A History of Marketing

A History of Marketing / Episode 52Gian Fulgoni has spent 50 years as a pioneer in market research and audience measurement. From his work on scanner data at IRI in the 1970s to co-founding Comscore in 1999, Gian helped invent how marketing gets measured, first in supermarkets and then on the internet.His career sits at the center of two transformations that reshaped the field. At IRI, he helped pioneer the use of supermarket scanner data and built one of the earliest controlled experiments in television advertising, a system that could send different ads to different households in real time, in 1979. Two decades later, he co-founded Comscore to bring that same measurement rigor to the chaos of the early internet, building the panels and tools that defined how digital audiences and e-commerce got counted.Gian has lived through every major shift in modern marketing measurement, and he’s candid about what went wrong along the way. He has watched the industry get seduced by metrics that are easy to capture but don’t actually measure whether advertising works.In this conversation, we cover:* Why digital marketing metrics like click-through rates and ROAS are misleading, and why the industry keeps using them anyway* How scanner data accidentally flipped CPG spending from advertising to promotion and handed power to retailers* Why data shows that creative is the biggest driver of advertising effectiveness, and why the industry keeps ignoring that lesson* What the dot-com era might tell us about today’s AI revolutionListen to the podcast: Spotify / Apple PodcastsSpecial thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Tod Johnson, whom you may remember from episode 51 of this podcast, for introducing me to Gian.Andrew Mitrak: Gian Fulgoni, welcome to A History of Marketing.Gian Fulgoni: Well thank you. Thanks for the invitation to be here today.Andrew Mitrak: I want to start right at the beginning. You studied marketing in London and then moved to Pittsburgh to work in marketing. How was the marketing scene different between the UK and the US?Gian Fulgoni: Well, you know, marketing was kind of viewed as having originated in the US, but that’s really not the issue that I was focused on. So my undergraduate degree is in physics. Right? And while I might have been good at it in high school, it was like going from the minor leagues to major league baseball when I got to university. I had no competitive advantage in physics. I was trying to figure out what to do next, and it was the beginning of marketing, actually, in the US and certainly in the UK. I did some research and realized that marketing might be a good place for me to be.I did, I think, anticipate correctly that data and computers and the like, analytics, would become more important in marketing as time went by, which kind of reinforced my decision to major in marketing. I got a master’s degree in it. Then I got offered out of the blue. I got a job while I was still at school that took me to Pittsburgh, and it was a company named Management Science Associates that was started by a professor out of Carnegie Mellon who wanted to do research on things he was interested in. He started a company that was focused on analyzing data, basically. Processing and analyzing data. And that’s where I ended up.Is Marketing a Uniquely American Discipline?Andrew Mitrak: I want to follow up on, you said that it seemed like marketing had originated as more of an American field. It’s something that on this podcast I’ve actually encountered. Like I’ve talked to Phil Kotler, who is often called the father of modern marketing, and he kind of says that marketing is uniquely American or comes from an American tradition. And I’ve talked to folks though from abroad who reject that or they push back on that, and it’s just sort of like a North American bias. So it’s interesting as somebody who was in the UK, you kind of perceived it that way. Can you speak to that?Gian Fulgoni: Yeah, I mean there’s no question in my mind. There’s no question in my mind. For example, where I got my master’s was the only university in the UK that had a master’s degree in marketing. That was in 1969. I mean, you could get a master’s degree in marketing in a bunch of universities at that point in time in the US. There were only two MBA programs in the UK at Manchester and London. You know, you had dozens of them. So, if you look at all of the people who pioneered marketing, they’re really from the United States. So I don’t think there’s any question that the US was ahead at that point in time and maybe to this day is still ahead.Andrew Mitrak: So did you go into marketing knowing you wanted to go to the US eventually?Gian Fulgoni: No. No, it was, I had done some research, talked to some other people who were going on to MBA programs when I was in my undergraduate final year. And that’s what I decided that marketing looked really interesting. As I said, I think I anticipated the data and analytics, computers, would become more important there. But I had no idea, no intention of coming to the US. It was when the job offer came along that I suddenly thought, man, this is the opportunity of a lifetime. I gotta do this.The Early Adoption of Computers and Data in MarketingAndrew Mitrak: You were really early to computers and data in marketing. Marketing as a field in the UK was early, and then attaching computers and data onto it. How did you make that connection initially?Gian Fulgoni: I think in large part it was because the company I worked for, Management Science Associates, their business was helping companies use whatever marketing data they had. And that would involve taking raw data, if you will, and processing it, analyzing it, whatever data it was. It could have been panels of consumers, back in those days it was diary panels. Or it could have been shipment data that companies had, or it could have been Nielsen audit data, or another database was SAMI warehouse withdrawal data, or whatever data they had. And so I was able to learn the basics of what was available as data, how to process it, analyze it, how to improve it, and I think started to get a feel for what was not available that maybe could be a home run if it became available.Riding the Technology Wave in Market ResearchAndrew Mitrak: It strikes me, this is a little bit of an odd question, but have you seen the show Mad Men?Gian Fulgoni: Yes. Yes.Andrew Mitrak: It strikes me the analogy I was thinking of like people like you who adopted computers early. In that show, there is a character, Harry Crane, who adopted TV, and he became the head of television and sort of rode the wave of TV. And people like you were very early on to computers and data and sort of rode that wave. I feel like marketers who can identify the right technology ride a wave, it can propel you in your career. Do you think of it that way at all, like part of it is timing and finding the right technology and positioning yourself as the expert in it?Gian Fulgoni: Absolutely. Oh, absolutely. I mean, I have often said I didn’t create any particular technology. I just took advantage of breakthroughs in technology that allowed for the creation of new applications and new products. But I think I did see early on that it just had to evolve, right? Computers, it was pretty clear, were getting faster, at that point bigger by the way, we hadn’t reached the trend when things were getting smaller. But you could see that the data that was becoming available, that was changing. The way that data was being analyzed, things that could be done with data that wasn’t available at the time. I mean, the emergence of scanner data was a great example, because that changed everything in how consumer packaged goods marketers operated. One truth at least that’s evident to me is that data, the availability of data, can change markets fundamentally. And I think there are numerous examples of that in history, if you will, certainly over the past 40 years or so.The Founding of IRI and the Emergence of Scanner DataAndrew Mitrak: Can you tell me the story of what led to you founding IRI?Gian Fulgoni: Yes. Well, I wasn’t the founder. Let me say I was hired shortly after they had started the business. And as it happened, the person that started it, John Malec, had worked at Management Science Associates where I was at, so I knew him. And what they did was pretty amazing, even looking at it today. So basically, scanning was beginning to be installed in supermarkets, but it was nowhere near pervasive. And so what IRI did is they bought the scanners for the retailers in two small cities, Pittsfield, Massachusetts and Marion, Indiana. And they gave the scanners to the retailers with the understanding that the retailers would stock new products as they came along that IRI would bring to them, that they would only supply the data to IRI, and that they would accept an ID card from households who became members of the IRI panel. Alright? So that was the scanning part of it, and that was a breakthrough because then we were able to cover the entire city. And there was no other city in the US that you could measure.Inventing the “Black Box” for Targeted TV AdvertisingGian Fulgoni: And then they did a second thing that maybe was even more dramatic. They invented a black box that sat on the television set of these households. In these towns, you couldn’t watch over-the-air television, the broadcast signals weren’t strong enough, so you had to have cable. They gave the panelists, with permission, a box that allowed IRI to change the television advertising in real-time without you knowing when that was occurring. Okay, so it was targeted advertising in 1979. Crazy to think about it today, right? And so what we could do is we could send one advertising campaign to one half of the panel and a different campaign to the other half then read the impact by looking at the scanner data and seeing what they were buying. It was a home run! … In 1979.Andrew Mitrak: I have to ask. So this black box, how did that work? Did they detect there was a commercial break and change advertising was it just like almost any broadcasting?Gian Fulgoni: Technically they way it worked is that we had an agreement with the cable company and so we had a studio at the head end of the cable system and so we knew when the ad was coming down that we had to change. So if we wanted to reduce ad spending, we would substitute a commercial for anti-smoking or something like that, or otherwise we would be able to ride the ad over another ad that the client owned. Okay? And then the box, we would direct the boxes that we wanted to see advertising A to get A, and the other ones would get B. But it all happened in real time. So if you were a panelist, you gave them permission for this to occur, but you were never aware of when it was actually happening. And as I said, it was a home run in terms of its ability to measure advertising effectiveness. It was just a beautiful A/B test design. Very profitable business. And we took the company public in 1983. So that was way before scanners had become pervasive. And then there’s a separate story around that as we built out the capability nationally.The Tension Between Data Measurement and Creative QualityAndrew Mitrak: It sounds just, that tech sounds way ahead of its time. It’s so ingenious. As you got all this data and you ran these AB tests, were there any myths about consumer behavior that IRI helped debunk or what were the key learnings that you found?Gian Fulgoni: Yeah, that’s a really good question. So I’ll give you one example. I won’t mention the client, but it was a client that was spending a lot of money on television advertising. And they wanted to see if they could move the needle in sales. So they came to us and they said, we’re going to spend six times what we’re spending, and we want to do that as an experiment. And that was putting the equivalent of a ton of money. And so off we went. We ran the test for six months. I’m looking at the results and there’s no increment in sales. There’s nothing. Right? I’m thinking, oh, this is going to be trouble. I gotta go and present these results. And so before going to the meeting, I was talking to the head of research who had commissioned the study and I said, this is going to be really a problem, isn’t it? And he goes, no, no. And I go, why is that? He goes, well, six times nothing is still nothing. And his point was that the creative had never tested well. And so you put six times the money behind poor creative, and you get nothing. And that was a real learning point for me. Because it pointed to the importance of creative. And then we did other work that confirmed it. That basically, and others have done the same thing, it basically points to the fact that typically two-thirds to 70% of an advertising campaign’s impact is because of the creative, not the money that you’re spending or the media plan. And I think that lesson is kind of being forgotten today. It’s all become a question of how many impressions you shove at people.Andrew Mitrak: I feel like sometimes, and I’m generalizing here, the creative people are almost at odds with the data people, or that they feel like they’re in different camps of marketing. But in this case, your data was supporting the importance of creative, and it’s sort of a better together type story.Gian Fulgoni: Well, yes, except for the creatives who wrote the creative that we just tested. They probably didn’t like the results. Yeah, I mean, there’s always been that tension, and I suspect it’s probably still there. I mean, there’s just this feeling that they don’t like being measured. I don’t know whether it’s fear of failure, if you will, or just the ego saying, “Well, look, I came up with this great piece of creative. Why do we need to measure it?” I don’t know what it is, but I do know that it’s always been an issue. But as I said, I think one of the really troubling aspects of advertising today in the digital world is that we’ve gone to a point where the attention paid to creative is minimal compared to all of this automation that’s going on that I think is just trouble personally, but that’s my view.The Pitfalls of Modern Digital Advertising and AI AutomationAndrew Mitrak: Yeah, for sure. That people just think, oh, just automate away your creative. It’s like, well okay, then your creative is going to look like everybody else’s.Gian Fulgoni: Right. Exactly. And now we’re going to use AI to create the commercials. Right? And AI is going to decide where it’s going to run. And then we’re going to use synthetic panels that are AI-built to figure out the response. I mean, it just seems idiotic to me. But I think I know the drivers of this. I think the drivers are the technologies available, and there’s a need for speed and low cost. And that overwhelms sensibility sometimes.Andrew Mitrak: Have you seen that story play out before at all? Or does it seem uniquely different? Like, you’ve gone through a handful of technology shifts and a lot of excitement around a thing where “this will change everything.” And of course, it does change a lot, or things change a lot, but maybe the changes might be misunderstood. Do you feel like this feels like a familiar moment to you, or does it feel like something different?Gian Fulgoni: No, it does. It feels like an exaggeration of the availability of technology and maybe a lack of focus on, it seems to be technology’s ability to drive the metrics and the system, but nobody seems to be paying enough attention to whether those metrics are really meaningful or not, right? Or how to deal with them. I can talk a lot about that in a second, but I’ll give you one vivid example.The Unintended Consequences of Scanner Data on Market ShareGian Fulgoni: And it’s scanners, right? So at the time that scanners became available broadly in the US, if you were in the consumer packaged goods world, the only way to know what was selling at retail was Nielsen’s manual audits. So Nielsen would have 10,000 people or something like that around the country who would manually audit stores. They’d go in, they’d look at what was stored in the back room in the store, they’d get the invoices for what was ordered from the warehouse, and derive what was sold over a two-month period. And so marketers were using two-month data points. Alright? Now, if you use two-month data points, everything seems to smooth out, and it becomes, the lines of market share seem to look flat. There’s not a lot of variability in it. Well, imagine when one day scanning data became available, and it was measuring weekly sales movement. All of a sudden you saw those weekly sales responses that were hidden in bimonthly data. Right? And it was caused by the promotions that were running. Promotions in packaged goods had been running week to week. A manufacturer would pay a retailer to lower the price for a week, they’d get an in-store display, they’d run an ad in the newspaper, and then next week it would be another different manufacturer, probably in the same category doing it, right? Well, if the only database you had to measure the impact was two months of data, and these events were running week to week, you could never figure out what was really happening. And then scanning came along, and it was dramatic because in a flat world where change doesn’t seem to be occurring, advertising thrived. And typically, two-thirds of marketing spending in packaged goods went to advertising, television predominantly, and about a third went to promotion. When scanning came along, it reversed itself really, really quickly. Because all of a sudden the retailers could see what was happening, and the retailers had such power that they were able to demand more promotions. And the manufacturers had to go along with it. And suddenly all of their spending started shifting to promotion. And it went from 70-30 in favor of advertising to 70-30 in favor of promotion. And I’m not sure that enough thought was given to the impact on a company’s financials. And the retailers became much more powerful to this day.The Short-Term vs. Long-Term Debate Andrew Mitrak: As you do promotions, there’s sort of this race to the bottom, and then that led to this whole brand equity thing too, right, where companies started to say, “Well, you gotta, you can’t just measure sales week to week, you gotta measure your overall brand equity, and if these promotions are hurting it...”Gian Fulgoni: Yeah, I mean it’s a real issue. I mean, race to the bottom, you know, is maybe a little bit of an exaggeration, but if price becomes the driver of people’s buying behavior, that’s not particularly healthy, I would think, you know, speaking as a marketer. So, speed was a big driver of it, and the data, the ability to understand what was going on. And you know, if you then fast forward through the years, things get faster and faster, and the ability to run promotions becomes faster and faster. And if you were to say to a marketer or a CMO or a CEO today, “Hey, I want you to run a campaign, an advertising campaign, but it’s going to be a branding campaign, I’m not going to be able to give you the results for six months.” They’d laugh you out of the room. Right? I mean, I can’t wait that long. I gotta know within a week or within a day what’s happening. And the moment you have that perspective, you know, I think you fall into the trap of fast digital marketing with metrics that are available but may not mean anything at all. And so I kind of trace it, you know, the evolution, at least in my lifetime, from the availability of scanner data through to today when digital marketing is pervasive, and the next step is going to be what does AI do to all of this.How Scanner Data Favored Promotions over Creative AdvertisingAndrew Mitrak: That’s really interesting. I don’t know if I’ve heard it articulated that way, that the scanner, of course I was aware that scanners were related to promotions, but that scanners were almost the causality of accelerating promotions and amplifying promotions, and that because this is something that’s measurable, you kind of over-index on this channel because that is what’s being measured. Right. And it’s just interesting, you’re somebody who’s made your career in this form of analytics, and just kind of hearing that you’re able to reflect on some of the unintended consequences or it kind of being taken the wrong way or going too far, is just kind of an interesting reflection.Gian Fulgoni: Well, I mean, maybe I had too negative of a view of it. I mean, when all of this reality hit home, a new area of analytics emerged, which was trade deal evaluation, price promotion strategies. And the big consulting companies took it over, right? It wasn’t the market research companies that owned that. I mean, the charge for those big studies was way, way more than we would ever charge. And you had to have the credibility of McKinsey or Bain to be able to get away with it. But it did drive a lot of thinking about, you know, how do you run these promotions, you know, with these retailers, and, you know, what should your price strategy be, etc., etc.The Early Days of E-commerce MeasurementAndrew Mitrak: So, you were early to adopting computers and data with marketing. When did the internet come on your radar? And what was your initial encounter with the internet? And as somebody who’s an early adopter of technology, what was your initial impression of, “oh, this is going to be big, this is going to be important for marketing”?Gian Fulgoni: Yeah, I was probably not as early as I should have been in the impact of the internet. I was invited to join the board of a company called Yesmail that was doing email marketing, basically. Around 1999, it became clear that the internet was accelerating, I mean, we didn’t anticipate the dot-com bubble at that point, for sure, and that there was the opportunity to kind of replicate what we had done at IRI on the internet. Alright? And my business partner and I, who had been president of IRI, and you know, when I was CEO there, a gentleman named Magid Abraham and I started Comscore. And the idea was, there were two aspects to it. One was e-commerce was emerging, why don’t we build a system to measure e-commerce trends across all categories, not just consumer packaged goods? And as a byproduct of that, we’ll be able to measure the effectiveness of digital advertising on online sales. Easy to say, not too easy to build. There’s no UPC code. So we had to develop all these screen-scraping technologies to just pull the data off from the computer screen. And then you had to have massive panels of people. And we had to figure out how do you recruit 2 million people who will let you, who give you permission to put our measurement software on their machines. So we figured that out and started measuring e-commerce, and we were the only independent company doing it. So we’d get invited onto Squawk Box or Squawk on the Street, and during the holidays, Black Friday, we would always be on predicting what was or reporting on, you know, what had happened. Um, so you know, it worked out well, and we started measuring advertising effectiveness around the same time.The Dot-Com Frenzy and 24-Hour Financial News NetworksAndrew Mitrak: So Squawk Box, was that CNBC or like Fox Business?Gian Fulgoni: It was CNBC.Andrew Mitrak: And this is like the rise of CNBC as well, as another part of the internet dot-com era, is that 24-hour news is a thing, and then all of a sudden 24-hour financial news and stock markets. And this is when people kind of, I feel like, an early wave of consumers sort of getting into the market and trading and all that. So you found Comscore, and you’re kind of a thought leader who’d appear on those types of shows?Gian Fulgoni: Yeah, we always looked for that. I think one of the things we did pretty well was marketing ourselves. And you know, we knew that if we could get onto Squawk Box first thing in the morning when a lot of stock analysts and traders were watching it, and you know, eventually we were public, that’s going to be good for the business. But this was in the early days, this was like 2001, 2002. We went public in 2007. So this was before we went public, but we got the publicity, and you know, that just helped the business, that helped the customer base, if you will. We started getting a lot of inquiries from companies wanting to buy our information and so forth.Bringing Market Research Rigor to the Wild West of DigitalAndrew Mitrak: Let’s go back to founding Comscore. Something that I’ve observed is that when a new technology paradigm emerges, often people kind of bring things in from the previous paradigm. Like, if you look at the very early movies, for instance, like the silent movies, they almost film it like it’s a play. A lot of movies just sort of point a camera at the stage. And then sometimes you see this with tech too, where early internet advertising kind of looks like newspaper advertising. It doesn’t sort of look like internet native, per se. Were there any things as you were figuring out and building Comscore that you’re bringing from IRI that did or didn’t translate into this sort of new paradigm?Gian Fulgoni: Probably more in the area of the underlying technology than anything else. What I mean is, as opposed to us figuring out how marketing was going to evolve. I don’t think it was that so much, but we certainly did understand the importance of scale in our data collection platform. That it had to be scalable in a massive way because it was clear that we would need to measure more and more and more things. And remember, at the beginning there was no social media, there was no search, there was no video. All of those things emerged later, but we had to make sure that the basic technological infrastructure was able to handle it. We did also though, um, bring over analytical methods that had worked for us. I mean, we knew the importance of measuring individual consumer behavior at the individual consumer level and then aggregating it up. We also knew the importance of A/B testing. We understood clearly the difference between causality and correlation, which I still think haunts digital marketing to this day. So, you know, we built out a company that used a lot of what worked for us at IRI in terms of technology and analytical approaches. And you know, how do we market the company? And what’s the best way to build it and grow it, and what kind of people do we need and where we’re going to get them.The Comscore Competitor LandscapeAndrew Mitrak: It’s an interesting story of a dot-com era company, that’s a startup being founded by veterans of an industry. You’re well into your career at this point, you have this long track record at IRI. Were there any competitors that were young, fresh out of college startups who didn’t really, maybe they knew the tech but they didn’t understand the fundamentals of marketing and running an analytics business?Gian Fulgoni: Uh, that’s a really good question. I don’t think so. I mean, the two competitors, the two competitors I can remember, you know, was NPD and Media Metrix [See Tod Johnson episode to learn more about NPD and Media Metrix], right, who were the first to measure audiences. And then Nielsen was doing it. And neither of those companies were being headed by young executives. So I don’t think I, I can’t maybe I’m not remembering accurately, but if you were to say to me, so who were the competitors you were worried about at that point in time? It was Nielsen and Media Metrix, you know, no question. So that’s an interesting question. I’m wondering what the implication of that is.Andrew Mitrak: It’s an interesting example because usually, very often when a new technology emerges, it paves the way for some new disruptor or somebody who’s kind of native to that category to have an opportunity. But it sounds like sort of the bigger, more established players, I guess Comscore was a new company, it wasn’t part of IRI, right? But it was founded by people who are veterans.Gian Fulgoni: Yeah, Comscore was really new. You know what it could be, Andrew, as I think about it, is that where the young kids were going was into the, they were forming the companies that were executing things online, whether it was e-commerce or advertising or whatever. And the whole industry was still young and relatively small. And so the need to measure some of these things maybe wasn’t as obvious as it was to us, where we came from legacy businesses that were pretty big. Right? And maybe we were anticipating that as e-commerce got bigger and as digital advertising got bigger, the need for these measurements would just become more and more important.How Cookies Inflated MetricsGian Fulgoni: Now, that’s not to say that there wasn’t a need for certain data elements at that point in time. And the one I will point to probably more than anything else is audience measurement. Alright? That was there because to get the advertising dollars, you had to show what, you know, how many people you were reaching. And that led to a big issue. A big, big issue. Because most of the website operators, the publishers let me call them, right, whether it was a newspaper or an e-commerce site or whatever, but you know, they wanted to get advertising dollars so they needed to show the size of how many people were visiting their website.And so they would turn to their analytics, their website analytics. Could have been, I don’t know if Google Analytics was around at that point, but there were a bunch of different, I think Adobe had some. And the problem that we highlighted is cookie deletion. And so all of these analytical tools running on the website were basically counting unique cookies. Well, if the cookie, if Jack Smith visits the website, goes off, deletes his cookies, and comes back, he’s going to be counted as a new visitor. And the cookie deletion was prevalent. And so the audience counts were grossly inflated. And we came along with much, much lower numbers. And so the arrows were being fired at us at that point, but you know, I think we did a pretty good job of clarifying that issue and pointing to what the real numbers were.Andrew Mitrak: Interesting. So the publishers have an incentive, because they want to charge more money to advertisers, to sort of raise their profile and say they have more numbers than they do. They kind of have an incentive to sort of overlook these cookie issues or other things. And you’re kind of coming in as a more neutral third party who’s calling balls and strikes and saying, “Ah, this is a different approach.”Gian Fulgoni: I’m not saying that they were doing this on purpose knowingly, that their counts were inflated. I mean, a lot of them didn’t. Nobody realized it. Nobody understood the degree of cookie deletion. I mean, we at Comscore produced reports that showed how often these cookies were getting deleted. Right? And then what did that mean to the overstatement of the audience. But you know, not everybody liked to believe it, and so it became a kind of a rough time, if you will, because the advertisers wanted to know what the true numbers were. The publishers wanted the highest number possible. I mean, no surprise there, right?Andrew Mitrak: Yeah, and at the time also, this is, I was probably a teenager or something like that at the time, using the internet, and if I recall on your browser, it was sort of just a hygiene thing. Like, “Oh, it’s running slow,” “Oh, whatever, delete your cookies, refresh.” And it was sort of just like a thing that you’d do. A listener who’s younger might not delete their cookies every day now, or cookies don’t really even exist anymore, right? So in some ways you’re vindicated about that. But it was just a behavior that you’d do, almost like defragging your computer, which you used to do or something like that. You just sort of like delete your cookies more often.Gian Fulgoni: Yeah, but you were also, what you also needed to wipe off was malware that could have been on your machine. And so the systems you were using would do both. I mean, it would just clean, you know, very few people would say, “Well, delete the malware but leave the cookies on.” Right? And so everything got wiped off, and you could, as I recall, you could delete it as frequently as you wanted. And so we had these charts developed that showed according to the frequency of deletion how much the overstatement was of the visitor counts.The Flawed Fixation on Click-Through RatesAndrew Mitrak: Interesting. So something within this is that you kind of pivoted from doing more e-commerce tracking to doing audience measurement, right? Was this sort of a deliberate pivot for you?Gian Fulgoni: Well, we always, so let me separate advertising measurement into two buckets, if you will. There’s the audience measurement part, and then there’s the effectiveness measurement part. We always were after the effectiveness measurement part. Because we had the sales numbers so we could do it. So we were doing that from the beginning. In terms of the market for the straight, you know, counts of how many people were visiting a website, that, the importance of that, I think emerged for us a little later. And you know, that’s when we went, you know, full tilt and introduced our product, which was built to scale and it was very successful. But yeah, I mean, we did know that there were multiple market segments that would emerge if we could capture the data, the variables for all of the elements that we were interested in. What we didn’t anticipate is the degree to which these computers were spitting out metrics that were irrelevant. But if you wanted to ignore that and leverage them, you could do that, and I’m heading straight down the path of identifying the click.Andrew Mitrak: Yeah, click-through rates.Gian Fulgoni: Pioneering work on that. I personally did a lot of it, where we basically showed that in a controlled test, so we’d look at click rates and then we’d look at the advertising effectiveness measured by an A/B test. There was no correlation. No correlation.The “Punch the Monkey” Era and Misaligned MetricsAndrew Mitrak: And it’s funny from this era as well, the advertisement that I have sort of a vivid memory of like on the internet was this “Punch the Monkey” thing where like it was a banner ad where like a monkey would dance around and it’d say “Punch the monkey,” and if you move your click over it or mouse over it, it says you just want to like click the monkey with something. And the trick of the ad is that anywhere you click on it, it works, whether you hit the monkey or not. But it’s just like, I don’t even remember what it was advertising. It was probably some scam or something like that, but it’s like it was everywhere at the time. And it was just purely designed to click on it. And it’s like, and they’re just like amping up clicks.And I think a lot of ads that were display ads or banner ads that we now almost think of as like a type of like a brand advertising and not necessarily optimized for a click in the same way, at the time, you’re sort of forcing those into clicks because that’s what got measured. And so it’s just sort of like a lousy ad that was sort of hacky. And so people kind of played games like that.Gian Fulgoni: Yeah, well if you were getting paid per click, you know, you’d want more clicks. Right? The problem was if you looked across the internet, the click rates were one in a thousand on average, right? And yet they were being used to evaluate the effectiveness of ad campaigns. I mean, the numbers were so small they were ridiculous, but then we provided more than enough evidence that it was irrelevant. Right? And here’s the problem, right? We could never get the entire industry to stop using clicks. Because they’re fast, and they don’t cost anything to produce. And I remember doing surveys of the industry, and I asked advertisers, publishers, and agencies, “How often do you use click rates to evaluate the effectiveness of ad campaigns?” A third of them said always. And this was after all this research had been published.The Overstatement of Digital Advertising’s ImpactGian Fulgoni: And I think if you fast forward now, you know, years later to look at what’s going on with digital marketing, there’s something really wrong with it, in my opinion and others, that the metrics that are being used are completely wrong, and they’re not measuring advertising effectiveness. It’s been said, you know, if you were to take and believe all of the studies that have been published about the effectiveness of digital advertising, the size of the US GDP would be double what it is today. And I think it’s a valid point. Not everything that can be measured matters. I forget who said that, it might have been Einstein, but it’s true. And unfortunately, in a digital world, these computers are throwing out digital markers all the time of likes and interest and clicks. And then the... I might be old enough to know the way that one should evaluate advertising effectiveness and the difference between causality and correlation, but I think the industry has gone crazy for these metrics that just don’t seem to be doing what they think they do.So I’ll give you an example. There’s a metric called ROAS, return on ad spend, that you might be familiar with. Right? Well, when you look at “return” on ad spend, it suggests it’s measuring the effectiveness, right? And the incremental lift you’re getting, right? Well, there are so many stories circulating where a CMO goes into the CEO and says, “Oh, great news, you know, the ROAS on our campaign is fantastic, here it is, it’s 4.6.” And the CEO goes, “Well then you explain to me why our sales aren’t growing.” We are in my opinion, in a phase where the effectiveness of digital marketing has been grossly overstated. I’ll go on record as saying that. And I think the drivers are you got so many metrics that are available and it doesn’t cost anything to use them. And you need the results quickly. So speed is another driver. And you end up using approaches that don’t necessarily do what you think they do.Andrew Mitrak: Do you think on net it’s overstated more because of bad practices and waste dragging it down or do you think it’s overstated because there are fundamental limits to how effective it can be?Gian Fulgoni: That’s a really good question. I would say both. I’d say both, and I would add a comment on the second one, which is creative doesn’t seem to be getting a lot of attention in digital marketing these days, right? And if one believes that an AI system can create the kind of creative you want, good luck with that one. I mean, as you said, I mean, if one believes that then all the advertising that’s coming out is going to be the same, everybody’s going to be using AI applications. An interesting thought is one AI application going to be better than another one at creative things.Andrew Mitrak: Yeah, for sure. It’s silly. There’s this Disney Pixar movie called The Incredibles. And there’s this villain in it, is this guy named Syndrome. And one of the things he says is he wants to give everybody superpowers. And he says, “If everybody has superpowers, nobody has superpowers.” And I kind of think of that with AI sometimes, of like if everybody has an equally capable AI to do all their stuff, well then how do you stand out in that world? Right? And play that. And I do think that the answer is actually that there is sort of a human element plus AI has to be part of the equation, that some “what are the things that I could uniquely make with AI, or AI could not make uniquely without me,” and then having some human touch. I just, maybe it’s just me being too sentimental for the value of humans, but I think that human touch has to be a part of it.Gian Fulgoni: I think you’re right. I hope you’re right. You know, and maybe, maybe it’s the prompting that’s going to be the solution there. Or maybe some of the other data that you need to collect on your consumers. I think that’s the other thing that seems to be slipping is, you know, “Well, how much do you know about your buyers as human beings?” Right? You know, and that kind of leads to this whole thing of “are we going to get AI doing automatic buying for consumers?” There’s a big split on that today, right? Some people say it’s crazy. I’m probably in that bucket. You know, that maybe it’s because I’ve just been around buying measurement for so long that I know that it’s not as rational as we’d like to think it is. It’s not. I mean, people don’t, you know, a lot of things affect the decisions people make about what they’re going to buy. You know, so I find it hard to believe that an AI, you know, ultra-logical system is somehow going to emerge as the way that the average consumer buys. That’s just me.Andrew Mitrak: Yeah, it’s funny. I am sort of in both worlds. I definitely am, I think it’s actually really useful to look at history and look at big trends and see what happened before. And then I am also like, I am very bullish on AI and a lot of things. But also, I don’t want to get over my skis, and I want to learn from things. Like you went through the dot-com crash, and it’s not to say that the internet wasn’t important, the internet was really important, but maybe it just got a little ahead over its skis. And I’m wondering, like, if you think of that era, are there lessons you draw from that? As somebody who navigated that, still had a successful business after that, probably went through some pains through it. Do you think of lessons from that era that you kind of have in mind today?The E-Commerce BottleneckGian Fulgoni: Yeah, no, I do, and I think it’s a good, very good analogy. Because if you look back at the internet and say, “Well, what happened with the bubble?” Well, it got way over its skis, right? The pricing and the valuations were crazy. I mean, you had companies that had no revenues, let alone no profits, were getting these crazy valuations, and then it was all hyped up, maybe inadvertently, but you know, and then it crashed, right? And a whole bunch of companies went out of business. Right? But what was left was a real foundation of technology and infrastructure, I think, that was then built on by the companies that either survived it or that then came along. And it became stronger than ever. And you know, if you look at, if you had bought a bunch of these stocks after they had crashed, you’d make a fortune given what happened to the right ones. I mean, a lot of the companies went out of business. But it is, it’s fascinating to me to see.And the one example I’ll give you that people point to is Pets.com. “What a stupid idea that was. I don’t know what thought of that.” Well, all you gotta do is look at Chewy today to realize that somebody made a lot of money, you know, on that basic idea. So, I think a lot of the ideas maybe failed because the capital infrastructure needed for them evaporated and so they were gone. But they came back in a different form later. And I think that might well happen with AI. I mean, the amount of money that’s being pumped into it is such that I personally believe it’s got to lead to a whole bunch of companies failing. Right? The question is which are the ones that, you know... some of these applications just seem to me to be way out there.Advice for Marketers Navigating Tech RevolutionsAndrew Mitrak: We’re looking at it kind of like on the company level or the sector level. Do you have any insights on like at the level of an individual marketer, or somebody who works in marketing and is thinking of like their career ahead? Are there any takeaways from that besides, I guess, looking at which companies will navigate it well and wanting to align yourselves with them, sure, but as a marketer are there any thoughts you have for an individual?Gian Fulgoni: It’s a great question, Andrew. The one thing I will say that I think has been true in my time on this planet is that if you are running a business, it’s a lot, lot easier to reduce your costs than it is to build your sales. And I would say that my feeling is that I am no doubt that AI is going to reduce costs dramatically for a whole bunch of companies. Now, is it at the same time going to help them sell more? I don’t know about that. Because if everybody has the same capability, I mean, you go back to what we were talking about earlier, right?What’s the competitive advantage that allows you to sell more than your competitor? I don’t know.I’ve heard one theory say that, and I think this was referring to companies in the service world, whether it’s consulting companies or auditing companies or whatever, right, where their assets are people. And they could reduce their operating costs pretty significantly using AI, I have no doubt about that. But once that’s done, is everybody then at parity? And what are clients going to say? A client’s going to say, “Well wait a minute, I’m not going to pay you the same amount of money I was paying you before, if you’re now making three times what you were making before.” So, I’m not clear in my mind on the impact of AI on the sales end of industries. I’m very, very bullish on its ability to reduce costs, but I also think there’s been hype about it. You know, maybe I come from the analytical world, but man, we’ve been talking about AI and its analytical contributions for years now. This isn’t, you know, like the past two years, and I’m still waiting to see more evidence of these breakthrough analytics that weren’t possible before AI. I mean, I’ve heard of a few, but nowhere near what the hype would suggest. I am worried that the purity of the analytical methods that I kind of grew up with has been kind of laid by the wayside today. And we are just dealing with a lot of hype and a lot of exaggeration.By the way, one other thing that I will go back to, just go back to the internet, that I think is important to realize that I didn’t comment on. If you look at the financial results of internet companies, you have to separate them into e-commerce companies and then advertising-related companies. The advertising ones are making a fortune, okay, the ones that survived. Maybe the newspaper industry was decimated by it, but if you look at the amount of money that’s being made through advertising, it’s mind-boggling, right? If you look at e-commerce, there aren’t many companies who can point to profitable operations if they have to ship products that are in any way, shape, or form heavy. I spent about 20 years on the board of a public e-commerce company that got around that issue called PetMed Express, and we sold pet medications. You had to have a prescription from your vet. But we were shipping products that didn’t weigh much. And so as Amazon forced retailers to go with two-day free shipping, and then, you know, the pressure’s on to do one-day free shipping, we were able to, you know, just survive and actually thrive in it, because the cost of shipping these light prescription products was not a constraint. And you know, maybe that’s another thing that will play out in some way with AI, is that depending upon the type of application of AI, you’re going to be making a lot of money versus not. I’m just kind of throwing that out as a hypothesis.Anticipating the Next BottleneckAndrew Mitrak: That’s right, that you optimize up to the bottleneck, and with the internet and e-commerce, the bottleneck is heavy freight shipping, right? And that’s just a problem that the ones and zeros and digits of the internet can’t kind of solve the atoms and weight and things of the physical world. And that I’m wondering what there are blind spots of the optimization of where are the next bottlenecks, where it gets up to this point and then there’s something, and then how long do these bottlenecks last? It’s kind of an interesting one.Gian Fulgoni: Yeah. No, that’s really interesting to think about. And I think it is also really valuable to look back and see what one can maybe decipher from the technological shifts that have occurred in the past.Andrew Mitrak: Gian Fulgoni, I really enjoyed this conversation, and I think listeners will too, so I just want to thank you so much for your time and for your insights. I really had a good time.Gian Fulgoni: You’re welcome. You’re welcome. Thanks Andrew. I appreciate the invitation. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 50Fifty episodes felt like a milestone worth marking. So I wanted a guest who was, well, obviously awesome.April Dunford is the authority on positioning for B2B tech companies and the author of the updated and expanded edition of Obviously Awesome. I’m a huge fan of April’s work and frequently reference her book, her blogs, and her frameworks in my daily work as a marketer. April’s premise is provocative: positioning cannot live in the marketing department alone. She argues that if the CEO, sales, and product leads aren’t in the room providing input, marketing is left guessing about what makes the product special and who it is actually for. Without their buy in, marketing will inevitably lose the “battle of opinions.”In this conversation, we discuss:* Building on Ries & Trout: The positioning pioneers defined the concept in their 1981 book, but they didn’t give a how-to manual. April does.* The death of the “positioning statement”: Why filling out a template is not a methodology.* Blind men and the elephant: How sales, product, and marketing departments each hold a different piece of the puzzle.* Skip the parts people don’t read: April discovered that CEOs don’t finish books, so she cut her manuscript in half.April is one of the most persuasive and grounded thinkers in the field. Here’s my conversation with April Dunford.Listen to the podcast: Spotify / Apple PodcastsSpecial Thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.The Origin of April Dunford’s Positioning FrameworkAndrew Mitrak: I have a confession to make. Every time I join a new company, among the first things I do is I visit aprildunford.com and I enter my new email address and I download one of your positioning templates. You probably have several of my old corporate email addresses cluttering your mailing list. Sorry about that.April Dunford: I appreciate you jacking up my newsletter subscription numbers.Andrew Mitrak: And a big fan of your work and I want to say congrats on the updated and expanded edition of Obviously Awesome.April Dunford: Thanks. I’m super excited to get it out there.Andrew Mitrak: For this conversation, I wanted to start back before you became the go-to expert on positioning, and when you were coming up in your career, when did you first encounter the concept of positioning?April Dunford: That’s a good question. Pretty early, actually. My first real job in tech was at a little startup and I was brand new and junior, they assigned me to a product and the thinking was that product wasn’t doing very well and the plan was to shut it down. This is why I got assigned to it as the product marketer.We didn’t end up shutting it down. What we ended up doing was looking at gathering some feedback from people that were using the product, and then we got an idea to reposition it. We didn’t know it was called positioning, we thought we were doing, we’re just doing a Hail Mary thing to see if we can make this unsuccessful product successful doing something slightly different.We repositioned it, relaunched it, and it was super successful. Revenue started going up to the right, everybody’s happy, we’re making a lot of money on that product.And then we got acquired by a big company in California and the big parent company assigned us a couple of products that weren’t doing very well and then said, hey, do that thing you did with the other one. I didn’t have really any idea what we did with the other one. I was worried about getting fired, I thought, okay, I better figure this out.I did a deep dive into positioning. I figured out, A, this is what it’s called. B, I had a lot of conversations with smart marketers asking them about, how do you do positioning? If you were in this situation, what would you do? Do you have a strategy for that or a methodology for that?I also read a bunch of books. There’s the classic positioning book, Positioning: The Battle for Your Mind by these guys Ries and Trout, written in the early 80s, but even back then was considered the book on positioning. And then I took a couple of courses and some post-grad stuff at a couple of universities just learning about positioning.I dumped into this whole positioning thing pretty early in my career, and I was really interested in this idea, could we get a way to do positioning in a really repeatable manner so that we wouldn’t have this problem of, we launched the thing and it didn’t work and then now we’ve got to try and change it. Could I get to a point where there is a process for us to follow to, first of all, maybe do a better job guessing at what the positioning should be in the first place, and then secondly, if we do need to change it, is there a nice repeatable step-by-step thing we could follow to do that.Is Product Positioning Intuitive or Learned?Andrew Mitrak: You initially positioned or repositioned a product without even knowing what positioning was or knowing that it was called positioning that you were doing. And then you went to look at the literature. What’s your takeaway from that? Does that reveal to you that the fundamentals of positioning are somewhat intuitive or can be learned, or do you feel it was just dumb luck really? Or do you feel there were parts of it where this is just obviously the right thing to do for the product? How do you overall think about, can positioning sort of just be an intuitive thing, or is it best to look at the literature that’s out there?April Dunford: Sometimes it is really intuitive. I would say that’s true. I would say a lot of the time when I talk to founders, they’ll talk about how they built the product in the first place, and they’ll be, we saw this need, we had this idea, we could do this in a different way than the existing products that are out there.And we looked at it, we understood what the competition was, we built a thing that was demonstrably different, we understood what the value of that thing was because it was solving our own pain, we understood what kind of customers would want to buy that, and therefore what market we position in. It’s just, it is what it is, it’s super easy. And I think that happens a lot in the early stages of a company. Not for everybody, but I do think it happens a lot.However, what also happens a lot is if you fast forward two or three years, the market’s changed. Maybe your competitors caught up with you and the thing that made you really different isn’t different anymore. Or maybe the way people buy or what they want to do has totally changed. Or maybe your competitors did an acquisition and that changes the whole way everybody thinks about this market.Or maybe you and your product have changed, and you now do a whole bunch of other stuff that you didn’t originally do, and that enables you to get at a different kind of customer to deliver a different kind of value. Now how do you position it? That’s where people get messed up. Sometimes it can be quite intuitive at the beginning, but then a whole bunch of things change and it’s, okay, now the positioning needs to shift. How do we do that? Because we didn’t do anything the first time, it was just obvious. I think that happens a lot.The other thing that happens a lot is you have this thesis when you launch the product and you said, okay, we saw this problem and this is what it’s gonna be and these kind of people are gonna love us for these reasons and here’s the competitor. Then we launch it, and it turns out our thesis was incorrect.We get out there and we’re, man, we launched this thing and we thought banks were gonna love it, but it turns out we’re selling to insurance companies, we didn’t really build it for that, but they’re buying it like crazy. Now we’re in the insurance business, hello. And they love it, but there are some things they don’t love so much, and they’re comparing us to competitors we never really thought about. How do we position this thing because we thought it was gonna be something else.And this is not unusual, to be honest. We call that a pivot in lean startup language. It’s not unusual for a company to build something for one market and then get in the market and find out, whoops, the market’s a little bit different than we thought. People are looking at our product a little bit different than we thought. We’re getting pulled into another market, so how do we position for that? And again, that’s when having a methodology for this would be helpful.The B2B vs. B2C Divide in PositioningAndrew Mitrak: You did your positioning exercise initially and then went to the books, went to Ries and Trout and the others. Do you find yourself as you’re reading the literature on positioning, was it confirming what you did, oh, that’s what we did was called, or was it saying, oh, were there things that you’re, oh, I wish I had known that to start, or what was the discovery process for reading?April Dunford: No. And I was so mad about this. Here’s how this went. I went and I’m having all these conversations with people, I’m talking to all these smart heads of marketing, right? And I’m saying, how do you do this positioning thing? What do you do? And everybody’s doing it the way we did it, which was a little bit of trial and error, a little bit of getting some feedback from customers, a little bit of, let’s try this and if it doesn’t work we’re gonna adjust. A bit of messing around until you get something that works.And that feels terrible when you’re the head of marketing because your head’s on the block, man. And if you don’t figure it out fast enough, everyone’s gonna get mad and you’re gonna get fired. And that was unsatisfying.And then I took some courses and read the Ries and Trout book, which does an amazing job of defining here’s what positioning is, here’s why it’s important. And then they give you a whole bunch of examples. But the examples aren’t tech, this thing was written before the internet, man. I think they have printers, HP printers or something is the closest thing in there, not even software. And I’m selling databases, and they’re talking about repositioning the country of Jamaica, and I’m, this is different.Andrew Mitrak: It is also very B2C oriented. I think the examples are Avis or Coors or beer. Do you find that both because of the tech gap with it and maybe the B2C bias that you as a B2B tech company...April Dunford: The B2C bias is killer in this stuff. I took a bunch of courses too, and it was the same thing in the courses. All the examples were shampoo and toothpaste and makeup, and I’m, again, I’m selling 200 grand worth of database stuff to really smart technical people. I don’t think this is the same. It’s selling a vacuum cleaner. And I thought the B2C bias is terrible.The other thing that you get in B2B tech that you don’t get in consumer is think about it. If I got toothpaste and I’m selling that toothpaste or hair shampoo to people that have dry hair or people that have dyed hair or something like that, right? And then if I decide I’m going to do a shampoo for babies or a shampoo for old ladies or a shampoo only for people with very, very curly hair, usually what you’d do is you wouldn’t take the same product and try to evolve it into that market. You would launch a whole different product and say, I’ve got this other thing, and that’s for the curly hair people, and this one’s for babies, and this one’s for people that dye their hair, whatever.Whereas in tech, it is very normal for us to launch a product in one market and then reposition it a whole bunch in the future. Let’s take Salesforce. When Salesforce first launched, they were aimed at the very, very bottom end of the market. Their initial deal was they were focused on companies that had sales teams of less than 10 people and the first three seats were free. And why were they doing that? Because the top part of that market was absolutely dominated by a great big competitor, and they didn’t want to go compete there. So they started at the bottom.But guess what? They inched their way up, and by the time they got to the mid-market, the big competitor had self-destructed and they were gone, and the top end of this market was wide open. And if you look at Salesforce right now, would you say that’s a product for very, very small businesses? No way, man, too expensive, too complicated, too everything. We just don’t have that in consumer products where you’re, it used to be this thing and now it’s this other thing and now it’s this other thing.The other thing that you’ve got in B2B is that the positioning matters a lot because the stakes are really high. Especially if I’m looking at enterprise software, the stakes are huge. You’re going to make a recommendation to your boss to buy 200 grand worth of software. You make a shortlist. You don’t just walk into the store and pick the thing off the shelf and say, oh well, if I got it wrong, I just won’t buy that one again. You’re going to get fired if you make the wrong choice. You got to make a shortlist, and it’s positioning that makes or breaks whether or not you’re going to get on that shortlist.And then once you’re on the shortlist, you got to survive long enough for them to take a real good look at your stuff. And if you get eliminated because often the shortlist is five, six companies these days or more, depending on whose data you believe. But let’s say there’s a shortlist of six, seven companies, you got to make it to top two. Otherwise, you don’t get considered. Your positioning is really important in that because the company hasn’t done a big deep dive into all your stuff yet. We just don’t have this in consumer. We don’t go out and buy a pair of shoes and make a shortlist and have a six-month process to figure out which one we’re gonna buy. We go out and we buy it and if it stinks, we just don’t buy that one again.Navigating the B2B Buying CommitteeAndrew Mitrak: One of the other elements as well from B2C versus B2B is often in B2B the buying decision maker or the buying committee is not the end user of the product, right? And there’s this abstraction between that. And that’s the other element is how do you market to both the end user and the decision maker.April Dunford: Yeah, that happens a lot in B2B. The economic buyer is often distinct too, right? What you have is this committee of people and you’ve got someone who’s what we would describe as the champion. And that champion, usually it’s their boss or someone that said, look, we gotta buy a new accounting package, buddy, go figure it out. You go figure it out, look at all the accounting packages and tell us which one to build, which one to buy. And then that champion is gonna go do their homework, so your positioning really matters for that person.But the champion also has all of these stakeholders around them that have to agree, otherwise the deal doesn’t get done. If the champion, let’s say the champion is on the business side and we’re buying technology, usually they got to go to IT and make sure IT is okay with it. IT can’t make the deal happen because they’re not in charge of selecting, but they can kill a deal by saying, oh I don’t like it, it’s too hard to manage, it doesn’t integrate with the stuff we have now, it doesn’t meet our compliance regulations, whatever, whatever, right?Same thing with end users. Often the end user is not an end user making this purchase decision, but they can have a big influence in that. If they look at it and say, well the UI is this and this is terrible, we’re never going to get people to be able to use this thing, we’re going to kill it. Or sometimes they’ll do a pilot with some end users, and if the end users give it the thumbs down, then it’s no good.And then you got to run it up to the economic buyer, which is generally another person too. And a lot of companies get really messed up with that and they’ll say, well the person that signs the check is the CRO, so that’s the buyer. And it’s, yeah, but the CRO assigned the whole purchase process figuring out who to buy to somebody underneath them. So you better figure out who that is because the CRO just says yes to whatever that other person suggests.We don’t have that again in B2C. This isn’t it. Sometimes in B2C stuff where it’s complicated, let’s say you’re buying insurance or you’re buying a car or you’re buying a house. Maybe there’s a spouse involved, maybe there’s a financial planner involved, maybe you get a little advice, but it’s nothing like what a typical enterprise B2B purchase process looks like. It is way more complicated.The Critical Distinction Between Branding and PositioningAndrew Mitrak: When you write about positioning, you make a hard distinction between branding and positioning, and you’ve written that you’re not a fan of the term brand positioning, which is a phrase you hear sometimes. Why do you draw a line between the two or how do you make this distinction?April Dunford: Well, here’s what I think. I think marketers like to make stuff up. I think marketers like to just redefine something for the sake of redefining it. And branding is probably the most poorly defined marketing term I can think of. When you say branding, you really gotta say, okay, what do you mean when you say branding?At most of the enterprise B2B companies that I worked at, when we talked about branding, the brand of the company was a lot about how we showed up in the market in terms of, what was our tone of voice? What was our iconography look like? It was a bit like what was the vibe of us when we showed up? What were the fonts and the colors and the pictures we used, and the way we did messaging and text, tone of voice stuff. That was all kind of branding, which is very different from positioning.Positioning is an input to that. If the big value of, let’s say I sell security software to banks, right? My branding should convey a lot of trust and solidness and authority because that’s what we’re trying to convey. If I’m selling software for daycares, maybe I can get a bit more playful because I’m talking about kids and moms and things. And I could use different colors and more playful images and maybe a bit more casual tone of voice and all that kind of stuff.And so in my opinion, positioning should inform what the branding looks like. But now I’ve seen other people define branding in a way that it includes all the things that I would call branding, and it also includes positioning, and we’re going to just kind of munge those two things together. That’s okay, if that’s the way you want to define it, but I still see those two things as being distinct. You got to do the positioning thing first, and then the branding thing flows from that.Why Positioning Must Go Beyond the Marketing DepartmentAndrew Mitrak: And is this somewhat related to how you argue that positioning should not just be a marketing exercise? That if the CEO and sales leads aren’t in the room, that the positioning won’t stick. Is that tied to why positioning is different than branding, is that it’s beyond marketing?April Dunford: Definitely, it’s definitely not just marketing, right? What we’re trying to do with our positioning is we are trying to define why should a customer pick us versus the other guys. And we need to think about, first of all, who are the other guys? What’s the alternative to what we do? And we should all be in agreement on that. Sales should understand that, marketing should understand that, CEO, product should understand that. We should all understand what makes us distinct and the value we can deliver to a business that no one else can.We need to get that in marketing, product management needs to understand that, sales needs to understand that. And then we all need to understand who’s a good fit for that, which is what are the kinds of companies we’re trying to target and therefore what’s the market that we intend to dominate. That is a strategic set of decisions in a way, and it’s very easy for teams to get out of alignment on that.It’s very easy for sales to decide, we’re just going to sell to these big companies because we like doing these big deals, man. We need to decide, is it worth chasing those big deals? Are we actually going to win them? Or are we more likely to win if we’re chasing a deal in the mid-market, for example? Again, I think this is, we get this distinction between B2B and B2C. In B2B, when I’m selling a big ticket thing and there’s a shortlist of companies to look at, we really need to understand what makes us stand out and what makes us different so that we can help the whole buying team understand what that is and move this deal along.If I’m just selling toothpaste, or makeup or a T-shirt, it often has nothing to do with the product and it has more to do with pure branding, right? This thing is going to make you look rich or, the Kardashians wear this thing so you should too or something.Whereas, it’s not like it’s all totally rational when we’re buying enterprise software, we don’t, there’s often quite a bit of irrationality in there in that the champion is worried about making a bad choice. The champion will often default to a really safe choice because it’s not going to get them in trouble. Or if the champion has an opportunity to look like a hero, they might take that too because it’s good for them personally.It’s not like it’s all totally rational, but at the end of the day, they do have to make a case to their boss. And that case has to say, look, we looked at the other things and we picked this thing for these reasons, and the reasons are narrow. This is either going to help you make money or is going to help you save money and that’s about it. We got to make that stuff super, super clear. Whereas, you’re buying a T-shirt with your own money, it’s fine. Maybe if you’re a teenager you gotta complain to your mom, but… [Laughs]Andrew Mitrak: [Laughs] Totally.The Conflict Between Sales, Product, and Marketing in B2B TechAndrew Mitrak: So I’ve also spent most of my career in B2B tech and on marketing teams, and whenever I run through positioning, I do find that there’s this issue where we have a number of stakeholders in product, and they tend to be biased towards product-led growth or if there is some land-and-expand model or some freemium model, they are biased towards what product can influence as far as growth is. And sales almost always is not interested in land-and-expand. They want big-ticket deals. They don’t hit their quota—April Dunford: I think it feels good to land a big deal if you’re in sales. I think that feels good.Andrew Mitrak: Exactly, exactly. And they want marketing to support that positioning. Marketing, we have our own ideas and customer research as well on what we think.April Dunford: Well, we like the ones—we like the market that’s the easiest to respond to our marketing stuff, which is often terrible leads too.Andrew Mitrak: Right. That’s an issue.April Dunford: We love time waster leads. We love those. It looks good in our metrics and we’re like, I don’t get what’s wrong in sales. They don’t ever convert any of our beautiful leads.Andrew Mitrak: Yeah, exactly. I feel like a lot of dynamic can be summed up to either: Sales wants more leads, okay, then marketing will get more leads.But then sales says, “No, not those leads. We want better leads. Those aren’t high quality enough.” And then marketing adjusts and then gets fewer leads.I feel like that’s a cycle that a lot of companies find themselves trapped in.April Dunford: It really helps to have a clear definition of what a best-fit customer is and why. Not just that we think this is a best-fit customer because we wish we were doing deals like that. It should be: “This is a best-fit customer for us because we are the only ones that can deliver this specific value.” If you look at us versus the other things that a customer is going to compare us with, we are the only ones that can deliver this specific value, and these are the kind of people that really care a lot about that. That’s what we really need to get at the root of. And it shouldn’t just be that we like those companies because they’re bigger and they have bigger budgets. Well, guess what? If they’re bigger and they have bigger budgets, then that means we’re going to run into these competitors that can handle that. Do we actually serve that customer better, or are we better at something else? And so getting everybody together in a room to get really clear on that is going to help us with all those problems when sales says, “Well, we don’t like these leads.” It’s like, let’s sit down and talk about what an excellent lead looks like and why. It should tick these boxes because we are very likely to win those deals for these reasons.Andrew Mitrak: In the dozens or hundreds of companies you’ve consulted with that have implemented positioning successfully, is it an equal split between partly marketing, sales, and product? Are they all like equal one-third owners of the process? Is it usually best if one is the owner of it and the other two are stakeholders? Does it need to be the CEO who is on top of it on the exercise? What’s the best model, or is there one right solution or ways to make multiple versions work?“Marketing Never Wins the Battle of Opinions”April Dunford: This is actually a great question. So I’m a big fan of doing a cross-functional exercise because, just in my own experience when I was in-house and working as a head of marketing, if I didn’t get everybody in the room together, I couldn’t go have a conversation with sales and think I had it and then take it to product because then they’d rip all that stuff apart and say, “No, that’s all wrong, it’s this.” Then you take it to the CEO and the CEO has got their own opinions and you end up with something else. So it’s just way more efficient to get everybody in the room together.But if you’re going to get everybody in the room together, we can’t just have everybody in the room together just say, “Okay, why does everybody love our stuff?” then that’ll just be a battle of opinions, and marketing never wins the battle of opinions. So the way my process works is we start with this conversation around competitive alternatives. Now, what’s funny about that is the question is: if we didn’t exist, what would a customer do? At that step, I think sales’ opinion on this matters more than anybody else’s. But it doesn’t stop everybody else from having an opinion, but everybody else’s opinion is generally wrong.Sales vs. Product Perspectives on CompetitionApril Dunford: So I’ll give you an example. Often what we’ve got, like when you go to product management and you say, “Who do we compete with?” they generally give you a way longer list of companies than sales does. Because product management is living a little bit in the future, right? They’re thinking about the roadmap, they’re thinking about where we’re going, and they’re looking at the superset of who could compete with us and who should compete with us. What they are not looking at is who does. Sales knows that. Sales knows that.Now, if I go to sales and I say, “If we didn’t exist, what would a customer do?” they can tell me exactly who lands on the short list. They can tell me who’s causing us pain out in the market right now. They generally won’t consider the status quo as a competitor because a good salesperson, if they lose to status quo, they will say, “We lost to no decision.” And in the minds of a good salesperson, that is not a no; that’s a “not yet.” We’re going to get them someday, just not this week, man. And so if you’re doing this exercise, you have to pull that out of the sales team, but it’s very important for the product team to hear what the sales team has to say. Because the product team is thinking about a different set of competitors, which is fine, by the way. Because they’re building for the future, they need to be looking at that.But when we’re talking about positioning right now, if the competitor is not causing us any pain, they may never cause us any pain. We don’t do a very good job of predicting the future that way. And the reality is if they do cause us pain next year or the year after, we’re going to adjust the positioning to take that into account. So step one, when I’m talking about competitors, I think sales’ opinions matter more.And then we didn’t even talk about marketing. Marketing, if you say to marketing, “Who do we compete with?” they’ll list the people that are spending the most money on marketing. That’s who they worry about because that’s who they’re fighting for keywords and everything else. And they go, “Oh my god, these guys, they’re everywhere! We see them everywhere. Oh my god, they have the biggest booth. Oh my god, they’re all over the place.” But again, if they’re not causing us any pain in sales, well, maybe you’ve got some competitors burning a lot of money on pretty s**t marketing that isn’t doing anything.The other thing you get is the CEO will have this opinion. Often the CEO was really involved in sales at some point, but maybe it’s been a couple of years. Or maybe they only see certain kinds of deals in certain situations, so they’re biased towards that. Again, sales understands the reality on the ground. So when we go to step one, personally, sales’ opinions matter more, but we’ve got to get everybody on the same page.Then we get to step two: okay, if we didn’t exist, this is what a customer would do, this is what we’ve got to position against. Now we get to step two, and step two is all about: what have we got that the other guys don’t have? Who knows that the best? Product management, by a mile. Sales doesn’t know. They don’t even pitch stuff they don’t understand. Marketing doesn’t know because there’s lots of stuff the product does that marketing thinks is useless or they don’t understand or whatever. The only people that can really give you the straight deal on “what have we got that the other guys don’t” is product management. A good product management team knows all about that. So again, other people in the group might think they know the answer to this; product management knows the answer to it.Then we get to the third step, which is value. This is where marketing comes in a little bit because only marketing understands even the concept of what value is. So they’re helpful in that respect. But here it’s a little bit interesting. Sales knows what a customer thinks is valuable and what they don’t. So they’re a good litmus test. If we come up with a value prop, sales is a good litmus test: does this sell? Sales can tell you generally because they know customers, they’ve been selling to customers, they know what flies and what doesn’t. Marketing understands what value is, so they know what a good value prop looks like and what it doesn’t. So this is where we see a lot of sales and marketing. But again, everybody’s got to agree on what this is.Then we’re going to get to this segmentation, which is: okay, we’re the only people on the planet that can deliver this value, but not everyone cares the same about it. So what are the characteristics of a good-fit account? And that is kind of a little bit of everybody chiming in on: okay, if the value looks like this, what needs to be true about the account in order for that to resonate? Are they bigger accounts or smaller accounts? Is there something in their tech stack that makes them more likely to make that more appealing to them or not? Is there something about their business model or something about the team we’re selling into that’s different? That’s a group conversation with everybody. So we have this team together. We obviously need the CEO in the room, and the CEO needs to believe that this is important work and sponsor this thing. But when I run one of these exercises, everybody needs to chip in, and everybody’s opinion is important at different steps in the exercise. This is why this is so difficult to do when it’s not a team exercise. It’s like that old picture of everybody wearing a blindfold and they’re all touching a different part of the elephant. The guy on the tail says, “It’s a snake,” and the guy on the leg says, “It’s a tree.” It’s a bit like that. Sales knows something, product management knows something, marketing knows something, the CEO knows something, support knows something. We’ve got to pull all of that out together and then synthesize it into something we can all agree on, and we’re all singing the same song, and then we move forward.Evaluating Positioning Success from the Outside vs. InsideAndrew Mitrak: As an outsider, I like to evaluate a company’s positioning or try to understand their positioning. But if positioning is this strategic foundation and it’s not branding, it’s not messaging, it’s not even just marketing, how do you go about evaluating somebody’s positioning from the outside? How do I tell if a company’s positioned well or if they just have a really talented copywriter?April Dunford: I’m glad you asked this because sometimes what I’ll see—and this bugs me a lot—I think I’ve been guilty of doing this in the past when I didn’t know any better. But sometimes what I’ll see, and I see this a lot on LinkedIn or social media, a random person like me will pull up some B2B website and say, “Isn’t this terrible? Who could understand what this is? Look at all that jargon! Look at all that stuff. Oh, this is terrible. This should be more B2C-like. This should be really easy and it should be exciting.”And the first time I saw one of these that I thought was really funny, this was a company that was growing 200% year-on-year on about $100 million revenue. And I’m like, my dudes, it is working just fine. So here’s the thing: it is very difficult for you to assess how good copy on a homepage is working if you are not the target buyer and you don’t even know who the target buyer is. If I’m selling something to—I was working with a company that does this stuff with airlines and I’m selling a very technical thing to people that do maintenance on airplanes—like yeah, man, you’re not going to understand what that website is talking about. And that’s okay. What really matters is: is it working with a customer, and is it doing the job we want the website to do? So that’s one thing.The second thing is, like you say, there’s copywriting and there’s positioning. If I look at a company’s copy, I don’t necessarily understand the strategy behind it. I don’t know exactly how they’ve defined a best-fit customer, for example. So I don’t know exactly who they think their competitors are. Therefore, I can’t tell: is it doing a good job of differentiating them from those competitors? Because I don’t know them, I don’t know their competitors, I don’t know who their buyers are. It would be very hard for you from the outside to figure this out. And so I don’t think doing a homepage teardown is a particularly good way to understand someone’s positioning. I get this a lot where a company will send me a link to their homepage and they’ll say, “Can you just tell us if our positioning sucks or not?” and I’m like, “No! Because I don’t know anything about it. I don’t know who your target market is, I don’t know who your competitors are, I don’t know anything.” And so it’s really hard from the outside to assess that.Identifying the Signs of Weak PositioningApril Dunford: Now, on the inside, poor positioning shows up in a set of very distinct ways. So the way I used to assess it—let’s say I got hired as the Vice President of Marketing and then everybody wants me to just spin up a bunch of campaigns, and I’m like, “Okay, but let’s make sure the positioning is good before we do that because otherwise I’m pouring water into a leaky bucket.” So let’s have a look at positioning.How I would assess that is I would walk over to sales—because I’m always working with enterprise companies that have sales people—and I’d be listening in on first-call conversations. Now, this is really easy because everybody records it with Gong, so you just listen to the Gong calls. But first-call conversation, weak positioning shows up like this: the customer shows up, the rep is there, and the rep’s doing their thing and they’re saying, “Hey, let me tell you something about us, and we’re this, that, and the other thing, and we do this and that for companies like you, blah blah blah.” And you can see the customer just getting super confused, like making this face: “What the heck are you talking about, man?” And usually what you’ll get is a few minutes in, and the customer will go, “Stop, stop, stop. Just back up. Back up. Go back to the beginning. I’m not sure I got it. Go back, say it again.” And the rep’s got to go back and repeat it again. Or they’ll get halfway through and the customer will ask a question, and the rep will be like, “Oh my god, the customer didn’t understand a thing I was talking about.” If you’ve got happy existing customers but a new customer is coming in that confused, that is usually a positioning problem.The other one you’ll get is prospects comparing you to things they shouldn’t be comparing you to. That is a clear sign of bad positioning. So they’ll come in and say, “So you’re like a CRM, right?” and you’ll be like, “No, no.” Or they’ll be like, “Oh, so you’re just like Workday?” “No, we’re nothing like Workday, what are you talking about?” And then the rep has to back up and do it again. So this idea that the customer thinks they know what box to put you in, but you’re actually living in a different box, that’s a sign of weak positioning.And then the other one you’ll get is a customer coming in and saying, “I get it, I get what you do, I get it. But I just don’t get why anybody would pay for that. Can’t I just do that with my accounting package? Can’t I just do that in a spreadsheet? Why would I just hire a couple of teenagers to come in and do that? That doesn’t seem...” and then in that case, what the problem is, your value is not clear and compelling. So inside we can assess it; outside, I don’t know.The Pitfalls of Tech-Forward PositioningAndrew Mitrak: It’s very tempting to be one of those LinkedIn people from the outside, but on the other hand, I was at a unicorn B2B freight tech startup. It was in the trucking industry and won a bunch of awards, raised a whole lot of money, and our marketing was great—everyone thought our marketing was great. But at the underlying thing, the positioning was often wrong. It was very tech-forward: AI, automate your freight, Uber for trucking type messaging. Everyone was like, “Oh, this is a no-brainer, let’s do this.” And I’d listen to Gong calls in sales and hear somebody pitching all this tech to a supply chain manager at a company in the Midwest, and it’s like speaking two different languages. The startup ultimately folded in a pretty dramatic way. But underlying it, there was just the wrong positioning. It’s easy to say this looks bad or great from the outside, but really you have to get inside the company before you really pass judgment on it.April Dunford: Fundraising’s not revenue, right? Fundraising’s not revenue. But we are in crazy times right now where there’s so much excitement about certain parts of the market where things are emerging, like all this AI stuff is so cool and the potential for this stuff is so big. We see this with pricing models changing, and now we’re looking at usage-based pricing versus subscription pricing. It makes it a lot more difficult to figure out if this company is actually successful or not.Positioning During Rapidly Changing MarketsAndrew Mitrak: Do you have principles for running a positioning exercise through a period of rapid change? It can feel like you’re building the foundation with positioning, but it’s moving so fast it’s like building the foundation on quicksand.April Dunford: I have some opinions about this. Stuff is changing really quickly, but I think companies are going to have to be very clear in their messaging and positioning about what’s real and what we can deliver today versus what is vision and a direction, and where we want to go, and frankly, hype. We’re building the market. Because I think if you’re building an AI company right now, you’ve got to do both. You’ve got to hype the hell out of stuff that doesn’t entirely work today, that doesn’t do exactly what we know it’s going to be able to do in the future—and we might not even be sure when—but we also have to sell what’s on the truck that a customer can buy right now.Those two things are often different. If you look at the one I think is the most remarkable to look at, it’s the vibe coding tools. If you look at what influencers from these vibe coding tools are talking about on LinkedIn and social media, it is super inspirational. You’re like, “Wow, that is so cool. Look at all the stuff we’re going to do.” Right now, there’s a bit of panic in the markets, like, “Oh my gosh, are we just going to be able to vibe code accounting software? Why should we even have accounting software? We’re going to vibe code a CRM. Sell Salesforce, man, that stuff’s just going to go away.” But then you go to their website, and their website doesn’t say they do that at all. Their website says, “Build a nice prototype,” because that’s what they’re actually selling today.Now, they’ve got investors and whatever, and right now it’s very difficult to be heard in the noise without being super hypey about this stuff, so they’ve got to do the other piece too. They’ve got to show the vision. They’ve got to show where this is going. They’ve got to show it in order to justify the valuations. They want people to be mucking around with it now with the idea that we should start doing some stuff with this now because in the future we’re going to do way more stuff with this. So there’s this balance, I think, between where you’re at and what you can sell today, and being clear about that when you’re in a sales process. You’ve got to balance that with this other half, which is hyping the hell out of it. When I say it, I mean the future, So, I’m hyped hell out of where this is going and what it’s going to be able to do and what’s happening in the future and all that stuff. The hype stuff changes very rapidly. What we’re selling and what customers are actually doing with it changes about the same as everything else. You’re going to have to check in on it in six months and see if it’s different or not, but in less than six months, your positioning’s probably okay. If I look at the vibe coding tools, those sites haven’t changed much at all in the last year.Andrew Mitrak: So overall, the act and the role of positioning doesn’t change in a period of rapid technical change. There might be new vectors for positioning; there might be new ways you can position within a new category.Balancing Today’s Reality with Future VisionApril Dunford: What you should expect is to be very careful, and you should be watching your positioning, and you should be very ready to adjust it when it needs to be adjusted. In a normal market, when I was in-house as the VP of Marketing, we would do a check-in on positioning every six months. That was more than enough, and it was rare that we would check in and have to change it if the positioning was less than a year old or even less than two years old. It’s pretty rare we would do the six-month check-in and say, “Whoops, need to adjust something”. These days, especially if you’re in this AI world, you might want to do that quarterly, and you should be very ready to make the adjustment if you think that it’s needed. But do I think your positioning’s going to change quarterly? No, I don’t. But it wouldn’t surprise me if you changed it within a year. That wouldn’t surprise me at all.Applying Positioning Principles to Your CareerAndrew Mitrak: I want to ask about how you’ve positioned yourself and positioned your own book. It feels like you’ve been very deliberate about your own positioning. You focus primarily on B2B tech, which is where you have your experience. Do you think that marketers should be applying these same positioning rules to their own careers?April Dunford: Maybe. I don’t know if I’m a great person to give career advice, but it certainly worked out for me. When I was working in-house, you’re applying for jobs as the VP of Marketing and you’re up against everybody else, and you’ve got to answer the question, “Why me and not the ten other people you’re interviewing?” In order to have a clear answer to that, you have to be able to say, “What am I better at? What have I done more than the other people? What’s my edge over everybody else?”For me, because I had done a lot of positioning stuff early, that kind of became my edge. I could talk about that in a deeper way. By the time I was at a company and then we got acquired, I had positioned a bunch of things at the acquired company. So by the time I came out of that one, I had positioned five or six products. That’s a lot, really. A senior marketer could go their whole career without repositioning anything if the positioning is working. So I thought I had that as an edge. In the later part of my career, if you hired me as the VP of Marketing, you hired me because you thought maybe you had a positioning problem. I could talk intelligently about how we were going to fix it, and that’s why you brought me on.I wouldn’t be applying to jobs where what they were really looking for was something really outside of that and it wasn’t really in my deep skill set. Yeah, I know a lot about lead generation, and yeah, I know a lot about email marketing. Yeah, we’re doing SEO and whatever; I know a lot of stuff about that. But am I going to get that job versus the person that comes in and says, “I managed this ginormous Google Ad budget at the last thing and all we did was SEO and I’ve been doing SEO for 15 years, I’m going to yak your ear off on that”? I’m not going to win that job. So I’m trying to focus on applying to jobs that are a fit for my stuff and then making sure I’m positioned in there as the best person for that job.That’s worked out pretty well for me. As a consultant, I’m trying to do the same thing. I’m trying to stay in my lane. I get tons of calls from companies that are B2C, or they’re B2B but they don’t have a sales team, or what they actually do is professional services. I’ve done a few services companies, but only if they tick the boxes. I’m pretty serious about who makes it through my filter, and that’s because I want to make sure we’re really, really successful. If it’s outside of my wheelhouse, I don’t know, I’m just kind of guessing. So I try to stay right in my zone of excellence so that if you make it through all my filters, then I feel pretty confident that we’re going to get a good result because I’ve done 300 other companies that look just like you. And you’re probably going to pay me more money to do that because I’ve done 300 companies that look just like you. Everybody else you’re talking to has done a little of this and a little of that, and it’s not like they don’t know what they’re doing, they do, but they don’t quite have the experience level in the little box that I do. So I try to stay in my little box where I can look you in the eyeball and say, “I’m probably the best person in the world to do this.” Not this, not this, not that, not this other thing—just in this little box right here. I think I’m the best in the world.The Strategy Behind Positioning “Obviously Awesome”Andrew Mitrak: Did you apply your positioning frameworks and methodology to your own book, Obviously Awesome, and could you share a little of that process?April Dunford: Yeah, so I was really clear when the book came out on what I was positioning against. What I was positioning against was, first of all, the old positioning book, which is the book that came out in the ‘80s by Al Ries and Jack Trout. Again, I love that book, and I think that book’s really good at defining positioning. What it doesn’t do is give you a how-to: step one, step two, step three. So I positioned mine against that and said, “Look, we are very much in alignment, Ries and Trout and my stuff. We agree on the definition of positioning, we agree what it is, we agree why it’s important. I’m giving you the how-to; they are not.” That’s why you need my book and not theirs.I was also positioning against the “positioning statement,” which was a common sort of folklore way of doing positioning inside a company. A lot of companies, if I went and said, “Have you done positioning?” and they said, “Yes,” what they’d done is filled out a positioning statement, which isn’t a methodology at all. But it was just kind of the thing that everybody did. So I was positioning against that as well. In the book, there’s a mention of the Ries and Trout book and the reason why I was frustrated that it didn’t have a how-to, and then it talks about the positioning statement and why I think that’s not a good way to do positioning. So I’m positioned against that.When I look at what I’ve got that the other guys haven’t, it’s a methodology. It’s one, two, three, four, five, six. Nobody else has a methodology. I’m going to give you a methodology. I am sure there are other ones now but one, two, three, four, five, six. The value of that is being able to do it in a repeatable way. Even if you’ve got to muck with the process, even if this is just a starting point, you at least got something.Designing Content for the CEO MindsetApril Dunford: Then the “who it was aimed at” was primarily CEOs of companies, but also, I would say my primary audience was the CEO of a tech company, but also at a secondary level, heads of product or heads of marketing. I did a lot of research with CEOs as I was writing the book about how they buy books, how they find out about books, and how they read books. That was super fascinating. The actual product of the book looks and feels the way it does because of that research. I talked to 50 or 60 founders, and here’s what I found out.How do you find out about books? You find out from your friends, other CEOs. It’s all word of mouth. Nobody goes to the bookstore and says, “What am I going to read today?” and browses the stacks. That never happens. They get a recommendation, people start talking about it, it’s word of mouth. So you’ve got to figure out how you’re going to spark some word of mouth on this book.The second thing that I thought was surprising is the CEOs don’t actually read books; they read half-books. Almost everybody told me this. I said, “How do you read?” and they’ll say things like, “Well, I’ll get on the plane, I’ll do my email for an hour, and then I’ve got two or three hours left in the plane ride, I’ll pull the book out and I’ll read and get to the end of it.” They’ll basically say, “I pull the book out and I read.” And I said, “But wait, you only got two or three hours, that’s only half a book. What happens?” And they say, “Well, if there’s bits I can skim, I’ll skim it and skip forward. You know, these business books are full of fluff. Sometimes there’s a whole chapter I can skim, or if they have a case study or something, I’ll skip that. You more or less get the gist of it in the first half of the book anyways because these books are so fluffy. So basically, I never read the back half of a book.”So I decided, “All right, I’m not writing a typical business book that’s 80,000 words or 90,000 words that takes you six, seven, eight hours to read. I’m writing a book that’s half that, and you can get through it in three or four hours.” Then I’m going to make the bits that you could skim, like the case studies and things like that, very obvious. I’m going to put them in a shaded box so that if you want to skip it, skip away. So it’s obvious what the core stuff is and what the stuff is you could skip. We’re going to make it like In-Flight Magazine—that’s what I kept telling the book guys “This is the inflight magazines”. I thought that worked pretty well. The number one feedback I got on the book after I put it out was CEOs would come to me and they’d say, “Oh my God, it was so good. I finished it in one sitting.” And I loved that. Part of the reason they finished it in one sitting is my original manuscript was like 70,000 words and we hacked at that thing until it was half the size. So yeah, I did use my process for that book.Andrew Mitrak: That’s so cool. Well, thanks for taking me behind the scenes of that. Congrats on the book and its success, and congrats on the updated and expanded edition of Obviously Awesome. I hope listeners, if any listeners enjoyed this conversation, they definitely enjoy the book; it’s available to order right now. Also, I highly recommend your podcast, Positioning with April Dunford. I’ve been listening to it to catch up and research prior to this interview and enjoyed it a lot. It’s super inspiring. I already mentioned your website, aprildunford.com, which has a lot of great resources as well. Is there any other place you’d recommend where people should connect or follow you? It seems like you’re everywhere.April Dunford: I feel like I used to be everywhere and now I’m not. I don’t do a lot of social media these days, for example. Occasionally I’m inspired to post something on LinkedIn, but it’s not very often. The best way to follow my stuff is the newsletter, the podcast, the books—these are the main things. If you go to aprildunford.com, you see links to all that stuff.Andrew Mitrak: They’re all great. I’ll link to it in the blog that accompanies this post. April Dunford, thanks so much and congrats again.April Dunford: Okay, thanks. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 48This week, I’m joined by Scott McDonald, who spent three decades in the research trenches of America’s biggest magazine publishers before becoming president of the Advertising Research Foundation (ARF), an organization now celebrating its 90th year of trying to separate marketing science from marketing spin.Scott led consumer research departments during the Golden Age of Magazines. His insights helped launch Martha Stewart Living, tripled The New Yorker’s subscription price, and he saw the internet disrupt the business model he’d spent years optimizing.Along the way, he picked up insights that still resonate. Including: * The Strength of Weak Ties: How a core sociological concept explains networking and provides a framework for go-to-market efforts.* The Power of Print: Why Steve Jobs insisted that every new Mac launch campaign include an ad in Time Magazine.* Cultivating Authentic Brands: Behind-the-scenes stories of using qualitative focus groups when launching Martha Stewart Living.* Scientific Marketing via the ARF: Including the empirical rule that cutting your share of voice during a recession will reliably cost you market share.Listen to the podcast: Spotify / Apple PodcastsNow here is my conversation with Scott McDonald.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Scott.Connecting Sociology with Marketing ResearchAndrew Mitrak: You got your PhD in sociology from Harvard University, and then you got into a career in media and advertising. Sociology is such a fascinating topic. I always enjoyed my sociology classes in college. At a broad level, how did sociology influence your career?Scott McDonald: Well, my interest in sociology went back to undergraduate days really, where I was mostly in the historical comparative wing of sociology and interested in social movements and things like that. And then when I graduated, I graduated from University of California, Berkeley and was totally broke by the time I got out of school. I needed a job. I went to the job board and found a job that involved program evaluation, just kind of project work, evaluating educational programs for the California Department of Education. And it ended up being quite fascinating because it was the first time I’d actually thought about how you would address structured applied problems using the skills of social science. So I cut my teeth on that, doing projects for the Department of Education, for Bay Area Rapid Transit, for all these sort of public entities. And that drove my desire to go to graduate school in sociology to learn the quant side, which I had not really studied as an undergraduate.So that’s really the main throughline to the work that I’ve had in advertising and media because I approached it very much through a background in studying statistical modeling, pattern recognition. I was particularly interested in graduate school in demography. And so demography sits at the border between sociology and economics. There are other borders in anthropology and psychology and other things like that. But I was mostly interested in the border between sociology and economics. And that carried through, I’d say, through my entire business side career. But also I had really fallen in love with doing applied work as opposed to sitting around theorizing at a university. So I was much more receptive to those job offers.And one came to me when I was just rehearsing for doing job talks, going around to campuses and presenting myself as a soon-to-be graduate of a PhD program. And quite randomly, a good example of the sociological theory of the strength of weak ties, that a job at Time (magazine) came up where they were looking for an academic social scientist to try to crack a problem that they found intractable. Because a guy at Sports Illustrated in the Time Inc. portfolio had gone to high school in Chicago with the wife of my thesis advisor. The weak tie led to the referral. I went to New York and hit it off and decided to move to New York and work for Time Magazine instead of joining the faculty at the University of Arizona as a starting tenure track professor.Andrew Mitrak: Can you define more so the strength of weak ties? Like what is that idea? I haven’t actually come across it.Scott McDonald: It was popularized as the six degrees of separation concept. That it isn’t so much who you know immediately, but it’s who people that you know know. That’s one degree of separation or two. So most jobs actually come to people through those kinds of referrals. Not exactly the person that I know, but someone else that I might be able to help them actually discover an interesting job. The exception usually in sociology is recent immigrants. Why do you have Haitian taxi drivers or Indian newsstand owners or something like that? Because their networks are small and they’re very specific to immigrant communities. But once you kind of move out of that, and of course universities themselves are super important as drivers of social networks, and they allow people to expand their networks a whole lot. There’s a whole field of economics now that has to do with the life chances that come to someone just as a function of whether they grow up in a well-networked place like say Austin or a poorly networked place like Waco. Geographically they’re not that distant, but they have very different social networks and different opportunity structures. So sociology, you know, again this is like demography, pattern recognition. When you think of the way that you would discover some of these theories and test them, they’re similar to analyzing the influence of say a magazine compared to a social media influencer. You can graph that stuff.Andrew Mitrak: It sounds like a concept that’s really applicable to marketing in a lot of ways. And we tend to as marketers think of it as just social networking or your second-degree LinkedIn connections or your alumni network, or how you might build an audience through reaching out to influencers and connectors. But it seems actually useful to look at concepts from sociology that have probably studied this in a more rigorous way and come up with things like the strength of weak ties to frame some of your go-to-market efforts.Scott McDonald: I’ve always thought of sociology as being very, very flexible partly because it overlaps with all these adjoining fields. And it’s always scrambling to try, it doesn’t have one unifying theory as economics does. It’s got a bunch of theories. So—Andrew Mitrak: Sounds kind of like marketing.Scott McDonald: It is, exactly. Exactly.The Golden Era of Magazine PublishingAndrew Mitrak: So you got to Time.Scott McDonald: My first big post-graduating job.Andrew Mitrak: And this was in the early 80s or so?Scott McDonald: Yeah, 1982.Andrew Mitrak: So what was the portfolio of Time magazines? Obviously everybody knows Time Magazine, and you mentioned Sports Illustrated...Scott McDonald: Yeah, so the big moneymakers were the weekly magazines. It was Time, Sports Illustrated, and People (magazine). And they all made boodles of money. It was sort of the heyday of the magazine publishing industry. There were also a bunch of monthly magazines as well. And of course, Time Inc. owned a bunch of other things. Book of the Month Club, a publishing imprint. I forget exactly which ones they had, but they had a lot of things. And importantly, HBO. And so there was already kind of a media empire. They owned some cable systems and stuff like that. And then a couple years after I joined, they merged with Warner Communications, which brought them a movie studio, a music company, and a bunch of other of those assets, the Turner Broadcasting System, and CNN, and all that. So it became more and more of a media conglomerate while I was there. A very interesting place to work.Andrew Mitrak: Yeah, we’ll talk about your time there, your work there, and how it evolved while you were there. But before we get into that, I thought this might be an opportunity to talk about magazines more broadly. You kind of called this the Golden Era of magazines. And they were such a huge part of American media and culture in the 20th century. And we haven’t really discussed magazines at all on this podcast aside from occasionally we reference an iconic ad that would have appeared in a magazine. And iconic ads are so critical to the medium of magazines. Do you have any thoughts on the rise of magazines in the 20th century and how it impacted the way brands marketed themselves?Scott McDonald: Well, a lot of magazines are aspirational. And people kind of put themselves into that. Many are vertical. Time was an example of a fairly broad magazine, and it competed with other leading news sources. But it was much more in-depth than say what you would get from broadcast television news or something like that. Much more the middle-brow intellectual version of news. It wouldn’t be The Wall Street Journal necessarily, but something that was very, you know, they broke stories and competed in news. So a high-brow, well-heeled audience at a reasonable amount of scale that provided, say financial companies, any company that was trying to influence opinion would be a reasonable target. So like Microsoft when it launched, Apple Inc. when it launched. As a matter of fact, Steve Jobs always insisted that any new campaign had to include Time Magazine. So he was from a generation that viewed this as a super important, influential medium.And magazines actually were that. They were criticized sometimes as being gatekeepers. Editors had a lot of power in setting agendas or anointing. I worked for Condé Nast. Vogue (magazine) is famous for anointing a new designer. Someone that Anna Wintour likes gets featured in Vogue and they’ve made it. It’s like they’re on the blotter. That’s less true now because you have competing sources of influence, but the appeal to advertisers in part was always that. And when you do consumer research, you would see that very often the readers of those magazines believed that the ads were really part of the value of the magazine. So a September Vogue was evaluated partly by how thick it was. Well, the thickness wasn’t editorial copy. It was a lot of ads for September Vogue, and consumers would actually think that Anna hand-selected the ads.How Brands Measured ROI on Magazine AdvertisingAndrew Mitrak: Can you take us behind the scenes of who are the players when it comes to marketers at a brand? Let’s say Apple, Steve Jobs wants his ads for a new Mac launch in Time Magazine. There’s Time, there’s the publisher, there’s advertising agencies, there’s Apple and the in-house company. What is sort of the relationship between how an ad actually gets into a magazine?Scott McDonald: Okay. So the publishers, and of course since I worked for Time Inc. and then WarnerMedia and Condé Nast across 30 years, my view is a bit, the lens that I apply is from the publisher side more than anything else. Publishers very much wanted to have a direct relationship with the brand, with clients. And a lot of the communications were direct there. So at Condé Nast, I would go present directly to L’Oréal, for example, one of the bigger cosmetics advertisers for the house. And this was somewhat in conflict with the agencies. Agencies were supposed to be planning media across the board, but they often were really confined more to managing the television side and later on the digital buying. So the publishers preferred that because sometimes they didn’t compete with more mass media like TV on reach, but they were more influential. Very similar to what we look at research now, podcasts don’t usually have the same amount of reach as some other media, but they’re much more influential. They’re persuasive to the people who listen to them. And so they have a traction that is in some ways very reminiscent to me of what you would emphasize in conversations with publishers about the value, why they needed to be in Vanity Fair (magazine) or whatever.Andrew Mitrak: How were the brands measuring their Return on investment on their magazine advertising? As we’ve looked at this era of marketing metrics and analysis, a lot of it tends to be around TV, and it feels like there was a lot more scanner panel data and things like that that were almost tied to television sets and stuff. But I haven’t actually heard it brought up on how it applied to magazines and such.Scott McDonald: It was harder to justify magazines in terms of bottom-of-funnel metrics because they don’t work that fast. They are much more about building Brand equity and upper funnel. So the big studies of that era needed to take a pretty long timeframe. They needed to be in field for a year or more to actually be able to demonstrate the value, and the value often was a brand equity value. It wasn’t pushing product. Newspapers worked fast. You know, that form of print media, you’d have the inserts before the weekend. It was mostly promoting sales, so eroding your profit margin in the same way that other in-store promotions would, and ultimately undermining brand equity. The point of good magazine advertising was to build brand equity and pricing power.So like a classic campaign that ran for over 20 years, the Absolut Vodka ad, was to me a great example of what’s different about print advertising compared to television or digital in most cases because it’s not interruptive. It works by invitation rather than shouting. It’s like, you want to put yourself in the picture? Oh, I want to be on that beach. I want to take that vacation. Or by being clever and witty, there’s a puzzle to solve. What have they done with that damn vodka bottle now? And, I mean, vodka is vodka, you know. But to be able to charge a couple of extra bucks because it’s Absolut is hugely valuable to that marketer. And so the game is a long-term game there. It’s not, and thus much harder to measure. And I think to the disadvantage of many advertisers that rely upon that kind of pricing power, it’s harder to sustain those forms of marketing these days because there is such a pull toward transactional bottom-of-the-funnel short-term metrics because they’re easier to measure. And they tend to be misattributed sometimes to shorter-acting forms of media that might have been, why did I search for that brand? But the search engine will get more credit than the advertising that made me type that brand’s name in the first place when I decided I wanted to buy something.Driving Brand Equity and Subscription GrowthAndrew Mitrak: I want to come back to where we were in the story. You joined Time in the early 80s, and you continued to work at Time Warner and Condé Nast, and always in consumer research and insights leadership roles. And so what was your role in doing market research for major magazine publishers? Was it more looking at their own metrics, or was it looking at metrics for the advertisers, or what was your job there?Scott McDonald: I set up the first consumer research department at Time Inc. And so the focus was almost exclusively on the demand side, on stimulating demand for magazines, working with the consumer marketing function and with the editors. And so a lot of work in magazine development, starting titles like Martha Stewart Living, Real Simple. Those were some of the ones that I worked on at Time Inc. And then there was a lot of magazine development work at Condé Nast as well, along with cover testing and developing forecasting models. You know, you have a couple different ideas for what you might run on the cover of Vanity Fair, which one will sell more. And so that was a key part there.Condé Nast also had The New Yorker probably, a super influential magazine, one I still read all the time, very loyal to it. But the job there involved reducing its dependence on ad revenue and building up the consumer side of that business. So it really involved gradually getting people used to paying $150 a year for it instead of $50. And that was strategically vital to a magazine like The New Yorker, which isn’t a behemoth in terms of reach. And so it requires kind of a different mix in the business model. But yeah, at Condé Nast I had responsibility for the advertising side, but they hired me primarily because of my reputation doing work on the editorial and consumer side.Andrew Mitrak: I make a lot of The Simpsons references on this podcast because I grew up watching The Simpsons. And I remember one of the first ways I ever heard of The New Yorker was a Simpsons joke where Marge is going through her mail and one of the envelopes was a rejection letter from The New Yorker subscription department. And I was basically a little kid, I was like, I didn’t even know what The New Yorker is.And I looked it up like, oh yeah, seems like it’s this magazine for rich smart people. And it’s funny to think of how a magazine sort of segments itself. The New Yorker is different than Time, but there are some overlaps, right? That Time is on every newsstand, it has broader reach, it seems like it’s more ubiquitous, and The New Yorker wants to be big and everybody wants to know the name, but not everybody necessarily reads it or pays for it or subscribes to it. And I guess can you speak to the different approaches you had for how growing market share and maintaining market share for a very large widely circulated publication versus increasing the brand equity and justifying price increases and higher subscription costs for a more niche publication like The New Yorker?Different Approaches to Managing Print Media BrandsScott McDonald: Well, to some extent, I mean, some of it really is respecting the editors that you’re working with and trying to find a way to help them with the particular problems that they face. So a demand problem for Time (magazine) really involves something like newsstand. The New Yorker didn’t depend upon newsstand sales; it was a subscription magazine. So it’s partly just kind of understanding the differences in those businesses. And Time was probably in more need in some ways of the kind of research help that I could make because it did depend on newsstand sales. And that’s something where the forecasting tools can be of greater use and a testing program, particularly if you’re out every week, you get a lot of data points that you can then reconcile to how it actually sold and refine your forecasts.So, but then a whole lot of times there’s a lot of news that happens. It’s not debatable what will be on the cover. It’s like what was the big story of the week. So your point of influence is more a slow news week where there’s what we would lovingly call a thumb sucker article. Just something that’s a bigger, in-depth piece that’s been cooking for a while and they’re looking for the right opportunity to run it. And for those they would really want to know some, it’s risk management. Like, how much will this appeal to people?Andrew Mitrak: Did the business interests of increasing reach of say Time Magazine for instance influence editorial decisions as like who would be on the cover? Because I could imagine that there might be certain figures that you put that person on and it’s more likely to buy news, more people will buy it, right? Or you might have data like, oh when we put handsome people on the cover, we get more than... Did that ever...Scott McDonald: It always is the editor’s choice. I’m just giving information. So there never was pressure from the corporation to, you know, just do what Scott says. It wouldn’t work well. It wouldn’t be good for the working relationship with the editors. It’s their remit. And so the principle of church and state was pretty much intact all the way along, and that would be, that wasn’t something that it was useful to challenge.But there’s a lot of financial, a lot at stake. Or at least there was during that golden era. I mean the advent of this thing, completely changed the game because attention moved entirely to the phones. It hasn’t really left there yet. And people were no longer killing time at a checkout stand kind of browsing a magazine rack to figure out something to amuse themselves for the three minutes, the 2.7 minutes that they were in line waiting to be checked out at the grocery store. Yeah, so the forecasting became less valuable as newsstand just as a category declined.Surprising Insights From Magazine Cover TestingAndrew Mitrak: Are there any general insights or truisms that you’d be able to share about what are the markers of like, say who’s on the cover of a magazine and like this type tend to lead to a larger spike? Like what’s the type of insight you would share with an editor that they would choose to use or ignore or...Scott McDonald: I’d say the things that are sort of durable truths, they didn’t need me for. I mean, put a Kennedy on the cover of People (magazine) and you’re going to sell. You can still, you can run JFK’s assassination 40 years later and it’s still going to sell. So I mean they don’t need me. They know that. But of course, if People magazine does this all the time, it’s not a good thing. They’ve got to find new things. So and Princess Diana, same thing. So there are cover subjects that for People or Vanity Fair (magazine) are pretty timeless.The I’d say the better examples would be the ones that were surprises. Where they had some other strong options, but there would be a surprise that came out that they wouldn’t have automatically assumed. And so a test that would highlight that would encourage an editor to take a chance on something. And this would be true even for just an unusual shot that doesn’t look like the usual cover of Vogue (magazine). So a model or an actress in an unusual yoga pose or something, would be, or pregnant. Just something that is startling and feels a bit like a risk. And then you give the editor some idea of what is the level of risk and the probability of success for something that is out of box. And so I think it was used more for encouraging innovation and risk-taking than moving always back to something that was kind of a hardy perennial or too predictable.Andrew Mitrak: So there were the truisms that were obvious, the JFKs and Princess Diana’s of the media. And then the things that were non-obvious that were unique insights that you were providing, were those sort of more temporal where you do that trick and then it sort of fades? I’m kind of almost likening it to people who analyze what’s trending on TikTok and social media trends and sort of seeing what are the types of stories that are this week. But you can’t, you kind of gotta hop on it now and it’s, this isn’t necessarily useful advice five years from now. Was it kind of like that type of thing?Scott McDonald: One example I can think of from Vanity Fair was Heath Ledger. So it was like a year after he died. And they put him into the mix on a cover test. It wasn’t my idea, it was the editor’s idea, but it was against some other things that going into the test you plausibly would say, well these other ones have a pretty good chance as well. There’s no particular reason to think that people are still that interested in Heath Ledger. But they were, and it was quite evident. Now doing it a year later, it probably wouldn’t be the same. So these are kind of timestamped and the value of them is in being able to do that probe at the moment and fit it to a model where you’ve got other data on other covers and you’ve studied the competition and you know what their newsstand sales were. And so you can get that data back from the distributor. So you’re able to build a more sophisticated model because you’ve accumulated more data. And it was all great until the whole newsstand business collapsed in response to this more transformative launch of a smartphone and major change in consumer behavior. It’s part of what interests us right now on AI of course, and trying to get an early bead on this next transformative change.Building Martha Stewart’s Brand with Consumer ResearchAndrew Mitrak: I’m going to ask you about the smartphone and the internet and AI. I have one more magazine question before I do though. Because you mentioned Martha Stewart Living. And I think Martha Stewart might be one of the greatest marketers of all time. And I actually haven’t discussed her that much on this show yet. And just that there’s a magazine title with somebody’s name, Martha Stewart Living, there’s not that many of those. It’s not that, and to build a whole, and it seems like a unique thing at the moment to build a whole magazine around her brand. And do you have any stories of the creation of Martha Stewart Living or what was that about?Scott McDonald: It was fun. The most fun part of it really was doing qualitative work, we did Focus groups with Martha in the back room. And it was of a genre of qualitative research where we decided that we really wanted to study the fans. So like this had worked very well for Warner Bros., so my confreres out at the Warner Bros. Studio, had this property Superman, that had been kind of damaged by this campy TV series in the 60s. And it wasn’t, they wanted to bring out a Superman movie that really worked, and they did it by studying the hardcore fans of the comic, of the original thing. So that was the approach with, and they managed to succeed in reviving the franchise for the movie.That was our approach with Martha Stewart, we really tried to identify the people that just loved her. And that we studied what was authentic about Martha. So my favorite exercise from it was asking Martha to just from her, come from her house in Westport and bring us some stuff that’s in her house, that we mixed in with other things that were expensive, or utilitarian. I was like gardening gloves, or a little trowel, or just stuff that from her house, random stuff, compared to other stuff. And we threw it all on the table and asked people to pick out which things were Martha’s and why they thought that. And they could do it. They could do it. They understood her taste, some of which might be Shabby chic, but it was her taste and they were spot on. And it kind of helped the editors because here was a situation where Martha hadn’t made a magazine before, so she’s contracting with Time Inc. to boot up this magazine. And she’s got some professionals in magazine design and editors and things like that that she’s working with, but it’s a new venture. And that really helped to refine understanding of what the secret sauce was and this sort of passion for Martha. And I think it was a good example of, again trying to provide some information, but respectfully. I’m not a magazine editor, and you just set up the occasion as an opportunity to understand and refine the description of that brand and what’s the flavor of that magazine.Andrew Mitrak: Right. Yeah, it seems like part of the core insight is really doubling down on the core fan base because if you’re making a magazine, you could sort of take it in different directions. And you can expand, if you have a lot of pages to fill, you could sort of dilute it and add a lot more stuff in. But instead, be like no, let’s really focus on what does this core group care about and try to get it to be the essence of Martha.Scott McDonald: You know, and it’s interesting too because as we discussed before, the ads in a magazine are a pretty important signal of who’s in the room, who’s allowed into this club. So if you’ve got tasteless ads in a Martha Stewart Living or in any Condé Nast publication, you’ve got a problem. And it’s an editorial problem. I remember once at Condé Nast, the corporate sales department did a big deal with McDonald’s. And they ran McDonald’s in like all of the Condé Nast publications. And we got consumer complaints. “This doesn’t belong in my magazine. How dare you.” So there is an interesting balance that takes place that just has to do with the signaling about what’s appropriate for this particular environment.The Early Days of the InternetAndrew Mitrak: When did you first realize that the internet was going to be a big deal?Scott McDonald: Right off the bat. The World Wide Web itself, which became I know was invented in 1989, but the first real operational browsers and effective implementation of the Web was in ‘95. And it immediately created a sensation, even though we were dealing with 300 baud modems and screeching sounds and all this stuff. Just the reality of having that amount of sort of global access to all these documents, was very bewildering. And for about four or five years, there was just a whole lot of experimenting taking place across all media.Time Warner at that point had already been investing in Broadband and trying to pilot Video on demand. So they basically switched video systems, and it was they were too early. The technology was too expensive still, but I got to sort of play around with that. But there was recognition that something big was afoot, and people just didn’t know exactly what to do about that. And that was, that was a pretty fun ride.Andrew Mitrak: Yeah, I imagine. It’s quite a ride. And so as a publisher, as the internet comes along, you know it’ll be a big deal, how does that impact your role as a researcher?Scott McDonald: In some ways it led to just some interesting new things I had to figure out how to do. So again, because I came out of academia, I would constantly look back to see how certain methods, for example, for doing analysis and or forecasts, might apply in this situation. So my job at Time Warner kind of morphed into trying to understand the internet and the effect it would have on businesses. And so part of what I was doing was studying like what there’s a lot of complexity and chaos and difficulty finding things, and there were no good Search engines. So you’d start studying how people were actually using the available tools, AltaVista for example. And so it introduced me a lot to usability testing, user interface diagnostics, because internally people were designing things like more complex remote controls for TV for cable systems. And for proliferating channels of content. You’d start studying the dynamics of search and what led to satisfaction with a search result or not.Time Inc. was experimenting with a satellite model that said, okay, we’re going to provide simplification, kind of like what AOL was at the beginning, where it was simplified into some aggregate content areas and you relied upon AOL or Time Inc. to filter all this stuff and make it simpler to find things because you’d aggregated content into kind of a hub. And part of my frustration was I wasn’t able to effectively convince the management of Time Warner that that was a mistake, and that that wasn’t actually going to win. That people wanted, they liked the freedom of all of those of being able to pull in documents from everywhere, and they didn’t really place enough value in that filtering design and structure. So Google would win. And as soon as Google showed up, Google didn’t even have a business model yet, but it was clear from day one when you’re studying that space that this is a significantly better search result. And you could see immediately that this is where Time Warner should be focusing its attention and not Pathfinder or something like that that was. Or, and it was the AOL deal, when that was announced, the merger with AOL, that was when I decided I was going to leave Time Warner. Because it seemed to me to be completely contrary to what I’d been learning.Andrew Mitrak: Seems to have been a prescient choice.Scott McDonald: Yeah, personally it was fine. I had a lot of options that became very valuable in that transaction and I could exercise them and walk away a happy camper. But it seemed like a very bad business proposition.From the Walled Garden to The Open WebAndrew Mitrak: Yeah, for sure. And it seems like the Time Warner AOL merger and sort of their Walled garden approach as opposed to sort of embracing the open Internet it seems like it also kind of ties back to their own business interests in being gatekeepers. And that if there weren’t gatekeepers that has sort of knock-on effects that might be bad for the publishing industry that sort of played out over the next couple decades.Scott McDonald: It’s the Innovator’s dilemma.Andrew Mitrak: Yeah, exactly. Did publishers start to see the writing on the wall there or when did that, when did because I’m sure there was a moment where the internet’s like, hey this is a huge opportunity, this is more, you know, free distribution, we don’t have to pay for paper, things like that. But then there seems to be like, oh but what if anybody can blog and what if people stop going through the gatekeepers? Like when did that turn or did you see that turn?Scott McDonald: That was more in the 2000s. So it was really when I was at Condé Nast, and Condé Nast was wrestling with the same issues. In some ways it had a pretty big portfolio of brands, but it ended up pruning those to the most distinctive brands that could be defended and that could operate as digital properties on a global scale. So they kind of shifted scale and integrated their international, like they used to license Vogue (magazine) in a bunch of different countries, and they kind of consolidated and it became a global brand more. And would be sold, the advertising would be sold on a different basis thus. So there were different forms of adaptation, they all needed to figure out how to do what they were doing on a lower cost basis because the impressions became more commodified in that market. Particularly once Programmatic advertising took place.And you know the, I mean the big change, the biggest change in my view was that advertising was severed from editorial content. Ads came from Ad serving. Advertisers bought an audience, they didn’t buy a placement inside a medium. And so the whole model and the kind of special relationship that I described where I’d be going over to L’Oréal and talking about our view of their customers, trying to share insights about customers that are gleaned from studying them in the context of Condé Nast magazines, was irrelevant because everything was much more commodified through that digital model of advertising insertions. The same issues are with us now with AI and you have different companies trying to decide do I license, do I make a deal with OpenAI right now or do I try and sue them, you know like The New York Times is doing, and require a different payment model for access to my content. And these are still commercial and legal questions that are not yet resolved but they feel familiar because they’re just a different iteration of the same business issues that developed in response to the Web.Applying Lessons from the Internet to the AI EraAndrew Mitrak: Yeah absolutely. Are there any other lessons that you’re drawing or thinking about from having navigated the internet’s disruption to the publishing industry and as we’re now entering or in the midst of this AI era, what that means for advertisers and marketers? Like are there any lessons that you’re thinking about that apply?Scott McDonald: Yes and no. I mean I think the in some ways this feels somewhat different. And I don’t know, you know the question of whether AI dramatically changes the consumer the labor market, and the ability of people to earn incomes that supports the advertising system is a fair question. Even though the history of all these tech innovations is that they generate enough new jobs to replace the ones that have been rendered obsolete. But I don’t know at this point whether whether I believe that this time around. So that’s a fairly big unknown that would be different in terms of the consequences of the innovation.If I was still working at a magazine publisher and or a publisher in general, it could be a TV channel that calls itself a publisher now, or any content engine, then I’d still be wary of how I monetize that content when it becomes Disintermediation. My advice still would be pay a lot of attention to trust and pay a lot of attention to the shifts in consumer behavior because advertisers always follow the consumer behavior. And consumers don’t always do what we as publishers want them to do. So you’ve got to be realistic about that and keep your eye on the consumer. That’s certainly a lesson I think from my Time Warner days where I don’t think they did that sufficiently. So.Andrew Mitrak: I don’t know if this is a lesson, but something to draw from the golden era of publishing is editorial taste, that as a marketer that uses AI products, the AI products don’t always have good taste, right? Or they kind of have sort of a median internet quality taste and like, you know, obviously they’re very powerful and all that but like there is an element of if everything kind of looks the same, and you can’t differentiate your AI output from my AI output, somebody’s editorial taste on refining and coaching and directing it kind of becomes more important. And I wonder if there’s sort of people embracing their inner editor and developing taste to sort of know what’s good and not...Scott McDonald: You know, this remains to be seen but it’s my observation that as AI improves, which it continues to do with breathtaking speed, it depends partly on you as the user to tell it what you want. It wants to please. So if you, so like in the context of say marketing applications or insight extraction, if you just ask a simple question, you’re going to get a pretty simple answer. If you actually feed it say peer-reviewed academic articles that you want a theoretical framework to be incorporated into the answer, you’ve raised the bar a lot. If you tell it that you want it to pretend that it’s a McKinsey & Company consultant, it’ll do it. It knows what you mean, and it will change the answers in response to your inputs. So I don’t see any reason why you couldn’t do that with regard to some matters of taste. If you could train your chatbot to be like those focus group respondents in the Martha Stewart Living example. And it seems in principle that you should be able to cultivate that.The Advertising Research Foundation (ARF)Andrew Mitrak: So I want to ask you about the Advertising Research Foundation (ARF). You’ve been president of the ARF for about ten years or so. What is the ARF for people who have are not familiar with it already and how has it evolved over the years?Scott McDonald: Okay. So the ARF is the Advertising Research Foundation. It is celebrating its 90th birthday right now. It was founded in February of 1936. As at the behest of the two founding members, the Association of National Advertisers, the ANA, and the American Association of Advertising Agencies, otherwise known as the 4A’s. And it was set up from the beginning as an independent foundation dedicated to furthering through research the scientific practice of marketing and advertising.So from the beginning days it wrestled with the kind of public facing questions of how advertising works. What’s the best way of measuring the audience of a Life (magazine), you know? Of not just the circulation but all the readers per copy and the people who look at it in barbershops and whatever, you know. What’s the best way of measuring the audience for a radio program? We know how many radio sets are in American households, but how many people actually heard a particular show? And then in terms of advertising, what makes some ads successful and others not? What’s the optimum frequency? How long does it take to burn in or to burn out? Those questions have been with us from the beginning, and they’re still with us today, it’s just a much more complex and fragmented media landscape.And so to some extent you need to update that all the time. And that’s still the kind of role of the ARF. It’s the power according to its bylaws, the power over the organization is distributed among marketers, ad agencies, media companies, and service providers, which would include all the measurement companies and everybody from Nielsen Holdings to little Neuroscience consultancies or brand consultancies or attention measurement companies, any of those things. And so ARF is kind of the Switzerland in the middle of that ecosystem that conducts research on basic questions of how advertising and marketing work, trying to stay as close as possible to the values of scientific inquiry. And that means, that doesn’t mean anything goes. And you’re in an environment where people make a lot of claims. All these campaigns do really well. You go to a lot of conferences and they’re all just like success story after success story. And you know not everything works, you know? And so trying to separate wheat from chaff and kind of build a body of knowledge about how to think about these things is the mission. To try to improve practice through the application of scientific methods. So.Andrew Mitrak: How do you, how do you deal with that at a conference or just in marketing in general? Because I think every marketer wants to say that they’re scientific. They want to say that they’re data-driven, but also every they want to say that their campaigns are working, right? They want to say yes and our campaign was great and there’s sort of a grading their own homework type thing. And there are ways where you can cherry pick your numbers, like “oh, our reach was great,” even if your conversion was bad. Or “conversion was great,” even though you paid too much. And I guess how do you sort out navigate that?Scott McDonald: Yeah, it’s difficult. Partly because, you know, the association itself, it’s a membership organization. So you don’t really want to offend your members. But on the other hand, at some level you might have to because not everything can be equally true. So that’s why the north star remains. And you try and set up... I mean a classic ARF study, we just did it around different aspects of attention measurement. This is a growing field. And you have different approaches, some of which rely upon academic understandings of cognition and memory and things like that. And others that really kind of just follow the development of tools that might plausibly be used as proxies for attention. So eye fixations, because we have Eye tracking and good cameras on our digital devices, on our phones, on our laptops. You’ve got information that’s used for ad verification purposes that would indicate that yeah, there’s a human there. There’s a hand on the mouse. You know? So that’s a proxy for some level of attention that is a signal not very expensive to collect because you’re already doing all this ad verification work, but how closely can we establish that that relates to any sort of formal definition of what we mean by attention? And by that are we talking about, you know, just eye fixations and Saccades? Are we talking about evidence of memory and recall around an ad?So there’s a lot of tests around that. And the ARF exists kind of to help sort out the quality of those. We have an academic journal. We connect to people who have, you know, where they’re peer reviews. There’s competition to get on the stage for our events. So people have to compete before a jury to even get a slot. And so it’s, it’s sort of through that process, which is similar to how it works in the other sciences. I mean, the best examples, if someone really wants to make a strong claim for their research, then they would, we’ll do an audit for them. We’ll run through and see whether we can replicate their numbers. We’ll see whether they did cherry pick. We will, and then we’ll take their data and host it on our website and make it available for anyone in the world who wants to have a go at it, to anonymize the data and, which is the same like if California Institute of Technology wants to make a big claim in the physical sciences, they got to make their data available to the team at Massachusetts Institute of Technology to build legitimacy around it. It’s a very similar concept. So that’s the space that we operate in. It’s geeky but it has some value in this ecosystem.Andrew Mitrak: Yeah. If I was to draw an analogy back to earlier in this conversation of you and your publishing days recognizing “hey there’s truisms that JFK assassination and Princess Diana, that always sells magazines at newsstands.” But like the real insights are sort of the non-obvious things that are more unique or maybe more time-bound. Could you draw parallels and find like what are sort of the truisms that the ARF has helped establish or that you’ve sort of recognized over the years in your role there, versus some of the more unique, non-obvious things that research is uncovering?Scott McDonald: There are a lot of them, I would say. We codified some of them in our, so the ARF acquired the Marketing Science Institute, which is a more academically oriented entity. We did this a couple of years ago. And MSI has published something they call the Empirical Generalization series, which only will, so it will formulate like “X causes Y.” And here are the estimates of effects, within this range and these categories, you know that might be covariates. But it’s reduced down to things that we think there is compelling enough evidence. And their filter on it is wherever there’s been a meta-analysis in like the top three or four marketing journals. So very high level of peer review scrutiny. And only where there have been 60 or more studies confirming this generalization that would allow you to talk about say the if you’ve got like a budget to spend and you need to spend some of it on advertising and some of it on price promotion, for example, in-store promotion, like what are the trade-offs and how do we think about that?So but I think for the ARF itself, probably the thing we’ve studied the most over the years, is anytime there’s a recession or a big disruption in the economy, the pandemic, September 11 attacks, any of these things that suddenly just have a big dramatic effect on markets and consumer behavior, there’s a tendency to cut marketing spend. Short-term marketing spend gets cut. So what’s the effect of that? Since we’ve studied it like from the Great Depression, World War II, the Korean War, any of these things that have these kinds of shock effects. And you’ve got a pretty good record of it. And the answer to it, I call it an empirical generalization, is that when you cut your share of voice, so you withdraw from the advertising market and don’t spend, so you’re not really getting a share of voice within a category, you lose share. And you lose it fairly quickly, and it takes about five years to recover, if you can recover. We have had whole brands that just kind of go away because they lost their position within a category.That’s connected to another generalization and truism that I think is there and is likely to remain there for a long time, that being the dominant brand in a category, which usually involves at least 20% share of market, although in some cases it’s a lot more, leader in the category. That leads to all kinds of benefits. Any advertising that’s done for the brand leader in a category has stronger coefficients of impact, both short term and long term. And to the dismay of the second and third or fourth participants in a category, their advertising is probably going to actually benefit the category leader. It’s an unfair world, but people just mistake it. And a lot of, it’s another sort of truism that I think remains, a lot of creative ads that are so creative that they don’t tell you who the brand is, people love the ad and they assign credit for it to the wrong brand. Because that truism was ignored. It might have won an award somewhere in an ad creative competition, but it didn’t really work for the brand because they didn’t integrate the brand, make it clear enough to the consumer what brand was being advertised. So there are a lot of regularities and it’s hard to not be like a broken record sometimes when you’re responsible for the catalog of those things. But there are mistakes that we shouldn’t be making over and over again. And I think MSI in its most recent iteration of the Empirical Generalization series had like 175 things that rose to the level of, okay these are generalizations. There’s like enough evidence, there is consensus around it. And that’s kind of how in my view science works. It still doesn’t mean that those won’t change and evolve over time as other situations develop, but you build it on the back of a lot of evidence that’s been objectively evaluated and critically evaluated. So.Andrew Mitrak: Yeah. That’s great. It’s great that your foundation is able to advocate for this research, make it available and share it. So let’s learn from science, let’s learn from history and not repeat the same mistakes over and over again. So Scott, I really enjoyed this conversation. For listeners who have enjoyed it as well, where would you point them to online so they could find out more about your work and more about the ARF?Scott McDonald: thearf.org and msi.org.Andrew Mitrak: Scott, thanks so much. It’s been a real pleasure.Scott McDonald: Thanks Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 47In 1967, a 30-second spot at the very first Super Bowl cost roughly $37,500. This Sunday, for Super Bowl 60, brands are paying upwards of $8 million. That is a price increase of over 20,000%.So… Is it still worth it?For Professor Tim Calkins, who’s spent 22 years studying this exact question, the answer is an emphatic, ‘Yes.’Since 2005, Calkins has led the Kellogg Super Bowl Ad Review, where MBA students evaluate every ad that airs during the big game. It’s easy to say which ads are funny. It takes more work to determine which ads will be effective.In this conversation, we dig into how Super Bowl advertising has evolved: why brands now release their spots weeks early, why the creative has gotten safer as the stakes have climbed higher, and what the tone of these ads reveals about the American economy and political climate.If you’re planning to watch the game this Sunday (or just the commercials), this conversation will deepen your appreciation for the work that goes into making every second worth $266,667.Listen to the podcast: Spotify / Apple PodcastsWe also talk about Tim’s years managing Kraft Mayo and Miracle Whip (two surprisingly different marketing challenges), and the most common mistakes that marketers make when delivering business presentations. As you’ll hear, Tim is an excellent speaker.Now here is my conversation with professor Tim Calkins.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.The Kellogg Super Bowl Ad ReviewAndrew Mitrak: Professor Tim Calkins, welcome to A History of Marketing.Tim Calkins: Well, thank you. It is great to be here.Andrew Mitrak: We will be publishing this right before the 2026 Super Bowl, which is Super Bowl 60. I had a lot of fun preparing and researching some of your work and also watching some old classic Super Bowl ads. The reason I wanted to have you on for this conversation is that you started publishing the Kellogg Super Bowl Ad Review in 2005, so over 20 years now. Can you introduce this project for listeners?Tim Calkins: This is our 22nd year doing this event. Back in 2005, we began the Super Bowl Ad Review, the Kellogg Super Bowl Ad Review as we call it. I teach at Kellogg, I teach marketing at Northwestern University’s Kellogg School of Management. Before I was at Kellogg though, I was at Kraft Foods, and I worked in marketing at Kraft Foods for a number of years. When I was at Kraft Foods, now Kraft Heinz, with my team I would sometimes do an exercise where we would look at Super Bowl ads and try to think about what we could learn from what had happened on the Super Bowl.When I came over to Kellogg, I thought there was a similar opportunity there to do something around the Super Bowl where we get the Kellogg students evaluating these Super Bowl spots. So the event has now been running for 22 years. The format is always the same. We pull together a panel of Kellogg MBA students. Nowadays it is about 70 or 75 students. As the Super Bowl unfolds, as it plays, the students evaluate all the ads that run.What makes our panel different from a lot of other panels that are out there is that we are very focused on efficacy. We are trying to think about: will these spots, will these Super Bowl ads, build the business and build the brand? Ultimately that is what Super Bowl advertising is all about. A lot of panels, and a lot of Super Bowl rating things—there are lots of these—they will look at likeability, humor, which one did you like the best, which one was funniest. Our panel, we don’t really do that. That’s not really the question. The question really is, using sort of an analytical framework and process, how do we think about which ones of these will be most effective?Every year we come up with our ratings. We give a handful of advertisers As, and then Bs, Cs. On occasion, we give out an F if somebody really misses the mark. It is a really fun event, but it also is a lot of work because what you realize being part of it is that there are so many ads that will run on the Super Bowl. There are probably 75 official Super Bowl spots, but then there are all these other things that show up. You have local spots, you have network promo spots for different shows. It is a lot of evaluation that the students do. It ends up being a very draining experience.Andrew Mitrak: Can you walk me back to the beginning? You mentioned Kraft, which later became Kraft Heinz, which I will follow up on because I want to ask you about that too. When you first started paying attention to Super Bowl ads there, this might be an obvious question, but what stood out to you about Super Bowl ads? Why did you want to pay special attention to Super Bowl ads?Tim Calkins: Super Bowl ads are really unique things in the world of marketing. What is amazing is they become more and more unique as time has gone by. Even if you go back 25 or 30 years ago—so we are now at Super Bowl 60, so you go back to Super Bowl 25 even—the advertising that was running was really different than normal advertising. What happens on the Super Bowl is a few things. Number one, it is expensive, so the investment is high. Number two, you have a huge audience, so there is a lot of people who are watching it. But also, the expectations are different for a Super Bowl spot.You can’t turn around and run an ad that you are running on Survivor. You can’t turn around and run that ad on the Super Bowl. For most advertisers, you are creating a special piece of creative just for that event. People expect to see amazing Super Bowl spots. That is the expectation and companies are under a lot of pressure to deliver.The Framework Behind Super Bowl AdvertisingTim Calkins: The reason it is really interesting to study is that you know that for each one of these advertisers, they are putting forward their best thinking, their best creative talents. This is the pinnacle of their work. So much scrutiny is on these things. Given that, it is fascinating to see what they decide to do. Sometimes they do brilliant things and other times they really miss. But to understand what is happening there and really think about it as a marketer is a really unique opportunity and you can learn a ton.Andrew Mitrak: You mentioned how Super Bowl ads are kind of this unique thing. They are a little different than other ads. When you think about this project of analyzing Super Bowl ads, how does it connect to your broader work in brand and marketing strategy? Do you see these as really closely related where a Super Bowl ad is just the epitome of a brand and a marketing strategy wrapped into 30 or 60 seconds? Or do you feel like this is just a little bit of a different, kind of like a fun side quest that’s related to a brand, but it is a slightly separate, unique, different thing than the rest of the brand itself? How do you frame this work?Tim Calkins: I think a Super Bowl spot is very much at the heart of everything that I teach. I teach marketing strategy, I teach biomedical marketing, I teach influencer marketing, branding. Across all of those classes where I really spend a lot of time is trying to think about the strategy. What are the choices that companies and brands are making? Are they going after new consumers, for example, or are they going after their current consumers? Are they trying to skew younger? Are they trying to go older? Is it about repositioning a brand, getting people to think differently about it? What are all the choices that companies are making?So when we look at Super Bowl spots, and I look at a Super Bowl spot, I am really interested in pulling apart the choices that the companies have made. Your first choice: the decision to run an ad on the Super Bowl. Well, that’s a big decision. How is it that the company reached that decision and decided that was a good use of 8, 10, 20, 30 million dollars? That begins there. Then the question is, okay, well what products are they talking about and who do they seem to be going after and what’s the message they are putting forward? All of those are sort of strategic choices that the company is making.Ultimately it does get down to some creative execution things, and those are fun too. But I think a lot of the heart of a good Super Bowl ad comes from the strategic choices that are made in the development process.Andrew Mitrak: What is the first Super Bowl ad you yourself remember watching? Were you always interested in Super Bowl ads?Tim Calkins: Oh, I’ve long followed the Super Bowl. Like everybody, I watched the Super Bowl. As I was growing up and came through college and all of that, I would watch the Super Bowl and you’d watch the advertising, of course, a big part of the event. It was really only when I got to Kraft that I began to look at it with a marketing lens. That is a very different way to evaluate a Super Bowl spot. Beforehand you might be looking at, you know, what’s one of the early ones I remember... the Coke Mean Joe Greene ad that ran, which was one of the great spots. Or, of course, Apple’s spot that ran back in 1984, these old spots that ran.But it was very different for me when you begin to think about these as marketing investments and marketing tools. That is where all of a sudden it begins to change how you watch a Super Bowl ad. It is one of the things I try to do as I talk about the Super Bowl, is to get people to look at them a little bit differently. It is so easy for people to pass a quick judgment on a Super Bowl spot. “Oh, that was funny. That was great. That was stupid.” People are very quick to pass judgment on it and nothing to stop them from doing that.But when you really pull back and try to think about what is happening there, it totally changes how you evaluate it and how you think about it. You just have a lot more respect for the risk of these pieces of advertising and you have a lot of respect for how difficult it is to do. I think to do a great Super Bowl ad is really tough. It is a really difficult thing. So when somebody does it well, you have to have a lot of admiration for that team and really salute them.When they miss, it’s not for lack of trying. It’s not for a lack of intent or trying and effort. It is something went wrong. Sometimes your heart goes out to them because you are like, “Shoot, I don’t know exactly the people who were working on this, but it did not go well for them.” So I guess it makes you much more empathetic about this advertising when you really understand what is happening.Andrew Mitrak: Yeah, it is good to be empathetic. It is also kind of fun to dunk on the people who miss and all that, but you got to look at everybody trying their best, marketers taking a high-risk bet and kind of good on them for trying whether it’s a win or a bit of a dud.Evolution of the Super Bowl Commercial LandscapeAndrew Mitrak: You mentioned a few famous ads that I want to ask you about because you mentioned Mean Joe Greene, the Coca-Cola advertisement, which is a lot of fun. And then of course the classic 1984 ad, which is probably the single ad that’s come up on this podcast more than any other advertisement. I kind of see that as sort of a watershed moment for the Super Bowl ad where it was a 60-second spot, big budget, directed by Ridley Scott, released in 1984 and obviously has the tie-in to 1984.Do you see any other milestones beyond that one in Super Bowl advertising? If you look at moments as the stakes in the Super Bowl have gone up, the prices of an ad have gone up beyond 1984, do you see any other major milestones or inflection points for Super Bowl advertising?Tim Calkins: People often ask, what turned the Super Bowl into this marketing extravaganza? I think what happened is that it has been a step-by-step process over the years that have really led to this. There have been iconic spots that have run over the years. Mean Joe Greene back in 1980. Apple, that was 1984. Then of course 1993, that was one of the great spots for McDonald’s with Larry Bird and Michael Jordan shooting baskets for a McDonald’s meal. That was one of these great iconic spots, celebrity, the whole thing. That was a really big spot people remember.The Budweiser Frogs in ‘95. That was another spot that people remember that sticks in the mind.What really happens here in the Super Bowl is that it is a step-by-step growth and increase in the importance of Super Bowl advertising. Part of what is happening with the Super Bowl growing, what is happening at the same time is that all the other media properties out there are sort of fragmenting. So if you go back 20 years ago, the Super Bowl was a big deal, but a lot of other things were a big deal too. The Academy Awards were huge and people would watch those. The Baseball World Series was huge and people would watch that. The Olympics was huge.What has happened over the decades is that so many of the other big events, viewership has declined as audiences have fragmented and we have so many choices of things to watch. The one thing that has held up and even grown as the years have gone by is the Super Bowl. Which makes it then more and more important when it comes to companies and brands and when it comes to the advertising because now if you want to reach everybody in the US or a good chunk of people in the US, really the only way you can do that is on the Super Bowl.The Surging Costs of Super Bowl SpotsAndrew Mitrak: I looked up the price of a Super Bowl ad when they started. A 30-second spot at Super Bowl I (1967) was $37,500 back in 1967 dollars. By the way, that’s from Wikipedia, so I don’t know if it’s 100% accurate, but let’s say that’s the ballpark cost of an ad at that time. Inflation-adjusted about 10x that is $360,000, so more expensive. But that said, today in 2026 the reported cost is about $8 million. So that delta between $360,000 to $8 million, that’s the increase in cost.That would mainly be attributed to there being no other option. If you want to reach all of America, there are not many other places where you could do that. Would you say that scarcity and the breadth of that reach is what justifies the higher costs that advertisers are paying now versus then?Tim Calkins: There are a lot of things that go into the price, but certainly the price escalation has been extraordinary for Super Bowl spots. But you know, if I could today buy a Super Bowl spot for the 2035 Super Bowl, if I could do that, if there were a market that would allow that, I would do that because I don’t think the Super Bowl is declining anytime soon.Why do companies pay so much money? Partly it is the sheer reach of it. It is, if you want to get to a big chunk of the population, the only place you can go. But it is not just that. The other thing that has happened is that a lot of people when they are watching the Super Bowl, they are there, they are watching the advertising. Viewership of the Super Bowl, you might have 110 million people watching the Super Bowl, but the vast majority of those people, they don’t care about the teams and they, in many cases, don’t really care about football either. You just have to watch the Super Bowl though because that’s what everybody’s doing that night.Nobody counter-programs against the Super Bowl. You are not going to have a piano recital on the night of the Super Bowl. People would say, “What are you doing? You can’t have like a Scrabble party on the night of the Super Bowl. You are not going to do that.” No, everybody’s got to watch it. So people show up there, they are looking forward to seeing the advertising. That’s what they are paying attention to.The other thing though that is happening is that Super Bowl ads are very symbolic. That is an important aspect of this. If you are a company and you are going to go buy a Super Bowl ad, what happens now is you are going to put of course a big PR push around that and you are going to do all these other activities. You want everybody to know that you are buying a Super Bowl ad. Because what does that say? Well, that says that you believe in your business, you are investing in the business, you are an important company, you’ve got resources. All of that is really valuable for branding and it’s got this symbolic nature to it that is hard to quantify but is very real. So there is lots of stuff that brings people to this moment.You know one other thing that helps Super Bowl advertising is that the Super Bowl is early in the year. It’s in February. Which you would think, well who cares? But in a way that is really important because most companies, if you are on a calendar year fiscal year—January and February, what do you have? Budgets. You’ve got money. At the beginning of the year. In November, your money was either spent or cut or something happened to it, the money might not be available. But at the beginning of the year, all these companies have big budgets. In many cases they say, “Let’s get the year off to a good start. Let’s get on the Super Bowl. Let’s run this advertising, really give the business a jump start.” And that is going to propel us through the year. That is another factor that kicks in here to make it so valuable for firms.Andrew Mitrak: That’s a really good point, that timing within the year itself. Because also it sets up a campaign or an idea that you can build on throughout the year as well. If I think of the 1984 ad, at the start of the year, that’s great, 1984. If it was at the end of the year, maybe 1984 is kind of a lame pun. Like, “Oh, we’ve heard 1984,” it just happened over and over. So I think the ads themselves are fresh, it’s a new year, it’s a new idea. This is a campaign that you launch big and can iterate on or call back to throughout the year. So it’s kind of a nice big upfront investment in your brand spend.Tim Calkins: Well, and you’ll see that a lot of advertisers will use the Super Bowl to launch new campaigns. So that is when they bring out the new advertising. And then they follow it up. Either they take that Super Bowl spot and run it again, either as is or in a shorter format, or they extend the campaign idea and bring other executions around the same creative look and feel. You sort of put it in the mind originally on the one Super Bowl, the one big event, and then come back to reinforce that and to get some repetition. They do that in the subsequent months.Andrew Mitrak: Do you think that companies measure the impact of their Super Bowl ads differently than they do other ads? Do they measure ROI in terms of different types of uplift versus some other type of ad? Any thoughts on, you know, they spent $8 million on these ads, how are they measuring the ROI on that?Tim Calkins: Measurement of Super Bowl ads is really tough. It is really difficult to do. What happens is that every company is measuring the impact. You are not going to go invest 8, 10, 20 million dollars and not try to figure out the impact. The problem is that it is not easy to measure the financial impact of a Super Bowl spot. Some things are easy to measure. You can measure website traffic and you can figure out if anybody came to your website. You can look at search terms, did anybody do that. If you are selling an app, you can look at how many downloads did you get and what happened there. If you’re relying on influencers, you can see what kind of activity. So you can look at a lot of these diagnostic metrics.You can also ask people, do they remember your Super Bowl ad, did they like it? All of those, that’s all easy to measure. But financially, it is very hard to put numbers around it. The big problem is that valuing a brand financially is... people try to do it, but it is a very imprecise science. So in theory, if you get out there and run an ad on the Super Bowl, and if it’s a great piece of advertising, at the end of the day people will think better of your brand than they did before. They will have more positive associations with your brand and they might either know of it for the first time or have some... but it helped the brand.The problem is you can’t quantify the financial value of that. I can quantify how many people came to my website and things like that, but that’s a very small part of it. You are never going to justify a Super Bowl ad based on those kind of metrics. You are going to do it for the brand value and for the long-term impact that it is going to have.I have come to believe there is one way to know though if a company is happy with their Super Bowl ad. The one way you know for sure is whether they come back to do it again. Because you know that if a company runs an ad on the Super Bowl and then the next year they don’t, well then you know that clearly they didn’t think or they had questions about the efficacy of that. But if they come back and they do it again, then you know something.Sometimes you’ll see advertisers, they will run on the Super Bowl for a number of years and then they don’t. And then the question is, what happens next? Somebody like WeatherTech. They ran for many years, but then they took a year off. And then they came back. What that tells you is that they clearly thought that they were benefiting from the Super Bowl spot. And when they stopped doing it, they saw the problem.Andrew Mitrak: Sorry, which company was that? WeatherTech?Tim Calkins: WeatherTech. Yeah, so WeatherTech, they do floor mats. Very strange company. It’s a private company. And they have been running on the Super Bowl though for many years. They are back in 2026. They ran in 2025. I believe they did not run in 2024. But they ran ‘23, ‘22, ‘21, ‘20. But then you know.Some brands have been back and they have run for just many, many years. TurboTax has run, this will be their 13th year running on the Super Bowl. And you are like, wow. Squarespace, 12th year coming up. Michelob Ultra, 9th year. What you know is that these companies have clearly thought about this and have clearly decided that the Super Bowl is a good investment for their brand.Why Major Brands Left the Super BowlAndrew Mitrak: I’ll keep a closer eye out for WeatherTech; I hadn’t heard of that brand, but I’ll be watching for their ad as well. Are there any certain brands that you’ve noticed that left and stayed out? Do you think there are brands that said, “Hey, the way we win is by not playing,” and just chose to opt out of the Super Bowl? Are there any examples that come to mind of not because they went out of business or aren’t a successful company anymore, but they just choose to opt out of the Super Bowl?Tim Calkins: Oh sure, a lot of companies have. They come and go as Super Bowl advertisers. One of the great Super Bowl advertisers for many, many years was FedEx. FedEx eventually stopped running on the Super Bowl, and we haven’t seen them in recent years. They made the decision not to do that.Then there are other brands that really found magic on the Super Bowl and then stopped. Somebody like CareerBuilder. You might remember them; they ran some Super Bowl ads that were really distinctive with chimps. They had these chimpanzees, and it was these very funny spots about the workplace environment and, “Do you work with a bunch of monkeys?” I think was the thing. Maybe you should get a new job, and CareerBuilder was going to be a place to go find your new job. They eventually stopped running on the Super Bowl. There were a lot of reasons why.It is interesting, though, for a brand like that, you stop running on the Super Bowl, and then you do begin to see an erosion in brand awareness. Clearly, I haven’t seen their numbers, but clearly, that brand was top of mind when they were a big Super Bowl advertiser, and that is not the case at this point.Andrew Mitrak: I wonder which one preceded which. For CareerBuilder, it’s interesting because others have taken up the space, like Monster.com or obviously LinkedIn and other tools are massive within it. I wonder if CareerBuilder, if they don’t advertise in the Super Bowl because their budgets went down because of their impact, or if they stopped advertising in the Super Bowl and then therefore they kind of lost some market share and it was sort of a downward spiral from there. I wonder which one preceded which.Tim Calkins: My understanding of the story on that was actually sort of interesting. They were using the chimps, which were super memorable and distinctive Super Bowl ads, but then they got a lot of pushback from the animal rights activists who said it’s totally inappropriate to be using the chimps. They were very targeted. Some of the activists were very targeted and went after some of the senior executives at the company. The company eventually said, “We can’t really use the chimps. We’ve got to do something else creatively.”When they did that, though, what they found was that it was very tough to come up with a great Super Bowl spot. So they ran a couple of years, but they did not get anywhere near the distinctiveness or the lift that they had before. Then I think they said, “It’s a lot of money, the creative doesn’t seem to be working here, doesn’t make sense to keep doing this.” And then they backed away.Andrew Mitrak: Yeah, I guess if you’re going to use the animals, use something like frogs that work better as puppets or CGI or whatever Budweiser uses versus the real chimps.Tim Calkins: Yeah. I mean, the good news now, I guess, is Generative AI can create whatever we want right now.From Single Super Bowl Spots to Integrated CampaignsAndrew Mitrak: Exactly. Aside from the advertisements getting more expensive, over the course of the last 20 years since you’ve been—22 years now since you’ve been running this—have you noticed the ads themselves change themselves or the nature of Super Bowl advertising? How has the nature of Super Bowl advertising evolved since you’ve really started paying attention to Super Bowl ads?Tim Calkins: So it’s changed a lot. One of the big things that has changed is that more and more Super Bowl advertising isn’t just about the Super Bowl ad; it is about the whole integrated campaign. I think there are two factors behind this. One is the investments have become enormous, and so companies want to maximize the return on investment to make the most of the opportunity. The other thing, though, that’s available is now there are so many other digital tools that are available.You go back 20 years ago, and we didn’t have Instagram and Facebook and TikTok to play with. All of that has emerged over the years. Now what you see is companies put forward incredibly elaborate, integrated marketing campaigns around the Super Bowl. For most of these companies, it becomes a three-week—really a two-to-three-week—marketing push where they try to hit every lever during those two or three weeks. They pull out the PR campaigns and the influencer efforts and all of this different activity to try to make the most of it. So that’s, I think, really different. That’s one thing that’s changed.Why Brands Release Ads Before the GameTim Calkins: Related to that, another change that we’ve seen is that more and more of these companies now release the spots ahead of time. It used to be that the vast majority of Super Bowl ads would run on the Super Bowl, and that was the first time you would see them. Now, the majority of advertisers—the vast majority—will release the ads ahead of time. They’ll release them either the week before the Super Bowl or maybe two weeks in advance, but they get those spots out there ahead of time. There are lots of reasons to do that, by the way. That is the best practice. That’s a big change that we have seen. There’s a lot behind that we could go into.Andrew Mitrak: What are the reasons you would release your Super Bowl ad before the big ball game? You’d think like, “Hey, I want to make a big splash all at once. Let’s kind of hold the dry powder and go big all at once.” But is there some strategy to releasing beforehand?Tim Calkins: Oh, there are a lot of reasons to release a Super Bowl ad ahead of time. One of the big ones is that there’s just more time. So if you put your spot out there a week in advance, you’ve got a lot of time to generate viewership and to get views of it before the Super Bowl even happens. The Super Bowl goes by really quickly.The other thing that happens is as an advertiser, the Super Bowl is very unpredictable. You don’t know what’s going to happen. Maybe it’ll be a blowout and you’re running in the third quarter and nobody’s watching anymore. Maybe what happens is a different advertiser runs a spot right in front of you that is uproariously funny, and that overshadows your spot. Maybe the creative idea that you’ve embraced is copied by another company, and they’ve got the same sort of idea.These are all unknowable, unpredictable things. How do you hedge that? You get out ahead of time and try to get some viewership before the game even begins.Another big one, and maybe I think the most important one, is you know ahead of time if you have a problem. So on the Super Bowl, there is so much attention and viewership that it’s terrifying for companies because if you make a mistake and you run a spot that people find—even a small group of people—if they find it inappropriate or offensive or something like that, it can turn into a massive problem for the company. How do you avoid, how do you minimize that risk? If you release the spot early, there is time for people to come back and say, “Wait, that doesn’t look right,” and then you can fix it before the Super Bowl goes and before you offend millions and millions of people.So there are lots of reasons at the end of the day to get that spot out there. Holding it back for the surprise, you’ll see some advertisers do that, but that is not a common approach anymore. The stakes are too high. It’s too risky. There’s too much money involved. It makes a lot of sense to release it ahead of time.The Rise of QR Codes and Digital Calls to ActionAndrew Mitrak: The other change that I’ve seen probably in the last 5 to 10 years or so is the ads themselves having more distinct calls to action or digital experience within it. The QR code... I can’t remember which company it was that just had a kind of bouncing QR code on their ad for 30 seconds.Or ones where there’s also one from a year or two ago where it was just a big long URL or some secret code to enter in an app, and you had to find all the letters and type it all in.So it seems like there are more and more—in addition to being aware of the digital surround or pre-releasing on social media or on YouTube in advance—there’s also on the ad itself having more direct calls to action and making the ad more interactive itself. Is that kind of a trend you’ve been paying attention to?Tim Calkins: Well, there’s no question that companies are trying to leverage technology and take advantage of that. Whether it’s the QR codes that you see on some of these spots or on other platforms, you see that I think more and more.Super Bowl Ads as a Mirror of the US Economy and PoliticsTim Calkins: There are two other really interesting things to watch for, though, on the Super Bowl. One thing is who shows up and who advertises. And that’s a really interesting question. It tells you something about the economy. Because to go on the Super Bowl and run an ad, that means that you’ve got resources and money and you have a certain amount of optimism about the future. If you’re worried about saving money, if you think your company is going to be having some hard times, you wouldn’t run a Super Bowl ad. Those are the companies that are feeling good. So it’s very interesting to watch that and to see who shows up.The other thing is to watch the tonality of the Super Bowl spot. I think you can really learn something about the US economy and how people are feeling if you really look at Super Bowl ads. Because all of these companies, they study the environment, they study how people are feeling, they come up with creative design to resonate with people. So what these companies see is a really interesting look at what’s happening within the country. And you can really see that happen in many ways.You know, actually if you look even when it comes to politics, you can see trends develop there. So if you go back, what was it now, a year and a half ago to the... Was it a year and a half ago? Before the election. Yes. But if you go back and if you... The question was who was going to win? Would Joe Biden pull it off and his group and the Democrats, or would Donald Trump come back?But you go back and you look at the advertising that was running on the Super Bowl that year, and there was a real tone to some of the spots around people feeling that it was tough in the economy, it’s tough to move forward, it’s tough to get ahead. What you could see there, there was a real sentiment that people were not feeling good about how things were going. They weren’t feeling good about their futures.And when you look at that in hindsight, you’re like, “Shoot, there it is.” If people are really feeling that way, that is a very difficult time for an incumbent or an incumbent administration, an incumbent party, to get the win. And you just look at it and you’re like, “Oh yeah, that’s interesting.” So it’s always fun to watch what’s the tonality.Last year on the Super Bowl was interesting. We saw a lot of traditional values on the Super Bowl. What did we see? People in traditional families. People at the cul-de-sac. What did we not see? You don’t see people at the club. You don’t see people in an urban environment. You don’t see super diverse groups of people. Last year we saw this real sort of pivot to these traditional kind of values, which again, I think just reflected a little bit of where the country is at the moment. So the Super Bowl, it’s really fascinating to watch what people run and what’s the tonality.Are We Past the Era of “Peak Super Bowl” Creative?Andrew Mitrak: Do you think that we’re past peak Super Bowl at all? I mean, you mentioned how you’d still... if you could buy an ad for 10 years ago at today’s price, you would do it. But also if I look up lists of the greatest Super Bowl ads of all time, there aren’t that many that are from the last five years or so that make the list. Like I looked up one that had a hundred or so ads, and the most recent ones were kind of clustered around 2010.There was “The Man Your Man Could Smell Like“ from Old Spice.There’s “You’re Not You When You’re Hungry,” the Snickers one that really revitalized the last decade or so of Betty White‘s career.Then there’s “Parisian Love” from Google, which is an ad that I love.And those were all from around 2010, I think, which was 16 years ago at this point.Do you think that’s maybe just bias against recent ads and they just need more time to sort of marinate and be part of the culture? Or do you think there was something from, you know, 15, 16 years ago that made ads more memorable than they might be today?Tim Calkins: So I don’t think we’re at peak Super Bowl because the trends that have made the Super Bowl so powerful are still very much intact. You’re seeing the Super Bowl as an event remain incredibly important, and viewership is solid—viewership has been up in the past few years—and other options are beginning to fragment.It is true that some of the most memorable Super Bowl ads are older ones. I think that’s true, though, for a couple of reasons. One, I think, is that there’s no question that Super Bowl advertisers have to play it pretty safe. And more and more it’s become true that taking a big risk on the Super Bowl, creatively or otherwise, is really pretty dangerous to careers. And not sure you want to do that. So that may be one reason.But the other reason, I think, is that the overall standard of the Super Bowl spots is getting better and better. So when we began our whole journey on the Kellogg Super Bowl Ad Review, each year there would be some that were just really not good pieces of advertising. And now that seems to be less the case. It just feels like the overall average quality of this advertising is getting better and better.But I will say one thing you can be very confident of—I’m going to make one prediction for the Super Bowl this year—afterwards, people will say, “You know, the advertising just not as good as I remember.” And they’re going to say that. But they always say that because what happens? In our minds, we remember a few iconic spots. We remember Larry Bird. We remember the first of the E-Trade babies. We remember that Apple spot.What we forget is that there were like 500 other pieces of advertising that ran over that period. So our memories, we’re picking out the highlights of the past 20 years and comparing this year’s collection of advertising to the highlight reel. That’s not a fair comparison. It’s a little bit like having a football team play the All-Star team. I mean, it’s just not...But people will say that because they always say that.The one thing that might be a problem though for Super Bowl uh as a as a platform I think is streaming and how that unfolds. So you know right now there’s sort of the network broadcast you can stream the Super Bowl. The interesting thing is it’s not a given. My understanding is it’s not a given that the same advertising will run. And if I were in charge of the Super Bowl as a media property, I would insist that the same spots run on both because that way the advertising is seen by everybody and it can be the basis of conversation.Where the Super Bowl begins to lose its punch to fragment like everything else is fragmented. And then instead of getting this big pop of a hundred million viewers, you start getting, you know, 20 million that maybe saw your spot on streaming or 60 million that maybe saw your spot on the network broadcast. And then I think you begin to ruin the Super Bowl as a big event that advertisers are worth really focusing on. That’s the biggest watch out. I have to think people will be smart enough not to get caught in that, but I do I do wonder if that could be a problem longer term.Are High Costs and Risk Aversion Killing Creativity?Andrew Mitrak: You mentioned a lot of great points there, and one that I want to come back to is that advertisers are somewhat risk-averse with a Super Bowl ad, that you want to avoid being too controversial. I wonder if that’s partly just because of getting more expensive as well? Or it also is somewhat mirroring the phenomenon that we’ve seen in the movies, where movies are more and more—as movie budgets get more expensive—you see more Avengers type movies that try to appeal to everybody. You try to see the superhero movie that appeals to everybody, relatively inoffensive.In the meantime, comedies—there’s almost no comedies in theaters anymore. What is comedy? It’s somewhat controversial in a way. And if I think of “The Man Your Man Could Smell Like,” the Old Spice ad, kind of a weird ad. Really funny, but kind of a strange ad and pretty risky too. Or “You’re Not You When You’re Hungry.” People tackling an old 90-year-old Betty White, also a pretty risky ad in some ways, pretty funny. And I don’t know if that ad would get greenlit today or get approved today in the same way because it’s kind of weird. It’s kind of risky.I wonder if some combination of needing to appeal more as the prices get higher, really wanting to avoid too much risk if that kind of is all playing into why some of the ads might be a little less funny today as well. Do you have any thoughts on that?Tim Calkins: I think there’s no question that companies are very careful with what they’re running right now, and that does impact the creative. It’s partly financial, but I think it goes way beyond the financial aspects. The thing to remember is that Super Bowl ads get so much scrutiny, and everybody knows they’re expensive, and everybody’s got an opinion.So if you’re the CEO of a company, you know what you don’t want to have to deal with on the Monday after the Super Bowl? Is having to explain to everybody why did your company run that really either offensive, ineffective—call it what you will—piece of advertising. And I think a lot of companies and marketers will say, “We don’t want that kind of scrutiny. That’s a reason not to go on the Super Bowl.” You’ve got to be pretty brave to advertise on the Super Bowl, to be honest. And I think if you are on the Super Bowl, there’s still a desire to play it safe.I mean, I guess the advertisers, I suppose, it’s not that different than the players on the teams. And the teams always have to balance how risky do you want to play and how conservative do you want to be. And the advertisers are working with that same set of questions.Andrew Mitrak: It’s a really interesting tightrope to walk because you need to be risky enough that you’re able to break through and justify your spend and not be too boring. But also, if you are too risky, you can wind up really shooting yourself in the foot. I empathize a lot with these advertisers and everybody behind the budget and the approvals on it because you don’t want to make the wrong choice there.Tim Calkins: Just imagine the process of developing a Super Bowl spot and how tough that is to navigate. Begin with the fact you have all these hierarchies within companies. If the vice president likes something, but the senior vice president doesn’t, you have that dynamic. But then they are all working with the outside firms as well. So an advertising firm will come in and say, “This is going to be just an incredible idea. This idea we have is so creative and unexpected. It’s going to be the best.”But then the brand leader has to say, “Is that really the case or not?” If they don’t think it is, then you have to tell the creative person that it is not the creative idea they think it is. And the creative person is like, “No, I’m the creative person here, and you are not thinking big enough.” Then the brand person is like, “Yeah, but it is my brand and I don’t want to run something that creative.” But then the senior person says, “Oh, I think we should.” Just the complexity of it all is really tough to figure out. How do you end up with the creative idea that is going to run?Andrew Mitrak: It’s almost a miracle that anything gets shipped at all.Have You Ever Purchased A Product Because of a Super Bowl Ad?Andrew Mitrak: So just wrapping up with the Super Bowl, I wanted to ask you, have you ever made a purchase or changed your buying behavior because of a Super Bowl ad influencing you?Tim Calkins: The answer to that is yes, of course. Now, if you want me to pick exactly the example that I had, that is more difficult. That is a tough one. What did I buy? I did love the Kia Telluride spot that ran. That was an amazing piece of advertising.Andrew Mitrak: I was going to bring Kia up because I have an anecdote. I have a Telluride that is sitting in my driveway right over there. I had never heard of a Telluride before, and I had never even considered buying a Kia before. But I saw that super bowl ad and thought, “Wow, that actually looks like a pretty cool SUV. That is a Kia? Telluride?”I was driving a Prius, and then my second daughter arrived some time after the Super Bowl. I tried to drive my whole family home and thought, “Wow, this car is really cramped. I’ve got to upgrade.” I just started looking at reports of SUVs and I thought, “Oh, Telluride. That is well reviewed. Oh, I remember that Super Bowl ad.”I didn’t just see the ad and go to the dealer the next day, but it certainly made it cool. It gave Kia a little more brand equity where they used to be a punchline of a car manufacturer in some ways. In fact, I think The Simpsons and Principal Skinner would drive a Kia and it was a joke. It was kind of disparaging.Now it is a lot cooler. I think part of that—not the only thing, it is not a silver bullet—but part of that is that they advertise in the Super Bowl and they really try to use that as a mechanism to build awareness and reposition their brand.Tim Calkins: I think it is an example of just a really effective Super Bowl spot they ran. Very risky. That was one, “We are not heroes.” We are an amazing Super Bowl ad. You look at the spot and all of a sudden, shoot, maybe I should think about a Kia. Maybe I should think about a Telluride. That is the power of it.It is one of the things in marketing that I think people in general have to be careful of. When you ask people, “What brought you here today?” or “Why are you buying this product?” or anything like that, it is important to remember that people will never tell you it was the advertising. They will never say that. Or very rarely they will say that. They will say, “Oh, it was word-of-mouth marketing.” Or, “I saw something else.” Or, “I heard about it on...”People say that partly because if you say, “Oh, I bought this product because of the advertising,” it makes you look like somebody who is not thinking fully. You can be persuaded by advertising. Who is persuaded by advertising? So people don’t volunteer that. But there is no question that advertising done well has an impact on how we make decisions and how we evaluate products and services. Absolutely.Lessons from Managing Brands at Kraft FoodsAndrew Mitrak: With our remaining time, I wanted to ask you a few questions outside of just the Super Bowl. You mentioned Kraft Foods. You managed brands at Kraft Foods. I’m wondering just broadly, what did you learn from working at Kraft Foods?Tim Calkins: Oh, I learned so much about teams, businesses, consumers, and marketing. It was just a terrific training ground for marketing. It really launched my marketing career. Even now when I teach at Kellogg, I look back to those days working on these brands to try to think about it.What were some of the big things though? One of the things was just the challenge of delivering business results. Until you have been there and see the pressure of it, it is hard to quite understand exactly how that works. Just the need to bring in the results.The other thing that is really interesting is trying to understand your consumers and figure out great communication—figure out how to talk to them in a way that will resonate. That is just really interesting and complicated. It is really fun because to do that well, you have to get in there and try to think about what is important to people. What are their values? What are the insights that motivate their life? When you do it well, you can come up with advertising and marketing efforts that really are incredibly powerful. They connect with what people value, think about, and care about.But it is all hard because people don’t necessarily tell you what they care about or what they think about. Often people don’t even know what they really care about. It is interesting; people can’t express it sometimes. So that was fascinating, to understand and think about how you develop great pieces of communication. That was a big one as well.Then there was a huge piece around working cross-functionally. On all those businesses, there are a lot of different things that have to come together. There is an operations side of things, a sales effort, a finance effort, market research, advertising, and promotions. Pulling together the team and getting the team organized, aligned, and working cohesively is really fun, but also challenging to do. That is the key though for any business. Unless everybody—all the different functions—are working together, it is really hard to get things moving forward in an organized fashion.Brand Management: Kraft Mayo vs. Miracle WhipAndrew Mitrak: I noticed on your CV you went from being brand manager on Kraft Mayo to senior brand manager on Miracle Whip. It just seemed like kind of funny consumer bases to market to back-to-back. I’m wondering if there was anything that you noticed jumping from one product to the next, advertising Mayo versus advertising Miracle Whip? Because they are brands that are so familiar. You see them in the grocery store every time. I see these. I imagine that there is probably some passionate consumer bases behind them. So do you want to kind of compare and contrast marketing those two products?Tim Calkins: One of the great things about working on these products is you realize once you get in there just how different they are. You think about Kraft Mayonnaise and Miracle Whip and you are like, “Well, how different can they be?” They are both viscous products that come in the same jar, sold at a similar price point with similar usage behaviors.But then you get in there and you realize they are totally different. Kraft Mayonnaise is a decent mayonnaise. But we were going up against Hellmann’s and Best Foods. At the time it was Unilever. Huge company, huge budgets, dominant market share. So we were sort of the scrappy little brand. Didn’t have a lot of resources. We had to find some way to scratch our way to some market share and try to keep that business going well.But then you move over to Miracle Whip. Miracle Whip is totally different. Miracle Whip is this powerhouse of a brand. In certain parts of the country, it is a super high market share. The big thing about Miracle Whip is that it has no competition to speak of. No direct competition. There is a little bit of private label, but Miracle Whip is Miracle Whip.So that is a totally different marketing challenge. It is around how do you activate your customer base? How do you resonate with people who really like Miracle Whip? It is a super polarizing product. But people who like it, really like it. So you just have to tap in to that consumer group and try to motivate them and try to get them fired up. That becomes the challenge for Miracle Whip.It’s a really interesting piece. One of the interesting things about Miracle Whip that really helps that brand a lot is it is very tough to define what it is. What is it? You are like, “Well, it is a mayonnaise.” But then people will be very quick to say, “Well no, it is not mayonnaise.” It is a really different flavor than mayonnaise. If you like mayonnaise, you are probably not going to like Miracle Whip and vice versa. So you can’t call it a mayonnaise.It is technically a salad dressing. That is the technical standard. But what is a salad dressing? What do you do with salad dressing? You put it on salad. So if you wanted to compete with Miracle Whip, I guess you would launch a salad dressing. But what do you do with salad dressing? You put it on salad. And what do you do with Miracle Whip? Well, you put it on a sandwich. So then maybe you are going to launch sandwich dressing. But what is a sandwich dressing? I don’t even know what that is. So Miracle Whip is just a totally interesting product. Makes a ton of money. No real competition. But so different than Kraft Mayonnaise.Becoming a Better Business PresenterAndrew Mitrak: I also want to ask you about presentations. You’ve spoken a lot about this. You are obviously a great presenter yourself. You wrote a book called “How to Wash a Chicken,” all about presenting. My question to you is, what do marketers most often get wrong about business presentations?Tim Calkins: Presenting well is so important in the world of business because that is how you have an impact. That is how you get your recommendations put forward. What marketers get wrong about presenting, I think, sometimes they make things just way too complicated.The thing about the world today, especially in marketing, is that there is so much data. There is so much information that is available. So it is very easy to end up with a presentation or a recommendation that is very clunky, full of studies, full of data, full of analytics, full of all of this information. But ultimately, that doesn’t lead to a really strong recommendation sometimes.I think the challenge today is: How do you take all this information that we have and figure out which information really matters? And then, how do you lay it out in such a way that people can really follow the story? They can see the narrative and they can begin to understand what is happening on a business.Marketing is all about action, all about moving forward. It is about recommendations: “Here is what we should do next.” To get there, you have to take people on this journey from where we are today to how that plan forward is going to be the best path. To do that, you really have to think about all the results we are looking at today, all the information, all this data, and how does all of that get us to the recommendation of where we want to go forward? That, I think, is the role of the presentation.Andrew Mitrak: One of my tactics for presentations is I try to keep my presentations themselves pretty short, like 10 slides or fewer, but then I have a really long appendix. I kind of preempt because when I present—especially if I think of ones where I am presenting to a cross-functional team, we might have to influence somehow, or an executive I need to persuade—often they might even interrupt and start asking questions immediately. I want to show that I am prepared and jump to an appendix, but also not have all that information upfront because then, to your point, it becomes cluttered. There are too many different things.Is my thinking about that the right way? Of just showing my homework in the back end but keeping it tight upfront? Or do you have any other tactics or tips along those lines?Tim Calkins: The question I would always ask is: What will your audience need or want to see? So anytime you are doing a presentation, one of the first things you have to do is think about who are you presenting to. You think about what do they like and what are they going to want to see. If I am presenting to somebody and if I know that they are going to want to see a five-year P&L for the business, well then I am going to proactively go ahead and put that in because I just know they are going to be looking for that.So I think that is a really important step, to think about your audience and then make sure you deliver against what they are doing. Ideally, when you are doing a presentation, you don’t end up going to the appendix. Ideally. Because if you have really done it well, I think you have a sense about what is going to be the next question they are likely to ask, and then you try to address it there.An appendix is good to have though, in case you do get questions from out of the blue. Especially sometimes with cross-functional people who might ask something, and then some of that stuff might end up in the appendix. So I think it can be a really useful thing to have along with you. The bulk of the presentation though, that is always the question about: Okay, what do I need to put in here and what is all the stuff I can take out?The Importance of Narrative Over DeliveryAndrew Mitrak: In my work as a marketer, I would say I spend more time making business presentations and presenting them than I do on actual creativity or actual strategy on marketing. Sure, there is strategy that sometimes comes up in the course of making a presentation. If you are presenting the strategy, you have to have done the strategy beforehand. But I spend a lot of time in slides and making them and presenting.But also, if you look at the time I spent in school sort of learning presentations versus the time I spent on all the other stuff, I probably underinvested in learning presentation skills upfront. Is that a pattern that you see as a professor? That generally speaking, we underinvest in teaching marketers presentation skills?Tim Calkins: Well, I think it goes beyond marketers. I think generally speaking, we do a very poor job in the world of business preparing people to put together good presentations. And there are lots of reasons for that. Part of it is that that doesn’t fall into anybody’s responsibility area. It is not the finance department’s—the finance department isn’t going to teach people to write a presentation. And the marketing department isn’t going to teach that. And the accounting department is not going to teach that. And the leadership group... Nobody really teaches it. Or few people. There are some communications folks you will see who work on it.The other thing I see is though that very often when we do teach people how to put together a good presentation, we end up focusing very much on the delivery. We spend a lot of time teaching people how do you use hand gestures appropriately, and how do you move around a room, and how do you speak in a forceful voice, and things like that. It is the execution, the delivery. Which in my mind is fine, that is good, I think that is all great stuff.But the real opportunity is before that. It is: How do you put together the recommendation? How do you lay out the story? How do you work with your data and turn the data into a logical story that leads to your recommendation? That is the part that is not really taught very well, in my experience. And it is something that doesn’t come naturally to people.It is also something that generative artificial intelligence doesn’t do well. Generative AI will produce a list of pros and cons for you, and it can create a PowerPoint page showing a list of points or bullets, but it doesn’t really build a great narrative that leads you to this recommendation about where we want to go. That is the value add.I actually think if you write—if you put together a great presentation—the delivery becomes really easy. Because the presentation almost does itself. Back when I was at Kraft, I would remember sometimes we would put together this really complicated recommendation presentation. And then we would send the summer intern up to go deliver the presentation. And the summer intern would be like, “What? I can’t.” You are like, “No, it will be fine.” The slides were good enough and the story basically just goes through it. It is just going to tell itself.But all that work gets done before the meeting begins. And I think that is the opportunity for people, is to really think about how do you put together these stories, how do you lay out stuff that makes a lot of sense. If you do that well, the rest of it is going to take care of itself.Andrew Mitrak: Professor Tim Calkins, I really enjoyed this conversation. It was so fun to revisit Super Bowl ads. I know I am much more prepared for the big game on Sunday. And also it inspired me to brush up on my presentation skills as well. So as we wrap up, where can listeners read more and find you online?Tim Calkins: My website and sort of my blog and my newsletter, timcalkins.com. Also on TikTok, you can find me at marketingprof_tim. So I’m out there posting a little bit on TikTok these days around Super Bowl spots and presenting and all of that.Andrew Mitrak: That is awesome. We will be sure to paste links to those in the blog that accompanies this post. So Professor Tim Calkins, thanks again so much for your time. I had a lot of fun.Tim Calkins: All right, Andrew. Thank you. That was great fun. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 45 Today marks exactly one year since I hit publish on the very first episode of A History of Marketing. I wanted to do something special for the anniversary, so I’m happy to share my excellent conversation with Rory Sutherland.You may know Rory from his Ted Talks which have been viewed by millions, or his TikToks which have been viewed by tens of millions. He is the Vice Chairman at Ogilvy and the founder of their behavioral science practice.I’m a big fan of his book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. As we discuss on the podcast, Alchemy is all about how marketers think, rather than just what we do.Listen to the podcast: Spotify / Apple PodcastsWe also cover:* The real David Ogilvy: Rory shares about meeting David Ogilvy, and the parts of Ogilvy’s life you won’t find in his books, like his stint as a British spy in Washington during World War II.* The “Capital M” vs. “small m” marketing mistake: Why the industry got marketing wrong by turning it into a department rather than a way of thinking.* Behavioral science and business: How to practically apply behavioral science and “nudge” to marketing strategies.Rory has a way of using history and behavioral science to reveal “unseen opportunities” that most traditional data misses. This conversation changed how I think about the role of marketing, and I hope it does the same for you.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.And thank you to Paul Feldwick, whom you may remember from episode 30 of this podcast, for introducing me to Rory.Espionage, Aerophobia, and the “Hidden” Psychology of David OgilvyAndrew Mitrak: I wanted to ask you about David Ogilvy. I wanted to start with him because he’s such a big figure, and I love his books. I haven’t actually discussed him that much on the podcast, and you’ve worked at Ogilvy since the late ‘80s. I’m wondering if you have an element of David Ogilvy’s success that you’ve learned from working at Ogilvy that I wouldn’t have learned from reading one of his books.Rory Sutherland: I only met him once, and I can date it more or less exactly because it was after the Eurostar opened—the tunnel train tunnel between France and the UK. David was absolutely terrified of flying. In fact, in later life, he crossed the Atlantic by ship in preference to flying. He was absolutely paranoid about flying. I’ve met people who met him off flights, and he kind of emerged down the jetway as a kind of physical wreck. So, he was only really prepared in later life to travel to London after the train service opened. Consequently, I only met him once. I knew his wife, later widow, quite well subsequently because we used to have Ogilvy events and WPP events indeed at the Château de Touffou where he’s in fact buried.I think actually there’s a part of his life as well where he will emerge actually even more interesting than he’s believed to be at the moment. Part of his life, which was effectively with British Intelligence in Washington, D.C. during World War II, when he worked with, for example, Ian Fleming and a few other people.Andrew Mitrak: There’s the book about this called The Irregulars. It’s fantastic.Rory Sutherland: The Irregulars, which is absolute—yeah, which I think I might have actually discussed this with the author. Of course, he was, whether it was just discretion or he was actually D-noticed or had signed the Official Secrets Act, but I’m fairly sure that during his lifetime he wasn’t really allowed to talk about this period of his life. A large part of which, I think, was effectively persuading the US to enter the war in the very beginning of 1940-41, pre-Pearl Harbor. He was engaged in persuading the US to enter the war, and then presumably also persuading the US to enter the war in Europe before they fully embarked on the war in the Far East. So, a large part of that was probably involved with his previous experience with Gallup; he would have been effectively gauging public opinion and working out the right strategies for getting American support, which was by no means, certainly in terms of the war in Europe, by no means automatic, certainly before Pearl Harbor. It’s very similar to World War I, in fact, where obviously Woodrow Wilson—who bizarrely is my fourth cousin twice removed—where Woodrow Wilson effectively fought an election on the whole basis of isolationism and then had to do an about-face. So, I think there’s a whole part of his life which he couldn’t write about at all, which, being a showman, which he was—and I make no apology for that—he would have undoubtedly loved to have written about, but simply couldn’t.Ogilvy’s Psychology of LeadershipRory Sutherland: When I said I met him the once, he presented his work and gave a talk. Interestingly, we’d sort of heard rumors that he was slightly losing his marbles because this would have been—he would have already been in his 80s at that point. But he was completely lucid and fantastically clear in his presentation. I always remember a detail, which is that he’d pinned up a lot of his work, which was then laminated and stuck to the walls. Of course, he then needed it collected, and you had that little awkward social moment where nobody wants to be seen doing the—in a large group of people, no one wants to be seen doing the menial work of collecting the drawing pins and putting everything back in a bag. He simply made the point that he said the work has been pinned up on the wall by the European chairman of Ogilvy, so it shouldn’t be beneath anyone’s stature to help me take it down. So, there was that psychological astuteness, a very, very clever bit of behavioral science. Look, if the second most senior person in the room has pinned this work to the wall, none of you should feel any diminution of status by removing the drawing pins. So, he was clearly that sort of very astute psychologist even in his—I’m trying to work out the date, he was born in 1911, so he would have been in his sort of mid-80s, I’m guessing. He died in ‘99 [sic], I think, if I’ve got that right.The Limits of Traditional Market ResearchAndrew Mitrak: Yeah. So, you mentioned how he has this intuitive behavioral science sort of understanding. He also worked for Gallup, and he really preaches about research, research, research in his books. A lot of your work is sort of where does research fall short, right? A lot of your insights are about what is intuitive or psychological where people aren’t stating their preferences? Marketers are being intuitive and uncovering revealed preferences through behavior. I’m wondering, do you have a heuristic for where research falls short, or where you might disagree with Ogilvy on his take on marketing research?Rory Sutherland: I mean, we can overstate this, because it’s often taken, my view, that market research is a terrible thing because people don’t know why they do what they do, which is to some extent true. Now, this is not to say that a lot of research can’t be both useful and accurate. If people really hate something and they say they hate it, it’s undoubtedly worth taking that on board. You could learn an awful lot about what you’re getting wrong by simply researching your customers. There are also, which David didn’t have to the same extent, completely free sources of information like call centers, which I always think are a massively underutilized resource because they’re the place where you learn what you’re getting wrong, or what your customers can’t do online, or all manner of things. So, don’t get me wrong. He never said this famous phrase often attributed to him: that the trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say. That’s somebody else who said that. I don’t think David would have said it because he was undoubtedly a research advocate because he preferred the discipline of research to what he called sort of random creative self-indulgence.Tacit Knowledge and Entrepreneurial ArbitrageAndrew Mitrak: It’s funny because I want to pause on that line real quick because it’s in your book. It’s in Alchemy, but you say in Alchemy that you don’t think he ever said that, or you can’t confirm whether he ever said that. So you found out that he did not say that?Rory Sutherland: Well, certainly nobody, and several colleagues of mine had tried to find an accurate attribution. I think if you go to something like Quote Investigator online, it has been attributed to other people, possibly earlier than David. And by the way, I mean, that’s not completely true. A lot of the time we do actually think what we feel, and we say what we think, and we do what we say. What is important, though, is that the tacit information is disproportionately valuable because it’s there that you can find yourself either under a massive illusion about what people really want because it’s what they say they want. Lower prices would be an example. It would be very, very dangerous to take that literally because people always say it because it’s a rational-sounding answer. “I’d do this more often if only it was cheaper.” Well, that’s both true and not true, and in any case, there will also be a chunk of people who will never tell you that they’d do something if it were only more expensive. So, around price, for example, there’s an enormous amount of misinformation. Also, information that’s tacit, which therefore isn’t in the public domain, is disproportionately valuable because it’s a source of kind of entrepreneurial arbitrage. And you know, I mean, okay, if you—nobody when Steve Jobs came along was really actively saying, “I’d buy a computer if only they weren’t so f**king ugly.” Okay? Nobody was really saying that. And so, an awful lot of entrepreneurial activity involves a bet on something which you assume to be felt but not said. Because the things that are said are already in the public domain and there’s no competitive advantage to be gained. It’s a bit like the stock market; it’s already priced in.I’ll give you an interesting example of this because I’ve been campaigning recently that hotels should provide monitors in the room. Because my argument is, I spend much more time in hotel rooms working than I do watching TV. And so, if either you had a USB-C cable which enabled you to connect reliably to the 4K TV, or you had the option of paying for a monitor in your room, I think a lot of people would go, “That’s great.” What’s weird about that is that until I said it, which was a hypothesis, nobody else was saying this. Because it’s one of those things that’s obvious in retrospect, but because the consumer doesn’t expect there to be a monitor in their hotel room, nobody complains about there not being a monitor in the hotel room. So, you know, all these weird things. I’ve mentioned other things like it really annoys me when I travel with my wife that most hotel rooms either have naught or only one inadequate desk. So one of you always ends up trying to work by propping up a laptop on the bed or on some woefully inadequate table or having to sit outside on a balcony. And the interesting thing about these things is that there are these unmet needs out there in the marketplace, which are really unmet because they’re unsaid, and they’re unsaid because they’re unthought, and they’re unthought because they’re unfelt. However, if you provide these things, my hunch is—and we can disprove this very easily by just charging 20 quid a night for a monitor and seeing what happens—it’s very easy to test that hypothesis.Why Data Without a Hypothesis FailsRory Sutherland: Quite often, I think what we’re trying to do, and Roger Martin is the real guru on this—what we’re trying to do is use pre-existing data as the basis for making a decision. And the problem is pre-existing data is not representative; it’s often completely wrong, or it’s miscategorized, or it’s misunderstood, or it’s simply inaccurate. The proper way to do business is to develop a hypothesis, design an experiment to reliably test the hypothesis, perform the experiment, analyze the data to see whether it refutes or confirms what you believe, and then rinse and repeat. Or act on the information that’s derived. But that starts with a hypothesis, which is an act of imagination. So, David would argue completely—and I wouldn’t disagree for a millisecond—that if the data you already have basically rubbishes a hypothesis, then that data’s really valuable. Or if it likely confirms a hypothesis, then that data could be very valuable in helping you decide what to do next. What isn’t a safe thing to do is this idea of kind of theory-free science where you just rely on the data to tell you what to do.Rory Sutherland: I have a wonderful story about this. On the basis, someone told me this very lunchtime, fantastic person who works for The Times—that’s the proper Times, not The New York Times. And they invested a huge amount of money in a science publication because they had very reliable data that told them that their readership loved reading things about science, and all the most read articles in The Times were about science. So they went and spent a fairly large sum creating a new sister publication and creating an app for it and publishing—and it went nowhere. And it turned out when they investigated it, that what had happened was that all articles about sex and relationships had been tagged as though they were effectively science articles. Because nobody knew how to define them, so they defined them not as social science, I think they defined them as sort of human science or whatever it was. And so all the articles like “Sex in the Olympic Village,” which was the most read article of ten years, which was talking about sexual practices at the Beijing Olympics, were tagged as being science articles. Brilliant informants said that based on that information, we would have probably been better off launching a pornographic magazine than a science publication. Because people are very interested in sex.Andrew Mitrak: Especially among Olympians.Rory Sutherland: Particularly Olympian sex is, of course, massively—you can imagine, that’s the most click-baity, fantastic title imaginable. By contrast, she said, we had a huge success launching a thing called Sun Bingo. And the simple insight was from a single journalist who said, “As soon as they ban smoking in bingo halls, the demand for the online bingo is going to go sky-high.” Now, that was a single anecdotal hypothesis which made them a fortune. And so this idea, I think, this is a product of defensive decision-making. And this is something which is also attributed to David, which he didn’t say, but I’m sure he quoted a lot. It was, funnily enough, originally said by another Scotsman, which is, people use statistics the way a drunk uses a lamp post: for support rather than illumination. And I think what we’ve got to be very careful of is there’s this massive tendency to go, “If you start your presentation with ‘the data tells us...’” Does it mean you’re going to make a very good decision? No. It might help, but I mean, it doesn’t certainly. On the other hand, does it mean you can be absolved of any blame in the event that things go wrong? Yep, absolutely.Research vs. Showmanship: Hopkins, Ogilvy, and FeldwickAndrew Mitrak: You mentioned how David Ogilvy was a showman, and of course he’s a showman. We talked to Paul Feldwick about showmanship; that’s a big topic of Paul Feldwick. We also talked about Claude Hopkins and his book Scientific Advertising.Rory Sutherland: Which Feldwick is less sympathetic to that book than I am, I think. And that’s because he comes from above-the-line advertising, and I come from below-the-line advertising, even though we went to the same school.Andrew Mitrak: I want to get your reaction to this. This is the thing about why he’s sort of dismisses it partly, is that the book is Scientific Advertising and the book would be like: give facts about the product and don’t be frivolous. But then you look at what Lord & Thomas did at this time, and they were doing big publicity stunts like baking the largest cake in the world, which had nothing to do with the product, and they were doing showmanship, and preaching on the one hand facts and scientific advertising, and then doing very unscientific things in a way it was sort of using science as a way to kind of sell your agency, because that’s what your buyers wanted.Rory Sutherland: He tells this wonderful story about Sunny Jim, which is the character that was used to promote Force cereal. And the bizarre thing is they went away from absolutely jingle-led entertainment in the US because Lord & Thomas, I think it was, told them they had to be more scientific and talk about the product. In the UK, the marketing department clearly went rogue. In my own childhood, we had a—and by the way, that was not just an advertising campaign, it was a branded merch campaign, because you could send off a certain number of box tops and £2.50 and have your own cuddly Sunny Jim, who was a weird kind of 18th-century roué character whose sunny disposition came from eating large quantities of the product, presumably. And he makes the point that the brand absolutely succeeded in the UK where it continued with its entertainment-based jingle-led platform, whereas the imposition of scientific advertising in the US was something of a catastrophe for the business.Rory Sutherland: So it ended up being one of those weird things which survived much better in the UK with what you might call a looser advertising regime than in the US. Now, Claude Hopkins, a lot of what he says is absolutely true for bottom-of-the-funnel advertising, direct response, which is before someone can send off a coupon. Okay, it’s very boring to say this, but putting “allow 14 days for delivery,” telling people when to expect their product. In many cases, someone can’t actually buy a product without—they can’t buy a car without knowing how big it is, because they need to know whether it fits in their garage. So at the point of final irreversible commitment, there is a whole lot of factual stuff. And I don’t apologize for this. And by the way, I don’t think internet advertising is always very good at it. A lot of online advertising seems to fall between two stools; that it is neither entertaining nor informative. It’s just transactional. Quite often you go, “Is this thing dishwasher proof?” would be the kind of thing I might want to know before I spend 200 quid on an ice cream making machine. That’s the kind of thing which is really, really important.Rory Sutherland: So Claude Hopkins wasn’t wrong, by the way. He was just talking about a very particular kind of advertising which was off-the-page, which was obviously—but was Lord & Thomas based in Chicago or New York?Andrew Mitrak: I think they were Chicago.Rory Sutherland: Well, you see, there you go. Because Chicago is the world capital of direct marketing. All those great direct marketing powerhouses like Montgomery Ward and I think Sears Roebuck started as a direct marketing house. Chicago, because it was the rail hub, was the direct marketing capital of the US. And so it always had a kind of slightly more Midwestern practical, pragmatic tone of voice because its target audience was farmers. And also it was often doing off-the-page sales or direct marketing of some kind or another, where at that point in the customer journey, there comes a point in the deal where you go, “Okay, I’m happy to buy this car, but when will it be delivered? What color can I get it in?” All that sort of specific stuff. You can leave out of the upper stuff, upper-funnel activity. But at some point, you need to absolutely be clear: okay, what is the deal in which I am now engaging? What am I signing up to? What’s the absolute deal here? What’s the worst-case scenario? Because there’s the creation of desire at the top, you might argue, and there’s the elimination of anxiety at the bottom. And Hopkins was quite largely right, I think, about what you need to do to get someone over the line. There’s a point where you’re looking around a house and the estate agent can crack gags, but when it comes down to the fine print, even someone as frivolous as me would go, “Okay, we do need to get a bit serious about whether the washing machine’s included.”Andrew Mitrak: Yeah, that’s fair. I think also what I’m just putting together now is Claude Hopkins, David Ogilvy, and you, I think all started in direct response, right? And I think that’s a certain—Rory Sutherland: Claude Hopkins and David Ogilvy didn’t actually, but he always said that it was the best place to start. That’s what he said. He always said that the best place for an account person to start was Procter & Gamble, and the best place for a creative person or copywriter specifically, I think, to start would be to spend three or four years working in a direct marketing agency where you learn what works. And where also, by the way, you learn one of the things you learn which I think Hopkins is probably right about as well, I think all good creative people understand this instinctively, is that really small things make a huge difference.The Behavioral Economics of “Small Fees”Rory Sutherland: I was just reading a piece of behavioral economics by the great George Loewenstein at Carnegie Mellon. It’s a famous paper from quite a few years ago, and he’s identified the population basically divides into unconflicted spenders who spend basically pretty sensibly. Then there’s a group of people which is probably 30% of the population who are skinflints. They find the pain of parting with money at the moment of purchase so agonizing that they don’t even buy things that they should buy that would make them happier in the long term. And then there’s a 20% of people who are spendthrifts. Now, here’s one of the most extraordinary findings, which amazed even me, which is they did an experiment where people had basically won or were given as a reward for some piece of work a box set of their choice. It was kind of like Family Guy, The Simpsons, the first season of whatever it was, some DVD program like Breaking Bad or something of that kind. I can’t remember the details; might have been The Sopranos. And then they were told, “We’ll send this to you free within a month, but we can also rush it to you overnight for a fee of $5.95.” Now, that basically put off the majority of the skinflints; they went, “No way am I paying $5.95 to get it four weeks earlier.” However, if you phrased it as, “We can rush it to you overnight for a small fee of $5.95,” then a large number of the skinflints were actually happy to pay. Brilliant, brilliant experiment. To an economist, they would be pained by that because $5.95 to them is $5.95, but if you refer to it as a small fee, then mean people go, “Okay, it was only $5.95.” If you say a fee of $5.95, “No, I’m not paying that.” Now, that’s even by my enthusiastic adoption of behavioral economics, that struck me as pretty goddamn weird. But nonetheless, it may be that a certain group of people find paying for things really painful, and you have to almost mentally prepare them for the act of parting with $5.95 by saying, “It’s almost, I think the implication is, this isn’t the market price, it’s just obviously it’s just a mere bagatelle.” But I find that so interesting.Why Marketing is Fat-TailedRory Sutherland: By the way, I think that we’ve got marketing wrong because I think marketing is fat-tailed. We’re judging particularly performance marketing as if it’s thin-tailed, as if one unit of expenditure delivers a unit of value. Every quantum of cost has to be matched to a quantum of incremental value; otherwise, you’re not allowed to do it. That’s just marketing now defers to finance. And my argument is, I don’t think it’s like that at all. I think the reason you do marketing is because one time in 10, 15, 20—if you’re getting it right—every now and then, you just stumble on something which is a complete game-changer. And I would argue that the way to judge—not all of it, but the way to judge a portion of your marketing expenditure should be very close to, well, for example, a Silicon Valley investment fund, a film studio, a pharmaceutical research laboratory, a publisher, an A&R man in music.Andrew Mitrak: The big hits pay off for the duds, right?Rory Sutherland: The big hits render everything else irrelevant. But whereas if you’re in music A&R and you’ve signed The Rolling Stones, that’s basically your career taken care of. In marketing, if you do the equivalent thing and you sign the Rolling Stones, well, you just get to work for another six months, and then the credit for all subsequent revenue emerging from that breakthrough goes to somebody else. It’s just swallowed into the balance sheet under the line “revenue.” And so, as a marketer, you’re held responsible for every quantum of cost, but you can only claim a small part of the upside, which is exactly what Steve Jobs noticed when he first joined Pixar.Why Steve Jobs Hated Making CommercialsHe went into making commercials, because Pixar was too expensive to make a feature film using that technology. So he was making commercials. And very rapidly Steve Jobs went, “This is s**t. I don’t want to do this anymore because I can only lay claim to a small, finite and predefined portion of any upside I create. I create a commercial that sells $110 million of product, I get paid $300,000. That’s not the kind of business I want to be in.” And every marketer finds themselves effectively in the same position, and every agency also, by the way, finds themselves in the same position.Andrew Mitrak: Yeah. It’s funny, you mention these Pixar commercials. They did these Chips Ahoy! commercials, you know, those terrible chocolate chip cookies and all that stuff. And I still think of, like, when I think of Chips Ahoy!, I think of those commercials. And those are from when I was a little kid. And it’s like, that’s still playing dividends today for that company, even though they paid Pixar once.Rory Sutherland: If Jobs realized, “If I make a film, you know, if you make Toy Story, I’m still earning money from that bad boy ten years later—you know, they’re the DVD sales or the streaming rights and the da-da-da.” Whereas if I make a commercial for Chips Ahoy!, I get paid for making the commercial and the upside—well, actually, it doesn’t even go to the marketing function. It probably goes to the marketing department in the first instance for the first six months of uplift, but the fact that you’re still remembering that ten years later, no one’s getting any credit for that.Andrew Mitrak: Yeah, I think it’s like 25 years later, 20, 25, something like that. Those were before Toy Story, which is like, what, 30 years old now?Rory Sutherland: Crikey, you’re right. That is seriously old. Yeah, yeah, yeah. It’s really old.Why Humanities and History Matter More in a World of AIAndrew Mitrak: So, I want to ask you also about history, because a lot of your examples in your book, in your talks, they draw from history. Of course, there’s like the Frederick the Great potato example, and you have, you know, going through your book, there’s like pictures of a design of a fencing sword from hundreds of years ago. There’s the Parthenon, and you have a chapter called “There’s Nothing New Under the Sun.” I’m wondering, do you read history a lot to get marketing ideas, or is history underrated? What’s your interest?Rory Sutherland: I think that you’ll find that people with a humanities degree become weirdly disproportionately valuable in an AI world.Andrew Mitrak: Totally. I’d like to think so.Rory Sutherland: And you know, I think that we’ve overvalued technocratic skills in relation to creative skills very, very badly in all the Western—and probably everywhere else—education systems. And actually, people who do hardcore degrees like engineering would probably come to agree with that. Einstein actually made exactly that point, which is that it’s the imagination that ultimately is the magical quality that makes us human. Therefore, if we can to some extent automate all the other stuff, what we’re left with is really a massive need for people who can ask better questions rather than get reliable answers, because the second part has already been done for us. You know, that’s taken care of. It’s a bit like, is there any need in an—just as you could ask the question: is there really any need for people learning log tables in an age of electronic calculators? Is there any need for people—I still, I did quite advanced mathematics, I still have no clue what a cosine is. I can’t remember. Okay? I’ve never had to work out the surface area of a cone. But on the other hand, statistical knowledge, I think, becomes more and more valuable because that’s more nuance-ridden. You know, actually, if you’re a statistician with a bad nose for statistics, you can make catastrophically bad errors while thinking you’re being perfectly logical. And so, as technology, in a sense, takes care of one thing, my ability at addition becomes less and less important—I probably need to understand the principles—but whereas my ability in other fields then becomes more and more valuable. So, AI will also sort of, if you like, further move the goalposts a little bit in terms of what we need.Rory Sutherland: And also just general, by the way, the great thing about advertising—which I’ll defend working in advertising and marketing on this grounds alone—which is, if you’re an actuary, you don’t really become a better actuary by sitting outside a cafe and watching people, or going to see a French art-house film, or watching people in the pub, or having a chat with some friends. But as a marketer, anything counts. I mean, you seek inspiration from wherever you can find it. David Ogilvy himself said, a good copywriter is characterized by being an extensive browser in all kinds of fields. And it’s kind of pattern recognition at some level. So, the more parallel field—nothing excites me more than to meet a copywriter who’s into jet engines or trains, or indeed a brilliant copywriter I met in Belgium whose main interest is branding in the medieval era. So he’s absolutely fascinated by medieval history, creative director in Brussels. And he draws extraordinary inspiration from things like, you know, why Charlemagne the Great was the first king ever to be crowned by the Pope. Which was effectively a kind of branding exercise which meant that you no longer had to completely defend your position in combat because you were now effectively divinely sanctioned. And therefore, anybody who sought to actually undermine you was actually taking on God rather than—now, he was chatting to me about this. Now, this is the kind of thing which automatically I find wonderfully reassuring. To be honest, there’s probably a high degree of ADHD which you’ll find in a creative department. Because, funnily enough, being distracted—I mean, of course we mustn’t mischaracterize ADHD—it also makes possible extraordinary feats of concentration. But the capacity to be easily distracted is to some extent in that job, it’s a feature, not a bug. It’s more virtue than vice, I would argue.Modernizing Ogilvy’s ‘Rolls-Royce’ Ad for the EV EraRory Sutherland: And people find creative people frustrating for all kinds of reasons. You know, they tend to miss deadlines or they start—more characteristically, they start work late because they’re waiting to get lucky or they’re waiting for inspiration. Or they change the subject, or they obsess about something which seems completely irrelevant. E.g., David Ogilvy is writing an ad, the Rolls-Royce engineers hated that ad because they’d spent a whole load of time improving the drivetrain and the suspension, and David was writing about the clock.Andrew Mitrak: Yeah, the electric clock that’s quiet.Rory Sutherland: I was saying a similar thing, which is my 21st-century equivalent of the Rolls-Royce “60 miles an hour, the loudest thing in the new Rolls-Royce is the ticking of the electric clock.” I was talking to a bunch of people involved in climate change awareness and particularly the transition to electric cars. I said, you can talk about efficiency till the cows come home. But the best ad for—I don’t know, have you gone electric in your car?Andrew Mitrak: I’m still running on dinosaur juice.Rory Sutherland: You’re on dinosaur juice. It drives, by the way, petrol-heads absolutely insane when you call it dinosaur juice. But I said the best ad I got for my electric car happened when it snowed, and I drove about a hundred miles, and when I arrived, there was still snow on the hood of the car. Now, in any petrol car—now, that’s an ad for the inefficiency of an electric car in a way that humans appreciate because there’s zero waste heat. I was astonished myself, because every time you drive anywhere, you’ve got snow on the hood of the car, and you drive for 10, 15, 20 miles, the heat from the engine melts it, it slides off, it melts, it liquefies, whatever. And then I found myself in a car park and you look at the car park and all the electric cars still have snow on the hood and all the petrol cars, it’s all melted. And that’s a wonderful ad for the extraordinary energy efficiency of the electric motor. But it’s an ad translated into human perception rather than scientific notation.Capital M Marketing vs. small m marketing: How Rory became accidentally famousAndrew Mitrak: Something that really resonates with me is this interdisciplinary thinking you bring. You know, you call it alchemy in the book, and really there’s psychology, there’s economics, there’s design, salesmanship, showmanship, culture, history, of course. And something about my podcast, “A History of Marketing,” people say, “Oh, that sounds really niche.” It’s like, well, marketing is kind of everything. It’s kind of all these things, and everything that happened before this moment is history. I’m wondering if you kind of also align with that?Rory Sutherland: This is the big mistake that marketing made, is it became a department. And it defined itself by what it did. And so people think of marketing as crayons, or it’s the coloring-in department, as it’s often called. Or it performs services like producing marcoms or brochures or hosting exhibitions or doing PR. That’s Capital M marketing, which is a tightly defined discipline and function within an organization. Then there’s small m marketing, which is the application of psychology to wider problems. Which literally, the market for small m marketing is a hundred times larger than the market for big m marketing, and yet we’ve sold ourselves both as marketers and as agencies. And this is—this is why I became accidentally famous. I keep telling people this. I said the reason I became—and I mean accidentally famous, it wasn’t my own strategic genius or insight that led to this. It was simply that I ended up giving a load of talks to people who didn’t work in marketing, which marketers don’t normally do. When marketers talk to people who don’t work in marketing, they immediately adopt the language of finance, which is defensive. It’s the worst possible, I think, way in which to actually communicate the value of marketing, which is to say, “Honestly, some of this stuff actually works. Look, we spend X and we got Y.” And it’s a completely subordinated view of selling your discipline.Rory Sutherland: Now, what happened is I ended up talking to a load of people, like, I’d talk at a bloody procurement conference or a compliance conference, or I’d go on a podcast which is all about engineering. And pretty quickly I’d go, “Well, there’s no point about talking about ads incessantly.” I’d show a couple of ads because they’re funny and illuminating and illustrate a point. But you know, if I just become a “how to make an ad” person, these people are never—99% of these people are never going to have to make an ad in their life and I become irrelevant; they won’t ask me back. So I just change—I just changed the script without really out of necessity, really, not out of inspiration, which was: let’s not talk about what we do, let’s talk about how we think. And suddenly—and that’s what the book is about—I suddenly realized that’s what Alchemy is about. This isn’t about what marketers do, it’s about how good marketers think.And suddenly I discovered—I expected Alchemy to sell to, you know, people in, you know, creative businesses and marketing people and, you know, a few curious other people who wanted to get a job in advertising or whatever it might be. But instead, I got bombarded by, like, engineers contacting me, hedge funds, venture capital firms. “What the f**k’s going on here? Right, okay, I wasn’t—I wasn’t expecting this.” You know, I mean, I went on a radio show with Chris Evans, and the book was like, for the next three days, it was like in the top 30 books on Amazon. Not 30 advertising books, not 30 marketing books, top 30 effing books. “This is f**king weird, right?” My argument was it was an accidental discovery that the market for how and the, by the way, the strategic and corporate importance of how we think, which is to look at something as if you’re behind the pupils of a customer, with the mental apparatus of a customer rather than looking at something through the lens of a manager or a, you know, a business operator. Which therefore makes possible, because of the vagaries of human perception, this makes possible a solution to problems which seems intractable in the physical world can be solved psychologically by simply understanding the psychology of the consumer or the, you know, the customer, whoever it may be. Or indeed your own employees, by the way, or your colleagues.Rory Sutherland: And so, what I—again, I’ll be absolute clear about this, it was a lucky accident, you know, it was born of necessity. And then I suddenly realized we’ve been total idiots because we’ve spent the whole 30 years defending what we are—our existence on the basis of what we do and what we’ve done. Whereas the real story here is how we think. And you know, I’ll give you an example. I think that government is increasingly hated by the population. Not because government is bad on policy or it’s too left-wing or it’s too right-wing or any of those economic or legal things. I think government doesn’t know how to relate to people. I think it’s become so tied up with sort of economics and law that it simply doesn’t know—I’ll give you an example. In London, in London, they introduced 20 mile-an-hour speed limits. Now, generally popular with cyclists, popular with pedestrians, popular with the residents of the road, very, very unpopular with motorists. Now, I support that decision on the basis of life-saving alone, and by the way, there are arguments which say that if you got rid of traffic lights and replaced them with small roundabouts—I know you don’t do roundabouts over there, although Florida has a few, actually—you could actually speed journeys. You could actually reduce journey time because although people are actually traveling more slowly, they’re able to interact with other vehicle drivers without the dirigiste intervention of a set of traffic lights. In other words, you could have much more free-flowing traffic over long distances.Rory Sutherland: But I said, look, if you said two things, right. One, the fine and the punishment for going 25 in a 20 limit should be less than the punishment you get for going 85 in a 70 limit. That’s the first point. In other words, it’s ridiculous to find—and I’ve just been fined actually for going 25 in a 20 limit on a—on what was actually a dual carriageway. Now, if you said to me, “Okay, because it’s only 25 and because it’s in a 20 limit, you pay two penalty points rather than three and the fine’s 50 quid rather than 90,” what the consumer would go, “Okay, you’re meeting me halfway. You’re being reasonable.” Okay? The second thing I would have said is: we’re going to introduce these 20 limits but we’re going to get rid of speed bumps. Because, okay, look, Mr. Resident, you’ve already got your 20 limit, the cars are driving past safely, you know, the 20 limit’s being enforced. Don’t make people drive over f**king obstacles as well, okay? Now, if you’d done this quid pro quo, consumers aren’t so bothered by the size of the quid and the size of the quo as long as there is a quid—sorry, a quid for the quo. If you just impose a rule with no concession made anywhere else, I think for entirely understandable evolutionary psychology reasons, people view that as being demeaning. Nobody in a free market business would ever conceive of approaching someone with a deal in which the counterpart was only a loser. They might try a deal where you get not very much in return for quite a lot. They might try that on. But no one would try on a deal where you go, “You give me this and I give you f**k-all.” Right? I mean, even to the point where if you make a donation to charity, they give you a little sticker. Right? You get something. It signals. Yeah, I get a bit of signaling value and you know, I don’t get bothered by other charity people because I’m wearing the sticker.Rory Sutherland: And yet government is basically institutionally autistic. In other words, it just imposes things that it decides are optimal without considering the emotional effect on the person who’s disadvantaged by the legislation or by the policy. It’s completely unlike every other form of transaction that exists between humans on the planet. It’s like Domino’s Pizza going, you know, “Pay us some money and we won’t s**t in your pizza.” It’s kind of like, what the ===? Right? That’s not—that’s not a deal, that’s basically an imposition, okay, yeah. Domino’s, “Oh, yeah, yeah, okay, I’ll have the express delivery. Oh, pay us four pounds and we won’t s**t on it.” Right? That’s basically how government behaves. And then they go, “Nobody likes us.” But—and by the way, I don’t totally blame politicians. I think politicians who are elected have quite a good eye for and actually are quite instinctive marketers in many ways, and some of them are certainly. I think it’s probably the bureaucracy with which they’re dealing which is institutionally autistic. That would be quite fun to do as the experiment. That would be really good fun to do as an experiment. “Yeah, pay us five pounds and we won’t s**t in your pizza.”The Future of Tipping and Service IncentivesAndrew Mitrak: I sometimes feel that way when I’m offered a tip on a page, because everything offers a tip now, and I kind of think, oh gosh, if I don’t put the tip in, what’s going to happen, right?Rory Sutherland: By the way, I’m unusual for a Brit in that in many settings I’m pro-tipping, because I think it does provide an incentive to provide better levels of service and so on. It also gives you a discretionary amount with which you can provide financial feedback and so on. Obviously, for reasons of total self-interest, I like to tip in places where I’m a regular, because I don’t want to be known as “Stingy Rory.” So, there are rational reasons. But in the US, I kind of go—like coffee shops—this is getting a bit weird. I am not the guy in the Reservoir Dogs.Andrew Mitrak: The thing is, now with terminals, you’re presented with the tip option before the service has been rendered. I think it works well as an incentive after, like, “Hey, you’ve done a good job and I’m going to leave a tip after.” Even the Reservoir Dogs scenario is more about that. But now with these Square terminals or whatever, it’s before I’ve even gotten my sandwich from you, I’ve got to tip you 20 percent.Rory Sutherland: And you haven’t even made the—so a large part of restaurant tipping, the reason you didn’t tip in McDonald’s is you hadn’t got your meal yet, so it was too early to decide whether the actual experience was tip-worthy.And now as you said, you’re at the terminal and it’s kind of like.Andrew Mitrak: Are they going to s**t on it? Is that the thing that’s going to happen if I don’t give the tip?Rory Sutherland: I absolutely agree with that. I think there might be a really interesting technology around tipping which I’ve actually discussed with someone once. I would like a world where you could tip call center staff, because the best five to 10 percent of them are worth their weight in gold. And I think they deserve a lot more money and I don’t think they’re paid nearly enough. So, there are areas where I’d like a mechanism.This is my idea, you actually have a load of cards with a QR code on them, and you basically hand them the card, which is for an indeterminate amount. Then when you finally check out of the hotel, you can basically apportion a reasonable amount of tipping to everybody in proportion to the value they’ve delivered in the course of your stay, rather than tipping the doorman when you arrive on the fear that they’ll treat you like s**t if you don’t. It also encourages perverse behaviors, like that business of insisting on taking your luggage up to your room. For crying out loud, I can manage a wheelie suitcase and an elevator. I don’t want you to take my laptop. Leave me alone.Why Behavioral Science Struggles in Corporate MarketingAndrew Mitrak: I wanted to come back to something that you brought up that was sort of a lightbulb for me, which is “Capital M” marketing, which is more like marketing organizations and how marketing presents itself, and then “lower case m” marketing, which is a little more marketing in practice and marketing thinking. I’m wondering if this is partly why I don’t see behavioral science and nudge really showing up within a marketing org. I feel like it’s somewhat at the margins. It might be a little experiment, it might be a pilot project, it might be something you hire a consultant for, but I don’t really see it embedded into individual roles or into org charts at a company. Do you see that as sort of why it’s a little at the margins of marketing?Rory Sutherland: Well, I somehow think that I don’t think it’s salvageable with conventional corporate structure. I think the way to solve it in part—but I don’t know if this works or whether it would be any good—is I think businesses should have a customer board where you actually talk about value creation rather than cost control. Because at the moment, what is ostensibly a board meeting is really a kind of exercise in cost reduction. It’s not a proper strategic discussion because it doesn’t include either the customer or the future. You can’t really develop a strategy without considering those two highly nebulous variables.Rory Sutherland: Of course, people who are certainty-addicted, typically like finance, who are basically variance-averse, they want to live in a low-variance deterministic world. Those people hate discussing those things because of course they are nebulous. It’s rather like I always think that cost reduction is immediate and quantifiable, which is why McKinsey & Company is an enormous business. Whereas value creation is non-immediate, it’s deferred, and it’s to some extent unpredictable. Consequently, people who are variance-averse overweight cost-cutting activity and are never held responsible for the opportunity costs that are incurred. There’s a trade-off between being efficient and being effective. There’s a trade-off between being short-term stingy and long-term rich. There are all these kind of trade-offs going on, but if you turn the thing purely to a kind of financial exercise, I think you’re killing a business in the medium to long term.The Strategic Advantage of Family-Owned BusinessesRory Sutherland: When I was tootling around Texas, every time I encountered a really impressive business, I’d make inquiries as to its ownership structure. Nine times out of ten, it was either founder-led or family-owned. I suddenly realized the family-owned businesses have this fantastic advantage over publicly held companies. Because one, they’re free to decide their own time frame. Two, they’re free to decide their own metrics of success. I don’t think you can be a brand unless you can design some of your success metrics that are actually chosen by you, not imposed on you by some investment analyst aged 27.Rory Sutherland: In order to be a brand, you have to distinguish yourself or differentiate yourself in some way, or at least make yourself distinctive. You’ll only do that by following metrics which are unique to you. I’d apply that to your individual life. I think you’re only a free individual—I don’t know if you’re one of these people whose parents wanted you to become a lawyer or a doctor—you’re only really a free individual if you say, “No, I don’t regard being a doctor as a badge of success. I want to go into contemporary dance.” That’s the definition of a free individual, which is you don’t allow all your targets and metrics to be imposed on you; you devise some of them yourself.Rory Sutherland: So, that’s a really important distinction. I think family-owned companies can play different time scales; they can play to a one-year, two-year, three-year time scale. They’re not fixated on the next quarter. They can define their own metrics of success and their timeline of success. Also, they’re focused on the customer and to some extent their own staff, more than the narrow preoccupations of not of share owners, by the way, but of shareholders, the institutions that hold the stock. They aren’t there to distract them all the time.Why Observing Reality Beats Investment StatisticsRory Sutherland: The final point, which Dan Davies, a wonderful writer who you ought to have on the podcast, makes is that the big advantage of being customer-focused over shareholder-focused is that your customers actually live in the real world. So, you are spending your time actually observing what is happening in reality rather than devising some artificial statistics to keep the investor community happy for the next three months. You are vastly better off devising your inspiration from reality than you are effectively pandering to a bunch of economic theories which were probably considered slightly dated at Harvard Business School in 1971, but which nonetheless pervade the general preoccupations of investment analysts.Rory Sutherland: I went to Buc-ee’s and I went to H-E-B and I went to all these Texas companies. You go, “Wow, these companies are actually brilliant. What’s going on?” Fortnum & Mason in the UK is just a luxury store, but there’s something about it when you go there. It’s almost imperceptible—it’s not imperceptible, but it’s kind of something you feel as much as you can quantify—which feels that no, these people are actually interested in being themselves and helping me.Rory Sutherland: The contrast is the economist and writer John Kay, Professor John Kay no less, went out for lunch with a friend of his at a lunch venue which they’d frequented regularly for some years. One day they turn up and he goes, “Something here doesn’t quite feel right. It feels like it’s been bought by private equity.” Sure enough, one of them gets their phone out and sure enough, four months earlier, private equity. Here we go. They’re going to build it up, looking for a way to offload it in a certain time frame, and the customer can go hang.Why Big Ideas Require More Marketing EffortAndrew Mitrak: I love your ideas. I love your book and I love your way of thinking. I’ve had a hard time implementing it at scale or getting it through at a large organization. Do you have any advice for marketers like me who work at large organizations?Rory Sutherland: My contention is that what marketers understand that often tech people don’t is they think the bigger the idea, the faster it’s going to take on and the less marketing it needs. I used to think that. Then I suddenly, because I’m 60, I’ve lived through the mobile phone, I’ve lived through the air fryer, I’ve lived through all these kind of patterns of tech, the microwave oven, I’ve lived through the DVD player. What you realize very quickly is: one, actually the bigger the idea, the slower it is to take off and the more marketing it needs. That’s because the bigger an idea is, the more behavioral change it requires for its adoption. Humans find behavioral change difficult for all kinds of evolutionary reasons. We like doing what we’ve done before and we like doing what everybody else does.Rory Sutherland: So, there are certain things which marketers are right about, which I think the rest of the business world is too influenced by mainstream economics, which is almost, “If you build it, they will come” stuff. Nah. Everybody quotes this phrase, “If we build it, they will come,” approvingly. But the film, Field of Dreams, was about a mad person who builds a baseball stadium in a cornfield to attract ghosts. It’s not really the basis for business wisdom, is it? I thought his business plan was terrible. You probably had a catchment area of 27 people and you’re the middle of bloody nowhere. Not where you build a baseball stadium, generally.Andrew Mitrak: It’s an odd one where I think the quote is probably bigger than the movie at this point.Rory Sutherland: Exactly, yes. Yeah.Recommended Reading: Humanocracy and the Unaccountability MachineAndrew Mitrak: Rory Sutherland, it’s so great to speak with you. I really enjoyed it. I love all of your work, all your books, all your podcast appearances, and talks. Is there anything that I could point listeners to? I mean, there are so many places. Where do you point people to?Rory Sutherland: Oh gosh. There are a few books recently. Gary Hamel’s book Humanocracy, I’m going to plug. I like plugging really interesting books. I’m probably about three years late with that book, by the way; it’s quite old. Dan Davies and his book The Unaccountability Machine. Dan makes a really interesting point, which is not a bad point at which to end, which is: he said a business is an artificial intelligence. Once you create a structure for decision-making, you have created an artificial intelligence, which is not the same as natural intelligence within an individual human brain. It’s fundamentally artificial because you’ve done all these things where you’ve defined things, you’ve categorized things, you’ve tagged things, and so forth. Consequently, collective decision-making is artificial.Rory Sutherland: And yet almost no thought is given to how those information flows are designed. In particular, Dan’s book is called The Unaccountability Machine because the primary motivation of people within an institution is actually career insurance and risk mitigation—reputational risk mitigation—not the success of the organization. To prevent that, you need to design decision-making very carefully. You need to have reasonable symmetry of upside and downside reward and punishment. We’ve often created organizations where if you make a small mistake, you get fired; if you come up with a billion-dollar idea, you get a pat on the back and possibly a promotion in two years’ time. I don’t think the way in which we’ve calibrated organizational decision-making is that good.Rory Sutherland: My weird conclusion from years of behavioral science, which is supposedly about human irrationality—I mean, Amos Tversky met someone in, I think at Stanford, as it would be. And this person said, “I study artificial intelligence,” and Amos said, “That’s funny, because Daniel and I study natural stupidity.” Now, interestingly, my kind of hunch—which is a feel—having spent years looking at this stuff, is individual human beings, when they don’t have to justify their behavior, make surprisingly intelligent decisions. Which are surprisingly intelligent once you realize what they’re ultimately trying to do. What their ultimate, maybe unspoken, maybe unthought objective is in buying a pair of Balenciaga sunglasses; you actually realize that what they’re doing makes sense within the constraints of ecological rationality, even if it’s not economic rationality.Rory Sutherland: The thing I also think is that collective decision-making is incredibly vulnerable to collective insanity. We’ve allowed, for example—I don’t know how this has happened—but we’ve allowed HR and finance to have the right of veto over almost any form of business activity. I don’t know how this has happened; it seems to be universal in all organizations. We’ve probably allowed, for example, within governmental decision-making, we’ve created these entities in terms of environmental sustainability or diversity or whatever it may be, which are actually massive opportunity costs. In other words, they prevent lots of things happening or even being tried or even being experimented on. We’ve allowed this to happen and no one really is speaking up.Rory Sutherland: There’s another brilliant guy called Philip K. Howard, who’s written a book about “can-do.” Fundamentally, we need to get back to the idea of business as a discovery mechanism, not business as an efficiency mechanism. The efficiency tail has been allowed to wag the discovery dog. That’s a terrible analogy and an awful place on which to end, but ultimately the solution to these things has to lie in how we design institutional decision-making better.Rory Sutherland: My hunch is that AI—okay, this is a kind of gag, but it’s nonetheless telling—what happens with all these people in finance and HR and everything else and IT: they never downsize themselves. There is no way of measuring how efficient they are or what contribution they make to the organization, and yet they are deeply involved in assessing the efficiency of people doing the real work. Often front-line service workers who aren’t even that well paid. Now, my hunch is: it’s those jobs that should be replaced by automation, not the front-line service jobs, because they’re specific to the brand and the business itself. Those are generic jobs which are a kind of internal corporate oncology all of themselves.Rory Sutherland: The old joke used to be that the factory of the future will consist of a man and a dog. The man’s there to feed the dog, and the dog’s there to stop the man touching the machines. That was the old joke about automation. Now, my contention is: the factory of the future will actually be a man and a dog, then there’ll be four procurement people who are continually reducing the size of the food bowl. There’ll be three compliance people who are legislating about the safe use of the lead to which the dog is attached, and there’ll be five people in HR to make sure the man doesn’t misgender the dog. I don’t know how we’ve allowed this to happen in organizations, but it’s what I call Soviet-style capitalism. It’s a kind of command-and-control mechanism where almost the internal political—what you might call ideological purity—of the activity is more important than the value of the activity. How we allowed this to happen, I don’t know, and what caused it, I don’t know, but until we do something about it...Why Video Conferencing Remains UnderappreciatedAndrew Mitrak: Is history just a big sequence of over-corrections? That’s what I wonder. Are we just continuously doomed to be swinging too far in one direction versus the other?Rory Sutherland: Is this even correctable? I don’t know. By the way, a separate talk I’d love to give one day is I don’t understand why we’re talking so much about AI relative to the importance of, well, Google Meet. Because video conferencing is an enormously important technology because it makes physical co-location unnecessary to a discussion. It massively reduces the costs of interaction. It means, for example, that your staff could move not to a low-tax jurisdiction but a low-rent jurisdiction, which would be far better off for them. Actually being able to move to affordable housing would make a bigger difference than a 10% cut in the rate of income tax in some cases.Rory Sutherland: Now, what everybody’s doing is this stupid thing where they compare like with like. Just to take an analogy with electric cars: the reason I support electric cars is not because electric cars are better than petrol cars in 2025, although they are. Petrol—I think they are better, but we can debate all that. I’m totally happy to have people go, “I go on a skiing holiday once a year and there’s nowhere I’d get 600 miles.” Okay, I buy all that. But the real reason to support electric cars is that in 20 years’ time, electric car technology could spawn a hundred meaningful innovations, and internal combustion engine technology won’t do that because it’s run out of road.Rory Sutherland: Now, what we’re doing with video conferencing versus physical meetings—which, by the way, is another form of transportation if you think about it laterally—is we’re saying: is a video meeting better than a conventional meeting? Maybe it isn’t quite as good. I don’t generally want to smell our clients; I’m perfectly happy just to talk to them face-to-face. But no, there are a whole load of incidental conversations and serendipity in the workplace; I buy all that stuff. But the point is that video conferencing in five, 10, 15 years’ time, if you reorganize your organization around it, has the potential to be transformative, whereas insisting on physical location does not have the potential to be transformative because we’ve been doing it for a hundred years and we’re not going to get any better at it.Rory Sutherland: So it’s like evolutionary potential, effectively. That’s the way to look at those two things, not side-by-side comparison on the now. It’s what offers you the biggest optionality and opportunity to innovate. Not what is better right now. In the case of the internal combustion engine, not that much opportunity. Electric vehicles: you’ve got electric scooters, cargo bikes, you have micro-mobility, you’ll have driverless cars, you’ll have all this stuff, none of which could happen with a gasoline engine. So we should be optimizing for optionality, not optimality. Don’t look at short-term optimality; look at long-term optionality. The scope of what you might call the adjacent possible is much, much bigger for video conferencing than it is for everybody in the office in a bloody expensive bit of real estate.The Failure of the Open-Plan OfficeAndrew Mitrak: And also, I want to come full circle back to Ogilvy as well. He did all of his writing at home, right? He’s a work-from-home guy right from the beginning.Rory Sutherland: Right from the beginning. There are certain things you cannot do in an open-plan office. The open-plan office was imposed; it’s in some ways catastrophic to all sorts of things. It’s neither sociable nor is it solitude. I think to work well, you need sociability and solitude; you want a pub and a library. But actually, what we get is something which isn’t a pub and it isn’t a library; it’s just this sort of weird hinterland sort of thing. It’s a no-man’s land sort of DMZ useless zone in between the two possible spaces.Rory Sutherland: So my argument is, look, I think what will happen is that if you’re McKinsey, say, 20 people internationally can form a consulting firm with the ability to draw on the 200 people in the world who know more about a subject than anybody else on the planet, and they’re going to out-compete you. Because they’ve got an access to talent that you haven’t got because you’re insisting everybody has to be based here and commute into a stupid building five days a week.Rory Sutherland: So the point is you’ve got to look at what the technology makes possible ultimately, not what it does right now. And that’s why I find it weird that we’ve effectively invented teleportation and no one’s talking about it. We take it for granted. And that’s just because the technology was old. But all really important technology takes ages to reach its level of full adoption. The fact that the technology is old means we don’t talk about it because it doesn’t make us look very cool. But I mean, the fax machine was a hundred years old before it reached sort of 5% penetration.In Praise of Paul FeldwickAndrew Mitrak: Well, this has been great. I’m going to check out Humanocracy, The Unaccountability Machine, and your future talks on teleportation and AI and everything. So, Rory, I could talk with you for hours. This is a real pleasure to speak with you and meet you. Thanks so much for your time.Rory Sutherland: It’s been an absolute joy. Paul Feldwick recommended you very, very highly. Good name-check. So let’s also mention, if he was too modest, all of his books, including Why Does the Peddler Sing?, are absolutely astonishing.Andrew Mitrak: Yes.Rory Sutherland: They’re a tour de force.Andrew Mitrak: Excellent books, and anybody who enjoyed this conversation and enjoys your work would also certainly enjoy Paul Feldwick’s work because it’s excellent.Rory Sutherland: Oh, absolutely. Yeah. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 43 If you studied marketing in school, you likely carried Kevin Lane Keller’s work in your backpack.He co-authored Marketing Management, the all-time best-selling marketing textbook, alongside Philip Kotler. And with Strategic Brand Management, Kevin he defined how a generation of marketers understands brand equity. As a Professor at Dartmouth’s Tuck School of Business, he has spent decades bridging the gap between rigorous academic theory and elite corporate practice. He’s consulted for giants like Disney, Nike, and Ford, but perhaps his most interesting “field research” came from working with the Australian rock band, The Church.This conversation is a rare treat for our listeners. Despite his massive impact and the high regard of his peers, Kevin keeps a relatively low profile and seldom sits for deep-dive, long-form interviews. This episode offers unique insights from one of the primary minds to shape modern marketing.Listen to the podcast: Spotify / Apple PodcastsIn our conversation, we discuss:* The P&G Playbook: How he helped transform Pampers by connecting functional technology to emotional “brand mantras.”* The Art & Science: Why great branding requires both a philosophical “philosophy of consumption” and disciplined data tools.* Managing The Church: What he learned about marketing, fan engagement, and “continuity vs. change” while managing a legendary Australian rock band.Now, here is my conversation with Kevin Lane Keller.Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Collaborating with Kotler on “Marketing Management”Andrew Mitrak: Kevin Lane Keller, welcome to A History of Marketing.Kevin Lane Keller: Thanks for having me.Andrew Mitrak: I’m so excited for this conversation because like a lot of people, Marketing Management was my textbook in grad school, and your name was on the cover there right alongside Philip Kotler’s. So, how did you get involved with becoming Philip Kotler’s co-author?Kevin Lane Keller: It’s interesting. I actually used the textbook too when I got my MBA. I had the third edition, so it’s going back a ways. I think it was the fall of 1978. I have enormous respect and he is a legend, but was a legend back then when I was taking the course. But I had the chance to publish my own textbook on Strategic Brand Management. I had done that and that was really my area of interest, but I’ve always been a marketer at heart in a very broad sense. So the publisher was looking for someone to be a co-author, and because of my experience and some of the things I was interested in, it seemed like a nice fit. So I actually did the 11th edition. Phil and I worked together just to sort of try it out, kind of both sides, and it went well. I enjoyed it a lot. And so I think it made sense and starting with the 12th edition I was formally the co-author and have been a co-author ever since.Andrew Mitrak: When you write a book like that, that is so widely read and is sort of the Bible for a lot of folks who are just getting into marketing—if a professional marketer reads one book, that’s often the one that they reference—is there a lot of pressure when you write a book like that to make sure it’s accurate and up to date? Do the stakes seem very high for it?Kevin Lane Keller: It’s daunting. When you think about it, it’s an impossible task because you’re trying to capture all the richness and all the detail and manage to distill that down and package it and write it and source it and reference it and everything, and make it engaging and interesting. So it is difficult. I enjoyed doing that. I think the challenge of that. And you break it down. It’s a little bit like building a house. You think, “Oh my God, building a house.” Well, you’re doing rooms and within rooms there are certain things you have to do. So you really break it down. It is very modular in how to approach it. But the big challenge is really keeping it up to date and making sure that it captures what modern marketing is and, more importantly, maybe what it should be.The Challenge of Keeping Marketing Texts RelevantAndrew Mitrak: Yeah, I have a question around keeping it up to date because there are probably certain core principles that you want to keep tried and true. Things like segmentation, targeting, and positioning, I think, were in my version of the book. I’m sure the Four Ps were referenced in it and things like that. But then there are a lot of things that change. So how do you think about what changes versus what doesn’t change?Kevin Lane Keller: I think there is always continuity and change in marketing in general. I’ve worked with a lot of brands, I’ve worked with a lot of legacy brands, really strong brands, and that’s always the challenge: how do I move forward, but how do I move forward in the right direction and in the right way, at the right pace and all of that. It’s no different with a textbook. You are thinking about what are the new ideas and the new concepts. And sometimes new frameworks and new ways to organize and think about things. But yet at the same time, there are those core principles and segmentation and targeting in some sense, and positioning in some sense. It may change some how you think about those, but that notion and those concepts themselves at least at a high level are ones that are retained. But a lot of things change and especially with digital and with AI, we’re really trying to make sure the book reflects that.Andrew Mitrak: Yeah, I was thinking just about that example exactly. Like I’m sure SEO is covered in a book, right? It’s a very big thing. But then even the language around it is changing. Sometimes it’s called Answer Engine Optimization with an AI. Sometimes called Generative Engine Optimization, GEO or AEO with AIs. And then it’s sort of just you might just call it LLMs. And the language itself, especially at this moment when we’re recording here in November 2025, is changing so much where if you committed to something in a book very quickly it could be outdated. If that version is used for years, it could just wind up being a thing where you’re like, “Ah, kind of missed the boat on that one.” So how do you sort of think about staying relevant without becoming outdated too much?Kevin Lane Keller: Well, I think you think about updating more frequently. I think that is probably one of the answers because there is nothing you can do. You can only go and be as current as you can till literally the moment of publication. So you’re always having the final proofs and you’re looking at them and you’re literally making changes and edits to try to make sure everything is as up to date as possible at that point in time. But at that point in time, then you move on in some sense. It is a little more dynamic with publishing. You have more opportunities to do updates and bring that in. So that’s the advantage of the e-text and the more digital versions versus the hard copy, the kind of classic textbook version in that sense. But you are always trying to. And look, the AI, that is an area that is just exploding so much and changing so much that it’s going to be a moving target for a while.Andrew Mitrak: Oh yeah, keeps it interesting.Kevin Lane Keller: Yeah, it does. Yes.Collaborating with a Marketing LegendAndrew Mitrak: So what was it like collaborating with Phil Kotler?Kevin Lane Keller: I had known him some through the years. He had actually tried to recruit me as a PhD student to Kellogg at one point in time, wrote a very nice letter when I was just first getting my PhD and through the years. He’s one of these guys. I joked when they had at one point an event to kind of honor Phil at Kellogg at Northwestern, and I joked that there had to be like three Philip Kotlers and we only actually had one of them in the room and the others were busy doing all the other things that Phil Kotler does because he’s just remarkably productive. I mean, unbelievably so. And the way he gets things done. But he’s the nicest guy. His ability, his radar to pick up on what matters. His ability to synthesize that, clarify it, put it into context. It’s just amazing. So for me, I’ve learned so much, which is great. But I’ve also enjoyed it so much. So he’s made it fun. So it’s just been great. And he’s still heavily involved with the book. So he definitely is still providing a lot of input, a lot of feedback. So he’s definitely part of the book still.Andrew Mitrak: That’s amazing. Even into his mid-nineties. I think because he was the first interview on this podcast and he had a similar experience where he would just respond to emails so quickly and kind of be on top of things so fast. It’s amazing that he’s able to do it all.Kevin Lane Keller: Well, there are three Philip Kotlers. I’m convinced. But maybe if it’s just one, it’s even more extraordinary. I’d be amazed even with three.Andrew Mitrak: When you first started collaborating, him having this Father of Modern Marketing type legendary status in the field, were there ever any disagreements you had with him? Or did you feel like you could push back or evolve things? Or did you feel like because of that, his status, you had to be deferential to him and also he was sort of the original author? What was that dynamic like?Kevin Lane Keller: That’s a good question because that’s a big issue. A lot of times it’s just people, you know, we all have that issue. We’re kind of territorial or we just sort of kind of want to stick with what we’ve done and for whatever reason. And he’s been always really flexible and open-minded about that. So that has just not been an issue, which has been great. I think there are certain topics he’s reluctant to give up in the book that sometimes, maybe they’re not as important now as they once were. They’re still important, and I get the reasoning, but that’s the one area is just sort of in that space where it’s just always harder. It’s easier to add than subtract. That’s always the hardest thing is subtracting. And you need to do both. That’s the challenge. Is what do you not include when you’ve included it before? And maybe there’s a reason to still include it, but if you do that for too much, then the book gets too long.From Ad Retrieval Cues to Brand EquityAndrew Mitrak: Yeah, that makes sense. So along with marketing management, you’re best known probably for your contributions to brand. And one of your early papers in 1987 I think, was “Memory Factors in Advertising: The Effect of Advertising Retrieval Cues on Brand Evaluations.” And so you were kind of early in working on brand and sort of connecting advertising, memory, around brand. So what led you to researching this area of advertising, memory and brand?Kevin Lane Keller: That paper was my thesis paper. And that came out of my co-chair was Jim Bettman from Duke University. He wrote a paper on memory factors in advertising that had an example about Life Cereal and Mikey. It was a very popular ad, but people could not remember the name of the cereal so they weren’t getting the impact from that because the ad was working but not branding well. People liked it but didn’t connect. So they put a little picture of Mikey on the front of the package, framed it with a television set, and said “Try the cereal Mikey likes.” So I called those “ad retrieval cues.” And so I studied those. It made a lot of sense to me because it’s trying to make those connections that memory just aren’t strong enough in memory. You’re helping people out in retrieval.But back door that got me into branding because the question was, “What did Life Cereal stand for without the cue and how did it tap into or remind people of the ads?” So I did a whole lot about memory and advertising and everything. But that’s how I got into branding. And then my most famous paper was in 1993, which was a paper I wrote about Customer-Based Brand Equity. And it’s a paper, 30,000 or some whatever Google Scholar cites. And it’s taught in seminars to this day. And I’ve written a couple follow-ups on that. I’ve written a ton in branding. But even on that specific paper, I’ve revisited it in some instances. But that’s really kind of... it all came down to understanding how brands work for people and especially in their memory and their knowledge and what they learn and how advertising affected that, but then how everything... how just brand in general operated.The Explosion of Brand Equity in the 1990sAndrew Mitrak: So it seems like in the late eighties to early nineties, brand was sort of the right topic at the right time. This is just as the idea of brand equity was really gaining traction. Can you talk about that transition that was happening with brand in the era? What was it before and then what was changing at this time?Kevin Lane Keller: Yeah, I mean it was one of those things where it really came out of what was happening in the eighties—all the mergers, acquisitions. People were having to value, so the intangible value of brands. So people were starting to recognize that. Brands obviously mattered to the CPG, the packaged goods companies, the more traditional consumer products. But all of a sudden a lot of different people, services and different organizations were all starting to realize in different forms that their brands really mattered. And so it was an exciting time because all of a sudden people were thinking differently about their marketing and literally what they did. And so to be sort of at the front end of that, which I was with some others, and to be able to talk about it and work with companies and help them understand that, you know, was just a really exciting thing to do. So it really, really took off. And when I published my book in even ‘98, there was just so much interest. And so the book sold a lot in trade even though it was a textbook because people at that time, there weren’t that many branding books.Andrew Mitrak: If you look at a Google Ngram of the mentions of the word brand, it really explodes in the early nineties or so. And that brand equity just led it to be a more elevated word within marketing and business in general. Did you see that wave coming and place yourself there because it was the most interesting topic area? Or did you feel like you were just interested in it independently and it happened to coincide with this? Were you thinking like, “Oh this is a big wave that’s coming, I want to be at the forefront of that”?Kevin Lane Keller: A little bit of both. I was fascinated by the topic. I thought it was really interesting and important. And I certainly recognized that others were feeling the same way. Interestingly, and eventually it, where we are today, it’s like part of everyday vernacular. I mean everyone talks about brands now. That was not the case 40 years ago or even 30 years ago or 20. So it took a while for that diffusion. And there are still some industries that are a little still maybe not embracing brand as much as you might think. But it was a realization that this is something that’s really important. It hasn’t been studied much. It needs academic study. It needs rigorous research.Comparing Brand Equity ModelsAndrew Mitrak: I interviewed David Aaker twice for this podcast actually, and we talked a lot about this era of brand equity and his work in this area. Did you work with him at all?Kevin Lane Keller: So Dave, I met Dave in 1985 actually when I was interviewing for my first job. And he was at Berkeley and on the faculty there. And that’s where I joined the faculty. And at the time Dave had been doing a lot... he was known more as a quantitative sort of marketing person, but he had been starting to move into strategy. I was somebody who had been studying advertising and, as I was saying, in consumer psychology and memory, moving into branding. And so it was a natural thing for us to work together. So he, some of his first papers, some of my first papers in branding were together. And they were on brand extensions. So which was at the time a big area. There were a lot of brand extensions that were happening and sort of but there hadn’t been much research. So we were developing models and running experiments and things like that. So we worked together for a good almost five years or so. And then we sort of went slightly different directions because he started working on trade books and going to a more practitioner audience. And I was at Stanford, you know, in the process of getting tenure and publishing research and writing a textbook. So I went a little bit more the academic route, although, you know, there’s obviously a lot of overlap between what we did.Andrew Mitrak: That explains sort of your different models a little bit because I don’t want to frame it as competitive per se, but it seems like you’re both people in the field of brand who are introducing your Customer-Based Brand Equity model. He has his brand equity models. And I could see if I’m a marketer at the time wanting to learn about brand equity, I’m like, “Huh, which model do I use?” Was there ever sort of a competition for mind share among both of you in your models? Or what was that dynamic like?Kevin Lane Keller: Well, I think they’re complementary in some ways. I mean Dave’s is much more of a strategy... it’s a little bit more asset-based in some ways. And mine is much more rooted in consumer and consumer behavior, consumer psychology and all of that, and to develop certain strategic principles that come out of that. But a lot of our recommendations are the same. Even though because some of his assets are ones that are consumer behavior related and my consumer behavior, I make sure I drive that into more outcomes and other things that capture sort of more financial and asset sort of based things. So there is overlap in that sense. So there really wasn’t... I see them as complementary in a lot of different ways.Constructing the Brand Resonance PyramidAndrew Mitrak: Totally, absolutely. Can you walk through... as you created this Customer-Based Brand Equity model in 1993, what is the approach to building a model? I’ve never built a model before. And it seems like a model you have to be sort of broad enough to encompass a lot of things and a lot of different industries, but also specific enough that it’s really meaningful and actionable and all of that. And of course grounded in reality and actual behavior. So what is the approach... where do you start with a model?Kevin Lane Keller: You know, it’s funny. The model that I’m probably most well known for, there’s the Customer-Based Brand Equity sort of definition and concept. And then the actual framework is the Brand Resonance framework. And that’s one where it is very much the sort of looking at how to build a brand and thinking about the stages people go through in their development. But I think that that’s one where I really, I literally sat in the back of a room and tried to lay out sort of the questions that people would ask about a brand and sort of just really tried to be as comprehensive as I could be, but then as concise and cohesive I could be as part of that. And so I think that was really the key was to do that.Andrew Mitrak: What I like about this is that this pyramid has very plain spoken language. It’s: Who are you (brand identity), What are you (brand meaning), What about you and what do I feel about you, and that’s brand response, right? And then What about you and what kind of association and how much of a connection would I like to have with you, and that’s brand relationships. And sort of it’s very a natural flow of like, “Hey, I need to understand this one to kind of understand the next one.” And was building it in sort of a plain spoken way where it’s kind of simple and logical, was that sort of part of your idea behind... or was that part of your approach to making it?Kevin Lane Keller: Definitely. And I mean the goal with that, like I said, was to be comprehensive but also to be as clear and logical. And I was trying to capture everything that I knew about marketing and consumer behavior and how brands are built. You know, so there’s an awareness and image component which are fundamental to brand associations, fundamental to any model, including Dave Aaker’s model, my model, etc. So had that and then the judgments and feelings, the head and the heart. And then resonance where you actually the customer feels in sync with the brand. They really feel a connection. So deep, you know, sort of intense active loyalty relationships. But each level of that pyramid had a wrinkle that like salience at the bottom was about breadth and depth of awareness. It’s like how easily is my brand thought of and how often? Is it in all the right times and places and ways? And points of parity, points of difference the next level up, which is my positioning model that I developed with Brian Sternthal and Alice Tybout at Northwestern. A different way of thinking about how those that brand image level. So I tried to make sure it was comprehensive, covered the key concepts, but also was original in certain ways that I thought were important to kind of bring in.Andrew Mitrak: That’s right. Yeah. It seems like a model also has to be original enough to merit a new model, right? While also not being so radical that it’s you have to throw everything else out, right? You have to kind of build on what’s already there. So kind of meet people where they are with their existing marketing activities and but also offer something new that’s actionable for them.Kevin Lane Keller: That’s right.Applied Branding: Transforming Procter & GambleAndrew Mitrak: Let’s talk about putting this into practice because you’ve consulted with a lot of really amazing brands: Accenture, Disney, Ford, Intel, Levi, Nike, many more, the list goes on. And are there any case studies from your career that you’re able to share about where you took this model and helped a brand implement it and had sort of real world outcomes?Kevin Lane Keller: So the ones, I mean like I said, I’ve had the chance to work with an awful lot of the top companies and multiple engagements, you know, which has been great. And the one relationship I had that I think was one of the more productive was with P&G, so Procter & Gamble. And it was in the kind of the 2000s and Jim Stengel was their CMO. Brilliant guy, wonderful guy and very sharp. But he really wanted to upgrade the marketing there. And so it was a nice relationship because I worked with some of their thought leaders in improving their toolkits when it came to positioning. This resonance model I described became their tracking tool. It was called “Equity Scan” and they used that to measure the strength of their brands and their development of their brands around the world. So they operationalized this in a survey form. I helped them with brand architecture, like how to think of whether it was Crest or whatever brand where you’ve got this complex portfolio and sub-brands and extensions and how to think about architecture for growth. And it was just across the board. It was just a lot of fun. It really made I think a difference for them because it really helped to get them thinking in a rigorous, relevant way in many ways they’d done before, but it was as we were saying before, kind of bringing in some original thinking to put on top of that layer.Andrew Mitrak: Procter & Gamble, this amazing, iconic brand, the originators of a lot of the original thinking about branding back in the 1930s, really long legacy of brand, but they have this big portfolio of brands that they offer. So were there any specific examples of where you applied your model or worked with them within their portfolio of brands?Kevin Lane Keller: I had a chance to work with a couple different brands, but the one that was probably my favorite was Pampers. It was a really successful brand and they had a great team, so they were obviously doing really, really well. But they sort of embraced some of the thinking that’s reflected in the positioning model and the resonance model: the duality of a brand and especially the emotional and functional components and how to connect them. So coming up with a brand mantra, “caring for baby’s development,” which really took the functional benefit of dryness and absorbency and the fact that the baby sleeps better and feels better, but then learns and plays and develops. And so really made that connection functionally and emotionally, which is exactly what the model that I have talked about. And so we workshopped that some and got to a really good spot and business really took off. And all credit to the team because they had built this thinking and structure in place that allowed it to kind of go that next level. But it was just a great, for me, a personal experience where applying some of these models and working with a team and just seeing the outcomes in such a demonstrative way for their biggest and most successful brand to take that to the next level was quite a thrill.Andrew Mitrak: I love it. I’m kind of smiling here because the brands that you have referenced, I have three daughters and I have one who’s six months old, one who’s three years old, and one who’s five years old. And the five-year-old is obsessed with Life Cereal, and you were talking about Life Cereal. That’s her favorite breakfast by far. And then yeah, we have Pampers in our house for the six-month-old. And it is, you’re right, it is actually amazing technology behind diapers as well, how they work. But also that I don’t necessarily buy diapers because of the technology per se. I look at price and a lot of things, but also Pampers, you just sort of trust it. If you see that on a shelf versus sort of a store brand or something, you’re like, “Oh gosh, is that going to cause an itch? Is that going to be worth it?” And it’s like, let’s just stick with what we know.Kevin Lane Keller: Right. Yeah, no, exactly. Exactly. And it’s a great functional benefit, but there’s an emotional payoff that you always want to make sure people are aware of because it matters so much to their lives.Bridging Academia and Practice via the Marketing Science InstituteAndrew Mitrak: So you also worked with the Marketing Science Institute for years. Bill Moult was a previous guest on this podcast as well, and he sung your praises as far as your contributions to the Marketing Science Institute. So can you talk about MSI and where an institution like that sort of fits into your work on brand?Kevin Lane Keller: So they were really instrumental in so many ways. So I won the doctoral dissertation proposal competition in 1984, and I was just starting to work on my thesis and I wrote something up, submitted it, and I was one of the first two co-winners. And that was really important for me because I still wasn’t sure what direction to go. I had a math-economics background. So they helped point me in the right direction—as it turns out, the right direction. I got great validation. And then all the branding work, they were very supportive and gave that gave me a platform to work with others, to share my ideas. So they were a real catalyst for that for me and for the field of marketing. And then I got more involved after that. I became a trustee, eventually an Executive Director on the board for a long time. And it’s just a great concept. The organization is a great concept because it’s that bridge between academia and industry practice and bringing together thoughtful practitioners and practical-minded academics to talk about the most important problems and the most interesting and challenging decisions. So it’s just a great concept and great organization.Andrew Mitrak: Yeah, for sure. It seems like we need more of that connection between academia and practitioner because it is a gap I’ve noticed on this podcast even when speaking to both people on the academic side and then folks on the practitioner side. There is a gap there, so we need folks to work on closing it.The Art and Science of BrandingAndrew Mitrak: I want to ask about the phrase “Marketing Science” and how it relates to brand. Because I think, speaking broadly, when I’m at a company, the brand folks are a little more of the art folks. There’s a little more of a general sense that brand is something that’s intangible, a little more difficult to measure. You think of brand and creative as sort of going hand in hand. And then what I think of like the data scientists I work with, often they’re measuring individual channels or they’re doing ROAS, or they’re doing ROI of specific campaigns. And that’s a little more the science element. I guess, do you kind of agree that that characterization sort of broadly exists? Or do you have any thoughts about that?Kevin Lane Keller: Well, I think there is some truth to that. One, it doesn’t have to be that way, and two, it shouldn’t be that way. And so I actually think it’s an art and a science. I think marketing, branding, anything. And I think the more you bring those together and celebrate those, appreciate that, and either do it in a holistic way across an organization, but even within individuals and those who are able to bridge that. But I think it’s really important. And I worry on the branding side, I don’t want it to be seen and licensed to be artistic and not feel that you need to have the rigor and discipline and other things to really make sure that you’re thinking things through in the right way, even while being creative, that you’re still mindful of other kinds of things.So I always talk about having, when I talk about art and science, part of the art is having a philosophy of how branding works. So there’s creativity, but it’s like, how does it work? Because you’ve got to somehow, no matter what you do. And so having that philosophy. So I tell my students that’s the key to me for the art and science is: what is your philosophy? What assumptions do you make about consumers, about competition, about brands? How they work, how they don’t work, all that. And you build those over time. I’ve got certain philosophies. You grow brands through little steps. I have certain tenants that I have just learned through experience and research and etc. So that combined with the tools that you can apply, like the resonance model and whatever that might be, but you need the blend of those because just having the tools is not enough. Just having the philosophy is not enough. You need to have the two of them.Andrew Mitrak: I’m going to take the bait. What are some of the tenants that you’ve learned? Or what are sort of the core things that you’ve learned personally that just seem to kind of apply across the board?Kevin Lane Keller: I mean, just at the heart of a great brand is a great product. I mean, that’s one of the ones I fundamentally believe in. But not everyone does. I mean, there are people who really don’t think it matters as much and what have you. And so, that said, every brand contact matters, you know, because it all affects knowledge. It affects what people think and feel and learn. So you sort of develop these tenants of that kind. And balancing continuity and change, and innovation and relevance. Making sure you have innovation so you’re always moving forward at the right pace and in the right direction and in the right way, things we talked about earlier. So you kind of develop these and then they inform how you apply your tools.Andrew Mitrak: Yeah, for sure. No, I think that’s a totally true tenant and it’s something I’ve actually thought about in marketing in general is that who are the greatest marketers of all time? They’re the people who work on the best products. If you kind of think of the Steve Jobs of the world or the Disney or the folks who have kind of changed marketing itself, there’s always a really great product behind it. And if there’s a great marketer and you can have a brilliant campaign, but if the product’s not there, you’re kind of going to forget about it and it’s not really going to have the mark it has. So part of it is having taste and choosing the right products to market as a marketer.Kevin Lane Keller: Well, but also product is part of marketing. And that’s really important. When you think of the 4 Ps, everything about that. So all the marketing should inform and work with R&D and everyone else to design the product to satisfy customer needs and wants in better ways and all that. So that’s why I mean it’s just making sure you don’t take the product as a given and not constantly thinking, especially now where you’ve got these platform brands. Brands and products are platforms. And so the product is one part of that. So you got to really think about how you’re enriching it in different ways with services and information and whatever else you can experience, other things you can do.Rock and Roll Marketing: Kevin Lane Keller & “The Church”Andrew Mitrak: Changing gears here, you manage a band called The Church. They’re one of the biggest bands that’s ever come out of Australia. And it seems like such a surprising thing. I’m just wondering, how did you come to manage The Church?Kevin Lane Keller: Well, “manage” is a little maybe overstated. I have to be careful with that. I’ve definitely helped manage them, so at different times. Less so now for sure. So I’ve been executive producer for them for a number of albums. And what happened, it was just a fortunate coincidence in 1998 where I happened to see them in San Francisco, in Melbourne, Australia, and then over in London. And it was just, as luck would have it, and some other things. And I kind of realized as great as the band was, the music business is incredibly unforgiving and they just needed help of various kinds. And some of it was financial. So I was a little bit of a patron of the arts, if you will. And this is before all the different ways now exist online where bands can do different things to try to support themselves. That didn’t exist back then. So really kind of stepped up and then also got involved in trying to help them financially and beyond financially—business-wise, career-wise, etc. Incredible band, very talented. I’ve learned a lot about the music business in the process. And it is a tough business. There’s just no question about that. A very, very challenging business. But it’s been hugely enjoyable and it was just pure luck that I kind of fell into this and then played this, took this role at that time.Andrew Mitrak: Did you have any background in the music industry? Or was this kind of bringing some of your brand and marketing consulting to the table? What was it that sort of set you up to be able to help them out?Kevin Lane Keller: Well, my background was hundreds and hundreds of albums and records and CDs and cassettes and everything. And I was just a huge rock and roll fan. I was, it was 1967, “Summer of Love,” I was 11 years old listening to a transistor radio. So I just always loved music and I loved the 80s music. I loved a lot of different decades and genres. But I especially loved The Church. I just thought they were an incredible band and were always special to me. And I always thought that they were a band I did not want to see go away for any reason. And so that’s why I stepped in. But I followed it some. If you’re interested in marketing, interested in business, interested in music, you can’t help but be thinking about—I’m the same way with movies—just all aspects of the marketing and business side of that. So I certainly had that armchair view, but I never actually worked with anybody before.Andrew Mitrak: You mentioned movies. There was a, I think when I first heard them, there’s a movie called Donnie Darko that came out where the soundtrack was very popular. It had 80s songs and I think it had “Under the Milky Way“ on it. And I think that’s probably the first time I ever heard The Church. Were you involved with any of their placement on movie soundtracks or any of that?Kevin Lane Keller: Not as much as I would have liked because that was something we always strived for. And it happened some, but we just weren’t, we didn’t have our act together enough. We weren’t organized enough at that time. It was a pretty grassroots effort. And so we were relying a lot on just the sheer talent and love and respect that people had for the band, and the brand I guess, if you will, to sort of move it into different arenas, which happened. There was one ad, it was a famous ad for Volkswagen “Drivers Wanted” going back in the day where it was literally supposed to have “Under the Milky Way,” which is one of their famous, most famous songs from their most famous album, Starfish. And at the last minute, somebody subbed in, and the person loved The Church, but subbed in a Nick Drake, who is an English folk singer, a song, I think it was “Pink Moon“ or whatever it was, into the ad instead. And it was just very disappointing because it would have been, it had got a lot of exposure, a lot of attention. It would have been a nice little nudge if you will. But that’s the way it works in this business.Andrew Mitrak: It’s a missed opportunity. But at least they were replaced with Nick Drake, who’s pretty great and not some just kind of schlocky song.Kevin Lane Keller: It was hard to complain for that very reason, but it still stung a little bit.Marketing Lessons from the Music IndustryAndrew Mitrak: So did your expertise in marketing and brand, what did you bring from that to a rock band? I am sure a lot of things were brought in. Were there any specific things or surprising things that you were able to apply to working with The Church?Kevin Lane Keller: It’s funny. It’s one of the things I see with other, even with companies. There are times they make things harder than they need to be. It’s always hard enough as it is, so the last thing you want to do is make it harder than it needs to be. And with bands, it’s a little bit of, just as an example, your setlist when you tour. Touring is important. But like what songs do you play? And you got to, there are a set of songs people want to hear. You may feel like you played them enough. You may feel like you’re kind of tired of them. Doesn’t matter. And it’s funny, the band went through a period, The Church, where they did kind of have that hit a wall with some of those songs. Didn’t really want to play them. But they’ve gotten past that now and I’m so happy for them. They really appreciate how much that means to people and they put their heart and soul into it and they put on these great shows with a balance of the old and the new. It’s back to what we talked about: that continuity/change. But you got to make sure you balance that. And that’s again a lesson I see for a lot of companies. Don’t make it harder. Don’t make it more difficult, you know.Andrew Mitrak: They want to rebrand, have a new slogan, do some new messaging where it’s like, well, you’re seeing it all the time because you’re a marketer at the company, but your audience, they don’t see it as frequently as you do. So maybe stick with the campaign that works a little longer.Kevin Lane Keller: Yeah, or just when you’re thinking of decisions, you’re just talking yourself into all these different things where, look, there’s just a lot of times just focus on what matters in different ways. And I think to be honest, that’s where the tools and the frameworks, because a lot of times the compliment I love from companies is when they say that you make it so simple. “You do it, it’s been great working with you, you just made it so simple for us.” And I’m always thinking, well, sometimes you’re making it so hard. I’m just providing structure and clarity and just trying to get them to see and then be able to make the decisions in the right way.Andrew Mitrak: So did managing The Church or working with The Church teach you anything about marketing? Or were there any things you learned that you were able to kind of apply the other direction towards your work?Kevin Lane Keller: I mean the one thing, music has always had a community and a fan base and everything. And obviously brands have embraced that in a much bigger way. But this was something that music was way ahead of in some sense. And connecting with them and letting them be the advocates, if you will, which has been so helpful for the band. So they benefit from the again, the love and support of their most devoted fans. So I think that’s definitely a lesson and just in general about how finding ways, it’s about engagement and the right ways to develop that and cultivate that. But recognize that not everybody’s engaged and so you’ve got a more casual fan base and they’re really important too. So that’s kind of one of the real lessons I got early on that was really helpful was just learning about that.What Remains Constant in MarketingAndrew Mitrak: Wrapping up, we were talking at the start about Marketing Management, all the updates that need to happen and AI and all these things that are changing in tech and in digital and in marketing. But I’m also curious, what are the things that aren’t changing? Are there any things that have stayed consistent and will continue to stay consistent for decades in the future?Kevin Lane Keller: Yeah, I mean we talked before about segmentation, targeting, positioning. I think just the general strategy notion. I think the ways you execute and implement that obviously change. I think Integrated Communications. I think Omnichannel, integrated channels. The mixing and matching of how you go to market, both in what you say and where you sell kind of, or how you sell. It’s at that high level, but then there’s so many unique things that are changing underneath that about how you actually execute that, how you implement that, even how you plan a lot of that. So I think that’s where you see so many differences I think. But I think there’s some of those kinds of high level areas of marketing and tasks that have to be done that I think that are still sort of relevant today.Recommended ResourcesAndrew Mitrak: Kevin Lane Keller, I’ve really enjoyed this conversation. For listeners who’ve also enjoyed it and they want to dive into more of your work, where would you point them?Kevin Lane Keller: So I’ve got lots of articles and a lot of research that I published, but I’d have to go with my textbook. And I wrote it as sort of being and wanted it to be seen as sort of the Bible of branding, this authority. And it’s now co-authored with Vanitha Swaminathan who helped me out on the book. But I think that’s the one. It’s written to have the rigor and the relevance, to be comprehensive, lots of examples. It’s not too dense or too academic, I don’t think, in the treatment of the subject. And so I think that’s one. It is daunting because of length and all that kind of goes with that. But that would be the place I’d go for those who are interested in really diving into again, those more thoughtful practitioners who want to kind of get into different frameworks, different ideas, different concepts, different research advances, whatever. That’s captured in the book. But I think it’s packaged in as user-friendly way as I can. So that’s probably where I’d send people.Andrew Mitrak: And this is your textbook, Strategic Brand Management, which is now in its fifth edition?Kevin Lane Keller: That’s right. That’s right. And again, for those interested in marketing management more generally, just want to know the fundamentals, I’d go back to the Kotler book that has been around for decades and still I think is a really useful resource for what’s going on in marketing and how to think about different topics and providing structure and insight and all of those kinds of things.Andrew Mitrak: Yeah, for sure. If you’re listening to this podcast and you made it this far, pick up a copy of Marketing Management as well and just keep it as a reference because it’s just, it’s worth just having just because even if you’re already familiar, it’s something that a lot of other people will have learned. So it’s worth just having as a reference guide. So Marketing Management and Strategic Brand Management. And Kevin Lane Keller, thanks so much for your time. I really enjoyed this conversation. I had a lot of fun. And so yeah, thank you.Kevin Lane Keller: No, thank you. I enjoyed the opportunity to talk with you and good luck. I think it’s a great series that you have and looking forward to seeing who else you have on next. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 42 This week, I’m sharing my excellent conversation with Geoffrey Colon, a creative strategist and author of Disruptive Marketing. Geoffrey is a self-described “hybrid” marketer with a career spanning the full spectrum of the industry, from running street teams for Red Bull to leading brand strategy at Microsoft, with stints at Ogilvy, Dentsu and his own agencies in between. He’s won Cannes Lions, Webby’s, and bylined articles in Fast Company and Advertising Age.In our conversation, Geoffrey draws a direct line between the first radio ads of the 1920s and the creator economy of today. He argues that the most successful marketers aren’t the ones try to invent something new, but those who embrace the art of the “remix” copying, transforming, and combining ideas from the past.Here is what you’ll learn in this episode:* The First Radio Ad: The story of station WEAF in 1922, and how a real estate promotion for apartments in New York City created the blueprint for interruptive advertising methods still in use today.* The Art of the Remix: Why Geoffrey believes we overvalue “originality” and undervalue the power of borrowing ideas from adjacent industries to create something new.* Guerrilla Tactics: A look back at the era of Red Bull street teams, and why physical, guerrilla marketing is making a comeback in a digital-first world.* The Power of Unlearning: Why the age of AI isn’t just learning new tools, but being willing to “unlearn” old ways without falling victim to sunk costs.Be sure to check out Geoffrey’s newsletter at Creative Studies and his popular TikTok.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.The First Radio Ad: WEAF and the Birth of Broadcast MarketingAndrew Mitrak: Geoffrey Colon, welcome to A History of Marketing.Geoffrey Colon: Thanks for having me.Andrew Mitrak: You wrote a book called Disruptive Marketing, which we’ll talk a lot about. The very start of the book talks about the first radio ad on WEAF back in 1922. Can you talk about this story and how did you kind of come across this?Geoffrey Colon: So WEAF was a station in New York City. At the time, radio was music and people talking on it. They would do things no different than today. They would maybe talk about what was happening in the world. That’s where most people were getting news, probably similar to how a lot of people get news on a news feed now on a social media app. You would turn the radio on and listen, I think as a group, to sort of figure out, “Oh, what’s going on?” and you would be entertained that way.And at the time, they had to figure out how to monetize radio. It was expensive. The technology to run it was expensive. And I think the station said, “Well, how are we going to make this work? Because we have to figure out how to pay for all of this equipment.” And one of the people there got the idea of, “Well, why don’t we talk about things that need to be promoted?” And they came up with an idea of, “Let’s promote this local housing that was basically available in the Bronx* where families could go live.” And that was really the first radio ad as we knew it.[*Correction: The neighborhood was in Queens, not The Bronx] And that, I guess, was the beginning of the end, if you want to look at it that way, Andrew, in the sense that all media always has advertising that invades it. So you have radio, you have television, you have the internet, you have social media, you have whatever comes next. But advertising always figures out how to invade these spaces where people pay attention to something.Andrew Mitrak: It’s a great story. I’m wondering, reading your book, it was published in 2016. It’s all here and now, future-looking work. And by the way, a lot of the future sort of, the things that you say in 2016 will happen in the future, happened in the future. So it’s very prescient in a lot of ways. But you start the book with this case study from 1922. What was your thinking? Why was that? Why did you feel the desire to start with this particular case study? What lessons did you want readers to draw from it?Geoffrey Colon: Yeah, there’s a tendency of us in marketing and many fields, we don’t really look back on really older history. We have a tendency of looking at things that have happened in the last two, maybe five-year cycle. And what I wanted to do is note like, hey, wait a minute. Here is a case of something that is 80-some years old and it basically explains how almost everything, what happens in every media space.So like when people say, “Oh, the world is about attention and capturing attention,” it’s like, well, that was the case back in 1922 when this radio station decided, “Oh, let’s use attention, people’s attention to promote an opportunity to live somewhere.” I mean, we’ve always been in an attention economy. I don’t think that’s new at all. And that’s what I was really trying to show. And I’ve always been a believer of like everything is a remix. If we go back and study history, it doesn’t necessarily, you know, what’s the phrase? It doesn’t repeat, but it rhymes. And that I think we’re not good as an industry of looking at how a lot of things are remixed and recycled from older eras that we just figure out like, “Oh, how do we make that fit the new era?” This concept of copy, transform, and combine.Andrew Mitrak: Yeah, no, it’s totally true. It’s a theme that we’ve covered a lot on the show of that there’s these things that feel like contemporary debates within marketing or advertising. Is it creativity or is it measurement? Is it storytelling or is it salesmanship? And these debates, they’ve been happening for like 150 years. It’s like a lot of the things, it’s like, “Oh yeah, you could just trace it back.” And it’s not new. And it’s like, gosh, wouldn’t you think like we would just acknowledge that or at least start like, “Yeah, these are debates that have happened. Let’s kind of move forward from there.”Geoffrey Colon: Yeah. Performance versus brand. I mean, a lot of people could say, wait a minute, that, you know, David Ogilvy was talking about that because he was always like, “If advertising doesn’t sell, then it’s not really doing what it’s supposed to do.” We have those debates now in this current era where it’s like, “Well, does it help sell?” It’s like, all right, we’ve been talking about this for 50, 60 years.Andrew Mitrak: Yeah, totally. So one of the things that I like about this WEAF radio case study story is that one of the things is that this idea of radio ads didn’t come from radio people. That it came from like telephone people at AT&T. And that it’s like there was an innovative thing at the time, right? It was radio and it was ads and it was selling stuff and that was a way to monetize it. So there was innovation there, even though it was also interruptive. But it was people borrowing ideas from an adjacent industry and applying them in a novel way. And it seems like that’s a theme throughout your work is that that’s an angle for creativity and for the eye. Can you speak to that idea of borrowing from adjacent industries and applying them?Geoffrey Colon: Yeah, I mean, I’ve always been a generalist, not to use that term, but you know, how do you look at the world that, you know, in a wide manner? And then say, “They’re doing this over there. How do we apply that in our area?” But again, remix it so it fits our area. I sort of cringe when people will sort of say, “We need to go out and get an expert to do this particular job.” And then the job isn’t really creative or the output from that job isn’t really creative. And then people will sometimes be frustrated and say, “Well, it’s not as creative as I thought it would be.” And it’s like, well, yeah, because you’re basically having people who are not really wide, they’re just deep. And they’re doing exactly what you expect them to do.I mean, there’s plenty of areas in marketing where I see this. Like if you market healthcare or insurance, you are probably doing a lot of the same things there. It wasn’t until a couple of years ago when you had organizations like GEICO and Progressive and State Farm said, “Wait a minute, let’s throw that old playbook out because they actually hired people who came from different industries to figure out what their marketing and advertising was going to look like.” So I think, you know, we should take more risk in terms of who can we get that is unique to basically apply their learnings to our field.We’ve seen this in lots of different areas. Even if people say like, “Well, you wouldn’t hire someone outside medicine to work on medicine.” The thing is doctors and scientists are still inspired by lots of areas outside of medicine that they then apply. This is why, you know, you have a lot of medical scientists now saying things like, “Hey, one of the best things you could do is actually fitness.” And fitness doesn’t necessarily fall into like medical science, Andrew. It falls into like, well, wait a minute, that deals with like VO2 max and basically walking and doing things that should really, you know, come natural to people. But, you know, the more you apply things from other areas, the more that actually can lead to some interesting outcomes for, you know, how we basically navigate life.Andrew Mitrak: Totally. You know, this is like another area that even within the guests that I’ve spoken with, I’ve spoken with real like, you know, marketing PhDs, experts, and folks who like are very, very deep into marketing as a discipline. And then I just had an interview that I just recently published with a historian at Nike. And basically the gist of the story was that, you know, their first head of marketing was their lawyer. Phil Knight was an accountant. Carolyn Davidson, who designed the Nike logo, was a student. And all these people who aren’t trained marketers, didn’t learn about the 4 Ps, you know, and didn’t get an MBA, but they just had good instincts, they had a passion, and they made many of the best marketing decisions of all time.And it’s just kind of a thing to square. Like what is it? Is it worthwhile to read a bunch of marketing books and really learn it? Or what does that say when so many like folks who seem like amateurs or are not experts but can make a lot of the same, the right decisions on it? So like, yeah, what’s your reaction to that?Geoffrey Colon: Yeah, I mean, I’m in the middle there. I’ve always been more of like a hybrid where it’s like, I think it’s bad if you’re a person who’s like, “Well, you shouldn’t study anything on marketing. You should just go do it and wing it.” I mean, like there’s a lot to learn from the science of marketing. I think like it’s important to study those things. That being said, I also think it’s good to not be mired in, “Oh, well, that’s the way to do it and that’s the only way to do it.” Because you don’t make up any ground that way, Andrew, when you sort of get stuck with the, “Well, this is how things have worked the last 60 years. That’s what we’re going to continue to do.” Because ultimately that’s what leads to fatigue from most audiences where they’re just like, “I know I’m looking at advertising or I know I’m being marketed to.” And then it becomes less effective.So I think it’s somewhere in the middle. I always tell students who are marketing majors, “Oh, I’m glad you’re doing that. But go build a business too. Go learn how to actually build a business, even if it’s like selling t-shirts online. Just go learn how to do something so you’re not a person that I call the professional managerial class, people who have advanced degrees, but when you say, ’Have you ever built anything?’ they’re like, ’Well, no, I’ve only managed things.’ I’m like, ah, I don’t know if you really, you know, I don’t know if that’s all that you need to do to make things really happen in life.”Andrew Mitrak: Or go sell something as well. Like building something and selling something, it’s like your empathy for a salesperson as a marketer changes so much if you’ve had to like sell and close a deal yourself or things like that where it’s like, yeah, you have to have like life experience to apply it as well.To kind of wrap a bow on the WEAF radio case study, it’s like on the one hand, this is a hundred years ago now and there are still radio ads and there’s still interruptive things. But then part of the lesson is like, can’t we evolve past that? Can’t we get past interruption? But then interruption still exists. And does that just mean that it’s been around for a hundred years, it’ll be around for a hundred more years and there’s that Lindy effect where it’s like it’s just existed forever and it’ll continue? There’s some reason to that? Or is the lesson like, no, we need to really think of how to break away from it? Do both of those things exist at the same time? Or what’s your thought about that?Geoffrey Colon: Yeah, I mean, I think if you didn’t have interruptions, you would just sort of have what we have with streaming nowadays. When I mean streaming, like when a streamer goes on YouTube and is on there for four hours or they’re on Twitch and you’re like, “Wow, like you’re not taking a break at all.” You just, ultimately the audience fades as well from scenarios like that. I’m not saying that everything has to have advertising breaks, but I think advertising when you do interrupt, you can decide what, you know, whether you want to take a break and not pay attention or you may happen to pay attention.I don’t know what the answer is there because I think if you integrate more advertising or more sponsorship into media, people start to get upset about that as well because they’re listening to you talk like you and I are talking and then all of a sudden they’re like, “Wait a minute, they’re talking about something and I think they’re trying to promote it.” And I don’t like that either. So it’s, you know, it’s, we’re in a weird world where we’re always trying to figure out the best way to sell or give awareness to something. And I don’t know what the right answer is.Andrew Mitrak: Yeah, sort of, I guess that’s part of the fun. It’s like an evergreen challenge and we continue to experiment.Guerrilla Marketing: From Ancient Rome to West PhiladelphiaAndrew Mitrak: And so, okay, shifting from that example, I also want to talk about some of the kind of historical moments of your own career because a topic that I haven’t covered at all in the show is guerrilla marketing. And can you just share when did you first start doing guerrilla marketing?Geoffrey Colon: You know, I was really, I got really into like graffiti and street art having grown up not far away from Philadelphia where graffiti actually, the modern graffiti I should say, was invented. If we look at, you know, where graffiti really originated from, there’s cases of it going back to ancient Rome and ancient Greece. But the modern version of it came from Philadelphia and then it was really...Andrew Mitrak: Like the opening of The Fresh Prince of Bel-Air [Laughs]Geoffrey Colon: Correct. Correct. No, that’s actually a good example. And then New York City took it and put it on another level. So I’ve always really been interested in guerrilla marketing because you are doing something out of context, out of the norm. You might be, you may see a blank wall somewhere and you’re like, “Okay, how are we going to take that over and paint it in a way that draws attention to what our product is that we’re doing?” It might be what we’ve seen recently with people setting up real-life versions of people in storefronts and getting people’s attention because they’re like, “Whoa, what is going on in there?” There was a recent case of a B2B product called Ramp that recently did this in New York City.So it’s, you know, guerrilla marketing does exist still. There’s just less cases of it because you can’t track it. You can’t really see what the effectiveness of it is. But it makes for good PR and it can be exciting because you can do stuff that’s just sort of out of the norm that we have usually been doing, I would say the last, you know, 20 years where we sort of stick to the playbook.Andrew Mitrak: It’s funny because you mentioned how you don’t see as much of it anymore. And it is one where as I became aware of marketing, I would hear a lot about guerrilla marketing, right? And I think that in the early 2000s-ish to maybe the late, early 2010s, I feel like I just heard guerrilla marketing as sort of a buzzword a bit. And then I don’t hear as much about it anymore. Is it because it’s been absorbed into normal marketing? Is it just like a PR stunt, I guess? Or is it that there’s actually less of it happening as the world becomes so much more digital? Or it’s not really a digital guerrilla marketing per se and that’s, and it’s not trackable and therefore so much marketing is digital that it’s just less guerrilla is part of it? Is that sort of, like why is it disappearing, I guess is my long-winded way of asking a question.Geoffrey Colon: I think we’ve, I think you hit the nail right on the head. I think we have over-indexed on digital. And so we don’t really put an emphasis on guerrilla marketing because that’s in the physical world, it’s in an analog world. The reason I think it’s starting to creep up again is because people are doing a lot more things in real life. But also a lot of that scales. Canadians actually were really big on guerrilla marketing. They, in Vancouver, they called it culture jamming. That, I mean, like Canada really sort of led the way. I think Kalle Lasn who wrote the book on guerrilla marketing is Canadian. So I don’t know what it is north of the border that made Canadians do that, but I think they saw something that said, “Wait a minute, let’s take advantage of the physical space and then figure out ways to draw attention to ourselves.” And then that’s just, that has spread across the world, you know, pretty much to every territory, every country now does some form of guerrilla marketing for brands.Andrew Mitrak: And as you were early in your career, you were doing some guerrilla marketing yourself. And I think, did you work with the Red Bull street team?Geoffrey Colon: I did. Yeah. That was pretty wild.Andrew Mitrak: What was that story?Geoffrey Colon: I was running sort of my own, this is early 2000s, my own influencer business out of my apartment in Brooklyn. And Red Bull approached me because I used to do a lot of street teams for music releases. Anytime there was something big coming out in the music world, street teams were the most effective way to call attention to that because you still had physical record stores. So you wanted to make sure people knew when something was coming out. And they said, “Hey, we want to hire you to figure out how to do this to get our product out to more people.”And Red Bull at the time was really only popular, the first area in North America that it was really popular was Miami because they sort of figured out how to get the product into nightclubs there. And then they said to the bartenders, “We’ll give you this product for free, but can you push it based on these drinks that you can mix together?” And then more people were like, “What is that?” And it’s like, “Oh, that’s Red Bull.” And that drove word of mouth that then got the beverage to grow off-premise. So it actually started to show up in like delis and grocery stores.But I ran, you know, street teams in New York for a while for Red Bull. And now we still see the cars out there with the can on the back that drive around. I mean, again, that’s a lot of guerrilla marketing as well. Like people will always ask me like, “What do you get from that?” But you get attention. You go to an event, people see things. Sampling was really big. So, you know, we would do a lot of things where we would actually get the can in people’s hands to try it. You know, I don’t see a lot of that anymore.Andrew Mitrak: I don’t know if I hang out in the areas where that might occur anymore. But I know when I was in college, I think that was the very first time I had a Red Bull, I think, was somebody with a car and a can and handing it to me. And being a poor college student, I’m like, “All right, sure, I’ll get some free calories out of this.” And that, I don’t know, I didn’t convert me. I don’t drink many Red Bulls, but you know, it got me to try it and be aware of it a lot.So how did you transition from having your own agency to working at Ogilvy?Geoffrey Colon: I sort of went from having my own to working at a couple of other places. And then, you know, Ogilvy had an opportunity and I was working at a really large digital agency before I went to Ogilvy. And I just was like, “Wow, it would be interesting to be at a big traditional agency at a time when they were really yearning for people with social media and digital experience.” And so, you know, I had a great boss there. She totally got it, was really a good social media marketer herself. And we just were able to apply a really lot of interesting strategy to the clients that we had. But I was also able to learn a lot from like the traditional creative directors there and how things were put together, you know, for what I guess we would consider old media. But I think, you know, when you understand that entire mix of how to buy media, how to make creative, what does that creative look like, what do these stories look like, what’s a customer journey look like? I mean, it’s a good education, I think, to be in an organization like that.David Ogilvy and the Hybrid Marketer: Balancing Creativity and FundamentalsAndrew Mitrak: Yeah, you were kind of talking about how you want to do both. You want to be a hybrid creative, but also you want to know the principles of marketing and you want to know the fundamentals. And it seems like that’s something you get out of a place like Ogilvy is some of the structure and discipline and kind of the big company thinking and almost understand which parts need to be disrupted in a way because you’ve kind of seen how a larger agency works firsthand.Geoffrey Colon: Yeah, and I mean, David Ogilvy is interesting because he has tons of case studies of things that I would consider to be disruptive for their time and place. I mean, a lot of times people are like, “Oh, that’s an old stodgy, you know, advertising agency.” But when you look at the case studies again, going back to how we look at history, it’s like, wait, what, you know, they did then could be applied now. And that can be quite disruptive. Putting an eye patch on someone who is, you get people to pay attention to the fact, “Oh, why does that person have an eye patch? Oh, that’s an interesting shirt.” You know, that’s, those are interesting tactics.Andrew Mitrak: Yeah. So how much, so you mentioned David Ogilvy and you worked at the agency Ogilvy and he had, he had probably retired in what, like the 80s and had passed away by the time you were at the company, right? But was his legacy still there? Like does his legacy a big part of the, you know, it still bears his name, so clearly it’s at some point it’s there. But do they still kind of like give everybody Confessions of an Advertising Man and have them like read Ogilvy on Advertising to sort of understand sort of some of the history of it?Geoffrey Colon: Your first day there, I remember, here’s Ogilvy on Advertising. Everybody gets that book who joins the agency. Yeah. So his spirit is definitely embedded there. There are quotes all over the walls there. I don’t think that I don’t think they’ve tried to move away from their historical legacy like a lot of other larger agencies have.Andrew Mitrak: Yeah, because a lot of other agencies, you know, the one of the names like Ogilvy just becomes an O, like an extra thing in like the big string of letters and it’s like it gets merged in and gets shortened and you kind of lose like who was that guy to begin with. So it’s cool that his legacy was still there. Like what, how was it sort of applied still? Like how does it go from like a wall or some quote to actually like showing up in materials?Geoffrey Colon: Yeah, I mean, every brief there is still originated from what his briefs were. So that hasn’t gone away. And if people are like, “Well, why don’t they update that?” Because it works. Like why change that? It’s because it’s simplified, Andrew. It’s really simplistic. And I think the issue with briefs is we make them so complex that when you get them back, you’re like, “This is 25 pages,” whereas it’s one page with three things that you’re basically trying to do.And I find in this day and age when everyone’s like, “Okay, let me do my hand talking here. Here’s the 70 things.” It’s like, no, no one’s going to remember that because people don’t have the time or attention to remember that. What’s the one thing you really want to get across? I think that’s important in terms of not just advertising, but like anything you’re trying to do in marketing. Whether it’s marketing a product, marketing someone who’s trying to run for office, or marketing anything, an idea. You really need to, you know, this is where the whole elevator pitch comes from. Nobody really wants to be in an elevator being pitched something that they’re like, “Yeah, I don’t understand what you’re saying.” They just want to know like, “Oh, by the way, I have an idea. It takes this and this.” And they’re, “Oh, yeah, let’s actually do that.” So communications skills, I think we’ve made them way too complex for the 21st century. And we can make them much more intelligent again.Andrew Mitrak: As far as the complexity, one of the truisms from David Ogilvy, his principles is like, if you have a successful campaign, keep running it. It’s like you’re not presenting to a standing army, you’re presenting to a marching parade. And the idea that if you have something that works, you don’t need to just like change it up every season just because. And I feel like there is a thing where it’s like people, you know, have the new holiday ad just because and totally rewrite everything just because it’s like a new year. And there probably could be a little more of just repeating a good message, sticking with a good slogan, not rebranding and having a new jingle or whatever. Like, yeah, do you think about that or are there other sort of like lessons that folks should sort of embrace still from Ogilvy?Geoffrey Colon: Yeah, I mean, that’s a big one. Like even modern thinkers like Mark Ritson talk about that. Like he will say, “Why are people running these new ads or why do they have a whole new campaign when they should run the this other one?” It’s one thing if you change a campaign because let’s say the company has new products or features of those products. But if you’re like, “Hey, let’s do a brand campaign.” It’s like, is your brand still based on what it is that you sort of laid the foundation for with this original campaign? Yes. Then keep running that because you’re, to your point, and I love the analogy, it is like a parade. There’s a lot of people who have not probably seen the messaging that you have to keep hitting and hitting and hitting until they realize like, “Oh, that’s interesting, that company.”And I think we’ve seen that in a lot of different areas, people taking that to heart. I just also liked David Ogilvy’s approach to the fact that, you know, he said like, “Your customer isn’t a moron. It’s your wife.” I think I have that quote correct.Andrew Mitrak: Yeah, it’s along those lines, yeah.Geoffrey Colon: Yeah, it’s like we have a tendency of thinking that our audiences are different from who they really are. And I think we’re actually going back to an era where if you understand who the audience is because let’s say you’re marketing something that you yourself use. So you’re like, “Oh, I know who the audience is.” Like that’s way more impactful than people who may say, “Well, this is who we want the audience to be.” That’s very different and that sometimes is delusional, if I may say that word.Andrew Mitrak: Yeah. No, exactly. It’s funny because when I recommend Ogilvy, I say, “He does use some gendered language at the time. Yada yada.” Like caveat, it was a different, I mean, I don’t know if it’s a good excuse, but it was a different time. But like there’s a lot of truth to that. And the intention behind it is actually, yeah, speak, don’t assume your customer is a moron. Like they’re actually intelligent. You don’t have to dumb things down that much.He also was a proponent of like actually having a lot of detail in your ads. And I don’t know if that works totally today on social and of course it doesn’t apply to every format. But in general, like just assuming like sometimes there’s a thing like, “Oh, everything has to fit in, you know, a three-word slogan and you can’t have a, you know, but it’s like actually sometimes you want to read a paragraph of like good copy about why this product is so great or that, you know, that Rolls-Royce ad about how it’s at 60 miles an hour, the loudest thing in this is the electric clock or whatever it was. Like these little things that just like, “Oh yeah, that like totally catches your imagination.” And he’s willing to write longer, which I also also like.Geoffrey Colon: Yeah. Yeah.From Agency to Big Tech: The Microsoft ShiftAndrew Mitrak: So you shifted from Ogilvy to Microsoft, and which is like a pretty big transition. So at this point you’ve been a solo agency owner, you’ve worked at leading digital agencies, you’ve worked at larger ones like Ogilvy, and here you are at like among the top few largest companies in the world and you do a brand leadership role for you. Like what was that like going to Microsoft and what was like sort of the big shift from agency world to, you know, big tech world?Geoffrey Colon: I mean, it’s a huge leap in terms of the learning curve because you’re going from outside a company and really being sort of an advisor because that’s really what agencies are, they’re advising their clients, to being in-house and having to learn everything about the brand. From like the history of the brand, every product at the brand, every failed product at the brand because that comes into play too in terms of understanding evolution. Every solution area that the company was involved in.I mean, there’s a lot to learn there, especially for, you know, when I got there, I think the company was around 40 years old, but it feels like 100 years old because there’s so many things that a company like Microsoft does. So yeah, it was a big learning. And I liked that though. I think, you know, drinking out of a fire hose is good for everyone to do at least once in your life where you don’t feel intelligent, you constantly feel like, “Wow, I don’t know anything.” And you have really, really smart people in the room around you at all times because that’s how you get smarter. That’s how you get better. You don’t get smarter or better by being around people who aren’t really good at their craft. So I think that was a great challenge. I looked back at that era and it’s, it was almost like having an advanced degree on steroids, Andrew, because you’re just like learning how to scale multi-billion dollar businesses.Disruptive Marketing and DisruptiveFMAndrew Mitrak: And so you wrote Disruptive Marketing while you were employed at Microsoft, right?Geoffrey Colon: Yes.Andrew Mitrak: And you’re publishing this and hosting a podcast called Disruptive FM while you were at Microsoft. And did you feel like, were you partly speaking and preaching to Microsoft employees trying to like evangelize a shift in thinking? Or were you more like and also speaking to people outside of Microsoft? Or what was your approach to sort of communicating both within your company and outside your company?Geoffrey Colon: Yeah, it was internal and external. I think what I identified is that regular people on the internet were going to have larger influence than what I guess you would call the mainstream media or journalists. At the same time, I also thought employees were going to have huge influence on how you sell products. And then you were also going to have a huge influence on the other people who work at the company in terms of inspiring them.I think what I identified early on is what you call, you know, the creator economy. This was 2013, 14 where I was like, “Hey, video is everywhere. This is, you know, how things are going to work.” And I remember someone going like, “No, no one’s going to watch video with like regular people or people who like work at a company.” And then I was like, “Hey, I think podcasting is going to be big and I think it’s also going to convert into like audio video like we’re doing right now.” And I remember someone saying, “Nope, that’s not going to happen either.”But the reason I look back on that and I realize why those people said that, these were people who were PR folks who were scared about change because if that changes, then their job, which was pitching people at the New York Times or Fortune or Wired, they don’t see that as relevant. And it’s like, no, no, no, no, you can adapt because you’re just going to be pitching to creators, these people who are all talking about different things on YouTube or TikTok. I just don’t think they could see that, Andrew, at the time. I think they see it now. But I think every company sees that now. So I don’t know. It’s sometimes lonely seeing some of these things, you know, ahead of the curve and at other times it’s pretty interesting. So...Andrew Mitrak: That’s right. I mean, because you’re also, you’re being a little provocative too. You’re talking about disruption and there are probably people where, you know, you kind of criticize MBAs a little bit. You probably work with a lot of MBAs, right? And you’re talking about this old way of doing things and Microsoft is probably doing a lot of those old things. Did that lead to any uncomfortable meetings at all or anything like that? Or what was that like?Geoffrey Colon: Yeah, I mean, I think that provocation, like if you look at how people provoke on the web now, a hot take gets people to, you know, “What? Why are you saying that?” You know, um, I think there were parts of the book that I, when I wrote it, I was like, “I’m going to say stuff that is controversial because otherwise no one’s going to pay attention.” And that’s sort of how the web operates for better or for worse. I don’t think it’s always a good thing that people do that.I think now if I rewrote the book or wrote a second book, I would take a different tone of that’s much more uplifting and has more of a collective leadership style. But at the time, that’s what you did to provoke people out of like a stupor. And yeah, those, I mean, sometimes people would be like, “Nah, this is not, you know, this is not where things are headed. This is always going to be relevant.” You know, that’s not necessarily something I always wanted to get into debates with people about. But, you know, I saw like, hey, there’s a need for creative technologists at these companies. There’s a need for people who understand APIs just as much as saying, “Well, I got my MBA from Northwestern or Wharton.” I don’t downgrade MBAs. When I wrote the book, I didn’t have one at the time. I went back and got one since. But like I think there’s much more of a need of just human understanding from folks that you may not get from an advanced degree.Andrew Mitrak: Totally. That’s right. And obviously the gist is the point of the book is not to like diminish MBAs or anything like that. But it’s to really advocating for this idea of creative hybrids and that there’s lateral thinking and having broad experience that’s not purely just MBA to management consulting to big tech and management with no experience actually building things and being hands-on and being able to draw inspiration from outside of a very specific worldview.Geoffrey Colon: That’s right. I mean, some of my best employees I worked with had like philosophy degrees. Some of the best UX people could also, you know, code or maybe they failed out of being like an engineer and did business. But like we’re in a weird, like to your point, Andrew, we have weird hybrid roles now that you can’t just say, “Well, I’m going to go and major in this.” It’s like you have to have a lot of different subjects and do a lot of different things and have a lot of range to really apply that to the world that we’re currently in or and the world that we’re like moving into.Podcast Marketing: From Niche to MainstreamAndrew Mitrak: I want to ask more about Disruptive FM because you, I’m relatively new to podcasting myself. I was a long, I was a very, very early like podcast listener like back in like when the Ricky Gervais Show was out in like 2005-ish or something like that. That was the first one I got into. But I mean, I’m sure you even predate me on podcasting.Geoffrey Colon: No, no, no, no. That’s about the time I got into things too. 2005-ish. Yeah.Andrew Mitrak: Right around that, yeah, right around then. But you actually were producing like relatively like way early like as far as especially business-wise, there wasn’t nearly as much business-related podcasting stuff. A lot of it was like comedy shows or things like that. But so Disruptive FM, you’re producing that. What did you learn about podcasting as you were doing it in those early days? Like beyond technical stuff or things like that, what was you worked on it for a long time, you’re still podcasting. What is it that you got out of it and what did you learn from podcasting?Geoffrey Colon: You know, the things that I thought people didn’t want to hear about when I would do episodes where I’d be like, “Oh, I’m going to, you know, interview this person who wrote a book.” I have a lot of authors that were on the show. You know, maybe the book wasn’t a bestseller or, you know, no one really knew who the author was. And I’m like, “All right, we’re going to do this. I doubt anyone’s going to really like this episode.” Those were the ones that always did really, really well. Like the niche topics. People loved hearing about that because they would always say the same thing to me, which is, “You know, hey Jeff, I wouldn’t know about that unless you told me about it.”Which made me realize that even in our algorithmic discovery world, there’s still a need for human curators, people who find things and tell other people about them because not everyone’s going to know about every single thing out there. And then when you make them aware of it, they’re like, “Wow, that is like a fascinating topic. I got really, really into that.” So that was a big learning for me early on, you know, before people said, “Oh, there’s tons of people out there who talk about micro topics.” It’s like, yeah, and a lot of them write books. People are really fascinated about that just as much as they are about, you know, the big authors.The Many Benefits of PodcastingAndrew Mitrak: For sure. Yeah, and reading somebody’s book and then getting to interview that person is a magical feeling too because when you read a book, it’s like you’re so removed from the author in a way. And in podcasting, you’d have no reason to really talk to me per se or spend an hour with me. I’m some guy with a podcast and all of a sudden you will and it’s amazing when you just reach out to people and be like, “Hey, I have a podcast. Do you want to talk about your book and talk about other things?” It’s kind of just a wonderful shortcut to get to meet people and have conversations that you otherwise wouldn’t get to have. And I just personally, I enjoy this and I also, I’m sure did you kind of experience that at all as you were just reading books and getting to talk to cool authors on stuff?Geoffrey Colon: Yeah, and in a lot of ways, I mean you bring up a really good point. It’s like exchanging business cards. I know that sounds wild, but when you’re like, “Hey, would you like to come on my podcast, we’re going to talk about this,” you then are connected to that person. It isn’t so much about the metrics as much as, “Hey, we talked, we got to learn some things from each other. This is really great. Now I know you and now I can actually talk to you in the future.” I mean, almost every person I had on, and I had a lot of guests on over the decade that I hosted that show, I mean I could reach out to almost all of them and say, “Could I ask you a question or could I run something by you?” And some of the people I had were nobodies at the time who are now huge. Scott Galloway, Steven Bartlett, Gary Vee, very early on when not many people knew these people. I had interesting CEOs on as well that most of them are retired but I think it’s interesting in terms of, I’m happy that people actually took a chance and said, “Sure, I’ll go on your podcast.” Some people I don’t even know if they knew what a podcast was when I would bring them on because it was audio at the time, audio only until later.The Evolution of Podcasting DistributionAndrew Mitrak: I didn’t think about that. At that time you were probably still having to explain what a podcast was like, “No, it’s not on the radio. No, it’s not a live webinar. It’s a recording.”Geoffrey Colon: This is how it’s distributed, you know, this is how people listen to it. It was at a time when Apple sort of ruled that world. Spotify didn’t have any podcasts, iHeartRadio didn’t have podcasts, Amazon didn’t have podcasts. I mean, it was still the wild west in terms of listenership and people taking a chance on that, but, you know, look at the medium now.Andrew Mitrak: Do you have any thoughts on how it’s evolved as a marketing channel itself? Like when you were starting, obviously beyond it just growing and there being more listeners and more podcasts in the world overall. Has it mechanically as a marketing channel or how brands or individuals think of it for marketing purposes? Has podcasting changed in your career working on it?Video Podcasting and Gen Z Listening HabitsGeoffrey Colon: Yeah. It’s gotten, I mean, some of the early podcasts I remember were almost three hours, like they were long. And you would just talk about everything. It actually reminds me a lot of FM radio. It’s like, “Hey, let’s just experiment and talk.” And they were minimally edited. You did not edit a lot of it because it just was for people to listen to. Now I find if you’re not doing video, you probably are going to have a harder time being discovered. Now, that’s at this moment. I’m starting to hear a shift from Gen Z listeners saying, “I don’t want to watch video. I want to be in my headphones again.” Now this is a, I haven’t scientifically researched this, but I’m starting to hear from more of the younger generation, they want to just listen to some things, but it still has to be theater of the mind. Meaning there’s two people talking, maybe then there’s something they shift to something else, then they shift to something else. So it’s like you have to still keep the audience engaged. And I think the same is true with anything now is it’s not a matter of being short, it’s a matter of like, is it interesting? Do you have interesting people? Are you talking about interesting things? I mean, that’s the biggest learning I think nowadays.The Shift to Fractional Marketing RolesAndrew Mitrak: You’ve had your own small agency, you’ve worked at large agencies like Ogilvy, you’ve worked in-house at Microsoft, which is one of the biggest companies in the world and you have your own practice again. You have your own agency again now.Geoffrey Colon: I do. Yeah.Andrew Mitrak: And how is marketing different across those environments? Just broad question, but what is the same and then what’s different across them?Geoffrey Colon: You know, most companies that I advise now and consult with, they really want people who are immersed in understanding what their company does. So they’re not so interested anymore in let’s hire an agency and they’ll do X, Y, and Z and then they’ll go away. They probably have an in-house team. So the in-house team does a lot, but they still need people who are outside in to keep them honest because if you look at some of the worst work that’s been done over the last five years, it’s been from in-house agencies that don’t have outside advisors. Because an outside advisor isn’t drinking the Kool-Aid of that company, let’s just say. And you need that. CMOs actually want that. They’ll say like, “Hey, we’re going to have a couple outside consultants.” And you know, you’d always be in-house going, “Oh great, we’re going to have this person who doesn’t know what they’re talking about.” But those people actually would just keep you honest about, like you said, “Hey, I don’t know that’s a great idea. Here’s why.” Or like, “That’s a great idea. You’re not going far enough with it to make impact.” So that’s what I’m starting to realize is that fractional work is really changing what our relationship is with marketing. I noted this in the book as well that most of us would be, let’s say, fractional temporary gig workers when it comes to marketing. And that doesn’t mean that all full-time jobs are going away. It just means that there’s probably less of those on the staff. And then everything else is supplemented with other people who may come on board and do something for five months and then they’re done with that particular project. So it’s almost like the future of marketing is the future of work, which is a lot like putting a movie together. “Hey, you’re going to be working on this. It’s going to take us four months to put it together. After that you got to go find whatever your next gig might be.” And I’ve been working like this now for the past year and a half. And I’ll be honest with you, Andrew, it’s scary, but it’s also exciting at the same time because it’s disruptive to make that point.The Power of Being a GeneralistAndrew Mitrak: It’s great. Everything you’ve talked about, I resonate a lot because I think of myself also as a very generalist type person. My background’s in video and in virtual reality production, things like that. And then startup marketing and I’m at big tech now but also do a podcast. And also have some creative outlet where I want to learn about other things. And my career is never like one thing at a time. It’s at least two things sort of. And you have more than two things. It seems like most of the time you have a lot of things going on, which is I think just good. It’s like a good way to have a rich experience in life and just embrace a lot of things and not like that you’re dilly-dallying and just sampling, but you’re doing a lot of things in a meaningful way, but also wearing hats which makes you better at the other thing. It’s like I do this thing here and that gives me an idea for this company over here. And that’s just I think a productive way to be a good creative and a good marketer, right?Geoffrey Colon: Yeah. It almost is like this, I saw this thing recently where someone said Dr. Seuss actually niched up instead of niched down, which is he was a really good writer, but he knew that just writing words wasn’t going to be enough. So he figured out slowly how to do illustration even though it wasn’t the best. But he figured that out and he became world renowned. That is like I think the way that I look at things now. It’s like someone might say, “Are you an expert in this area?” No, and I probably never will be, but I’ll know enough to be dangerous to get by on that with the other things that you need to blend together to make something happen in our sort of creative era that we’re in. That’s really how creators operate. When you talk to a lot of creators, like people will say, “Oh, you’re amazing at this.” And they’ll be honest. They’ll be like, “I don’t really know how to use that. I just sort of figured it out.” And that mindset, we need more of that, especially to solve I think most of the problems in the 21st century because you can’t just be like, “Well, we don’t know what to do there. Let’s just give up.” It’s like, no, you got to figure that out.Adapting to AI and Unlearning SkillsAndrew Mitrak: Yeah, no, totally. And also I think there’s, we’re at this moment of course with AI where a lot of things are like you have to unlearn and relearn things too. And if you have an experience at learning new things, it’s a little less intimidating to unlearn some things because you’re less attached to them. Because it’s only if your whole body of work has all been in one really specific area doing one thing in one specific way and then this new technology comes and changes that, it’s like, “Wow, I have all this sunk cost.” And I have a little bit of sunk cost across a lot of things, but I’m willing to kind of give it up a little more and change it. So I think it’s like overall a pretty healthy thing.Where to Find Geoffrey ColonAndrew Mitrak: Well, Geoffrey, I’ve really enjoyed this conversation. There are a lot of places where listeners can find you online. Where do you recommend people who have enjoyed this conversation find your work and follow you online?Geoffrey Colon: Yeah, I have a website, geoffreycolon.net. I spell my name with a G just for those who are listening. I’m also pretty active on LinkedIn and I have a Substack like so many people called Creative Studies. I’ve also been a lot more active on TikTok. I know that sounds wild, Andrew, but I don’t know, like sometimes I just like to talk about interesting things because you’re like, “Well, I’m just going to bring the phone out and do it and it doesn’t have to be polished.” And people sort of, they like that. They just join in on the conversation. They ask questions. You know, I try to talk about the things in terms of like, “Hey, everything is a remix. Here’s where this may have originated from and we’re seeing it again.” And I think younger people really love that. And I like that too. I think that that’s important in our era where, I think as a person who’s more advanced in my career, I think it’s important to give back to people who are new in their career, whether it’s through time or advice or just listening.Andrew Mitrak: That’s awesome. I love that, you know, you’ve inspired me. I should open up TikTok again. I’ve dabbled in it and I do get scared about it. But here I am, I’m telling everybody to unlearn and relearn. I’ve got to do it myself and get back on TikTok. So I’ll check out your work there and dabble as well. And it’s great. I know a lot of college students listen to this as well. So I’m glad that you’re there educating young people about your career. So yeah, Geoffrey Colon, thanks so much for joining me. I really enjoyed this conversation and it was just such a pleasure to read your book, to read your work, and I’ll keep following you online because it’s all great stuff you’re putting out.Geoffrey Colon: Thank you, Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 40Long before giant balloons floated down Broadway* at the Macy’s Thanksgiving Day Parade, a remarkable young woman with a prosthetic eyeball developed the beginnings of the Macy’s brand in the 1860s.Her name was Margaret Getchell. She was a marketing visionary who gave Macy’s its iconic red star logo, she captured customers’ imaginations with fantastical window displays, and she cemented the brand’s connection to the holiday season.Even though she was the first female executive of Macy’s, Margaret Getchell’s contributions were largely lost to time. That was until Stephanie Forshee rediscovered Getchell’s story began the work of restoring her legacy.Stephanie published Getchell’s belated obituary in the New York Times as part of their “Overlooked No More” series, and introduced her story to a new generation through her children’s book, Hidden Gems: Margaret Getchell LaForge, which is part of a series celebrating fierce females in business.It’s an inspiring story that gave me new appreciation for the Macy’s brand. Now, here’s my conversation with Stephanie Forshee.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Stephanie Forshee, welcome to A History of Marketing.Stephanie Forshee: Thank you. Thank you for having me, Andrew. I’m excited to be here.Andrew Mitrak: I’m so excited to speak with you and have a great conversation about the life and career of Margaret Getchell. That’s a name, Margaret Getchell, that I’m guessing a lot of listeners haven’t heard before. You’ve written a piece for The New York Times about Getchell, as well as a children’s book called Hidden Gems. So to start, how would you describe Margaret Getchell to someone who’s never heard of her before?Stephanie Forshee: Yes, I think you’re correct that most people don’t know the name. Margaret Getchell was America’s first female retail executive. She worked for R.H. Macy & Co. during the 1860s and 1870s. She worked with the founder, Rowland Hussey Macy, who was a distant cousin of hers. She started with the company in 1860 as a cash clerk, worked her way up to head bookkeeper, and then made history in 1866 when she was named Superintendent of the store. That means she was the manager of the store, overseeing about 200 employees at that time, which would have been a big deal, of course.Rediscovering a Retail PioneerAndrew Mitrak: As well as that managerial and executive experience, she had a lot of contributions to marketing that we will speak on as well. I’m just wondering, how did you first come across this story? When was the moment where you realized, “Wow, I need to help tell this story and make more people aware of Getchell?”Stephanie Forshee: Early in the pandemic, very early on, when we were still in lockdown, March 2020, I was a business journalist at the time and enjoyed reading about businesses, particularly retail companies. I was nerding out on this book about the history of Macy’s. Within the first few chapters, there was information about Margaret Getchell and some of the early employees of the store. That’s when I learned she was supposedly America’s first female retail executive.I had never heard the name, so I was very intrigued by her story. I was doing a little searching online, and I just thought maybe it was just my ignorance, silly me for not having heard of this woman, but I quickly realized that not a lot of people knew about her or had written about her. There was an encyclopedia.com entry about her and maybe two or three articles about her at the time. She was very uncovered in terms of what she deserved. I started researching her as much as I could and immediately became more and more intrigued by her story. I was very interested in the idea of uncovering information about this woman that very few people knew about. So that was exciting for me as well.Andrew Mitrak: It’s always an exciting rush of a feeling when you discover somebody who has an interesting story and realize it is relatively uncovered. You think everything is covered on the internet, and it is surprising, of course, your book is called Hidden Gems, when there is more to be told here. I’ve experienced that myself, and it is a good rush.Stephanie Forshee: Yes, I can definitely relate to that.Andrew Mitrak: Your background is as a PR professional now, but you had been a reporter as well at some point, so telling stories was in your wheelhouse as well.Stephanie Forshee: Yes, I was a business journalist for about 15 years and worked for various publications. I was always drawn to stories that were sort of off the beaten path. Finding Margaret fit into that narrative, even though it was something completely new to me—covering a historic figure and researching someone like this. That was a whole new process but used a lot of the same skills.From Schoolteacher to Retail ExecutiveAndrew Mitrak: Let’s walk through some of Getchell’s career. To start, how did she get her job at Macy’s? You mentioned that Rowland Hussey Macy, the name of Macy, was a distant cousin of hers. Was that the initial connection for her to start work there?Stephanie Forshee: Actually, they had not met at that point. She graduated high school at the age of 16. She was very skilled with numbers, so she became an arithmetic teacher for a school on Nantucket. Then she traveled to a couple of different cities in New Jersey and New York.Years earlier, she suffered an eye injury. It was a freak accident playing a game of tag with her sister. It was a gory accident where she injured her eye. She didn’t immediately lose her vision, but it was deteriorating over the years. When she was 19 years old, she finally had surgery to have her eye removed and replaced with a prosthetic eye. It is one of those incidents that changed the trajectory of her life.Andrew Mitrak: Just to pause on that—an eye injury. Today that seems gruesome, but in the 1840s or 1850s, just thinking of what eye surgery was probably like back then... there were probably not the same types of anesthesia or processes. It seems like a really horrific, traumatic, formational experience.Stephanie Forshee: I agree. That is something I’ve been researching the past few years—what that would have been like, that time versus today. You’re right, it is not something that anyone would want to endure. But it did shape her as a person and was something she had to deal with.So, when she was 19, she underwent this surgery. This was early in the summer of 1860. As she was recovering, the doctor recommended she should consider a change in career. She had been a school teacher at that point, and he was saying that grading papers by candlelight things like that was probably not too great for her eye. That’s how the story goes. In hindsight, the doctor was probably suggesting, “You’re 19, you need to be married and go about your life.”But she did take it into consideration to change her career. She had heard of her distant cousin Rowland Macy. They had both grown up, he was 20 years her senior, but they both were from the island of Nantucket. He was her distant cousin, even though they never met. She decided to apply there. The meeting went very well; she had an interview with him, she explained that she was skilled, so he hired her as a cash clerk to start, and she made her way up from there.The Humble Beginnings of R.H. Macy & Co.Andrew Mitrak: It’s funny that it all started because a doctor allegedly recommended this change in career. It’s funny tho, reading some of these old books, old biographies, how often doctors would recommend things like, “Go move out West” or “Go live near a lake.” Doctors don’t really prescribe that kind of treatment anymore. A lot of changes in medicine and doctors’ recommendations. Anyway, this may have been the starting point for her meeting with R.H. Macy. The meeting went well. Can you share a little more about R.H. Macy and about Macy, the department store itself in 1860? Obviously, I am guessing, it wasn’t the major brand that it later became. Where was it in its journey? Just started? Was a little more established? Where was it in its establishment?Stephanie Forshee: At that time, the New York store was only two years old. Rowland had other ventures—he really had a lot riding on this because he’d opened stores in Massachusetts as well as California, and Wisconsin, and those just didn’t pan out the way he had hoped. He was not the “Merchant Prince” at that time as he came to be known later.At that time, the store was on its way. Sales were okay; they were definitely growing and surviving. But when she came to the store, it was not a full-fledged department store by any means. It was a dry goods store. The advertising, the signs out front just said cloaks, millinery, silks, and gloves. They had select items, but it was just a small store. Over the years, it would expand greatly.Andrew Mitrak: Can you paint a picture of that time for women in business? Was it common for somebody like Margaret, a young woman, she was 19 or 20 at this time, to get a job at a store, or was this unusual just to work in business at all as a young woman?Stephanie Forshee: In New York, it would be pretty uncommon even just to have this job, much less what she would go on to accomplish. There were definitely women employed by the store, but it wasn’t that common at that point.What is interesting is that she was from Nantucket, so she came in with all the confidence in the world. Nantucket, if you ever visit there or even read about it, they are very proud of its heritage and history. They were known as the whaling capital of the world at that point. Most of the men, the majority of them, were out on whaling voyages for months or years at a time. The women, just like in many times when men went to war, women had to run things. It was like that early on. In Nantucket, they were having to run the post office, the schools, and pretty much the whole town while men were away on these whaling voyages.She would have grown up seeing that in her community. Roland, having that same perspective, knew that women were just as capable. So they were, in a way, in their own bubble thinking that women could do things and run businesses too. But to your point, that was not very common generally at that point. And that would be the 1860s, right before the war. So in the coming years, it would become more common.The Origin of the Macy’s Red Star LogoAndrew Mitrak: That’s really interesting. This connection to Nantucket, and you mentioned whaling, and this actually leads to one of the most iconic contributions that Margaret Getchell has was the Macy’s logo, which was a tattoo that R.H. Macy had, that was a whaling tattoo. Can you tell the story of the logo and how Margaret Getchell helped identify and create that?Stephanie Forshee: She started out as the numbers person, accounting and bookkeeping, and gradually became a trusted confidant of Rowland Macy. She was constantly coming up with ideas. She would say that she liked to “put a bug in his ear” for different things.One of her greatest contributions was the logo. She knew that he had a red star tattoo on his wrist. At the time, I think that he was actually kind of embarrassed by this tattoo or his past as a whaler; it wasn’t something that he was particularly proud of as he was trying to make a name for himself as a merchant in New York at that point. But she saw that and thought it would be a good idea to be an emblem or insignia for the store.She decided to put the red star logo on their letterhead and on each individual price tag and for items within the store, which we will get back to that as well. Macy was one of the first to have fixed prices. Before that, it was all negotiating and haggling on prices. The fact that they had price tags on their individual items was innovative at that time. The other thing is that they put the red star on columns outside the store, which still stand today. The original Macy’s is actually at 14th Street and 6th Avenue; that predates the famous Herald Square location.Andrew Mitrak: I use the word “logo” to describe this red star, but that is kind of an anachronism. It wouldn’t have been called a logo at the time. Logo is kind of a more common thing later. The red star emblem itself has been such an iconic part of Macy’s. Was that somewhat unusual for a company to adopt an emblem like that, or was that common or can you contextualize that decision for them?Stephanie Forshee: I wouldn’t say that it was common. It would have been somewhat unusual, but not restore our business, a logo like this, but it did exist for sure. One of Macy’s earlier ventures, he was in Haverhill, Massachusetts and his logo used a rooster as an emblem at that time in some of the newspaper advertisements. So it wasn’t unheard of by any means, but at that time, they didn’t think it was a “must-have” for a business.Andrew Mitrak: That’s right. If I were to think of them at the time, I haven’t studied this deeply, a lot of them tend to be much more ornate and much more detailed than have the names as part of it and it’s hard to remember. The red star logo or just a star itself, is such an instantly recognizable, simple type of emblem. You can see that Macy sort of wants to use it in different ways, where they’d like to use typography, and it kind of gave them some more flexibility on how to use it. So it seems like a really good decision as a logo and you couldn’t just do a star today cause it seems like so widely overuse. Also, it’s also claimed by Macy as a thing. It seems like it was a really good, prescient thing for Margaret Getchell to notice, latch onto, and embrace as well.Stephanie Forshee: Yes, at the time I think it was just a great idea that she had. To your point, the simplicity of it is what really stuck with people. As you know, it is still the logo today, so it must have been a success.Innovative Marketing Stunts and Store LayoutsAndrew Mitrak: Let’s talk about some of her other contributions to Macy’s, specifically around things like placement and displays. Do you have any favorite examples of her other contributions—clever tactics to help increase sales and attract customers?Stephanie Forshee: She loved thinking different innovations for the store. She was constantly coming up with ideas for different departments. It was her idea to introduce the toy department and the book department; at that time, it would be a bigger draw than today. Unfortunately, Macy’s doesn’t have a ton of books in its stores today.She always came up with new ideas for new merchandise. One of my favorite examples of Margaret’s innovations is that she loved a good publicity stunt. One of the things she did was bring cats into the store. She dressed them up in baby doll clothes and put them in little carriages, or prams as they were called back then. She put those in the window display. I’m sure passersby were wondering, “What on earth is going on?”They were so intrigued and enchanted by these cats. So many people came into the store that day, and they had record sales selling all these baby doll clothes, different accessories, and the dolls themselves of course. That was just one example of creative, out-of-the-box thinking.Andrew Mitrak: Just to comment on this cat thing, and it’s so funny when I read this. I’ve been to a few conferences where everybody has booths in these conferences, and it’s almost like a window display, and you want people to come to your booth. A thing that sometimes people will do is bring puppies. “Oh, we got puppies! Come play with puppies and hear about our company software, B2B SaaS product.” People will be like, “Oh my gosh, that’s so innovative. They got puppies there.” This is kind of just a riff on something that Margaret Getchell did 150-plus years ago. So it’s funny that sometimes, like these tactics that they can be from the past, but still see kernels of that almost today as well.Stephanie Forshee: Yes, I can only imagine this within the children’s department at that time, just hanging out with all the cats.Andrew Mitrak: In addition to cats, any other favorites of yours?Stephanie Forshee: Macy’s had a lot of ideas, and a lot of the New York department stores were following the lead of European department stores. Soda fountains were becoming all the rage. It would have been the late 1860s and the early 1870s. When they were becoming popular, Margaret knew that they needed a soda fountain at Macy’s. Her idea was to place it towards the back of the store so that customers would be eyeing other items as they were walking back and forth to the soda fountain. That is something that we know most stores do today, but at the time, it was a grand idea.Andrew Mitrak: Totally. Today, I think of grocery stores—essential products like milk are almost always at the back of the store. It’s the thing that expires, the thing you often need a refill of. Just thinking of, “What is the thing that will attract people in? How do I make them exposed to more of the products and merchandise within our store to increase sales?” Super clever.The ‘Customer-Obsessed’ PhilosophyAndrew Mitrak: She had this motto: “Be everywhere, do everything, and never forget to astonish the customer.” Do you have a sense of how she actually used that motto? Was it something she wrote down? Was it something she said to her employees? How did that motto manifest?Stephanie Forshee: It’s not exactly clear. It must have come up because many employees said that she had embraced this motto. I would imagine she used it in training, perhaps with the cash girls. I have mixed feelings about the motto. “Be everywhere, do everything”—it is true, if you want to astonish the customer, you do have to do those things. But I think she, as well as Rowland Macy and leadership within the store, were maybe workaholics for sure. From everything I read about them.Andrew Mitrak: To me, it has echoes of Amazon. I am in Seattle, and so Amazon is a big company– It’s a big company everywhere, but it’s one that’s so close to my home– and it sounds a lot like Jeff Bezos. He has this idea of customer obsession, and that’s in their culture. And of course, they are the everything store and so “Be everywhere, do everything, never forget to astonish the customer” seems like it echoes Amazon. And at the time, Macy’s was selling books and all sorts of goods, they were being an everything-type of store.Stephanie Forshee: That’s a great parallel. They definitely took the customer obsession very seriously.Establishing the Holiday Shopping SeasonAndrew Mitrak: I want to ask you about one more famous contribution she had: convincing Macy’s to have the store open on Christmas Eve. I think this was in 1868. Now Macy’s is so associated with the Christmas holiday and Thanksgiving through Christmas season. Can you just share a bit about this decision and the impact that had?Stephanie Forshee: At that time, she was wanting the store to stay open late. It started out on Christmas Eve and would later turn into the entire month of December, staying open late because, as we know, there are lots of last-minute shoppers. She knew that was an opportunity for the store to make more money if they would stay open late. They did, and they had record sales that day. It’s one of those things that today, in hindsight, some people who are working on Christmas Eve and throughout the Thanksgiving holiday might not love Margaret’s grand idea.Andrew Mitrak: There is a trade-off on your priority stack: do you prioritize the customer or your employees? It seems like that trade-off was for the customer at the expense of some of the employees who have to work longer hours as a result.Leadership Changes and Unfair CompensationAndrew Mitrak: Getchell is a pioneer in the business world and she is a pioneer of reaching the glass ceiling at Macy’s. She was promoted to Superintendent, she became second-in-command to Macy himself. But as Macy’s the brand grows, she becomes overlooked. Her time there was super impactful but relatively short, and was not a multi-decade career there. Why do you think it was that she became overlooked?Stephanie Forshee: There are a few things. We haven’t talked about her husband yet, but she did meet her husband, Abiel LaForge, at Macy’s. She was introduced to him through Rowland. He had been a soldier during the Civil War and met Rowland Macy’s son, helping him out. He became a close, trusted person of the Macy’s family. Abiel eventually comes to work for Macy’s years after Margaret started.He was very dedicated to the company, for sure, but he was not coming up with all these innovations and he was not giving the same type of contribution as Margaret. In 1872, Rowland Macy is thinking about future partners of the firm—what’s going to happen if he retires or passes away. He is looking at successors. For some reason, Margaret is completely overlooked in this equation. As much as she was given opportunities before and for the year prior, at this point, Rowland, he did choose Abiel LaForge, as well as one of Macy’s nephews, Robert Valentine. There is no exact reason given. I think simply because she was a woman. At that time, he gave her a lot of opportunities, but it seemed like there was a limit there.Andrew Mitrak: As an aside, she does marry Abiel LaForge. I’ve referred to her as Margaret Getchell, but her full name is Margaret Getchell LaForge, and it does seem like they’re kind of almost both used. I know your book is Margaret Getchell LaForge, but the New York Times’ piece just calls her Margaret Getchell. I wasn’t quite sure which name to use. Do I use LaForge or not?Stephanie Forshee: Yes, so they were married in 1869 and she did take his name. But I think that some people who would just say Margaret Getchell is because most of her contributions really to the store were before her married life. So it was out of respect for that.Andrew Mitrak: I’m going to quote from your New York Times article: “In fact, after her husband became a partner, her compensation was eliminated and she gradually stepped away from her work to care for her children. Having a husband who owned a stake in the business was considered sufficient, as he would support the family with his earnings.” It sounds like her compensation was eliminated before her job was eliminated. To all these points of Macy being tough on employees, that seems really unfair.Stephanie Forshee: When you think about it today, it is unbelievable. You can’t really think of someone not being paid for their job. In a lot of ways, Margaret was ahead of her time. She not only worked when she was married, but she worked through her pregnancies as well. That was really unheard of. She would have already had two children by 1872. When her husband was named a partner, but at that time, that was when her compensation was taken away. With Abiel being a partner in the store, everything was going to be the same pot of money, if you will.Andrew Mitrak: It sounds like that period from 1860 through the end of that decade, she really was full-time Superintendent, rising the ranks, having astonishing contributions. Then from 1870 onwards, it becomes a little less formal.A Legacy Cut ShortAndrew Mitrak: You mentioned that R.H. Macy had been doing succession planning in the 1870s. It is important that he was, because there are a series of tragic endings in a short period of time. R.H. Macy died in 1877, age 54. Then Abiel LaForge dies a year after that in 1878. And then sadly, Margaret Getchell dies in 1880 at 38 years old. Is there anything you’d want to share about her final years?Stephanie Forshee: It is really sad to think, she accomplished so much in the business world and started her own family. For anyone to pass away at 38 is devastating. The fact that she lost the two men she was closest to in her life—her employer, that she grew so close to and her husband—those few final years were extremely hard for her. She had some health issues, things like nerves pain and chronic pain. She ultimately passed away from a combination of heart failure and ovarian issues. As far as I know, it would have been ovarian cancer, though at that time they didn’t exactly know how to treat that. Those final years were definitely marked by tragedy.Andrew Mitrak: It also seems like, certainly tragic on a personal level, but for Macy’s the company, it leaves a leadership vacuum. The steward of the brand and marketing innovation is gone. The founder is gone. Abiel, considered one of the potential successors, is also gone. Who takes the reins at Macy’s, and do any of Getchell’s innovations survive this transition?Stephanie Forshee: A few people stepped in temporarily because it was a very quick succession with Macy and Abiel LaForge dying the next year, and even Valentine. When Macy passed away, Margaret’s husband Abiel and Robert Valentine had intended to and filed paperwork to rename the store “LaForge & Valentine.” So in some way, it is crazy to think of now because of all the tragedies that happened, because they passed away, the store was never renamed. It’s crazy to think that it would have been a completely different name.A few people stepped in temporarily over those next few years. Over the next decade, it was a shorter tenure. It was the Straus family who would eventually become in charge of the store for decades and innovate even further in the coming years throughout the early 1900s.In terms of her innovations and contributions to the store, surviving her legacy, I think in many ways they did. When Macy hired Margaret, because she had been so successful, that encouraged him to hire many more women and promote them to leadership roles. Even though, they didn’t quite get to the level that Margaret did—there were managers and head buyers—but the next Superintendent or two were not female. But there were some positives to come from that.The Enduring Spirit of InnovationAndrew Mitrak: It wasn’t until decades later in 1924 that Macy’s launched the Thanksgiving Day Parade, which is probably its most famous marketing event. Getchell obviously wasn’t alive to see it, but do you see any of her fingerprints on this event?Stephanie Forshee: In some ways, yes. There is nothing you can directly link to say she had the idea for a parade, but just the fact that she was constantly innovating and encouraging others to share their ideas. I think she would be in favor of it and definitely proud that Macy’s came up with this idea and was able to pull it off in a way they have. To see it today, I’m sure she would be very pleased.Lessons from Margaret Getchell’s LifeAndrew Mitrak: Wrapping up, as you reflect on Margaret Getchell’s life and work and you spent a lot of time on her biography, are there any top lessons that you’ve taken away? Are there ways you’ve applied her “astonish the customer” philosophy, or other ways you take her lesson to your own professional life as a marketer and PR professional?Stephanie Forshee: Absolutely. I think of that all the time. I feel inspired by her. I have been writing for the sake of other people knowing her name and learning from her, but I feel very lucky to have been the person to follow her journey and research her over the past few years. The “astonish the customer” philosophy—I am constantly thinking of that.I also put myself in her shoes a lot. I don’t know this for sure because it’s not something she wrote in her diary. I think she must have faced some forms of imposter syndrome or having doubts, being one of the only female leaders. I put myself in her shoes a lot thinking, “Okay, if she can do it, I can do it.” Those are the things that encourage and inspire me.Andrew Mitrak: That’s a really inspiring lesson to wrap up on. Stephanie Forshee, thanks so much for joining. I’ll be sure to post links to your piece in The New York Times as well as your book Hidden Gems in the blog post. Stephanie, I’ve really enjoyed the conversation. Thanks so much for joining me and sharing about the astonishing career of Margaret Getchell LaForge.Stephanie Forshee: Thank you so much. Thanks for having me, Andrew. It was great.*Footnote: In the intro, I mention balloons floating down Broadway. While the parade famously followed Broadway for decades, the route changed in 2009. Today, the balloons float down 6th Avenue, though they still end at Macy’s flagship store on Broadway & 34th. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 38“Why should all alcoholic drinks taste punishing and challenging? Why shouldn’t they taste pleasant?”My guest, David Gluckman, asked himself this question in 1973. It led him to develop what became Baileys Irish Cream, a liqueur that’s now sold ~2.5 billion bottles globally.In our conversation, David shares the remarkably haphazard origin story of Baileys along with the contrarian lessons from his career creating alcoholic drink brands like Tanqueray No. Ten, Cîroc, and Smirnoff Black.Listen to the podcast: Spotify / Apple PodcastsWe dive into the stories and insights from David’s book, “That sh*t will never sell!” David’s candid about his disdain for modern marketing practices, his frustration with Baileys’ brand extensions, and why he believes great ideas never come from middle management.I also ask David about how brands interact with unexpected internet memes, the ethics of marketing alcohol, and if cavalier marketers like him can succeed in an era when brands have become bureaucratized. Here is my spirited conversation with David Gluckman. Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.How a Tax Break Inspired Baileys Irish CreamAndrew Mitrak: David Gluckman, welcome to A History of Marketing.David Gluckman: Thank you very much. Nice to be a part of it.Andrew Mitrak: I loved reading your book, That Sh*t Will Never Sell, which is a really fun read. I’m excited to speak about your full career and all of the amazing products and beverages you’ve had a chance to work with. But I thought I’d start off with one of your most famous stories and case studies, and that’s all about Baileys. Could you share the story of developing Baileys?David Gluckman: It all happened very quickly and it happened pretty well seamlessly, as well. We got a brief on a Friday afternoon which said that the Irish government were looking for brands for export, and if they were successful, they’d get a 10-year tax holiday, which is quite significant. But it was just a telephone conversation late on a Friday afternoon.And the following Monday—we had just been in business on our own—my partner came in and I said, “What are we going to do about this Irish brief?” We discussed it and I said, going back to my previous career 10 years earlier, “Is there anything in my experience in the development of Kerrygold butter—branded Irish butter—which we could bring to bear on this?”My partner said, “Well, what happens if we mix cream and Irish whiskey?”So, being an action man, I said, “Let’s go down to the local supermarket, buy some cream, buy some whiskey, mix it together, and see what it tastes like.” There was no intellectualization, there was no identification of a target group or anything like that. We simply—the brief was hot off the presses, so we just started thinking.The mixture of Irish whiskey and cream was pretty disgusting. But I just figured there was something there. So we went back to the supermarket, looked around, and we bought some powdered drinking chocolate. Added it, added some sugar, and I think the realization dawned: Why should all alcoholic drinks taste punishing and challenging? Why shouldn’t they taste pleasant? And what we had with this mixture was a very pleasing, chocolate-flavored drink.I got quite excited by this because there’d never been anything quite like it that I’d come across. So I called up my client and said, “We have an idea in solution to Friday’s brief. Can we talk?”And that’s how it started, really. It was my experience on Kerrygold that was the trigger, if you like, that led to the first part of the solution, which was the product, the liquid.The Benefit of Ignorance: Developing a Drink with No TrainingAndrew Mitrak: Yeah, that’s right. It seems like such a jump. So this, to place this in time, this was the early 1970s.David Gluckman: It’s 1973. That’s right.Andrew Mitrak: 1973 that you’re developing Baileys. And you had worked previously with Kerrygold and on Procter & Gamble products. But it seems like jumping into you mixing the drinks themselves and coming up with a concoction, it seems like a jump. And you were also involved in the branding elements as well. So this is an example of the product being developed with the same people behind some of the branding of the product. I guess, could you speak to that experience of just developing a drink and developing a beverage itself? Did you feel like you had any training or authority to do that? Or what prompted you to actually develop the drink?David Gluckman: I think that not having any training and being fairly ignorant was probably a benefit. Because had we had some scientific knowledge, we would have been deterred by the thought that something that contained cream could survive in temperatures of 40 degrees above zero or 40 degrees below. If you have a certain element of ignorance, you can do anything. If you don’t know what you can’t do, you can do anything.And I think ideas start in different ways, and that’s how this one started. I can’t explain why. We didn’t start like this every time, but I wasn’t averse to mixing products up and changing things around.Andrew Mitrak: There must be so many lessons in this because it all starts with a tax incentive, which is—I wouldn’t imagine, it doesn’t seem like the best reason to start a beverage is because of for tax reasons, but why not? You do that. You mix it yourself with ingredients from the grocery store and it’s, I don’t mean this in an insulting way, kind of dumb. It’s just like, “Oh, that’s Irish cream, Irish whiskey, why not?” It’s not really over-intellectualizing it.And then you go on to develop the name and the brand and the bottle. Can you speak to the next steps of building everything that surrounds the liquid itself? What did that look like?From a Bottle in a Cab to the ‘Baileys’ Bistro SignDavid Gluckman: I was excited, so I jumped in a cab and took it over to my client. And he was just intrigued by what I had in a bottle in my hands. So, not allowing any foreplay, he grabbed it and tasted it and said, “Hey, this tastes really good. Maybe we should do it.”And that was the most important part of the whole procedure because had he turned to me and said, “Look, this is not our thing,” that would have been the end of the brand and the end of the story. But he bought the idea immediately. He just thought it was worth taking to his technical people to see whether they could make it happen.But then he said to me, because he was a man of some impatience, “We must now think about branding.”And I remembered... the best way to start branding is to start with a name, a brand name, because you can’t design a package without a brand name. And I remember talking to a gentleman, the late Tony O’Reilly—very famous businessman, he was for a while president of Heinz in America, worldwide, and also one of the most famous men in Ireland. He said to me over a drink, “If you ever develop a brand that requires an Irish surname, don’t use one like his.”So I said, “Well, why ever not?” I mean, O’Reilly’s, whatever it was, sounded perfectly normal to me. He said, “No, Irish family names have a tendency to sound whimsical.”So that lodged in my cortex somewhere. And I remembered that. Anyway, we were moving office, and as we arrived at our office, there was a restaurant below it called Baileys Bistro. And I think when you’re developing brands, you think about every aspect of the brand almost 24/7. It becomes a kind of an obsession. It’s always not too far from the front of your mind. And when I saw the name Baileys, I thought it was perfect.Baileys Irish Cream. It just seemed to fit. And so I called up my client and said, “Why don’t we call it Baileys?” And he said, “That sounds terrific. Let’s do that.” It’s an Anglo-Irish name. And that’s how the name began.Crafting an Instant Classic: The Design and Branding of BaileysDavid Gluckman: And from there we developed packaging. And I think that in the brief for the packaging, there were echoes of Kerrygold. I said to the designer, “Imagine Kerrygold with all that wonderful bucolic greenness that is Ireland, and build that in. But remember that it’s an alcoholic drink and people will pay a premium price for it. So it doesn’t belong in the chiller cabinet, but on the liquor shelf. So give it some status and some quality.”And he got it almost in one. But in effect, that was the Baileys story. There are one or two bits and pieces, but effectively that was it.Andrew Mitrak: The thing that surprised me is just the time in which this happened. 1973... I was born in 1990 and that, and so Baileys was around before I was born and certainly had been around by the time I became of drinking age. And it just seemed like one of the products that’s been around forever, right? That so many spirits and liqueurs feel like pretty old brands. And Baileys, for me, just seemed—I would have assumed that it was a hundred years old or more, not just invented today, like 50 years ago or so.Did you think about creating a history for Baileys or having it appear to be older than it really was and have some traditions to it? Or did you want it to be perceived as, “This is a new product, this is a new option for you, this is a new alcohol you can consume?”David Gluckman: I think we were governed by the kind of style that attached to alcoholic drinks at that time. You know, there was a lot of heritage, dates going back to the 19th and 18th century. There were idiosyncratic devices, like the bat on the Bacardi bottle. I think the convention was antique and conservative. Although there were brands that were emerging at that time that were much more modern, like Malibu, for example, which didn’t follow those rules.But no, I don’t think so. I think we just had a vision in our mind of what the label and the packaging had to say. And it was all about a celebration of Ireland’s green and pleasant land. And I was imbued with a certain passion for the country through working with O’Reilly and on Kerrygold, and that always stuck with me.‘Benefit Out’: Why Baileys Wasn’t Built for a Target AudienceAndrew Mitrak: You mentioned that there wasn’t a lot of, you know, target audience and persona building and things like that that went into it. Did that come down later, after you had invented it and passed it off? Did the targeting and demographics and how to go to market and where to target first—did that come later after you had handed off the product, or was it never part of it? Was it just a beverage for everybody to begin with?David Gluckman: Well, my belief, I think, is what I call “benefit out.” In other words, I think if you have a product that has something to offer, communicate that to people and it’ll find its own level. So I didn’t have any particular target archetype in mind. People were doing that kind of thing back then, but having been in this particular field for 50 years, I think most of that is bullsh*t.You design a product, make it available. The advertising and marketing people will fine-tune it if you like, but we handed it over the product as it was and left it to the companies. I think it’s one of the saddest things about my job is you develop a brand for which you have a passionate feeling, and then it disappears and perhaps isn’t developed along the lines you would like. But that’s life.The Creator’s Dilemma: Letting Go of a Brand You BuiltAndrew Mitrak: Yeah. So this is something I wanted to follow up with you about because you were a consultant, and you obviously had a massive part in Baileys, from the conception, the ingredients, the name, the bottle, so much of it. It’s you bringing this to life. And then you don’t own it at the end of the day. You hand it off. And you write, “I can remember being introduced as someone who, quote, ‘a man who helped out with the label design.’” And that rankled you a bit, but you let it go. And is it hard to let go of a product that you helped create?David Gluckman: Not really. I mean, I think that the remark to which you refer was made at the launch party in Dublin in 1974. And somebody... I think the Irish are very protective of brands that go out under their name, as they should be. And somebody introduced me not as one of the people who created the brand, but someone who helped with the pack design. Since I have absolutely no graphic skills whatsoever, that rankled a little.And then I think if you look back on things, you realize that for ideas to succeed, other people need to own them. In other words, what this guy was saying is, “This is my brand, not his,” and “I own it.” And I think that’s important. It’s a grown-up way of accepting the situation with brands. But if people start buying into it and feel ownership, then it’s very important.Andrew Mitrak: That’s an important lesson and something I think every marketer and brand person could keep in mind.What Explains Baileys’ 50 Years of Staying Power?Andrew Mitrak: So reflecting on Baileys, it seems like there are just so many spirits that have been introduced and come and gone and had various levels of success over the last 50 years. And why do you think Baileys has had the staying power that it’s had?David Gluckman: Well, I think what amazes me about Baileys is how it hasn’t been superseded by competitors. In other words, it’s sort of kept its position. And I think that’s largely through manipulation of price because Baileys, I think, sells for far less than it ought to. But I think that in that way, Diageo, because of the economies of scale, et cetera, are probably able to prevent any other operator from really damaging it. I don’t think that’s forever. I think that will happen.I hate Baileys’ advertising and I loathe Baileys’ brand extensions because I think they’re cheap and nasty and trivial. And I’ve been quite vocal in my comments along those lines. But that’s... it’s been a long, long dead for me as a brand.Andrew Mitrak: You’ve watched it from the sidelines over the last five decades or so since you handed it off. And they have, you know, Baileys candies and peppermint Baileys and all these new flavors of Baileys. And it’s just like, “Okay, that seems a little...” Parts of it seem a little gross, but it also seems to cheapen the brand and some of the core ideas that you helped develop there.When a Meme Takes Over: Baileys and the ‘Old Gregg’ PhenomenonAndrew Mitrak: The first time I ever came across the brand Baileys was in this viral video that was an early meme called “Old Gregg.”Andrew Mitrak: And I was a teenage boy, like probably 15 years old when this came out. And there’s this absurd sketch that has a line from this character named Old Gregg. And the character asks:“Have you ever drunk Baileys from a shoe?” And this was my first time, I’m like, “What is Baileys?” And still today, within a very small group of people who are give or take five years from me, if I’m at a holiday party or some gathering and there’s Baileys, someone might say, “Have you ever drunk Baileys from a shoe?” And it’s just a silly thing. And I’m wondering, did you ever come across this sketch at all? And do you know if anybody at Baileys had a reaction to this Old Gregg comedy bit?David Gluckman: I don’t. In fact, the first time I saw it was the link you sent me yesterday. Yeah. And I’d not heard of it before. And bear in mind, I went to the Baileys 50th-anniversary lunch recently, but that’s the only connection I’ve had with the brand since the 1970s.Andrew Mitrak: There’s an interesting thing where there’s meme culture of the internet. There are these people who like share things, and brands don’t always have control over that. That the internet—you bring a thing to life, and then some comedy sketch makes a silly joke and has your product being drunk out of a shoe. And no control over your product whatsoever, but sometimes the internet just will run with a thing. It just seems like an interesting little case study of what a lot of brands deal with, where there’s some meme that now comes across on the internet that a brand has to somehow choose to embrace, choose to ignore, or just choose to live with for a bit. And it just seems like an interesting element of today’s media culture of how a brand might have to interact with the online universe.David Gluckman: Well, again, that’s beyond my pay grade. You know, the brand has been handed over, and I either jump up in the air with delight or cringe when I see the way it progresses. But you know, that’s life.Why Great Ideas Start at the Top, Not in the MiddleAndrew Mitrak: You go on through your career and it turns out okay. You work on a number of great brands: Tanqueray No. Ten, Smirnoff Black...David Gluckman: Cîroc.Andrew Mitrak: Cîroc, yeah. And more, the list goes on. And rather than tell the story of each of those, I’d also, in your book, you also talk—there are these themes that come through your work as well and lessons that you’ve learned from all of them. And I thought we could talk about those lessons, and maybe some of your stories of those other brands you worked on could come through that.And one of the lessons that I totally identified with is that successful ideas don’t start in the middle of the organization. They start at the top. And that you need corporate cojones, you need leaders—usually the president or CEO or founder—to have conviction and make bold bets for a product to succeed, for a brand to succeed. Can you expand on this idea?David Gluckman: Yes. What happened was that roundabout the time... I think I started in brand development in ‘69. Around ‘72, I think, an American called Tom Peters and a colleague called Robert Waterman wrote a book called In Search of Excellence, which we read. And we got very excited by this book because it talked about how companies worked, how big—and these guys were McKinsey consultants, I think—and they were talking about what it was like being inside big companies. And we came to various conclusions. It took a long time for these conclusions to bed down, but I think they’re very appropriate now.One, that you could never develop a successful new brand if your path to development was through middle management because middle managers didn’t have the power to make things happen. So what IDV did, which was before it became Diageo, was instituted a thing called the “champion system,” which we got from Tom Peters, which said that anybody could commission a new brand provided he or she had the power to make it happen.So we were getting top members—we had the finance director come in with a brief—mainly top-level management because, A, top-level management weren’t interested in the mechanics of doing something. A middle manager has to go and spend hundreds of thousands of dollars researching an idea to prove to his people above that it’s going to work. We didn’t have that problem. You would simply be asked by your client, “Will this work?” to which the answer was, “Yes, I think so, but I’m not sure.” And you can never be sure whether something would work.So we had this top-down approach. The other thing is we didn’t engage marketing people. None of the brands we developed went down the marketing route or were developed through the marketing route. Marketing was very successful in making the brands work, but we didn’t use marketing. We didn’t use that constant desire to prove everything. If you look at Baileys and deconstructed it, nothing would have been as it was if we’d gone through the marketing route. Everything would have been questioned and debated and alternative before it happened, and might not have been quite such a successful brand. So we had a different way of working.“Don’t Go Through the Marketing Route”Andrew Mitrak: I want to follow up on this idea that you don’t go through the marketing route because something that I’ve thought a lot about on this podcast series is I want to cover the stories of a lot of the greatest marketers of all time. And within business, the greatest marketers of all time within companies, very rarely would you think that it’s the CMO, actually. If you look at a list, you’ll see it’s often founders or CEOs that have very strong marketing instincts. Steve Jobs, Walt Disney, Oprah Winfrey, Lee Iacocca.David Gluckman: A lot of people in the drinks business: Sidney Frank.Andrew Mitrak: Yeah. And it strikes me that a lot of the best... if you ask somebody, “Who is one of the best marketers in the world?” they usually won’t name somebody with “marketing” in their title. They’ll think of a CEO or founder who has really strong instincts. Do you have a reaction to this?David Gluckman: I think that’s true, and that’s certainly been my experience. The best people I worked with were board directors. O’Reilly was a fantastic guy to work with because he could take a decision. And he’d take a decision—I was a junior executive, aged 24—and if I came up with something that he thought was interesting, we’d do it.Whereas with marketing, you go through strategic analysis and you look at target audiences and you spend buckets of money doing market research. I remember I did a pitch to Unilever 30 years ago, and I said, “If I ran your business, I would cut your research budget, your market research budget, in half, and then I’d halve it again. And get people, A, to use their brains more, and B, to look at the data you already have.” I didn’t get the business, but that wasn’t a surprise.Andrew Mitrak: That is funny. It is interesting how often a company will always want to commission new research, even if the company’s been around for a very long time and probably has decades of existing research you could draw from and draw conclusions from faster and more cheaply.Why Buying an Idea is as Important as Creating OneAndrew Mitrak: Another idea of yours is that the person who purchases the decision deserves as much, if not more, credit than the person who comes up with the idea. Can you speak to that or can you articulate what this idea is?David Gluckman: This is something you learn over time. Ego plays such a big part in this whole business in which we work. But when you come to think of it, if somebody had said, “Look, I don’t think this chocolate milk stuff is our kind of thing,” that’s the end of the story. I think the people who buy ideas are not given nearly enough credit for that. I would say that every single idea of mine that got out of my office and into somebody else’s and worked was down to the person having the ability to buy the idea on an argument, because we never spent any money on research. We figured it was a complete waste of time.Because if you get nine out of 10 consumers thinking an idea is good, the chances are it’s mediocre because you’ve just reinvented your competition. Good ideas will get two passionate people out of 10 loving it and the other eight hating it, and you build from there. But you can’t use that as a tool to sell it to your marketing guy. Two out of 10 people think it’s a brilliant idea, you ought to go with it? No chance.Andrew Mitrak: So how does this change your behavior over time, knowing that you’re really dependent on the person buying the idea? For me, for instance, this totally resonated with me. And I know that I almost treat my ideas a little more cheaply in a way where there was a time, especially early in my career, when I feel like I had a good idea, I’m like, “Oh, this is so precious. I shouldn’t share it with anybody. I should really develop it for a long time.” And now I’m like, whenever I have an idea, I just share it. I try to get it out there. And I know whether it gets adopted or not, I’m not going to feel too bad over it. Of course, I’d like things to succeed and be adopted, but just get it out, share the ideas, be confident you’ll come up with more ideas. And if somebody buys it, great. And of course, do your best job to try to sell it, but if you don’t, try to not let it be out of your control. Is that your thinking about it, or are there other ways we should treat our ideas differently, knowing that really their success depends on somebody buying the idea?“There’s No Plan B”: Why it’s best to pitch only one ideaDavid Gluckman: When I worked in advertising in London in the ‘60s, there was one agency called Collett Dickenson Pearce, which I think was one of the best agencies in the world in its time. But they only ever produced one idea in response to a brief. When they went to a client, they said, “This is what we think you should do.” And there were two ways out of this: the client would give them good reason not to do it, in which case they’d do another one, or they’d fire the client and look for somebody else.And at the time, we were just amazed—working in more conservative agencies—how could they do that? How could they just go with one idea? But I think when you engage with the business of creativity and the business of solving problems, you realize that there can only be one solution within your capability. Now, I’m not saying it’s the perfect solution. There might have been a better idea than Baileys, and there may be better elements in brands. But I think if you’re really true to what you believe, you go with one idea.To the point, I had this long relationship with my client. I remember once going with two ideas, and my client said to me, “You haven’t solved it, have you, if you’ve got two ideas?” And I said, “No, I haven’t.” So they said, “Go away and come back with one.”Andrew Mitrak: Yeah, one of the quotes in your book is, “There’s no plan B.”David Gluckman: I think that’s what we had to do. After Baileys... when I started, the first pitch I ever did, there were 48 ideas. That was because we weren’t sure what the client wanted, and the client wasn’t sure what they wanted either. So there were 48 solutions. Whereas once things became more specific, you could look for one idea.Innovation vs. Renovation: The Case for Inside-the-Box ThinkingDavid Gluckman: The areas I... I think there’s a lot of glib nonsense talked about my particular field. The word “innovation” is used because somebody comes up with a turnip-flavored Smirnoff or something. But that’s not innovation. That’s something that you knock up on a Friday afternoon after lunch. That’s not innovation. Innovation is something new and doesn’t happen all that often.I have this... you know, people talk about breaking paradigms and disrupting markets. Most of that’s complete bullsh*t. My counter-theory to this is what I call “inside-the-box thinking.” I think most of the thoughts and ideas that have been any good that we’ve produced have been from inside the box, from looking at past research that people have done, just reading through documents and reports. From looking at... coming up with ridiculously obvious observations.Like, I remember when we did Tanqueray No. Ten, the observation upon which it was based was: Did you know that there’s 10 times as much vodka sold as gin? So why don’t we try and get vodka drinkers to drink our gin? And how do you do that? You take out all that juniper flavor and tame it down and make it fruitier and fresher-tasting. Now, that’s inside-the-box thinking because that’s based on data that’s already there.Andrew Mitrak: I love this idea of inside-the-box thinking. Do you have some practical guidance or a few tips for embracing this, for discovering ideas that are hiding in plain sight?David Gluckman: Well, I think you have to disregard consumer research because I think it’s a very blunt tool. And I say that from having done hundreds of focus groups all around the world, many, many in America. But you don’t have to go and ask consumers what to do. There’s a legend on the front of my book, which is the story of the man who sold the world what it didn’t know it wanted. And I think that’s what you’re doing. You’re trying to develop things that people didn’t know they wanted. I think that’s quite an important... you know, if you take the research route into innovation or development, you just end up with what people say. Can we produce a product to compete with Red Bull that doesn’t taste quite so ridiculous?The Rise of Non-Alcoholic Beverages (and Their Puzzling Price Tags)Andrew Mitrak: Back to alcohol brands, you’re mentioning the brand extensions that Baileys has done over the years. It seems like there’s this tension between alcohol beverages wanting to be part of cultural trends and to be innovative, but also that there’s this history and this tradition to it, right? Johnnie Walker has been around for 200 years, but I remember not too long ago when they were releasing all these special Game of Thrones editions to their brand. And similar with Guinness, you know, it’s a big piece of Irish pride, they’ve been around for hundreds of years. I hope they don’t mess with the recipe too often. But now I’m seeing the alcohol-free version of Guinness. And I actually think it’s pretty good, as far as non-alcoholic beers go. But it’s very different than traditional Guinness, and it almost seems like sacrilege to mess with Guinness, right? So, do you have thoughts on how brands both stay true to their values, their history, and not damage their brand with too many brand extensions, but still want to try new things and to innovate and be relevant?David Gluckman: I’m quite an outspoken critic of the non-alcoholic category, particularly wines and spirits. I bought a bottle of Gordon’s a while back, Gordon’s Zero. And it cost a pound less than a bottle of full-strength Gordon’s. And when you think about it, what you’re paying for that money for is gin-flavored water, which is crazy, really. I mean, gin-flavored water for £14.Andrew Mitrak: You’re totally right that, especially with a spirit or wine, the trend to go from like 14% to 0% just seems like almost too big a jump somehow. I think it works better with beer, but the pricing of it doesn’t make any sense to me at all. That if you look at the non-alcoholic beers at a supermarket, at least here in America, basically the same price, sometimes even higher than the alcoholic ones. There’s a thing called hop water, which is like the hops in an IPA beer that are infused in water. And sparkling water will be 30 cents a can here, but hop water will be like $2 a can or more. And it’s like, why is that? It’s just sparkling water with a different sparkling flavor.And then mocktails, if you go to a restaurant, there’s this thing called a mocktail instead of a cocktail, and it’s juice. It’s just juice! But it’s priced the same way a high-end cocktail is, and it just seems crazy.David Gluckman: Yeah, exactly. I find it strange. I had some non-alcoholic product, which I will not name, the other day, which cost, I think... on a 70cl bottle, which is our unit size here, cost about £42. And a bottle of Johnnie Walker Black Label, where your capital has been locked up for 12 years in a warehouse, costs £35. I think that’s just crazy, really, that you’re paying for a kind of flavored squash thing for £7 more than Johnnie Walker Black. It’s ridiculous. But that’s the way the world works.Marketing Alcohol and Navigating the EthicsAndrew Mitrak: I want to talk about this trend towards non-alcoholic beverages because I think it does coincide with more awareness about the negative health impacts and societal impacts of alcohol. People are almost willing to pay more because it’s perceived as healthier. Do you think that’s part of it?David Gluckman: It’s in part. I think we went there in 1984. The guy to whom I reported at IDV, who was a global director of the company, said to me one day, “Well, look, I think that alcohol is going to come under attack.” This was 40 years ago. He said, “Alcohol is going to come under attack.”We were amazed at how successful Perrier was, especially in the US. Because to me, Perrier is just soda water with history. And so we looked at developing a series of non-alcoholic products, which we did, and they were quite successful, except the company committed too much money. They set up a separate organization to manage it without having the critical mass of some big brand to make it successful. But we were there then. We had developed a brand called Aqua Libra, which was incredibly successful in the UK for a while, and another drink called Purdey’s, which is now owned by Britvic. So we went down that route. But the company, I think at that time, went into the merger and took the decision that their business was alcoholic beverages, not non-alc. So they were dismissed.Andrew Mitrak: I do want to ask you about this a little more as well because on the one hand, I’m mesmerized by the capabilities of developing an alcoholic beverage and the marketing around it, and iconic campaigns. Absolut Vodka, the Super Bowl is so full of great beer advertisements that people will talk about for weeks afterwards. So a lot of the best marketing and branding and advertising is around alcohol, but it is something that does have societal harm to it. My family has a history of alcoholism, and I’ve seen firsthand it’s had really, really bad impacts on people. And I’m kind of... it’s a tension because I can both admire the brilliance that goes into developing the products, but I can also see some of the harm that the products have had on people and in society.Does that ever come up? How often does that come up as you were working on these products, as you work in this industry? Do folks think very much about that and how they reconcile some of the negative impacts of the products they’re selling?David Gluckman: There was always that background feeling, as there would be with cigarettes. You know, should I be doing this? Is this the field in which I should be engaged? And because I smoked when I was younger, I would never have taken on a cigarette brief, I don’t think. But alcohol... well, it was there in the back of my mind, but it didn’t stop me from working in the category. It was just so interesting. And the laws protect us from selling booze to children and things like that. So that’s an adult decision.Andrew Mitrak: As companies introduce new brands of alcohol, they’re doing that because they want their company to grow, right? And they want to sell more. And in America at least, the top 10% of drinkers consume like 90% of the alcohol. And I’m wondering, where do they want to sell more to? Do they want to sell more to that top 10% of drinkers who are already drinking a lot? Are they trying to find new drinkers and bring new people into the market? Are they trying to upsell people so they’re paying more for alcohol than they otherwise would, so they’re not going at the bottom-shelf liquor, they’re going more for the premium one? Do companies have that strategy in mind of like, which market are we breaking into? How are we growing our product? And how does that reconcile with the ethics behind alcohol marketing?David Gluckman: I think most of the time people copy other people. So if somebody brings out a raspberry-flavored vodka, seven other people will come up with raspberry-flavored vodkas, which is copying. When Seedlip came out with their non-alcoholic spirit, about which I was quite scathing, other people have rushed in and copied Seedlip as well. So a lot of it is just copying what other people are doing. Not many people are looking to completely change things around.Could There Be Another David Gluckman?Andrew Mitrak: I’ve really enjoyed this conversation and reading your work. One of the questions that I have is that, could there be another David Gluckman? You seem to have been in the industry at this moment and had this career where you could come up with these ideas and work with relatively small teams and take bets and find the right decision-makers to champion that.But a whole industry and things have been bureaucratized around it, things have been so formalized with more stringent types of market research. It seems like there’s so much more consolidation within the beverage industry that they might be a little more risk-averse, and that having independent voices or having smaller teams create bolder ideas just doesn’t seem to happen as much anymore. So I guess the two parts of the question is, could there be another David Gluckman or a person like you who does what you do? And if so, how would they go about it?David Gluckman: I think the only way that would happen is the way it happened for me, is to find a client with whom to work who makes that possible. A client with corporate cojones, if you like. A client who says, “Yes, we can,” has a very positive attitude. And the client—I mean, I think if I didn’t have a client, I would have been... I might have done one or two brands if I’d been lucky. But the client that I had that could go to a member of the main international board and sell an idea off the back of a cigarette pack, and they empowered this kind of thing, they stimulated you.I think it’s the company. Otherwise, it’ll happen with entrepreneurs because the beer business is certainly full of people like that. Brilliant, brave people who went with their instinct.Andrew Mitrak: Again, for listeners, the book is That Sh*t Will Never Sell by David Gluckman. It’s full of great stories, some of the case studies you’ve heard here, but they go into more depth, and there are lessons and a lot of wit and fun throughout it. So, really enjoyed the book, David. Aside from purchasing your book, are there any places you’d point listeners to as far as where they can find more of your work online?David Gluckman: Well, I think they’ll be all over the place. So if you just Google me, you’ll probably find some stuff. If anybody buys a book and wants to have a chat, my Zoom door is always open.Andrew Mitrak: Oh, that’s a very nice offer. I hope you get flooded with meetings. So yeah, David Gluckman, thanks so much for your time. I really enjoyed the conversation.David Gluckman: It was a pleasure, Andrew. Enjoyed it too. Thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 36This week my guest is Ken Rufo, the owner and principal of Manchester Street, a marketing consultancy focused on B2B differentiation. Prior to this, he ran positioning and strategy at Emphatic Thinking, a consulting firm that’s now owned by Accenture. Ken earned his PhD in communication from the University of Georgia, and I met him back when he was my professor in my master’s program at the University of Washington.One of the things that I like about Ken Rufo is that he brings such a unique, original view on marketing, and he’s not afraid to be provocative and contrarian. For instance, when it comes to marketing messaging, he’s less interested in brand storytelling and more interested in making persuasive arguments. Listen to the podcast: Spotify / Apple PodcastsKen questions if marketing’s obsession with data was actually a mistake. He argues there’s too much attention on what’s easy to measure instead of what actually influences buying decisions.These are themes that I explored in my prior two episodes with Jon Miller and Kerry Cunningham, and I see this conversation with Ken as completing a trilogy of sorts on how B2B marketing has developed in the 21st century and how data and analytics and marketing tech have all changed how we go to market.Note to listeners: I hope you don’t mind the past month’s focus on recent marketing history. It’s been fun for me to dive into the inflection points that shape today’s digital marketing world (especially in B2B)as it’s relevant to the work I do every day. Don’t worry: we’ll travel back to earlier times of marketing history in episodes to come.Here’s my conversation with Ken Rufo.Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Bridging the Gap Between Marketing Theory and PracticeAndrew Mitrak: Ken Rufo, welcome to A History of Marketing.Ken Rufo: Thank you for having me.Andrew Mitrak: You were a professor that I had in grad school, but you’ve also been a successful principal at agencies and a consultant. And a thing that I’ve noticed over the course of the 40 or so interviews I’ve had for this podcast is that there is a really big gap between academia and practice. And you seem like one of the few individuals that I’ve encountered who successfully bridged that gap. I’m wondering if you have any observations on that.Ken Rufo: Yeah, it’s a good call out. And I think that academics, to their disservice, are significantly behind the times. And this is a very gross generalization, so there are going to be people who listen to this who get upset with me. But you look at a lot of the even the digital marketing curricula that are present in MBA programs, they’re five years on a good day behind where the industry is. They’re a decade behind, right? Like there are still classes in digital marketing that are not talking through the kind of granularities of a DMP DSP integration, for example. And I don’t know how you really understand what’s happening at a digital marketing level if you don’t understand that degree of technical granularity.On the other hand, I think that one of the things that happens on the non-academic side is because there is not rigorous academic theory and research behind a lot of things, there are a lot of things in the marketing world that are imaginary that we take as being true. A lot of things like that. You’ve probably heard things like the seven touchstones, right? Like you need seven touches before there’s a sale. That’s made up.Andrew Mitrak: The marketing rule of seven.Ken Rufo: Yeah, that’s a made-up rule. It was made up by a radio station like back in like the 30s or 40s to explain why it is you should buy multiple ad spots. It wasn’t based on research. There is research about threshold effects within persuasion within marketing, but it’s highly variable based on like the size of the market, the number of entrants, how recently you’ve been an entrant. Like the math is super complicated and it’s really only understandable right now post hoc. It’s not like this formula thing that you just plug in a formula and be like, I need nine buys, you know.Andrew Mitrak: It is funny how sometimes somebody will present a plan or some strategy and say, as we all know, you need seven touchpoints to get a customer. And you kind of want to start off with the meeting by saying, that’s BS. But it’s something we all kind of nod along with.The Evolution of Marketing’s Value Proposition in the Post-Dot-Com EraAndrew Mitrak: I know we could go a number of routes, but I want to kind of narrow in on the last 25 years or so to the post-dot-com era of marketing. Do you have thoughts on how the value proposition of marketing itself has changed over that era?Ken Rufo: Yeah, I have two, I have two really, I think, strong thoughts on this. And one of them will be a hot take and the other one will be, I think, really conventional. I think the first thing is we’ve gotten better and better and better at targeting. And we’ve realized that it’s not just enough to target a person, you have to target a time. Right? So like there has been a general switch from kind of like segment-based or audience-based marketing towards finding the moments in which the touchpoints actually matter, right? And the easy way to think about this is that in any act of marketing for it to be compelling, I need both my interest in the thing to be present and my attention to be available.So I can have the most amazingly catered, like audience of 10 people type message, you know, like really granular messaging, but if I’m not paying attention, and it’s not the right time for me to make a purchase, it doesn’t matter. Or at least it doesn’t matter in any kind of timeframe in which I could attribute conversion, right?So that has been really amazing. There is a downside to that. This is not the hot take, but the downside of that is that the more you target a smaller window, like you went from like broad message to a group of people to a person to a moment in that person’s life, the harder it is to fit a lot of information in. There’s a kind of compression paradox where if I’m just targeting you with the right display ad at the right time or the right search ad with the right time, it’s a smaller target and if I nail it, I just can’t fit that much information density into that package. And so that is a little bit of an issue. So I think that’s one of the things that’s really cool about what’s happened is that we’ve kind of understood this.“Hot Take”: Has Marketing Cannibalized Itself?Ken Rufo: The other thing, and this is more of the hot take, is that we have shot ourselves in the foot. I’ve never seen an industry self-cannibalize as successfully as marketing did when it went digital. Everyone was so excited to go digital. They were like, we’re going to we’re going to show you, like if we invest over here, we can AB test, look how B performs better than A and, you know, our CTR rate is like 100% higher, which often when people say like our CTR rate’s like 100% higher, what they mean is that there were five clicks before and now there’s 10 clicks out of a thousand. You know, now that that was in fact technically a 100% jump, but that’s not super compelling. I don’t know you can build a growth strategy off of like a five to 10 click-through rate, especially when that’s not even the conversion.But the biggest issue is it’s not how persuasion works. The stuff that we measure in a digital world, the original value proposition is we can provide you with demonstrable and measurable results. But the reality is that’s not how persuasion works and the kinds of things that we measure don’t measure persuasion, they measure interaction.Andrew Mitrak: Do you think it’s a result of marketing needing to justify its own existence? We want to prove the ROI of marketing and therefore we’ll kind of invent some metrics to prove ROI and therefore we’ll kind of obsess over those metrics and we need to get them better and better all the time. Is that kind of what’s behind it or if not, what would you attribute the cause to?Ken Rufo: Okay, that’s actually a really fascinating question. I’m going to say there’s three. The first one is marketing is often considered a soft skill. So unlike technical skills or financial skills or whatever else, marketing is a soft skill. I say some slightly compelling things and we wordsmith, right? Wordsmith is typically used in a negative, oh, you’re wordsmithing, right? Or sometimes a positive when you want to hire somebody in to make something sound prettier or whatever.But it’s considered a soft skill. So there’s a lot of folks in the especially in the tech world who like because they can solve computer challenges, kind of assume they can solve marketing challenges. Sometimes they’re right, sometimes that’s not accurate. I think same with CFOs, they tend to look at the CMO and they go, look, I can I can look at like we had X number of sellers, we hired X plus 10, you know, we got more revenue, see the sales team created revenue. How did you create revenue? Right? And the marketers are like, well, okay, I’m going to come up with an Excel document, it’s going to show you a bunch of stuff and we can attribute a lot of that to marketing.And I think the problem here is that because it’s a soft skill, it’s not as trusted, right? And there’s a bias against soft skills by folks who are more technical or objectively inclined. But I think the other problem here is that at the end of the day, marketing measures the interaction that a company has with a customer prior to sale and occasionally if we’re talking about retention marketing subsequent to a sale, right? But it does not measure the act of persuasion. Like what’s happening inside the brain is still black box, right? It’s still like unknowable. So I think part of the problem here is that what marketing is measuring is just it’s not measuring the right things. And not because they’re not measurable, I don’t know.The Challenge of Measuring Marketing’s True ImpactAndrew Mitrak: Yeah, that’s right. I guess every other department, most other departments at least, you know, sales, you have closed deals, you have revenue. Finance, you have profitability. If it’s a product or engineering thing, you could measure the rate at which things are delivered and customer service or other things you can measure tickets closed and things. And everybody needs OKRs or you know, some type of measuring and marketing needs to create them. Would you say that marketing, and I obviously we’re saying marketing like there’s a lot of companies out there, there’s different areas of marketing, but just by and large in broad strokes, do you think marketing has kind of come up with some of the wrong ones, and when do you think they started doing that?Ken Rufo: Look at it this way, right? Like CTR is a great example of this. When a CRO goes to present the effectiveness of their sales team, they don’t ever say we AB tested a 46-minute pitch meeting versus a 48-minute pitch meeting. We looked at a blue background on slide four versus a teal background on slide four, right? And what we noticed was a 67% more like larger focus of eyeballs, right, on the slides. Like so no one else offers that level of granularity as a means to justify their existence or process, right? See, I think we can separate the value proposition of the existence of marketing from the processes of marketing. And I think we’ve tried to substitute measures for the process for measures of the value. Does that make sense?Andrew Mitrak: Yeah, for sure. I think like kind of up-leveling the message back to your original hot take of marketing shooting itself in the foot. And to paraphrase it, hopefully not too poorly, is that marketing kind of got obsessed with data science and that may not have actually been a good idea for it in the long term.Ken Rufo: Yeah, I think some degree of data science is absolutely essential for contemporary marketing because you do want to know like, I think there’s a difference for example, between an ROAS measurement and an ROI measurement for marketing, right? And I think the latter of that is much trickier than the ROAS, right? Because within ROAS, I can look at like this ad versus that ad and I can say, well, this ad did perform better, right? But that doesn’t necessarily tell me that the idea to run ads period, was a good idea.Right? And that’s the part that I’m saying is tricky. There is still a lot of assumption and a lot of theory that is implicit within most marketing campaign structures, right? Or messaging structures or brand structures or brand architectures, right? But I think marketing did get a little bit too oriented on the data science thing where they were like, look, like we can pull numbers now. We can run some Python scripts, we can use R. And everyone was very excited. And I’m not necessarily sure that worked out. I look, every company I work with, I won’t mention specifics. Almost every company I work with, when they get bought by private equity, the very first thing that gets cut is marketing. Which is weird because at the moment you’re purchased by private equity, you have an automatic marketing opportunity boost, right? Why do they cut it? Because they can’t prove on a spreadsheet that it actually has value.Are we coming full circle back to Brand Equity?Andrew Mitrak: You know, the thing is, actually, I think a lot of that is why brand equity started. If I kind of think of David Aaker and his work and the original Marketing Science Institute conference, it was in the era, it was in the 1980s, in the era of, you know, the Wall Street movie with Michael Douglas and private equity, corporate raiders. And all of a sudden, marketing needed to justify itself and say, hey, brand equity, equity, that talks to the private equity folks, right?Ken Rufo: Yeah, exactly.Andrew Mitrak: So it’s kind of funny that you’re bringing it up. We’ve almost kind of come full circle as far as what you’re experiencing there.Ken Rufo: Yeah, and I do think that’s kind of like a weird moment that we’re in. I think we have reached a kind of weird full circle where we’ve gotten adept enough at targeting and measuring that now we’re looking for value in places that are not the metrics.Is “Marketing Science” a Real Thing?Andrew Mitrak: Do you think… this is going to be a loaded question here. I mentioned the Marketing Science Institute. I’ve spoken to folks from Ehrenberg-Bass, the Institute of Marketing Science. And I like a lot of their work. And also I mentioned how I worked with data scientists for marketing too.And there’s this Peter Thiel quote, I know he’s a controversial figure, but sometimes he has spicy quotes. And he a quote that’s something to the effect of, “If ‘science’ has to come after the word it’s describing, then it’s not science.” Right? Like biology and physics, those are science. Political science, social science, those aren’t actually sciences. So do you think marketing science is actually a real thing?Ken Rufo: Okay, so I mean, I should point out that etymologically, like biology, the logos that is “ology” in biology is the equivalent of science. Logos would have been like words, meaning, theory, structure, right? So like what we call science would have been that, right? Like scientia, the word that gave us science, right, is just the Latin version that we use. Okay, whatever.But I understand his point. His point is, the more you have to say it, right, the more you say like, I’m very handsome, the less it’s probably true, right? So I do understand the basic point. And I don’t think he’s wrong about that. I think it’s more like, what is the purpose of science?Andrew Mitrak: Maybe what’s also behind my question is that it seems like as far as marketing marketing itself and the value proposition of marketing itself, it wants authority and prestige and to be more tied to science. And it might even call itself “marketing science.” And that may lead you to kind of obsess over numbers like CTR. I’m wondering if that is a little bit of marketing, just putting a veneer of science on itself and is not as scientific as it might want you to think.Ken Rufo: Okay, here’s the charitable read on this. I think there is a general desire in most sectors of business to prove that you have value, right? Like to prove that you’re producing really good stuff, right? And the reality is that marketing has a variety of core functions and many of those core functions are very difficult to measure, but it does not mean they aren’t true, right? It doesn’t mean there aren’t scientific ways of assessing them. It just means it’s very difficult to measure some of those things, right?So, you know, for example, it’s very difficult because it’s functionally a counterfactual to say, would sales have sold as much if the landing hadn’t been softened by some really effective marketing stuff, right? If they hadn’t read some pre-materials or some good thought leadership or they didn’t have some ideas or vocabulary that was instilled in them by the marketing materials that they got or the account-based plan or whatever else, could sales have gone in and have, you know, a 40-minute conversation that resulted in a likely sale? Like could a seller pull that off?And the answer is sometimes a seller is just very talented and they can pull that off like out of a vacuum, right? Like I’ve seen some sellers who are so compelling, I’m probably sure I could if they had asked for one of my kids eventually, I probably would have given it. They’re just they’re just they’re very smooth. I appreciate that. Some folks are just like that. Not all sellers are like that, right? And the question is, when you talk about an average seller with average marketing, is that more powerful than a good seller with no marketing or really amazing marketing with a bad seller? That combination is very, very difficult to measure, right?We don’t have a lot of interoperability in the metrics that we use for marketing in a way that would make sense with the measures that we have for sales, right? We typically look at like we gave you a target, you hit your target, you had some tough accounts, you grew your accounts, etc, right? You had a certain number of calls, a certain number of meets, a certain number of deck deliveries, right, etc, right? There’s a variety of things that we can look at as sales metrics, but they don’t really work interoperably with our marketing metrics. So it’s a little bit harder to guess that that’s the case. And typically, although this isn’t always the case, revenue and marketing are split.So there’s no reason why we would want them to be interoperable. They report separately. I think marketing wants very much to say, hey, look, we contributed to that. Like you wouldn’t have done as good of a job if we hadn’t been around. But that’s just a very difficult case to make conclusively.Measuring Marketing’s Impact: B2C vs. B2BAndrew Mitrak: Is there better data for it on the consumer side or the e-commerce side? For instance, most e-commerce websites are pretty much the same functionality at this point. The variance between a good seller and a bad seller on the B2B side versus a good e-commerce site—the gap has mostly narrowed. Sure, there were early leaders who were way better, but other people usually catch on pretty quickly and implement whatever the best practices are. So, is marketing’s impact just a little easier to measure on the consumer side or the e-commerce side?Ken Rufo: Yeah, that’s a great call out. I tend to think about things from the business-to-business perspective.Andrew Mitrak: Yes, same here.Ken Rufo: In B2C, I think there are some differences because there is a more direct line between a marketing material and a conversion. So it’s a little bit easier to verify that some things resulted in a conversion. I still think there are a lot of attribution problems with this. I think there’s a lot of questions about whether or not incremental ads added to the conversion or if the conversion would have happened anyway. And that’s not a negative about marketing, I’m just saying that, let’s say I’m really interested in a product and I keep thinking about it. I see an ad and I go click on the ad because I’m already interested in the product.There’s an interesting question about whether the ad generated interest, added interest, sustained interest, or just filled a gap until I was ready to make a purchase. Those are four different scenarios for what an ad can do, and you would measure all of them slightly differently. For example, maybe there was something in that ad that broke a moment of tension within my deliberation process, and I was like, that is the phone I want to buy. That is the upgrade phone I want to buy. I want to go with a Pixel instead of a Samsung this time. And maybe there was something in that ad that did that, but I might have already been interested in the Pixel before that. Maybe the ad got me interested in the Pixel in the first place. We can look at the fact that an ad interacted with a consumer and we can say, hey, that ad was part of the journey that they made, and they ultimately decided to make a purchase, so the ad gets attribution, it led to a conversion. My point is just that we don’t always know what its actual rhetorical or persuasive function was—whether it was strictly awareness, deliberation, what other thing was contained within that.“Stories Bring Us Together, Arguments Set You Apart”Andrew Mitrak: If marketing’s obsession with data science helped shoot itself in the foot, what’s your take on storytelling?Ken Rufo: I don’t want to plug Manchester Street, which is my little entity, too much, but we do use a line that I like quite a bit, which is not mine originally. A very talented graphic designer named Nick Danielson used this line I think for the first time. Stories bring us together, but arguments set you apart. I think that when you’re thinking, especially in the B2B context where decision-making tends to be multiple people, it tends to be against very particular requirements, and sometimes sales can be more complicated, sometimes even elevated to complex in terms of the level of integrations. In those instances, storytelling is a great way to say, “I get you.” It’s not a great way to differentiate. The power of stories is precisely that it combines shared experience, but that does make it harder to stand out from the crowd.So I like storytelling, as long as it’s in the service of well-thought-through and very persuasive argumentation. I think storytelling for the sake of storytelling is a fun exercise, but there are novels for that. So I think it’s not necessarily what I think of as being a marketing function. That being said, I think that storytelling is a great corporate function at a strategic comms level, as a kind of organizing principle for the culture of an entity or an organization. I think storytelling is really useful for that. It helps people see themselves as part of a larger project or value, and I think that’s really powerful. I just don’t think that a lot of people see... look, you own a cell phone.Andrew Mitrak: I own a cell phone.Ken Rufo: Alright. How many times have you seen a Google Pixel ad or an iPhone ad where they’re out and they’re camping and they take a picture of the stars and you’re like, I need to go camping with my phone to take a picture of the stars. In fact, I can’t go camping without an iPhone or without a Pixel or without whatever. You know what I mean? You kind of like the emotion, but that’s not how you would decide on a phone.Andrew Mitrak: I think with the picture of the stars, I couldn’t say the specific ad you’re referring to, but I know the type of ad. Usually, the thing is you want to differentiate this year’s phone versus last year’s phone, right? And low light, that’s a difficult thing, and having a more powerful camera that’s better in low light, maybe telephoto, I don’t know, or the wide one. And it seems like a way of choosing a more extreme use case, which is a night photography use case, and which I think in a way is hopefully showing storytelling but also somehow weaving in some type of competitive differentiation, in that case, the camera.Ken Rufo: Those ads don’t do that. I just disagree with the premise that those ads do that. I think if we go back to Apple ads like the “Think Different” campaign, I think that’s a much better example of tying an emotional value or aspiration to an argument. “It just works,” or “I saved the day,” Apple “Think Different”—I think that was a really compelling way to separate the idea that if you wanted a machine that you could muck around with, then sure, maybe Windows. But if you would like to just be creative and not be encumbered by the machine, you can Think Different and do that. I think that’s a much more compelling campaign. In that situation, it’s a great example of where the story serves the argument, rather than just being the emotion for the brand or the product.Why It’s Time for CMOs to Embrace the ImmeasurableAndrew Mitrak: Coming back to data science and marketing, maybe having shot itself in the foot, and just to kind of tie the bow on that thought… What should be done about that? Or what should have been done differently about that?Ken Rufo: Those are two probably different questions. I think what should have been done differently is just that we over-promised what was possible. And I think we over-promised what was possible in part because of the question that you asked at the very beginning, which is the split between the academic and the practical that we see oftentimes. I think that in practice, people just thought, oh my gosh, if we can show these numbers, we’re going to be able to prove that marketing has really good ROI. We know it works. We all kind of intuitively know marketing is useful.And now we just thought, well if we have the metrics, we will be able to show this. But because the folks who were doing that were not folks who studied persuasion, rhetoric, psychology, other than as adjacent things that were useful to very specific acts, they weren’t really digging into the research and the theory that undergirded our understanding of those things. If they had at the time, they would have realized that the things we can measure don’t really assess whether or not the marketing was effective; they assess whether or not the marketing happened. And then we can do a post-hoc behavioral analysis, kind of like behavioral psychology, where we say, well, the result was more clicks, ergo, it must have been a more effective ad.But that doesn’t explain the act of persuasion. It doesn’t tell us that the messaging was better for a reason. It tells us that we are making an assumption after the fact that the behavior suggests that B is better than A, not explaining why B is better than A. And I think that’s a bit of the problem originally.In terms of what would fix it now, I think that marketers, CMOs, my preference would be that they just really stand up and say, look, a lot of what marketing does... marketing has some core functions: it makes you aware, it differentiates, and it educates on a point of view. I can measure awareness pretty easily, actually. I can measure whether or not my campaign made you more aware. Unaided brand recall, click-throughs, whatever, those are all actually pretty good measures of whether the ad effectively made you more aware. Search optimization, etc. In terms of, did it differentiate? That’s a little bit harder because we have to have a better understanding of whether or not the message actually resonated. And in terms of educating, what I mean by educating, I mean that I got you to think about things from my point of view.That is very difficult to measure. Unless I can somehow measure whether or not your sentiment, if I look at the sentiment that’s being used, matches the verbiage that I want you to use, that’s really the only good measure for that. I think that CMOs should stand up and say, a lot of what we do isn’t super clearly measurable, but I’m convinced that there’s a vision and a strategy and a thought leadership and a coherent way to do this. In the same way that when we think about sales methodologies, and we think about, say, Challenger Sale versus solution selling versus impact selling, we’re picking a framework that we think is just going to be the most effective based on our experience and intuition and a degree of measurement, but it’s not entirely decided by measurement. Marketers should do the same thing.A Collective Action Problem in Marketing LeadershipAndrew Mitrak: Do you think there’s a collective action problem among CMOs to do that and stand up and do that? If I’m the CMO—I’m not a CMO, but if I was at some big company and said, “I’m going to take this belief, things that are not measurable.” And then some executive, CFO, CEO, somebody who has influence over whether or not I have a job, says, “Yeah, but this guy over here from that company says they can measure it. I’m just going to go hire that person.” It’s like if one CMO does that, good for them, and maybe that works at a company, but there’s also a threat from others who might have bigger promises and then come in and do those promises, maybe not deliver on them, and then get another CMO job a few years later before people figure out it’s not working.Ken Rufo: That’s a real risk, and you’re not wrong. But the average tenure of a CMO is, I think, still somewhere around 18 or 19 months.Andrew Mitrak: Right.Ken Rufo: So it’s not like the current system is highly stable. I think this is one of those things where we all got seduced by the siren song of digitalization. Digital transformation was promised in a variety of venues, first in operations and workflow and cloud practices and whatever else. And then we were pretty convinced that we could assign data to a lot of different things to improve operational practices. And sometimes that data just doesn’t measure what we think it’s trying to measure or even sometimes what it purports to measure. I think a lot of companies sold CMOs and sold CEOs on the idea that if we could just attach more digital data, if we had the right platforms in place, we could do some stuff.By the way, there are some instances in which data is incredibly useful. I actually think that ABM programs are a great example. I think account-based marketing programs really benefit from data, although we should point out that most ABM programs look at completely different stats than our typical demand gen programs or even some of our brand programs. They look at completely different stats. I actually think those stats are often very, very useful in determining whether or not the ABM program is actually effective, along with conversion rates. And I also think that you should probably post-hoc interview sellers to talk about what the sales cycle was through.One thing that I would love to capture more data on—because I’m not an anti-data person, I like it—is I would love to know what questions sellers get asked in an aggregate subsequent to a campaign structure. So a seller goes into a meeting, how many times does the language accord with what we had in our thought leadership? How many times do they ask the questions that we’re suggesting are important questions in our marketing materials, so that we’re controlling more of the conversation? How often does that happen? But again, that requires a degree of integration in that training process, which is difficult.The Shifting Dynamics of Marketing ConsultancyAndrew Mitrak: So you’ve been in the marketing agency world and consultant world. Has it been close to 20 years for you doing that, or how long have you been doing marketing consulting?Ken Rufo: I don’t know. I’m really old now, so it’s been a while. I’ve been doing this for at least a decade and a half. I could probably figure out the exact timeline.Andrew Mitrak: How has that changed? How have the dynamics of running a consultancy changed over the time you’ve been in this profession?Ken Rufo: You might actually be better at answering this just because of the range of people you’ve talked to. So I can really give very limited anecdotal assessments. But I think it’s changed in a couple of core ways. The first one is the absence of business travel now, the relative absence of business travel, is really large because it’s much easier to develop larger, integrated relationships with an entity that you’re doing consultation for—whether it’s marketing strategy or strategy all up—when you are physically present in the day-in and day-out of an office where people are also physically present.There are all sorts of cross-pollinated... you know, people use “water cooler conversations,” but there are those things. You end up sitting down, you go out to drinks, whatever, and you end up getting some other tidbit that starts to factor into your analysis and assessment of what’s going on. And there is just a sort of magic to that as you learn more about the dynamics of an organization.One thing that I learned really early on as an academic who was moving into this world is that every business makes a decision for a reason. Sometimes it’s terrible decision-making, sometimes the reasons are not good, but they are absolutely intentional. There’s never a random policy; it’s there for some reason. It might be counterproductive, might be a bad policy or whatever else. But if you don’t understand what those reasons are—and sometimes those reasons are just people politics—so, one of the things I think does impact your ability to do marketing strategy from afar is that you just don’t have as complete of a puzzle in the post-COVID, less-business-travel era. I don’t think that’s a ding against consultants; it’s just that you have to change some of your own workflow processes to adjust for that. In some ways, you need to schedule meetings with people that you make sure are diversified across their level of the organization.We sometimes do these messaging workshops, and when we hold them, we want to make sure that the person who’s monitoring web traffic is in the same room as the person who’s setting the messaging strategy. Because I need to be able to say to that person, “Is that actually what the web traffic says?” and they go, “No.” And I go, “Okay, great.” Or sometimes we’ll do multiple workshops where we’ll do product in one group, marketing in one group, sales in one group, execs in one group, and then we’ll do a reconciliation group where we say, “Okay, so here’s a chart of how everyone disagreed. Who’s right? Like, why did product think X when marketing thought the opposite of X? Is it because marketing doesn’t understand product, or is it because product doesn’t understand the customer? Where’s the miscommunication there?” You have to adopt those sorts of processes now because you have such a partial window into an organization. So that’s one thing.The Value of Marketing Consulting in a World of AIKen Rufo: I think the other thing is just that there’s a lot more scrutiny right now on whether or not the consulting dollars pay off. And some of that is because of some, let’s say, high-profile examples of getting paid to change the name of a streaming service and then getting paid because that didn’t work out to change it again, and to eventually get paid to change it back to what it was before you got paid. And I’m not calling anyone out on this, particularly.Andrew Mitrak: Well, it’s got to be HBO to Max, HBO... all that. They themselves are pretty cheeky about it. I don’t know about the background stuff on that.Ken Rufo: The same entity was billed, let’s just say, billed for all of those.Andrew Mitrak: That’s funny.Ken Rufo: But I do think there’s a little bit more scrutiny because there have been some high-profile mess-ups for consultancies. But the other thing, by the way, is just AI. Like, I can hop on to some of the better AI programs and I can say, hey, give me the Forrester read on what this would be. Here’s a paper on how Forrester assigns its quadrants, what would we have to do to be considered in this quadrant? Here’s what Gartner says, what would we need to do to be part of this thing? And I think the pressure to have a person be smarter than the aggregate of the data of an organization that can now be parsed by AI is just really high. You just need some really innovative stuff. And I think, weirdly enough, this is actually where the academic part comes full circle, because now what we need is not aggregate levels of practice. Like, “I have so much experience, I can tell you what to do,” because so can all the things that cataloged evidence of your experience. What I really need is your way of seeing, and that’s theory.The Consultant as an “Insurance Policy”Andrew Mitrak: One question I have just about where marketing consultants fit in is that... I’m going to say something provocative and you can shoot it down, okay?Ken Rufo: Yeah.Andrew Mitrak: Do consultants partly exist so the decision-maker at the company doesn’t get fired? That if I’m a marketer and I have an intuition about a thing, let me hire a marketing consultant to do things, and you say to do this thing that I was kind of wanting to do, and then it doesn’t go well, I’m like, “Oh, that consultant.” At least I get to keep my job, but I’ll fire the consultant. Are they partly an insurance policy?Ken Rufo: Oh yeah. Yeah. There have definitely been... I think in two ways. Sometimes you’re just there to resolve an internal political dispute. Like one person says A, some other entity says B, and your job is to come in and be like, “I think A is probably the more reasonable thing.” And they go, “Aha!” But typically, it’s A that paid you. And I’m not saying that’s because you are biased in your thinking because A paid you; you’re biased because typically the reason why A decided to bring in a consultant is because they were pretty confident they were right anyway, and they just didn’t want to keep spending political capital to convince someone when they could just have a third party do it. But the other reason is, you’re absolutely right, we are fireable. And so when we mess something up or whatever else, it absolutely can just be because the consultant’s an idiot.Andrew Mitrak: Yeah, and this kind of comes back to the AI thing. If I’m the marketer and I’m having some political dispute or whatever, I can ask the AI and we can both ask it and then see if it supports our opinion and say we’re right. Or we can go to the consultant and do it. If I choose AI and I make a bad decision and I get fired for it, that’s my fault. They’re like, “Hey, you shouldn’t have trusted the AI, you should have done something different.”If I hire a consultant, you kind of get the insurance policy benefit, right? I can fire the consultant. So it’s like the AI in some ways for consulting isn’t as much of a threat.Ken Rufo: Yeah, there is that.The Value of Consultants: Breaking the “Inside-Out” PerspectiveKen Rufo: I think the other way to think about it, which is the more useful and charitable part, is that there are two things that consultants typically bring to the table. The first one is, because we work with a variety of companies, we have a variety of lateral experiences that we can draw from. A lot of times, the really good new twist in marketing is simply an idea from an adjacent industry that one industry wouldn’t have thought of, but the other industry needed to think of. And when you put them in juxtaposition, it suddenly makes a lot of sense. So someone who’s worked across a lot of industries is very useful.There’s an idea, both John Dewey and Thorstein Veblen talked about this in different ways. One called it “trained incapacity,” one called it “occupational psychosis.” But it’s the basic idea that the more you work in a particular space, the harder it is to see the outside point of view. This is the cop where every boyfriend that comes home with the daughter is probably a criminal. It’s that kind of idea. Or in marketing, we refer to it as the problem of the “inside-out perspective.”I’ll give you a great example of this. I was working with a company where we’re in a meeting and the head of product goes, “No other company does the following things.” And he lists this thing that their product did really well. And he’s like, “Nobody else does that.” And I said, “Well, that’s just not true,” because we always do a lot of really heavy compete analysis. And I said, “That’s not true. These entities all claim to do that exact thing.” And he goes, “Really?” And I go, “Yeah.” And he goes, “Well, we do it better than they do.” And I was like, “Okay, come on. You can’t say that’s true. You didn’t know they did it a second ago. You can’t now say that you have an assessment comparatively of your value relative to theirs. You were unaware they did it.” But that’s what I mean. Sometimes just having somebody who can come in and be like, “Dude...” is a way to break that inside-out glass and force them to think about things from outside. So I think that’s a real value that consultants can provide.Andrew Mitrak: I really enjoy this conversation, Ken. Something I like about you is that part of your offering is debating to get to the truth and also you kind of not that this is a debate per se. And it was a little more back and forth than usual on this podcast, and it’s something that I think brought a liveliness to the conversation.Ken Rufo: I will tell you, from an argument perspective, when I think about storytelling serving argument, there’s a concept called agonism. It’s where we get the idea of agony or struggle. Antagonism is typically when you are opposed to something, but sometimes you just struggle. And there’s this idea that when you put multiple ideas against each other for the purpose of letting them struggle, you emerge with a better idea. There’s actually good research on this.There was a great example, there was a study out of UC Davis, I think maybe about 12, 13 years ago. And what they did was they looked at... they basically assigned some students to do a thing. They said, “Come up with these ideas.” They assigned to one group no instructions. Another group they gave brainstorming instructions that are very similar to what you might see in an early design thinking workshop. And then they said, “And you guys argue about it.” What was interesting about it was not only did the argument group come up with more ideas that were more advanced in the sense that they were actually useful, they had been thought through a little bit, than the even the brainstorming design thinking group, but when they then called everybody back two weeks later, a lot of those same participants were still actively thinking of ideas in a way that the other groups were not.So I just tend to think that especially in marketing, you are talking about a battle of ideas. So preemptively have that battle. There’s lots of stuff that I’m probably wrong about. My kids tell me I’m wrong about a lot of things, but I’m always open to a better argument.Andrew Mitrak: There’s a great book on this. A previous podcast guest was Ian Leslie; he wrote this great book about John and Paul, but he also wrote this book that was called “How to Disagree.“Ken Rufo: I’ve not read it, but it sounds great.Andrew Mitrak: It was a good one. You might dig it. And I just plugged somebody else’s book, sorry about that. But if listeners have enjoyed this conversation, want to learn more about you and your work, are there places where you’d recommend they follow you online or any links you’d like to plug there?Ken Rufo: Look, I’m on LinkedIn. I have a LinkedIn profile, kind of. Manchesterstreet.com is the name of the agency, you can go check out the website.But the reality is, honestly, I think LinkedIn is such a diminishing return right now that I don’t really post on it anymore. We are looking at doing two things that I will, I guess, preemptively plug. Manchester Academy is probably going to start by the end of the year. This is going to be a kind of online course system that looks at some things like, what does the research say is the most effective way to run a meeting when you’re trying to get buy-in from execs who are a level higher than you? It’s going to be stuff like that. Or what’s the correct way to run a strength-weaknesses analysis that isn’t reductive to a SWOT analysis? Is there a way to do that at a marketing level that’s more important? So we’re going to be having those sorts of courses.And then we’re also looking at starting up a Substack that I think is going to be a more kind of heavy, just like, hey... because when we have conversations with clients and I say, “Well, one theory is this,” and I’ll cite something, they’ll be like, “Oh my gosh, I wish I had known about that.” And I don’t scale well. I can’t have that conversation an infinite number of times. But there’s been a request that we just start to put some of the theory discussions as well as some practical examples in some sort of a newsletter. So that’s probably something that we’re going to start up again by end of year. But if anyone wants to talk about stuff, just look me up. I’m super happy to have conversations about stuff. And if you think I’m wrong, absolutely tell me I’m wrong. Understand, I have no allegiance to any of the arguments that I’m saying. I think they’re right. But if you convince me they’re wrong, it doesn’t hurt my feelings. I want to be better. So if someone listens to this and is just very irate, breathe, and then reach out and send me an email.Andrew Mitrak: Ken, thanks so much for your time. I really enjoyed this conversation.Ken Rufo: Absolute pleasure. Thanks for having me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 34Today we’re talking about a phenomenon my guest, Kerry Cunningham, calls the “MQL Industrial Complex.”If you’re not in B2B marketing, that term might be new. It refers to the Demand Waterfall, a framework introduced has dominated business-to-business marketing for two decades. It’s shaped how companies organize their teams, spend their budgets, and ultimately, measure success. It introduced the phrase MQL (marketing qualified lead) and standardized SQL (Sales Qualified Lead). Kerry Cunningham is among the world’s foremost experts on this topic. He was a Senior Research Director at SiriusDecisions, the company that invented the Demand Waterfall in 2006. He was also a VP at Forrester, the company that owns it now.And here’s the twist: Kerry is now one of the Demand Waterfall’s staunchest critics, arguing it was misguided from the beginning. He’s now Head of Research and Thought Leadership at 6Sense and is exploring what comes after the MQL.As a B2B marketer who’s spent a lot of time working within this model, I tend to agree with Cunningham’s arguments. This conversation gets to the heart of some of the bad incentives and flawed assumptions I’ve seen firsthand, so you might hear me get more fired up than usual in this one. Even if you’re not in the world of B2B marketing, this episode is a great case study in how marketing theory, practice, and technology all intersect to shape the industry.Now, here’s my conversation with Kerry Cunningham.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Kerry Cunningham, welcome to A History of Marketing.Kerry Cunningham: Thanks, Andrew. I’m glad to be here.Andrew Mitrak: I’m excited to have you because I first encountered your work from The Anti-MQL Manifesto and your description of The MQL Industrial Complex. MQLs have existed as long as I’ve been in B2B marketing, and they’re something I kind of live with, for better or for worse—probably mostly for worse—throughout my day. And so, transparently, I think they’re the wrong metric and lead to a massive waste of time and effort. So your content around this resonated with me.But part of this podcast, since it’s a history podcast, I’m always curious about, “How did we come up with these ideas? Where did MQLs come from? How did we start living in this MQL industrial complex?” So, can you describe for listeners, where did this MQL industrial complex come from?The Genesis of “The MQL Industrial Complex”Kerry Cunningham: Totally, yeah, I’m happy to talk about that. And I think it’s important to understand the history because one of the things that I’ve been doing really constantly over the last seven or eight years is telling everybody we’ve been doing it wrong. And that message is not always well-received, curiously enough. But what I find is if there’s an understanding of how we got here, then it can help ease the pain of realizing that we got to move on.So how we got here, I think, is kind of just a fluke of technology in a way. My friend Jon Miller, who started Marketo, or one of the founders of Marketo, and a few other folks—the founder of Eloqua. I almost started working for one of the very first marketing automation platforms back in the late 90s also.Those systems were designed primarily with the idea of the buyer as a person in mind. And certainly, the simplest way to have a system that is going to try to engage people and then try to collect and do something with that information is one based on individual people.The buyer in B2B has never been an individual person, except on the very low end of the scale. But, you know, we find even now, if the deal is a $50,000 annual value or more, which is not a particularly big deal in B2B, there’s five or six people involved in that not just the decision-making process, but all the researching process.So anyway, the first technology that came around was built around the person because that was the easiest object to focus on. And what happens over time is you get these systems, it was widely adopted and very rapidly. And then once that happens, then things come along like—I worked at SiriusDecisions for a long time. SiriusDecisions developed the really canonical framework for measuring how you’re doing in this world where you’re producing leads.And so, SiriusDecisions developed the framework, it became a standard, and so you’ve got these practices: “Oh, let’s go out and get some leads, that seems like a thing that we do. Okay, great.” Now we’ve got a framework for saying, “Here’s how we should measure it.” Then you get standards, you get benchmarks are developed, and everybody wants to know, how am I doing? What are the best practices for improving that?And before long—and this is why I call it a complex, because it isn’t just the technology. It’s the technology plus you get these measurement frameworks, you get standards, you get benchmarks. And all of those things get an entire industry focused on how to improve their execution of the process, rather than asking the question, should we be doing this at all? Because if anybody had been asking the question, “Should we be doing this this way at all?” 20 years ago, the answer would have been, “No, this doesn’t make a lot of sense.”But instead, what happens is you get some technology, it’s the first thing everybody has. You want to use it. How does it work? Well, we send emails to people and they respond. They come to our website, they fill out a form, and we go after them. Okay, well, we can do that. Who’s doing that well? What’s the best process for doing that, right? So it all just goes down that path of, how do we do it well, or how do we execute best against this, instead of really thinking about whether we should be doing it.And the curious thing is, in those same organizations, and I was in some of them back in the day, you have people in product marketing, content marketing, even when it was new, thinking about buyer personas and understanding that each account that they might want to sell to has multiple buyer personas. But nobody ever connected the dots between, “Well, what happens if we get multiple buyer personas who happen to respond to this stuff we’re putting out there?” Is that a thing we should notice? Should we care about that? Does it matter? Is it good? Is it bad? That question, I mean, like literally never got asked. And when you look back, it’s like, well, that’s the simplest, dumbest thing in the world we should have been doing.So that’s really kind of how it goes. It’s kind of this first-through-the-gate with the technology, and then everybody went after it.How Marketing Automation Software Shaped the MQLAndrew Mitrak: That’s a great high-level overview and framework for how it developed. You know, just kind of diving deeper into that, when that technology developed—it sounds like the technology developing, the first marketing automation platforms that were adopted—that kind of helped set some of the groundwork for this industrial complex to be built upon. What were those technologies specifically, and around what years did they come out and start to get adopted?Kerry Cunningham: Yeah, so the marketing automation platforms. And so, Marketo wasn’t the first, but it was certainly the first really widely adopted, really well-marketed. And it functioned very well for what it did. Eloqua came along more or less at the same time. So this is the mid-2000s, 2005, 6, I think, in that time frame when these things come around.A lucky coincidence for me, in a sense, is that—and actually, I think I would take that back and say it’s probably more like 2007, 8, 9 when it really started taking hold. The technologies were around since 2004 or 5. I dropped out of B2B. So I was part of a company, and we had a liquidity event, and I just dropped out of B2B for about four years. The four years when marketing automation was really coming in and taking over. So I left B2B, I did other things, I came back, and I was able to look around because I wasn’t part of the implementations of all of this. I didn’t get caught up in the “how do we do it better?” I came around and I looked at it and I was like, “What the hell is this? This doesn’t make any sense.” The buyer is this big group of people, and all you’re doing is looking at individuals and not even noticing if we have buying committees, whatever, paying attention.So that’s really when it happened and also why I was just fortunate. Like, if I had been working in the space in that time, I’m sure I would have fallen into the same trap as everybody else. I’m not any smarter than anybody else in that respect.Andrew Mitrak: And so these technologies come out, and they look at leads as an individual person versus being structured to look at somebody as like a team—that teams or groups of people purchase products. Was that a technology limitation at the time as to how these were built? Or was it more of just the initial idea? Because if there were some flaws to them, I’m wondering why they got adopted. Was it a technical reason at the time? Was it just that, “This is better than before, and don’t let the perfect be the enemy of the good”? What do you think it was that led them to get so adopted at this point?Kerry Cunningham: A little bit of a mix of those things. So I think one, the technology is easier if you don’t have to connect disparate individuals from the same organization. That’s a complex problem to solve. And you’ve got examples from B2C where they already have systems like this where we’re tracking individual people in B2C contexts. So you can just port that idea over, which is really what happened, to B2B. So it was kind of a borrowing from B2C, where the buyer really is an individual most of the time, into the B2B context.And then, frankly, I think just what we do as humans, which is we fall in love with the technology, and we’ve got a new toy, and we’ve got a new thing, and we don’t think that deeply about whether it really is the right fit all the time. It’s just, it’s exciting to have it.And I was around at the time before this happened. And before this happened, you’ve got outbound prospecting, and you’ve really got no inbound marketing the way we came to think about it. You get very few leads of any kind. Mostly, it’s just you have to find companies and go out and prospect into them. So I wouldn’t want to underestimate how exciting it is as, one, as a marketer to finally be involved in revenue, because frankly, before that, you’re not. Right? If you’re a marketer prior to the time that there’s marketing automation, you’re pretty far removed from anything to do with producing revenue. You do branding. The closest you get is you put on events, you do field marketing things. Right? But you’re not producing, you’re not delivering leads in some old way most of the time.Andrew Mitrak: Most of the time. Yeah, maybe there’s some direct response type things, but those are usually consumer-oriented and not for big-ticket B2B products, right?Kerry Cunningham: Right. And they’re really small scale. So, you know, way back in the beginning of my career, I worked at some trade publications, and so you can get—you had direct response literally postcards from magazines and things. But it’s really small scale and not—it didn’t occupy an important space in anybody’s mind about how a B2B company was going to generate revenue. So it really was exciting, and I don’t think we should underplay that in thinking about the history of this because I think that’s a huge piece of it. It’s like, now marketing can be really close to sales. Marketing can participate in the production of revenue. For sellers now to be able to get these names of people who’ve come to your website that you have now, and they’ve filled out forms and looked at your content. I mean, this was very exciting, right? This is fun. This is a lot better than cold calling.Andrew Mitrak: And if I think of that mid-2000s timeframe, the dot-com bubble bursting was not that far in the rearview mirror. There was still some skepticism around the value of the internet in some ways. Mobile and the whole world being online in the way that it is now still hadn’t quite happened yet. So there’s probably some—and then there’s a continuous pressure for marketing to show its value. What is the ROI of marketing and beyond things like brand equity and such. So it seems like a very appealing thing to adopt.Standardizing the Demand Waterfall: How SiriusDecisions Solidified the MQL FrameworkAndrew Mitrak: So you were a research director at SiriusDecisions, and they developed this Demand Waterfall. It introduced these popular B2B terms like Marketing Qualified Lead (MQL), and Sales Qualified Lead (SQL). So you joined after these had already been developed? Do you know how these were developed and what it was like, what did SiriusDecisions do to develop this?Kerry Cunningham: Yeah, so I can talk about that. I got there right after the last lead-based version of it was developed. My job for a couple of years was mostly to help marketers improve their execution within that framework. And what we discovered—not discovered, but a realization my buddy Terry Flaherty and I came to after a couple of years of doing that is like, there is no better that’s any good. You can just keep getting better at this, really, but it doesn’t change the outcomes at all. And so we changed it.But the way that it came about was really smart people thinking really hard about what the process should be. And this is, I think, the thing that’s dangerous, and we always have to be on the lookout for. Right? So we’ve got this machine, marketing automation, that’s connected to our website, names come in. And so we think, “All right, what should we be doing to optimize the throughput of this system?”And really smart folks at SiriusDecisions sat down and thought through all of that, worked with hundreds and hundreds of B2B marketing organizations, and I think came up with what I think is the absolute best set of things you could be doing if that’s your paradigm, right? The right checkoffs, the right handoffs, the right nomenclature to distinguish, making sure that at every step in the process when marketing hands this thing off to a BDR (business development representative), say, that we have a date stamp attached to that. We know when it happened, that when they work their process, we know how long that process is, and then we know when the next stage was reached. So working through all of that, and did that for, you know, eight or nine years, I think, building that process out so that you could have industry-standard benchmarks, industry-standard terminology, industry standards for what those handoffs ought to look like.Along the way, they also introduced the scoring of leads because initially, these are just people who fill out a form, but now, maybe we don’t want them to just fill out a form. And I think, at some point, someone said, “You know, there’s a couple of ways we could go here. We could just look at the individual and say, well, how much content is that individual consuming? And what’s their title? Or we could look at whether we have multiple individuals from the same organization,” and the easiest answer was, “We’ll look at what the individual is doing.” And that’s the way all of the systems were built. And it was just the wrong way for it to be built.Unintended Consequences: The Tragedy of “Second Lead Syndrome”Andrew Mitrak: So, just to spell this out as an example, one company could have 10 people all fill out one form to get an asset, which is a signal. Or a company could have one person fill out that form and then click on an email and then do some other things. And that one person would get scored to be a lead, but that company that had 10 people all engaging would get ignored because they didn’t meet the scoring threshold. And so you’re kind of incentivized as a marketer to find more highly engaged individuals like that because then you get to beef up your MQL things, and you kind of ignore the harder challenge of reaching a bunch of different stakeholders in an organization.Kerry Cunningham: That’s exactly right. And to me, that’s the tragedy of B2B. What you just described is a massive tragedy. Now, it could be if you get 10 people from an account that come to your website and look at your content, they’re going to get themselves to be your buyer anyway. But you’re not doing anything to capture that or promote that.So the thing that happens with that 10-person buying committee who comes to your website and looks at one piece of content each is, one, none of them become MQLs. Sales ends up talking to that account because eventually they come and say, “Hey, look, I’d like a demo.” And sales ends up talking to them. Sales puts it in Salesforce CRM or whatever as something that they found or something that came over the wire or whatever it is. But in the meantime, marketing has done all of this work to get these people to come and engage with content. It worked, and there’s no record of it. Like, no record that gets attached to the sales opportunity that gets produced. Right? So what marketing has done that’s been effective is completely unknown, remains completely in the dark. And it never gets connected to the sales opportunities that get produced and moved. So you lose an opportunity to understand what’s working.It gets worse. We had this term we developed at SiriusDecisions when we were figuring all this stuff out called “second lead syndrome.” So most B2B organizations were structured such that if that first lead from an account comes across, goes to the business development rep who makes the calls, that’s great. If a second lead comes in the next day from that same organization, the BDR pay structures are typically that they can only produce one sales-qualified lead per account. So they look at the second one that comes in, and they say, “That’s no good,” and they mark it as a duplicate lead.Andrew Mitrak: Right (shaking head) and it still happens!Kerry Cunningham: Yeah, I know it does. Yeah, that’s another tragedy, right? And one that you think, if you just thought about that for a couple of minutes, you would never do that, right? I mean, I’ve said—I’ve talked about this to like, literally thousands of people, and everybody goes, “Oh, you know of course, you know?” And yet...And that’s why I think that this MQL industrial complex is a real thing. Because normal people under normal circumstances, it would occur to them that that’s dumb.Andrew Mitrak: Yeah, it’s like, it reminds me—it’s like if there’s an open house and you’re a realtor, and a wife comes in to look at it, and then you engage her, and then the husband comes in afterwards, and you just ignore that person. Or whatever order it is, or another family member. Oh, that’s a lot of high intent, but it’s as if they’re ignoring that second person like, “Oh, I already talked to that family once, I don’t need to talk to them again.”It would never happen in the real world, but somehow in these digitized systems and the incentives that get construed around it, it kind of makes everything sort of wacky, for whatever reason.Kerry Cunningham: Yeah, it completely distorts everything because everybody gets focused on this process that is in place and “How do I optimize that? How do I get my credit in that system, in that process?” And everybody was smart enough to think, “Well, that doesn’t make sense. Let’s do something else,” but nobody did because they’re just trying to optimize their particular outcomes in that process.The Ripple Effect: How MQLs Reshaped Org Charts and GTM StrategyAndrew Mitrak: We talked about the marketing automation platforms—the technology. There’s the SiriusDecisions of the world and the strategy and sort of the structures around it, it’s kind of a consulting complex on how to optimize this. And then also, it filters out into both marketing team org charts and how marketing teams go to market, or and even sales orgs also, and BDR orgs, go to market as well. Just like what tactics they prioritize, how they incentivize their teams. Do you want to speak to any of the other sort of marketing or GTM(Go-To-Market) org chart effects of adopting this complex in this time?Kerry Cunningham: Well, it’s hard to remember, but 25 years ago, there really wasn’t a demand generation function. And now it occupies most of the budget for B2B organizations. And so, one, it introduced this whole new function whose job was really just to produce leads, because demand was recognized really only as the leads that you produce, the MQLs that you produce. That’s the output from that function.And then you’ve got all of these functions that really do need to be there even without leads now, like RevOps (Revenue Operations) and those kinds of things. But all of those things are built on the back of, “Now we have to have this machine that really efficiently moves things from place to place.” And so you’ve got not just org charts, but industries built up around measuring these processes, attribution models, the measurement models.And frankly, that’s the stuff that—that’s the real industrial complex stuff for me. Because once those measurement practices are put in place, once a person has a job of measuring how this process goes—I’m in marketing ops now, and I have this job and I measure that—you get software built to help do that. You educate CFOs on why this is the right thing. And now you’ve got other parts of the organization holding you accountable for how well you do that.And so, in fact, today, I think one of the biggest reasons the MQL industrial complex hangs on is that people who built their careers in the last 20 years are now the leaders of organizations. And what they’ve known is an MQL industrial complex is, “How do we produce and optimize the production of MQLs?” And so they’re insisting that we have these objects, these MQLs, and all of the metrics associated with them when they’re no longer—I think most of the people close to the action already know that they’re not the right things, but they can’t get away with changing it.Andrew Mitrak: Yeah, there’s sort of both the leadership problem, kind of a collective action problem of, depending on how large your organization is, you got a lot of different people who are invested in this system aligned with that. And then also it could make certain marketing tactics just not look very good. Or it could make a lot of that leader’s decisions look like, “Oh, you’re telling me that all that stuff I was celebrating over the last five years is actually just wasted?” “I don’t actually want to say that to my boss.” So it’s kind of a tough thing to wind up changing.Kerry Cunningham: It is. Yeah.Gated Content and the Rise of the BDRAndrew Mitrak: You mentioned BDR, business development representatives, also sales development representatives—I think those are mostly interchangeable, SDR, BDR. Did that function also kind of emerge during this time of the MQL industrial complex? Because it seems like, did that org, did that exist more than 20 years ago, or is that kind of a new function as well?Kerry Cunningham: It did, but it was all outbound. So, in fact, for a big chunk of my career, I ran a third-party teleservices organization, and what we did was find prospects for tech companies. But it was almost entirely outbound, 99% outbound.Andrew Mitrak: And phone call at the time as well, probably was a more so than email, just because of the time frame. If it’s more than 20 years ago, not everybody had email in the same way or having cold emails wasn’t quite… There weren’t the ZoomInfos of the world or whatever other data providers there were.Kerry Cunningham: Yeah. That’s right.Andrew Mitrak: It seems to me like the thing that also sort of happens as a result of this is that there becomes this playbook of the marketing team creates content, and instead of just getting that content to as many people as possible, you put it behind a form because that form is how you measure something. And then what happens with that form is you start sending people a bunch of emails. And there kind of becomes this exchange where, “I’m going to give you something, but in exchange, you’re going to give me your email, and in exchange for that, I’m going to send you a bunch of emails you probably don’t want.” And that just becomes a whole mechanism that we all kind of have, there’s sort of like an invisible handshake that we all kind of agree to as a thing, which just sort of always struck me as kind of odd, is that that’s part of it.When Buyers Got Wise: The Decline of the Form FillKerry Cunningham: It is very odd. Yeah. It is. Yeah. So again, I mean, looking at it from the outside, you go, “Well, that’s kind of weird.” It’s kind of like the vendor is charging for the content about their solutions. And, you know, you could do well to ask the question, “Are they getting away with that?” I mean, you know. (Does that work?) And the answer is no, they’re not. Like, because we do this research now. We ask buyers, “Do you fill in forms?” And literally, we’re talking about one purchase you made in the recent past. “Did you fill in a form with the vendors you were looking at?” Two out of 10 people say yes. “Did you fill in a form to look at content with the vendor that you actually bought something from?” Three out of 10 people say yes.So, you know, I mean, that’s horrible, right?Andrew Mitrak: It’s a lot of folks that you’re like leaving off the table.Kerry Cunningham: It is. And it’s almost certainly the people that you really want to talk to, right? Nobody who understands what’s going to happen would choose to do that. You know, so nobody wants to be chased, you don’t like it, we don’t respond to it. And so, if I’m a senior leader in an organization and my company is looking at vendors, what we know from the research talking to buyers is that they absolutely will go to the vendor websites. And if you think about it, even the CFO for a reasonably sized company, if they have to sign off on a deal, if it’s like a big enough deal for them to have to sign off on it, they’re going to come to your website and look around, you know? And they probably already know you anyway, that’s a different story, but they’re going to come poke the tires. They’re certainly not going to fill out a form.So what message do you want to deliver to that person? What level of comfort do you want the CFO to have or the head of purchasing to have when they come to your website? What experience do you want that to be? If you were thinking about that, you would never put a form in front of it, right?Andrew Mitrak: Do you think that the consumer behavior changed over the years? Like, I wonder if there was the—so there’s, there’s the tech, there is the, um, you know, demand waterfalls kind of created and this concept of an MQL. There’s marketers changing their behavior and starting to put things behind forms instead of just making it available. And then do you think at some point a hypothesis I might have is, maybe early on, maybe for the first few years of this being a thing, CIOs (Chief Information Officer) and important decision-makers might fill out a form, but by now they’ve all caught on to the game. They know at this point, since this is so saturated and it’s become such an abundant practice, that, “Okay, I fill out the form, I get a bunch of emails I don’t want. I’m not going to do that anymore because I’ve been bait-and-switched too many times. I’ve had too many instances where the content wasn’t actually that great and those emails I got were kind of annoying.” Like, do you think that they changed their behavior over time, or do you feel like it was always kind of the case that CIOs and other important decision-makers just wouldn’t bother with a form?Kerry Cunningham: Yeah, I would, I think there probably were a few years back in the beginning of this, but I think you only need to go through a cycle of being hounded to decide you’re not going to do that again. I don’t think it took long. And when we look at the, I think the earliest research I could find on form-fill rates just looked at the number of form fills against the number of web visitors, and that was about 3% 12 years ago. It’s 3% today, overall. So, you know, that has a lot of junk and it has bots and all of that stuff. So the real relevant numbers are how many members of a buying group, our actual, you know, legitimate one will fill in a form. And that’s the more two out of 10, three out of 10. And I bet that hasn’t changed very much.And again, it’s a thing, you know, so think about content marketing is a huge part of this MQL industrial complex, right? Because it was built—content marketing exists, so that’s another, that’s part of the organization that really, that’s part of the org chart that is built to buttress this MQL industrial complex. And it’s a trick, right? It’s just a trick to get people to fill in the forms. That’s all it is. It’s a trick. But the better you get at that trick, the more likely it is that you are going to bring people to your website to look at your content who are actually not in-market. Like, if you have crappy content, the only people who are going to be coming to look at it are the people who want to buy your stuff, or they’re looking at you and your competitors. But the better you get at it, the more traffic that you get that isn’t going to be in-market right away. And that’s going to make everything that you’re doing look worse within the complex of the kinds of measurements and things that we have. So your conversion rates will go down. Your number of visitors, traffic, and all of that will go up, conversion rates go down.Now, that’s great if you actually are just worried about selling stuff. Right? If I just, if I just care about whether we’re going to build buyers who are engaged with us and like our content and all of that stuff, then I don’t care about conversion rates as form fills. I care about conversion rates of accounts to whether they become customers. So if I’ve got great content and people are loving our brand and learning about our solutions, does it matter that they filled in the forms? Well, it matters to you because you get measured on whether they fill in the forms. It does not matter to them, the buyer.And that’s the, that’s the disconnect that happened, and where it just, we became blind to the fact that we’re just focused on our own goals and trying to, you know, the process is really about us trying to get what we want. The buyer is kind of getting what they want. I mean, even if they do fill in a form or they get a junior person to go fill in the form, they get the content, they get it from somebody else, they get what they need. They’re going to get what they need. But you’re not going to get what you need, and it’s going to look worse all the time. And that doesn’t make any sense.And so if you’re a marketer and you’re trying to justify your existence, your ability to justify your existence is continually declining. The ROI numbers based on leads that end up on opportunities continue to go down because, as you said, people are wise to the trick, and they’re not going to engage in that trick. And you can chase them all you want, they’re still not going to respond. We’ve got a lot of stats on that from our buyer research. So buyers, if you ask them when do they talk to BDRs or sellers for the first time, it’s 70% of the way through their buying journey. And if you ask them, “Did you initiate contact, or did the vendor initiate contact?” buyers say that they initiated contact more than 80% of the time. And again, if you ask them, “But were you being called and emailed?” the answer is yes, almost all the time. But buyers choose the timing of when they’re going to engage, and that timing does not change simply because you’re calling and emailing them.And, you know, when I talk to marketers, I just think, “Well, just think about yourself. Does a BDR emailing and calling you ever change your behavior at all?” Right? Do you change, do you do anything differently because people are calling and emailing you? Of course not. You know? I mean, you’d never even would dream of it. You know, if you like the vendor, you put the email in the folder and you hang on to it for when you want it. You’re not going to respond. I mean, you know how that’s going to go if you do. All right? So, no, of course you don’t.Was the MQL flawed from the start? Or have we just outgrown it?Andrew Mitrak: Reflecting on this system as a whole is your overall take that it was misguided from day one and was like a mistake that was like fundamentally flawed? Or is your take more that it was appropriate for its time to some extent, but we can do better now because we have better technology and better insights now? Or what’s your overall kind of assessment of sort of the whole era?Kerry Cunningham: I would say it was fundamentally flawed from the beginning. There, it would have been complicated to fix from the beginning. It would not have been complicated to know that it needed to be fixed. That’s really what got lost in, and that’s why I focus on this complex idea, because it’s not just the technology, right? The technology got there, but the technology and the process and the measurement and all of that, it has an enormous weight to it that squelches the very simple thinking that would have said, “You know what? Okay, this is what we can do today, but by three years from now, we’ve got to notice when we have three members of the buying group that show up and fill out our forms.” Or, maybe since marketing has known that, say, the form-fill rate is about 3% to 5% for the last 20 years, marketing could have said to themselves, “Well, you know, all of those people that are coming to our website, we’re paying for all of that. And I wonder if there’s anything we can do to understand what’s in the rest of that web traffic.” And the answer has been yes for a really long time, right? Because it’s practically all, you know, I tell folks, look, if you’re paying to bring people to your website, the outcome from that is almost all anonymous traffic. That, I mean, almost every penny you spend results in anonymous traffic. So if you’re not doing everything that you can to legally understand what’s going on there and and which accounts are on your website, that seems like malpractice, you know? And but you’ve got a whole industry engaging in malpractice. It doesn’t really hurt you.Beyond the Waterfall: The Shift to Buying Groups and What Comes NextAndrew Mitrak: I think the natural next question is, “What comes next?” What takes its place? Also, do you have any examples of companies or individuals who sort of bypassed this complex entirely and sort of just operated outside of it? Do you have any ideas or successful stories of who’s marketed outside of the MQL industrial complex?Kerry Cunningham: We do. A little bit of this may seem self-serving, but I can talk about some of the, some of the things that we that have been done. So one, you know, back at SiriusDecisions, we ditched the old lead-based waterfalls and built a completely new one that was based around this concept of buying groups and noticing that there were buying groups. So that was back in 2017. And, you know, hundreds of companies have adopted that way of looking at the world. And some of the biggest companies in the world are still doing it. My friends back at Forrester, which bought SiriusDecisions, are still working with companies and getting them to adopt that. And and some of the really big companies are doing that.The reason I came to 6sense is because they’ve got a machine that’s built for identifying buying group-level signals. So, do you have multiple leads? We can show you that. Do you have anonymous traffic from those same accounts? We can show you that. Is there third-party signals outside of your website? Right? We can show you that and bring those things all together. So we’re not the only ones, there are others as well, but that’s the, that’s the answer. And the technology for doing that is actually really mature. It’s been around for quite a while, it’s been around for 10 years, but it’s mature now. It’s, it’s attainable by everybody. And so, I mean, there are, there are hundreds and hundreds and hundreds of companies that are doing this the right way, at least for part of their go-to-market practices. So, you know, we, part of this, the weight of the MQL industrial complex led people to do some really bad things like saying you should have both a lead-based and a buying group-based waterfall at the same time. No, that’s stupid. Unless you sell to individuals and you sell to big companies. As long as you sell to companies, you should be focused on buying groups, buying groups alone.PLG: Reconciling Individual Users with Buying Group IntentAndrew Mitrak: There are a lot of companies that do both. They have some freemium model, they have some land-and-expand model, they have some, but I guess that is a little more of like a product-led growth type thing where if you have a user signing up for a product or some trial or or some lighter weight account, it is a little bit different than them filling out a form for a PDF or something and becoming like an MQL. So I guess what, what is, how do those things kind of coexist?Kerry Cunningham: Yeah, so I think of the product-led growth lead, somebody who signs up and does an individual user of your license, as a slightly better MQL. If what your aim is to sell enterprise licenses, the fact that one person in a 10,000-person company is using your thing is better than if no people are using it. How much better is it? If you don’t see any other interest, it’s not any better. You know, it’s just like, you’re not going to go sell them anything just because one person downloaded and is using your thing, right?Andrew Mitrak: It kind of depends on the type of product someone. I think Figma, it’s like, oh, it’s, it’s kind of had virality sort of embedded in the product where one user uses it and they share it with somebody or, “Oh, and to see this design, you have to create an account.” And then, then all of a sudden you kind of have a buying group because you have a number of users who are using it, similar with Zoom, you know, because you have to have multiple people to communicate. It’s a better MQL in that, and it really becomes impactful when multiple people use it within an organization, which leads you right back to the buying group framework.Kerry Cunningham: Well, exactly right. So I think, you know, it’s a great signal to have if your product allows you to have that kind of delivery mechanism. That’s great. Now we want to look at all of the signals that would tell us whether the rest of that organization is in-market. And, you know, the key is just being able to to spend your resources in the place where it’s likely to do the most good. If you’ve got a potential 500-user account and there’s one user there and no other signals, it’s just not a good, it’s not a good bet right now. If it’s a great account for you, good fit, I wouldn’t, I’m not saying ignore it, but I’m, they’re not in market now. But if you have another account with no downloaded users because their policies don’t allow it, but they’ve got 50 people on your website, you should be paying attention to that one first.Beyond the MQL Industrial Complex: Are “Signals” the Future?Andrew Mitrak: On this topic of what comes next for marketers, what is your sort of vision for replacing the industrial complex? What are the big things that sort of need to fall into place to have sort of a new paradigm adopted?Kerry Cunningham: The concept of signals is a really important one. Back at Forrester in 2020, a colleague and I did a report called the Buyer Signal Framework. And that was our way of saying, here’s how we step above the level of the lead. We know that there’s the lead, there’s anonymous traffic signals on your website—far more valuable than whatever leads you have—and then there’s all that third-party intent signal, plus there are other kinds of signals as well.So, I think, first of all, we need to adopt a signal-based approach to understanding the market. And I don’t think that has an expiration date on it. You know, we have to have a pretty expansive view of what those signals can and should be and be continually updating that perspective.The thing that we struggle with still in B2B, in marketing, is we have had, through this lead-based process, a very top-down view of how we understand which buyer is good. Because, you know, we’ve said going to this web page is worth 10 points and going to this one is worth 20 points or whatever. We’ve controlled that. And I still see a lot of marketers want to look at big data the same way. So, we’ve got literally—we process, 6sense processes, a trillion signals a day at this point.So marketers need to leave behind this idea that they should start with and have a top-down control over how they understand which buyers are in-market. That’s not the way it works in the world today. It’s a signal-based view. We use AI to understand the patterns, and that’s what we should be looking at, is all the signal we can, use AI to understand the patterns that betray a buyer that is or is not in-market, and then where are they. And you don’t need to be an expert in AI or in big data for that. What you need to do is really understand a little bit of just what’s possible. And what’s possible is we can know a lot.Because buyers now have so many resources. There have been so many tricks set up across B2B, across the digital universe, and all of those tricks are selling their data. And so when people go anywhere, whether anonymously or known, to look at data and content or whatever, they turn into a signal. So it’s kind of, you know, the bad news about the industrial complex is we were looking at the wrong, we were looking at it through the wrong lens. But if we broaden the lens and step back and say, “All right, instead of looking at the individual, we’re going to look at the buying group or the broader organization to understand what they’re interested in,” we’re looking at much of the same data, but we’re looking at it in a different way that is much more diagnostic of the thing that we’re trying to find and to engage with. And so I think that’s the, that’s the perspective that everybody has to have. It’s like, you know, the data is out there, the technology is out there. What we have to do—and even if you’ve got your leads, okay, great—but we have to look at them differently.Avoiding the “Signal Industrial Complex”Andrew Mitrak: The thing that I’m completely on board with is getting rid of the forms and you know, don’t try to trick people behind a form and all that. I agree a lot of the MQL stuff is wrong.The thing that I would worry about with a signal-based approach is that you develop a signal industrial complex that eventually people learn how to game. And then also there’s not all, not all signals are created equal, not all people who collect signals or sell signal intent data are of equal value. That there’s, there’s sort of folks... I’m not going to name names, but folks who I’ve evaluated or purchased from where, “I think that signal stuff that I paid for was mostly snake oil, and I didn’t see any benefit to it,” right? And, and, um, and I wonder how do you set it up? But I, intuitively, I think it’s the right thing, though. Like, it’s like, okay, obviously this is much better and that there are people who visit websites, there are people who engage with content, there’s data everywhere. And if you can make use of that data, you’re going to have a much, you know, better success at understanding the effectiveness of and what marketing is working.It’s just like, how do you, how do you set it up in such a way that you’re not 20 years from now talking about, “Oh gosh, that signal, that signal-based marketing industrial complex was a bad idea.” How do you kind of set it up with the right guardrails in place so it sort of is indeed an improvement?Kerry Cunningham: Yeah, so I think the process has to be set up to collect or use as much signal as possible to make zero assumptions about what any of it means and to apply math on top of it to identify patterns and not try to outsmart the patterns. And so there’s two places, I think, where we get in trouble. One is we try to decide what signals we think should matter instead of just getting them, you know, bring them all in, put them in the bucket, and let the AI, which, you know, really, predictive modeling, which has been around for a long time, is a form of AI. And it’s really all we’re doing is we’re looking at the signal and trying to identify. So what we want to do is just avoid making any assumptions. That’s, and it’s difficult, right? It’s difficult to do that because we want to say, “Hey, I know, we’ve done this before,” but no, you have to just let the data and the math do its job, build that model. And then the model will tweak and adjust as you move. The times change, what happened last month may not predict what happens next year very well. So, you know, those things have to be—we have to adapt to those things. But what we can’t do is panic the first time it doesn’t seem to be working and say, “Okay, shut it off, let’s go do, let’s, you know, go do leads again or something like that.” It’s just, you know, and that’s a difficult thing for us.Andrew Mitrak: That’s right. There has to be some understanding that, hey, those dashboards that we used to have, we expected those to all drop down significantly. And you have to kind of go to a new paradigm and mindset shift, which could be a little scary, but it’s overall, it’s it could be a much better outcome.Kerry Cunningham: One of the big fears that happens that prevents organizations from really scaling this approach is if you take away the forms from in front of the content, you don’t have all of these names coming in. All of these names made you feel comfortable and like you had some control over what was going to happen next. The truth is you didn’t. You know, there was an illusion of control.Kerry Cunningham: But I use this analogy, probably makes some people angry, but, you know, in psychology when they do the experiments and they teach pigeons to press the button to get the pellet, other forms of that experiment are they drop a pellet at random times, right? And does a pigeon just say, “Hey, every now and then a pellet drops in, I’ll just wait for it to happen?” No, they do not. They develop behaviors that are highly personal to each pigeon that they believe are causing the pellet. So if they were just spinning around and pecking the ground before the pellet dropped in, the pigeon, in whatever ways pigeons think, think, “Huh, okay, spin around, peck the ground. If I need another pellet, that’s what I’m going to do.” And that’s what they do, right? And if it doesn’t work, which it won’t, then they’ll think, “Ah, okay, maybe I wasn’t doing it right.” They don’t think, “All right, never mind, I’ll just wait.” They think, “I’m not doing it right,” and they spin around twice, and maybe that works next time, right?So you get, you could have cages of pigeons on a bench in a lab, each with their own superstitious behavior about what causes that pellet to drop. And that’s exactly what we’ve been doing in B2B when we have these leads and we call out. We have all of these superstitious behaviors. “Oh, maybe if we call them 12 times, maybe if we call them 15 times.” But there’s like no canonical—you would think, you know, in B2B, across all of this time, with the billions of dollars that have been spent, the smartest people on the planet have been working in B2B, and nobody has come up with the right sequence to run to qualify a lead or to do something else or to do—there’s like nobody who can, you could point to and say, “That’s it.” In all this time, we figured it out, that’s how you do it. Why? Because there isn’t a figured-it-out. You know, it just doesn’t exist.Andrew Mitrak: That’s great. I love those analogies. The other one, I read this in a book somewhere, I don’t know which one, but it’s an analogy that I’ve used, and it’s a little bit of a joke, so here it goes: A man walks out of a bar, and there’s a drunk down the street under a street lamp, and he’s looking around. And the man walks up to the drunk person and says, “What’s what’s going on, sir?” He says, “I’m looking for my keys. I dropped them as I was leaving the bar.” He’s like, “Well, the bar’s down there. Why are you looking over here?”And the drunk man replies, “Well… this is where the light is.”And he’s looking in the spot where the light is, where the signal is. And I feel like that’s sometimes what we do as marketers, too. We are able to measure this one thing, and so that’s what we search for as well, where there’s this whole universe of other things to look for but we ignore because they’re harder to find and inconvenience us.So it’s like we’re attracted to this one little small area instead of seeing the bigger picture.Kerry Cunningham: Yeah, it’s a big part of it, right? Because there are lots of forces that keep us kind of doing the wrong things collectively over time, and that certainly is one of them, you know, the ease with which that has been looked at and tracked.Practical Takeaways for the Modern MarketerAndrew Mitrak: Just reflecting on this conversation and the MQL industrial complex, the anti-MQL manifesto, the benefits of signals, do you have any other takeaways for marketers? I don’t know if any one of us individually can change the whole system, but what can we do if we’re operating within a certain system or we’re, you know or we just want to be better marketers? What could we, how can we make use of this information to be better at our jobs?Kerry Cunningham: Yeah, so there are some things I think everybody can do without really a—well, a little, maybe a little bit of additional tech if you don’t have it right away. But first of all, look in your own—if you have, if you’re producing leads today, look in your own leads data and understand what that looks like. So we started doing this again a long time ago at SiriusDecisions, and this is what brought us to an understanding of buying groups. Because when you look at leads data, what you see is that there’s typically between one and a half and two and a half leads per account. And that’s if you just take all of the leads and you just sort it by domain and and that’s what it looks like. So immediately, if you’re being judged based on conversion rate to opportunity and you know that you’re only going to get one lead at the most on an opportunity, you’re being screwed already by, you know, by half, at least, right? Just looking at that.And that can be a revelation for people in the organization. Like, “Look, this is what it looks like.” And then at least, at the very least, start doing a report monthly, weekly, that shows how many leads are we getting per account and deliver that to sales leaders and have a conversation with the sales leaders to say, “Hey, look, you know, maybe right now we’re looking at these as duplicate leads, but here’s another way to think about it. You know, this is evidence of interest from this organization, multiple levels of interest.” So start introducing those concepts today, but do it with your own data. You know, take our reports, they’re all free to download and all that from 6sense, but take that, take that data and show, “Here’s what the industry looks like, here’s what B2B looks like in general,” but always look at your data and say, “And here’s what it looks like for us,” because everybody’s going to say, “Yeah, but for us.” So you’ve got to do that homework.Then, if you have a tool that does any sort of website de-anonymization today, use that. Get in the sales cycle for 6sense, we’ll do it for you, but you’ve got to see the anonymous traffic on your website because that’s the vast majority of all signal you’ll ever see. And what you want to see is, one, if we get multiple leads from an account, that very first thing, is that account likely to end up in a sales cycle, and are they likely to go deep? And you can even do something that says, “All right, so if we get one to two leads in an account, how likely are those guys to become pipeline? If we get three to five, how likely are those accounts? If we get six to 10, how likely are those guys?” Right? So you can start to look at the impact of having buying groups engaging with you and the likelihood of those, of sales getting a better outcome. Because now we can show that to sales and say, “Look, this is how our buyers are already buying, and what we want to do is make sure that our processes reflect what’s happening in the data so that we don’t miss.”Because what you can also do, and you will see frequently, is that, “Here’s an account where we got three form fills in this two-month period of time, but there was never any action on the account.” That’s probably a lost deal, right? That’s probably a deal that went to somebody else, and we just never did anything with it. Maybe those people all filled out a form, none of them scored up and became your MQL, so nothing happened. That’s the 10-person account. Go look for those. You’ll find them in your data. They’re there, right? Use the anonymous traffic the same way. All of those things can help build the case internally for why we just need to look at this differently. Even if you don’t want to take—like, and I don’t recommend taking all your forms off until you’ve had these conversations internally, until you can see this, and until you’ve built a mechanism where you can say, “Here’s a report that shows we’ve got multiple leads, let’s prioritize that account.” Right? So you’ve got to have a process for doing that.Same thing with the anonymous traffic. I mean, it’s a mistake to take a report that says, “Hey, we’ve got five people on our website anonymously, sales rep, go call on that account.” Your sales reps are going to hate that and are going to throw up all over that. They’re going to want the name. But if you’re the marketer, what you can and should do is say, “All right, well, here’s a set of accounts that have had an extraordinary number of people on our website this month, and we don’t have any of the names that we would like to have. Sales isn’t taking action on that account. What can we do to drive the kind of engagement that we need in this, what will be a very small set of accounts?” Right? So if you’ve got, you know, pick a threshold, but if we have five or more people from an account on our website anonymously this month, you know, for 6sense, “All right, do we know their CMO? We sponsor a community for CMOs. Is that CMO part of it? If not, that CMO should get an invitation to that right away,” right? And if we have any events coming up that are wine tasting events, dinner events, those kinds of things, you can’t do them for everybody. But if you’ve got five accounts a month that are on your website and deeply engaged, but you don’t have the right people to talk to and sales doesn’t want to go do anything with them yet, then that’s a perfect set of accounts to find another set of much higher-value experiences for those accounts to drive some engagement, to get, you know “You’re looking at us, right? So we’d like to buy you some wine. So let’s get together.” You know, that actually works. You know, it actually, those kinds of things actually do where you’re providing—or maybe it’s something that’s more work-related. “We have subject matter experts that you could talk to about given things. We have other kinds of events that you could go to.” So it’s building much more engaging kinds of experiences for your buyers. And then, you know, you’re not going to be able to deliver those on mass, but what you can do is identify the set of accounts where you should be delivering those, not just the good-fit ones, but the good-fit ones where you’re showing engagement where we’re not really there yet. It’s going to be a very small number of accounts relatively for anybody. But you can do some extraordinary things for those accounts and for the people inside them that you’ll be able to afford to do or more likely be able to afford to do because the number of them by then will be so small.Read Kerry’s Research OnlineAndrew Mitrak: Thanks for all of those insights, those tactics, those tips. Kerry Cunningham, I’ve really enjoyed this conversation. One last question is, where can listeners find you online and read more of your work?Kerry Cunningham: I’m on LinkedIn all the time. So, Kerry Cunningham on LinkedIn. I think there are a couple, but I’m pretty easy to find related to B2B stuff. And then on the 6sense website, there’s 6sense.com/research. We call it the Science of B2B. And all of our research is there. There’s videos, there’s, you know, dozens of reports, both about buying and about marketing processes.Andrew Mitrak: I’ve read through some of that research and really enjoyed it and appreciated the thoroughness of the work and the data that backs all of your insights and recommendations. So, Kerry Cunningham, thanks so much for being on A History of Marketing. I really enjoyed the conversation.Kerry Cunningham: Yeah, thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 32This week we’re diving into early internet history and the digital transformation of Hollywood with the one and only, Shelley Zalis.Zalis is the founder and CEO of The Female Quotient, an organization dedicated to elevating women in the workplace and closing the gender gap for good. With millions of social media followers and tens of thousands of global event attendees, The FQ is the largest global community of women in business. But before she became a leading voice for workplace equality, Zalis was a tech pioneer who transformed the market research industry. In our interview, she tells the story of taking research from the analog world of mall intercepts and random-digit dialing into the digital age. She personally pioneered the modern, internet-based methods that are standard practice today.And she led this transformation by tackling one of the toughest industries to break into: Hollywood. You’ll hear how she used the early internet to reinvent movie trailer testing, breaking a decades-long monopoly in the process.I’m a huge fan of both early internet history and the inner workings of the entertainment industry, so this was an absolute blast. As you’ll hear, Zalis is a charismatic leader and a great storyteller. She shares amazing stories from her career, and the “heartbeat moments” she faced as an entrepreneur. After meeting her, it’s clear why Zalis is such an inspiration to so many millions of people worldwide. Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsMore from Shelley Zalis:* Follow The Female Quotient on Instagram * Read her column for Forbes* Find Shelley Zalis on LinkedInSpecial Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Shelley Zalis.“How did a nice girl like me get stuck in market research?”Andrew Mitrak: Shelley Zalis, welcome to A History of Marketing.Shelley Zalis: Just calling it history and marketing is interesting in and of itself. So you had me at hello.Andrew Mitrak: Awesome. All right, well you've been a driving force in marketing and market research, so I'm looking forward to a conversation about your historic career and how you've seen the industry evolve. But I want to start right at the beginning. How did you get started in market research?Shelley Zalis: How did a nice girl like me get stuck in market research? That's a really good question. It actually started by—I didn't think I was going into market research. It was by accident. I was at Columbia, and I was a senior. Senior year, I went to the job bulletin board, and I saw this—I was studying psychology—and I saw this great ad up that I thought was a job at an ad agency. And I love commercials, and I watched them all the time. So creating them and working was like, wow! And I love examining people and their minds and messaging and comms.So I go to this interview, and I walk in, and there were four women sitting in the entry of the office, all eating ice cream and gossiping from People magazine about, you know, celebrities and trends. And I'm like, "Oh my God, I love this job." Only to find out it was a market research company. I got a D in statistics, so I would never be in a market research company or apply. If I thought it was market research, I would never have applied for the job. It was called Video Storyboards. So I thought you made these great boards and whatever.And then the owner comes out, and he's wearing Wallabees, red socks, and brown corduroy pants. And his shirt was kind of messy, and his name was Dave Vadehra. And lo and behold, I ended up accepting the job, and I worked there for probably six or seven years, and I loved it. But I did not apply for a market research company. I thought it was an ad agency.Pre-Internet Market Research: Mall Intercepts and Paper SurveysAndrew Mitrak: And so this was in the offline, pre-internet era. Can you just paint a picture of what market research actually was and what it looked like at the time?Shelley Zalis: Market research for me, at the time, was mall intercepts. So we did mall intercepts. And we stopped people and showed them an animatic. We produced these storyboard animatics on three-quarter-inch cassettes. You remember those thick things? And people would be in the malls, and they'd pop in the video. You'd sit in a little kind of place and watch it, and then it was a paper-pencil survey where they would answer the questions on a survey. And even on rainy weekends, somehow we managed to get these surveys done.It was an amazing experience for me. I did not know what qualitative was. I did not know what quantitative was. I only knew what Video Storyboards was. And I had a typewriter, and I did everything. I'd sit and type code, and I would tick, tick, tick, tick, tick to make the five-slash was across the board. That's how we coded and tabbed. We did coding and tabbing. And I knew nothing more than that's what I did. And we would sit around with the clients, and I'll never forget Bausch & Lomb was a really big client of ours, and we would show them the results and then I would just tell them what I thought. We'd watch the ads, we'd look at the results. And that's how we did market research.Andrew Mitrak: You said you did everything. Were you more client-facing, or were you the person at the malls kind of getting people in? What was your role at the company?Shelley Zalis: I did everything, which is probably why I'm a really good researcher because I understand the mindset of people. I understand what answers mean. I understand open-ended responses, close-ended responses. But more importantly, what I really understood was taking data and telling stories from it. And that was always really my sweet spot, especially with clients. I loved that meeting when the client would come and say, "So, which commercial is better than the other one, and why?" That "why" was so defining for me. Data is the "what," and that story, that heart of how people really feel, and that it is a love relationship with a brand and the authenticity of the story and the consistency, that to me was so remarkable.The Jump to Quantitative: Trading a Typewriter for a ComputerShelley Zalis: And then I got a phone call one day after six, seven years, whatever. Um, from a company called ASI that was later acquired by Ipsos, which is full circle because I was acquired by Ipsos too. And the job was coming to work at a quantitative market research company. Quantitative? What is that? And so I went into Dave's office, I said, "Dave,"—and I was like a daughter to him. 212-689-0207. I still remember the phone number, and this is 40 years ago. And I said to him, "What is quantitative research?" And he says, "It's basically what we do, but it's bigger sample sizes."And I said, "Well, I just got recruited by this company to come for an interview. I think it's time for me to fly. I think you need to let me go. It's time for me to go." And he says, "You're right. I don't want you to go, but go."And so I walk into this big office. I mean, we were in a little tiny brownstone, Video Storyboard tests. And now I go into this office with like 50 people or something, and they're not sitting around eating ice cream and talking about celebrities and people and gossip. It's like everyone is at their desk and punching away on their computers and all this kind of stuff. And the CEO comes out to greet me. And he is this tall, handsome man with a navy blue cashmere cape, an Armani cape. He says, "Shelley?" I said, "Yes." He says, "Come in." And he takes me into his office, and he has a big desk and a standing desk, and then sofas and chairs and tables. And he says, "Okay, here's your interview. I'm going to show you three commercials." I think it was for either Pizza Hut or Domino's. My gut tells me it was Domino's Pizza. He says, "And you tell me which one is going to do better and why."And I'm like, "Oh, this is easy. I am so well-trained for this."And he shows me the commercials, and I said, "This one did better. Here's why. Here's how they have to fix this..."He goes, "You're hired."I said, "Great."He says, "And I'm going to pay you this kind of money. And what do you need in your office?"I said, "Well, I need a typewriter and a TV."He said, "Well, why do you need a TV?"I said, "I watch TV commercials all day long. I love ads."And he says, "Okay." Then he says, "And a typewriter, that's not going to happen. You're going to learn how to use a computer."And I said, "Uh-uh. Not me. I think on a typewriter." And that was how I got my job at ASI.Andrew Mitrak: That's really funny that you were resistant to the computer because later on, you'd lead the transition to online and everything. So it seems like a pretty big difference there.Shelley Zalis: Well, the interesting thing about Video Storyboards to ASI: Video Storyboards was mall intercept, and ASI was telephone. And we would buy, to run the ads, we would buy time on unused cable channels. So those 105, 120, you know, this is before the world was as it is today. To the point where I was having my first child—you're a new parent—my first child, he's now 33, 34 years old. And at night, when I was feeding him, I would watch infomercials. And they were on all those underutilized channels because that's how they bought time to run programming on those channels. So it's just so full circle.In-Person vs. Over-the-Phone: The Early Days of Data CollectionAndrew Mitrak: So if ASI was doing things over the phone and previously you were doing mall intercepts, was there any trade-off in the quality of the data when you're doing something over the phone versus in person? What is—because obviously, you can do a lot more scale over the phone than at a mall, presumably. So what was the main difference?Shelley Zalis: Well, I think also random representative sample. I mean, if you think about going into the white pages, which is RDD, random digit dialing, back to those days of thinking of RDD, you would randomly pick that name out of a phone book. And so it's more representative. And also, you don't just recruit or stop people in the mall that look like you or sound like you or talk like you. I also never really understood how we would fill surveys in a mall on rainy weekends. Yet, we managed to fill them. And if you actually looked at the surveys back in those days, there were a lot of erase marks. Oh, was it really a man at this age, or was it a woman, but you made it a man because you had to fill your quota.Now, I had the same issues with telephone, by the way, but it's a much bigger, more random population, I think, than just geographically this is the mall in Beverly Hills and this is the mall in Chicago, you know, whatever.Andrew Mitrak: And when you're running this over the phone, what are your main clients? What problems are you trying to solve for them? Like what is the primary type of thing that you're doing for them at that point?Shelley Zalis: Well, we would recruit them. This is a really long time ago, so I might not remember this perfectly. But you would recruit them, and this is why we did the testing on unused channels, to watch—and this is how we added recall testing, 24-hour recall to see if you can remember not only the ad but who the brand sponsor was. Right? And so it was more pre-post recall testing and then asking them the questions about it. So that's how we did it at the time. When we were doing mall testing, you could do a 30-second, a 15, 30, 60-second ad, but you also, because you had that attention sitting down, they would also be able to see it in real-time and just give you their answers. Do you like it? Do you not? When we were doing recall testing, we embedded the advertisements into shows. And that's how we got recall measures. You're bringing me back to the nineties.The First Online Ad StandardsAndrew Mitrak: Yeah. So the reason I want to dwell on some of these offline things, over the phone, mall intercepts, is that you were also really early when it came to online market research.Shelley Zalis: First.Andrew Mitrak: Yeah, you were the first. Sorry, I didn't mean to say “very early.” The first, literally the first!And I'm wondering how you knew that the internet would be a big thing and not just a flash in the pan. And how you saw that this would be able to solve problems that in-person mall intercepts or kind of manual phone-type market research couldn't do. Why did you know that the internet would be a big thing?Shelley Zalis: I had no idea. So I did not know. But at the time, when I was at ASI, you know, we were doing telephone research. But I also was working on infomercials because it was a big aha moment for me, these infomercials: direct response, call to action. And so I created a dual-dial technique. No one did research with infomercials because your call to action was your numbers and your metrics for success. How many people bought from the show they watched? But I always thought to myself, an infomercial is a 30-minute show, and they would always put the call to action at the end. But what if I didn't wait until the end and I wanted to buy it? I didn't see the number. So I did a dual dial. One dial—and I did this in a central location—one dial that you could move to gauge your interest across the board. And the other dial, at what moment would you want to buy?And that is how we ended up creating a call to action in a 30-minute, every eight minutes. It was just mind-blowing for me, but using technology, and we did them in theater settings, and I had these dials and it was really quite remarkable.And the other thing that I was doing at the time, the internet online was starting to happen, but brands were creating 200-page websites for brands. Like for Tide laundry detergent, they would have 200 pages with the ingredients and how to do this and how to do that. And I thought to myself, gosh, no one wants to read 200 pages of a website about Tide laundry detergent. And by the way, Tide doesn't create a program to advertise in; they put their advertising in other people's programs.And there were also no standards online with banner ads and split screens and skyscrapers. I mean, do you remember—how old are you?Andrew Mitrak: I'm 35.Shelley Zalis: Okay. You won't remember this then because it was just beginning, but there were no standards. A banner ad could be this big or this big or this big, a square, that. And so how could Procter... if Tide wanted to buy ads across content sites, they would have to make them all different sizes. And so I built a consortium. It was called IIX, Interactive Idea Exchange, and CIA, Consortium for Interactive Advertisers, to bring 10 non-competitive advertisers together to create online advertising standards. The government called it collusionary, so we brought in the IAB, and then that's how the IAB started.But that's when I started understanding—oh, by the way, what we realized about the 200-page websites, most consumers would only go to a couple of the pages. And that's when I started creating microsites for brands, where instead of creating their own website to advertise in, we took the three pages and moved it to other people's content sites that had an audience. And so like for Tide, we called it Stain Detective. You could go to the page, and anything, any stain you had, it would teach you how to remove it. And it wasn't... Tide wasn't always the solution. And it was amazing.Pitching Online Research to an Offline WorldAndrew Mitrak: And so you're doing this—just place me in your career. Is this after you've left ASI and you started OTX that you're doing this, or are you still at ASI and doing this?Shelley Zalis: This is pre-OTX, where I had the idea. But by testing websites, I had the idea, "Well, why don't we migrate research from offline to online by creating a research website?"Andrew Mitrak: Right.Shelley Zalis: And that was how I got the idea to test shows, commercials, all of that inside a website by recruiting people to that website to test. And that was the whole epiphany around it, which is why I told you about infomercials and website testing, because it was how I ended up coming up with the idea of online research.Andrew Mitrak: So when you came up with this idea for online research and you pitched it to your bosses at ASI, I'm sure they were like, "Yes, let's do this! Let's all change!" Is that what happened?Shelley Zalis: No. Not at all. I went to my bosses and I said, "I have this really big idea. Let's migrate research from offline to online." ASI had just gotten acquired by Ipsos. And my bosses and bosses' bosses and bosses' bosses all said to me, "Well, it's not the right time." I said, "Not the right time? Why?" They said, "Well, first of all, Ipsos just acquired us and they want us to go global. So we have to invest all of our resources in global expansion because we were very US-centric. And second of all, no one is online except wealthy old men with broadband connections." And to test video, you needed high speed, but there was no high speed. The majority of people that were even online were on 14.4k modems. Clunky. And definitely not consistent if you're going to show video to show consistency, and you need that for research. And because no one's online, you can't get a representative population.So everything that they were telling me was "why not" versus "why yes." And so a week later, I'm on a panel with Larry Mock, who was the Chief Research Officer of Procter & Gamble, the largest consumer packaged goods company in the world. And my bosses were all in the front row, and I'm whispering to Larry. And Larry was very famous, very well-known as a market researcher. You should interview him. He'll tell you. And I said to him, "Larry, when is the right time to come and talk to you about migrating research from offline to online?" He said, "Next week." I said, "Great."So I come off the stage and my bosses said, "What'd he say? What'd he say?" I said, "I just asked him when is the right time because you told me there needs to be a right time. I want to know when that right time is to come and talk to Procter & Gamble." And they said, "Well, what'd he say?" I said, "He said, 'Come next week.'" They said, "Great. John will go, Paul will go, we're going to go, and Star will go." I'm like, "What about Shelley?" It's my idea, I got the yes, and if I'm not going, I'm going to cancel the meeting and wait for the right time.And that was my moment of truth. It was my heartbeat moment that I'd rather be in charge. Why am I always being told I'm not the right one, it's not the right time, it's not going to work, it's not possible, I'm going to fail? And that's when I left and started OTX. Had to.Hollywood Goes Online: Measuring Movie Trailers on the InternetAndrew Mitrak: So literally, that was the moment that you decided, "I've got to start my own company. These folks are going to miss out. They don't know what they're doing and I need to be in control of my own destiny." When you founded OTX, this type of company just didn't exist before, right? It was the first of its kind. So how did you know what you needed to do to build OTX? It's like, okay, I'm going to found it. What then? What are the first decisions you make to build this new type of market research company?Shelley Zalis: Well, what's crazy about that story is when I was doing website testing, I had hired this young guy, his name was Trevor Kaufman, to help. I didn't know anything about online or whatever. So he helped a lot. And I said to him, "Will you help me build a website for online research? And if anyone buys it, I will give you a million dollars." He was 20, 21 years old. And so we built it in my basement. And I brought the idea to Nielsen. And I said to Nielsen, "I have this crazy idea to migrate research to online." And they said, "We love it. What do you need?" I said, "I need a million dollars to give to this young kid."And we ended up giving Trevor the money. But it was over a year helping do the research and test and whatever. But I say we made him a millionaire at a very young age. And I pioneered at Nielsen, and I called it Reel Research, R-E-E-L Research. And I decided I was going to start in movie research, movie testing. Why? I knew nothing about the movie business. Zippo, zero, nada. But I knew that if I could test movies and trailers—which were two and a half minutes long versus 30 seconds for CPG clients where nothing changes—I could do anything. So if I go for the hardest category and build around that, then the rest is easy.And there was only one person in the entire world doing movie research, and his name was Joe Farrell. And this story is so crazy, you can't make this up. Joe Farrell had a monopoly. Nobody could break the monopoly of NRG (National Research Group), Joe Farrell. He was the godfather; they called him the godfather of movies and movie research. And crazy enough, let's go back to Video Storyboard days. He tested trailers in the malls. So now I'm back to my Video Storyboard days. And successfully, and he was the CEO whisperer. He was the whisperer to everyone. He would tell someone, "This movie's going to be big, move the date." And no one could break his monopoly. So I thought, you know what? I'm going to try. And I'm going to go in with online research.Breaking through Hollywood's Research MonopolyShelley Zalis: And I realized there's always a yes, you just have to find it. But no one was able to find it until I came along. And so I went to Warner Brothers. And there was a guy named Dan Rosen and Richard Del Belso. I am so grateful for them. And I said to them, "Are you perfectly satisfied with how you do research in the movie business today?" And they said, "Well, of course not. Who's ever perfectly satisfied?" That was my crack.I said, "Great. I have this crazy idea to pioneer online research, migrating it from the mall to this. I don't know how to do it, I don't know what I'm doing, and I don't know anything about the movie business. But will you take a chance on me?" And Dan will tell you it's because I actually told him the truth. "I know nothing about this, but we're going to hold hands and go together." And I said, "And all I want from you is to give me every ad you've tested in the mall and let me test it online so I can calibrate the norms. And it won't cost you a nickel." He said, "Great, I'm in." He said, "The only problem is we have exclusive contracts with Joe Farrell, and we'll get sued." I said, "Let me see the contract." I look at the contract, and it was exclusive, but it was exclusive for mall testing. There was no online. I said, "Dan, loophole. I'm online. He's mall intercept. So you're not breaking the exclusivity with another mall intercept testing company, I'm online."And so that was that. Partners, hand in hand. And we held hands and I tested everything in parallel. Now, the interesting part was they called me Jane Doe because if Joe Farrell would have found out, it wouldn't have been a good thing. Not that they were breaking a contract, but he might have withheld information from them. Joe Farrell used to call me "her." "If you're going to work with her..." He called me her, and I like that. That was really good.But we also had the producers and the directors that were all comfortable with offline data. So I said to Dan and to Richard, "Don't go in with online data because a) it's not reliable yet, b) I don't know what it means, c) we haven't calibrated the norms. I'm not comfortable. But what I do want you to go in with is the verbatim testimony." Because in the malls, they would scribble the answers of what you liked about it. There were two things. What did you like or what didn't you like about the commercial, the trailer or whatever? But online?​​ But online, the verbatim testimonies were wow! They were the wow factor because people gave robust answers in bold type, in capitals, when they want to say, "I love Brad Pitt!"I said, "So you go in with the quantitative results from Joe Farrell and then just supplement. And don't say it's another company, just go in with these verbatims. Add the verbatims."And they go in with the verbatims and the producers are all, "What the... where did you get these amazing verbatims all of a sudden?"And he said, "Oh, online. We're doing it online."And everyone starts saying, "I want the online. I want the online version."And lo and behold, we started calibrating the norms. And not only did I do Warner Brothers, but I went to Sony.And I said to Sony, "Warner Brothers is using it."And as soon as you say that, Sony is like, "Oh, me too." And then Disney, "Oh, me too. Me too, me too."Power of the pack. And next thing you knew, we were in. Am I telling you too many pieces of the story?Andrew Mitrak: No, this is great! Shelley Zalis: Then all these CEOs, the studio chiefs... by the way, Joe Farrell was the godfather to their children. So this was not an easy thing to break. And all of them had these decks—paper stacks, paper stacks, paper stacks. And I said, "I'm not going to deliver paper. We're going to deliver the reports online." And they're like, "No one's going to read them. No one is online." And I said, "Okay. I am going to deliver a teaser in paper with chocolate chip cookies and milk. And it'll have a code to go online." And sooner than later, everyone was doing online. And then Joe Farrell, who would always say, "Everyone lies online. It's terrible methodology,"... but we also did movie research online, predicting... and we were nailing it. And he kept saying, "No, it's not this, it's not that. And telephone and mall is the way to go." And I said, "How do you know that people in the mall and people on the telephone don't lie? Why are you just attributing this to a new methodology and look at what it's not versus what it is? What percentage of people lie online, too? What percentage have you looked at those paper trails?" I only knew this because I've been there, done that. I did telephone and I did mall. So you can't mess with me. I've been there, done that, right? Anyways, those were all the little loopholes of how we actually created online. And then next thing you knew, Joe Farrell started going online trying to build an online business, but we were already in online.Andrew Mitrak: Right. Yeah. So National Research Group, NRG, was founded in like the 70s or something like that, right? So it'd been around for a long time. Wrote all his contracts for malls, which is the only way to do it back then. Along comes a new paradigm, online, and you find this wedge because the new paradigm, new market opportunity. And also your position, it's OTX... online is the "O." So you're branded as the online expert. So I imagine if a 1970s-founded, Joe Farrell, old-school way of doing things, repositions to be online, it just doesn't quite have the credibility that you have. And it seems like you also found product-market fit because a movie trailer is, one, it's probably one of the few types of ads that people actually want to go out and see. Usually, people have ad blockers, but some of the most popular videos online are new movie trailers. So you can actually watch this. And they're probably short enough where the buffering and the bandwidth probably somewhat works if it was much longer than that.“Wrap, wrap, wrap!” Securing Movie Trailers with DRMShelley Zalis: It works because it was two and a half minutes, and so we had it download in the background as it was loading. So it was not easy, especially on 14.4 modems and maybe the fast ones were 28.8. And people with T1 lines were not representative; they were mainstream. And I had to ensure that everyone saw the same quality. And so what we did was we built this buffering mechanism that allowed the video to download as you were answering questions in the survey so that by the time it opened, it would be already downloaded and you would have smooth sailing. I used an analogy: it was sort of like if you're on a freeway that is jammed, you go really slow. If there's no one on the freeway, you go really fast. But you have to be able to build it so that everyone has the same experience.And then protecting the video, because in the movie business, a movie could close before it opens. It was all about opening weekend. And the reason I built it for the hardest common denominator was because the studio would send you 20 ads on a Friday night that had to be encrypted and encoded. If you're just sending it to a mall, boom. If you need to encode, encrypt, and then get big enough sample sizes—I think we were doing 300 because I had to match what Joe Farrell was doing, it was 200 or 300 per trailer or commercial—that had to be given back to the studio by Monday morning. And I remember in those days when I built the system, we had a refresh button. Refresh, refresh, refresh, refresh, because I had to make sure that there were 300 people filling out the survey by the four quads, too. A movie is stereotyped by male, female, under, over 25—four quads. It's a four-quad methodology. And if I could build a system that could encrypt, encode, get the surveys up, get the samples in, and deliver results online by Monday morning, I could do anything.And we had to build a DRM solution, which didn't exist. You know DRM?Andrew Mitrak: Digital Rights Management, right?Shelley Zalis: That didn't exist. I had to build an encryption system because I'll never forget this moment on a Friday night. I'm having dinner with my family. And online, you're always on. There is no off button. You're always on. And I get a phone call from a lawyer at one of our studios that said—and it was for one of the biggest films of all time—someone lifted the trailer. Now these trailers are not aired, and they lifted the trailer and broadcasted it out.Now, thank God the trailer did really well, and the movie was going to be a blockbuster. But that was scary as hell. And I remember saying to the lawyers, "First of all, trailers have been lifted in the mall. So let's not... Second of all, you know that is the risk with online. It ended up doing well, and I said maybe this is a new way of going viral, you know, the talk." And I said, "And third of all, it took... I can't remember the number, but a group of hackers. It wasn't just a single individual. It was a group of sophisticated hackers—because it was a superhero thing—it took a group of them over 24 hours of nonstop working to break my code. 24 hours with over 25 people." I said, "So my system is pretty secure." Like, I said, "You go see how easy it is to lift one of those tapes that you have lying around between intercepting UPS and FedEx packages to somebody not paying attention to someone pulling that. You tell me that's never happened to you before." But that was a moment. And so we built a DRM solution to wrap, wrap, wrap, wrap, wrap around the videos.Andrew Mitrak: What was your relationship like with filmmakers themselves? I imagine a superhero movie, they want to test, test, test and get all four quadrants and that. But there's probably certain auteur-type filmmakers who see their film as their baby. Did you ever have relationships with them where they saw, "Oh, testing, that's... they're the bad guys who just want to change my artwork"? What was the relationship like? And do you have any examples of changes that were made to movies or movie trailers as a result of the tests?Shelley Zalis: So, we tested so many trailers. And for them, there was no... they created them, and all we were doing was showing them which one was going to do the best. And of course, it wasn't just four quads. They would say, "This is our target," and we had to reach the target. And after a while, I had an enormous community. I called it the blender. Now people call it a router or whatever. And the way I built the sample, because that didn't exist either, I had to build a sample ecosystem. I had to build an RDD online. So think about RDD offline is the telephone book concept. I was actually teaching a class as a guest lecturer at Wharton in the business school, and I remember telling the students how I came up with the sample methodology for online. I said, "I closed my eyes one day and tried to imagine RDD on steroids, but online." And so I mixed all of these samples from Greenfield to Harris Interactive to AOL... and I put them all into this blender. So it was a blend. And I said, "It's sort of like One Fish, Two Fish, Red Fish, Blue Fish."And I took the entire class downstairs to the library to read One Fish, Two Fish, Red Fish, Blue Fish. And I said, "You need all kinds of fish in the ocean. Different fish in the lake. Different... if you want an ecosystem of representation." And that was the idea of... and then eventually, I ended up having 20 sample companies, 50 sample companies, whatever, all... and it would go like this, and the router was the hardest thing to build, that the first male 25 would go into that survey. I was doing a hundred surveys at a time. Go to that one, the next one into that one, that one. So it was representation on steroids. And it was magical.The movies we tested in real life, that was not online because they were two and a half minutes, and so we did that the old-school way. But we didn't start with movie testing; we started with trailer testing online. And then the movies just came our way. And what was amazing about the realness of it, because you... testing a movie, you want to smell people, you want to see people, you want to hear people. A movie director or producer would hear when someone would laugh or when someone would cry or... so that we did offline.The Three Sales of OTX: A Journey from Nielsen to IpsosAndrew Mitrak: Yeah, that makes sense, yeah. So I could spend hours just talking about movies and this early internet era because I'm fascinated. I love movies, and I'm always fascinated by early internet history as well. But I know we have limited time, and I want to just jump ahead in your career to The Female Quotient. You wind up selling OTX to Ipsos.Shelley Zalis: I sold it three times.Andrew Mitrak: You sold it three times? What were the stories of selling it?Shelley Zalis: Well, I first went and pioneered at Nielsen, and I had to build from scratch. And then I left Nielsen because they wanted to walk, and I had to run. And then it's now called Nielsen Online, but it started from REEL Research, R-E-E-L Reel Research.Andrew Mitrak: Okay, I misunderstood. I thought you had sold the product, like they were buying your license to the product, but you sold the company itself to Nielsen?Shelley Zalis: No, I did not get anything from Nielsen. I was an employee. I brought the idea to Nielsen and pioneered at Nielsen.Andrew Mitrak: Oh, okay.Shelley Zalis: And I got this young kid money, but I was a salaried employee with a big idea that needed to see it come to life. I then left Nielsen because people were starting to compete with who would run my business that was incredibly successful. So I left it behind and I joined iFilm.At iFilm, I was an owner. And iFilm, do you remember iFilm?Andrew Mitrak: I know I've seen the logo "iFilm" a number of times.Shelley Zalis: But you would have seen it because iFilm was the first YouTube. It was so ahead of itself, but it was YouTube. Let's just... and so I went to iFilm.It was run by Kevin Wendle, who was the founder of CNET, and Skip Paul. And they were a dot-com company so ahead of itself. But the reason I joined them was they understood video on the internet, and they understood the internet. And they wanted to run. And they were obsessed with REEL Research that then became Nielsen Online. And that's when I called it OTX. And I built, in a warehouse—it was like really a dot-com, and I was surrounded by young, techy, entrepreneurial people. I was like in heaven, as a traditional researcher, to now be in this spirited place. And my business ended up growing exponentially. And I used off-the-shelf technology that I modified using iFilm's help. It was called iFilm OTX. It was booming. I loved it.And I sold from iFilm... well, iFilm was doing video. And one day, I heard that they wanted to go into porn. By the way, don't forget, this is online, and they should. Like, they had all the channels. That should be a channel.Andrew Mitrak: Yeah, it makes sense... It's just, do you want to work there? Do you want to work at a company doing that?Shelley Zalis: Well, iFilm OTX because they wanted the iFilm brand on top. I came with the name OTX; they said we're going to call it iFilm OTX. Anyways, I walked into a board meeting one day and I said, "Here's the deal. You should go all in in porn, but go triple X because that's where the money's going to be, and I'm out." And so I sold from iFilm to Tom Freston and Bob Pittman. And Bob had just started a company called Pilot. He had left AOL Time Warner. Tom Freston was a VC. And I sold to them. So that was the second because I'll call going to iFilm then going to... and at iFilm, my ownership was in terms of revenue because zero on zero is zero. No one thought I would be successful. And I ended up selling... I was doing 30 million in revenue at the time. And I sold to Bob Pittman and Tom Freston and stayed with them for a few years, and then we sold to Ipsos.Andrew Mitrak: I wish I could spend more time going on this because I need to ask about The Female Quotient...Shelley Zalis: I like you. I've never told it this way.Andrew Mitrak: No, I love hearing it this way. I love all these details, and I want to spend proper time on all of that. But also, I can't talk to you without also, of course, talking about The Female Quotient. And so you transition from innovating in research to innovating in culture with The Female Quotient, where you're founder, CEO, and chief troublemaker. When did this start? It sounds like the values of equality have been with you for forever, but was there a moment when you knew this needed to be its own company?Founding The Female QuotientShelley Zalis: Yeah. So I'm at Ipsos now. When I went to Ipsos, I had 250 employees. When they acquired me, I was doing 60 million in revenue, and I was operating in six cities. I now sell to a company doing 2.6 billion in revenue, 16,000 employees, operating in 83 countries. Now, my dream was I wanted to sell to a VC, not to a traditional research company because I was going back to the Nielsen days then. And I had 10 out of 10 offers from different VCs. I accepted one, and they were going to buy us for $100 million. And my only wish and my only ask wasn't about salary. It was that you can buy me for $100 million, but I want a $100 million shopping budget. I want to go buy all these small, new, up-and-coming technology companies that's going to make the online research business go to a whole other level. And I got a yes, and the deal was done, signed, sealed, and delivered. And then the market fell, the dot-com market boom fell.The head partner of the deal calls me up. I'm in Hawaii celebrating with my family. She calls me up. And she, Vivian, and she says, "I have good news and bad news. What do you want to hear first?" I said, "The good news." She says, "We're still going to go through with the deal. $100 million, no problem." I said, "Bad news?" She goes, "I can't guarantee you the $100 million shopping budget." And I said to her, "I am so grateful, but I can't do it." I said, "Because especially with the world collapsing, the traditional market research companies are going to win, and my little cute company will disappear because it's the alternative, it's the 'and,' it's not the 'either/or' yet." And I had to walk away. And Bob and Tom were really pissed at me, but I quashed the deal; they would have cashed out. I cared about my employees and my team and growth and innovation and all of that, and I needed that innovation budget, of which I didn't have with Tom and Bob.And so I waited longer, and then Ipsos came and acquired us. And so while I was at Ipsos, I was the only female CEO, top 25 in market research, you know, when I had OTX. Didn't stop me, but I knew I thought differently, I acted differently, I led differently. I knew all those things, but it didn't matter. It was my company. I gave myself permission, and I was doing just fine. And now I'm at Ipsos. I'm sitting at a board, a publicly traded company, two women on a board of 26. And they were moving my employees around like chess pieces. And tears came down my eyes. And I was pulled aside after, and I was told by the HR person, "There's no room for emotion in the boardroom." My head said, "Just agree because they just bought my company for a lot of money." And my heart said, "No way."And so I went and gave a speech to thousands—I was a global speaker at this point. And my speech was called "Bring Emotion to the Boardroom," exclamation point, heart, heart, heart. And that was that. And it was clear to me that with the power that I had, with the position that I had, with the purpose that I had, with the passion that I had, that I needed to give back with generosity what I wished I had my entire career, which was girlfriends in business. And so while I was at Ipsos, I started the Ipsos Girls' Lounge because I wanted to go to CES, 150,000 people, less than 3% were women. I did just fine in the predominantly male-dominated conferences, but it was boring and it wasn't fun, and I wasn't surrounded by people just like me. So I invited five girlfriends, and I said, "Walk the floor with me at CES. And if you have other girlfriends, invite them." 24 hours later, 50 women showed up. And two remarkable things happened at the time. One, every single guy's head turned. "Where the hell did all you women come from?" And that's when I coined the phrase "power of the pack." A woman alone has power; collectively, we have an impact. And the second was I was surrounded by women just like me: imposter syndrome, work-life balance, how do you do it all? How do you stand out as a woman in business thinking differently, acting differently, behaving differently, and not wearing those ugly suits and the ugly shoes and trying to fit in? How do we stand out the way we want to? And that was when the Girls' Lounge was born. And we were all doing deals in my bedroom. It was a king-sized bedroom. And by day two, 100 women; by day three, 350 women. We took over the penthouse suite. Boom. Girls' Lounge was born.And I called it the Ipsos Girls' Lounge. Then my five-year contract ended, and I had no earn-out, but I'm very loyal. And they wanted to renew my contract. And I said to them, "I will, as long as you commit in writing to keep funding the Ipsos Girls' Lounge because it's really important to me." My contract came back, and my package was in there, but there was no Girls' Lounge. And I said, "Well, where's the Girls' Lounge?" They said, "We want to do it, but we can't guarantee it." I said, "No guarantee means it's not going to happen." And I said, "I'm not resigning, I'm just not renewing, and I'm going to take the Girls' Lounge with me because it's not important to you. So I'm going to take it, and you could become the first partner in the Girls' Lounge."That was over 10 years ago. And today, the Girls' Lounge has evolved to the FQ Lounge. It's brought to you by, you know, collectively by amazing Fortune 500 companies, men and women. We have over 7 million-plus women in business across 30 industries, 100 countries that are part of the pack. So from the OG of five to now over 7 million. We host pop-ups all over the world at industry conferences, but we also do pop-ups and summits across different categories. We also are now in the media business, waking up one day to a very unique community of over 7 million B2B women in business is one of a kind. And then, you know, we have an advisory practice advising Fortune 500 CEOs on how to close the gender gap across the board, but more importantly, how to make everyone feel seen, heard, and belong.Andrew Mitrak: Seeing your content online, the community you've built, people's reaction to this, the amazing storytelling your team does across all social channels, it's just so inspiring and it's so amazing to see what you've built. I wish we had more time together so I could just ask you more and more about this. But I really appreciate your time, your stories from your career, from market research, from all those really cool inside Hollywood stories of film trailer testing online. Shelley Zalis, just thanks so much for your time. I really appreciate it.Shelley Zalis: Well, first of all, I want to thank you, Andrew, because you've asked the questions that haven't been asked, and putting it in a timeline, but the linearity of where we were to where we are, but also to where we're going is so incredibly important. And I call people like you conscious leaders because you're just conscious, and it's not whether you're a man or a woman, it's about the intentionality. And so thank you for your intentionality and your passion for all of this, and for being a new dad!Andrew Mitrak: Thanks so much. Well, I know your career inspires so many people, including myself, and just hearing from where you've come from and all of the gritty details along the way and everything you did, it's just so inspiring to hear. So Shelley Zalis, thanks so much for joining me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Bonus EpisodeThis week’s conversation with Paul Feldwick was so packed with histories and insights that I simply couldn't fit everything into one episode. So, I cut out one of my favorite parts to share with you as a separate “Bonus Episode.” (Even if you’ve heard the main episode, this will be new to you.)Paul shares the behind-the-scenes story of the iconic 1990s Barclaycard ads, starring the comedian Rowan Atkinson. Atkinson used these ads to develop the spy character that would become Johnny English.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsFeldwick worked on these ads when he was Executive Planning Director at BMP DDB Needham Worldwide, the lengthy-named agency behind Barclaycard’s classic campaign. The execution took so many unlikely twists and turns, Paul wrote the story as a case study for WARC (World Advertising Research Center) and in his book "Why Does The Pedlar Sing?"To give you a sense of how legendary this story is, the late Jeremy Bullmore once wrote: “It's possible that the only honest case-study in the history of marketing is the Barclaycard case written by Paul Feldwick... it describes in hilarious detail just how luck, agency obduracy and a collision of events entirely fortuitously led to an award-winning campaign of great commercial effectiveness.”I love this case study because it articulates so much about the messy relationship between clients and agencies, strategy and creativity, and how seemingly obvious insights like, “Rowan Atkinson is funny” can lead to successful marketing campaigns.I hope you enjoy it. And be sure to listen to my full interview with Paul Feldwick if you haven’t already. Paul is entertaining and persuasive throughout.More from Paul Feldwick: * Paul just published Creative Awards: A Very Short History, which argues that ad industry awards judge “aesthetics” at the expense of “effectiveness” and attempts at assessing loftier values like “purpose” are misguided.* Paul’s excellent TEDx Talk Aesthetics And Jugs And Rock'n'Roll, discussed towards the end of the main episode.Note: A special thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.The Disconnect Between Strategy and ExecutionPaul Feldwick: There's a lengthy story at the start of Why Does the Pedlar Sing? about a campaign for a credit card called Barclaycard, which is still a very big brand in the UK, a campaign using Rowan Atkinson, which we did in the early 1990s.Andrew Mitrak: These ads, I was not familiar with them, I'm from the US, but they're so good and they're so funny. And I watched them on YouTube. I encourage listeners to go to YouTube, if you just search "Barclaycard ads," it'll probably autofill and find these Rowan Atkinson ones. And they're so funny, so clever, and they usually are about a minute long or so, they're almost little short films.Paul Feldwick: They're 60-second ads. I mean, the great thing nowadays is that so many ads are instantly available on YouTube, or other platforms, but mainly YouTube is usually the best place to start. And you have to remember that even 30 years ago, that simply wasn't the case. I mean, 30 years ago, if you wanted to say to somebody, "you should see this great ad for Barclaycard with Rowan Atkinson," it would involve getting hold of a copy of a video cassette that had this ad on it, you know, in a format that you could access. So we take that so much for granted now, but it does make it much easier to have these conversations.But I brought it up, as I say, I write extensively about it in the first couple of chapters of Why Does the Pedlar Sing? because it's such a great example of the disconnect between what we actually ended up doing, which was producing something that was first and foremost, whatever else it did, it was entertaining. It works because it's entertaining, it works because it's funny, it works because it's got high production values, it works because it's a very enjoyable piece of 60-second cinema that people watch. And yet, at the time we were doing it, although part of us knew that was what we were doing, we also still were having to pretend that this was all about just communicating a product benefit in a sort of slightly clever way. So there was this doublethink always going on. And I suspect where it works, it does still go on. Although perhaps partly as a result of what I've written, and maybe some other things that are going on, I do sense that in the last 5 or 10 years, it's become more acceptable to talk about advertising as entertainment. There was a time when that was something you almost couldn't say, because it would immediately invite a lot of people going, "advertising is not meant to be entertaining, it's meant to be selling," you know. You can still find plenty of people who will bang that particular drum.“The Only Honest Case Study in the History of Marketing"Andrew Mitrak: Let's come back to this Barclaycard example because there's a quote that I pulled that's from Jeremy Bullmore. The quote is, "It's possible the only honest case study in the history of marketing is the Barclaycard case written by Paul Feldwick."Paul Feldwick: I actually did write the account of how we got to this campaign, quite a long time before I wrote Why Does the Pedlar Sing? I wrote it as a sort of standalone article, probably about 20 years ago now, I would think. And I just felt the story needed to be told before it all got completely forgotten. And I just told it to the best of my ability. Because what happened, and I think anyone who's worked in an advertising agency will recognize that this is not that unusual, although this may be a fairly extreme example. But what happened was we were pitching for the Barclaycard account, and we won the pitch with a particular campaign, which was nothing like the campaign that eventually ran. And this is very typical, actually. As I'm sure you know, a lot of pitch-winning campaigns for one reason or another, they never win. It was a totally, totally different kind of campaign. It was based on a sort of a very abstract idea, if you like, which was, Barclaycard, we think it's all the credit cards you'll ever need. And this was illustrated with some very dramatic, very expensive film, which was going to involve people like running up the stairs of skyscrapers and standing on the roof of skyscrapers and cutting up all their other credit cards and throwing them to the four winds so that they'd flutter down into the streets. I mean, you can sort of picture how this could have been done in a very dramatic way with music building to a great climax. This was about the time that, you know, Saatchi's had just done those sort of big ads for British Airways which were done on an epic scale. It was, you know, it was sort of about 1990, it was that that sort of mood. Note - For more on this era of advertising and Saatchi’s British Airways adverts, see my conversation with Mark TungateWhen the Pitch-winning Idea Won’t Actually WorkPaul Feldwick: This was what won the, won the campaign. And so everyone was sort of very enthusiastic about it, of course. I mean, the client had bought it, we'd won the campaign with it, everybody loved it. And then things started going wrong. We started doing some research, and the researchers came back and said, "Actually, the public don't seem to really like this campaign very much. They don't really get it, they're not very excited by it." But because everyone was so invested in it, they didn't dare say, "We think you should can it and start again." They said, "I'm sure we can just make it work with a little bit of tweaking." So they were doing that. And then meanwhile, we were also finding the campaign was going to be incredibly expensive. And we were also finding that, you know, every ad that ran on British television then as now had to go through some sort of copy clearance committee. So there were various hoops that they'd have to pass and they were saying things like, "Well, look, you can't show other people's credit cards or be seen to be cutting them up. And you certainly can't be seen to be throwing them off buildings because that'll be like littering," and stuff. So there were all sorts of problems with this campaign. But nevertheless, nobody, there was a kind of groupthink thing going on. Nobody could get their head at all around saying, "Perhaps we should stop and do something different," because this was the great pitch-winning campaign, you know, and nobody could dare say a word against it.So, to cut a long story short, the agony was prolonged for about six months, during which we tried to make this campaign work. And every time we tried to make it work, it got worse and worse and worse. So, you know, it ended up, it ended up with like literally one man standing on a fire escape cutting up a credit card and putting it in a brown paper bag. And people were kind of going, "What the hell is all that about?" So we were finally bumped into a sort of, and it was a really important relaunch for the client as well. This wasn't just a new campaign, there was a huge amount riding on this. They were relaunching the whole brand, they were introducing for the first time a fee for the cardholders. You know, and everything was built around a particular date when this relaunch was going to take place. So, you know, there was a deadline, there was a huge amount riding on it. And, you know, this is the point at which I'm sure they must have been tempted at some point to say, "Let's fire the agency and start again," except they didn't really have the time to do that either. So we were kind of stuck with each other.The Birth of a Classic Campaign: “You should use Rowan Atkinson because he’s funny”Paul Feldwick: I'll cut to the chase. With a bit of to-ing and fro-ing, at the very last minute, somebody came up with like the third or fourth idea, which was, "We'll use, we'll write some scripts around Rowan Atkinson." And we took those out to research and they weren't very good, even so, and people didn't get it. And I had to come back from this research, which I, at this point I was conducting the research myself. And I came back and I said, "The only thing I can salvage from this research is that people really like Rowan Atkinson and they say you should use Rowan Atkinson because he's funny whatever he does."And at the same time, we were in touch with Rowan Atkinson, and he was quite keen to do advertising, but he was also, he had a whole character that he wanted to develop, which he'd come up with entirely, which was the character that eventually turned into Johnny English many years later on. So he said, "Well, I've got this idea for a character." So anyway, one thing led to another, and we got to a point where we all just had to kind of trust the process, trust Rowan Atkinson, trust each other to develop, and our creative department became involved in writing the scripts. And we shot the first few films, and there wasn't even time to research them before we went on air. We just had to kind of believe in it. We researched them as soon as they went on air, because worst-case scenario, there was a point there where we could do something about it if it was terribly bad. But fortunately, it wasn't terribly bad, it was actually brilliant.Allowing for improv while sticking to product messagingPaul Feldwick: And it took me a long time to make sense of that story. There's, as Jeremy says, you know, this is a very funny story in some ways, and it's the kind of story that people in advertising agencies actually like to tell to each other in the pub along the lines of, "Oh, you know, well, we farted around for six months and we got it all horribly wrong, and then just at the last minute, we got lucky and we were able to sort of save the day." And that's one way of telling the story, that's close enough to the truth to be plausible, but it doesn't really tell you quite enough. It doesn't really tell you anything useful to learn from, because, you know, if you're a client hearing that story, you think, "Well, that's all very well, but that's not really how I want my advertising development process to go." So I wanted to sort of think, "How else can we tell that story so that we can learn something from it?"And what it seemed to me had happened was that throughout the sort of initial development process of the pitch and then working with the campaign after the pitch, we were still very wedded to a very traditional model of how we thought that advertising was meant to work, which was, you know, you have a proposition and you find a way of dramatizing the proposition, and that's what's going to somehow persuade people that Barclaycard is the better brand. And then because we were so up against it and we had to change our minds very much at the last minute, and because we then suddenly lighted upon this brilliant comedian, Rowan Atkinson, and his equally brilliant producer-director, John Lloyd, who was working with him, we were suddenly, we moved into a different realm altogether where suddenly in the realms of show business.And the shoots were very interesting because they were all location shoots. And Atkinson and Lloyd and all those team were there, and the agency creative teams were there. And some of the clients were there as well, but they were kind of, they were out of the office. They were in places like Marrakesh and, you know, Moscow. And to some extent, they had a script, but they were also, they were shooting it as if it was a comedy show, so that it was like, if you said the line and it wasn't funny enough, Rowan Atkinson would say, "Well, look, let's rewrite the script." And they did. So there was a lot of room for improvisation in it as well. And the reason that those ads are so successful and so funny, and that they still stand the test of time in most cases 30 years on, is because that was the approach that went into making them. It was not the traditional advertising agency, client breathing down your shoulder, "We have agreed every word of this script and we have got to do it exactly the way that we agreed it with the client, and we have got to get in three mentions of the product," and so on and so on. It was much more done in a way of, above all, this has got to work as a piece of film.And so it did. That was how they made it work. Which is not to say it's self-indulgent or it doesn't do the job. It does the job brilliantly. And I think we always felt that actually, because, you know, people like Rowan Atkinson and John Lloyd didn't have anything to prove, they didn't have any axes to grind. They didn't have any problem with thinking, realizing this is an advert, you know, we're here to sell the product. So that you'll notice when you look at some of these scripts how Rowan Atkinson gets the brand name into just about every line in a totally seamless way. He's always sort of, you know, he's the guy who refuses to use the Barclaycard, and he's arguing with his assistant who's the guy who does have the Barclaycard. He's thinking like, "Barclaycard, Boff. What do I need a Barclaycard for? I managed perfectly well without a Barclaycard." So it all happens quite seamlessly, but it's just done in a way that works. And I think looking back on it now, I think that we made this huge leap without quite realizing it from thinking like a sort of old-style ad agency and thinking, you know, plonk, plonk, plonk, to thinking like entertainers. And that's why those ads are so, and I mean, it needs to be said, because we haven't said this so far, but what's crucial to this story is that campaign was incredibly successful. I mean, it wasn't just, "These are great ads that the ad industry thinks are wonderful." These were ads that were hugely popular, hugely famous, and as a result, did an incredibly strong job for Barclaycard. And they are still probably in the UK, just about the only ads for Barclaycard that most people will remember as long as they're old enough to remember them.So that for me became the start point for Why Does the Pedlar Sing? because that was building on the idea that so much successful brand advertising has its roots in the whole world of entertainment and show business rather than in that sort of world of propositions and reasons why, which is another kind of advertising history, but increasingly, I think, not the most important or relevant one to what advertising in that kind of sense achieves.Path dependency: The process and end result would not have won the pitchAndrew Mitrak: What's funny is that despite all the success and even your case study of these ads, that it is show business. It's Rowan Atkinson is funny and whatever he's in, and you just got to trust him and let him improvise and all that. The agency could never sell that to the client. They want all the analysis, the positioning, the branding, the data, the research, the focus groups. They want all of that, and that's just the process through which they buy that, even though there's evidence to the contrary.Paul Feldwick: That is a fundamental cultural issue. And, you know, it's still very, very rare that people kind of get that right. I've seen examples, you know, continually, one sees examples of campaigns. I mean, there was a campaign a few years ago in the UK for Tesco, a big supermarket.And it should have been great because they hired some really brilliant, famous entertainers to do it. They hirednRuth Jones and James Corden, I think, and you know, the people who did Gavin & Stacey or whatever. And you see the ads and they're just kind of, they're leaden, they're sort of flat. And you can just sort of get this feeling that everything has been overcontrolled, so that it loses that magic that it needs to become a piece of entertainment. And it's that aesthetic quality which is so important in making the difference between an advertising campaign that sort of flies and one that doesn't. And it's quite an intangible quality. So, you know, it's a cultural thing that people think they're playing safe by trying to control everything. And in fact, they are not playing safe because they are jeopardizing the very thing that they're trying to achieve. And I think that's still happening, if it's still happening, because people are still not clear enough in their mind that they need to make this leap. And to some extent, the advertising industry has itself to blame for all this. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org