NZ Marketing editor, David Nothling Demmer in conversation with global brand consultant and acclaimed professor Mark Ritson.
David: What are some of the challenges facing brands today?
Mark: A lot of senior marketers are obviously struggling with budget. I think we are at a point now, where marketers know that they need to spread their money top and bottom of funnel, long and short around the performance. I don’t know many good marketers that aren’t on top of that.
The problem comes in convincing the rest of the organisation that moving money up the funnel is the most prudent way to make more money and pushing it all the way down to the bottom, ironically, given ROI is often cited as the reason, is a really dumb financial move.
The issue of how to get the rest of the organisation to commit, always comes up, wherever I go.
Probably the other one that’s raised the most at the moment among those smart marketers, is pricing. I don’t know how inflation’s running in New Zealand, but if you are anywhere near 10 percent annual inflation, which we have seen in most places, or close to it, you’re going to have to increase your prices, or your profitability is going to get hit.
The problem we have in most companies these days, is a reticence to involve marketing people in pricing. Now that’s partly marketing people’s fault because they haven’t got a clue about pricing. They’re effectively just advertising people. But even when we’ve got proper well-rounded marketers that can contribute to pricing, the organisations don’t appreciate why they need marketers involved. That’s a tragic error, because most of the time, when marketers aren’t involved with research and price setting approaches, companies end up under-pricing. As a result, companies are losing a lot of money from just not having marketing as part of the pricing operation.
In New Zealand, where we do, pound for pound, tend to have better marketers, that’s more a story of the organisations not having confidence in them, than it is lack of capability in the marketers. It’s a real opportunity that many organisations aren’t grasping.
There are two other issues I’m really having an interesting foray with at the moment.
One is positioning. I’m really passionate about encouraging brands to be distinctive, but to also maintain a goal of relative differentiation, which I think is possible, if you understand it properly.
Then the big one, at the moment, is targeting. It’s all very well talking about sophisticated mass marketing, but most companies can’t afford to do that. So even if you don’t believe in segmentation, and I think there are some good arguments against it, you still have to make your targeting choices, and they’re just as complicated as ever. That one’s pretty high on the list.
David: How do marketers go about getting buy-in from the board?
Mark: That’s a big question. Well, I actually call that the question! It comes up, without exception, wherever I go. About a year ago I got sick of making up answers, which patently weren’t correct. So, I reached out to six CMOs I know have come into a company that wasn’t a believer. They’ve since got them to believe and then had success.
I basically asked them your question, which is, “How did you get it to happen?” Interestingly, they all said the same thing. All of them had been brought in with a remit to improve marketing and therefore they had, as one of them called it, a headwind for change.
I’m not sure it’s even possible for an established senior marketer in an existing role to get that kind of change, because even if the company knows there’s a problem, I don’t think they perceive the incumbents to be the people that will solve it. Now, I hope that isn’t always the case, but what came through from my sample, was people asking me, “how come you get to do consulting on strategic things?” Well, people come to me for what I do. You know what I mean? It’s self-selecting.
“Senior marketers are employed when your marketing’s screwed and are expected to fix it,” was the commonest answer of all. But the other response from the six CMOs was, “use case studies”.
Another interesting answer was to manage the senior team very carefully. Most marketers can’t manage up, so they used the arguments that convinced them why they need to invest in brands, on the senior team, that don’t give a shit about that. You have to politically manage that.
Finally, you have had to have already built that reservoir of confidence before you try and change the nature of marketing investment. You’ve got to have proven yourself already. And unfortunately, many marketers have disproven themselves in the past and not being strategic enough.
So, you need that reservoir of confidence from the senior team before you even go near this. I think a lot of marketers think, “I need to get the confidence of the senior leadership to invest more in brands,” but that’s not how it works. You’ve got to get the confidence of the senior leadership team that you know what you’re doing, and then you can invest more in brands.
It’s not a topic for debate, it’s whether they think you know what you’re doing. And unfortunately, in many cases we still have marketers that don’t, they’re too advertising focused. It’s only eight percent of the job. That’s probably the big barrier we still face.
I don’t think it’s the CFO’s fault very often. I think the classic marketing excuse is to blame the CFOs for short-term thinking. I don’t think that’s true. If you look at how CFOs value organisations, it’s 80 percent future cash flow over 10 years. That doesn’t sound very short-term to me. I think it’s marketers that have the problem in getting and demonstrating the capability to be strategic, long-term, and dependable.
David: What current thought leadership around trends in marketing strategy is exciting you?
Mark:I remain a big fan of what the B2B Institute are doing at LinkedIn in America. I mean, they’ve got a pretty standard formula, which is to take all the main theories of marketing mostly from B2C, but apply it to B2B and also develop it a bit as well. They’ve produced some really interesting empirical work just by working with lots of experts, but in a really applied way. So, I’d have them right at the top of my list. I just think they’re doing great work.
Grace Kite [business economist] is very good around econometrics. I think she’s realistic. Econometrics tends to be, for a lot of people, a complete waste of time, so I think having someone who’s an expert in it and who can talk about the proper realities of it, is really useful. Her stuff is very handy.
It’s the 10th anniversary of How Brands Grow and it’s the 10th anniversary of The Long and the Short Of It. For me, those two have held up incredibly well as the two main tomes that have changed the face of marketing a lot. And not just in our 10 years, but in the past 30 years. Those two books are the big ones still.
David: Have you had much engagement with Kiwi brands that you think are doing particularly well in terms of their marketing at the moment?
Mark: I’ve done a lot of work with YouTube in the past year, looking at how brands can utilise long and short form, digital video. McDonald’s is probably, globally, pound for pound, doing the best work. I don’t know how they perform in New Zealand, but generally they seem to have got their heads around mass emotional branding for everyone and have then targeted very specific product communications for particular segments or particular promotions.
That sounds obvious, but there aren’t many brands that really get at that. And I think Maccas is doing a stand-out job. They’re strong in the UK, and in the US, they’re killing it. There was that period where Burger King got all this kudos from Cannes because they had all this daring work, but it was poor work. It wasn’t bad work, but it wasn’t good either. Meanwhile, Maccas was doing very humble, obvious stuff, but it was stuff that was working.
I’m a huge fan of Tracksuit, the Kiwi brand tracking company. I really think they’re onto something. I have to be clear I have a nought point two percent holding in Tracksuit. I won’t make any money if they ever sell to anyone, but I now have a tiny bias towards them because they’ve given me point f*** all of it. Still, I’ve remained very enamoured with them. I think what they’re doing and making is very practical and simple. It’s the new direction for a lot of tracking, just to keep it accessible and keep it simple, and also use the new systems of data production to make it that way. I think they’re going to be a world leader.
David: What else is happening with Mark Ritson?
Mark: My life’s changed a lot in the sense that I really used to be a part-time professor and then mostly full-time consultant and I’d travel all around. Mini MBA will do six to seven thousand marketers this year. So, effectively, in a good way, I’m locked up at home working on that. It’s pretty much full time. Right now, we have, probably, 3,000 marketers going through the two courses. We work at that most of the day and we launch a third course on the Mini MBA in September, which is the Mini MBA in Management, very exciting, but a lot of work to pull off.
That’s all the other courses, except for marketing, taught by the world’s best business school professors. We are about to launch that in September. So, lot’s going on.
I’ll also be in New Zealand in November thanks to the NZ Marketing Association and YouTube, hosting a series of events.
David: What are your thoughts on what’s happening in the AI space?
Mark: I think that AI is currently an idiot magnet, bit like Gary Vee [Gary Vaynerchuk, an American entrepreneur and internet personality] in the sense that we all have to think about it, but those that really get into it, don’t really understand what they’re doing, is my take on it.
I think it will change many facets of what we do, but not as many as we think. The only immediate role I see for it in the very, very short term, is that it has a really interesting application to secondary data. If you look at how we
diagnose situations, we’ve got primary data and we’ve got secondary data.
Secondary data is normally very labour intensive. The application of AI to produce secondary data analysis fascinates me and looks really useful. Everything else is further off. That’s not to say I don’t think there’s huge potential in it.
I’ll give you a good data point, and it comes from the UK, not from New Zealand, where you’d expect it to be a little better. We did an analysis with the better briefs team last year, of big briefs. You know what I mean. Between clients and agencies. 60 percent of them don’t have clarity on who their target consumer is. That’s more than half. So, my frustration with AI, is we’ve got marketers wanging on about future technology, but they cannot do the basics. They haven’t positioned, they haven’t done targeting, they’re not involved in pricing or product development anymore. But we’ve left all of our traditional challenges aside to focus on something which is not directly in our wheelhouse.
We’ve done this before. A year ago, we were all talking about the metaverse. It frustrates me that we are an industry that can’t walk, but we try and get into a supersonic UFO and fly instead. Just start with walking because most marketers can’t even walk, sadly.
Mark Ritson is a brand consultant and former marketing professor. He has a PhD in Marketing and taught on the MBA programmes of leading business schools including London Business School and MIT. He currently teaches the Marketing Week Mini MBAs in Marketing and Brand Management.
This article was originally published in the June/July 2023 issue of NZ Marketing. Click here to subscribe.