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The Marketing Architects
Creating Future Demand with James Hurman
00:42:45
84% of the time, buyers choose a brand that was already on their radar before they ever started shopping. So why do so many marketing budgets only chase the people ready to buy today? This week, Elena, Angela, and Rob talk with brand strategist and...
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- [00:00]
James Herman
And what we now know is that when someone comes into a market 84% of the time, that person will buy something from a brand that was on their consideration set before they came into the Marketing Architects.
- [00:13]
Linda Jasper
Hello and welcome to the Marketing Architects, a research first podcast dedicated to answering your toughest marketing questions. I'm Linda Jasper. I run the marketing team here at Marketing Architects and I'm joined by my co hosts Angela Voss, the CEO of Marketing Architects and Rob DeMars, the chief product architect at Misfits and Machines for hello.
- [00:31]
Angela Voss
Hello.
- [00:32]
Linda Jasper
And we have a guest today. James Herman is a brand strategist, entrepreneur and author based in Auckland, New Zealand. He's the founder of Previously Unavailable, a venture company that creates and invests in new businesses and co founder of Tracksuit, a brand tracking platform operating across New Zealand, Australia, the UK and the US he also created the Master of Advertising Effectiveness, a program teaching marketers the evidence based principles of advertising effectiveness. James has written two books, the Case for Creativity on the data showing that more creative businesses are more successful, and an upcoming book that you can download now, but it's coming out in print in August, which is called Future Demand on why building your brand among tomorrow's customers is key to long term growth. So James, thanks for joining us.
- [01:15]
James Herman
You're welcome. And hello from London. Whenever someone introduces me, I tend to feel a bit exhausted after all of that.
- [01:21]
Angela Voss
Well, let me make you even more exhausted because she didn't mention that in 2013 you were literally named the number one strategic planner on the planet. That sounds pretty amazing on a resume, but even more interesting. Okay, you've done a lot of unexpected things. I mean in terms of writing advertising effectiveness books, co founding a whole company. But you also wrote a children's book about luck. Can you talk a little bit about that before we get into the the ad stuff?
- [01:52]
James Herman
Yeah, that was a really interesting project. So I read this book called the Luck Factor by a guy called Richard Wiseman, British psychology professor. He stud studies lucky people and unlucky people and he wrote a book on how you can be more lucky. And I read it and I was in my 30s and I was like this is awesome. But I'm kind of a grown up now. I'm set in my ways. Wouldn't it be great if we taught these principles of luck to little kids? Like how what better thing could you teach a little kid than how to be lucky? And so I kind of turned that into a kid's book, launched it on Kickstarter and sold a bunch of copies, had a lot of fun in the process and it's really nice. Every now and then I get some grown up comes up to me and says, oh, I read my kid your story every night. It makes me feel very warm and soft.
- [02:35]
Angela Voss
Well, if you want to check it out out there, it's called the Boy
- [02:38]
Rob DeMars
and the Lemon adding to cart.
- [02:41]
Linda Jasper
Awesome. Maybe some future marketers will read that. Investing in future audience so there you go.
- [02:46]
James Herman
Yeah.
- [02:47]
Linda Jasper
Well, I'm going to kick us off, as I always do, with some research. And no surprise, I chose a piece from our guest. A few years ago, Work published a white paper called Rethinking Brand for the Rise of Digital Commerce and James wrote the lead analysis in it. Within the paper he argued that the whole industry has taken the wrong lesson from big digital disruptor brands. We watched them grow fast on performance marketing and assumed that brand building was becoming obsolete. But he argued that without brand, those companies eventually hit what he called a demand ceiling that restricts their growth. We should think of brand as creating future demand, making sure the customers who will buy from you down the road already know you and feel good about you before they're in market. You have to create future demand at the same time that you're capturing existing demand. And when those two things happen at once, growth is sustainable and sustained over time. So James, thanks again for joining us. Let's start with the idea of future demand, which is a concept you must feel strongly about because you are turning it into a book or turned it into a book. What are the mistakes that you notice marketers making that cause you to advance the ideas behind future demand?
- [03:47]
James Herman
I do believe in it reasonably strongly and where it started from that paper was kind of the genesis of the idea. So the folks at Walk were talking to me about how to convince these more modern companies. In that particular case, it was E commerce retailers who've kind of grown up with digital marketing. How do we convince them that brand is important? I looked at the companies that we were investing in via my company in New Zealand and the startup world in general. There was this real pattern that a startup would start, they grow really fast, and then after about three years that would plateau off and they weren't seeing the same low cost of acquisition and high growth. New customers were becoming more and more difficult, more and more expensive to find. And so I really dug into kind of what was causing that and that was where the sort of realization that at any point in time there's only a certain amount of people in the market and once you've sort of exhausted that group of people, it becomes very difficult to find more of those people if you haven't done this sort of much more broad based kind of broadcast marketing that reaches big groups of people and kind of turn them on to your brand before they come into the market. I'll give you a kind of simple example by what I mean by current and future demand. So when I speak at conferences, I always do this thing where I say to the audience, I want you to put your hand up if you're in the market for a new smartphone right now, like you in the process of buying a new smartphone, or you're going to buy a new smartphone next couple of weeks. And always a couple of people put up their hand. And then I say, okay, now I want you to put your hand up if you think you're going to buy a new smartphone over the next two years and almost everyone puts up their hand. And I do that experiment to show this really simple kind of point that in any market there's two types of demand. There's what I call current demand, which is the two people that put up their hand, that's people who are in the market ready to buy right now. And there's what I call future demand, which is all the other people that put up their hand, which is those people who are not in the market right now, but who are definitely going to come into the market at some point over the next few months or years or whatever it might be. So this is how markets work. It doesn't matter what category you look at, there's always a small group and market and a much larger group out market. Now we can convert that small group in market with our performance marketing, but that big group who's out of market, I'm not going to get someone who's just bought a new smartphone to buy another one today. Right. No matter how good my ad is, that's just not going to happen. People flow in and out of markets in quite a natural, organic kind of a way. And so our job as marketers is to make sure the maximum number of people come into the market feeling good about our brand, feeling familiar with our brand, it being kind of top of mind, so that when we hit them with our performance marketing, they're more likely to respond to that performance marketing by our product. And then once people are in market, of course, the main job that we've got to do as a brand is just get as many of them as possible to choose us and not the other brands. But if the other brands around us have done a better job of priming those folks before they come into the category. We're going to find it harder than those brands to convert those folks. So hopefully that's a kind of a quick sort of summary of what I mean by future demand and current demand.
- [06:52]
Linda Jasper
Yeah, the iPhone example is a great one. And I think hearing you talk about it, the way you've advanced it, it makes so much sense. But it's so easy for marketers to get stuck in sort of the digital doom loop. Seems like it's easier to think about the short term to invest in performance marketing. So many marketers do hit that ceiling. So I was curious, what have you. So you've worked with marketers all around the world. What have you seen the best marketers doing to take these concepts and like practically in their marketing, what actions are they taking that's different from those more performance, short term, sort of trapped brands?
- [07:26]
James Herman
Sure. I mean number one, I think the allocation of investment. And so if we think about, you know, how much we spend on brand marketing, how much we spend on performance marketing, brand marketing and what I mean by brand marketing is much more broad reach, much more creative, much more emotional marketing. It's marketing that is really designed to engage people rather than just communicate facts at them. And so what we see in the data, and we've now got several very strong data points over many, many years, is that the that spend about half and half on brand and performance are the companies that see the best overall marketing roi. So I don't mean roas on a particular ad. I mean if you take all of the marketing and advertising activity a company does, all that they spend on that, all of the incremental sales that they get back in from doing that, that's total marketing roi. That's the number we should be really kind of thinking about as a business. The companies that achieve the best overall marketing ROI spend about half and half on performance and brand. Now we live in a world where like actually there's not that many companies that spend half and half. Most spend most of their budgets on performance marketing. Right. They lean right into performance marketing. And the data is very clear that you will see a lower overall marketing ROI if you do that. Because performance marketing generates visible kind of measurable immediate sales. We tend to believe in particularly the non marketing stakeholders around us, that they tend to believe that that's the right thing to be doing, that's the most kind of responsible place to be putting our budget, what we can return from. Because what if that brand stuff's not working. Now of course the brand stuff is working. It's just that we can't see it show up in the data so much because we're marketing to a group of people that aren't in the market just yet. So they don't show up in today's sales data. Does that mean we should stop marketing to them? Well, only if we don't want them to buy from us in future. So I think that's the first thing that a good marketing function or a good CMO will do is just kind of make sure they're allocating about half of their budget to each of those two jobs. That's a really important thing. Second thing, I think the best CMOs that I've worked with are very good at marketing. Marketing. What I mean by that. So Dara Tresidder, who's the CMO Autodesk at the moment, so she told me a few years ago, she said, james, marketing has not done a very good job of marketing marketing. And it's a wonderful little set of words, very pithy. She was also absolutely right. We've done a great job of marketing the products and the brands and our care, but we haven't done as good a job of marketing our discipline. Like how it works, why it works this way, what we need to do to make it work better. So we're forever fighting these fires with non marketing stakeholders, whether that's our cfo, our board, who, whoever we've got around us. We're trying to get them to allow us to do creative emotional stuff and to invest in brand. And it's a really hard argument because they're going, no, I just want you to drive sales tomorrow. And so it's kind of about taking this information that I write about in the book. We've now got 20 years of really, really strong marketing science and marketing effectiveness research and we need to communicate that to the non marketing stakeholders around us so they're not confused about why we're trying to do this stuff that seems weird, creative emot marketing that doesn't seem to show up in the sales results tomorrow. So we need to do a better job. And then the third thing is marketers because they know that they really lean into creativity and emotion on the brand side. They're not just trying to make a kind of rational product ad and then put it in media that reaches heaps of people. They're really disciplined about saying, no, we're going to use, we're going to try and make an ad that earns the attention of lots of People because it's really creative, it's enjoyable to watch, and it sticks in people's memories because it's really emotional. We remember feelings far longer than we remember facts. And so the question is, how creative is this, how emotional is this, how memorable is this? It's not how well is this communicating the facts, Right? On the other side of the business, the performance side, they're really disciplined about that is the place for the facts. That's the place to tell our story about why is our thing better? You know, what are its benefits and how much does it cost and where can I get it from? All that stuff that's really important. On the performance side, they should be doing that. But a disciplined marketer will be disciplined about doing those two jobs quite separately because they're two very different jobs to do. So those are the things I think a really good CMO knows and does.
- [11:43]
Rob DeMars
James, I don't know if you've seen this in your data too, but one of the things we often talk about on the podcast is just the US being a bit behind in terms of their understanding knowledge of the foundational principles that actually drive growth for brands. That was the impetus of the podcast, actually, is why we started it. There's establishing the baseline knowledge and then I think there's the say, do gap, where there are a lot of marketers that I think foundationally understand maybe what drives growth. They've read enough. They, you know, have been exposed to yourself or Mark Ritson or the IPA or Ehrenberg Bass, but have a hard time converting their current culture and practice over to this balance. You talk about the split of current versus future or what should be put into sales activation, investment and short term versus brand and long term. So what do you typically see as some of the biggest obstacles to making those changes? And what advice would you have for brands trying to go in that direction?
- [12:40]
James Herman
Yeah, it's a great question, I think. Let me answer it in two steps. So the first thing, a lot of the marketing science and effectiveness research has come out of the uk, and I think the uk, like culturally British people, are quite biased towards thinking and intellectualizing and discussing things in America. What I see is you all are quite biased toward action. You like to get shit done, right? The way that some of the marketing effectiveness stuff has been communicated has been a little academic, right? And that's not necessarily the most consumable for an American audience because you are sort of biased towards action. You want to know quickly out of what it is and how to get it done, which is a great quality. Right. And so I think firstly, I'd say so much of the work that I'm doing is sort of starting with, okay, how do we take this great stuff that's been done in the UK or in Australia or these other parts of the world? How do we take the great sort of academic stuff that's happened? How do we start to put that in language and in framing and mental models? It's actually really easy for people to pick up and use rather than expecting that an American marketer is going to want to kind of wade through the papers and the research and the academia and all that kind of stuff. So I think it's on us as a marketing effectiveness community to communicate what we're doing in a really effective way. So American marketers can go, okay, I get that now I understand how to apply it. So that's a big part of what I'm trying to do. The second part of your question is that se do gap if you do understand this stuff, it's very hard to get done sometimes. And this comes back to the marketing of marketing, the non stakeholder issue that we have. And I think right now that non stakeholders are kind of the biggest challenge that we have in marketing and communicating to them is becoming increasingly important. So I'm doing a couple of things. One of the things that I'm doing is related to what I just said. It's like, how do we put this stuff into frameworks and mental models and language that can be not only easily understood by marketers, but actually easily communicated on to their non marketing stakeholders? I think if you understand the principle of access, share of voice and you know, you have deep knowledge of category entry points and blah, blah, blah, blah, blah, right? That's not often super easy to then pass on to a CFO or talk about that stuff in a way that makes sense. Whereas what I've found is kind of the idea of the future demand framing is it's actually quite easy to talk to a CFO or a CEO or a board or an engineering team or your legal partners or whatever. And they get that really quickly. You say to those folks, do you want great brand building? And they're like, I don't know, maybe you say to them, do you want future demand? And they're like, well, yes, of course we want that.
- [15:20]
Angela Voss
Right?
- [15:21]
James Herman
And so it's kind of a framing that enables marketers to better pass it on to their non marketing stakeholders. And then the third thing that I'm doing is playbooks. So I've got A friend, Laura Jones, she's the CMO of Instacart. She's done an amazing job over the past four or five years at transforming that organization from 100% performance into a balance of branded performance. She's turned into one of the best brand builders in Silicon Valley. She's worked inside an environment that's a tech environment in the Valley. They're very numbers based, they're not very friendly towards brand historically. But she's managed to turn that around. She's managed to lead a conversation with her CEO, her CFO and her, her board that has enabled her to buy the right to do the kind of work that's really grown the business. And there are other marketers around who have done the same thing. So what I'm doing with those folks is I'm creating playbooks, like digging into what exactly did they do, what were the steps they took with those stakeholders that allowed those stakeholders to believe in what they were doing. So one of those is in the book that's the case study with Laura. And then I've got another one coming up from a massive telco in Australia. And I'll keep doing these sort of over time because I think what marketers are sort of crying out for is okay, this is great, but how do I do it? And so the lessons that other CMOs have learned about how you have these non marketing stakeholder conversations, how you take the business on the right journey, I think those are just so instructive and so important for other marketers to kind of learn from and follow from. You can learn all the theory, but it's like, okay, right now how do I put it into practice? How do I learn from those who have cracked that nut? Because it's a hard one to crack, but once you do it unlocks so much value.
- [16:59]
Angela Voss
My family's credit card statement would agree with Instacart success. So they're doing a great job.
- [17:04]
James Herman
Oh yeah.
- [17:05]
Rob DeMars
I also feel like when we think about that intellectual belief system and marketing effectiveness that seems to permeate out of the UK and Australia. In the us it feels like we're very obsessed with data and actually specifically our own data. There's a ton of data that supports that brand drives growth and you need balance. But we get very obsessed with that. Short term data and measurements is just a big problem as we try to close that Seidou gap. Tracksuit, right, as a platform that helps with that classic brand is hard to measure problem and the void constantly kills that brand investment. So how do you actually measure future demand without sliding right back into the short term proxies that caused the problem in the first place. I would imagine that CMOs need some help in trying to evangelize with the CMO, with the CFO and need some leading indicators that we're going in the right direction. So I'd love to just hear more about that.
- [18:03]
James Herman
Basically, you've got metrics which tell you how well you're converting the current demand in the market. So all your performance metrics do that brilliantly. Right? Really great. Those are excellent metrics to use to understand are we converting the demand that's in market in the most efficient way possible? So that's great, but it's a totally different set of metrics. You need to understand whether you're building future demand because those folks that you are marketing to, they're not in the market just yet and so they don't show up in the sales data at all. Right. So there's no way that that can give you a glimpse of that. So really you go back to brand tracking. You go back to, you know, are we building awareness over time? Are more people becoming familiar with us and our brand? We have a familiarity bias. So we bias towards things that we're more familiar with. I really like this brand, Coca Cola. I'm not sure if you've heard of it. It's a brand that I really like. Coca Cola have done just an incredible job of maintaining clear market leadership in a category that has a very low price of entry is competitive. Right. And for decades and decades and decades. Why have they done that? Well, part of it is that the product's really good. Coke is a really nice tasting drink. But guess what, there are a lot of other nice tasting drinks out there, folks. So what Coke have also done is, you know, how they put their logo on like every convenience store in the world. You can't even walk through a city basically without seeing a Coke logo. That's what I call familiarity, infrastructure. Right. They make sure that we are never not familiar with Coca Cola.
- [19:28]
Linda Jasper
Right.
- [19:28]
James Herman
They are just so good at doing that. Can you measure like exactly what that sign on the front of that convenience store has done for sales? Well, you can try, but good luck with that. They've really done that job of like keeping familiarity really, really high. And so brand awareness is like a proxy for that. Like how many people are aware of our brand. We need to keep ourselves familiar and consideration. Like how many people would consider buying from us. Have we done a good job of kind of, you know, making people like us enough frankly to decide that they want to buy from. And what we now know is that when someone comes into a market, 84% of the time that person will buy something from a brand that was on their consideration set before they came into the market. So are we driving that consideration up? Are we on that consideration set? So brand tracking helps us understand that where's our brand awareness at versus our competitors? Where's our consideration at versus our competitors? Where's our preference? What do people associate with us? What do they feel towards us? What do they think of us? That's a really important set which gives us a glimpse into the future. It tells us of those folks that are going to come into the category at some point in the future. How do they feel about us? Because if they're not familiar with us, they don't consider us. We're really unlikely to put an ad in front of them that's going to lead to a sale. So we need to have both of these things like side by side, right? Two dashboards, one for our performance current demand, one for our brand future demand. Tracksuit, you mentioned before. So tracksuit is one way of doing that. I'm not going to sort of get real salesy about tracksuit, but I mean, basically the idea with tracksuit was how do we make our brand tracking more like an always on dashboard, just like your performance dashboard? And how do we make it vastly more cost effective? It's very expensive in the traditional way and we wanted more brands, particularly the smaller growing brands, to be able to have access to the sort of research and data. And so we ought to be obsessed with data. We ought to be looking at the data and let that guide us. But if we've only got one half of the data right, if we're blind to the whole other half of it, then are we going to make great decisions? Probably not.
- [21:28]
Rob DeMars
Let's talk a little bit about channel strategy. You've long been a believer in broad reach video and we're obviously TV agencies, so we're a little bit biased here. But from a pure media standpoint, what do you think makes TV so well suited to creating that future demand, specifically versus just harvesting the demand that already exists.
- [21:49]
James Herman
Tv, the reason that it has been so effective and continues to be so effective is if you think about what I was saying before, if we want to create future demand, we've got to use creativity to earn the attention of people who aren't in the market yet and therefore don't care much about our category. And we need to Leave them with positive memories of us. And so we need to make them feel something. And let me dug into that just a little bit. So everyone understands that we store facts and feelings in our brain in two different places. Our facts are stored in a part of our memory called explicit memory. Explicit memory decays very fast. What that means is we forget stuff stored in that memory really quickly. So that's where all the facts go. If you tell people that your features and your benefits and all this fact stuff, it goes into their explicit memory. It doesn't sit there for long. It kind of fades really quickly over time. Emotions, they're stored in our implicit memory. Our implicit memory has a very low decay rate. It means that we remember feelings for a really long time. Right. And so Maya Angelou said, I've learned that people will forget what you said, they will forget what you did, but they will never forget the way you made made them feel. We all know that to be true because we're humans, right? That is true. But it's backed up by the science. And it's true for brands as it is for people. Right. We remember feelings a long time. So if we're talking to someone who's going to come into our category in six weeks or three months or eight months time and we give them some facts, they will almost certainly have forgotten those when they come into the category. If we give them some feelings, they almost certainly will remember those feelings when they come into the category category. Now, what television always enabled us to do was it's great for creativity. We do really creative things on television and we can do really emotional things. We've got sight and sound. We can combine those things in ways that make us feel things. Right. Whether that's really happy or really emotional or really kind of inspired or whatever it is. It's much easier to do that in a television commercial than it is on a little ad that's kind of rushes through your feed on your social networks, Right?
- [23:52]
Rob DeMars
Right.
- [23:52]
James Herman
So that's why TV is a great canvas for creativity and emotion. That's why it's really useful. It's also, you know, historically had very, very large audiences, reached lots of people. And when we're creating future demand, we need to reach those massive groups of people who are not yet in the market for what we've got to sell. Now, over time, TV viewership has declined. TV viewership is still really high. It would surprise anyone. Surprises me every time we look at the data. It's still really high. It's not as high as it used to be, but it's still a very good part of the mix and things. YouTube, if it's like longer format, unskippable YouTube delivered over connected television that also has that same sort of effect, reaches lots of people, is a really nice video format to communicate creatively and emotionally. And so I think that's the reason why, you know, I continue to make the case for video because it just enables us to do the things that are best at creating future demand. Does that mean we can't do those things in social or in other forms of digital media? No, it doesn't. It's just much, much more difficult to do in those arenas. And I think some of the other sort of more traditional broadcast media, whether it's outdoor, whether it's radio, they again, give us these bigger canvases, bigger, longer canvases to do things that are more likely to really make people feel things and allow us to do more creative stuff. So that's why I sort of advocate for those. They're not the whole game. Of course, we should be using the Algos and the retail media platforms and all of that for our current demand conversion. Absolutely. But we look at the total M and when we need to do that future demand job really well, then doing it on those sorts of canvases is much better than trying to do it on a social feed.
- [25:32]
Angela Voss
I really love your coining of the term familiarity infrastructure. I'm going to steal that shamelessly and put it in my pocket for future use. That obviously plays into creative. Right. How do we become familiar? We can become familiar with creative. And in your first book, you made the case that more creative businesses are more successful. Why is that? Why is creativity so powerful? And where has the marketing industry really gone wrong in the ways that it has invested in it effectively?
- [26:04]
James Herman
So let's pick that off in a couple of ways because I think. Why is creativity important for business is a slightly different question. Before we get into the sort of advertising and marketing part of things, who was it, was it Drucker that said, said, you know, businesses have really two functions, marketing and innovation. And innovation is such a critical function because we want an organization to grow. Increasing its kind of surface area of ability to sell is really important. That's why, you know, you don't find a car brand that just has one model or you don't find a car brand that's making the exact same car as they made 20 years ago. Right. The innovation that goes into creating new models and updating the models and making them ever more comfortable and safe and nice. To drive and all that kind of stuff is really critical. So all of that takes human creativity, right? Those are all creative acts. The creating of new things that are more desirable than the old things were and creating many, many of them. So our company grows. So that's fundamentally why sort of creativity is important to business from a growth point of view. You know, creativity is also important to business from a kind of efficiency point of view. So reducing our costs, reducing the amount of effort or money that it takes us to do things, things humans find unbelievably creative ways to kind of keep doing that. So creativity is important to business in that sense. Why is creativity important to marketing and advertising? It's coming back to that fact that most people aren't paying a lot of attention to advertising. Say you're one of the two people that put your hand up to say you were buying a smartphone, you know, in the next couple of weeks, if you saw, right, a side by side comparison of an iPhone and a Samsung Galaxy. And it was just functional information. It was like all their features and benefits and where you can buy it from and how much it costs, what this reviewer has said, and that reviewer and the star ratings and all of that functional stuff. If you're in the market for a smartphone, you're probably going to stop and read that. You're really interested, you want to make the right decision, you're about to make that decision. You would sit and read that if you're not in the market for a smartphone. Yet, there's a very, very low chance, unless you're weirdly interested in mobile phones, that you would stop and read that information. In fact, we would mostly just filter it out because it's not relevant to us. So it comes back to this idea that for most people in a market, they need creativity to earn their attention. I'll give you another example. I bet you're not in the market for buying a commercial truck right now. Some folks might be. I don't know. I've never met, I've never actually met anyone when I've been like doing my talks to marketers that's in the market for a commercial truck. But everyone watched Jean Corp. Van Damme do the splits over two reversing Volvo trucks within you playing in the background, right? We all did. Why do we do that? Completely irrational. We're never going to buy a commercial truck. Total waste of 60 seconds of our time. But we all watched it. Why did we watch it? Because the creativity of it earned our interest. It earned our attention. It made us Watch it. Even though it was not fundamentally relevant to us in a rational sense. And it also in the attention of all the people who would come into the commercial truck market over the next 10 years, they'd all remember that ad, seeing that ad, right? So I think that's really kind of the case for creativity in advertising and marketing is we've got a lot of people we've got a to talk to who are not yet fundamentally interested in our category. They're not yet in the market, and we can't earn their attention with a list of facts about our product. They don't care. They're not going to look at that, they're not going to read it, they're not going to remember it. So we've got to use creativity, the art of doing original, engaging, beautifully crafted things. We've got to use that to earn the attention of all those folks that we want to be our future customers and that the business needs as future customers. Customers. That's really what creativity is all about.
- [29:46]
Angela Voss
Jean Claude Van Damme. That was a good ad, right?
- [29:53]
James Herman
Jean Claude Van Dam, right?
- [29:56]
Angela Voss
Absolutely. I stole that from Fresh Prince. He used to say that. Jean Claude Van Damme, I'm fine. That was really cool. And that was a good ad. Are we getting better? You know, if you just look at the whole, like, we spend a lot of time thinking about marketing effectiveness and you've really done your service to the community with all of your studies, your products and your training. Do you think the overall discipline is actually getting better when it comes to marketing effectiveness?
- [30:22]
James Herman
There's that quote. Was it Asimov or someone who said, like, the future's here. It's just not evenly distributed. And I think that's the same in marketing. You know, I know of a lot of companies that have taken this knowledge and used it to vastly improve the value of their organizations. And I know of a lot that haven't. Right. And so I think we have improved in pockets. But there are some big forces against us, right? Big forces preventing us from doing that. There is a big knowledge gap. There's still not enough people who really understand this stuff. I'm trying to change that. We've got a sort of translation gap. There are people that have heard the headlines, but, you know, haven't really wanted to dig into the academic papers and all the rest of it. So we need to translate this stuff better. That's what I'm trying to do. So even though we've had a lot of the stuff for a few years, it hasn't been Translated in a way that really hits. So yeah, there's the knowledge gap, there's a translation gap, there's a non marketing stakeholder gap. Non marketing stakeholders still operating under this kind of, this mental model that advertising works by causing people to buy things, by persuading people to go out and buy products. It doesn't work in that way. We think it does, but advertising actually doesn't cause sales, but it does ensure that brand brands win a greater share of sales, which is obviously incredibly valuable to a business. But I think because we're caught in this kind of incorrect mental model of how advertising works, most non marketing stakeholders kind of go, well, that's how marketing works and that's how we should measure it and that's how we should figure out whether it has worked. And also, shouldn't we spend less on marketing and just make it more efficient? Shouldn't we do that? And so these ideas which I think permeate the business world need to sort of be challenged. But again, in a way that sort of respects the fact that, that it's on us to communicate these things in the right way and educate the community around us in the right way to make sure that they understand the way that marketing and advertising really work. They understand that marketing and advertising are investments. They're not operating costs. Even though we can't capitalize them on a balance sheet, they are actually more capital investments than they are like operational costs. And so no, we shouldn't try and reduce them and make them more efficient like we do with all of our other opex, we should treat them like investments. And if you've got an investment that returns $4 profit for every dollar invested over two years, right? And normally you would pour as much money as humanly possible into that investment, you wouldn't try and skimp on it. So there's all of those sorts of things that we need to get better at communicating to the finance community about, you know, how the returns of advertising actually show up when they show up and how big they are. We've got a ton of work to do yet. The field of kind of marketing science and advertising effectiveness, marketing science had been around in probably ever since the 1950s or something like that, but up until about 2000 or something like that, most of it was hidden away in journals that and frankly no one read, right? No marketers, nobody read them. And so as a discipline, it's only really been publicly visible for about 20 years. That makes a pretty nascent discipline in the grand scheme of things, right? If you invent a new academic discipline and it's only 20 years old. It probably hasn't found its way out into most of the world and it's not going to for a few years yet. So we're still sort of at the beginning of the journey. So coming back to your question, have we got better? Yes, in pockets we have in other large pockets we've got a lot more work to do. It's quite natural that we've got more work to do because it's quite a young discipline. So let's get out and do it.
- [33:43]
Angela Voss
Let's get out and do it. I'm from America, I love me some America, but I want you to be straight, straight with us Americans here. You've operated across New Zealand, Australia, the UK and of course the us. Is the US kind of suck when it comes to just being overly focused on short termism and performance obsession? Like how do we compare to some of the those other countries that you work with? Or on the flip side, are we, are we awesome?
- [34:11]
James Herman
I think that I'll go back to again. Like the American culture has a real bias towards action and a real bias towards seeing results like quickly from all of that action. And I don't necessarily think that's a bad thing inherently. Like per se, it's not a bad thing. I also think that most of the rest of the world is pretty short term oriented as well. Like to be fair, like it's not like in the uk, it's not like their adolescents are saying to the boards of the companies, we want you to go really slow. You know, everyone else is obsessed with short termism as well. I think it's perhaps accentuated a little bit in the us but no, you don't suck. I think like you're really, really good at all sorts of forms of marketing, right? Like really world leading and all sorts of stuff. Just epic business builders. So I think it's kind of like it's taking that really great foundational base and just going, there's even more that you could do to be even more awesome as opposed to sort of, you know, approaching it from a point of view that you're sort of getting it wrong somehow. There's a lot to learn. There's a lot that the rest of the world can learn from America and there's a lot that America can learn from the rest of the world. And so I think yeah, we should sort of approach it from that point of view and just kind of share more and figure out how we all get more awesome together.
- [35:24]
Linda Jasper
Love that that's why we like having people from different countries on the podcast too, because we have a mostly us listenership. But it's nice to hear opinions from different places in the world. World. This has been wonderful. We have just kind of a fun wrap up question for you here, which is what's a brand that you were a future customer of for years? So you loved it, you were aware of it years before you actually bought it.
- [35:44]
James Herman
Probably Land Rover car's really easy one, right? You know, it takes a while before you can afford the car that you actually want. But yeah, there's something about like I have a Land Rover Defender, I bought it last year, like brand new and I got to like spec it out and like do all of that yummy stuff. And I really love that. For years I kind of saw the, I saw lovely ads which kind of made Land Rover seem like this. It was the kind of brand that evoked kind of, I mean, one of their cars is called a Discovery, but kind of evoked discovery.
- [36:13]
Angela Voss
Right.
- [36:14]
James Herman
Going out into the world and being sort of at one with nature and getting to places that you couldn't get to, you know, if you were just driving a Toyota or something like that. And so that always really spoke to me. And so, yeah, I'd say that's probably, that's one, one thing I'm looking around at other things that I now own that I couldn't afford to own before. Yeah, that's the one that probably really comes to mind. I'm trying to think of something, what would be the next one. I think like Bentley is still, I'm still definitely in Bentley's future demand set. And maybe one time, one day I'll be able to afford the Continental GT Cabriolet. But we'll see. It's also, it's like, it's like really kind of subconscious. A lot of marketing works on our subconscious, right? We've got a bunch of stuff stored away in our biases that we're not actually really aware of because they don't work in that way. They're not in our conscious brains. Right. And it's. And so much of marketing is about speaking to that subconscious and forming those biases that tend to control our behavior a lot more than advertising controls our behavior or conversion advertising controls our behavior. So sometimes it's kind of hard to tap into exactly what my biases are that have been built up over time that might inform or affect my future behavior. But. But it certainly works that way. You know, we got so much great cognitive science, behavioral Science now that really informs the way that we do make decisions. You know, it's worth reading up on that. It's worth reading, thinking fast and slow and digging into behavioral economics and understanding all of that stuff. It's super interesting and it's really useful to know as a marketer trying to change behavior. Behavior.
- [37:49]
Linda Jasper
We covered a study on the podcast the other day where you were, they were asking consumers like if they've heard of this brand or not. And they had been exposed to it through tv and a lot of people couldn't remember it, but they actually had like body changes, like they had like skin temperature on them and things like that. So that was, that was cool.
- [38:06]
Rob DeMars
I was wondering if maybe Rob and I had the same one when I was thinking about what brand was working in my brain long before I visited. I don't know know if this actually works because I visited as a child. So maybe it's a loyalty play. But mine's Disney. Lots of places to take kids on vacation. And particularly not a super cheap experience either. But whether it was the cruise line or the parks, that's what came to mind for me.
- [38:32]
Angela Voss
Yeah, for me, I've been a Die hard since the 90s. I've been die Hard Apple. So of course I was always an Apple watch guy for sure.
- [38:42]
Rob DeMars
For sure.
- [38:42]
Angela Voss
Just in, in on the ecosystem and anywhere. And I've always been a nerd. I've never been an athlete, but I decided to try running. And I run like a turtle. I'm very slow, but I always admired the Garmin watch wears because I'm like, that's kind of badass. You're kind of off. It's like, it's a focus tool for whatever. So I'm now a Garmin watch owner. And it tracks just how slow I am, which is great. But I, but it, but they got me, you know, it's kind of a. That was a long term one. I always saw him in the distance. I always admired it. And, and, and now I'm. Now I'm in.
- [39:21]
James Herman
That's another great way to look at it actually. If you wear something like, I remember like cycling, I'm not a cyclist. I'm about like you, Rob. Like, my joke is that when I run, I look like a normal person runs while piggybacking someone else. That's me. And I find it very hard. I'm also not a cyclist at all. But there were some super cool cycle brands that startup like Rafa, you know that brand Rafa, like. And I was like, man, that looks so cool. If I was to ever ride a bicycle, I would get some of that gear because that looks great. So, yeah, that's another really interesting way of thinking about it. And Ang, I just think Disney are amazing. I mean, I took my kids to Disneyland a couple of years back, the one and the original one in Anaheim, and it was like I was so impressed. Like that commitment to absolute excellence and customer experience is unbelievable. They are institutional geniuses. That was like very impressive experience.
- [40:14]
Linda Jasper
Amazing brand.
- [40:15]
Rob DeMars
Elena, what's yours?
- [40:16]
Linda Jasper
Yeah, mine, I was thinking is Iron man the brand? Because I've been aware of Iron man forever. He's cool with the tattoos.
- [40:23]
Rob DeMars
And
- [40:26]
Linda Jasper
then I even became a triathlete. But it took a few years before I actually purchased anything, like did an event through Ironman. So I think there's probably a lot of future customers too that maybe have families or aren't ready, but they're aware of the brand and like they've created such a good brand awareness around what they do. So that was mine. But yeah, lots I could probably think of so. Well, James, this has been amazing. Thank you so much for joining us. We love what you do, what you stand for, what you talk about, anything. You've got a lot you could plug anything right now that you want to plug, where people can follow you, where
- [40:55]
Rob DeMars
you want them to go.
- [40:56]
James Herman
Look, just the Future Demand book and the world we're creating around it. And so there's the book. There's an app where you can ask the book anything. So once you've read the book, rather than carrying it around with your post it notes and pencil notes inside it, this is an app where you can ask the book anything. It'll give you great answers with charts and data in them. You can turn that into a PDF that you can then send to a colleague if you need to convince them of something. You can turn into PowerPoint presentations, you can download and edit and all that kind of stuff. So. And there's also a featured mind community where, where you can come and join in in conversations with all of us nerds that are interested in this kind of stuff and get updated on all the newest research and ask me questions if you like and all that kind of jazz. And so just get involved with the world. It's all@futuredemand.com URL was still available, which does not happen much these days.
- [41:42]
Rob DeMars
But wow, that is surprising.
- [41:44]
Angela Voss
Nice.
- [41:45]
James Herman
Yeah. Yeah. Futuredemand.com that's where you can find me and all that. I do and I hope to see you there.
- [41:51]
Linda Jasper
Yeah. We're excited when you released. You, like, released some early. Like on LinkedIn. You posted about and released some early copies. And I had, like, two different co workers zoom me like, you're never going to believe what I've got. And I was like, I already have it. Okay. But they were excited to get sneak peek, so we're excited for the physical copy too. We'll definitely be purchasing. So thanks so much for joining us.
- [42:10]
James Herman
You're so welcome. Thanks for having me, gang. It's been really fun.
- [42:13]
Rob DeMars
Thanks, James.
- [42:14]
Angela Voss
Thanks, James.
- [42:16]
Linda Jasper
That's it for this episode of the Marketing Architects. We'd like to thank Taylor Delos Reyes for producing the show. You can connect with us on LinkedIn. And if you like the podcast, please leave us a review. Now go forth and build great marketing Marketing Architects.
- [42:34]
James Herman
Pardon me. Sorry. The Coke's making me burp.
- [42:36]
Angela Voss
That's part of their strategy. They're making you remember it.
- [42:39]
James Herman
Exactly. Yeah. It just made for yet another Coke moment in this. In this podcast.