Why your brand can't afford to be boring - Rebecca Darley, Vodafone Australia

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0:38All right, without further ado, let's go on with the show. Ladies and gentlemen, welcome back to Uncensored CMO. Now, this week, we have got Vodafone and their CMO, Bec Darley, talking about how she is challenging the brand leader Telstra in the Australian market. This is an amazing conversation. There's so many lessons in here about how to be a big challenger and also how to lead as well. This is a great conversation. You'll enjoy this one.

1:08Bec Darley, welcome to the show. Hey John, thanks for having me. Yeah, it's great to be here. And I love the fact you've turned up in brand colours as well. So anyone watching this will notice how on brand you are today. Yes, I have. We talk about brand codes and brand cues. I am living it. You absolutely are. Even down to the trainers. Now, of course, not even people on camera will be able to see the trainers, but you've gone all the way. I won't put my feet up on the table, but yes, they are red too. Exactly. It's good to see that commitment to the brand coming through. Just to introduce yourself, you've worked in many different categories.

1:38You know, what brands have you worked on? Maybe tell us what have you learned in experiencing so many different parts of the marketing world? It's a really interesting place to start, actually, because I've intentionally built a career across categories. And it's most simply because I love learning businesses. And coupled with that, marketing, in my mind, is a toolkit. And it's about knowing which levers in that toolkit to drive performance. And so that's the part that I've loved the most across the experience. I started out through the ranks of brand and advertising, actually. So the first 10 years of my career were in brand building, understanding brand positioning, customer insight, and also acquisition and really understanding demand generation and building future demand.

2:32So that stood me in really good stead. And the storytelling that comes with that is so powerful. I then spent the next 15 years of my career in really data, tech and digital. And what that's really given me is that full marketing exposure, that toolkit. And so that has really allowed me to know which levers are going to drive performance and where. But what it's also given me, and it's what many marketers struggled with if I go back kind of early parts of my career, So the understanding of performance and measurability, one of the things that always frustrated me was we knew brand and acquisition was working, but how did we actually prove it?

3:18And I think the beauty of what we do is the art and science. and so some of those brands and categories that I've worked across I spent some time at Vodafone 20 years ago we'll come back and talk about that I worked for Sony in Japan Ikea I spent a lot of time in Europe and in Sweden I worked for BMW for a time and I spent a large proportion of my career in banking here in Australia working for the number one and number two CBA and Westpac and And so it's been a little bit of a homecoming coming back to TPG Telecom, a parent company, a portfolio of brands of which Vodafone is a part. And so I suppose what I've loved and learnt the most is what I've touched on, just that breadth and the ability to understand different businesses and really utilise those learnings to power and empower the business that I'm in.

4:12Yeah. Something we'll come on and talk about, actually. One thing I noticed in my career, when you're working in the big companies, you tend to have quite a narrow role, don't you? You're in charge of comms or you're in charge of PR or you're in charge of products or something like this. I remember my learning massively accelerated when I left kind of the big corporate world, went into a PE-backed business. And suddenly I'm running everything, you know, down to like the staff uniforms. And I was answering the, you know, the Twitter handle and this kind of thing. And it's sometimes changing context as well, you know, where it can give you much more depth of responsibility, which is very helpful early on, isn't it?

4:48And then you suddenly realize that marketing has to make a difference to business. You can't get away with, oh, you know, we shifted our brand, you know, awareness score by 2%. You've got to go, is this going to materially impact the business? I've intentionally worked for, as you say, those big, large scale multinationals. I've worked for privately owned businesses. I've worked for market leaders. I've worked for challenger brands the thing I love the most about marketing the impact it can have on all of them but in very different ways and in very different contexts it's it's the power of what we do and the part that keeps us getting out of bed every day and then you realize as well you change one thing you see the effect on it on another thing or you can make remember when I was in sort of product back business we'd have to make trade-offs between you know if we launch this uh new product it means we're going to have to change the line over yeah means our customer service might drop it you know but we're trying to meet demand for a new trend and this sort of thing so suddenly you you see the impact the marketing has on a whole business in a way that when you're sheltered from it in a big business you go oh I'll change this I don't have to worry about the consequences you know all the way through the supply chain yeah I'm a generalist and that's the part that I love the most I have intentionally worked within all of the key marketing disciplines they're all like my children I love them all but I am an absolute generalist and I can go deep enough in most areas, but I also have specialists who can go really deep.

6:10And it's the trust and reliability on those people within your team and within the business that actually is what's so powerful. Yeah, yeah, that makes so much sense. Now, I must talk about Vodafone because, and I'd love you to give a bit of context to this, because anyone in the UK listening, I mean, I'm a Vodafone customer myself, number one network, everyone's heard of Vodafone, you know, dominant in the marketplace. It's not the same here, is it? It's very different. Yeah, just describe the market position and the backgrounds of the market here in Australia. Yeah, it's really important context for your global audience.

6:42So to your point, Vodafone is number one in the UK. We hold a very different position in this market. We are a laggard number three. So we have a very dominant number one player in Telstra, has between 50 and 60 % market share. We have a number two player in the market, Optus, sitting early 20s market share. And Vodafone sits as a number three at around 17 % market share. So for the global audience expecting Vodafone to be number one, we're far from it. And there's been some structural issues in this market that we've now overcome, but were real barriers for us. And I might even take a step further back and just give you the Australian context for your global audience, which is Australia historically has been a market of duopolies.

7:34We have two supermarkets here in Australia, Coles and Woolworths. We have two airlines here in Australia, Qantas and Wasanset and now Virgin in this market. And we've had a monopoly in this market on Telco, which is Telstra. And going back, we also had government ownership here in Australia until the 80s of our number one bank, being Commonwealth Bank, of our airline, Qantas, and of our telco, which was called Telecom Australia at the time and rebranded as Telstra. During the late 1980s, and I'm really not going back that far when you think about the late 80s, the deregulation by the government meant that they were privatised.

8:25And what that really did was open up competition in this market. So it was only the early 90s that Australia got its second telco brand, which was Optus. And that was followed by Vodafone being granted the third network license in this country. So really, when you think about it, what's that 30 odd years since we've had open competition in the market? And that, I think, is a really interesting point. And I'll double down on that by virtue of the government ownership. Telstra, our number one telco in this country, still receives over a billion dollars of funding from the government every year. So it's not a level playing field.

9:08That's incredible. A billion dollars. That's incredible. Yeah, it is. So to that end, being a third player in a highly commoditized, deeply penetrated, highly competitive market is really tough. And we're not going to win by being the same as every other competitor in our space. 100%. So as a challenger and as number three, what are the key principles to take on the Giants? I mean, a lot of people listening will be in that position. You know, a lot of people aren't the dominant player, aren't the number ones, have got less resource at their disposal, whether it's people or money or time or brand awareness, all those things.

9:52So it's a tough place to be. So what do you do? You know what? it's a tough place to be, but it's also such an interesting place to be. And so when I think about where we are at the moment, I would describe it as reawakening the sleeping giant would probably be the summary of it. And that has taken both confidence and patience as an organization. That confidence has come from a multi-year level of transformation. And maybe I start talking a little bit about what's going on in the business. The business has gone through a number of merger and acquisition activities. So we are a portfolio of brands.

10:37We've got six brands in the staple, Vodafone obviously being the key mainstream brand. that has led to a lot of work internally to really get the operational financial and commercial efficiencies so really the business is focused internally on being fit for future getting all of the internal structures right what that has now meant is that the business has the confidence to go to market but that confidence has come from two things firstly we sold our fixed fiber a network last year. So it's made us much leaner and stronger. It's also given us a very, very healthy balance sheet. The second thing is we doubled the size of our network last year.

11:24So we did a network sharing deal with Optus, which means that we are now on par with Optus for network coverage in this country. And that has always been the structural issue for Vodafone. What it's also meant is that by population, we are now 1 % behind Telstra. And Telstra has always owned network coverage in this country. So it's really the confidence now to boldly go out and talk about the fact that we are a credible alternative to the big two players in the market. The thing that we often forget though, is as much as we're talking to the external customer and consumer, We're also talking to our internal customer and consumer.

12:08And so that confidence is so important for our people. And that's part of where we've doubled down. We know, and I certainly know from my career, the riskiest place for any brand, let alone a challenger brand right now, is to be safe and boring. And we are striving to be anything than that. And that is really about shaking up the long-held category conventions and really calling out to consumers that there's a completely different way to think about things and not being afraid to do that. It's really interesting how you, because you might have assumed that you talk about we're going to be really close to our customer.

12:48And I know you are, right? Yeah. But you've got the internal job first, which I think is quite revealing, isn't it? Like what has to be true to be successful often means looking in and sorting out the internal things first and getting the infrastructure in place to then compete and give you confidence. I like that. Absolutely. It's a very good point. A lot of people skip that step in how do we make ourselves ready to win in a sustainable way. It's a hollow promise otherwise. And it was part of what attracted me back to the business a year ago. The business has done the work, will continue doing the work.

13:22We're now ready. And that's the point around patience in a business. This is a business and a group that has been very clear on what they need to do to set themselves up for that future success. And now's the time. There's a phrase the team at Mischief use, which reminded me of something you said there, which is how can you use your competitors' weight against them? You talked about the advantage that Telstra have, the billion dollars and the amazing network coverage. But you've lent into that in quite a surprising way. So just explain to everyone listening how you've lent into what might be perceived as your disadvantage.

13:58Where challenges struggle is that they start playing the same game as the category leader. And all you're doing is reinforcing the category leader. Actually, we've flipped the script. So we don't have the biggest network coverage in this country. We're behind by 1.5%. But let's own the truth around that. We've got coverage of 98.5 % of the population. If that 1.5 % in very rural, regional Australia is what you need, then we're not for you. And that's okay. So this is really about being clear on who we are and what we stand for and really having the confidence to stand behind that. And that's precisely what we've done.

14:41So to that end, we knew we wanted to talk to the market about that. we knew that we wanted to really give the market a shake and what has been really powerful is finding that brand persona who could really give the market that we jolt the job that we needed in a very real and very true way and so we intentionally partnered with the American comedian Ali Wong who has a very similar brand personality to ours straight talking fearless bold and disruptive and really the work that we've created with her is really questioning those category norms actually we don't have coverage in the middle of the outback we have coverage where most of you live so we're owning that and to your point we're flipping the script and being very clear on who we are and we're also being very clear on value and what it represents for people at a time when they need it the most.

15:44I almost describe it as a Venn diagram where being very clear on what the business offers and what consumers need right now, the sweet spot sits in the middle. And that's precisely what we're doing. Here in Australia at the moment, we've got the lowest consumer confidence since 1973. We've got fuel prices going through the roof. Our cost of living is rising as it is in many markets around the world. Our housing prices are challenged. The cost of living is a real challenge for people. So actually, what is it that Vodafone does? Well, we have great value mobile, but it's at a better price than the leading competitor.

16:27That's the sweet spot for us right now. And it's grounded in a real consumer insight and a cultural tension that exists. And we're really wrapping that functional need in a very strong and emotional brand promise. Now, just for anyone who hasn't seen it yet, just talk through the two ads you're talking about. They're both very funny. And she's a great front woman as well. She does an amazing job of communicating both the lack of coverage, I say in quotes, and the price advantage. But just describe the two commercials you created, because they're very good. Yeah. So the first spot sees Ali Wong standing in the outback and she has a very unusual animal standing next to her that she's not seen before, which she calls a massive chicken.

17:13In fact, it's an emu. And she's calling out the fact that emus don't need coverage and there's nothing here in the outback. And then we cut to see Ali in a regional backyard talking about the fact that Vodafone has coverage where 98.5 % of Aussies live. We haven't built towers in the middle of the outback and charged customers for it. That's at a direct juxtaposition to our major competitor. And you wouldn't expect that, actually. You wouldn't expect that. It's very challenging behaviour. It really is. Take your weakness and turn it into an advantage. Yeah. We're taking those perceived negatives and really translating them into those customer promises or customer values.

17:57The second ad is really pointed at our major competitor. We opened seeing Ali walking through a suburban park and she literally says to camera, Vodafone is cheaper than Telstra. Now we beep the Telstra, but you hear enough to know that it's Telstra. okay so Vodafone they give you that big fancy pants telco experience kind of like telstra only it's cheaper we then cut I didn't even notice the beep that's interesting yeah well that's good we have a beep we beeped the telstra well done yeah because I just assumed it was good okay you hear enough and we then cut to an office and we see two lawyers sitting there They're wearing the colours that are very clearly our major competitor.

18:45And we hear the lawyers say, did she just say Vodafone is cheaper than Telstra? You can't say that. Did she just say they're cheaper than Telstra? I'm just saying, why would you pay more? She can't say that. You can't say that. And then what ensues is a chase. The lawyers rush out of the office. They're chasing Ali. She's shouting into camera, I will not be silenced. Tell my story. The lawyers are chasing her, saying there is no story. And we end with Ali calling out that Vodafone is cheaper than Telstra. So it's pretty bold. That's pretty bold. It's bold work. Now, what I want to know is what your actual lawyers in your business thought of this idea.

19:25Yeah. You know, this is such an important and interesting point. We talk a lot about the role that the CFO plays in marketing. There is also a really important role that legal teams play. and certainly with this work. Our legal teams never once said no. In fact, they have been the safe keepers of the idea in partnership with us, bolstering the idea and really pushing us to make it as strong as we possibly could. That is the opposite of many legal teams that I've experienced. And part of that is inherent trust, transparency, and engaging early, actually. And so we sat down, took them through the scripts.

20:10And as I say, instead of saying no, they helped us make it stronger. They talked to us about, well, what if you phrase it this way? What if you change this line to this? And so they have in every sense helped create this work. It's not without risk. But it's calculated risk. And it's born out of a very clear strategy and a very clear vision. And then partnering throughout that process and the meticulous execution of that is where you start to see it build all the way from strategy through to what you see in market. I love that. Because you can imagine most marketers are going, oh, I don't want to show legal because if I show legal, they're going to tell me not to do it.

20:53You know, that's your fear, isn't it? But actually legal are there to help you and make it better. and they'll see the world in a different way. It speaks to the growing confidence in the brand and in the organisation and to the fact that we know we can stand behind it. It's not a hollow promise. And this harks back to the work that the organisation has done over the last few years in building the network, getting all of the functional capabilities internally right and being ready. And that is what attracted me to the role, knowing that I also had the partnering across finance, legal, the backing of my CEO to do this.

21:31And I very clearly sat in the interview with my CEO for this role saying to him, I'm a builder, not a maintainer. If you want someone to come in who's going to shift the dial one or two points, I'm not your person. But if you want to be brave and drive wholesale change, let's do it. And we're doing it. Now talking legal and stick on the legal theme, The other campaign we started talking about as well didn't go as smoothly, did it, as you might expect? It attracted a few complaints. I thought it was surprising, actually. I mean, it makes sense when you think about it, but not everybody was impressed, were they?

22:06No. And, you know, this is the thing about calculated risk in marketing and bold work. You have to be very clear on where those risks sit and be okay with that. we we have really become as marketers in my opinion quite safe and sanitized certainly as a challenger and number three you you have to take those risks and they have to be in partnership with your internal teams we knew we would get backlash yeah we'd planned for it in fact so you know it's it's something that we stare into it's something that i actually feel very comfortable with because embracing the discomfort is when you know that you're actually onto something.

22:53And that's what I think is really powerful about what we're doing. There was a really wonderful speech recently from Amy Kean, a social psychologist who really spoke about the age of boring. We're going to move beyond it. To quote Greg for a second time already, But they've got another quote of mischief, which is you don't have the budget to be boring. Correct. If you've got the number one position, you can afford to just blanket the entire country with your communication, eventually kind of get through. Yeah. If you're the challenger on a quarter of the budget, you cannot afford to be boring.

23:32No. It's not going to work. No. I'm outspent three and a half to one by my major competitor. I'm outspent two to one by my nearest competitor. Doing the same thing is not going to get me there. So I have to find ways to cut through and it has to be relatable. It has to be meaningful and it has to stand out. And that's precisely what we're doing. It's been really interesting since launching the work two months ago, the amount of messages and phone calls I've had from people saying, wow, that's brave, that's ballsy. Actually, it isn't. It's the right thing for us. The brave thing would be to be the boring thing.

24:08Absolutely. Absolutely. The riskiest thing you can do is be safe. 100%. Did it get banned? Yes. It did get banned? It did, yeah. So what happened after your first ad got banned? We had actually concluded the campaign and it was banned at the same time. The reason it was banned by ad standards, and this is the ironic part, was for health and safety reasons. And that was because we were calling out that we didn't have coverage in rural and remote Australia. I would go the opposite way. We're operating here in Australia in the least trusted category. We're being honest about where our coverage is and where it isn't.

24:51So that in itself has been rather intriguing. That's so interesting because you're absolutely right. You should be applauded for having absolute honesty and transparency about what you're not. That's so interesting. Yeah. Wow. It's a really interesting category. I've talked about the fact that it is so commoditized. It's fragmented. Price is a race to the bottom. It's deeply penetrated. And so reappraisal and switching is really where your growth is going to come from. What we're doing, though, is starting to move away from pricing gigs to really find an emotional positioning with our customers, recognizing the fact that not everyone's in the market right now, but we have to cut through and find ways to achieve that mental space for people when it's so limited and so compromised.

25:50So we're doing that in an interesting, irreverent way, so that when you do actually think about telco and where you might go, we're on that consideration set. We don't have an awareness problem. We have a consideration and conversion problem. And what I like about what you're doing with price is price communication doesn't have to be boring. There's a supermarket in the UK called Audi. It's a German supermarket, very famous for being low priced. And one of their ads is called Like Brands, where they kind of show you the brand and they pull the Audi equivalent out from behind. And you've got the price tags and it's like this, but like a quarter of the price.

26:28And the amazing thing about that is when we tested it on System 1, it actually got a five-star reaction. So it actually beat a lot of very famous brand campaigns because it was landing an emotional point for people. It's like, oh, wow, what do you mean I can get that for less? You know, we forget because we think of price as functional and rational, but price can be delivered in a very emotional way. Absolutely. It always has its place. But what we've really created here in Australia is we've trained consumers on price. Actually, we're not standing for more as a category. And I'll applaud Telstra for the work that they've done over recent years to really start to shift that.

27:12And we are doing the same thing. But we are adding the zag to their zig and doing it in a very rich competitor way. which is really resonating. It is, isn't it? I talk with marketers all day. Many of them say the same thing. Traffic is down, leads are down and they're not sure why until they realize what has changed. Most of their customers now trust AI to recommend the right brands to them and the first one that AI recommends, they go with. Visibility in AI search comes down to whether AI trusts your content but most brands have no idea where they stand. So how do you show up when someone asks AI about the things that you sell with HubSpot AEO.

27:53HubSpot AEO shows you exactly where your brand stands in AI search and makes clear recommendations on what to do to improve it without having to guess. So when someone asks AI what to buy, you're already the answer. Try it for free at hubspot.com forward slash AEO. You talked about optimization earlier, and I thought it would be worth talking about optimization because we're living in an age, particularly with AI, where we can optimize everything, we can drive everything to average, is there a risk that we're losing some of the creativity you're talking about? Because in a desire to be efficient, we're losing what is effective.

28:29Absolutely. I really dislike the term performance marketing. All marketing is performance, actually. It's just doing it over different horizons and to different objectives. We have to, and this is the art and science I talk about, we have to give ideas the breathing space and not optimizing them in a spreadsheet. And unfortunately, that's where some of the understanding of marketing in business has fallen down. The shift towards science and numbers should not be at the expense of brand building and great ideas. The great marketers are finding that balance because we have to deliver that dual objective of building future demand and driving current demand.