The Fine Art of Reducing Marketing Expense in an AI World | Dwight Hutchins |Boston Consulting Group

Summary

CMO Confidential Podcast Summary

Episode: The Fine Art of Reducing Marketing Expense in an AI World
Date: September 30, 2025
Host: Mike Linton
Guest: Dwight Hutchins, Senior Partner & Managing Director, Boston Consulting Group

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Overview

In this episode, Mike Linton and Dwight Hutchins dive into the realities—and pressures—of reducing marketing expenses in today’s AI-transformed landscape. Drawing on Hutchins’ extensive consulting experience and Linton’s CMO expertise, they unpack how shifting market forces, economic stress, and the AI revolution are intensifying demands on marketing leaders to do more with less. The conversation is rich with actionable strategies, real-life war stories, and sobering observations on the CMO seat’s growing complexity.

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Key Discussion Points & Insights

1. The Economic & Consumer Backdrop (03:05 - 06:26)

• Uncertainty Reigns: Hutchins describes markets in flux due to geopolitics, inflation, tariffs, and shifting consumer behaviors.
• “It’s creating a lot of stress in the marketplace, and it’s changing consumer behavior and buyer values at a record pace.” — Dwight Hutchins (03:10)
• Companies are forced to juggle top-line growth with cost pressures, increasingly at the expense of the marketing budget.

2. The Perennial Squeeze on CMOs (04:44 - 06:53)

• CFOs demand expense reductions: Marketers are told to drive growth but also “hand back hundreds of millions of dollars.”
• The “trip to the dentist” analogy: “The dentist forgot the Novocaine.” — Hutchins, on how tough the pressure is now (04:37)
• Despite strong earnings, persistent uncertainty drives continuous belt-tightening and caution in spending.

3. AI’s Double-Edged Role (08:02 - 10:49)

• AI both amplifies complexity and offers solutions for measurement, consumer insight, and campaign execution.
• The marketing value chain is more fragmented than ever: More channels, more formats (TikTok, influencers, social), spreading budgets thin—“like peanut butter.”
• “AI complicates that, but also can help with that.” — Hutchins (08:02)
• The need for agility: Agencies and internal teams must race to keep up with both consumers and AI’s potential.

4. Lessons from Social Media Transformation (10:49 - 12:44)

• A client success story: By “forensically finding money that wasn’t performing anymore,” a company reallocated over $1 billion from underperforming marketing spend to more effective channels.
  • “They went through an exercise to get more performance and more cost effectiveness out of their marketing spend and they took a billion out. But then they pivoted rapidly to social media. And so that was a game changer.” — Hutchins (11:12)

5. Analytics-Driven Spend Reduction: Practical Approaches (13:28 - 19:34)

• True efficient marketing demands ruthless analytics—breaking down campaigns to the granularity of every ad, exposure, click.
  • "When I go in and ask a CMO or a brand manager, can I see last month's performance report? It takes them three weeks to get it to me. You're saying it tells me they're not using it to manage..." — Hutchins (13:46)
• Identify and eliminate waste:
  • In TV: Oversaturation can waste 50%+, in digital it could reach 90%.
  • Example: “A target audience is getting hit by an ad a hundred times a week... there's a diminishing return somewhere well before a hundred.” — Hutchins (15:20)
• Performance A/B testing: Use small-scale, fast tests to validate cutbacks—reduce frequency, measure impact, and redeploy funds where most effective.
• Focus on the “first fast response”: Analyze brand placement in consumers’ minds for specific demand spaces (e.g., first brand that comes to mind for a safe car).

6. Overcoming Internal Resistance (19:34 - 21:58)

• Cuts must be data-driven and transparently communicated, engaging CMOs and brand managers in hypothesis-driven tests.
• Most CMOs resist initial expense reductions but become advocates when freed-up funds can fuel high-impact projects or innovation, like AI initiatives.

7. DIY Cost Control—Tips for Smaller Teams (22:38 - 25:29)

• Even small brands or budgets need to maximize “working” vs. “non-working” dollars (media spend vs. production, agency fees, etc.)
  • “The money that you spend to produce the ad can’t be so much that you don’t have any money to actually show someone the ad.” — Hutchins (24:40)
• Focus spend where it can achieve sufficiency—reach enough consumers frequently enough to drive real impact. Spread too thin = wasted budget.
• Aim for best-in-class ratios: For every $1 spent producing, at least $5 (ideally $9) should go to actual consumer-facing media.

8. The Folly of Overproduction & Promotions (26:25 - 27:37)

• Don’t overspend on creative excellence that sacrifices reach. 80%+ of promotion value comes from brand and message, not production glitz.
  • “I make the joke that they’ve hired Steven Spielberg to direct... there’s all of this money on production that doesn’t drive any more value than black and white.” — Hutchins (26:25)
• Caution with promotions: Escalating deals rarely yield incremental returns.

9. Zero-Based Budgeting: Pros and Cons (27:37 - 29:35)

• Provides cross-company discipline but only works if data is accessible and process does not become bureaucratic overkill.
  • “There’s goodness in moderation and there’s really bad stuff if you become a fundamentalist and zealot.” — Hutchins (27:37)

10. Organizational Challenges—Biggest CMO Mistakes (29:50 - 31:19)

• “Sufficiency” issue even at scale: Too many small, disconnected campaigns, especially in matrixed organizations, result in squandered resources.
  • “I have looked at multibillion dollar marketing budgets... up to half of their spend was not in... the sufficiency range... It was all tactical local execution.” — Hutchins (29:50)

11. The Need to Rethink Marketing Execution (31:19 - 32:48)

• CMOs must restructure how marketing is executed across complex global/regional/brand organizations.
• “A fundamental rethink of organizational structure and execution and even where the line is drawn from insourcing to outsourcing, I think that in many cases too much has been outsourced...”—Hutchins (31:44)
• Without proper structure, data, and governance, cost-cutting efforts can’t succeed.

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Notable Quotes & Memorable Moments

• On AI and the need for precise measurement:
  “Back then, as always, it’s about analytics. Right? It’s about taking the data and really tearing apart your campaigns all the way down...” — Hutchins (13:28)

• On the CMO-CFO dynamic:
  “...the way to make your CFO love you is to be ahead of that curve.” — Mike Linton (21:58)

• On working vs. non-working spend:
  “Pick a sub segment and be able to reach sufficiency one, two, make sure your ratio of what you spent to produce it is less than, I would say, a generous spend is $1 to produce for every $5.” — Hutchins (25:29)

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Funniest Story (33:03 - 35:11)

Hutchins recounts his Wild West experiences running field marketing across Asia, Africa, and the Middle East:

• Brands gave away batteries taped to products in stores as promotions—because the brand manager’s father sold batteries, not because it matched the product at all.
  • “The products had two batteries taped to the top... Now the batteries had nothing to do with the product at all... The brand manager's father sold batteries.” — Hutchins (33:33)
• In-store promotions and free gifts with purchase are rarely effective: “I have yet to find more than 10% of those that work on an ROI basis.” (35:00)

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Actionable Advice & Takeaways

• Ruthlessly assess spend using analytics and performance data; don’t trust legacy allocations or gut feel.
• Ensure your marketing execution achieves “sufficiency” rather than scattershot tactics—whether your budget is $10M or $1B.
• Regularly audit working vs. non-working spend ratios, cut unnecessary production and agency costs.
• Challenge promotional tactics and “free gift” strategies; most are not ROI-positive.
• Zero-based budgeting should be used with moderation and data support, not as a dogmatic exercise.
• Restructure marketing for today’s complexity—rethink insourcing vs. outsourcing, governance, and execution to unlock real efficiency.

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Final Thought

Efficiency isn’t just spending less—it’s spending smarter, guided by data, agility, and a willingness to break outdated habits. In the AI era, CMOs must blend relentless measurement with bold organizational redesign to keep brands ahead.

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For more insights, tune into the full episode or subscribe to the CMO Confidential Podcast via Spotify, Apple, or YouTube.

Transcript

[Dwight Hutchins]

The CMO Confidential Podcast is a proud.

[Mike Linton]

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[Dwight Hutchins]

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[Mike Linton]

Then visit iheareverything.com welcome to CMO Confidential.

[Narrator]

The podcast that takes you inside the drama, decisions and choices that go with being the head of marketing. Hosted by 5 time CMO Mike Linton.

[Mike Linton]

Typeface helps the world's biggest brands move from business brief to fully personalized campaigns in hours, not months with its Agentic AI marketing platform. They are the first enterprise platform with agentic AI marketing workflows designed to instantly automate work that used to take weeks. With Typeface, one campaign scales into thousands of personalized experiences across ads, email and video while staying true to your brand. The company's AI native platform integrates seamlessly into your martech stack and marketing workflows and includes enterprise grade security. Adweek named Typeface AI Company of the Year. Time Magazine featured them as a best invention and Fast Company called them the next big thing in tech. See how major brands like Asics and Microsoft are transforming marketing with Typeface. Learn more at typeface AI/welcome marketers, advertisers and those who love them to Chief Marketing Officer Confidential CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing Officer of Best Buy, eBay, Farmers Insurance and Ancestry.com here today with my guest Dwight Hutchins. Today's topic the Fine Art of Reducing Marketing Expense in an AI World. Now Dwight is a Senior Partner and Managing Director at Boston Consulting Group and an Adjunct professor at Northwestern. Previously he was a Managing Director at Accenture, where he specialized in consumer products and health and public service. He started his P and G career. He started at P and G as a manufacturing engineer. So we have P and G in common and a lot of other things. So welcome Dwight.

[Dwight Hutchins]

Thanks Mike. Really excited to be here.

[Mike Linton]

So you're in a catbird seat of looking at a lot of companies and a lot of marketers and businesses all over the place. Let's start with what are you seeing in the marketplace today, both from a company perspective in General and then CMOs in particular?

[Dwight Hutchins]

It's a great time to have that question. Mike Edgewood all of the changes that are happening in the economy, all the different public policy, things that are happening. Tariffs, counter tariffs, concerns about inflation, interest rates. It is. It's creating a lot of stress in the marketplace, and it's changing consumer behavior and buyer values at a record pace.

[Mike Linton]

And there's no stability anywhere. Right. Can't count on anything.

[Dwight Hutchins]

No, absolutely. And so the thing is that everything from big purchases like homes, which then drives a lot of spend on. On. On furniture and other upgrades, to small purchases for daily goods, you're just seeing shifting behavior. People are shifting down, people are delaying. People are making different choices. And so in a world like that, how does a marketer get the attention, make sure their messages are resonating, and actually break through all of the concerns and clutter that's out there today? So that's what the CMO is really, really struggling with.

[Mike Linton]

And so I hear you saying, look, companies are dealing with massive uncertainty. The CMO still has to drive profitable growth almost always. There's usually some pressure on cost that goes with that, especially if people are nervous. And I think you've written that you see this as a tough market getting tougher.

[Dwight Hutchins]

Yes.

[Mike Linton]

Like, I mean, by how does it get any tougher? You just described, like, a trip to the dentist. Let's talk about how it gets tougher than this.

[Dwight Hutchins]

The dentist forgot the Novocaine.

[Mike Linton]

Oh, my gosh. You're just painting a great picture for what's coming next.

[Dwight Hutchins]

Yeah. So the thing is that the market is tougher, and so to earn a buck, it's just getting harder. At the same time, the CFO's job has gotten a lot harder because they've got to account for all of these changing costs. And the first thing they do is they turn to the CMO and say, I need you to continue to keep the top line going, but I need to take a big bite out of your budget. And that just comes rolling down. How do I, you know, maintain the commitment that I've made to profitable growth and brand, but at the same time hand back hundreds of millions of dollars now?

[Mike Linton]

And you think written in that kind of or beneath that statement is it's always the cfo. It's always been on the. I always want to get expense reduction across the whole. Marketing's a big line item a lot of times, so they get it. But you're saying it's getting tougher. And is that getting tougher because people are banking for uncertainty or other stuff because the stock market's at record highs, there's decent earnings coming. What do you see behind all this?

[Dwight Hutchins]

Let's say uncertainty Right. So yes, right now things, you know, there's been worry, there's been bouncing around then current numbers are coming strong. But if you listen to all of the earnings calls, there's still a lot of uncertainty out there and a lot of questions around when will we will have a clear picture on everything from employment on one side to inflation on the other.

[Mike Linton]

Okay, so, and I think this is a really good summary you've done of what's going on in the businesses. It may look good on the top, but beneath the surface, everyone is paddling like crazy.

[Dwight Hutchins]

Yes.

[Mike Linton]

Very nervous about how choppy the sea might get. And let's throw in some AI specifics on top of that because you have all this money going into AI infrastructure, everyone rushing to go AI, you're seeing all the people say maybe this thing isn't going to pay out as fast as we thought. Tell us what you see there and then the pressure, the additional pressure that is putting on everything.

[Narrator]

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[Dwight Hutchins]

And even before AI, the execution of marketing has only gotten more difficult. From influencers to the proliferation of various social media platforms. TikTok, is it going to stay in the U.S. is it not so the choices the marketer has to reach, the consumer just keeps getting spread out. So that's one angle that I'm seeing being a challenge for execution because right now it's spreading the ad budget like peanut butter as opposed to really focusing on what works. AI complicates that, but also can help with that. What we're seeing is a lot of experimentation, particularly I think on the harder end, which is the ad production and creative. There's a huge opportunity upstream in terms of measurement, in terms of understanding consumer behavior, understanding consumer insight and doing a better job of targeting. So there's one piece of, you know, from a media execution standpoint and media buying of who should we be targeting, when should we be engaging them, how should we be engaging them? And then there's a downstream in terms of everything from developing brand briefs to developing the actual ads themselves. So a marketer has to think about all of those things and how to layer those in. And of course they don't own a lot of the assets that are involved with that value chain. So they've got to pick the right agency and the right agency capabilities. And that is shifting dynamic in and of itself.

[Mike Linton]

We've had a couple of guests on the show that have said things along the lines of the CMO job is, if not the hardest, surely one of the hardest in the C suite. And when you throw AI on the top of this, particularly if you have a large budget, you can make a case that you're at the front end of all this stuff while you're. You are getting almost always expense reduction pressure. And that's kind of, I think what we. That's the topic of the show. And now that we've set the stage, I think one of the concepts I want to talk to you about is your thinking is that really all companies, marketers in particular should be preparing to reduce the expense line. Why they manage all this complexity because that's just the way of the world and that's Darwin at work in the marketplace. Tell us, set the stage for us about how you are looking at this across companies and then marketers, marketing in particular, but companies first and then we'll dive into how to do it right.

[Dwight Hutchins]

This reminds me of the oh so distant past of social media and the advent of social media and the ad agencies and the value chain was much slower to pivot to social media than the consumer. So a lot of money was still being poured into traditional media when the eyeballs had massively shifted to social media and it took years to catch up. And the ones who did it, the ones that did it first and best saw outsized gains with that one client I worked with did both. They went through an exercise to get more performance and more cost effectiveness out of their marketing spend and they took a billion out. But then they took pivoted rapidly to social media. And so that was a game changer.

[Mike Linton]

Hey, Dwight, can we go? They took a billion out of what? And like roughly what percent of the.

[Dwight Hutchins]

Budget was that that they don't speak about? So I can't. But it was double digits in terms of.

[Mike Linton]

Okay, so. So we'll say way more than 10%. So that is a massive chunk. And then you run that, you take that money and I hear you saying then you take that money and you turn the marketers loose on new stuff that's working. So you're not stuck doing this incremental move. You are shifting immediately into the big story.

[Dwight Hutchins]

Yeah, it, it lays out how they went through that. And there's a lot of media on it as well. There's a lot of news stories on how they radically transformed by pulling, finding, forensically finding money that wasn't performing anymore. It worked before, but it's not working now. And they had to do the analytics to find it and to extract it and then pivot it to take to new areas that were working really well.

[Mike Linton]

So let's talk about how do you do that? Because since the dawn of marketing time, everyone has been. You had the Wanamaker thing. 50% of my budget is wasted. I just don't know if 50%. There's teams of people constantly looking at this marketing, analytical department, CFOs and everybody. How do you recommend people do this differently? And we're not even talking about the cultural resistance yet. What they did, what you did in that billion dollar thing, that's a massive shift in focus versus an incremental. We're going to tear this apart one thing at a time. This is, we are going to find this and then we're going to move all of it.

[Dwight Hutchins]

And again, again, that's. And if you move forward in a world of AI, it's even more true. Back then, as always, it's about analytics. Right. It's about taking the data and really tearing apart your campaigns all the way down to every 32nd AD, quite frankly. And today it's obviously every click, but also every exposure, every impression. You can measure it. But when I go in and ask a CMO or a brand manager, can I see last month's performance report? It takes them three weeks to get it to me. You're saying it tells me they're not using it to manage, they're using it to plan in some cases, but they're not using it to match.

[Mike Linton]

Wow, that is super interesting because you would think in that kind of world, analytics are your best friend. But one of the things about analytics is everyone has their own version of there's last touch attribution, there's all the brand measures, there's the long term spending and brand building, there's all this other stuff. How do you figure out where you really are on that efficient frontier? Because everyone thinks they're really efficient, but it's hard to believe anybody really is. How do you assess true efficiency?

[Dwight Hutchins]

It comes across in a Couple of buckets. One is you hold performance equal and you go, okay, how, how clean is my execution? And it's just basics. Right. Over saturation in, in TV, you can, you know, you can waste 50% of your budget. In digital, you can waste 90% of your budget. And what do I mean by that? Yeah, we have seen situations where, and we've all experienced it as a consumer, where a target audience is getting hit by an ad a hundred times a week.

[Mike Linton]

Yeah.

[Dwight Hutchins]

And there's a diminishing return somewhere well before a hundred. Right. And so we've calculated as much as 90% of that money was wasted and it was a significant percentage of the budget. Right. And so when you're, when there's no science, art, nobody's theory that says a hundred times a week is the right number, then if you cut it to 50, it has no impact on your performance and it cuts your budget in half. That you can reinvest somewhere else. So that's the efficiency piece. And we're seeing that from everything from the length of the ad to the quality of the ad to the free.

[Mike Linton]

Yeah. Because if you could go to 15s, you can cut it in quarters. Tell me about you. You also mentioned 90% of your performance. Money can be wasted. Tell me where you're going with that one.

[Dwight Hutchins]

So again, that's on the efficiency side. And the flip side of it, though, should start with consumers. Right. Consumer behavior and buyer values. And one of the things that we've invented or innovated with is first fast response, which is if I come up with a brand, what is your first fast response to? You know that, that contextual situation, and that is where you're trying to get to for a particular demand space. What is the first brand that you think of for that moment, whether it's what car you want to buy.

[Mike Linton]

Yeah. So if I do call and I say, what car do you want to buy? That's the first response. Or, and, or what car do you need if you have a family? Is that what you're talking about?

[Dwight Hutchins]

Absolutely. Top line, I want to get fancy sports car. What's the first thing that comes to mind? Or I want a safe car. What's the first thing that comes to mind? Or I want, I want a refreshing beverage.

[Mike Linton]

Have to be top of mind, essentially.

[Dwight Hutchins]

And so then you're finding where is that again, demand space. That is important to the mic lens of the world. And you're driving towards where am I vis a vis the competition in that demand space. And if I'm not First, then that has a huge impact on my brand power and market share. So you start there and go, how am I executing against the right brand space? Where do I the right to win? And then how am I executing against that? Not how am I executing against three little variable. Yeah, three to three demographic levers.

[Mike Linton]

Yeah. So if I said best marketing podcast, I know what you would say. Yeah. So when you get, when you start getting this data, how do you know you're cutting the right stuff? Because I, in my career I have managed to reduce budgets significantly in a bunch of places. But there's always, you know, a hue and cry that you're going to destroy the company. Oh yeah, you're going to destroy this thing.

[Dwight Hutchins]

Your uncertainty and doubt is a great defense.

[Mike Linton]

Yes. And a lot of times sometimes it's right to, or at least it's been right sometimes. So how do you know you're cutting the right stuff? Because you're going to, you're not going to do it without some analytics that say this is right. How do you know you're doing it right? And, and then how do you overcome this? A multi part question. How do you overcome the naysayers in that who have already looked at the data and are saying no, that's totally.

[Dwight Hutchins]

Wrong, you're cutting the right costs. When the CMO says you're cutting the right costs and how you get there is that you have the data and you ask the simple question, what brand value am I driving by showing a small segment of my target audience the same ad a hundred times a week? And do you think we could do it 50 times a week? And can we run an A B test in a very short period of time in a small of the market at 50 times a week, 25 times a week?

[Mike Linton]

I used to have this thing, find the men, find the men.

[Dwight Hutchins]

So yeah, you've got to use the facts and work with the brand managers and the CMOs to test the hypotheses to get to some places comfortable.

[Mike Linton]

Two things I would say that one that assumes the CMO is on board with I got a cost, I got expense reduce. And a lot of some CMOs are never on board with that because they think all the money is perfect. And so I want to talk about that. That was. So that's cpg and you are the first person to speak Dutch on the show by the way. So non cpg where it might be a little harder to understand some of the brand stuff. And then CMOs that actually don't buy in to the expense reduction Story we started this whole show with, I haven't.

[Dwight Hutchins]

Met, I've only met one CMO that has bought into it in my 20 years of doing this starting. Most CMOs buy into it by the end. A few obviously do not. But it depends on what the mission is. If you've been told by the CFO to go find this, then it is about doing the least harm possible. When we've gone in, we have been able to do it in ways that takes out very low performing spend. And so that's 1, 2 is we find more low performing spend than the CFOs asked for and we found places to reinvest. And so again we get the CMO fresh cash and they always have unfunded projects that they want to go execute against. And that's if the CFO is pushing, even if the CFO is not pushing. The more forward leaning CMOs who want to do for instance big things in AI are looking at this as a way they know they can't go to CFO and ask for more money, especially the sums that we're talking about. So the opportunity is to look within your own budget, proactively go find the lower performing spend and pivoting it in such a way that you both are able to continue against execution objectives as well as have the R and D funds to go try some of these new things.

[Mike Linton]

Yeah, I think there is always an advantage to being ahead of the game versus Chase and the way to make your CFO love you is to be ahead of that curve. But I want to talk about, so we have a lot of audience out there that maybe can't hire a top notch company to come in and do this for them. How should they get started on this if you can't use any outside help and you've decided, gosh, I got to move my marketing team into the space right now where we are more expense conscious, where give us some tips, give our audience some tips on how to do it.

[Dwight Hutchins]

Okay, first of all, I would say that your audience, I would imagine the first thing is that they actually can afford the help. We are so confident in our ability to help that we are willing to put our performance at risk and put our money where our mouth is. Like we will go find you the performance improvements and if we don't, then that's on us, not on you. And so we can do a very quick diagnostic to see what is the size of the prize and the levers that have to be pulled and then get into a commercial conversation that says we can Go deliver that and you get to pay us out of money that you wouldn't have had otherwise and still have money to reinvest. Now if you're. And I've been able to do that with budgets below 100 million and again, I think your audience is going to be at or well above 100 million.

[Mike Linton]

We've got a bunch of big, a bunch of small, a bunch of B2B. We cover the gamut.

[Dwight Hutchins]

Okay. Yeah. And so if you're talking about smaller brands or smaller marketing budgets, then again I would come back to the basics of brand execution. I've seen in small budgets out of kilter ratios of non working to working. Where you've spent so much money on ad fee, on, on agency fees and production, you don't have enough money to actually buy the media.

[Mike Linton]

For everybody in the audience who might not know the difference between working and non working. Working dollars is money that the consumer sees and non working is money that is used to get that stuff to, to the consumer, like producing an ad, like driving your CRM system, et cetera. And one of the things I think Dwight's talking about here is the ratio between working and non working is really a good place to start, especially if you're small. And I think I didn't mean to interrupt you. I just wanted everybody to know what you're talking about. So let's talk about how you would attack working non working dollars.

[Dwight Hutchins]

Yeah, thank you for that. Sometimes we get into too much inside baseball. The money that you spend to produce the ad can't be so much that you don't have any money to actually show someone the ad.

[Mike Linton]

And you can only run it one time.

[Dwight Hutchins]

You can't show enough, can't show it to enough people enough times to make a difference. And so that's the other piece is the first question is do you have enough money to make a difference? And if you don't have enough money to make a difference, then you know you're probably wasting your entire budget.

[Mike Linton]

Yeah, right.

[Dwight Hutchins]

And so if you don't have enough money to cover the entire market, you really need to pick a subset of the market where you can move the needle. Because showing the entire market you're at once a year is the equivalent of showing at zero.

[Mike Linton]

Right.

[Dwight Hutchins]

So pick a sub segment and be able to, to reach sufficiency one, two, make sure your ratio of what you spent to produce it is less than I would say a generous spend is $1 to produce for every $5. You've got to show it best in class Drive that number even further down.

[Mike Linton]

Now you can get the nine to one if you're really young. And I think I hear you saying two things here. Correct me if I'm wrong. The first is you have to have a threshold of spending that makes a difference in terms of consumer impressions somewhere, right? And even if, and if you don't have that, it doesn't matter how great your creative or your search word buying is or cra, you're not going to move the needle in a significant way. And the second thing is don't over index on making it beautiful. If you can't make it reach everybody.

[Dwight Hutchins]

80% of the value. We've seen this and again this is even with the biggest brands disproportionately work with billion dollar brands and in store promotions, for instance, 80% of the value is just the brand and the message. It could be in black and white but instead they've I make the joke that they've hired Steven Spielberg to direct. They've got Taylor Swift mission to make the song, they've got Tom Hanks and Tom Cruise starring in it and there's going to be a helicopter and a volcano. And so there's all of this money on production that doesn't drive any more value than black and white that says our product is great, buy it here.

[Mike Linton]

Same thing. It's the same thing with promotions, which is if a dollar off is really good then $3 must be great and I should go to $10. And I'm like that is probably not the greatest thinking. I also want to talk about zero based budgeting, something I'm personally not a fan of, but a lot of people are. Tell me your thoughts on zero based budgeting. And zero based is everybody starts from zero and you have to justify every everything you spend.

[Dwight Hutchins]

Full disclosure. I've run some of the biggest zero based budgeting programs that's ever been run. And what I've learned is just like a lot of things in life, there's goodness in moderation and there's really bad stuff. If you become a fundamentalist and zealot.

[Mike Linton]

About it, but really zealous on do we need a tax department really?

[Dwight Hutchins]

Yeah. So the core principles apply and really what I've seen is if you apply it in a way that pushes the company and stretches it, but doesn't either break it or bog it down, first thing is do you have the data to support it? I've gone into places and said let's stop now. You do not have the data. So this will, it will take Your entire organization the rest of the year just to collect the data. And that's not the highest and best use of time. So let's pull it back a level. Other places I was able to get 200 million transaction records in a week.

[Mike Linton]

Yeah.

[Dwight Hutchins]

And then feed that into our systems and be able to come back with precision analysis of where money was working and not working against their, against their brand objectives.

[Mike Linton]

There's also the zealous thing which is do we really have to justify that we need like a call center, stuff like that. Do you always go to zero on everything or can we just stipulate that this part is there and we're going to make it more efficient but let's not go to zero on everything.

[Dwight Hutchins]

Yeah. You've got to start just like brands. Right. You've got to start with your brand objectives and think long term about where you're trying to take brand equity and then get into what is the best way to invest to get that done. Not should we have brands. Right. That's for business schools and other places of luxury.

[Mike Linton]

I'll let all the business school professors that have been in the show opine on that. Before we get to our traditional last question, I'm going to ask you too. What are the biggest mistakes marketing leaders are making right now?

[Dwight Hutchins]

When we were talking about sufficiency, we were, it sounded like we were just talking about smaller brands and smaller marketing budgets. I have looked at multibillion dollar marketing budgets of many companies and I would say that in some cases up to half of their spend was not in a, in the, where I would call the sufficiency range. And so it was a lot of little campaigns that didn't add up to any master plan or master brand strategy. It was all tactical local execution. So one of the challenges that CMOs have is in a matrixed organization, global multi brand, country led, is that you've got 10,000 flowers blooming and not enough control. Particularly in a world in which again, digital creates many opportunities for success as well as waste.

[Mike Linton]

I think that is great insight where you can see you have all these beliefs at all these levels and that is using up a huge amount of money, but you don't have enough of a pattern to move the market. Last question before we get to our last question. Anything we haven't talked about that you want to share before we go to our traditional last question.

[Dwight Hutchins]

So I think it's building off of that, which is CMOs need to fundamentally reimagine and restructure how the marketing, how marketing gets executed across their enterprise. And it's not going to just be the CMO alone. Right. Because again, you've got regions and you got countries and you've got brands and the powers are diffuse for many good reasons and many legacy but not currently working reasons. And so a fundamental rethink of organizational structure and execution and even where the line is drawn from insourcing to outsourcing, I think that in many cases too much has been outsourced and in some cases, you know, not enough has been insourced. And so a fundamental rethink about that is, is, is I think a precondition for taking advantage of any of the other things that we were talking about.

[Mike Linton]

Now I hear you saying in there, inherent in that answer is it's not just about getting more efficient in everything that you do, it's about rethinking everything you do and seeing if that works and making it more efficient and it's.

[Dwight Hutchins]

A barrier to your ability to reach those efficiencies. Yeah, yeah. So we can sit here and talk about efficiencies all day long, but if you don't have the structure, the data or the governance, it is just talk.

[Mike Linton]

There you go. So this brings us to our traditional last question. It's a two parter. You can take one or both, but you must take at least one funniest story you can tell on the air and or practical advice we haven't discussed yet.

[Dwight Hutchins]

The funniest story is probably more of a wild west because I spent 10 years in Asia looking over Asia, Africa and Middle East. And it's more in. In store marketing which many of you.

[Mike Linton]

Can tell us that we love the wild west.

[Dwight Hutchins]

Okay. I think it's a rapid series of the net of it is that in store marketing in particular is a hot mess. Everything from I had one in which the stores were complaining that their products were falling off the shelf and why were the products falling off the shelf? And it was because the products had two batteries taped to the top of the product as a free gift with purchase. Now the batteries had nothing to do with the product at all. Think about like milk with batteries, washing detergent milk, cans of soda. So then why were there two batteries? The gift with purchase and we found out that the brand manager's father sold batteries. And so literally the decision making criteria of what the gift would be was oh, my dad sells batteries. That would be, I got a good deal on them, so let's just take them to the top of the box. So that asked me is okay, you're Getting ready to go look at all my in store promoters. I got a few questions if you when you get back, could you tell me how many showed up at work? What did they do? Did it add any value and was the juice worth the squeeze? Did I get enough value for what I spent? Particularly if I've got people representing my brand that don't work for me and I'm like, that doesn't sound like the right execution. And so the wild west is I look at your discounts as well as free gifts with purchase. I have yet to find more than 10% of those that work on an ROI basis.

[Mike Linton]

10%. I'm thinking of all the other things. It's a good thing you sold batteries and not some other things.

[Dwight Hutchins]

So yes, I would say as much as we talked about traditional media and ad production, the craziest stuff I see is for instance, a warehouse full of Happy Chinese New year promotions from 2015. And I go and ask the company, when are you planning on using this?

[Mike Linton]

Oh yeah, it's only another 75 years or 85 years until we get we can use 15 again. All right. I still think the batteries on top of the bill gets the best, so I think that's a great way to end the show. Thank you Dwight and thanks to everyone for listening to CMO Confidential. If you're enjoying the show, please share and subscribe. Look for all of our shows on Spotify, Apple and YouTube which include it's a Bird, It's a Plane, Holy shit. It's AI parts one and two. If you drop the best marketers from the 1950s into today's jobs, how would they do the case for and against CMOS and Colonel Mustard in the study with the job spec How Poor Design Shortens CMO Lifespans hey all you marketers, stay safe out there. This is Mike Linton signing off for CMO Confidential. Legacy marketing tools weren't built for AI. Typeface is the first multimodal platform where agentic workflows handle everything from brainstorming to launch across every channel and customer Touchpoint. Their AI native design transforms manual marketing tasks into automated workflows that create personalized text, imagery and video at enterprise scale. Typefaces AI integrates with existing martech stacks through APIs and native connections so you keep your processes while gaining AI superpowers and enterprise grade security. See how brands like Asics and Microsoft accelerate innovation and transform a single idea into thousands of personalized on brand experiences. Instantly ready to see what marketing looks like when AI handles the heavy lifting? Learn more at typeface AI/cmo home.