Why Marketing Effectiveness Feels Impossible with Simon Peel

Summary

Podcast Summary: "Why Marketing Effectiveness Feels Impossible with Simon Peel"

Released on July 15, 2025, "The Marketing Architects" podcast delves deep into the intricacies of marketing effectiveness with Simon Peel, Managing Partner at The Other Lot. In this episode, Peel shares his profound insights and experiences from leading global media strategies at Adidas and beyond, offering a research-first perspective on building sustainable revenue through effective marketing practices.

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1. Introduction to Simon Peel

00:00 – 01:00

The episode kicks off with Alena Jasper introducing Simon Peel, highlighting his impressive trajectory from VP and Global Head of Media at Adidas to his current role at The Other Lot, a media consultancy that champions innovative approaches to media. Peel is recognized as a vocal advocate for marketing effectiveness, emphasizing long-term brand building over short-term performance metrics.

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2. Adidas’ Overinvestment in Digital Marketing

01:37 – 08:55

Alena Jasper opens the discussion by referencing a 2019 Marketing Week article authored by Peel, titled "Adidas: We Over Invested in Digital Advertising." Peel recounts how Adidas, under his leadership, realized that excessive focus on digital and performance marketing—particularly channels like paid search—was not yielding the desired ROI. Instead, econometric modeling revealed that brand activity accounted for a staggering 65% of sales across all channels. This revelation prompted a strategic pivot towards long-term brand building and a more balanced media mix.

“We discovered that brand activity was actually driving 65% of sales across all channels.” – Simon Peel [04:03]

Peel elaborates on the internal resistance faced, particularly from a CEO deeply invested in digital strategies due to their apparent profitability and impact on share prices. The shift towards brand building was not just a strategic necessity but also a battle against entrenched digital-centric mindsets within the company.

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3. Challenges in Shifting Marketing Focus

08:55 – 13:16

The conversation delves into the difficulties of convincing stakeholders to prioritize effectiveness over efficiency. Peel explains that vested interests within organizations often hinder the adoption of more effective marketing strategies. He emphasizes the importance of incrementality tests and randomized control trials in demonstrating the true impact of various marketing channels.

“We were trying to convince these teams that actually if you want to drive profitability, that's not the right way to do it.” – Simon Peel [04:45]

Peel shares how Adidas conducted extensive testing, which consistently showed that retargeting efforts lacked incrementality, thereby eroding brand value instead of enhancing it. This realization was pivotal in advocating for a more balanced approach that includes significant investment in brand-building activities.

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4. Adoption of Marketing Theories in the US vs. Europe

13:16 – 15:09

Peel discusses the varying adoption rates of marketing effectiveness theories between the US and Europe. While Europe had embraced these concepts a decade earlier, the US market remained reluctant to change due to its deep-rooted belief in precision advertising and personalization at scale.

“The US was much more reluctant because of this fashion that was happening at the time, arguably still happening...” – Simon Peel [13:32]

However, Peel notes a gradual shift in the US as more marketers recognize the limitations of traditional attribution models and the value of long-term brand investment, signaling a potential tipping point in marketing effectiveness paradigms.

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5. Measuring Marketing Effectiveness

22:52 – 25:24

A significant portion of the discussion focuses on measurement frameworks essential for demonstrating marketing effectiveness. Peel outlines a tripartite approach:

1. Econometric Modeling: Utilizes multivariable regression to analyze the impact of various marketing activities.
2. Randomized Control Tests: Employs holdout groups to measure incremental uplift from specific marketing efforts.
3. Attribution Modeling: Assesses the performance of different marketing channels and creative strategies.

“The key components of how to measure the effectiveness of advertising ... econometrics, randomized control tests and attribution modeling.” – Simon Peel [25:02]

Peel asserts that combining these methodologies provides a comprehensive understanding of both short-term and long-term marketing impacts, enabling more informed strategic decisions.

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6. The Role of AI in Marketing: A Contrarian Perspective

30:13 – 33:32

Peel shifts the conversation towards the burgeoning role of Artificial Intelligence (AI) in marketing. He expresses concerns over the opacity in media buying, where middlemen and lack of transparency lead to inflated costs and poor inventory quality. According to Peel, AI, while transformative, risks perpetuating inefficiencies unless marketers are vigilant about understanding underlying processes and maintaining transparency.

“AI is brilliant. It's really playful, it's fun, it's scary... but we are going to be encumbered by media industry opacity.” – Simon Peel [30:20]

He warns that without proper oversight, AI could exacerbate existing issues in the advertising ecosystem, leading to diminished effectiveness and increased costs for advertisers.

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7. Introducing The Other Lot Media Consultancy

28:56 – 35:24

Peel introduces The Other Lot, outlining its mission to help advertisers, agencies, and publishers navigate the complex media landscape. The consultancy aims to provide transparency and competitive advantage by adhering to principles of effective marketing and mitigating the negative impacts of opaque media practices.

“If you want to go on a different journey, if you want to get more money, if you want to grow your brand, then maybe think about a different type of consultancy and come and talk to us.” – Simon Peel [30:56]

The Other Lot positions itself as a counterforce to traditional media consultancies, advocating for data-driven strategies and robust measurement frameworks to ensure marketing investments yield meaningful returns.

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8. Light Buyers vs. Brand Loyalty

25:55 – 28:39

Peel challenges the conventional wisdom surrounding brand loyalty, presenting data that contradicts the notion of a loyal consumer base. At Adidas and Halion, his teams found that light buyers—those who purchase infrequently—constituted 70-80% of both buyers and revenue. This insight underscores the importance of targeting and engaging light buyers to drive growth, rather than solely focusing on nurturing existing loyal customers.

“70 to 80% of purchase also came from light buyers. People that bought product for the first time that year.” – Simon Peel [28:39]

This revelation aligns with the principles advocated by the Byron Sharp and the Ehrenberg-Bass Institute, emphasizing the significance of broad reach and acquisition over retention in most market contexts.

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9. Personal Anecdotes and Final Thoughts

35:24 – 38:35

The episode concludes on a lighter note with personal anecdotes. Peel passionately defends his love for lime pickle, humorously highlighting the often-overlooked pleasures in life. This segment adds a personal touch, showcasing Peel's relatable and approachable personality.

“I would be prepared to go into bat for it and I fight for it at home.” – Simon Peel [35:40]

Alena Jasper shares her own affinity for unconventional food pairings, further humanizing the conversation and providing a memorable close to a deep dive into marketing effectiveness.

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10. Connecting with Simon Peel and The Other Lot

38:22 – 38:35

In the final moments, Peel directs listeners to The Other Lot’s website and LinkedIn page for more information, encouraging those interested in transforming their marketing strategies to reach out.

“You can find us on LinkedIn as well. We just started on there, but yeah, the website is probably the best place to find us.” – Simon Peel [38:22]

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Key Takeaways:

• Prioritize Effectiveness Over Efficiency: Long-term brand building often yields more sustainable revenue compared to aggressive short-term performance marketing.

• Robust Measurement Frameworks: Utilize econometric modeling, randomized control tests, and attribution modeling to comprehensively assess marketing effectiveness.

• Embrace Transparency in Media Buying: Be wary of opaque practices in media purchasing, especially with the integration of AI, to ensure investment efficacy.

• Focus on Light Buyers: Targeting and engaging infrequent buyers can drive significant growth, challenging the traditional focus on brand loyalty.

• Adapt and Evolve: The US market is gradually shifting towards more effective marketing paradigms, aligning with practices long embraced in Europe and Australia.

This episode serves as a compelling guide for marketers seeking to navigate the complexities of modern marketing, advocating for research-backed strategies and a balanced approach to both short-term gains and long-term brand health.

Transcript

[Simon Peel]

There's a change that's happening in the us, but it's the biggest advertising market in the world and it's also one that's more reluctant to change. I think it's happening now, but in the rest of the world, particularly Europe and Australia, it happened like 10 years ago.

[Alena Jasper]

Marketing Architects. Hello and welcome to the Marketing Architects, a research first podcast dedicated to answering your toughest marketing questions. I'm Alena Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co host. Rob Demar is the chief product architect of misfits and machines. And we're joined by a special guest today, Simon Peel. Simon is now managing partner at the Other Lot, a media consultancy that believes in doing media differently. But before that, he was VP and global head of media at Helion and famously led global media at Adidas during one of their most transformative marketing eras. He's a vocal advocate for effectiveness, a skeptic of shiny objects, and a believer in many of the principles we hold dear. So thanks for joining us, Simon.

[Simon Peel]

Thank you for having me. It's nice to be here.

[Rob Demar]

It's great to have you. Now. Now head of media, Global media at Adidas. I got a question for you regarding brand loyalty. All right. Do you still wear Adidas? Are you rocking them right now?

[Simon Peel]

Oh, I've actually got a pair of socks on. They have two swipes. Like you can see there's two, not three. Yeah, I do still wear Adidas. So it's. It's only the Americans and the Australians that call it Adidas, by the way. I do still wear them and I wear them to go run in primarily. So I'm not as hip. This trend is. I used to be. So I can't get away with them sort of walking around the house.

[Rob Demar]

You have to say that again. I've grown my whole life calling it Adidas, which is probably wrong even in the English version. So how did you say that again?

[Simon Peel]

It's Adidas. Adidas, I think all American. Not all Americans, obviously, but Americans and the Australians as well also say Adidas.

[Rob Demar]

What do they say in Canada?

[Simon Peel]

They say Adidas, apparently.

[Rob Demar]

They do. Really?

[Simon Peel]

We would need to ask them.

[Alena Jasper]

Some countries call Nike. Nike?

[Simon Peel]

Yeah, the Brits used to do that for years. Yeah.

[Alena Jasper]

Yeah.

[Rob Demar]

Wow. The first time I heard that, I want to go to the Mall of America, into the shoe store and ask for Adidas and see what they.

[Alena Jasper]

They would look at you like.

[Rob Demar]

I'm excited now because I can be like, snooty. That's how it's said. Now I know.

[Alena Jasper]

I was overthinking how we should pronounce Adidas on the podcast because I've listened to your talk a few times and I was going back and forth on it in my head, but it's too easy to call it.

[Simon Peel]

Adidas, so I think that's fine.

[Alena Jasper]

Okay.

[Simon Peel]

All right.

[Alena Jasper]

All right. Well, we're back with our thoughts on some recent marketing news. Always trying to read our opinions in data research and what drives business results. And we're excited to have Simon here today to talk about all things marketing effectiveness and more. But first I wanted to open with an article. Simon, you probably won't be surprised by this. I hope you're not too tired of talking about this by now, but this is for Marketing week and it's titled Adidas. We over invested in digital advertising. This is by Sarah Vizard. Back in 2019, Simon revealed that Adidas had been over investing in digital and performance marketing. Due to a flawed focus on efficiency and short term roi. The brand lacked proper measurement tools, they relied heavily on last click data and their investment was skewed towards channels like paid search. But after introducing econometric modeling, Adidas discovered that brand activity was actually driving 65% of sales across all channels. And the company began rebalancing its media mix, embracing long term brand building and light buyers. And Simon stood on Stage at the IPA's F Week and openly shared this journey, urging marketers to focus on effectiveness over short term gains. And Simon, not to be creepy, but I have watched that talk several times even before preparing for this interview. And that story is how I know of you. We've loved sharing it out in the agency. It's had an impact on marketers globally and I still find it really relevant even a couple years later. Would you mind talking a little bit more about what you discovered there and why you decided to share this sort of marketing effectiveness experience publicly.

[Simon Peel]

So maybe I'll start with the second question, like why we decided to do it or talk about it. So the IPA is the institute practitioners of advertising. So it's like a very established body in the uk. And when I was a graduate after university and I was training in my profession in advertising, we all had to do IPA courses. It was kind of the standard entry into advertising. So when the IPA asks you to do something, you feel quite compelled to do it. At least I did and I was absolutely shitting myself. We had not that long previously appointed a new agency and one of the guys at the agency, a guy called Chris Bins was like, what are you going to say? You can't tell the truth? And I was like, well, that's what I'm going to do, you know, I can't go on there and just lie. That was part of the reason why we decided to talk about it. The other was because internally we just, it was really hard with the structures and with the CEO at the time to get people to listen. So the CEO at the time was a guy called Casper Rod and he was very focused on digital as part of his strategy and E Commerce because it was highly profitable. His reputation and also his shares were dependent on profitability. It's understandable that he wanted to push that agenda. But he and a number of teams in turn, including the digital team that had a vested interest in this, were very sure that it was digital advertising and primarily search and retargeting that was responsible for of that E commerce profitability. And we knew that not to be true. So Adidas, or Adidas had gone through this sort of transformation in 2014, led by a guy called Eric Blitke, who was the CMO at the time or Chief Brand Officer. He's now under Armour. And Eric basically said, you know, we have been too focused on lots and lots of products. We're not talking to the right audience, we're not focused on our brand. And he basically put the brand back at the center. And then as we did that, we realized that our sales were shooting up. It's kind of like Adidas has just had this resurgence over the last two years again, because the new CEO has realized it's not about E commerce, it's about wholesale retail. It's about having that physical availability everywhere. But it's about brand desire. Ultimately, if you want to sell these products got to be cool. And retargeting people and annoying them on the Internet might not be the coolest in the world. So there was this kind of problem that we had internally which was we were trying to convince these teams that actually if you want to drive profitability, that's not the right way to do it. The IPA talk was discussing some of the findings that we had, which was basically we had a number of attribution models because we had Google Analytics 360 at the time on our website, we had Adobe analytics on our website we had what was called Facebook Grubbers Meta, but Facebook had a people based attribution model as well. And then we had built bespoke attributions within the ad server which looked at different dimensions. There's Basically, I think there's eight, might be six standardized attribution models that you can build in ad servers. And we looked at various ones and then we built custom ones and we built data driven ones. So we were quite advanced in it and we had Econometrics running at the same time. And basically Econometrics was just saying something completely different. It was saying, well, you know, a lot of this paid search targeting stuff isn't actually driving your sales. And I had spent two years from probably 2015 to 2017 running incrementality tests and randomized tests, looking at retargeting and whether it was driving incremental sales. It wasn't just me, there was a group of us doing it, but I was like the provocateur saying, I don't believe this. So we ran these tests for two years and basically it showed no incrementality from retargeting by none of them. But at the time we were investing more and more into these digital channels. So what was happening is we were sort of eroding the brand because we weren't investing enough behind it. And we were supported putting more and more money into channels that weren't actually effective. So we were going kind of mad. We were like, what the fuck are we going to do? So that's why we stood up. Well, I stood up on stage, on the IPA stage to talk about it, to say, look, we're making mistakes, we're trying to be better, we're trying to learn these things. But like, it's not just us, you know, I'm sure lots of other people were feeling something similar, which I think at the time it resonated because a lot of people were in that slump as well. And I think that's now beginning to happen with cpg, particularly in the US where retail media is doing the same thing. It's basically performance media 10 years ago. And like you've got this stupid attribution model, so I can see why it's still relevant in some ways.

[Alena Jasper]

That's really interesting. I remember in 2020, Adidas signed Anthony Edwards. He was like the. One of the biggest deals. And it's funny that that's off the heels of refocusing on brand. It's like, oh, that was probably a good decision to invest in, invest in athletes and other ways to show the brand in different ways.

[Simon Peel]

And that's Bjorn, you know, that's the new CEO who came in from Puma and he basically said, that's where we're going to focus, we're Going to focus on the brand, we're going to focus on wholesale retail. We understand that that's where we need to go. So you. That's him having a very different perspective to the previous CEO.

[Alena Jasper]

Well, I think talking about it, like you said, was helpful for other marketers who are in the same position. You mentioned that it's hard to convince leadership to move away from some of these models, like you mentioned, using, like, incrementality tests. Was that the main way that you sort of convince stakeholders, or how would you recommend other marketers go about this? Because that sometimes feels like the bigger hurdle is just how do you convince people internally to test something different?

[Simon Peel]

Yeah, it's really hard because there are vested interests, particularly at clients. Often they have built structures and headcount around these ideas. So back then we're talking about 2019 or what have you. It was all about digital and, like having a digital team. Everything's digital. So it seems really silly to have a specific digital team. I'm sure the same thing will happen with AI. You know, we'll have AI teams and they're going to be like, oh, my AI works better than yours. Because people were like, I've got to prove this value of my team and to grow and to get promoted, I need to get bigger teams. It's really hard for clients to make this type of argument. I mean, we. We basically. We were banging this drum for years and years. We did internal trainings. Every month we would do a training session. We'd have typically about five or six hundred people join those training sessions to learn more about it. We ran annual strategy sessions. We put people on training courses. So a lot of people went onto Mark Ritson's training course. They did the IPA training course as well. I think we put like a couple hundred people on that. We sent round the Binet and field books to everyone. I think we bought like six or seven hundred books and sent them around to, like, senior leadership down. If you think about Byron Sharp stuff, most of the people aren't in market most of the time and it's all about reach. That's essentially what we were doing. We realized that no one cared what we were saying. So eventually we sprayed enough of it out there. Someone would be in market for that message and they would start paying attention. We also sent out like weekly newsletters. We did this thing where we were trying to, like, be provocative and joking and stuff like that. So we have these people wanting to sign up to our internal newsletters and it just bubbled up, like, because There were so many people feeling the same way that we did as well. We were like bubbling it up from the bottom and getting people from the bottom talking upwards and saying, what the fuck are we doing? This is crazy. And at the same time we were like presenting to the board like, you know, not swearing so much, but we were kind of saying, these are the financial numbers and these are the financial implications. We can go one way and we can get less money or we can go another and we can get more money. So which one do you want? And the problem at these big companies is often the boards are risk averse and are short termists. Like big, publicly listed companies have to disclose their earnings on quarterly basis. Their remuneration, the board's remuneration is tethered to that. So often they don't want to take a risk that is about delayed gratification or delayed revenue. They want the revenue now. So there's this horrible cycle that you have to go through. And honestly we were banging the drum for years. I believe my friends that are still there are still banging the drum. You know, like other companies, people are banging the drum as well. So it's not like we were successful. We made a dent and we convinced some people we didn't change the way that the company operated. We didn't. Like that was done by people much more senior than us that had the same point of view as us. We're just like, fuck it, we're going to change stuff. Yeah, we went top down, bottom up.

[Rob Demar]

Speaking of banging the drum around the theories of Bennett Field, Byron Sharp, you mentioned in 2019 a lot of people were starting to talk the talk, but few were actually walking the walk. Do you think that's changing now? Are you starting to see a tipping point happen?

[Simon Peel]

I think in America it certainly changes. So we've been talking about this at Adidas since 2015 and initially some markets were really bought into it. So Europe was really bought into. I mean, the Net and Field are British and the IPA is British. And the studies initially were based primarily in the uk. They're now global. So there was a high propensity for the Europeans to buy into it. There was a lot of supporting work by the FES in Germany at the time as well. And despite there being evidence in the US as well, the US was much more reluctant because of this fashion that was happening at the time, arguably still happening, coming to an end, related to first party data and personalization of scale. So because the market, the marketing market is very different to the rest of the world and there's a belief in precision advertising. The US was very slow to come on board with the long and short of it. I believe that's changed Adidas now and certainly I can see it from an outsider, you know, like Les Binette I think is quite famous in the US now. Peterfield probably as well. And Mark Ritson's obviously he's just told his company he's going to do a big splash in the US and really go after it. So you can see that there's a change that's happening in the US but it's the biggest advertising market in the world and it's also one that's more reluctant to change. So in many ways I think it's happening now, but it in the rest of the world, particularly Europe and Australia, it happened like 10 years ago.

[Rob Demar]

Do you think that's why the default still tends to be efficiency over effectiveness? Because just how hard it is to change? Or you also mentioned the boards needing that ROI quarterly versus long term.

[Simon Peel]

It's multifaceted. It'd be wonderful if it was just one answer. And it's like, oh no, it's just because people are focused on cost savings and roi. That's what we'll figure that out and then everything will be okay. Which, you know, we kind of thought for a while. It's just not that simple. I was presenting in Brussels this week to a company called egta, that the European trade body for TV and audio in Europe. I was talking to them about the long and short of it. And like these are like TV sellers. They're selling advertising space for TV and radio. I was talking to them about the long short of it and they were like, yeah, I know all of this. We've been saying this for years and people just don't care. I was explaining there is this thing that biologically humans are naturally short termist. So there's experiments. You may be aware of them from around 1972 in Berkeley University where they took like, I think it was 300 kids, but I might have the number wrong, but they had a load of kids and they did something called the marshmallow effect or the marshmallow study. And it was basically, you can have one marshmallow now or you can have two marshmallows in 15 minutes. I hope I'm saying marshmallows right.

[Rob Demar]

I just called you out and said it perfectly. Absolutely.

[Simon Peel]

So you can have one marshmallow now, you can have two in 15 minutes. And 70% of the kids chose one marshmallow. Now and these studies undertook at Berkeley University, they also did across rats and chimpanzees and adults. And all of these studies have recurred over and over again throughout the years. And they all show the same things. Like naturally, humans focus more on the short term. That the heuristic is called the hyperbolic discounting bias, which basically means you discount future value even though it's greater for something that's available now. I don't think it's just, oh, it's roi, it's risk adversity, it's focus on personalization and scale or retargeting some natural inclination that we all have to focus on the short term now. And when our financial regulators also push that agenda. Like for instance in the US if you're a publicly listed company, it's been an obligation to report on a quarterly basis since 1934. Is implemented in law more in the 1970s in Europe, they realized that this was having an impact on short term prioritization. CEOs were suddenly cutting everyone's jobs, but they were focused on short term profitability, understandably. So the European Union in 2013 realized this and brought into law that companies didn't have to report on a quarterly basis, they could do on an annual basis and therefore erode some of the business focus on short termism. But because the global financial market is kind of run by the US it hasn't made such a big impact as I think they would have liked. And I'm not trying to blame the US here, I'm just trying to say naturally, biologically, we're set up to think short termist. And financially and commercially, we're set up to think short termist. So it's natural that marketeers would think short termist as well. It's in our inclination.

[Rob Demar]

Ironically, I'm old enough. I was actually one of those kids in the marshmallow study and I ate them all. Give me the whole bag.

[Alena Jasper]

A true American you are, Rob. Well, Simon, I think from our perspective in the U.S. i think you're right that there is a greater move towards this stuff and it's becoming better known. But what we found with clients is I think you need two things to be successful with these point of views. One is having just an understanding throughout the company. But then to our clients that have been most successful in thinking long term, it comes from the top. I think that's difficult sometimes if you don't have the CEO bought in. If you don't have those high level decision makers, I think it can be hard and then of course, it varies by company because marketing's responsibilities and respect vary so greatly by company. And I know that after Adidas, you led media at Halion and now you're managing partner at the other lot. Has your thinking changed over time at all as you've worked in different companies?

[Simon Peel]

I think it's mellowed. Like, with Adidas, the brand meant so much to me personally. Like, my identity was linked to it. It was so meaningful to me and a number of others there. It's something that you're proud to say that you work for or with because it has so many memories from childhood and, like, it's just a cool brand. But as I've sort of gone on to other companies, I went to helium, which was GSK's consumer healthcare company. It's basically the largest consumer healthcare company in the world. The brands are less personally meaningful. I don't identify with a toothpaste or paracetamol as much as I would love to be, you know, like an Advil, I'm an Advil person, but it doesn't resonate with me so much. So with that brought about a more mature approach, I think, which was, okay, it's not just about the personal identity or the identity that it has within other people at Adidas or the consumers as well. Like, it's not about that tribalism. It's about the right business structure and the right business approach. We implemented a very similar strategy tailing to the one that we did at Adidas. The long and short of it was a factor of it. Like, it's not. You can't just go in and you can't just say, okay, let's do the long and short of it. Because there's so many different facets that you need to fix. So as an example, Halen, I went in and presented it and people like, yeah, like, we believe in that. Let's do it. But then it was like, okay, but you need to prove it, Simon, if we're going to change our investments, you need to prove it. Which then meant, okay, can prove it. Because the taxonomies that allow us to measure in a certain way, they've looked at brand and activation, or long and short aren't in place. So I can change the investment, but I'm not able to measure the efficacy of it. That's just one example. Like, we needed to change the taxonomy globally across 100 plus brands, across 90 markets, across all of our media spend, which was huge. Still is huge. They're one of the largest advertisers in the world. That was just one factor of it. And there's so many different factors that you need to address. You need to address the contract with the agency. Is the agency incentivized to do the long and short of it? Are they incentivized to put brand over performance? Have you got the measurement structures correct? Have you got the KPI framework correct? There's so many factors. So yeah, but did the same thing. And the team there did the same thing, a similar thing, but it was done in a more mature, less sweary way and with a greater sense of look, this is a journey that we need to go on together. Adidas is much more tribal because it's about two clans bashing up against each other, because that tends to happen in D to Z. FMCG or CPG is more about like, how do we go on this journey together over a period of time?

[Rob Demar]

So how does a marketer prove it? I mean, everybody's looking for that single source of truth. How do you tackle measurement when you're trying to balance both the short and the long?

[Simon Peel]

Well, so it depends is always the answer, and there's always the horrible answer that no one wants to hear, but it depends. So for instance, one very simple measurement framework is, okay, you have to have econometric modeling. Like it doesn't matter really what size you are. If you're spending over $1 million a year, you should have econometric modeling. And if you can't afford to work with the best econometric agencies in the U.S. you know, like the likes of Ipsos, MMA or Analytic Partners, there are free choices out there. Like Meta has Robin, which is an open source option. Google has Meridian, which again is an open source option. They're not as good as working with Ipsos, MMA or Analytic Partners, but they're free. So you can do it. You still need Econ Matrician to help you run them, but you need to run econometrics because it looks at multivariable regression modeling, which sounds fancy. It's the same thing that predicts the weather reports. It's the same modeling that predicts the gross domestic product of a country. So it's got real credibility. But at the same time, you need to run randomized testing. So the US has a very privileged position of having DMAs. You've got, I think 210 DMAs designated marketing areas in the US so you can run some activity in one DMA, do a holdout group in another and run something else in another, like to prove that TV works As an example. And then you can look at the incremental uplift over the short period to see whether that DMA of extra TV has worked versus no TV or whatever it might be. So you need to run these randomized tests and then to be fair, despite attribution's huge problems, it helps with optimization. So as long as you've got econometrics as the base of where your investment should be in your base of measurement and you're running your randomized tests, you can use attribution to understand whether this type of creative is working or whether this type of format is working, or whether this digital channel is right. So having those three together is really important. Brand equity, you've got to have that campaign lift. You should really have that. But if I was like to break down the key components of how to measure the effectiveness of advertising, it would for me at least would be econometrics, randomized control tests and attribution modeling.

[Alena Jasper]

Yeah, I think we'd be aligned there. As a TV agency, we love a holdout test and it sounds simple when you first start talking about it, but we found that our most sophisticated clients, it's something that they've got down. It's just typically how they test new marketing channels. Simon, when we talked, you said a phrase that always like, lights up my marketing antenna, which is light buyers. Because we've seen firsthand that reaching light buyers, it's key to growth for the brands that we work with. But how have you thought about taking that belief and actually translating it into a marketing strategy?

[Simon Peel]

It was fundamental Adidas. I mean, it's part of a strategy. It's an insight into a strategy. It's not the strategies go after like buyers. It's the same with Halion as well. So with Adidas, because we have D2C channels, people go onto the website and they would buy shoes. We were able to ascertain whether they were new buyers or they were repeat buyers. And we were able to do that over a long period of time as well, over a three year period because a lot of the company was focused on lifetime value and like the repeat buyers and increasing loyalty. But again and again we always saw that light buyers made up 80 to 90% not just of the buyers in total, but of the revenue as well. Like always, it was light buyers because Rob might buy a pair of Adidas this year, but Eleanor, you might not buy them for another couple of years, despite us having your email and your phone number and your dma like you may not have buy it and this is the thing people come in and out of buying. We all think we're really loyal to brands. I think everyone's loyal to Apple because I've had two Apple phones in a row. But the truth is my wife changes hers all the time and my daughter changes hers. So because my orientation, I'm sure Rickson talked about market orientation but like, because my focus is this, I believe everyone else is the same and it's just not true mathematically it doesn't prove to be true. And I think that's this. There was so much data to disprove loyalty, like it's just not a big thing at all. And if you focus your business on loyalty and this is true of brands above a certain size, right? Like if you're a small brand, loyalty is much more important. Same if you're a very niche brand, right. If you're luxury or you know, very high end net worth individuals, then it becomes more important. But most things, most of the times aren't like that. And it's totally the same as CPG as well. So one of the first things that I did when I went there is to have a look at loyalty versus light buyers, right? And we had a, because we had the data from retailers, we saw exactly the same thing. It's like 70 to 80% of all of our revenue came from light buyers. 70 to 80% of purchase also came from light buyers. People that bought product for the first time that year. So it's, you know, Ehrenberg, Bass Institute of Marketing Science talk about in the books and you think it's theoretical but you can go and test it like it's true pretty much everywhere apart from these very niche areas.

[Alena Jasper]

That's really interesting.

[Rob Demar]

I feel like this whole episode has really been kind of about your new tagline, right? Which at the other lot media done differently. And because so much of what you're talking about is contrarian to what traditional beliefs have been. What does it mean for you?

[Simon Peel]

So the other lot is basically it's a media consultancy to help advertisers, agencies, ad tech and publishers get more out of media to get a competitive advantage. Because there are so many people and companies out there that don't really understand these principles and then don't know how to apply them. The idea with the consultancy is that actually if you come and work with us, we'll help you do that. We'll help you get a competitive advantage, we'll prove out these numbers and if required will help with your infrastructure. Your technology kind of goes against the grain a little bit, you know, like it goes against what some institutions or companies have been pushing for a number of years because it's financially beneficial to them to push that agenda. And we're just saying, look, that's not actually true. And there is. As long as you know where to get the information, you can see that the story is actually very different. If you want to go on a different journey, if you want to get more money, if you want to grow your brand, then maybe think about a different type of consultancy and come and talk to us because we'd be happy to help.

[Rob Demar]

What's going to make people most nervous when they talk to you in terms of your most kind of contrarian viewpoint, where they're going to be like, oh my, buckle up.

[Simon Peel]

I think it's time for a contrarian corner.

[Rob Demar]

The lines are drawn.

[Simon Peel]

Who's right? It really depends. Some things that I think aren't contrarian at all, other people think are one of the big ones for me is AI. You know, like it is coming, it is scary and it is ubiquitous. It's not like the Metaverse where it was like Zuckerberg talking and like trying to convince us all to buy into this nonsense. This is happening and it's going to be very big and transformative. My concern with it is that because particularly in the media industry, there is so much opacity and there is so much middlemen involved or middle people involved and everyone is taking a cut. And because people don't understand law and how contracts work and how the agent and principal works in law and how you can get around that to, to create margins, because they don't understand that's happening anyway. And it means that in everywhere around the world, but in media we're buying a lot of very bad inventory, very poor inventory, like make for advertising inventory fraud, really bad stuff because the parties in the middle have vested interests in arbitraging at a higher rate and they can arbitrage at a higher rate because the inventory is so crap, like really cheap stuff, put really high margin on it and set it to a climbing brilliant and you can still sell it at a lower cost per thousand than they wanted to pay. So that's going on in our industry and then you've got AI coming in over the top, typically owned by agencies that do principal media that sometimes have high margins in this obfuscated area. And it's just going to keep on perpetuating it. Because if I'm an agency I'm going to be saying again, like I want A higher margin on my buys. But obviously I don't want the client to know that and it's just going to perpetuate some of these things. So I don't know if it's contrarian because a lot of people know that this stuff is going on, but I guess it's slightly contrarian because I'm saying AI is brilliant. Right. It's really playful, it's fun, it's scary. But if we don't understand what's going on behind it, behind some of the pipes that make our media industry or our advertising industry work, we are like properly in real trouble because we're going to be encouraged to buy Absolute Dog, really. And it's going to affect journalism, it's going to affect proper creation of beautiful production, it's going to affect the consumer experience and it's going to affect the advertisers investments. They're going to get less money, it's going to become more ineffective, inefficient, and then it's going to affect the agencies in the middle. So I guess it's contrarian in that sense. But I'm saying, look, there are parties out there. Marketing architects are one of those. I believe that our group, the other lot, are one of those which can help advertisers and clients get around these problems. Yeah, I don't know if it's contrarian, but that's this point of view. Certainly.

[Alena Jasper]

I think it is. I mean, I think it's really important because we've seen firsthand, we just, again, we just buy television media. But when we started to move into connected tv, moving from like linear, adding ctv, we started working with some of the more of the traditional big players to buy media for our clients. And we couldn't believe the cost. It was just like cost. It was so expensive. It doesn't make any sense. And we realized it was all the fees, there was the middlemen, like there's all these hands in the cookie jar. So we ended up spending millions to build our own DSP and go direct because we're thinking there's just no way a performance marketer can make this work. But our clients are very performance driven. I imagine these big brands, to them you can spend all this money in. But you're right, I think it's really important and I don't think marketers broadly are aware of it, of just how many fees and how sketchy it can get with middlemen. So I think it's great to call it out.

[Simon Peel]

Yeah, totally. I mean, just to add a little Anecdote on this. Like I was saying, I was Talking to the TV industry in Europe this week and the TV sellers who are using these SSPs and going through these programmatic pipes, they don't even know this stuff is happening. It's crazy. So, Eleanor, when you told me about you building your own dsp, I was like, that's amazing because that's exactly what clients need, as long as it's transparent and you provide that transparency to the client. But whatever your margins are, they need to be fair and you need to be profitable. But you're not incentivized to buy the rubbish, the thing that you guys have done so well. So I think it's a really important step that you've taken.

[Alena Jasper]

All right, Simon, if you could change just one thing about how brands approach advertising today, what would it be?

[Simon Peel]

I think I would try to think a bit longer term, but I would do that by using measurement to help reinforce it. Actually, numbers are really important. So just think a bit longer term and then justify it with long term econometric.

[Alena Jasper]

Love it. All right, let's wrap up with something a little more fun. So, Simon, you've stood up for long term brand building even when it went against the grain at some of the companies you've worked at. What's something in your personal life that you'd go to bat for just as hard even if nobody else agreed with you?

[Simon Peel]

This is really rubbish, really. But I'm a big fan of lime pickle. Do you know what lime pickle is? No. You don't really get it in the us Actually, you don't really get it outside of India or the uk. We become very big fans of curry. Part of Indian curry, you get like a load of condiments and one of them is lime pickle, which is like limes that been pickled for a couple of years and spices and honestly, most people think it is disgusting. Like it's absolutely revolting. It makes people's like stomachs churn. I think it's one of the most delicious foods there is in the world. And I'm convinced, you know, there's all this stuff at the moment about microbiomes and its effect on your brain and longevity. I think Andrew Huberman and his group of friends should eat lime pickle because I think that's the biggest microbiome and I'm not sure I could back it up. I would be prepared to go into bat for it and I fight for it at home. You know, my wife hates the smell of it, but we've always got to have jar of that in house.

[Rob Demar]

So funny. Simon. We must be brothers from another mother, because I obviously, I knew about this question ahead of time, and I was thinking about it, and last weekend I was at an event where they were serving carbonated pickle juice, and everyone around me was like, this is horrible. And I'm like, I love this. It's delicious. You know, it's cold. And my wife, like, we bought a 12 pack of it because we were like, carbonated pickle juice. We're never going to find this again. And it was wonderful. So I'm with you on the pickle front.

[Simon Peel]

Yeah. I think you and. You and I, Rob, are going to live to 200 years old.

[Alena Jasper]

No, that's. That's funny. It's funny. You both did. Is that the one you chose, Rob, too?

[Rob Demar]

No, it was. I swear to God.

[Alena Jasper]

That's crazy.

[Rob Demar]

I'm like, well, I was thinking of last weekend. I'm like, I really love this. This carbonated pickle juice. I thought it was a genius idea.

[Simon Peel]

What would you go in for bat for in your personal life? Because me and Rob are pickle mad. What about you?

[Alena Jasper]

Yeah. Now, I want to say something like, pickles. I did have pickle pizza at the Minnesota State Fair last year, and it was so good. Pickles belong on pizza. Maybe that could be something. But I was going to say, my husband and I got a dog about a year ago, and we'd all like the dog training classes. And they were like, don't let the dog sleep on the bed because it. It messes up the hierarchy. I disagree with that. I think all dogs should sleep on your bed because it's one of the joys in life to have a dog sleep on your bed.

[Simon Peel]

I agree.

[Rob Demar]

And the further they sleep towards your head, the more dominant they are. So our golden doodle literally sleeps right on my head.

[Alena Jasper]

Awesome. Well, Simon, where can people follow you? Where can they learn more about what you're doing at the other lot?

[Simon Peel]

Yeah. So we're online with TheOtherLot.com you can find us on LinkedIn as well. We just started on there, but yeah, the website is probably the best place to find us.

[Alena Jasper]

Thanks so much for joining us.

[Simon Peel]

No, thank you for having me.

[Alena Jasper]

That's it for this episode of the Marketing Architects. We'd like to thank Taylor De Los 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.