B2B brand building in the era of AI with Jon Lombardo and Peter Weinberg

24:38And a lot of people kind of like shit on the finance companies like, oh, you need to be as hip and innovative, as cool as the tech companies. When it comes to distinctiveness, it's actually a real liability. The fact that the tech companies are so obsessed with being new and refreshing their creative and identity every five minutes versus these banks and insurance companies, which like Wells Fargo, they've had that same logo for like 100 years or something like that. So the finance companies stick with their assets for much longer. They're slower to change, which people criticize them for. But the upside is that their assets compound in value over time and they have some of the most distinctive assets in the category.

25:20Compounding, another financial concept, which is how you build brands over time and how you build brand assets over time. It's good. It's good. This is an important point though. So something should change and something should never change. The things that should change can be thought of as CEPs. Sometimes you talk about security, sometimes reliability, sometimes savings, sometimes speed. Those situations could change from creative to creative, from execution to execution. Something should never change. Your bulldog should never change. Your wagon in Wells Fargo should never change. And so if you think about the construct or like the mnemonic of like you to be remembered, you need RMB.

25:54I can't spell remember without RMB. You've got to get big reach. The messaging, which is CEPs, that can change. Got to be rooted in customer view, but that can change. But the branding should basically never change. But everybody's dying to change. Constantly, constantly. It's the number one thing. The only constant is change. I won't name the client because I would hate to shame them on the podcast. But I once visited this client. They showed me this wall in their office. And it was like the 30 taglines they had used over 50 years. and they were like, this is our wall of fame. And I'm like, this is your wall of shame.

26:24This is a shame. Like at De Beers, you couldn't have that wall. It's a diamond is forever. At MasterCard, fantastic marketing organization, B2B and B2C, it's priceless. And they have never moved away from priceless. So it's just, you know, this is partially about incentives. Everybody wants new stuff. Every CMO wants to throw out what the last CMO did. The creative agency wants new creative because that's how they get paid to develop new creative. But the ability to just stick with the old thing that's working. Well, going back to compounding, we did this test on, we took about 100 ads and we retested them over different time periods.

27:05So ones that were one year old, two years old, five years old, ones that had heavy investment, ones that didn't and so on. And what we found is in the vast majority of cases, the scores went up. So it turned out basically that the more you see things, the more familiar they become, the more you like them. We're in. We're in. Exactly. That's what we conclude. If there's just like one behavioral science concept every marketer needs to understand, it's the mere exposure effect, which is just basically people like things they've seen before. They like familiarity. That's how marketing works. It's just like, oh, I'm going to buy Salesforce for my CRM because that's a familiar name, and I like it because it's familiar.

27:42It's the same thing you created. It's loss aversion, isn't it? It's loss aversion. We fear loss more than we, you know. Well, something that's unfamiliar, it's a red flag. Like if somebody brings you a CRM, if they're like, hey, I'm Jimmy's discount CRM shack, you're like, I never heard of that. And then you start to ask yourself, why have I never heard of that? It must not be a very good or successful company. Salesforce, that's a brand I've heard of. They must be doing something right if I've heard of them and everyone else has heard of them. So, you know, we talk about it. Sometimes people talk about rational versus emotional, but I prefer Rory's framing of logic versus psychologic.

28:16Right. So there's a lot of psychological sense in choosing familiar things. Right. It's how you de-risk a decision. I just generally like wear in and wear out. I mean, it's just a very simple, easy thing to understand. And again, there are different types of marketing have different objectives. Brand building should wear in. It should not change. performance marketing you know fine to change that again because you're trying to get an immediate click if you don't get the click switch to the new creative so that can wear out but branding doesn't wear out it wears in and so understand kind of fit for purpose there's two types of marketing two different executions two different approaches but most people again don't think about that because especially in b2b it's just all performance marketing it's all i fear wearing out and of course that's not the right way to think about it especially in the world we're talking about which is consistency over time compounding over time asset you know increases over time but But again, you know, B2B marketers are also the B2C marketers often run the P &L.

29:07So they're very commercial. Like you are a commercial marketer. So you very much understand the commerce side of the business. B2B marketers don't really have that same relationship with finance. They're not meeting with finance regularly. They don't understand the overall, you know, complexion of the business from a commercial perspective. That's a problem. Like that needs to change. I mean, there's a whole conversation to be had around. I mean, a lot of what we're talking about is this, you know, marketing and finance interface or marketing to the CFO. But that's an entire, you know, entire, there's years of work that need to be done there.

29:35And people are, some people are doing that work that everybody in B2B needs to study and learn from. Yeah, I think I'll do an entire episode on it. It's worthy. That's probably the biggest skill. Because actually, I genuinely believe that the CMO has got a bigger impact on the future prosperity of a business than any other role on the C-suite. In terms of you're looking at the strategy, you understand the consumer market orientation. You're often spending the biggest discretionary spend in a company. you know you're shaping culture you know huge huge impact and the secret i think is well basically linking your marketing back to financial outcomes right and being able to explain that and few marketers can explain that the return that they're going to deliver for their business also finance people can't explain it either i mean you know the finance teams are just as guilty of not understanding marketing as the finance marketing teams are guilty of not understanding finance i mean it really needs to come together a gentleman that we like a lot i think was on the podcast Chris Berggrief.

30:29He's coming up. He is coming up. He's perfect to talk about this topic. But he went and tried to figure out the finance professors and the marketing professors, do they talk to each other? Have they made this link between finance and marketing? And they don't talk to each other. So it's not happening in the academic world. It's not happening in the practical world. Another huge opportunity for somebody is just to have that conversation in a more constructive, kind of applied way. Now, we're solving the virtues of consistency and not changing. And obviously, you guys became very well known for your roles in LinkedIn, running the B2B Institute.

30:58And then you announced your departure a few months ago, and we've not heard much since. What's going on? Well, we've been in stealth mode, building our new company, Evidenza. We've been in our underground laboratory, building this secret weapon that we think is going to help turn the tide in the war on brand in B2B and B2C. So, yeah, we quit abruptly about four months ago. So, Evidenza, this is the name. So are you going to be following your own advice on distinctive assets? Yes, John, of course. Absolutely. If you keep asking questions like that, John, you're never getting back on my podcast ever again.

31:35We're already working on a really tight jingle, which Peter is super excited about because, you know, evidenza. So we're saying we're giving marketers the intelligence they need to go on the offenza with evidenza. Or if you're in a particularly kind of tenuous situation, maybe you're going on the defenza with evidenza. Either way, you can sit on a credenza and look at your intelligence from Evidenza. Evidenza. So you're trying to bring some sexy Italian... We're trying to bring Italian flair to the marketing effectiveness revolution. To the dull data. And I'll tell you this, John, it's not going to be blue.

32:09The color is not going to be blue. That's a relief. Can you reveal the color live on air? I can. I can. We are green and gold. This is actually a very interesting use case of AI, is that AI actually really well understands distinctiveness. In other words, if you go in right now to Chad GPT and you're like, hey, I want to start a CRM company. What colors are infrequently used in the category? It will tell you, you know, hot pink, you know, mustard yellow. It will give you what other brands don't look like. So it has an understanding of what people look like, don't look like. And that can help you kind of counter.

32:45Parmigiano, Reggiano, Off-White. Yes, which is our color scheme. Ragu Blood Red. You know, it gives you all the Italian flair with the marketing science. Yes. That's true. I mean, you just actually revealed why System 1 is hot pink. Actually, that was exactly the insight. It's like everything's blue. We're going to be hot pink. Yeah, and it pops. It does, isn't it? You see that System 1 pink in the feed, you know? There's only a handful of pink brands I can think of. There is T-Mobile. T-Mobile. There is this cycling company called Rafa. You probably know that. I know. There's Klarna, and then there's System 1.

33:15There is. What a group to be in. It pretty much described my lifestyle, you know. running out of money needs to pay for something. The colors of our new company, Evidenza, go on the offenza with Evidenza. Green and gold, colors of money, never hurts to be the colors of money, right? If you're trying to be about marketing and money, which is really what we're trying to be about. So beautiful colors, Art Deco colors, gorgeous colors. So you're teasing us with the brand here. What about the product? What are you actually going to do? We don't think products matter. Marketing matters, but products don't matter.

33:47It's all about the brand, right? This is the point. Who needs a product? Yeah, listen, I'll give you the tale. I'll give you the tale of us quitting our jobs, despite my wife being seven months pregnant, as a reminder. Essentially, I think what we discovered in our last year at LinkedIn is you can tell clients about all these principles of marketing effectiveness. But to really get them to implement it and, frankly, to buy into it, you have to show them these principles apply based on their own data. So essentially, you have to do market research, right? You've got to go out and survey CRM buyers or cloud computing buyers to understand what do they think of the brand, what category entry points are up for grabs, et cetera.

34:28So we're doing a lot of market research. The problem with market research is just that it doesn't scale very well. There's a lot of big problems, but the two biggest ones are just that market research tends to be very expensive, especially in B2B where you're trying to survey CIOs, CEOs, people who are not going to take a 60-minute survey for a$100 Applebee's gift card, right? You've got to pay through the nose. Sometimes you can't even pay, right? So it's very slow – or sorry, it's very expensive. It tends to be very slow as well. Like sometimes it can take 3, 6, 12 months to get market research results back.

35:04So we were spending millions of dollars on market research, but we were just finding it didn't scale very well. We couldn't bring it to, you know, 40 ,000 clients. We could only bring it to like four clients. And then we started learning about this very hot new technology called synthetic market research. So in other words, instead of surveying a real human CRM buyer, you can survey the AI impersonating a CRM buyer, an impersona as we call it. And you can ask them the same questions you would have asked in your market research. Are you aware of the brand? What are the buying situations? Which brands come to mind in which situations?

35:45Distinctiveness, you name it, any type of market research question. And what we found, we've probably run about 60 head-to-head tests over the past four months, is that you get essentially the same answers. We're talking about 90%, 95 % similarity between what the synthetic respondents tell you and what the real human respondents tell you. With the critical difference that it didn't take six months. It took six minutes, six hours. And it didn't cost you a million dollars, right? Because you didn't have to bribe a thousand CEOs to take a survey. So basically, John and I, in our final quarter at LinkedIn, started to realize, hey, this is a critical business function, market research, a critical marketing activity that most companies don't do because it's so slow and expensive.

36:33and AI is actually going to revolutionize market research, which nobody is really talking about. Everyone's talking about how it's going to change copywriting. Nobody's talking about the other application, which is market research. And we said to ourselves, damn, that could be a really, really big business. So AI gives you customer on demand. You can model synthetic customers based on the underlying training data in these models. So it comes back to something we talked about. How do you work backwards from the customer? How do you establish market orientation? How do you understand the customer?

37:03AI is really incredibly good at that. So we could figure out, you know, you can work at LinkedIn and know why people buy Sales Navigator and then ask AI, why do people buy Sales Navigator? And you can get a really pretty strong match there. I mean, 80, 90 % match. So a core insight like that allows you to then think about, OK, you've just collapsed the time and cost to do something by probably a thousand. That's extraordinary. I mean, Bezos, I always think about like when we left our job, like why do we leave our job? I mean, AI is growing so rapidly. What did Bezos say about when he left Amazon?

37:34He said, internet was growing 3 ,400 % a year. Like, I've never seen something. He was looking at D.E. Shaw, which is one of the biggest hedge funds in the world. He probably would have made$100 million, billion at the hedge fund. And he said, I'm going to leave my hedge fund job because this thing's growing 3 ,400 % a year. I mean, AI is growing that quickly. I mean, people have struggled in some ways to figure out what the applications are. But a very simple thing is, you know, figure out category entry points, figure out distinctive assets, figure out segmentation, figure out targeting, all these sorts of core marketing jobs that companies today will pay hundreds of thousands of dollars for and wait three to six months.

38:13It can happen. I'm not going to kind of be specific about it, but it can happen a thousand times faster. Honestly, probably better. Yeah. You mentioned earlier, you've compared it to traditional research methods 60 times to get the 95 % overlap. Have you delivered this with a customer in the real world and to see how it plays out? Yeah. So that's what happens. So we tell customers, hey, we have a synthetic research platform where we can now do qualitative interviews or quantitative surveys against any audience, you name it. And some clients say, amazing, because I couldn't do any market research.

38:50Like, let's do this right now. And then you've got skeptics. And this is true about AI. People are skeptical. So we've had a few clients who have said, you know, if this is what you say it is, that would really be revolutionary. But I find that very hard to believe. So essentially they request a test. And so how the test works is a client will come to us and say, I'm going to give you my survey questionnaire. So the questions I asked, and I'm going to show you the composition of the panel. But I will not give you the answers. Now I want you to provide the synthetic answers. So that's what we do.

39:22We take their questionnaire, we send them the synthetic answers, and then you compare them. You compare them in terms of correlation, and we see 0.9, 0.85 correlation. You compare the mean difference, so how different are the actual numbers, and sometimes it's like two-point difference on a consideration question. But the crucial thing, John, is just how similar are the conclusions? In other words, you don't necessarily care are the numbers the same. It's would you have made the same decision? and that's where we just find synthetic data crushes it. We see like 95, even 100 % of the same conclusions but reached much faster and in a more efficient way.

40:02That's really interesting, isn't it? Because having worked quite a lot with market research people, they tend to exaggerate the small differences, don't they? And miss that the overall picture is the same. It's like, oh, 2 % difference in this particular. People obsess over data. But the point of the data is to make a decision. Is the decision the same? I mean, the key thing here is you can now make the decision legitimately a thousand times faster. And it's not a shitty decision. It's a smart decision. I mean, I think if you forecast out, we're not there yet, but if you forecast out five years, I can't imagine any wise, intelligent marketing department will be making decisions alone.

40:35They'll all be making decisions in combination with a synthetic CMO. Some sort of system that is an advisor or kind of a co-pilot, right? That's just how it's all going to happen. Well, back to our compounding point, right? So the compounding benefit of making a decision a thousand times quicker is huge. Because if you get to the right answer quickly and the implementation of whatever the decision is, you know, campaign, new product, whatever, is going to be exponential. Yeah. But I think the fascinating thing is that, you know, so let's say now you can do market research on demand with synthetic respondents.

41:07The problem then becomes not getting the answers but asking the right questions. This is a quote John and I love from Picasso. Shout out to Picasso if he's listening to the podcast. Picasso if you're listening. You know, he said the problem with computers is they can only give you answers. They don't know what questions to ask. So really, in the past five years at LinkedIn, John and I had a front row seat to this effectiveness revolution where people now know what to ask. Don't ask, are you aware of the brand? Ask, in these 30 situations, which brand comes to mind, right? And now you can use synthetic data to answer those questions.

41:41So it's a combination of this effectiveness revolution and an efficiency revolution where you can now ask the right questions and get answers far more efficiently than you ever could before. To mention another listener, Einstein, wasn't he the point about, you know, you spend 99 % of your time finding the right question? Yes, exactly. And then the answer appears. You spend hours agonizing. Yeah, something like that, isn't it? You know, it's the same kind of point, isn't it? The benefit of asking the right question. Yeah, and that's going to eventually we believe all research will be synthetic research.

42:11That's what I think will happen in the next five to 10 years. At first, it'll be a competitive advantage just to be doing synthetic research at all because you'll have more customer information in a more efficient way. But very quickly, the flip is going to switch, right? Where it's actually how good are you at asking the right questions. It's not getting the answers quickly. It's asking the right questions. And there's another thing that often you see in technology. When new technologies premiere, people just use it like the old technology. So radio was talking over, obviously, the radio. then when TV comes out, it's an image.

42:42It's not just a voice, but people are just on the TV like this talking like it was radio. So we tend to do kind of like the old thing in the new paradigm. I think we're still doing the old thing in the new paradigm, frankly, trying to replicate a piece of market research around awareness or attitude or something like that. There's a lot of stuff though, which we're still trying to figure out with clients hand in hand, where they're just new questions you would never ask. There are new audiences you have never surveyed. There are just a whole bunch of different ideas you could probably try to figure out.

43:09where it's not something you previously did, but now you can do it. People who figure that kind of stuff, I think everybody will start with the old paradigm and the new technology, but people who figure that stuff out, they're going to have a huge advantage. There's good behavioral science on this as well, because the more technical the change, the more familiar and everyday you need to make it feel for it to be adopted. There's a lot of evidence for that. So in a way, you want to sort of exaggerate what you do on the simplest of tasks. Well, it's also like right now you save market research for only your biggest decisions and you'll do like one survey a year.

43:44In this future world where synthetic research kind of democratizes access to market research, now you can use it for small decisions. You know, like I'm choosing between these 20 segments for a campaign I want to run tomorrow. Which one? You know, it can play in new spaces, smaller scale decisions. You know, sometimes you need answers not in six months, but by next week. Market research can't play in that space. synthetic market research can play in that space. So it really is like an entirely new paradigm. And, you know, we hope to... Let me go back to the buying situation thing we talked about earlier.

44:17Like, in one afternoon, I could run for probably 30 different industries with different makeups of buying committees, finance and tech and insurance and construction and manufacturing and whatever biotech. I could probably map 30 different buying journeys. How many people? How long? What are the complexities how do you break ties you know if you're all you know kind of unclear what to do you could map the entire those entire categories those entire industries in a whole afternoon how long would that take what would that have cost in the traditional world could have taken a full year and nobody has really the budget to be able to do that because who would fund it you know no company's going to fund it on behalf of everybody so it's just a simple example where something you didn't previously you couldn't previously do now you can do it in an afternoon yeah well the other thing of course is not not just other decisions you could now take in a large organization but smes who haven't had access to the budgets that you might require so it opens up a much bigger democratizes market research for the first time it's not just a luxury investment listen if you go back to ritson the centerpiece of every marketing strategy should be the customer market orientation all effective marketing flows from an understanding of the customer in b2b especially it's not that easy to understand your customers it's hard to get a hold of them These are highly paid professionals, senior people at organizations.

45:32Now you can talk to them infinitely. They're infinitely patient, infinitely knowledgeable. You can talk to them all day. So it does sort of democratize access to the customer, especially for these small companies that previously just couldn't afford to do it. I actually had a conversation recently with somebody who works in IT, IT service management. Is it a real person or a synthetic person? It's a synthetic person. It's a synthetic person. You must have to ask this every day. Every day. John, is this real or is this real? Exactly. Who's answering this? The lines of blurring. Is it your opinion?

46:01This person was a VP and I was trying to figure out this other role, where is it in the organizational chart? And I was like, well, does that person report to you? They're like, no, that person doesn't report to me. That person reports to this person. I'm like, well, how many levels are between you and that person? Like, well, that person, I'm in a very strategic hire role. They're two levels down from me. They're just focused on a more tactical part of IT service management. And it was quite extraordinary that you could actually get at, like I never even thought about it. and we don't even really do much on organizational design, but you could probably work through organizational design by talking to enough of these impersonas, which is just, again, like I never even thought of that.

46:35That's the kind of thing where, you know. Mapping the buying committee. Yeah, how you'd even think about that. Yeah, it's very interesting. Yeah, get a job title, source it, and all sorts of stuff, isn't it? That's what we've been doing. We've got all that. We've got segmentation. So people say, my category is cloud computing. We'll say, great, here are all the key segments who buy this category. Here's how many people are in each segment. where here's what percentage of sales comes from each segment. Here's what media they consume. And then you can actually talk to them. You can talk to your segment and ask them whatever you like.

47:04So again, it's just bringing the customer to the center of your marketing strategy and helping clients build marketing plans with the click of a button powered by synthetic market research. I mean, segmentation seems to me like hilariously unrigorous, non-rigorous. I mean, I know some people talk about K-means clustering. There's obviously some people who do it in a more sophisticated, statistical way, but these, like AI is just a series of statistical models that can produce these sorts of, it's probably done on semantics, not done on kind of the different kind of similarities within the K-means cluster.

47:36But that's like, segmentation is just something where, again, taking a really long time, getting a result that's not very good. Like that is just something that like should probably entirely be done going forward by, at a minimum, you should start with that. And maybe you then shop that around to a bunch of customers and a bunch of salespeople and a bunch of finance people and say, help us kind of fine tune this. But I would start with AI for almost any of these things. And then maybe I would have a final layer I'd get from my sales team or my customers. But I would probably flip the process from the way it is today.

48:03So maybe to wrap up then, based on experience, he says, most marketers are making it up. Most marketers are deciding on gut feel or they're having to go, you know, to use expensive market research. So maybe don't pretendza. Don't pretendza. Use evidenza. Get evidenza. Yeah, but that's the point. Stop a pretensa. Instead, use evidenza. Okay, I've got the accent for it. These marketers got to go in. That's the real insight in marketing, surely. Most people are making it up. Most marketing plans. Most people in life are making it up. If you probe at these marketing plans and really ask them how did they decide to go after this segment Why did they choose this tagline?

48:45Very quickly, you find, to your point, it's just like out of thin air. Nine out of ten cats were making it up all along. Yeah, exactly. They just made it up. And it's because it's hard to get evidenza. Exactly. It's not easy. Now it is easy. And I think you'll see more evidence-based decisions, more effective marketing, and that is how we will grow the entire global economy. And that's just our small ambition. For all of you marketers out there that also want to become more quantitative and rigorous and the work that you do as we do ourselves, please feel free to reach out so you can go on the offenza with Evidenza.

49:17I go on the offenza. Perfect. Well, John and Peter, as always, it's a pleasure to talk and thanks for coming on and telling us all about it. Thank you for having us. Great to see you, John. Thanks for appearing on my podcast. It was wonderful. Uncensored B2B. Yeah, Uncensored B2B. Thank you very much for listening or watching Uncensored CMO. I hope you enjoyed that. If you did, please do hit the subscribe button wherever you get your podcasts. If you're watching, hit subscribe there as well. I'd also love to get a review. Reviews make a big difference on other people discovering the show. So please do leave a review wherever you get your podcasts.

49:51If you want to contact me, you can do. I'm over on x at Uncensored CMO or on LinkedIn, where I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time.