Moment 190: Everything You Definitely Don’t Know About Marketing (But Should), From 4 World Leading Experts!

0:02In business, your marketing is your lifeline, but connecting with the right audiences can be challenging, especially for B2B marketeers who need to hone in on speaking to the right decision makers within businesses. So how do you find these people? With LinkedIn ads the sponsor of this episode, you'll get access to professional network of individuals who influence your business, with over a billion members, 130 million decision makers and 10 million C -suite executives. With LinkedIn ads, you're not guessing who you're reaching, you're targeting and engaging and converting with real precision to get results.

0:33Kill the guesswork with LinkedIn ads and enjoy this mashup clip of insights from some of the world's top marketeers on what it takes to make an impact. And if you want to get started now, LinkedIn ads is offering a hundred dollar credit to launch your first campaign. Go to LinkedIn .com slash DOAC24 to claim your credit, terms and conditions applied. Marketing is just who might be interested in this thing. And a lot of it is the fundamental thing is if no one knows you exist, no one's going to be able to buy your thing. And so marketing is the process of attracting the attention of people who might be interested in the value that you're creating.

1:14And in an ideal world, making them curious, wanting to learn more, asking for additional information, engaging with what it is that you have. A lot of people can fleet marketing and sales to me, their distinct processes. So marketing is the attracting attention and generating interest. And then sales is the process of convincing someone to buy and then getting them set up as a customer. And a lot of marketing comes down to what is it exactly that you're trying to gather attention for and where do those people generally hang out? What are they curious about? What are they already paying attention to?

1:58What can you take advantage of or dovetail into in order to attract someone's attention at the right moment at the right time and make them aware that you have something that could benefit their life. Here's what it is. Here's how you can benefit from it. Yeah. Because many companies see it as like an annoyance. Like I've sold you the fucking thing. What are you doing? I'm not bothering me. I mean, treat you like it. You're a nuisance. Yeah. Yeah. And that's the shame. Because really like those happy repeat customers are not just like your high lifetime value customers, the customers that will stick with you, keep spending money with you.

2:37They're also a primary source of marketing. Like word of mouth marketing is all happy customers telling other people who might benefit from your product that, hey, here's this wonderful thing. You should probably check it out. And so yeah, like things like post sale support, sometimes customer reactivation. So like to your point earlier, it's a very straightforward marketing technique called reactivation. If you can contact Jack and say, hey, you bought candles from us last year. Would you like to buy candles from us this year and get him to pick up just a couple more more candles. Like the cost of that promotion is potentially very small.

3:19You already know he exists. You already know that he's purchased. Can you just get him to do that again? Those are some of the most effective marketing sales campaigns that you could possibly run. But it also requires that they had a good experience with whatever it is that you're offering in the first place. How is the, the, the, the, the, the, the, the, the, the lands of advertising and a brand building a reputation changed in your lifetime? And what is the most important thing for brands to understand now or some of the important things for brands to understand now if they ought to be successful?

3:53Yeah, so my first job in business school, I started coming called profit brand strategy. It's now about 500 people. Now it's just called profit. And the basic notion was it was based on the principles of my, Professor, my second year David Ockery's considered the father of modern branding. And it was that the intangible associations with a brand or a set of products or services are the only sustainable advantage. That if you can wrap a set of products and services with these brand codes of masculinity, European elegance, youth, and then pound away at those associations using this incredibly cheap, cheap, efficient medium called broadcast advertising, you can take a marginal shoe, salty snack, marginal car, and get amazing margins on it.

4:38So that was, that's been the, from the underworld or two to the introduction of Google in the 90s, the algorithm for creating massive shareholder wealth was find a mediocre product, rapid and amazing brand codes and make people feel more patriotic or more younger, stuff the channel with it and print money. The PNGs, the PepsiCo's of the world, you know, the Coca -Cola is these are the economic titans of yesterday. The sun has passed midday on that because our weapons of diligence, whether it's Google or TripAdvisor, Amazon reviews, now gets us to the best product without the benefit of this weapon of diligence called brand.

5:13When I came to London, I used to stay at the four seasons from the Mandarin Oriental, why? Because someone else was paying and they're always an eight. And then I went on TripAdvisor and I went on my social graph and I found out the people love the con at hotel or people love the Furndale hotels. So I start saying the hay market. Why? I like a place from the nice gym and I want to stay out with, hang out with people who are younger and cooler than me. So I started saying a boutique hotel. So all of a sudden, product became the bomb again and then your ability to embrace these new mediums around social became more important in broadcasts advertising.

5:45So the traditional metrics of branding, the traditional vehicles for branding, a brand identity in broadcasts advertising that I've been preaching in brand strategy, the sun has passed midday. If you look at my curriculum and the majority of curriculums and marketing departments, you could argue that we're just training people to go to work at Unilever General Mills and be laid off 24 months later. Branding has become much more about innovation and actual product quality. Now that extends into how you discover the product, how you absorb the product, the community around it. But Tesla is a better product.

6:18Apple used to be an underpowered product with a great brand. Now it's a great brand with a superior product. So these Airbnb is a much better product. These things are, Google is 10X better than what was there before it. So supply chain design, the way you absorb the product, it's ease of use. You know, it's moved from kind of what you call a brand economy to back lack of a better term and innovation economy. So rather than taking classes on advertising, I say take classes on supply chain or analytics or really understand industrial design. There was a general feeling that all product quality had maxed out.

7:02And then the internet came along and unlocked all this product innovation. So cars they felt had hit kind of a peak in terms of product quality. And then all of a sudden with the internet and GPS, you could tune a car up wirelessly. You can unlock the doors. There was all kinds of crazy things you could do with it in addition to an addition to EV. I mean, there's just been so much actual innovation around the product. And what are the most valuable companies in the world having common? They either spend no money on advertising and they're spending less. Apple's the strongest brand in the world.

7:37At least a consumer brand I would argue the strongest man's in the world. The university is, but it's reallocated six or seven billion dollars out of broadcast advertising into its channel into stores. It built 550 temples to the brand. And I think of that as almost part of the product. My 12 year old library board yesterday, so I went into the Apple store. So that's kind of consuming the product. And I end up buying screen savers and new cases that I'm sure are 90 points of gross margin that I could find to FNAQ or Best Buy or someone for less money. But we want to be in that store and in that environment.

8:08So it's moving out of pre -purchase broadcasts advertising into the distribution channel and into innovation. But the traditional norms of marketing or branding as I taught it, that shit's over. Don Draper has been drawn and quartered. If you're watching a lot of advertising, it means your life hasn't worked out. The majority of people who are technically literate or wealthy can avoid 80, 90 % of advertising now. They watch Netflix. They subscribe to Spotify. They live in cities where they have local officials that demand you can't see a billboard from a park.

8:50So advertising is a tax on the poor and the technologically literate. So it's moved to more distribution and innovation. But for God's sake, don't avoid the falling into the trap of thinking that the masters of the universe are branders or advertisers. Having worked in the advertising industry, this is a conversation we have all the time with clients. It's the you'll meet a certain type of client who's very religious about the bottom of the funnel. If I can't track it, I don't know exactly what you're saying. I won't do it. I won't do it. Then you'll sometimes meet the opposite, which is someone who just loves to spend on brand.

9:26And I don't necessarily think that's wrong. I mean, Mark Ritz, very good marketing professor, always talks about the importance of both ism. And he says, it's vitally important that when I actually speak about the importance of brand marketing, that you do not interpret this as denigrating digital marketing. In fact, I go a bit further and say, the bottom of the funnel in many respects is the thing you have to optimize first. Because there's no point in actually, if there's a bottleneck at the bottom of the funnel, if there's some constraint or a problem or a failing, you know, if you have very poor conversion, okay?

9:59There's no point in spending money on advertising because you'll just introduce more people to a disappointing experience. So you've got to get the back end. I would argue the first thing, in theory, you should optimize if you're being an absolute pureist, is repeat purchase. Because having gone through the expense to acquire these customers, actually, that's the metric that always fascinates me because we're talking only about electric cars. And I said, the question about electric cars isn't how many people are buying them, okay? It's not what percentage of the new car market in the UK in July were plug -in vehicles.

10:32Now, only question worth asking really in the long term is, does anybody who buys an electric car go back to buying a gasoline car? Because if the answer that is hardly anybody, then, okay, you don't know the exact shape of the S curve, but you know the growth is going to be pretty spectacular. And so the thing to understand, I think, in a market is to what extent does your product actually convert someone to something? And then the lifetime time is over. So you start with repeat purchase, then you go to conversion, and then you'd work your way up. But what tends to happen is that when people are obsessed with quantification of everything, okay?

11:12It's worth noting, by the way, that all big data comes from the same place, the past, all right? So there's a limit to how much big data, particularly if you've had some major event like a pandemic in between, how much big data can actually tell you about the future in any case. As David Ogleby famously said, you're not advertising to a standing army, you're advertising to a moving parade. People are coming in and out of market all the time. And so you're absolutely right. You get some people who are just famed junkies. And by the way, I suppose there are brand categories where that's appropriate.

11:44If it's sold through retailers, in other words, if it's mostly sold in the physical space, you might argue to an extent, for, let's say, a Burger King or a McDonald's, that's not a totally crazy position. Although it is now, because suddenly they've got to think about delivery and whether people order through the Apple order, throw an intermediary, because it has a major bearing on their business. But at the same time, yeah, I mean, the tragedy is this idea, this false dichotomy between brand advertising and what you might call performance or digital marketing, as if you have to be in one camp or the other.

12:20Where is the balance, though, and how does one go about? Is it just intuitive? Is it just there are figures on this? So if you look at the work of Liz Bennett, for example, in Peter Field, the ratio shifts a little bit. But generally, they'll stipulate a figure around about the 6040 mark in favor of what you might call brand mass media expenditure. Because they have a mutually beneficial relationship on sale. I've tried to find them, make them on the market. And at the first 20 years of my life, I spent in direct marketing. And actually, because direct marketing was unfashionable, we spent a lot of time denigrating, advertising spend, because they got much bigger budgets left, not necessarily rightly, but they were also much more indulge than we were, because they didn't have to prove effectiveness down to the same level of statistical significance.

13:12But we came to realise pretty quickly that actually, first of all, there's nothing harder than direct marketing, a product that nobody's ever heard of. And that every time, just to give an example, every time American Express went on television or advertised big in mass media, the response rates to direct mail would not quite double maybe, but they'd increase pretty significantly. You had to work less hard. And you had to work. It's that wonderful phrase, which comes from a book by, let me get his job right, his name right. I think it's Matt Johnson, who's just written a book called Brands that Mean Business.

13:49And his wonderful line is having a great brand means you get to play the game of capitalism in easy mode. And what is true is, is fame to some extent brings a load of benefits, which aren't necessarily sales related. So, for example, you can cock up and your customers will be more forgiving. Okay? Take the example of Apple. I mean, on a couple of occasions, Apple has produced products which had fairly major flaws, which might have proved pretty fatal to lesser brands. The famous phone, where if you held it in the wrong way, it didn't make phone calls, for example. And given the reality distortion field around the Apple brand, people have passed over those incredibly rapidly.

14:34And so, there are people with less price sensitive, that's not easy to measure, by the way, as well. It's very easy to measure the extent to which something has an effect on sales, but the effect to which something has an effect on price elasticity and the extent to which you can command a premium because it's a great brand. Because it's a great brand. It's harder to measure, because you don't have the counterfactual. When you sell something, the counterfactual is that you assume that you wouldn't have sold it otherwise. But if you sell something for a high price, you can't in fact determine that without your advertising, you wouldn't have sold it for that premium price.

15:12So, to some extent, this quest for perfect measurement to reduce marketing to a kind of Newtonian physics is a bit of a false god. Fame, you talked about fame there. Fame can also be applied in the topic of personal branding as well. Obviously, social media has allowed us all now to build up personal brands. You've got the Gary Vaynerchucks of the world who have built their companies are famous because they've branded a person at Ogilvy and within your marketing. What kind of shift have you seen in the desire for people to become brands themselves and how valuable do you think that is? I think advertising always had those personal brands.

15:52And if anything, it's slightly diminished, actually. Really? A campaign magazine always did a very good job of making sure there were 30 or 40 famous names within the business. That just happens in a different medium now, right? It happens on LinkedIn. Yes, I agree. So, one of the greatest things, for example, is a wonderful, wonderful guy who now must be, I don't want to name his age, but he's passed retirement age called Dave Trot. You probably know him. He'll be brilliant interviewer, by the way, on the show. Absolutely fantastic. But what has been absolutely fantastic is that he's a glorious advertising mind.

16:34I mean, just an absolute ornament to the industry. And he, through Twitter and through blogging, has had a completely new lease of life and influence to a completely new generation of people and has been hugely valuable as a teacher. And what's interesting about that, actually, is that, of course, he does that unpaid. And one of the things that is complicated about this new world, okay, the most valuable thing I often do in the course of a working week is either to give something away or to put somebody in touch with something else. Neither of which, that kind of butter, neither of those things is in any way monetizable, is it?

17:17Well, reciprocity would say otherwise. No, I suppose you've just got a rely on a high degree of reciprocity, in some respect. I mean, it always bothers me about this, which is that we're in a business advertising which is paid by the hour, which is a terrible way to pay for ideas. Because the value of something has no relation to the time devoted to its inception. And it is genuine, I mean, I always joke about this. The most valuable thing I probably did was almost accidentally, my working life, which was to go to the government's behavioral insights team. And as a sort of fanatical vapor, I'd been a long time smoker and had been able to quit for the first time successfully by switching to vaping.

17:58It took me a little while, but once I'd made the switch, I'd never gone back. And I went to the government's behavioral insights team and I said, look, these things are coming over from both Japan and the United States, their electronic cigarettes. I think there are two things you need to be alert to in psychology. One of which is that because they actually replicate the habit of smoking, not just the nicotine, they are a major kind of, what you might call a gateway drug act. There are major source of harm reduction, at the very least. It may help people to quit. The very least it'll help people to shift to some much less harmful delivery device.

18:35Versus patches. Versus patches and guns and things like that, which didn't replicate the behavior. And then the second thing I said is the second thing you've got to be alert to is that because of peculiar human psychology, half the people in the, what you might call the health and anti -smoking lobby will be fanatical about banning electronic cigarettes. And all creditors and behavioral insights team, under guy called David Halpom, I think they went to the camera and government and said, favor here, can we have a light touch on vaping regulation, please? And various parts of the EU have gone for much stricter regulation.

19:10There were some countries which were more or less banning it. The US has banned jewel for some reason. On that point of personal branding, though, do you think building a personal brand is important? It's pretty interesting. I mean, you have a personal brand whether you like it or not. And that's one really important point about branding, which is that everybody, you know, and that's by the way, why I think marketing is so important. Because the brand is not the heated steering wheel of the marketing world, you know, the optional extra that you can do without, but it's quite nice to have. People are going to perceive you in some way, regardless of anything you do.

19:47Okay, they're going to form an impression of you. They're going to form an impression of what you're worth, what kind of business you are. You know, and they will use all manner of kind of inferences and heuristics to arrive at this conclusion. And in many ways, I suppose this is why I argue that marketing isn't an optional extra. It's an essential because the worst thing you can do is build a great product and fail to present it in a way that is convincing, appealing, attractive, or which confers status on its users. You know, and the same applies for your personal brand. And the same, yeah, the same applies.

20:23You're going to have a personal brand whether you like it or not. So you might as well try and have a good one. I think it probably is true to say that the personal brand requires sacrifice. You know, that old saying that strategy is the art of sacrifice. But wait, not totally true. I think there are win -wins, you know. It is a sacrifice of a personal brand. But well, I suspect. You don't need to suspect you get a personal brand. Yeah, you have to have weaknesses as well as strengths. Now, interestingly, for example, one of the things that we've part of my personal brand is I'm not a CEO. I'm no aspiration to be a CEO.

20:59And I know enough about myself to know I would not be good at that job. Okay. There are certain forms of ambition and aspiration, which, you know, consonant with a personal brand that I have, are basically their avenues that are close to me. I'm not very good at administration. I'm very bad at making difficult decisions. Self -awareness is a personal brand strength. Yeah, I mean, I'm, I'm, I'm, no, where I'd be useful. I'd be useful at making a bleak or unusual suggestions. I'd be useful at getting people to consider the same thing in five different ways, or promoting a counterintuitive thought.

21:34I might be useful at suggesting some, but you know, I've got a fairly good personal roller decks, you know, before you run off and do this on your own, why don't you talk to this guy at this university who's been studying this for the last 15 years? In those early years of Tinder, I remember being told the story, maybe 10 years ago in San Francisco when I was working there with a guy called Michael Birch, who was the old Bibo founder. In his little sort of incubator that I was in when I was 20, they were telling me the Tinder story of how you went to a fraternity. For people that don't know what fraternity is, what's a fraternity?

22:08So I guess in the UK it would be like college clubs, maybe, do they have like members clubs or something like that? So it would be sort of sororities and fraternities and sororities are a house of women and fraternities are a house of men and essentially a lot of college students, they do something called rush, where they rush and they go house to house and they meet all the women or all the men and then they basically pref. They put in the name of the one they would really love to be a part of and then they see who accepted them back. It's been criticized up and down and there's a lot of things that are not, you know, spectacular about it, but this is a way a lot of people find friendship and community.

22:48It's a community gathering for their college so with Tinder I essentially went back to my alma mater at SMU, I just graduated so a lot of my best friends were still in school. So I got access to the campus and I would start at the sororities and then go to the fraternity so I essentially have all the young women download it and then run to the fraternity and then they would download it and then everyone would start connecting. So you know, is that good? Is that bad? How do you want to chop that up 10 years later? Who knows? But that's the reality and you can't escape the truth. So you heard about this way back when?

23:24I heard about this 10 years ago because we were building community center gaps. We're building something called BLAB which resembles what clubhouses now and when we were talking about the marketing strategy Tinder kept coming up and but yeah, that was the thesis. It was like should we go to fraternities and go get, you know, to try and build that sort of isolated, tight community to try and get product market fit because network effects really really, especially in the dating game. The most important, that's why there's only a handful of dating apps that have ever survived. I mean, at least during my time doing this, which is almost a decade now.

23:59But what's interesting is there's such a, not to not to say only I could do this or only somebody else could do this, but there was a superpower in the timing of it all because I just graduated and I knew all of these people. So if some random startup founder knocks on a sorority door, the police are coming. You know, you can't do that. So I felt like I had this insider hook, right? Because I was technically an extension of that by proxy because I had just been on the college campus. I took the photo of one of my guy friends back then who was, you know, all the young women had mega crush on him.

24:44And then I took the photo of my best friend, Danielle, who was very well liked on campus. And I went into Danny's journalism class because she was still a student. And I basically snuck into her journalism class and used Photoshop. And I took the Tinder screens and I put the guy's face on one and her face on the other. And I said, find out who likes you on campus. And then I saved it to a file because this is the olden days at this point. And I went to FedEx, which is like the office supply store across the street. And I printed a thousand copies. And I quite literally handed different students on campus $20 to go distribute them under dorm doors and to put them on wind shields and to put them, you know, in their different social clubs and to essentially distribute these flyers everywhere.