A History of Marketing / Episode 48

This 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 Podcasts

Now 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 Research

Andrew 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 Publishing

Andrew 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 c...