Transcript of Moment 190: Everything You Definitely Don’t Know About Marketing (But Should), From 4 World Leading Experts!

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Marketing is is just who might be interested in this thing?

And a

lot of it is the the the fundamental thing is if no 1 knows you exist, no one's going to be able to buy your thing. And and so marketing is is the process of attracting the attention of people who might be interested in the value that that you're creating. And in an ideal world, making them curious, wanting to learn more, asking for additional information, engaging with what what it is that you have. A lot of people complete conflate marketing and sales. To me, they're distinct processes.

So so marketing is the attracting attention and generating interest. And then sales is the process of convincing someone to buy and then getting them set up as as as a customer. And a lot of marketing comes down to what is it exactly that you're trying to gather attention for, and where do those people generally hang out? What are they curious about? What are they already paying attention to?

What can you, what can you take advantage of or dovetail into in order to attract someone's attention at the right moment at the right time? And make them aware that you have something that could benefit their life. Here's what it is. Here's how you can benefit from it. Yes.

Yeah.

Because people many companies see it as, like, an annoyance. Like, I've sold you the fucking thing. Why are you emailing me?

It's not bothering me.

And they treat you like you're a nuisance.

Yeah. Yeah. And that's a shame. Because, really, like, those happy repeat customers are not just, like, your high lifetime value customers, the customers that will stick with you, keep spending money with you. They're also a primary source of marketing.

Like, word-of-mouth marketing is all happy customers telling other people who might benefit from your product that, hey. Here's this wonderful thing. You should probably check it out. And so yeah. Like, things like post sales support, sometimes customer reactivation.

So, like, to your point earlier, it's a very straightforward marketing technique called reactivation. If you can contact Jack and say, hey. You bought candles from us last year. Would you like to buy candles from us this year? And get him to to pick up just a couple more more candles.

Like, the cost of that promotion is potentially very small. You already know he exists. You already know that he's purchased. Can you just get him to do that again? Those are some of the most effective marketing sales campaigns that you could possibly run, but it also requires that they had a good experience with whatever it is that you're offering in the first place.

How has the the the the the the lands of advertising and a brand building a reputation changed in your lifetime? And what is the most important thing for brands to understand now or some of the important things for brands to understand now if they are to be successful?

Yeah. So my first job in business school, I started a company called Profit Brand Strategy. That's now about 500 people. Now it's just called Profit. And the basic notion was it was based on the principles of my professor in my 2nd year, David Aaker, who's considered the father of modern branding.

And it was that the intangible associations with a brand or set of products or services are the only sustainable advantage. That if you can wrap a set of products and services with these brand codes of masculinity, European elegance, youth, and then pound away at those associations using this incredibly cheap, efficient medium called broadcast advertising, you can take a marginal shoe, salty snack, marginal car, and get amazing margins on it. So that was that's been the from the end of World War 2 to the introduction of Google in the nineties, the algorithm for creating massive shareholder wealth was find a mediocre product wrapped in amazing brown codes and make people feel more patriotic or more young or younger, stuff the channel with it and print money. The p and g's, the PepsiCo's of the world, you know, the Coca Colas, these are the economic titans of yesteryear. The sun has passed midday on that because our weapons of diligence, whether it's Google or TripAdvisor or Amazon reviews, now gets us to the best product without the benefit of this weapon of diligence called brand.

When I come came to London, I used to stay at the 4 Seasons from the Mandarin Oriental. Why? Because someone else was paying, and there was an 8. And then I went on Tripadvisor, and I went on my social graph, and I found out people love the Conant Hotel or people love the Ferndale Hotel. So I I started staying at the Haymarket.

Wow. I like a place with a nice gym, and I wanna pay stay out with hang out with people who are younger and cooler than me. So I started staying at boutique hotels. So all of a sudden, product became the bomb again, and then your ability to embrace these new mediums around social became more important than broadcast advertising. So the traditional metrics of branding, the traditional vehicles for branding, a advertising that I've been preaching in brand strategy, the sun has passed midday.

If you look at my curriculum and the majority of curriculums and marketing departments, you could argue that we're just training people to go to work at Unilever or General Mills and be laid off 24 months later. Branding has become much more about innovation and actual product quality. Now that extends into how you discover the product, how you absorb the product, the community around it, but, you know, Tesla is a better product. Apple used to be an underpowered product with a great brand. Now it's a great brand with a superior product.

So these Airbnb is a much better product. These things are gen Google is 10 x better than what was there before it. So supply chain, design, the way you absorb the product, its ease of use, you know, it's just it's moved from kind of what you call a brand economy to, for lack lack of a better term, an innovation economy. So rather than taking classes on advertising, I say take classes on supply chain or analytics or really understand industrial design. You know, there was a general feeling that all product quality had maxed out, and then the Internet came along and unlocked all this product innovation.

So cars, they felt it hit kind of a peak in terms of product quality. And then all of a sudden with the Internet and GPS, you could tune a car up wirelessly. Know, you can unlock the doors. There was all kinds of crazy things you could do with it, in addition to in addition to EV. I mean, there's just been so much actual innovation around the product.

And what are the most valuable companies in the world have in common? They either spend no money on advertising or they're spending less. Apple's the strongest brand in the world, at least a consumer brand, I would argue, the strongest brands in the world, universities, but it's reallocated 6 or $7,000,000,000 out of broadcast advertising into its channel, into stores to build 550 templates to the brand. And I think that is almost part of the product. My 12 year old and I were bored yesterday, so we went to the Apple Store.

So that's kinda consuming the product, and I end up buying screensavers and new cases that I'm sure are 90 points of gross margin that I could find to FNAAC or Best Buy or someone for less money, but we wanna be in that store and in that environment. So it's it's moving out of prepurchase broadcast advertising into the distribution channel and into innovation. But the traditional the traditional norms of marketing or branding as I taught it, that shit's over. Don Draper has been drawn and quartered. If you're watching a lot of advertising, it means your life hasn't worked out.

The majority of people who are technically literate or, wealthy can avoid 80, 90% of advertising now. They watch Netflix. They they subscribe to Spotify. They live in cities where they have local officials that demand you can't see a billboard from a park. So the advertising is a tax on the poor and the technologically illiterate, so it's moved to more distribution and innovation.

But for god's sakes, don't, you know, avoid the of falling into the trap of thinking that the masters of the universe are branders or advertisers.

Having worked in the advertising industry, this is a conversation we have all the time with clients, which is you'll meet a certain type of client who's very, who who's they're religious about the bottom of the funnel. They're really if it if I can't track it and I don't know what exact I

won't do it.

I won't do it. Then you'll sometimes meet the opposite which is Yeah. Someone who just loves to spend on brand. And I don't necessarily

think wrong.

Right? I don't think they should Yeah.

I mean I mean, Mark Ritz, very good marketing professor, always talks about the importance of bothism. And he says, it's vitally important that when I actually speak about the importance of brand marketing that you do not interpret this as denigrating digital marketing. In fact, I go a bit further and say, the bottom of the funnel in many respects is the thing you have to optimize first. Because there's no point in actually, if there's a a bottleneck at the bottom of the funnel, if there's some constraint or a problem or a failing, you know, if you have very poor conversion, okay, there's no point in spending money on advertising because you'll just introduce more people to a disappointing experience.

You're wasting money.

So you gotta get the back end. And I would argue the first thing, in theory, you should optimize if you're being an absolute purist is repeat purchase.

Mhmm.

Because having gone through the expense to acquire these customers and, actually, that's the that's the metric that always fascinates me because we were talking earlier about electric cars. And I said the question about electric cars isn't how many people are buying them. Okay? It's not what percentage of the new car market in the UK in July were plug in vehicles. Now only question worth asking really in the long term is, does anybody who buys an electric car go back to buying a gasoline car?

Because if the answer to that is hardly anybody, then, okay, you don't know the exact shape of the s curve, but you know the growth is gonna be pretty spectacular. And so the thing to understand, I think, in a market is to what extent does your, product actually convert someone to something. Mhmm.

And then the lifetime

value So you'd start with repeat purchase, then you go to conversion, and then you'd work your way up. But what tends to happen is that when people are upset are obsessed with quantification of everything, okay, it's worth noting, by the way, that all big data comes from the same place, the past. Alright? So there's a limit to how much big data, particularly if you've had some major event like a pandemic in between, how much big data can actually tell you about the future in any case. As David Ogilvie famously said, you're not advertising to a standing army.

You're advertising to a moving parade. People are coming in and out of market all the time. And so, you're absolutely right. You get some people who are just fame junkies. And, by the way, I suppose there are brand categories where that's appropriate.

If it's sold through retailers, you know, in other words, if it's mostly sold in the physical space, you might, you know, you might argue to an extent, you know, for, let's say, a Burger King or a McDonald's. That's not a totally crazy position. Although it is now because suddenly they gotta think about delivery and and whether people order through the app or order through an intermediary because it has a major bearing on their business. But but at the same time, yeah, I mean, the tragedy is this idea this false dichotomy between brand advertising and what you might call performance or digital marketing as if you have to be in 1 camp or the other.

But where is the balance, though, and how does 1 go about is it just intuitive? Is it just,

there are figures on this. So if you look at the work of, Liz Burnett, for example, and Peter Field, the ratio shifts a little bit, but, generally, they'll stipulate a figure around about the 60 40 mark in favor of what you might call brand mass media, expenditure.

Because they have a a mutually beneficial relationship.

Obviously, top

of the funnel makes the bottom of the funnel.

My the first 20 years of my life was spent in direct marketing. And, actually, you know, because direct marketing was unfashionable, we spent a lot of time denigrating advertising spend because they got much bigger budgets than us, not necessarily rightly, but they were also, you know, much more indulged than we were because they didn't have to prove effectiveness down to the same sort of level of statistical significance. But we came to realize pretty quickly that actually, first of all, there's nothing harder than direct marketing a product that nobody's ever heard of. Yeah. And that every time, just to give an example, every time American Express went on television or advertised big in mass media, the response rates to direct mail would not quite double maybe, but they'd increase pretty significantly.

You had to work less hard.

And you had to work it's that wonderful phrase which comes from a book by, let me get his job right, his his his name right. I think it's Matt Johnson who's just written a book called, Brands That Mean Business. And his wonderful line is having a great brand means you get to play the game of capitalism in easy mode.

Yeah. I see.

And that's and what what is true is is fame, to some extent, brings a load of benefits which aren't necessarily sales related. So, for example, you can cock up and your customers will be more forgiving. Yeah. Okay? Take the example of Apple.

I mean, on a couple of occasions, Apple has produced products which had fairly major flaws, which might have proved pretty fatal Mhmm. To lesser brands. You know, the famous phone where if you held it in the wrong way, it didn't make phone calls, for example. And, given the reality distortion field around the Apple brand, people have passed over those incredibly rapidly. And so there you know, people are less price sensitive.

It's that's not easy to measure, by the way, as well. It's very easy to measure the the extent to which something has an effect on sales, but the effect to which something has an effect on price elasticity and the extent to which you can command a premium

Because it's a great brand.

Because it's a great brand. It's harder to measure because you don't have the counterfactual. You know, when you sell something, the counterfactual is that you assume that you wouldn't have sold it otherwise. But if you sell something for a high price, you can't in fact determine that without your advertising, you wouldn't have sold it

Yeah.

For, you know, for that for that premium price. So it it's to some extent, this quest for perfect measurement to to reduce marketing to a kind of Newtonian physics is a bit of a false god.

Fame. You talked about fame there. Fame can also be applied in the topic of personal branding as well. Obviously, social media has allowed us all now to build our personal brands. You've got the Gary Vaynerchucks of the world who have built, you know you know, their their companies are famous because they've Mhmm.

They've branded a person. At Ogilvy and within your sort of your your marketing, what kind of shift have you seen in the desire for people to become brands themselves and how valuable do you think that is?

I think advertising always had those personal brands. And if anything, it's slightly diminished, actually.

Really?

Campaign magazine always did a very good job of, you know, making sure there were 30 or 40 sort of famous names within the within the business.

That just that just happens in a different medium now. Right? It happens on LinkedIn with

Yes. I I agree. I mean, you know, so, I mean, 1 of the greatest things, for example, there's a wonderful, wonderful guy who now must be I don't want to name his age, but he, you know, he's, you know, past retirement age called Dave Trot. You probably know him.

Dave Trot.

Okay. He'd be a brilliant interviewee, by the way, on the show. Absolutely fantastic. But what has been absolutely fantastic is that, you know, he's a glorious advertising mind. I mean, just an absolute ornament to the industry.

And he, through Twitter and through, blogging, has had a completely new lease of life and influence to a completely new generation of people and has been, you know, hugely valuable as a teacher. And what's interesting about that actually is that, of course, he does that unpaid. And 1 of the things that is complicated about this new world, okay, you know, the most valuable thing I often do in the course of a working week is either to give something away or to put somebody in touch with something else. Neither of which, you know, that kind of barter, neither of those things is in any way monetizable, is it?

Well, reciprocity would say otherwise.

Yeah. I know. I suppose you've just gotta rely on a high degree of reciprocity in some respect. I mean, it always it always bothers me about this, which is that we're in a business advertising, which is paid by the hour, which is a terrible way to pay for ideas. Yeah.

Because the value of something has no relation to the time, devoted to its inception. And, it it it is genuine I mean, you know, I always joke about this. The most valuable thing I probably did was almost accidentally my working life, which was to go to the government's behavioral insights team. And as a sort of fanatical vapor, I'd been a long time smoker and had I've been able to quit for the first time successfully by switching to vaping. It took me a little while, but once I've made the switch, I've never gone back.

And I went to the government's behavioral insights team, and I said, look, these things are coming over from both Japan and the United States, their electronic cigarettes. I think there are 2 things you need to be alert to in psychology. 1 of which is that, because they actually replicate the habit of smoking, not just the nicotine, they are a major kind of what you might call a gateway drug act. Yeah. They're they're a major, source of harm reduction at the very least.

It may help people to quit. At the very least, it'll help people to shift to something a much less harmful delivery device. Versus patches Versus patches, guns, and things like that, which didn't replicate the behavior. And then the second thing I said is the second thing you gotta be alert to is that because of peculiar human psychology, half the people in the, what you might call, the health and anti smoking lobby will be fanatical about banning electronic cigarettes. And all credit to them, behavioral insights team, under a guy called David Halpin, I think they went to the Cameron government and said, favor here.

Can we have a light touch on vaping regulation, please? And, you know, various parts of the EU have gone for much stricter regulation. There were some countries which were more or less banning it. The US has banned Jewel for

some reason. Bizarre. On that on that point of personal branding, though, do you do you think building a personal brand is important?

Yeah. It's very interesting. I mean, you have a personal brand whether you like it or not, that's 1 really important point about branding, which is that everybody, you know and and that's, by the way, why I think marketing is so important because it's not the brand is not the heated steering wheel of the marketing world, you

know, the optional extra that you can do without that is quite nice to have.

People are going quite nice to have. People are going to perceive you in some way, regardless of anything you do. Okay? They're going to form an impression of you. They're going to form an impression of what you're worth, what kind of business you are, you know, and they will use all manner of kind of inferences and heuristics to arrive at this conclusion.

And in many ways, I suppose, this is why I argue that marketing isn't an optional extra, it's an essential because the worst thing you can do is build a great product and fail to present it in a way that is convincing, appealing, attractive, or which confers status on its users.

And the same applies for your personal brand.

And the same, yeah, the same applies. You're gonna have a personal brand whether you like it or not, so you might as well try and have a good 1. I think it probably is true to say that the personal brand requires sacrifice. You know that old that old saying that strategy is the art of sacrifice. But, wait, not totally true.

I think there are win wins. You know?

What is the sacrifice of a

personal brand? But, well, I I suspect.

You don't need to suspect. You've got a personal brand.

Yeah. You you have to have weaknesses as well as strengths. Now, interestingly, for example, 1 of the things that were part of my personal brand is I I'm not a CEO. I have no aspiration to be a CEO, and I know enough about myself to know I would not be good at that job. Okay?

There are certain forms of, of ambition and aspiration which, you know, consonant with with a personal brand that I have, are basically the avenues that are close to me. I'm not very good at administration. I'm very bad at making difficult decisions.

Self awareness is a personal brand strength.

Yeah. I suppose. But I'm I'm now where I'd be useful? I'd be useful at making oblique or unusual suggestions. I'd be useful at getting people to consider the same thing in 5 different ways or, promoting a counterintuitive thought.

I might be useful at suggesting somebody you know, I've got a fairly good personal Rolodex. You know, before you run off and do this on your own, why don't you talk to this guy at this university who's been studying this for the last 15 years?

In those early years of Tinder, I I remember being told the story maybe 10 years ago in San Francisco when I was working there with, a guy called Michael Birch, who was the old Bebo founder. In his little sort of incubator that I was in when I was 20, they were telling me the Tinder story of how you went to a fraternity. Mhmm. For people that don't know what a fraternity is, what's a fraternity?

So I guess in the UK, it would be, like, college clubs maybe. Yeah. Do they have, like, members clubs or something like that? So, basically, it's sororities and fraternities, and sororities are a house of women Mhmm. And fraternities are a house of men.

And, essentially, a lot of college students, they do something called rush, where they rush and they go house to house and they meet all the women or all the men, and then they basically pref. They put in the name of the 1 they would really love to be a part of, and then they see who accepted them back. It's been criticized up and down, and there's a lot of things that are not, you know, spectacular about it. But this is a way a lot of people find friendship and community. It's it's a community gathering for their college campus.

So with Tinder, I essentially went back to my alma mater at SMU. I just graduated, so a lot of my best friends were still in school. So I got access to the campus, and I would start at the sororities and then go to the fraternity. So I'd essentially have all the young women download it and then run to the fraternity, and then they would download it, and then everyone would start connecting. So, you know, is that good?

Is that bad? How do you wanna chop that up 10 years later? Who knows? But that's the reality and, you know, can't escape the truth. But so so you heard about this way back when?

I heard about this 10 years ago because we were building community centric apps. We're building something called Blab, which resembles what Clubhouse is now. And when we were talking about the marketing strategy, Tinder kept coming up. And, but yeah, that was the that was the thesis. It was like, should we go to fraternities and go get, you know, and to to try and build that sort of isolated tight community to try and get product market fit.

Yeah. Because network effects really, really and especially in the dating game.

The most important. Yeah. That's why there's only a handful of dating apps that have ever survived. I mean, at least during my time doing this, which is almost a decade now. But what's interesting is there's such a not to not to say only I could do this or only somebody else could do this, but there was a superpower in the timing of it all because I just graduated, and I I knew all of these people.

So if some random start up founder knocks on a sorority door, the police are coming. You know? Like, you can't you can't do that. So I felt like I had this insider hook. Right?

Because I was technically an extension of that by proxy because I had just been on the college campus. I took the photo of 1 of my guy friends back then who was, you know, all the young women had mega crush on on him. And then I took the photo of my best friend, Danielle, who was very well liked on campus, and I went into Dani's journalism class because she was still a student and I basically snuck into her journalism class and used Photoshop. And I took the Tinder screens and I put the guy's face on 1 and her face on the other and said, find out who likes you on campus. And then I saved it to a file because this is the olden days at this point.

And I went to FedEx, which is like the office supply store across the street, and I printed a 1,000 copies. And I quite literally handed different students on campus $20 to go distribute them under dorm doors and to put them on windshields and to put them, you know, in their different social clubs and to essentially distribute these flyers everywhere. So this entire campus and now in hindsight, it's probably not great. It's littering. There's all sorts of bad things involved with it, but, like, I'm just telling you a story.

So, yeah, basically, that was that was just 1 of the tactics I I used to go and put it all over campus. And then I had a few t shirts printed up that said, don't ask for my number. Find me on Tinder. And I had my girlfriends wear the t shirts when we went to the bar. And so I gave them, you know, a couple $100, and they would go around and buy drinks.

And then when people would ask for their number, they'd essentially say you have to download Tinder. So it was a lot of these tiny hacking concepts that made no sense. No 1 had ever done these things before. I had no playbook. It wasn't like, you know, I was reading some manual to marketing.

It was just what felt around me. It was it was just bringing the real life dating experience to life through an through an app, marketing.

There's, like so many important messages of of marketing there. I mean, the first 1 that you said was was that you were the customer. You were so close to the customer that you understood them. I mean, even you said, about how if another startup had come and knocked on the sirotta, well, they wouldn't even know which door to knock on for a start.

That's true. You know what I mean? Like, They

would've knocked on the wrong door, got the wrong people, and they wouldn't have understood those people, their motivation. So like, really, you being the customer I think is such a key thing. And then, the second thing you said about like, if I'd read a marketing book, and you're kind of just doing it based on intuition. I've I've seen over and over again from speaking to really successful CEOs and founders, how important naivety was. Like, not knowing

So important. Just following your gut.

Yeah. Because then you that's like first that's creating something from first principles as opposed to convention. That's real innovation. Right? Like and it creates solutions that are more suited for today and for the challenge that you're solving, which no 1 has ever had the the challenge of solving

Right.

On that date ever.

Right.

But naivety, you know, and this is this is sometimes why I think some of the best founders don't come from, like, business school or from marketing school. The best marketeers aren't marketing graduates because naivety is such a superpower.

It's a superpower and following your instinct. And if you understand what moves people and what motivates people, then you have this opportunity to connect with them on a real level. I mean, we've done things that are ridiculous. So I remember we would make these signs that said, they had the big x's, like, no. You know, like, you're not allowed to.

And they said, no Facebook, no Instagram, no Snapchat, no Bumble. This was, like, week 3 of Bumble or something, some ridiculous early, maybe 1st year. I can't remember at this point. And we would post those all over the universities. So there was this association where it was like, wait.

I can't do the things I really wanna do. I wanna sit in class in Snapchat. I wanna sit in class in Instagram. What the hell is Bumble? And so we were essentially seeding this psychological

Curiosity.

Curiosity, and then we were actually sending young women wearing Bumble shirts into classes 10 or 15 minutes late, interrupting a class of 300 people and saying, oops, sorry. Wrong room. But everyone's looking at this young woman and or young man, whoever it was, wearing a Bumble t shirt. So we were seeding curiosity in this, like, why is Bumble everywhere type of thing.

Mhmm.

And

so, you know, a lot of people think, oh, well, I can just go start an app, and I'll just buy some, you know, Instagram ads, and I'll just be successful. But if people only knew the fraction of the insane, everyday little hacks that, you know, I did and our team did to bring this to life. We were the 1st people, certainly the 1st tech brand, to do humor accounts, to pay for the humor memes. Do you remember the humor memes?

Well, we we ran a bit of a 100,000,000 followers on meme accounts. So

Yeah. So you know all about this. But, like, we were way back years years ago, I remember reaching out to, I can't remember what it was, 1 of these meme accounts. And they're like, wait. You wanna pay us to I'm confused.

How does that work? And we're like, okay. Here's the deal. We have a few $100 or whatever it was, we turn around a year later. That same account is charging a $100,000 a post.

So we there's also something about luck and timing, being just right before something. You know? And if you look at Bumble, we were also beating the woman drum, the the this this drum of we need to advocate for women, beating this drum of let's put women first. Let's let's elevate women. Women are not equal in their relationships.

Women are not being treated respectfully. Women are being abused on the Internet. Women are not being treated right. We were saying this in 2014, and then me too would come a couple years later. So I think we've we've been lucky as a business to basically be right before the wave,

and

then we've been able to be a part of that wave versus chasing a wave. And so many people chase a wave. So many people chase a wave. They look around them like, well, what's cool? How do I chase that?

And I feel like we've always had the good fortune or whatever you wanna call it. Conviction? Sure. Inspiration? To go first.

And so that's been, maybe a superpower of ours over the years.