I’m in B&Ts “Meet the Futurists” – marketing trends & predictions

B&T has come out with a new feature, “Meet The Futurists”. They asked me and a number of fellow marketing and advertising leaders what our views (predictions) were about marketing trends.

My answers covered: the media industry, digital marketing, the advertising industry, blockchain, marketing science (Ehrenberg), lean startup principles in marketing, artificial intelligence and plenty of other areas.

Here’s the piece on marketing trends / futures (click the image to download the PDF):

Here is the full interview:

What’s your one BIG FUTURE prediction for media in the coming years?

Media will go from a people heavy industry to a technology platform heavy industry. Artificial intelligence will drive applied media outcomes, where a couple of smart media strategists sitting across a number of software platforms will replace the jobs of thousands. This will massively erode margins and make most media companies shrink and die. Further, blockchain media attribution will provide clients with transparency they can only dream of now. These platforms will democratise the industry, drive increased transparency and trust, and better media and client outcomes, making it easy for any creative / comms / PR agency or client to take media buying in-house.

How will our workplaces change to suit?

In the old days, organisations grew, and with scale they gained certain economies: The ability to buy expensive barriers to entry, the ability to purchase sophisticated computers and software platforms, and the ability to hire top talent via expansive human resources departments that would ensure new entrants were facing an extremely steep battle in matters of cost, quality and scale.

However that has all changed. It’s now the opposite, as highly sophisticated software is available at a per seat, per month basis. Talent is now accessible via open online markets such as Linkedin. Huge computer systems that were once physical are now virtual, such as AWS. And even the manufacturing of goods and services has been commoditised via trading platforms such as Alibaba. Any founder or entrepreneur has BETTER access and ability than enterprise. A credit card is more agile than a procurement department.

So, the only advantage large businesses have over small businesses is their access to capital. But because large organisations don’t generally adhere to lean principles, they are afraid of marketing-based validation, and have mountainous layers of bureaucracy, their capital is wasted.

Our workplaces will therefore become smaller, more agile and more focussed. Like creative industries such as music and film, where vast swarms of teams gather to work on projects at various phases of production, marketing workplaces will be a mix of highly specialised people supported by a “sexy stack” of software, virtual assistants and AI bots enhancing and applying our knowledge and skills at scale.

Algorithms are fast replacing human brains. Should the thinkers and the creators be worried?

Linking neural networks and machine learning to marketing science will drastically simplify marketing strategies, tactics and approaches, and it make marketing much easier and more effective. Thinkers and creators will be empowered – most of the work of people in advertising, marketing and media could be easily replaced and most likely will be in the next three or four years. Audience identification, profit / revenue growth strategy, product optimisation, profit pool estimation, budget allocation, channel resource allocation, media planning, media buying, media optimisation, creative optimisation and workflow management can all be done with software now. Creativity, ideas, insights, innovation and corporate strategy cannot yet be done by machines. Creatives and planners should be fine – for the foreseeable future.

What will brands increasingly have to do to stand out above “the noise”?

As Peter Drucker once said: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions; marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

So how do brands then distinguish themselves with marketing and innovation and stand out above the noise? By adopting marketing science and lean startup principles. Marketing science is yet to make serious inroads, and until it is accepted rather than seen as a subjective fad, then marketers and agencies will truly struggle to achieve great results, and therefore be taken seriously by business leaders.

One of key challenges here is ensuring there is something to talk about – the products and services must be superb and distinctive. However the product innovation and product development lifecycles in business are generally too slow to outpace competition, so distinctiveness and excellence are increasingly difficult.

Further: Most efforts in business around ideas, products and innovation is merely internal noise – LMNA (Lots of Meetings, No Action). Worth nothing until it is shipped.

So therefore, market-validated innovation must play a more substantial role. Shipping and testing product variations, ideas and communications to new markets rapidly and iteratively is the only way brands will survive. Test every idea, every innovation, every suggestion at great reach – and learn in a mature, failure-filled way.

When Growth Stalls: How to Boost Growth in Large Organisations

The push to start new businesses continues. In Q1 2017, the number of seed and angel deals increased by 1.4 per cent compared to Q1 2016.

While small businesses are the heart and soul of jobs growth, it’s just as important that established businesses focus on growing – less startup, more scaleup; less entrepreneur, more intrapreneur. So how can large organisations grow? To sustain growth, there must be a continuous pipeline of growth initiatives that represent new sources of profit for your brand. What distinguishes companies that carry on growing is their ability to create these new initiatives along short, medium and long-term horizons (a framework featured in The Alchemy of Growth). Here are four pillars to consider as you take stock of your growth strategy.

Brand growth

Brand growth comes from distinctiveness and memory. Building memories and an understanding of your brand is essential so that at a potential purchase moment, buyers think of you over a competitor brand. How to get there:

Short term: Treat your brand like everyday is launch day and be in market. Revisit your marketing strategy to ensure all efforts are focused on awareness and acquisition. Not loyalty programs.

Medium term: Develop reach initiatives to drive further awareness of your brand. Sponsorship, display ads, outdoor, TV/video advertising and more, are effective at raising awareness.

Long term: Use your distinctive brand assets – jingles, logos, colours, taglines, and so on, in all communications for as long as possible. Over time they will become strongly associated with your brand and act as a mental cue in a purchase occasion.

Channel growth

Channel growth comes from improving access of your products and services to your customers and employees, changing behaviour and selling effectively. How to get there:

Short term: Audit your current channels and begin building the right infrastructure of physical and digital touchpoints.

Medium term: Improve your distribution channels to increase the effectiveness of your sales team. The more that non-value-added work can be removed, the more your salesforce is empowered to provide a personalised service experience.

Long term: Develop a single customer view to build pricing and product models. To ensure feasibility, continue to refine your product, price, and distribution methods.

Customer experience (CX) growth

Customer Experience growth comes from acknowledging a focus on the “moments of truth” that deliver customer-first experiences.

How to get there:

Short term: Audit the user experience of existing products or channels by looking at analytics data from past visitor sessions or from capturing user sentiment. Uncover experience issues and begin to define ways to improve conversion and ensure customer satisfaction.

Medium term: Create a contact strategy to identify gaps and communication opportunities in order to develop and innovate the customer experience. Having a consistent approach attracts and converts prospects but also maintains a greater number of customers for the long term.

Long term: Build products with a customer-first perspective using a Minimum Viable Product (MVP) approach. This allows the business to collect the maximum amount of validated learning about customers with the least effort.

Connections growth

Connections growth comes from connecting consumer insights (via data and analytics) to deliver new or improved products and services.

How to get there:

Short term: Audit your data and analytics to uncover insights about your customers, then determine the metric that matters for your business.

Medium term: Begin using your data to deliver marketing effectiveness. Test, learn, and refine innovations and ideas in market.

Long term: Develop a single customer view to build pricing and product models. To ensure feasibility, continue to refine your product, price, and distribution methods. The world is changing all around us all the time. To continue to thrive as a business in the next years and beyond, large organisations must look ahead, understand the trends and forces that will shape their business in the future and move swiftly to prepare for what’s to come.

Originally appeared in CMO Magazine

Why marketers should cut social media budgets

All too often, brands invest millions of dollars into social media for the wrong reasons. Paid advertising is a more effective way to acquire new customers than investing time and money into a social media presence.

The key to marketing success is to reach as many category buyers as possible. Your users need to be aware of your brand.

It’s a relatively simple concept. If someone thinks of your brand at the point of purchase, it increases the likelihood of a sale. So why do brands still invest so much into their social media presence?

According to The Journal of Advertising Research, social media attracts people who are familiar with, or heavy buyers of a brand. Think about it – you probably wouldn’t like a brand on Facebook unless you’ve already made a purchase with them or you’re already aware of their presence. If you’re going to acquire new customers, it’s important to reach out to new users and make sure they’re aware of your brand. Invest in higher reaching channels rather than focusing on your existing social media followers.

The proof is already out there. Brands will often back away from traditional high reaching mediums (such as television) to invest in social media, only to see a decline in sales. The Pepsi Refresh Project is a perfect example. Pepsi reduced its television investment to finance its social spend. While the project was live, Pepsi saw a consistent decline in market share, resulting in a loss of over $4o0 million.

Although this doesn’t mean that brands shouldn’t exist on social media. Social media can be a great tool for customer service, it can boost SEO and act as a content hub for thought leadership initiatives. Paid social advertising is a great way to reach users outside of your current social media following and drive customer acquisition.

I Sea: Awards are not the purpose of advertising

I worked in the music industry for many years, with many globally renowned artists, songwriters, composers, producers and musicians, from Max Martin to Mutt Lange to David Hirschfelder.

These creative titans always only ever had one measure of success: ‘How many units did we sell?’.

To them awards were largely an irrelevance. Advertising seems to work the opposite way. Many people claim to be creative – not to sell, but to win awards. Awards are not the purpose of advertising. The only role of advertising agencies is to reduce price elasticity of demand for their clients products and services through inspiring, memorable, high-reach communications.

This grows businesses. This increases total, long-term shareholder return. This builds 100-year brands. That’s what advertising does when it’s really, really good.

However, many, many ad agencies don’t understand business, don’t understand this concept, don’t aim for it, don’t measure it and ultimately add zero shareholder value.

So how do they measure success? How do they feel like they’re winning? Through Likes, awards, plaudits of their peers and other empty measures.

And in many, many instances, they are so unfocused, so utterly without purpose or vision that they create fake work in order to win creative awards at Cannes in the hope that they can win clients, do empty work without meaning and make enough money that they can traipse off to Cannes the next year with a bagful of fake work and win creative awards.And so on.

So much so that the KPIs of most ad agencies are populated with awards win metrics, so that awards become the sole focus of the agency. ‘Scam’ is even joked about as ‘Strategic Creative Advertising Marketing’. Not doing worthy work – but making fake work to win awards.

So, the creative awards shows are largely filled with fake work, with organised ‘voting blocks’, where countries and holding groups game the voting systems to ensure their underperforming sectors, geographies or brands can win awards.

 grandprix

They claim these creative awards will ‘allow us to hire better staff’ or ‘give us profile with clients’. However, these just don’t add up.

What adds up is that only approximately 20% of marketeers are trusted by their CEOs to drive growth in their business. That the average tenure of a CMO in a publicly-listed company is less than three years.

That clients all over the world are waking up to the fact that the trillions of Likes they campaigned so hard for haven’t added to their revenues.

What adds up is that to grow, CEOs increasingly turn to accounting firms and other consultancies to provide marketing and advertising services because they understand business.

What adds up is that advertising is losing the battle for talent; where will our talent come from unless our industry adjusts course and more agencies recognise the true, sustainable measures of success?

Ideas are the most powerful driver of business growth, but the most revolutionary and amazing ideas in the world today aren’t being judged at awards shows in the south of France; they are being judged through the consumption of sovereign individuals, consumers who seek to buy these ideas, fragmented into the shape of can’t-live-without apps, of memorable songs, of stunning product design, of brave start-ups, of beautiful stores, of essential credit cards.

This kind of commercial creativity – this creative gale of entrepreneurship and capitalist endeavour – needs the help of advertising agencies to grow and to flourish. Clients make this incredible stuff, it’s our duty to extract the intangible value and to inspire people to buy it.

What advertising creates isn’t worthy of award, but it is highly worthy of reward. Drag a person out of their living room and into your store. Build a website that allows them to buy something in such a beautiful and simple way that they’ll do it again.

Use data and insights to create and launch 1,000 new insurance products – one for every suburb.

Make someone change the way they drive home to shop in your supermarket. Build an app that gives service staff everything they need to make the experience incredible. Inspire and educate clients as to how marketing really works.

Create content so useful that a million people refer to it every year. Give millions a message so insightful, resonant and so well branded that they can’t forget you when they next want to buy your brand of drink. Do this every day. Find ways to measure it. Find every day success. Be rewarded.

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The purpose of agencies needs to move away from the disgusting work epitomised by Grey Singapore with its ‘I Sea’ app – disturbingly and predictably awarded at Cannes – and towards recognising the real growth and real success as measured through: client revenue growth; client share price growth; increasing internal rate of return, decreasing cost per acquisition; enduring advertising creative that burns its way into the consciousness of people who don’t care and don’t share; to convincing millions of consumers to buy the products and services of clients instead of a few giddy creative directors sitting in a room in Cannes.

A true democratisation of success. Real reward. Music to my ears.

McDonald’s new unbranded campaigns are actually very distinctive

McDonald’s recently released a series of advertisements which are completely stripped of any branding, yet the brand is still instantly recognisable. The ads show a close up of the food but have no text, logo, or mention of McDonald’s.

Mc donalds

mc donalds

Mc Donalds

McDonald’s is known to focus on food in its advertisements which, over time, has built strong mental connections between the food and the brand. This means that it can be recognised by its food alone.

This is similar to what Nike has done with the iconic Swoosh. Nike consistently used the Swoosh in every piece of brand communications over a long period of time, making it strongly associated with the brand. Now Nike can be recognised by the swoosh alone.

The best way to build distinctive brand assets is to create something that is unique and use it in all communications for as long as possible. Over time it will become strongly associated with your brand and act as a mental cue in a purchase occasion.

It is however risky to leave other brand assets out of your communications because over time they may deteriorate in peoples memories.

To find out more read: Would you like fries with your branding?

Why your brand should be as famous as Kim Kardashian’s bum.

Everyone knows who Kim Kardashian is, unless of course you have been living under a very very large rock. Kim Kardashian is…. well famous for being famous.

Most brands have far more value than Kim Kardashian, so why is she more famous? Every brand should strive towards being famous, and it’s possible, but we might have to take a few lessons from Kim.

How do I make my brand famous?…

Kim Kardashian is famous because she has very distinctive and memorable brand assets that she promotes incessantly. Kim Kardashian is defined by her consistent pout, overt cleavage, the alliteration in her name, the sound of her voice, her pop star husband, and of course her most prominent ASSet, that “broke the internet” a few weeks ago.

Along with being distinctive, Kim has a high reach fan base – her focus isn’t on an existing fan base, but on GROWING it. Like every brand, she loses people every day, but like the best brands, she acquires them in even greater numbers by spreading her fame to new people and new markets. A very effective acquisition strategy that every brand should emulate.

She’s currently on ‘Keeping up with the Kardashians’, has a diary full of public appearances, a plethora of product endorsements, has her own fashion and fragrance collections, a mobile game for iPhone and Android, she is always in the news, on the front of gossip magazines, penetrating your Facebook feed, and even at a mall near you. She’s everywhere, you just can’t avoid her, and this is what your brand should strive towards. Even if you don’t know about her nor care about her, you probably recognise and remember her.

This is like ANY brand. Consumers generally don’t care and don’t share brand stories. People have enough trouble building relationships with family and friends let alone brands – hence why brands have to be hugely distinctive and seek fame in order to be successful. Don’t rely on fan bases. Don’t assume strong levels of passion or knowledge. Just have that same vain desperation for your brand to be famous that Kim has for herself.

Kim Kardashian’s success is thanks to her multiple distinctive assets that are seen everywhere. This is exactly what your brand should strive towards.

  1. Your brand should be distinctive. Create assets that are ownable and unique. Like the McDonald’s Golden Arches and Coca-Colas “Dynamic Ribbon” typeface.
  2. Be everywhere, show everyone your assets. Reach as many people as possible with your marketing message and make yourself famous

Everything is in a constant battle for attention and memory. Every brand competes with Kim Kardashian. Make sure your brand is distinctive and famous in order to succeed.

Take Bart’s advice – Don’t sell your soul… to the discount devil

In the mid 90’s Bart Simpson sold his soul to Millhouse for a mere $5. After a series of calamities he realised that life isn’t the same without a soul.

Fast forward twenty years and it appears that brands haven’t learnt a thing from the world’s favourite animated bad boy.

Walk into any supermarket and you’ll be slapped across the face with an array of specials, markdowns and 2 for 1 deals, but does selling your brand’s soul to make a quick buck really pay off?

As a shopper who can resist a bargain? As a brand, however, does it actually increase the sales of a product?

The simple answer is no. By discounting your product you are cannibalising your future sales, training customers to only buy on sale and devaluing your brand.

How does this work? When a product goes on sale, people will purchase it at that discounted price, not full price. You’re giving away discounted product to people who probably would have bought it anyway, therefore eroding revenues.

If a brand of toothpaste goes on sale, for example a two-for-one special, people will buy more than one tube meaning they won’t need toothpaste for a longer period of time. No matter how cheap the toothpaste is, people are not going to clean their teeth more often. Discounting gives away product that would have been purchased in the future, it doesn’t increase overall sales.

Discounts also impact the way customers perceive your brand. Slashing prices gives them the perception that your brand has lower value, it also turns the conversation away from product benefits and providing need solutions and solely to price. This trains your customers to expect discounts and to only buy from you when you are on sale.

Three things build brands and increase sales:
Have a good product: if it’s a bad product people won’t buy it.
Be well remembered: with memorable advertising and communications, extract intangible value and tell people what makes your product great.
Well distributed: make sure your product is available for sale absolutely everywhere.

Price promotions don’t work.

People hate losing control (of videos) because they don't expect to

Yes, of course people hate those ugly video pre-rolls that appear before video content on YouTube or other video publisher sites. Video pre-rolls are totally annoying – almost as annoying as page takeovers that completely interrupt / destroy the user experience, because we have no control over them.

Let’s consider the context of an interruptive 30 second pre-roll.  We’ve sat through highly interruptive videos in the form of traditional TVCs for years, and despite benefit of using those times to run off and put the kettle on or using ad breaks as a toilet break, they’ve not been particularly good or bad. We don’t get too annoyed by TVCs.

So why are single video pre-rolls so f*cking annoying? Because we are interrupted in an environment where otherwise, we have complete control. Whilst in the digital space, we control our preferences, our options, our screen sizes, our content – everything is customisable, everything is under our command. One of the most attractive elements of technology and social media is the customisation of it – the purity of delivery and our ablity to mold it to our will completely.

We’re annoyed because they’re ultimately sh*t and they cannot be controlled in an otherwise totally controllable environment. Most of the time we spend on them, we spend looking or the little small “x” to close the video. (That some publishers / media companies claim this as a “click” is another story – and similarly annoying).

Control is something that we do not get from TV, that we’ve never had, therefore our expectations are lower, as are our frustrations when we are interrupted with ads. Even when we fast forward through TV recordings, we recognise the trade off between being able to time-shift and the delay in which we’ve been able to consume it – we’ve customised it.

We trust more when we control more. It’s why trust in technology companies is higher than most other companies – in dealing with technology companies and products, we assume that eager nerds have delivered pure products that we can control, interact with and pour our lives into. When this changes, we recoil in horror.

To subscribe, or not to subscribe?

The late Frank Thring once voiced a radio ad for Melbourne’s famous radio station, Triple R, dragging out his vowels and consonants in a very “Thring-esque” manner: “Subscriiiiiiiiiibe to 3 Triple Rrrrrrrrrrrrrr or dieeeeee a mis-er-able deathhhhh!”. So many companies want us to subscribe to their services, but what’s in it for us anymore?

The advantages for companies can be broken down into three major elements. Firstly, they have revenue certainty over the subscription period. Most subscription services are based on a minimum time frame, six months, twelve months, two years at a fixed cost per month.

Secondly, they understand who their customers are (we often hand over a heap of details when we subscribe).

Finally, they’re also guaranteed higher revenues if they bundle – forcing us to buy a heap of editions / channels / products / services that we wouldn’t ordinarily buy if they were unbundled. This is one of the biggest advantages for these companies. For example, Pay TV makes us subscribe to various channels in packages, even if it’s just a handful of shows we’re actually interested in. We might not buy a newspaper seven days a week, but subscriptions guarantee that we get the newspaper 7 days a week.

The past reasoning for bundling was that the cost of transmitting a single TV show to a single person would be so expensive as to make it a ridiculously low value proposition for the customer. If billions of dollars of pay TV infrastructure, satellites and digital set top boxes solely consisted to deliver four Collingwood matches and “On The Couch” just to me every month, it would be economically unfeasible. However, to amortise the cost across one hundred channels bundled up and sold to millions of Australians, then it makes more sense for all parties (although four Collingwood matches and “On The Couch” is the only good content on Foxtel). Similarly, I might only be interested in a single section of a newspaper, but the act of unbundling and offering for sale, for example, HiT or EG alone would be economically unfeasible for News Limited and Fairfax respectively.

Digital platforms are forcing content, products and services to unbundle. Let me describe it with an example from the music industry. Albums were the ultimate “bundle”. To get access to the three hit singles, you had to buy the full album, including filler. Record companies would “delete” the physical single after a period of time to ensure sales of the album were guaranteed, and demand for the brand/band was high, versus demand for the single product. iTunes commercialised (and legitimised) the unbundling of content by allowing people to buy individual singles from an artist at any time, and have them digitally delivered instantly. Even the lesser tracks on an album, those that weren’t economically viable from a production and marketing perspective, are now viable. The costs of distribution are almost negligible. Digital has obviously changed the business model.

Now, many other organisations are bypassing collectivism and distributing content, products and services through their own channels / platforms, at marginal cost. The iPad is one such supporting platform. So who will suffer, and who will gain?

Middle men will suffer. Content aggregators that act to simply distribute via a lowest cost business model, will thrive. Organisations who attempt to add value through elaborate, high overhead marketing and fixed distribution (like current record companies, book publishing houses and department stores) will suffer as they will attract less willing suppliers (who won’t be sold on their benefit) and less customers (who won’t be convinced to pay a premium).

Consumers will benefit. Amen.

The Viral Plague – Why "viral" videos are a waste of time and money

The Virus of Viral
A new, virulent plague has afflicted communications agencies and marketing departments all over the world; one that’s based on the flimsy notion that consumers can’t wait to latch onto branded content and share it with their friends.

In fact, there seems to be a prevailing thought that some sort of “consumer sharing pipeline” exists, all of them eagerly awaiting for their weekly dose of “Old Spice”. Do people really sit around on a Friday afternoon, scouring the interwebz, looking for a corporate video to fulfil their obligations and scratch the “viral” itch for the week?

Realistically, we know it’s not true. Despite all the chat about social creativity or shareability, sharing is something people do for two reasons alone:

  1. To benefit their friends
  2. To make themselves appear smarter/funnier to their friends

Just because your company thinks it’s important, it doesn’t make it true for most consumers. YouTube is littered with the detritus of agency and client attempts to create “virals” that have gone miserably – and expensively – wrong as a result of ignoring these fundamental principles.

Sharing is good
Sharing is a core part of the human existence. Socialising and discussing information and ideas can be mutually beneficial, while improving the welfare of our friends has a strong intrinsic value, and may also have the beneficial side effect that our friends start thinking better of us. Increasing the esteem we’re held in may act as the major motivator to share for some people, but is often merely the unintended benefit of sharing.

The two criteria listed above should be used to test the appropriateness of the content created by communications agencies and marketing departments. Ultimately, if they want their message to be shared, companies must provide content that adds value. That’s important not just because they want it to be, but important because it really is genuinely “arousing”: interesting, emotional, rational, relevant and salient. Or just laugh-your-arse-off funny.

Hurdles to Sharing
In order to create content that people will actually share, it must at least be objectively brilliant, and should also satisfy all of these criteria:

  • Access – The content must be extremely simple to access
  • Consumption – It must be very easy to consume
  • Comprehension – It must be self-contained and easy to understand
  • Benefit of sharing – It must be beneficial to my friends and/or make me look better
  • Cost of sharing – weighing up the ease of sharing against the benefits of going through with it. It should be ‘worth it’.
  • Currency – It must be new – or at least carry the high likelihood that it is fresh to the receiver / future receivers
  • Perceived benefit of receiving – when the person receiving it thinks it’ll be good, they’re more likely to investigate it
  • When they benefit and/or think better of you because of it
  • When they think their friends will benefit and/or think better of them by passing it on themselves

The Long Tale
Even if it’s great, it doesn’t mean it’ll be rapidly shared. Viral is an outcome, not a strategy. There are many excellent examples of brand information and other video storytelling that aren’t “viral”. Good content that’s well executed and is always there, always on, always accessible, will always be viewed, slowly but surely. This kind of content simply makes sense. It’s an effective way of extending communications across media; less about the short term-high burn, and more about the “long tale” of storytelling over time – where a single YouTube video can achieve reach and be of benefit for years to come.

As an industry, we need to stop getting over-excited by the lure of free distribution and rapid spikes in viewers and realise that, just like any other medium, social media has costs. Only then might we be cured of this epidemic.