the era of massive changes, you just haven't been along that far so far. If you've been through the 90s and noughties, you would have found just the same amount of transition going on. It's just you haven't experienced it yet. You know, the evolution of TV. I'm sure when TV eclipsed radio, that was a big moment. The programmatic era. The programmatic era. The DTC era. The arrival of websites. Yeah. So, you know, we've been experiencing this tactical metabolism for a long time.

12:15It's still going on. And that's the place where, yes, it's true that we will always have to be tactically agile. And when I talk to brands, I often say to them, strategically, I think you need agility like a hole in the head. because strategic agility is another word for not being strategic you know hold hold the hold the wheel but when we get to tactics i think agility is a really useful skill and being able to move and change and flex so i think thinking about it in those disparate ways you know strategy is unchanging tactical execution is always changing it's a help helpful way to structure it fundamentally if you're close to your customer if you're getting dirty in the market as you talk about you see those, why those tactics are changing, those behaviors are changing, and then you just have to adapt yourself.

12:57And obviously the consumer is constantly changing too, but the need for market orientation and understanding and research and empathy is again a marketing fundamental that remains eternal. So you've trained 40 ,000 marketers through your mini - 40 ,000 so far. 40 ,000 marketers through your mini MBA. 60 countries. Congratulations. And you just sold the business relatively recently to scale it up even further, I'm sure. Yeah. Just as you think about change in media consumption, change in consumer behavior, change in AI, what are the skills that marketers actually need to maintain and grow versus what is less important today than perhaps 10 years ago or 20 years ago?

13:37Yeah, it's on everyone's mind right now. You know, I think the number that I have in mind for AI is just 65%. I think that's the proportion of marketers and marketing. The anthropic data, I think, is pretty accurate that will be ultimately taken over by AI. It's not zero, it's not 100, it's two thirds of our industry. so what does that leave us with i think it leaves us with two things in particular it leaves us with strategy so you have to you have to know what you're doing before you make these tools work you know the analogy i use is ai is incredibly fast racehorse the fastest racehorse we've ever seen right but if you get someone that hasn't ridden before or even been trained in riding to ride that horse, it's going to end very badly.

14:24So I don't think you need to be trained in AI. I think that's a nonsensical idea. The nature of AI is it does not require you to be trained in it. I think you need to be trained in strategy and the big picture of marketing so you can operate AI and understand the right questions. That's the first piece. The second bit that I think is going to be crucial for us is we still need managers. In any vision of an AI marketing future, someone ultimately has to manage the plan has to make the case for budget to explain the rationale upstairs so i think we'll see and we're already seeing it junior marketers are an endangered species and we'll see a constriction over the next 10 years less and less jobs there we'll see managers and marketers moving less between roles because they sense the constriction going on.

15:17So we'll see people, far less mobility. When we come out of this as a smaller, tighter, maybe more effective discipline, I think the men and women left standing are the ones with strategy. So the lesson for people is, sure, learn AI, but understand marketing, get the big picture, learn how to be a manager and a strategist, because those people will just be even more valuable, I think, as we move forward. And I'm relatively certain of that. You know, I don't know what's going to happen, but I can't envisage how AI would take that part of marketing out. So I'm actually a little more bullish than I have been.

15:56And part of that is because I meet with a lot of CMOs and I feel like we're at the end of the beginning, three years into this AI transformation where there's an inflection moment. And what we're seeing with Google, with Gemini, is that it's actually empowering people, not just as a replacement. And most of the C-suite conversation is about AI subtraction. Just do it cheaper. Just do it with less people. And what I'm actually starting to see and hearing positively, we're seeing in our own work inside of Google, is that, and I'll use Tony Stark. Tony Stark, brilliant technical mind. Put him in the Iron Man suit, and all of a sudden he's a superhero.

16:28When we actually put Gemini and we put some of the Nano Banana and VO in the hands of our marketing teams, they take these brilliant Stanford, Cambridge graduates who are incredibly be talented, take away the drudgery from their work and actually they become superheroes. And that's the exciting part. Now, obviously, I get your analogy about that. You've got to understand where you're directing your repulsor ways and that sort of stuff. But it's actually the notion of AI as a growth engine, ability to do things you've not been able to do before, both creatively and from a business growth perspective, is actually, I'm looking forward to getting past that subtraction.

17:02It's actually into the addition part. I totally agree with you. I mean, it's funny. We've been putting a lot of projections into AI. what happens to our training revenues. We're growing, but not if the number of marketers reduces. But every scenario we put in there tells us the same thing. There will be less marketers in the future to train, but the ones left will want training more and want that big picture more. And it's actually for us, in almost every scenario we run, and we use synthetic data quite a lot now, on one hand, we will have less marketers, but on the other, better marketers doing better marketing.

17:34I'm hoping we get past this subtraction phase And I'm actually really excited by the creativity and the opportunity that AI is creating. And actually, AI just being absorbed back into sort of the mothership. In the same way that social and digital, digital agencies, and now it's all just got subsumed back in and everyone is digital. And it's like, we're breathing. That's a great analogy. If we can get to that place where, you know, and I think we'll be there pretty soon. AI becomes so implicit in everything. We never, we'll never hear the words AI ever again. And even these brands, I think, you know, I think they're going to disappear.

18:07you know this this discussion of chat gpt it's going to be the pipes that connect ultimately humans to tasks and i think it is an astonishing period that you and i will get to see right and i have a front row seat working inside of google you do gemini is really yeah doing some remarkable things something else anyway it's pretty exciting okay so you teach classes on brand strategy on all this sort of stuff so let me just play this up because um let's go back 15 years in time walmart is the biggest player in the category by far yes and they have owning the most important criteria always low prices always always low and they're never changing now the same way that verizon has just been like it's the you know the network it's just always always they just continue with that right yeah target isn't as cheap it just isn't it can't compete on price so they went for a positioning around style younger aesthetic cool and all that sort of stuff And honestly, it worked for a lot of audiences.

19:04So you're not advising they shouldn't have done that. So what went wrong? Two things. So first of all, give Walmart a bit more credit, right? Because you're right. Always low pricing was their mantra for 30 years. And then the smartness of those guys was to say, actually, that's a feature. You know, always low prices. It's true. It's a feature of Walmart. But actually, remember, Walmart weren't doing that well 20 years ago. on the back. They were doing well on low value categories, but a lot of the demographics weren't going. And they were smart enough to do proper positioning, which is to go, why don't we not go away from that?

19:39But why would it change the feature of always low prices into something a little bit better, a benefit of the feature? Hence that really powerful new positioning, which is save money. That's the next step up from lower prices and then go one more up. and what are you going to do with saving money live better i think it's one of the great bits of positioning of the last 20 years it looks the same but it's two rungs up the benefit ladder and it's therefore 100 times more powerful but you're right they stayed within their position so what to target do clearly absolutely correctly you're not going to go against the gorilla in terms of strength you know what i mean you can't you can't beat them at that game so what you have to do is go back to the board and say, right, what have we got, relatively speaking, that is a core strength of our brand that the competitor can't match us on, that the consumer still wants and perhaps wants even more, or some of them want really more.

20:38And you're absolutely right. They got it right. They went with style. They did a bunch of collections that were democratizing fashion and premiumness. But what happened was somebody took their foot off that pedal. The minute we getting a purpose it's awfully generic it switches off at least half of the population more often than not but it's all about the company and therefore it's dreary and it's not positioning and the opportunity cost of not being able to say hey this is what we do for you you know colgate talking about you know how they feel about coronavirus what do you do to my teeth do you know what i mean like what what what's the impact on my teeth that opportunity cost became expensive very quickly and i'm glad to say we're almost through it now but my goodness it was a long 10 years so if you're a marketer listening to this part yeah and you're at your brand what is a shortcut like set of questions you would ask yourself right now whether the brand i'm working on right now has a positioning that is actually a positioning great great point i'd say three things one if it's more than a page it's pointless if you look at our kitkat do it which is my favorite brand it's all done on a page if you you've only got two or three brain cells in the consumer's head.

21:46The minute you start building pyramids and keyholes and decks and brand books, you've completely lost the plot. I've had bow ties. Oh, bow ties. Perfect. Keyholes. You know, you're throwing shit against the wall. Nothing's going to stick there, right? So too much. So first of all, tightness. The second thing is the most important thing in your brand positioning are the presence of your distinctive brand assets, because 70 % of the game is salience. So before we get to what the brand stands for, what are the four or five brand codes, distinctive brand assets. You've got your logo. There are two, three, four other things.

22:20I worked on Sephora for many years. I worked on the brand. We did the original positioning work when it really grew up. And the most important thing for Sephora was, yes, our logo, calpinage, which is black and white stripes in fancy French terms, a touch of red. And these codes made Sephora look like Sephora and come to mind in a mall or in an ad yeah so you start with that so the second thing is have you got four or five distinctive brand assets in there because they're more important and then okay so are you actually using them versus yeah show me your palette if you don't have a palette we're not going to paint in it you know you're going to look very generic and then then and then we get to our positioning i'm going to give you an arbitrary rule which is there's only probably room for two maximum three things in there in the case of walmart there's one really maybe two you know we're going to save you money so you can live better it's kind of the same thing right the minute you get four five six seven eight nine twelve fifteen things in there a brand personality and a brand framework and a brand purpose it becomes completely empty so it are there one two three things that you're going to position on and these are the things you want the consumer to think when she thinks about you there's something about founders and founder companies and it's interesting because a lot of the examples of these great brands who've got these great brand purposes, KitKat, Walmart, you know, in part it's because they've stuck with it for decades.

23:45Yes. Avis, we try harder, that sort of stuff. But there is a moment where the founder, if the founder isn't quite, the founder knows it, feels it, they have to be able to translate it into sort of the transition. So just talk about the way you've experienced that. So I worked a lot with French, I was trained by Americans, I worked a lot with French companies. And one of the things you learn from the French approach, which is very good, is you have to understand the history and the founder. And what you find every single time is the personality and life experience of a founder is imbued into the brand to this day.

24:19It might be there because of the distinctive brand assets. You know, I'll give you a good example. I worked for many years on Hennessy Cognac. Richard Hennessy. It's a good account to work on. It's maybe the best of all, right? And Richard Hennessy was a soldier. He was very good at it. He's a fantastic soldier. And then found himself in France, no more wars, and basically started growing Eau de Vie and became this phenomenal success with Conny. But that aggression and focus is part of Hennessy's approach. And Richard Hennessy was also unusual because he had soldiered across many different countries.

24:57And that's in Hennessy to this day. If you look at how Hennessy plays the game in Paris versus Tokyo versus Shanghai versus New York City, you will see four different brands. But none of it is inconsistent. You can blend and play different games in different places. So you have a literal link back to the founders. So just going back to something you were saying, I looked at my Google Calendar. Last year, I took meetings with sales representatives from Meta, Snap, Amazon, Apple, TikTok. 75 meetings last year across all of them right one a week or more right and one of the things which is really fascinating to your point about the founder is you can see the founders in the sales teams the way they carry themselves and it's kind of a fun little exercise if you work on the media side or work in the market every time you meet with someone from metal you meet someone there's an echo back to the original 100 and you can see it as a pattern it's so good it's really really fascinating and then if you can see it there that means i think i think our customers would see it as well i'm not quite sure if they see it in the ads and the way that works because we sort of smooth that over but it's just it's interesting you can't help be who your dna is and there's a moment of genius right so they have this god-given thing you know when you see it close up it is something to it is the closest we get to magic in commerce to see a founder who's created something you know the jobs thing it's a form of magic you know and and it's something i think it's something gorgeous about branding is that link back to a man or a woman is always there and and the stories that are in the history will exactly to your point will be borne out right now so okay i'm gonna ask this slightly controversial question here please um predict where the apple brand is going to be in 20 years time i love this i can tell you i think apple if it's done well will become the next luxury brand.

26:53It's already moving that way. And to understand why, you have to understand that all luxury brands didn't begin as luxury brands. You know, I'm wearing and you're wearing a chronograph. These things were high-tech 150 years ago when Patek Philippe first made a wristwatch. People were like, oh my God, what is that? That's high-tech. Gradually, the categories mature and ossify and then we get luxury. You know, champagne is luxurious because it used to explode. it was a it was a complete revolution of consumption you know so i think what you see with luxury brands is innovation that ossifies into luxury and if you think about what apple is it's iconic it has this incredible historic founder and story i think it needs another 50 years to cook i'm a practitioner of marketing you are and the gap between the theory and the practitioner i'd love to hear from you there have been some moments where you were trying to do the write creatively commercially long-term branding thing long and short of it and the politics of the organization the bureaucracy the got in the way what's your my best one when did that happen what did you do about it i mean the best one is probably my biggest failure in my consulting life and it was partly politics but it was it was really my fault um we we were working on lueve which is this wonderful wonderful brand.

28:17Loewe I don't know what it is. Loewe is a Spanish Madrid leather goods brand. Okay so you really fucked it up right? I really fucked it up. Well it was yeah so it's in in Spain it's bigger than Hermes or Chanel. Wow okay good to know. But never you know never escaped the Spanish thing. It was a very minor brand and I saw the problem literally you would see Loewe bags everywhere and they're very easy to spot but every time on the arm of a beautiful 65-year-old Spanish woman. And every time you saw a 25-year-old, 35-year-old Spanish woman, it was with Chanel or Vuitton or Gucci. So the problem was apparent.

28:55And I pushed with be more radical, be more radical. You know, you've got to break this up, you know. We have to do it. And so in the end, we came up with an astonishing campaign, sort of metrosexual, transsexual, gorgeous people, you know, dressed them all in Loewe, gave them all Loewe bags, and filmed a new Lueve campaign in Madrid. And it was sensational. It was phenomenal. You know, these kids have Mohicans. It was going to be it. And then the president rang me up and she said, we're on the news. We're on the Spanish news. I'm like, well, that's good news. And she was like, no, no, not really.

29:26It was like, you know, what have these people done to Lueve? It was like, you know, the number two story on the news that night. And our YouTube channel went from, you know, 62 views to 600 ,000 views in two days, but not in a good way. And basically, it was a disaster. And it was my fault because I pushed them to a place of transgression where the company wasn't ready for it, but the market wasn't ready for it either. And I think it was my first experience, not just a really bad failure, but also that sometimes the theory, if it's not properly executed within the constraints of culture, will be disastrous.

30:06And that you hadn't done the real market research to understand how far you could move the brand at that moment. I think it was worse than that. I think I hadn't properly understood the thing I was meant to be an expert of. Lueve is a proud Spanish, incredibly noble brand. And I pushed it too much. And I'm a big fan of Tom Ford for many, many reasons. But one of the best is, for me, he's so articulate about things like this. And of course, he fixed Gucci. What's one of the many things he's done? And his great quote was, the right thing at the wrong time is still the wrong thing. There's so much wisdom in that sentence, you know, which unfortunately I did not have at the time.