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- [00:00]
Fergus O'Carroll
Welcome to OnStrategy Showcase, the official podcast partner of the Effies Worldwide. I'm Fergus O'Carroll in Chicago. We are coming up on our Sydney show. It's actually happening next week. So I think probably by the time this episode airs, which will be, I think on the 13th or maybe, yeah, the 13th of April will most likely be sold out for Sydney, which is amazing. Really excited. We're gonna be at WPP's campus which is Ogilvy is hosting us and that's in Sydney, Australia. Then the following week we're in Auckland, New Zealand and that is Wednesday the 23rd of April, we're going to be live at Colenso BBDO. So if you're in that part of the world, it would be phenomenal to see you and to be able to connect. We are going to be talking today about a new report from warc. Here's a clip from today's show.
- [00:58]
David Tiltman
What we're trying to encourage is this mindset that an investment in brand is an investment in performance. And this is one of the big findings from what's happened in the last few years as people have hit this sort of wall in performance advertising. As more and more sort of smaller scale up companies that are very digital native have started looking for an alternative approach. We're finding that the two things work together. And that's an absolutely fundamental argument in the report. And it's a really important argument to be able to make internally because otherwise you end up with brand building becoming a silo that is not directly attached to commercial effects. And then we all know what happens then it's the first thing that gets cut when budgets are under pressure.
- [01:48]
Fergus O'Carroll
That is Chief Content Officer for warc, David Tiltman. I'm excited to bring this interview to you. It's important because it is the delivery of what many of us have been asking for, which is to take the principles that were learned through the long and the short of it and all of the work done by Bennett and Field and to be able to see by an original assessment of American data from American companies whether or not that plays out in the US which parts of its play out which parts of it are new. So this is the report reflecting exact analysis. There's a bunch of partners involved with it. You can actually see the report on the WARC website. That's warc.com if you're a member of Warc, you can download it. If you're not, you just have to view the report online. It's called the Multiplier Effect. And this actually has some aspects to it that sort of progresses the thinking that originated back in the uk. And this is a report. It contains tools, insights, suggestions. It in essence gives you a business case to help you make the case. The business case for brand versus performance marketing and some other factors that you're going to hear about it. So excited to have it. It's David Tiltman from Wark and Joy. So it is great to have David Tiltman back on the show. Thanks for joining David, to talk about this report.
- [03:26]
David Tiltman
Pleasure as always, Fergus.
- [03:29]
Fergus O'Carroll
Both of us have been talking about this on the sidelines and we've talked about it in the show in terms of the need for something like this report. But tell us about why WARC did this and why now.
- [03:44]
David Tiltman
Yeah, great question. And there's a bit of a story, I guess, a bit of a story behind the report. So it took us the best part of a year to put this together from start to finish. And we, we set out to do it because anyone who knows Walk knows that we've been across some of these topics for many, many years. We worked with Les Binette, Peterfield and the IPA even before they released along the short of it. We worked with the Ehrenberg Bass Institute for many years around concepts like mental and physical availability. So we were across a lot of these ideas and particularly this topic of brand and performance. We just realized that every time we presented these ideas to, particularly to a U.S. audience, the first question we would get would be, where's the US data? So long and short of it, for those of, you know, is very UK skewed data. It's based on the IPA Data Bank, Ehrenberg Bass Institute. Obviously their data's global, but they don't make it specific to a particular market and everybody feels that their market is in some way different or special. So what people wanted to know was how do, how can we make this data as sort of relevant to our market, to our situation, as we possibly can do? And so what we set out to do was go, well, what is the best way to make a case for what we see as being the sort of most effective approach to advertising that is native to the US And I guess so our starting point was sort of how do we prove this out with US Data? And then as we were sort of working on it, we a few other things were sort of happening at Cannes last year and we realized that it wasn't just about let's make a case that is exactly the same as all the cases that have been made in the past. There was a particular need right here, right now for something that in our view sort of moved the game on a little bit. We realized people like Scott Galloway, this isn't a new thing. But Scott Galloway been talking to a few years about the death of the brand era or the era of brand is over. We realized that actually we didn't just need to make a case for brand building from a purely neutral starting point. We almost had to reverse a general tide in business that sees brand and a lot of the things that marketers hold dear as, as essentially outdated concepts. It wasn't just a sort of case of let's make a, let's talk about it from a US point of view. It was about, well, how do we, how do we use examples that feel modern? How do we highlight examples from non traditional sectors and make this a report that is really relevant for not just for the Procter and Gambles or the Mars is or the Pepses or whatever of this world, but for, but for a whole range of marketers in different positions. So that's the sort of story behind it. And I hope we've had such an amazing response to the report so far that hopefully we're helping in that particular sense.
- [07:17]
Fergus O'Carroll
So when you look at what Scott Galloway said last year, Ken, did you interpret that as him saying that brands were dead or that brand advertising was dead?
- [07:28]
David Tiltman
Now this is, it's a great, it's a great question and it's not a distinction that I think Galloway makes. So if you look at, if you, if you read the books he's written this in, or look at his stage, stage sessions where he talks about this or listen to his podcasts, what he talks about specifically when he says the era of brand is over, is he, he is referring to a, an age, whether it's a mythical age or not, but an age where you could basically take a parity product, wrap it in a bunch of lifestyle associations and sell it for a price premium. So it's almost like a straw man version of brand where it's taking product, putting a celebrity or you know, an interesting advert on the front of it and boom, you've got a lever of growth in his argument that is no longer as significant a lever of growth as things like supply chain innovation and sort of tech and product development. Now, as I say, it's a sort of straw man argument because I think we would all agree that we all agree with that definition of brand, if it ever was true, isn't a sort of viable modern definition of it. But for us, he's sort of conflating brand as a, as a concept with brand advertising via mass media, with a sort of slightly cynical approach to business that is just, let's make something crap and pump it and pump it out in, in the easiest way possible. So there's quite a lot to unpack in it. And it's why we think we need a sort of 21st century case for brand building that, that recognizes what brand can and cannot do and what brand advertising can and cannot do. So we do make that distinction in the report that brand is much bigger than brand advertising. But in the report we're obviously focusing on the advertising side of it.
- [09:38]
Fergus O'Carroll
So for the US work, I'm curious, why would Binet and Field not be involved in this? That was obviously a deliberate decision.
- [09:49]
David Tiltman
Look, it's a great question. It's not that we wanted to cut them out, but they're sort of busy people. I mean, until recently, Les had a busy day job. And what we wanted to do was not be very consciously working with the sort of themes and ideas that they and others, people like James Herman, who we've worked with before, been on your podcast, have put forward. What we wanted to do was to find a group of people and we'll talk about those people who absolutely embedded in the US market. And so when we're sort of building out a database and an evidence based argument, it feels absolutely relevant to that market, rather than saying, let's start with a set of assumptions or a set of thinking that already exists in a different part of the world and try and prove it out in the U.S. so we, and I do appreciate that the irony of me coming on here with a very English accent and talking about this.
- [10:59]
Fergus O'Carroll
But you're an internationalist, David.
- [11:02]
David Tiltman
I'm very, very much an internationalist focus. We were very keen to do it with a us, a US set of like a US cast of characters, if you like. And this is an absolutely not a sort of dis on any of those people because they're great thinkers and they've done a lot of amazing work for the industry.
- [11:24]
Fergus O'Carroll
Yeah, I mean, it's a smart idea and I think to do it because, you know, it could have resulted in just somebody saying, well, you're just trying to prove out, as you said earlier, that the principles that they developed are actually valid. When what you really wanted to have is like a clean sheet to figure out what are the principles and then compare them to how they are in the uk.
- [11:46]
David Tiltman
Exactly, exactly. It's exactly it. Because you Know, we've just heard it so many times, we need an answer that is right for the US And I think you're only going to get that by starting and finishing from the.
- [12:01]
Fergus O'Carroll
U.S. so David, what can people expect when they, when they download or have a look at them at the multiplier effect?
- [12:09]
David Tiltman
Yeah. So the report's in sort of two sections. The first section really looks at that sort of data journey we went on. And we look in at the, what we call the rise of the advertising doom loop. That's this sort of, this sort of vicious circle you can get into as you start over investing in performance advertising. Then we look at what we call the brand advantage and why combining techniques actually leads to better effectiveness outcomes. And then I guess the core bit in the middle is what we call the multiplier effect, which is where we start to look at how the two techniques intersect, how they combine, how they work together and why silos are a really, really bad idea. The second big sort of section of the report is around the implications of the multiplier effect. Once we understand what the multiplier effect is, how do we start to build ideas and build strategies and investment profiles that enable us to harness it? And so we look at that in three ways. We look at it in the work. So what does this mean from sort of campaign development? We look at it from budgeting. What does it mean in terms of the amount you need to spend on these different sort of areas? And we look at it in terms of measurement. So how do you sort of start to shift your measurement approach to properly capture this multiplier effect?
- [13:41]
Fergus O'Carroll
We'll be right back. Want always on brand metrics that deliver value to stakeholders. This episode is brought to you by Tracksuit, a beautiful, affordable and always on brand tracking tool that helps consumer marketers and agencies answer the question is what we're doing working? A not so secret fact is that companies pay $100,000 or more for brand tracking, which is out of the question for many modern brands whose budgets are under pressure. Tracksuit provide enterprise level brand tracking without the big price tag. Their in house research experts do the heavy lifting using best in class practices to craft and launch your survey and get you results fast. Tracksuit is fast becoming the common language for marketers and agencies to measure and communicate the value of brand building. Check it out@gotracksuit.com that's gotracksuit. Now back to the show. I think this is true, David, that there's a significantly larger amount of money, it is true, spent on performance marketing in the US Than there would be in what we might typically call brand campaigns in the US So it has been really difficult, given that there's been so much success reported in people's ability to drive immediate business using performance marketing techniques, that it was tough to listen to this voice that was saying we need to have better balance. It's probably still tough, even though many marketers want to do that, to be able to make the case for that, because it does take a little bravery to sort of pull back on performance to invest in a more balanced approach. So for those that want to do that, this is a US based report that helps them with charts, with graphs, with proof points, with a narrative to help make that case in a pretty compelling way. So how do we start to explain this in terms of this journey in the report? One of the points you bring up is that advertising has two jobs. Is that where we start to explain this to the listener?
- [16:00]
David Tiltman
There is a big problem around how we categorize brand and performance. And often, often we get really hung up on trying to define one or the other by the characteristics of an ad. Or, you know, if you include a QR code at the end, does that make it a performance ad? Or if you know, you feature a particular type of image, does that make it a brand of a performance ad? So what we wanted to do is go right back to sort of first principles and say what jobs are advertising does advertising need to do? We talk about there being two jobs of advertising and the starting point for the two jobs is whether a customer is, or whether a potential buyer, I should say, is in market or out of market. And again, we're not the first to say this. The 995,5 rule from B2B will be well known to many of your listeners that came out of the Ehrenberg bass Institute and LinkedIn.
- [17:01]
Fergus O'Carroll
Originally the John Dawes theory, right?
- [17:04]
David Tiltman
Exactly, exactly. So this is basically that most of your potential customers are not in market at any one time. And it can be, as you know, a very big majority.
- [17:16]
Fergus O'Carroll
And just for context, for people, people. Sorry to interrupt you, but just for those who aren't familiar with that. So it says that depending on your category, it can be vastly different. If you're into big appliances where a decision to purchase is made every 10 years, or if you're into something that's, that's machinery, heavy equipment, automotive, those are probably factors where is maybe 5% or less of your market at any one time is in market to buy. If you're a CPG and you're a peanut butter. It's probably maybe 50% at any one time. But the delineation between those people who are in market and those people who are not in market need to be treated differently is the way that they're suggesting here. Yeah.
- [18:03]
David Tiltman
And so once you understand that most of your potential buyers are not currently in market, that sort of feeds into what, what the two jobs are for the people who are in market, who are. And again, you know, there's different. It sort of varies by category. But if you're in market for something, then you're probably going to be more receptive. You'll be on the lookout for information that might help you make a decision or, or simply, you know, you're more likely to click on something that will take you to a purchase opportunity. The second job of advertising is what we might think of as brand building, which is creating relevant associations and sort of assumptions around the product or service that mean that when that potential buyer comes into the market, they are slightly more likely to choose your product, and it is only slightly more likely. We're talking about applying sort of marginally increasing the odds over a large enough set of customers that overall it has a material commercial impact. But if we think of these things as two different jobs, then we start to think, well, okay, how does advertising achieve those two jobs? And typically they developed two styles of advertising. There is advertising that we think of as brand building, which is sort of broad reach because it's trying to reach as many potential buyers as possible. It's emotionally engaging because you need to make people pay attention because they're not in the market, so they're not really on the lookout for your messaging. And you need to try and make people remember some things.
- [19:56]
Fergus O'Carroll
Basically what you're looking at is there's sort of a spectrum, this idea of 95.5. So if 5% are in market 95 or not, it's constantly fluid. So if it's a month later, there's new people in market. Exactly right. Exactly. Exactly. Exactly. Yeah. So you're preparing. You can't sell somebody who's not in. It's pointless waste to be selling a product to somebody who's not in market, as you said. But what you can do is prepare them with messages that create preference once they fall into market and make that. Make that message more meaningful. Less transactional has always been sort of the way that brand was considered, that brand advertising could not get into product, and product advertising did not get into brand. They lived in totally separate worlds. And so what we're saying is that when we look at the last 10, 20 years with digital advertising, with search and SEO and SEM, that you were really, you were really, at that point there was no interest in doing anything brand because everybody thought all they had to do was spend on short term performance advertising. That was about price and item, pretty simple. And people were eating up and they were in record numbers. But it eventually slows down. And now I think what we're beginning to see is it becoming far more expensive to do performance marketing. Therefore the conversation I think was more open to, well, who, what do you, what do you then do? And this is where the brand element has come back into popularity, right?
- [21:34]
David Tiltman
Exactly. And we're seeing a growing number of companies reassess this. I mean, partly it's because of signal loss in a lot of the digital, digital platforms, but it's also a realization that you can hit a wall with this. Analytic partners looked at the revenue return on investment from different styles of campaign. So a performance dominated strategy, a performance and equity or brand building strategy, and a much rarer one which is very dominant in terms of brand equity. The most effective strategy was the balance strategy. Now the big number I guess for your listeners is that a combined strategy of performance advertising and brand equity led advertising delivers an uplift in revenue ROI by between 25% to 100% and the median uplift is 90%. That means it is almost twice as effective in terms of driving additional incremental revenues as the performance led strategy. If you look at it the other way around, if you're moving from a performance and equity, a sort of balanced approach into a performance only approach. So if you're going down that sort of doom loop we talked about earlier, then the shift in revenue ROI is between about 20% to 50% with a median of 40% decline. So it's plus 90% going one way, layering in brand advertising to a performance dominant approach and minus 40% going the other way, going from a balanced approach into a sort of performance dominated. So it was like this was really, really quite stark numbers. We expected a bit of a difference, but actually this was really big numbers. And to be very clear, this is not drawn from awards case studies. So this isn't a sort of self selecting pool of campaigns. It's based on the work analytic partners does with their clients of all shapes and sizes. So it's data that we think is very robust.
- [24:12]
Fergus O'Carroll
If somebody's listening to the show and they believe in this, help them, help them make the case to their Board, what are some of the key parts of the report that can help them make that case strongest? And then we'll talk about how you go about executing on a new approach.
- [24:32]
David Tiltman
There's a section in the report called the multiplier effect specifically and it looks at the reasons that brand and performance need to work together. And one of the most straightforward ones is that actually performance advertising works hardest when people already know, are aware of, have associations with the brand. So we're increasingly finding that investment in brand advertising has a knock on effect on performance metrics. And we see this with a lot of the, the sort of digital native companies that start layering in good brand advertising into, into their mix. Instacart as an example that we had them in Cannes last year. We've also got people like dude Wipes in the, in the report there's a brand called Chubby's as well, which is USDTC clothing company. And the thread they start to draw is that actually as they increase their investment in brand advertising, they start to see their customer acquisition costs in performance go down. So what we're trying to encourage here is a mentality where we don't see this thing as like okay, well the brand, we're going to make this investment in brand and then maybe in two years we'll start seeing some price premiums. You should be able to see some sort of link, particularly from very performance driven organizations, some sort of link between that brand advertising and some sort of moderating impact increase efficiency within performance within a relatively short period of time. And so what we're trying to encourage is this mindset that an investment in brand is an investment in performance. And this is one of the big findings from what's happened in the last few years as people have hit this sort of wall in performance advertising as more and more sort of smaller scale up companies that are very digital native have started looking for an alternative approach. We're finding that the two things work together. And that's an absolutely fundamental argument in the report. And it's a really important argument to be able to make internally because otherwise you end up with brand building becoming a, becoming a silo that is not directly attached to commercial effects. And then we all know what happens then it's the first thing that gets cut when, when those budgets are under pressure. There's a great presentation from Cannes last year. It's on the walk website by Laura Jones, who's the CMO of Instacart. And she really talked about how they really had to make the case for brand Advertising and they had to be able to show that the, the brand advertising had that impact on customer acquisition cost that we, that I mentioned earlier with the multiplier effect. And so it was only, it was only when they could show that the brand work had a bigger impact on customer acquisition cost than some of the performance work did, that they could start to join the dots. And really then it was about building a joint measurement culture. But look, we're at the start of this sort of process because this whole organizational structure piece is an area we're going to come back to in a subsequent wave of this research.
- [28:19]
Fergus O'Carroll
Is it fair to say that brand improves performance and performance improves brand? Do they work both ways or is it a one way relationship?
- [28:30]
David Tiltman
It's a great question. So brand tends to improve performance more than performance tends to improve brand. And that's because of the, if you think about who brand style advertising tends to reach, it's reaching across people who are both in market and out of market. So it's reaching a broader audience. Performance advertising, because it's laser targeted on in market demand, would, that would sort of struggle to have an impact on people who are currently out of market. Now there are things you can do with performance advertising to tie it back into brand or to create brand moments that reach slightly broader out of performance techniques like promotions, if you do them right. And then of course the simple fact of selling somebody to something and putting it in somebody's hands, that can have a brand impact as well, their actual use of the product. So it's not entirely one way street, but from an advertising point of view, there is data we cite from System 1 in the report that shows that advertising that works really well at building brand equity also tends to have a higher than average impact on performance of sort of short term sales spikes. So yes, the direction is more one way than the other.
- [30:03]
Fergus O'Carroll
So the thing that I brought up a couple of times in our conversations is this label that I use, I may not be the first person to use it of course, but branded performance, it's the idea of executions that can do both. It's come up a lot. And there's a lot of CMOs that have been on our show who feel that their work is doing both and their businesses are doing well. So it's not two separate campaigns, it's one campaign that can do both. We had Duluth Trading Company, which is a workwear brand here in the U.S. about a billion dollar brand and they feel that same way that their work, and I would agree with them, that is actually doing a very good job at both performance oriented, transaction driving as well as bringing personality and distinctiveness of the brand into a single execution. You and I have talked in the past about GEICO as being a great example of this. I actually think McDonald's is a great idea of this. What is the point of view of this report? Or does it have a point of view on whether campaigns, a single campaign, can achieve both?
- [31:16]
David Tiltman
We do have a point of view. It is that we talk about platforms, not campaigns. So can you come up with an idea that is broad enough to build different styles of advertising around? Now, different brands in different circumstances, in different categories will have different routes forward. So I don't want to come up with a sort of one size fits all. And we talk about how your starting point matters in the report a lot. But I think one core principle, and you've just mentioned it with things like geico, is that a really good brand advertising campaign should drive sales. It's not like we're only talking to people who are out of the market and therefore we just have to wait for them to come into the market and that will happen at some point. This stuff has always worked. This stuff has always sort of driven some sort of immediate response because it's reaching people who are in the market now. So of course it should. The question is whether if you add an extra layer of techniques onto that, could you make the impact of that even harder, so even greater? So again, I want to get away from this idea that brand advertising only works in one way, it works in multiple different ways and the challenge is finding the best sort of combination of techniques to get the absolute maximum outcome.
- [32:58]
Fergus O'Carroll
It is David Tiltman, Chief Content Officer at WARC and SVP Content for Alliance Intelligence. You can look at the report on warc.com it is terrific. It's full of useful data and as you've heard in this episode, there's a lot to get through. So don't also forget that work advisory is there. If you have follow up questions, I'm sure you can reach out to work advisory and they can help you sort of figure out how it might be applied to your particular category. David, thank you so much, man. I appreciate having you on the show again and as always, it's a real pleasure.
- [33:34]
David Tiltman
Fergus. I love talking about this stuff, as you can probably tell.
- [33:37]
Fergus O'Carroll
Yeah, likewise. And we will see everyone on the next episode.