Coke CMO’s lessons on advertising, innovation and surviving corporate politics - Walter Susini

0:00Ladies and gentlemen, welcome back to Uncensored CMO. Now, we've got an amazing episode coming up for you now. I'm joined by former Coke CMO Walter Susini. We're going to be talking about all the big lessons from running a global household brand name like Coke. And we'll be diving into his brand new book all about how to survive corporate life. And he knows more than anyone else how to do that. So this is a fantastic episode. So many lessons for you in it. You're going to love it. Here it is.

0:31Walter Susini:welcome Walter thank you thanks for having me here it's great to have you here that's fantastic especially because I'm here when I'm not a CMO anymore I know which is even better by the way because you can actually tell us what it's like I can be the uncensored you can be the uncensored CMO this is great I've been looking forward to this conversation so much particularly having read your amazing book as well that's just come out so congratulations on doing that um maybe introduce yourself for everybody listening um what's been your career journey yeah i think you can hear my accent i'm originally italian but i believe all over the world almost 20 years in latin america then you know i've been in london now for seven years in u.s starting advertising as many of us that don't know what to do in life then move to marketing coke the first time so the principle of insanity.

1:26Walter Susini:I went to Coke twice, expecting different results. Then I moved to Unilever, global VP of marketing and design, and then back to Coke after an experience of having my own consultancy company and be president of one of the dance agency in Latin America, the McGarry Bowen agency. And so I came back to Coop eight years ago as CMO for Europe, Africa, and Middle East. Then I've been aptly part of a big reorg. Every three years, there is a big reorg in big corporations. So I took Europe as one of the second biggest regions. And I've been there two years and a half ago when I decided to move on and have a portfolio career and bring my daughters to school at eight o 'clock in the morning so well what a wonderful thing to do we'll come on to the book of course but I thought I'd start with where you and I first met so I just left Brewdog and joined System 1 correct and I came to meet you at Coke and I had a question on my mind because i when i looked at the system one data i noticed that coke have run the same ad at christmas yeah back then for about 20 years you ran this holidays are coming out every single year and i came to i tracked you down to find out why are you running this ad yeah and you also ran a global ad at the same time so what was the thinking behind sticking with the same ad for so long because it's become iconic hasn't it no look and it's funny i'm i've been laughing the last probably two years of all this discussion of AI and the Coke ads and the Christmas track.

3:07Walter Susini:This ad has been iconic for the company for many, many years. And when I came back to Europe in 2017, basically that we were preparing the global ad. So I was responsible as a region for the global ad. So we did a really good ad that I don't even know if you remember when basically the little girls give a letter to his dad. That was amazing. Exactly. And so the dad goes until the North Pole, but when he got there, Santa Claus is not there anymore. And then you see that the letter is come back. And when basically Wyden present me the ad, they didn't even present me the ad. They give me the letters.

3:54Walter Susini:Wow. Because I was traveling all the time, was like I start to cry because it was the letter that my daughter gave to me for, you know, come back home for Christmas. But, you know, it's a different story. But that year I said, look, we have this fantastic global arts. Why do we need to run this again and again? And so I look at the data, I saw all the things and I said, look, this is basically the beginning of Christmas in UK. so December 1st or November 27th when you hear the jingle that's when you hear when Christmas starts here and I said you know what, I don't care about this these are all like legends and things so for the first year I was here I didn't run the ad I don't want to even tell you how many letters emails, complaints I got from people out there, because it was not Christmas without that ad.

5:01So I learned on my skin how important is that ad.

5:07Walter Susini:And I don't want to talk about, you know, compound creativity, the same ad and things, but this has been a relevant asset for the company forever so what what the ai one did last year two years ago was simply keeping building on the same idea just with a different technique yeah but this ad has been fantastic for so many years such a good lesson i mean people i think people got confused with the ai thing because they're talking about oh ai scored a you know high score yeah but what you had is 20 years of memory of culture of distinctive assets of familiarity and that's what it was just reproducing it wasn't that ai came up with the uh with the idea it was you know when the big professors around the world talk about you know also musical ass how important is musical asset and i said look i come from a company where musical asset has been important forever you know but but even 30 years ago when i was in advertising i work on philadelphia and craft craft has been using the angels and the little jingle of the angels for 50 years so now we are i'm glad that we are going back to talk about you know music asset uh you know puppets or whatever but this has been for the brands that has been doing this we know it since the beginning of the history i think we're just rediscovering aren't we there's also a generation that are coming up in marketing that are now learning how because jingles are out of fashion characters are out of fashion and yet they're highly effective correct even on social media we did some research with tiktok last year and sonic devices and jingles were the most effective way to hold people's attention even in tiktok so you look at the um you know from tv to tiktok and you've seen the same thing over and again but john what what made intel inside you know there was a stupid chip invisible chip in a computer what made that stuff was the jingle was the sound device and this has been the cases that we all studied I love the fact that we are going back now to basics but for maybe grey beers like me it's like okay what we are really saying that it's new.

7:34Walter Susini:What we knew all along has been proven to be true. Or we should have. Should have known, which we've forgotten. I agree. I came across this wild data point a couple of years ago from Thinkbox and they were filming people during the ad break. Now the first bit won't surprise you, that only 30 % or so of people were actually watching the ads during the ad break. They were going making a cup of tea, they were looking at their phone. But the kicker was 70 % of people could remember what they heard during the ad break. And suddenly I thought, wow, like, you know, branding the music and the soundtrack becomes, and there's this amazing scene that they've captured where there's this couple on the sofa, right?

8:14And they're joking, going, nobody watches the ads anymore, do they? And he's kind of looking around to his partner. And then Just Eat comes on and they sing, did somebody say? And they go and order dinner on Just Eat. And they don't realise they've just said no one listens to that.

8:30Walter Susini:It's crazy, you know. Of course. But it's such an important thing. Yeah. Now, talking of advertising, right? Yeah. We must talk about a soup bowl. And I want to know. I want to know because everyone lost it over the Pepsi commercial, didn't they? Which obviously featured the Coke, famous Coke polar bears. Yeah. And there was a big debate online about why would anybody put their competitor distinctive assets into an ad? I'd love your take on that. Look, I wrote a post on LinkedIn kind of defending the fact that probably Pepsi was making a favor to themselves and to Coke. You know, I don't know the level.

9:10Maybe you give me some data.

9:12Walter Susini:Yeah, I've got that here. 60, 40, 70, 30. Yes. So they both were making favor to each other. Now, why I think Pepsi did a clever thing. because Coca-Cola has not been using the polar bears for a reason I cannot discuss in a public podcast for many, many years, especially in the US. I think I was the last one in Europe to use polar bears in a print ad in Germany in 2018 when I was putting different colors bears to say what unite us is better than what divide us. It was in a moment there was a lot of tensions and things. and we use the polar bears. But US was not using polar bears for probably, I don't know, I don't have the data, but let's imagine 20 years.

10:00Walter Susini:And you say, so Coke did a big mistake not using the polar bears. Pepsi did a really good things in using the polar bears. So the real question for me is how many people knew that the polar bears were Coke in the new generation stuff? Now, for us, that is a Coke asset and is a fantastic Coke asset from the 20s, as the contour bottle is a Coke asset, as the Christmas truck is a Coke asset, as the ribbon is a Coke asset. I can quote several assets, so Byron Sharp would be happy how Coca-Cola used the assets. We've been using assets forever. Actually, one thing I always say is that we, especially at Coke, we are gardeners.

10:50Walter Susini:marketers are all gardeners. Because when you have a garden, you don't just go in and prune everything and destroy what you find to put, like plants that don't even exist in that environment. So if you are in England, you don't put palm in your garden. You put the right plant that can thrive and survive there. So that's how you use the asset. So I think the real answer to that is definitely this ad make a favor to both company. The level of favor depends also on the target they were looking at. Maybe a 15 years old in US don't remember or don't even know that that asset is a Coke asset. So I think this is also a wake-up call to Coca-Cola company to keep using the assets, all of them, all the time, because if you don't use an asset, someone else will pick it up.

11:50I totally agree. Well, I've got the data here. Oh, good. Here we go. I want to hear that. So here we go. So we tested it on System 1. And first of all, the Pepsi ad got a 4.2 star out of 5.9. So it scored well above the average. It's entertaining. It's emotional. It's funny, right? Interestingly, it was a very intense ad. So in terms of the strength of emotion, it's very, very high, which is good. Here's the interesting thing in terms of distinctive assets. Within the first two seconds, 75 % of the audience knew it was a Pepsi ad. And by the end, 91 % did, which is way ahead of average. So that was really good.

12:26This is where we get into the polar bears. Key associations, after having been exposed to the ad, 52 % associated with polar bears, 71 % associated with Pepsi. So you're right. Both brands. Both brands. Both brands. So the answer is a bit of bothism, right? Both brands benefited from it. But humor, 37 % of people had the primary emotion was humor, which is very high, very, very high. I think one of the reasons it because, again, if you said to me, John, should you put your competitors distinctive assets in your ad? Ninety nine point nine percent of the time, I would say no.

13:00Walter Susini:Correct. But I think with Pepsi, their entire position as a challenger brand up against Coke has has relied on the comparison, the taste test. You know, they've been doing that for, I don't know, 30, 40 years now. I remember it growing up, you know, the Pepsi Challenge. And I think the thing they also did well, which is a bit sort of left brain versus right brain, is they made something very culturally relevant. Like the cultural references with the, you know, the Coldplay concert at the end. They had some really, really good things in there that probably made it go viral in a way that. So if you look at the net result in terms of did they get a lot of earned media?

13:38They got a huge amount of earned media kind of result of the ad. I think it's the one exception to the rule, probably. No, it is.

13:44Walter Susini:But we also have another discussion, especially on the social media, around the fact that does the test, the comparison test, works or not? This, for me, is a better discussion. Because apart from the 70s, when they really, because they launched the test in the 72 or 73, during the 70s it basically transformed the category so it was a fantastic idea then they keep doing it but to be honest with you I never seen results that still work like it worked in the 70s so for me the discussion with Pepsi is more like because in the 80s and the 90s I remember a fantastic ad from Pepsi Do you remember the Indiana Jones of the future that find this Coke bottle?

14:41Walter Susini:And they say, Professor, what it is? The archaeologist. And he said, I have no idea. There is a really competitive, you know, ad that is not done using the test. Because I think at the end, the test spot something that in marketing doesn't exist. You buy, you drink brands, you don't drink products. So if blind tests will be the solutions, like we would be a lab science, as I wrote in a couple of posts. You know, that's not conceptually. I'm more critics on the test than on the positioning of Pepsi. that I found, thanks God they went back after, you know, the Kendall infamous ad. They went back to really challenge Coke.

15:39Walter Susini:That's their job. That's what they need to do. Absolutely. I love the fact you talked about marketing is not a lab science there because it brings us beautifully on to a new role you've got as professor of practice. Yeah. I love the fact that you're called professor of practice. Are there many professors of practice in the world? because I think this is a great role to have, right? They are. I mean, and it's not something I invented. They are, in UK, we are a little bit more traditionalist on how we work in the academia. So in UK, for example, with the London Business School, I would be assistant professor.

16:18Walter Susini:I would be lecturer. There are many other terminology. in some other university they have this role of professor of practice that is exactly bringing the real world in the academia because one of the criticism I have in many of the discussions we've seen in books in LinkedIn in podcasts and think is that many of the people that bring this theory to life they never work one day in a corporate environment. And the theory is one thing and it's really good and it works and people should read it, study it and things. But then you face the reality. You know, it's like it was the Mike Tyson when he said, you know, you prepare the match and then someone punch you in the face.

17:14Walter Susini:You know, like that's exactly the difference between theory and practice. So professor of practice is when I go in class, I have, it's funny because with the MBA students, now with the computer, with the phone, nobody pay attention really when the professor talk. When I say, look guys, I am the lucky guy that basically launched, you know, Coke Energy, one of the biggest failure of Coca-Cola in the last 15 years. they put the phone down and they listen because i tell that's the reason why it failed that's the reason why it works so you don't bring like i don't want to call it generic case but cases that happens and everybody read it but you bring your actual experience in the job and that's quite valuable especially for for you know young young students i think can we can we talk about coke energy yeah because um one one insight i got when i was working on lucas aid which surprised me actually was that energy is a need state the coke is huge because i thought it'd be tasty refreshment i mean but actually particularly red coke the energy need state was number one that was quite a surprise how important it is as an energy pick me up look i'll give you a another element more.

18:37Walter Susini:I think that Coke failed 50 years ago to build an energy drink because Coke was the first energy and that the caffeine is there and there is an espresso there inside a can. We could have pushed that more many, many, many years ago. And that is a platform that we lost. So when we decided to go back to this and that was like really had the convictions that this could work. And we have data that basically people out there were saying, look, you know, Red Bull kinds of, it's an acquired taste. Okay, so it's an acquired taste. We can do a much better energy drink because it's going to be Coke. Then, you know, they love the brands, but they also love Coke, the brand.

19:29Walter Susini:So we had all the elements absolutely started, You know, the target was clear, as Mark Ritzel would say. Everybody was clear. Now, the point is that when you launch an energy drink that tastes exactly like Coke, people say, I don't believe you, because the acquired taste of the energy drink today is to have this stingy, like something there. And you say, OK, that's easy. I'm going to add a little bit of vitamin B12 and something. and it's going to get closer to this taste. And when you launch it, people say, this is not my Coke. This tastes shit. You know, I don't want that. So you never get it right.

20:14Walter Susini:So the point is, Coca-Cola is in the energy space. Does Coca-Cola have the right to do an energy drink is a completely different question. Because if you are too close to the energy drink, you're not coke anymore if you are too close to coke oh you're not effective as an energy drink you know so the issue there is not do people love this kind of thing yeah maybe there is a space there potentially there is a space in reality it's more difficult now I think I heard you in few podcasts in the past talking about the fact that companies are not patient and I'm so with you on that. After one year, we were delisting and thank you.

21:08Walter Susini:I still believe that now after probably three, four years, that could have five, eight, 10 % of the market. Now the question is, is good for Coke have 10 % of this market or should have more? That is a different business questions. But I think we could have had a little bit more patience on this. that's such an interesting point actually because um back in my britney days i did an analysis of innovation over 10 years and i looked at the top 20 innovations in year one versus top 20 innovations after 10 years yeah there's only one brand that appears in the first and the second list it's coke zero coke zero because coke zero got to 90 distribution in six weeks no one had ever done that before interestingly though even coke zero sales declined in year two and in fact there was three or four relaunches or kind of packaging refreshes i've never seen as much sampling on any products before in my life as coke zero so even coke zero which is a really obvious bit of innovation it's coke but zero sugar even that took about 10 years you know i was there i was there in 2005 when we launched coke zero was you know helping the global team on this it's funny because Coke Zero was launched as the male Coke versions to Diet Coke and Coke Light.

22:30Because at that time we had Coke Light, Diet Coke, and we launched it in Australia in the black can and all this.

22:38Walter Susini:That was like a very specific target and very specific idea. Then it got like a little bit forgotten and things. And, you know, US was with Diet Coke. And when in Latin America, we decided that we would go full on Coke Zero, you know, and we replace Coke Light in less than two years. That was an incredible. Coke Light was 100 million unit cases in Latin America. We are talking about a huge business. And then Coke Zero started to pick up, pick up, pick up. But I think it's in the last four or five years that really Coke Zero becomes. Yeah, I see it everywhere I go in the world now. Everywhere. Yeah, it's phenomenal.

23:22Walter Susini:Absolutely. It's a phenomenal product because that is like, I'm going to give you the same taste with zero sugar. Yeah. It's super clear, isn't it? I mean, there's an innovation rule, actually. We have a system one called the 80-20 rule, which is a bit like the most advanced yet acceptable idea of innovation. The sweet spot for innovation is 80 % of it's familiar and 20 % of it's new. Correct. And what we've noticed is if you go too far to the new, a bit like with energy, it's like, oh, I can't process that. And if you make it too familiar, it's not interesting enough. And Coke Zero is a perfect example of just it's Coke.

24:01And the little twist is it's zero sugar. So in terms of kind of comprehending the proposition, it's dead easy.

24:05Walter Susini:You know, Coke is one of the few brands that sometimes I challenge when at Unilever we used to map brand with the LA map. Yes. So extrinsic, intrinsic, me and we. No, very, very useful tool. Coke is one of the few brands that is basically everywhere. You know, it's not really me only. It's not really social only because you can have it, you know, when you are like in your mood and it's not really extrinsic. It's not really intrinsic. So when you have such a footprint of a brand, it's also difficult to do a positioning. It's difficult to do targeting. It's difficult to do everything. That's why it's more important to have the brand assets.

24:50Walter Susini:It's more important to keep the colors, to keep the logo. Sometimes to my students, I show the Pepsi logo the last 100 years and the Coke logo of the last 100 years. Basically, the Coke logo never changed. The Pepsi logo changed like six times. It's a little thing. But again, it's the gardener. You need to really prune and really be there. You sit on the shoulder of a giant at the end of the day. That's well said. Ladies and gentlemen, sorry to interrupt this episode of Uncensored CMO, but I'm doing it for a very good reason. On the 21st of April, we're going to be putting on The Calling in London.

25:29This is your chance to join some of my most prolific guests to learn about how people got to the top. I'm joined by some of the world's greatest founders, the very best CMOs and the very best career coaches. This will be a day you do not want to miss. But listen, tickets are going fast. So go and search Uncensored CMO The Calling to find out how you get hold of tickets. And I really hope to see you there. Now, you've been the CMO, as you say, very, very large for Europe anyway, for a very, very large, iconic household brand, a big legacy. I wanted to ask you about the reality of being a CMO. I did a study recently with TikTok, which we called the real four Ps of a CMO, because we were catching up and we were chatting about a CMO event they were running.

26:16And I was saying, we do know that most CMOs don't do much marketing, don't you? And we were sort of giggling over it. I said, well, their four Ps are quite different, like people, planning, politics and persuasion, right? That's exactly right.

26:29Walter Susini:Is it? It is, isn't it? I just wonder, from your point, what would people be surprised to learn about the reality of being a CMO, maybe versus perception, what it's actually like? These four P's, by the way, are absolutely fantastic. And I wrote a little bit in my book about this. And first of all, I want to make a point that we always forget when you get into a marketing function, that marketing is a discipline, not a function. And I'm keeping teaching to my students that marketing is a discipline. So if it's a discipline and you are in charge of this discipline, the principle of a discipline that you have to spread it.

27:15Walter Susini:You have to teach others what it is. And I think we are like, because we are arrogant. I mean, marketing is one of the most arrogant function in a corporation. we tend to say, we know you don't know. And actually it's like, because we know, we bring you on board. We bring you on board on a discipline that, look, my old CEO at Coke, now it's old because it's also retiring at the end of the month, James Quincy put customers at the center of his business strategy. So if customer is at the center of business strategy, marketing is at the center of any organizations. But the point is that you need to seduce others, convince others, influence others, bring others on board, not only as other function, but as consumers.

28:17Walter Susini:Because at the end of the day, we are all consumer. And so that's why for me that it's important these four P's you are putting out there, because our job is not to tell others that we are right. And that's what we should be done. It's bring others on the marketing board. and you know I hear many like we need to learn the finance language we need to learn operations we need to learn everything at the end of the day we are the only one that need to learn all the others others need to learn nothing from us and I think that if you really change this dynamic that it's not us that we need to just learn the finance argument by the way, we all have a business degree.

29:11Walter Susini:I give a big news to those that don't do marketing. 99 % has a business degree. So we know what a P &L is. We know what the ROI is. So it's not that we need to start tomorrow to learn these things, but we need to bring this. I've been presenting the brands to the finance team many times at Coke, at Unilever. And if you find the right way to seduce them, You have an ally. But if you say, I'm marketing, you are finance, I'm marketing, you are sales, then it becomes a really difficult job. I love your framing of discipline rather than function. That's so helpful. I was debating actually with Corey on a Renegades podcast about what is marketing.

30:01And she was sat in front of 50 people and she asked them all to kind of write down what they thought marketing was. No two answers were the same. and we concluded when we debated it marketing is everything because everything can be marketing and this is part of the problem that a lot of marketers have because they reduce it to a function without realizing that influence is everything the company does now and in the future and once you reframe that as a discipline your influence has to be company-wide you can't just restrict it to the job i'm doing which kind of links me to the cmo role because i think the biggest challenge i had in my career was making the switch up to cmo because i realized my peer group didn't know what I did correct and suddenly all the topics and debates in the boardroom were about redundancies or financing or strategy or layoffs you know I mean it's like a completely different conversation you find yourself in and one where really you're a leader of the organization who just happens to be in charge of a marketing team you know it's much more that way around