Mark Ritson on the fall of Nike, KitKat’s perfect positioning and whether Liquid Death is more than just water in a can

Summary

Podcast Summary: Uncensored CMO Episode Featuring Mark Ritson

Title: Mark Ritson on the Fall of Nike, KitKat’s Perfect Positioning, and Whether Liquid Death is More Than Just Water in a Can
Host: Jon Evans
Guest: Mark Ritson
Release Date: November 13, 2024

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Introduction

In this episode of Uncensored CMO, host Jon Evans welcomes marketing guru Mark Ritson to discuss the top ten marketing stories of the year. Recorded in a lively pub setting in Bow, East London, the conversation delves into significant industry insights, including the challenges faced by Nike, the exemplary positioning of KitKat, and the intriguing rise of Liquid Death. The relaxed atmosphere sets the stage for an engaging and candid exchange of ideas.

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1. Revisiting Mark Ritson’s Influence and Marketing Week Success

Timestamp: [00:06] – [02:33]

Jon Evans opens the episode by highlighting the annual tradition of counting down the year's biggest marketing stories, particularly those that gained traction on Marketing Week and LinkedIn. Mark Ritson shares anecdotes about his interactions with colleagues such as Les and Sarah, emphasizing the dynamic and ever-evolving nature of marketing discussions.

Notable Quote:

Mark Ritson [00:27]: "Forget about that bit of the day."

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2. The Impact of Purpose and Diversity in Advertising

Timestamp: [02:08] – [12:04]

The conversation shifts to the role of purpose in branding, with Ritson critiquing Rory Sutherland's perspective that "the era of brand is over." He references his own experiences at Cannes, where a candid Q&A led to valuable insights about diversity in advertising. Ritson emphasizes that representing minority groups should stem from a genuine commitment rather than a mere commercial excuse.

Notable Quotes:

Mark Ritson [05:01]: "The purpose of purpose is purpose."

John Evans [07:55]: "Could we get every ad that has someone from that community explicitly presented, and let's see how it performs versus average."

Ritson presents data showing that including LGBTQ+ individuals in advertisements does not negatively impact performance, countering the common misconception that diversity equates to profitability. He advocates for authentic storytelling that resonates with all audience segments without feeling forced or artificial.

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3. KitKat’s Exemplary Positioning Strategy

Timestamp: [29:06] – [37:18]

Mark Ritson lauds KitKat’s unwavering positioning strategy—"Take a break"—as a benchmark for effective brand positioning. He narrates his in-depth research and direct discussions with Nestlé’s global head of KitKat marketing, Wael Younis, highlighting the brand’s single-word positioning supported by distinctive asset codes like the red Pantone and the iconic four-block logo.

Notable Quotes:

Mark Ritson [30:48]: "Positioning is the intended brand presence in the brain of the consumer."

Mark Ritson [33:29]: "It's a brilliant strategy because it's so clear you immediately know what you're going to do."

Ritson discusses the importance of relative differentiation, where KitKat focuses on being consistently associated with breaks rather than diversifying its positioning. This steadfast approach ensures long-term brand recognition and consumer loyalty.

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4. Liquid Death: Beyond Just Water in a Can

Timestamp: [14:17] – [43:58]

Ritson and Evans delve into the innovative marketing strategies of Liquid Death, a water brand packaged in cans. They explore the logistical challenges the company overcame, such as establishing canning lines for spring water and breaking into a market dominated by giants like Coca-Cola and Pepsi. Despite the high costs and complexities, Liquid Death’s disruptive branding and unique packaging have garnered significant attention.

Notable Quotes:

Mark Ritson [40:20]: "If you have a gay couple in an ad buying a car, on average, it will perform no better than a straight couple buying a car."

Mark Ritson [43:49]: "It's all about profitability. Right. Not about revenue."

They analyze Liquid Death’s pricing strategy, noting its premium positioning compared to traditional water brands. The discussion underscores the importance of marketers being involved in pricing strategies to enhance profitability rather than solely relying on volume sales.

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5. Debunking the Myth of Performance Branding

Timestamp: [21:26] – [25:15]

Ritson challenges the growing trend of "performance branding," arguing that combining brand building with performance marketing dilutes the effectiveness of both. He references Peter Field’s work, emphasizing that true brand-building advertising not only drives short-term sales but also fosters long-term equity.

Notable Quotes:

Mark Ritson [21:31]: "Performance marketing as we know is great in the immediate but doesn't do anything for your brand."

Mark Ritson [25:15]: "We underestimate the audience."

He advocates for a clear separation of brand building and performance marketing efforts to maximize their respective benefits, rather than attempting to merge them into a single strategy.

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6. The Challenges and Missteps of Nike’s Marketing Strategy

Timestamp: [25:48] – [54:46]

A significant portion of the episode focuses on Nike’s recent marketing missteps under the leadership of CEO John Donahoe. Ritson criticizes the overemphasis on direct-to-consumer (D2C) strategies, which led to a decline in physical retail presence. He argues that Donahoe’s response to the Covid-19 pandemic—pivoting heavily towards online sales—was a short-sighted move that ignored long-term brand building.

Notable Quotes:

Mark Ritson [48:33]: "I have to tell you, you know, I'm very exposed very early to a lot of different companies, different people. Most of them have done very well, many of them. Some of them are CEOs of very big companies."

Mark Ritson [51:18]: "It's all about profitability. Right. Not about revenue."

Ritson contrasts Nike’s approach with Airbnb’s, praising Airbnb for focusing on brand building during the pandemic, which allowed them to emerge stronger post-crisis. He underscores the importance of consistency and long-term strategy in maintaining brand equity.

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7. Insights on Byron Sharp and Scott Galloway’s Theories

Timestamp: [34:27] – [47:35]

The discussion briefly touches upon the theories of Byron Sharp and Scott Galloway. Ritson critiques Galloway’s notions on compound interest of relationships and the idea that "outrage is the new sex." He acknowledges the truth in Galloway’s observations but cautions against the over-reliance on generating negative emotions for engagement.

Notable Quotes:

Mark Ritson [45:54]: "Outrage is the new sex in terms of we used to say sex drives sales, but actually now it's outrage driving clicks and views and engagement."

Mark Ritson [46:13]: "Unfortunately, he's correct. Yeah, he's right."

Ritson reflects on how marketers, including himself and Evans, contribute to the culture of outrage by crafting controversial content that garners attention, often at the expense of positive brand perceptions.

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8. The Power of Consistency and Relative Differentiation in Branding

Timestamp: [36:52] – [43:58]

Ritson emphasizes the critical role of consistency in brand messaging and the concept of relative differentiation. Drawing from his teaching experiences and interactions with top-tier brands like Procter & Gamble (P&G), he illustrates how maintaining a clear and consistent brand position over decades solidifies consumer recognition and loyalty.

Notable Quotes:

Mark Ritson [37:10]: "The point is, I'm going to focus on it. I'm going to make the decision to do it. I'm going to say it for 30 years with better creative and more money."

Mark Ritson [43:58]: "If you have a gay couple in an ad buying a car, on average, it will perform no better than a straight couple buying a car."

He underscores that successful brands like KitKat achieve and sustain their market positions by consistently reinforcing their unique value propositions, avoiding dilution through erratic or unfocused marketing efforts.

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9. Addressing the Overemphasis on Advertising in Modern Marketing

Timestamp: [43:49] – [54:46]

Mark Ritson critiques the current landscape where marketers are predominantly involved in promotion and advertising, often neglecting critical areas like product development, pricing, and distribution. Using Liquid Death as a case study, he argues that while effective advertising can create buzz, without comprehensive involvement in other marketing aspects, brands may struggle to achieve sustained success.

Notable Quotes:

Mark Ritson [42:53]: "It's all about profitability. Right. Not about revenue."

Mark Ritson [43:49]: "The way to drive profitability is price. And the way to get a premium price is to have marketers involved with pricing."

Ritson calls for a holistic approach to marketing, where promotion is integrated with strategic decisions on product and pricing to ensure long-term profitability and brand strength.

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Conclusion

In this insightful episode, Jon Evans and Mark Ritson navigate through the intricate landscape of modern marketing, dissecting successful strategies and cautioning against prevalent pitfalls. From applauding KitKat’s steadfast positioning to critiquing Nike’s strategic missteps, the conversation underscores the necessity of consistency, authenticity, and comprehensive marketing involvement. The discussion on Liquid Death serves as a testament to innovative branding, while reflections on industry theories highlight the evolving dynamics of consumer engagement. For marketers seeking to refine their strategies, this episode offers a wealth of knowledge grounded in real-world examples and expert analysis.

Notable Closing Quote:

Mark Ritson [54:46]: "We haven't written about the same thing. I think if I see your stuff already, your Tyndall stuff already, I'm like, right, okay, move on. It's not a bad thing, is it?"

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Recommendations for Listeners:

• Reflect on Brand Positioning: Take a cue from KitKat’s "Take a break" strategy to define and reinforce your brand’s unique position in the consumer’s mind.
• Embrace Comprehensive Marketing: Ensure your marketing team is involved beyond advertising—integrate product development, pricing strategies, and distribution planning.
• Prioritize Authenticity: Whether representing diverse groups or crafting emotional advertisements, authenticity should underpin all marketing efforts.
• Learn from Leading Brands: Analyze how brands like Airbnb successfully pivoted during crises by focusing on long-term brand building rather than short-term sales tactics.

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Stay Connected:
Subscribe to Uncensored CMO on your preferred podcast platform and leave a review to support the show. For more insights and discussions, follow Jon Evans on X and LinkedIn.

Transcript

[John Evans]

Ladies and gentlemen, welcome back to the uncensored cmo. Now, it's tradition that every year about this time, Mark Ritz and I get together to reveal the biggest stories of the year. What's been making people click on his stories on Marketing Week, and what's got everyone talking over on LinkedIn. We count down the top ten in this episode. It's a lot of fun. You'll enjoy it. Here it is. This is a podcast and we're down the pub for a change, which is change of venue. So cheers, here's to.

[Mark Ritson]

Very good to see you, mate.

[John Evans]

Good to see, man.

[Mark Ritson]

This is a great, great podcast.

[John Evans]

This is the great Friday morning podcast.

[Mark Ritson]

We're right in the middle of Bow in East London, South London, and it's very interesting because it is. I've got half Australian eyes now, you know, despite being British. And it is stunning. What is it? We just. I came in here at 1 o'clock and there's about eight pubs on a tiny street and they're all full and everyone's drinking. No, they're not in there for a quiet drink, you know, they're in there for beers and most of them are also smoking, which you. Which you just don't see in Australia. I'm not saying it's good or bad, it's just you forget how much the English like to go down the pub.

[John Evans]

Take me the City. Something about the city on Friday, isn't there? It's like the traditional, like, trading's done for the week. Get down, it's Friday lunchtime. Exactly.

[Mark Ritson]

Forget about that bit of the day.

[John Evans]

Indeed.

[Mark Ritson]

But it's old man's heaven around here because you've got about 25 men's tailors, 10 barbers, eight pubs. You know, you could live here forever.

[John Evans]

Yeah, It'd be amazing. Well, this is a cool idea because I think it was like I'd let. Les and Sarah came on the podcast earlier this year and they said, like, I saw it, you should do this down the pub. Which I thought was great idea. And then Les and Grace Kite did one the other day.

[Mark Ritson]

It's funny that Les would suggest that whenever you see Les, he usually has the same idea. Right?

[John Evans]

Yeah.

[Mark Ritson]

I went to a very posh restaurant with him with a company once and he spent the whole evening saying, come on, let's go. There's a good pub over the road. Let's get out of here and go there. And I'm like, we can't do that, Les. You know, but you must have asked me eight times, let's go. Dog and Biscuit was on the other side of the road. Come on, let's go. The Dog and Biscuit.

[John Evans]

I did tap him up, actually. I was going to get him behind the bar for us as well. Pulling the pints, sadly wasn't available, but send our love to Les. What I thought we'd do. Let's count down the big stories of the year.

[Mark Ritson]

Yes.

[John Evans]

See what's been trending hours.

[Mark Ritson]

Not everyone's just hours.

[John Evans]

Yeah, exactly. Yeah, yeah.

[Mark Ritson]

Who cares about anyone else?

[John Evans]

Exactly. We'll make the news. Right, so, you know, Russell Parsons gave me a list of your top five.

[Mark Ritson]

Which I don't know. Right.

[John Evans]

Did you get the data, by the way? Do you get to see that?

[Mark Ritson]

I don't. I can. I sometimes say to Russell, I say to Russell generally like twice a year, how they going? But I don't otherwise do it. And as you know, the amount of effort you put in to a column.

[John Evans]

Yeah.

[Mark Ritson]

Does not translate in any way, shape or form to what it does next. So there's no point, you know, I mean, the exception for you is probably that Galloway stuff, which you spent obviously a lot of time on and it did actually blow up.

[John Evans]

Yeah, yeah.

[Mark Ritson]

I mean, Galloway kind of has that capability.

[John Evans]

He has that fetch.

[Mark Ritson]

I can imagine him going to the car park and it becoming a massive story on CNN or something.

[John Evans]

Well, he's just. The way he talks is just like clickbait headline just coming out of his mouth every.

[Mark Ritson]

He's not bluffing either. Right. He has that great skill as well of you can be contentious, but you actually have to believe it. And he does believe it. And I find him fascinating. I know him a little bit. He's very, first of all, very nice man. Second, he's obviously extraordinary smart, but he's. And I don't want this to sound like an insult because I truly respect him and see him as my superior on every level. He doesn't know that much about marketing and branding. It sort of came out in your podcast. And yet he's America's great marketing expert. And I get. You get the experts that you deserve, I think at each period. Right. And again, don't get me wrong, I think he's has greatness about him, but the marketing and brand chops, you know, his business jobs, his, you know, investment knowledge, his tech knowledge. Exemplary. Right.

[John Evans]

He's gone beyond marketing really, isn't it?

[Mark Ritson]

He really has.

[John Evans]

I think that's the thing. I mean, the one bit that I think hit a nerve certainly based on the feedback, was his point about the era of brand is over. And I think the data point that I think he missed was like he quoted Amazon. Amazon's actually the world's biggest, biggest appetizer.

[Mark Ritson]

I don't think he's noticed it was once true. Right. Jeff Bezos found Jesus about, you know, nine years ago, Right? Yeah, I think that's a good example. I think he's left marketing. I think, unfortunately that's his most famous marketing call and it's totally incorrect. Yeah, clearly. Yeah. But all these other minor calls were pretty good, you know. But yeah, he's off, you know, saving American teens and masculinity and stuff and things that we don't even have any idea about.

[John Evans]

And, you know, so getting back to that, then, my favorite post on LinkedIn this year. Right. Was Fernando Machado's. His take of you. Yes, your famous Cannes column.

[Mark Ritson]

We should explain this. Right. So about 15 years ago, I was never a big fan of Cannes. It just annoyed me that everyone was out there in the sunshine pretending to work. So I wrote a column basically saying, this is everything marketers can learn this week in Cannes. And it was an empty column and it's the only column I've ever. My long suffering editor, Russell has put up with a lot of shit, but that was the one where he really did say, I can't publish this. And I sort of made him do it. Right. And yeah, it's. Is it my most read column? Well, no, there's nothing to read. But I think it's the one that people do talk about. And then to your point, what did, what did, what did he do?

[John Evans]

Well, basically he just said everything Mark Ritson's taught us in Cannes this year in my column.

[Mark Ritson]

Yeah. So I went to Canva, the first and possibly only time, and then he got me and I think was spot on. Yeah, spot on.

[John Evans]

Yeah. I imagine he had that ready to go for a long time. Maybe.

[Mark Ritson]

Maybe. I mean, I mean, he asked, he said, is that okay? And I was like, of course it's okay, because, you know. Yeah, Salient. Uber Alex.

[John Evans]

Exactly. But anyway, talking cam. So your number five most article. Yeah, getting in there now. Brand purpose doesn't need a commercial excuse.

[Mark Ritson]

So there I was actually at Cannes for my first time. And I must say it was good. It was good. It was entertaining.

[John Evans]

We struggled through, didn't we?

[Mark Ritson]

We managed. We somehow made it work. I was sat there and we did a Q and A in the Sunshine Needs. And we were obviously drunk and somebody asked me a very long winded question, but basically they asked me about, do we need diversity in advertising? And all of this. And I made a very long winded attempt to say, no, it'll be okay, blah, blah, blah. And it was an ill thought through, well meaning comment. But afterwards, a quite senior female marketer came up to me who's a member of the LBTQ community and said, basically, you know, you kind of missed the point because I get what you're saying, but there's lots of young lesbians, transsexuals, who, when they see members of the community represented, really feel like this is a place where I'm safe, because often they don't feel safe. She said it beautifully. She didn't tell me off, but she told me off. And I said, to your absolute. I said, I get it. I really do go, I don't get it because I'm a white, straight idiot. You know what I mean? Drinking red wine. You know what I mean? You know, why would I get it? But I get it now. Thank you. You know what I mean? She did it beautifully. And I said, what we need to do really is show that, you know, the reason you would show members of that community in advertising isn't to make money. It's just because it's the right thing to do. And it's almost better if the argument is, ooh, if you show a lesbian couple in your ads, it'll make you more money. It would be even better if it didn't because it means you're doing it because you want to support that community and do the right thing. And your mate, Andrew Tindall was two blocks away. And I said to Andrew something about gay advertising and something about advertising metrics. Hey, could we run the numbers and look at every ad that you guys have ever tested that has a explicitly presented member of the lb? I say it wrong. What's the acronym?

[John Evans]

Lgbtq.

[Mark Ritson]

Lgbtq. Could we get every ad that has someone from that community explicitly presented, and let's see how it performs versus average. So he went away and did it with your magical toolbox. And sure enough, and to my, actually, to my delight, it proved to be no more or less effective. Yeah. So if you have a gay couple in an ad buying a car, on average, it will perform no better than a straight couple buying a car. Okay. And I wrote a column that basically said, and that's okay because I get tired of people arguing that purpose will make you more money, or in this case, diversity will make you more money. It often doesn't. And in fact, it might even not make you. It Might make you less money. In this case, it doesn't make a difference. But my point is, you show those couples in those ads because it's the right thing to do. They're buying your products at 10% of the population. It's just the right thing to do. And even if they slightly underperformed, you should still do it. Because if you believe in purpose, the purpose of purpose is purpose. And I have to tell you, John, absolutely no one understood what I was saying, because after I wrote the column, everyone went, oh, yeah, great column. But guess what? If you show gay people in your advertising, you. You make more money. And it's like, no, you don't. And even if you do, that's literally not the point. Don't say that. Because if I can prove to you by showing a transsexual in an ad, you get less money, by your logic, we should stop doing it, which I absolutely don't believe either. Right, so it's back to this. Purpose of purpose is purpose. And it was very interesting. I absolutely, I think, managed to not explain that to anyone, and I may not have done. Does that make sense to you?

[John Evans]

It doesn't. I mean, we did. We did a study I'm really proud of, actually, three or four years ago with itv. This was after the George Floyd summer and itv, when Penguin ship was banned. Yeah, I know, it was. I mean, it was really moving because I think diversity, diversity. The band that won Britain's Got Talent, they did a show, I think, inspired by the kind of Black Lives Matter thing in the summer, and ITV had loads of complaints. And I got a call because of what people were complaining that it's political, it's divisive. And the aggro they got on the phone lines, was that right, really bad? It was really bad. I mean, you know, there were stories of, you know, people breaking down, being upset. These are cool people that had to handle the calls. So I got a call from Kate at itv and she said, look, can we just look at your data and see what happens when you represent, you know, minority groups? You know, is there a downside to it? Does what we're experiencing on the call lines represent how the nation feels? So we did this thing called Feeling Seen, and we tested, I think, 30 ads across the nation. And what we found is. You're absolutely right, is there was no downside to it at all.

[Mark Ritson]

How much upside?

[John Evans]

Well, what we found is, which I think is exactly Andrew's point, is that it varied. But basically, the better you tell the story of the group and in fact, there's one really interesting point that probably the main lesson I learned was it it's better to tell one person or one group story well than try and represent everybody. So the ads that didn't work right are those ones that cut between different groups and demographics?

[Mark Ritson]

Yeah, it's the Village People.

[John Evans]

Oh, yeah, exactly. It's like they're all inclusive. We're all here together sort of thing. Ooh, yeah, yeah, exactly. But, you know, if you told one story, it's basically good storytelling through the lens of a minority group. Tell that story really well. That lifted it a lot.

[Mark Ritson]

It's interesting. The other point I made in my column was a gay man buys a burger like a straight man. You know what I mean? If he tries to, in some way, in the script of the ad, announce himself as a member of the gay community while buying his Big Mac, it's clearly off. Do you know what I mean? That's not how anyone behaves. So there's also that element, I think, of naturalism. Where can it be woven into the story in a manner that's real? Or can we just assume that some of the people buying these burgers in the ad may well be gay or lesbian or. I think that's also a key point. When anything is signaled too strong, people get annoyed, I think.

[John Evans]

Well, I mean, back to your conversation. I think, with Tamara at Cannes, it's about authenticity as well, isn't it? You know, making sure that you understand the audience you're communicating, to do your research, you know, and tell their story in authentic ways.

[Mark Ritson]

I did something very interesting, a lot. This is a long. 30 years ago. I got a scholarship grant. I was doing research on what we would now call brand codes and how they were altered by subcultures. And it came out of a lot of subcultural research. I wrote a paper on it, very academic, and I got a grant when I was in the States to go to about seven or eight gay pride marches around the world. And I was mostly interested in going to New York, Brazil, et cetera, go to gay Pride. And I was finding the people that were making the T shirts. So you'd have. At the time, there was the Nike slogan with Dikey underneath it, right? Fag and dyke in the Hagen Dazs style. And I was finding these people and interviewing them to say, why are you doing this? And what I learned. I learned many things on that journey. But one of the things I learned was, well, first of all, how articulate back then members of that community were, because they, you Know, I was interviewing a 21 year old guy who's doing it and he sounded like a 50 year old. He'd had so many experiences and not necessarily good ones. Very thoughtful, very great in qualitative research. But basically the story was these companies are taking our money but they don't show us. So what we're doing is creating our own versions so we have representation. And so I think, hope those kinds of things don't happen anymore because there is representation and so there should be. And not necessarily because the argument I got from my article was and also it'll be very popular with the gay community or the lesbian community or the trans community. And I'm sure it is. And I think your data shows that. But you lose what you gain. There's also the homophobic community who don't usually tick the box, but when they see it, they are less turned on. So I think it washes out in the end.

[John Evans]

Yeah, I mean, I mean the good news from research we did is, is in most cases and particularly now, I think we've learned a lot in the last kind of five or 10 years. And most cases of representation done really well. And that's really why we wrote the fitting scene report. We just wanted to make sure no brand has an excuse not to get it right.

[Mark Ritson]

And I think the excuse being it's not going to hurt rather than it's going to make you an extra million dollars is a much more complex and nuanced argument. Right, let's move on. Okay, I'm doing you, so to speak, here. Number five, your liquid death article.

[John Evans]

Oh yes.

[Mark Ritson]

Now this isn't the more recent liquid death nonsense that you've also been pulled into. This is a little bit earlier.

[John Evans]

This is, this is. Well, I met Mike Cesario so. Which was incredible. Basically got him to tell me about how he invented the brand and where it came from, which I was probably one of the top. I think it's in the top five episodes I've ever done.

[Mark Ritson]

And I know why it was good. But there's another reason. Marketing chops. More marketing, more creative. What was your sense by the end of it?

[John Evans]

Well, I think you see, I got a bit of a counter view here. Cause I think they're so good at promotion that we forget they've also had to do some other stuff. Right. Say for example. Here we go. Producer James has brought us some liquid death here on cue.

[Mark Ritson]

Like every marketing table in the world. We should have it right there.

[John Evans]

We should have it right there in camera, ladies and gentlemen. So they're famous. They're famous for obviously, you know, generating a lot of noise on social media, doing things in a very disruptive way. The name, the packaging, everything is brilliant. But I know this market, right. And that's.

[Mark Ritson]

Right, you do.

[John Evans]

I do. So I spent most of my career in this market. If you said to me, design a water brand in a can, it sounds very simple. Right. I can tell you it's an insane idea because there are no canning lines where there is spring water. It's a weird thing, but most cans are carbonated soft drinks. They are basically factories in the cheapest industrial sites you can imagine, because they're trying to get cost low. It's basically the opposite of where you get water from. Exactly. Right. Whereas spring water is in posh glass bottles and clear pet, because you have to see the liquid. So putting spring water in a can sounds like a simple idea, but logistically it's a complete nightmare. There's like one place in the entire world you could actually go and do that, which is in Austria. So they've gone to ridiculous lengths to eat. Just do what they've done. The second thing I think is quite amazing is placement. Like in the us, particularly, like, every fridge is owned by Coke or Pepsi.

[Mark Ritson]

That's right.

[John Evans]

And they have bottlers all around the country. They're absolutely. And they've got people that. In fact, the difference with, say, the UK and the US is the people that put the products on the shelf are employees of the brand. They're not employees.

[Mark Ritson]

All those old Coke guys going around all those trucks. It's classic product availability. It is physical availability.

[John Evans]

So I think the creativity with which they've got their product to market by looking at food service, going to festivals, going to cafes, they basically found a way in. So in the us, legally, the big beer brands are not allowed to own the supply chain. So they found a way to go into food service very cleverly and build their brand there. So I think that's been fantastic and I thought. I'll put you to the test on this one, actually.

[Mark Ritson]

Please.

[John Evans]

I thought I'd quiz you on something. So if producer James has got a couple of bottles of water.

[Mark Ritson]

I thought we were here to drink beer.

[John Evans]

I know we're going to have a quick water in there. I thought I'd ask you for some pricing advice, actually. As you hear. Okay, guess the price. So we've been down to Tesco, we got three, three, three prices per liter.

[Mark Ritson]

What are we doing?

[John Evans]

We can do price per. Yeah, let's go price. Let's go price per unit and I'll do the conversion. I've got it written down here.

[Mark Ritson]

Well no we can do it just on. Let's do on package size, right?

[John Evans]

Yeah. Okay, so let's start with this one. So we've got here a 2 liter bottle of Tesco water. They've kindly put Aspec which I assume is.

[Mark Ritson]

Is it an actual spring or they.

[John Evans]

Just made that up naturally filtered through ancient rocks in the Eden Valley. I think it's natural mineral water. So yes it is the real macaron.

[Mark Ritson]

The real that makes any difference. Cost has nothing to do with prices. Yeah it's private label. It's two liters and that will cost you sir 69p.

[John Evans]

Very close. 80 pence.

[Mark Ritson]

There we go, there we go.

[John Evans]

First one pretty ghost. Let's go. I tell I didn't get the full 12 pack but let's go for a 12 pack of Highland Spring. 500 miles on the go pack you've got a pack of 12, 12 of them.

[Mark Ritson]

They're half a liter individually that that would go for in the crazy world we live in now about 1 pound 20. So I'm gonna go for 8.993 pound 50 for the 12 pack.

[John Evans]

Uh huh.

[Mark Ritson]

Well I feel like I'm on one of those Coca Cola ads. No, is that right?

[John Evans]

It is now because I worked in this. Right. So water is the most commodity traded category ever. So ingredients cost zero and ingredients is usually in a soft drink probably one. So you've got zero. Then you've got obviously plastic costs that's probably 2 or 3p and then basically is variable production and then you've out of packaging and distribution. So the cost of a 24 pack wholesale to manufacture is about £2.

[Mark Ritson]

It's a Gillette level of profitability.

[John Evans]

Yeah, yeah. So basically you got so many, so many water brands that all look the same with their provenance. You know Highland Spring, you know every other spring in the country disappears. France. Exactly, exactly. All at the same. So the it's the most insanely competitive market. The only margins are tiny.

[Mark Ritson]

The only is interesting and I'm very much part of this now is and I would like to advise all of your listeners of this too that the plastic particles in these bottles given that they have been transported heated, cooled, bent, snapped is literally going to kill you. Yeah, it's frightening. I haven't stayed up on the complete data but they once thought there might be sort of a thousand little micro plastics in there. Now they realize that. Well no, we just weren't Looking with the right microscope, there's a million. And I'm on a plane tonight. QF2 back to Australia. It's a real challenge for me because I get a flask. But when I run out I won't drink anything out of plastic even though I'm quite thirsty because I am conscious of it. And I do think as we go.

[John Evans]

Why is that more widely available, widely known?

[Mark Ritson]

I mean I can only imagine there's a significant lobbying effort that would do. But I do think it speaks to our third brand which has obviously symbolic strengths but has a really significant product advantage, at least for a while. Because you wouldn't believe how hard it is on the road to find water that's not in a bottle.

[John Evans]

That's why I think given liquid death have gone to the ridiculous extent of finding a spring water and a canning line.

[Mark Ritson]

They know then.

[John Evans]

They've. They know and also they've kind of. It would cost a lot to replicate this. You'd have to. You'd have to find a spring water source which isn't any. They're not in like down the road locations. They usually somewhere exotic. You'd have to build a canning line. I mean you're talking multi millions of.

[Mark Ritson]

Pounds and they have no SKUs in plastic which suggests they know none.

[John Evans]

They're doing. Yeah, yeah. Yes. All in cans. All in cans. So pricing.

[Mark Ritson]

Now this is interesting because I work in marketing. I've drunk a large amount of liquid death but never had to pay for it because someone is always giving it to me, like today.

[John Evans]

There you go.

[Mark Ritson]

But my best guess would be a. Let's go for.

[John Evans]

Let's go for a four pack actually because I brought this four pack. Yeah.

[Mark Ritson]

So times I was getting a 149 for an individual which brings us into I would suggest £4.99.

[John Evans]

Really close. £5 50. Very, very close. So the pre.

[Mark Ritson]

Quite the premium.

[John Evans]

The premium. The premium to highland spring seven times. Premium to Ashbeck 11 times.

[Mark Ritson]

Now their, their cogs is probably about on that same multiple too but obviously once that's taken care of. So is the margin, is it the same proportion too? So yeah, very good.

[John Evans]

All right, number four. No such thing as performance branding. So I think this is the idea that marketing clearly drives sales and in fact drives sales not just in the future but now.

[Mark Ritson]

Yeah.

[John Evans]

Whereas actually performance marketing as we know is great in the immediate but doesn't do anything for your brand.

[Mark Ritson]

Yeah. I've written this before and I just felt like I just kept seeing references to performance branding or Some other version of it. And you had kindly given me the data. I mean, it was System One's original point. Right. Which sometimes my role as a columnist is not to come up with ideas, it's to see someone else's idea and go, that's massive. And certainly not to steal it. I mean, you know, you reference back, but your job is to make it much bigger. I mean, I sort of did that with Field and Burnett, which I was talking to Les last night at dinner. You know, he's always, thanks, Mark. You've, you know, because I absolutely explicitly, I mean they're already very famous, don't get me wrong, more famous than me. But I explicitly thought they are not well known enough for the quality of that. And I just went on a mission to go Field and Burnett. Field and Burnett. Field, Burnett. And it was the same with your work. So you guys had shown so elegantly on your two by two that if you look at brands, advertising, that really is the five star brand building stuff 95% of the time. It's also going to really, really sell production. Yeah. Long drive, short. But when you flip it over, the nuance is, the paradox is if you look at the stuff that's above average in selling product, good performance marketing, it's orthogonal to brand building, meaning there isn't any. It doesn't do you any harm, but it doesn't do you any good. Yeah. Versus anything else. And I just thought that was the hugest point. So for once I didn't really write about any particular moment of the week. I just went on a launch. And it was also aimed at those that again, we get a lot of these people who argue you don't need to do long and short. You can have a great ad, builds brand, sells product and you can. And again, Peter Field did this work. You absolutely can. But overall, on average, what you find when you try and do that is because you're trying to do product and brand and you're trying to do tofu and bofu and emotion and ration, mass marketing and targeting. It ends up being a bit of a camel and on average much less effective than splitting your money up within the same campaign and doing a bit of brand building here and a lot of performance there. And I think technically it was one of my more advanced columns for the reader. But what I found over the years is you don't underestimate their ability to get it. And also that these are the ones that people remember. I did a session for PNG this week. It's quite emotional. For me, because like you, any marketing man or woman with chops knows that P and G are the best marketing company in the world. It's in, arguably invented brand management. And so they had their top 200 from Europe in London, and they wanted me to go and talk to them. And I said, well, I don't, you know, I don't know what I've got to say. Any other company, I'll tell them what to do, but you're P and G. So they sent me some really advanced questions, which I answered. But I also was overcome with the fact they all knew who I was. And this was P and G. And it's columns like this one that gets me png. It's not columns where I get my ass out. Do you know what I mean? It's the columns where you go, I think my audience is smart enough to get their head around this data. Let's really, you know, let's almost write a little bit of a textbook chapter here. And they're the one that's how you get P and G to give you respect, which, if you are a lover of brand management, is all you look for in the world. It's like a beautiful woman thinking you're handsome. Do you know what I mean? When P and G rate you, you are pretty much, as far as I'm concerned, done. And it's funny, when I posted about it yesterday, the number of people who went, wow, even on Tindall, your mate was like I said to him last night, I said, I did P and G top 200 this morning. And he went, p and G. P.

[John Evans]

And G. Yeah, that's good. That's good. There's more of an appetite, I think, that kind of data than maybe there is.

[Mark Ritson]

We underestimate the audience.

[John Evans]

I know, because I can see this from having been a kind of client side back in the day, is you're fighting the perception of marketing as being all fluff. And when you bring the evidence, it.

[Mark Ritson]

Really, like, gets people not just tactical stuff. Yeah, I mean, I think system one is very important because I think you illustrate the point that your metric is so ridiculously simple. Because you do such complexity to create simplicity, I can then bounce off it to very complex points. If I have 400 charts to explain it, we're not going to get there.

[John Evans]

Yeah, yeah. Now you have to see. Right, right.

[Mark Ritson]

Come on.

[John Evans]

Good. All right, where we go now we're.

[Mark Ritson]

On to you with Nike and Nike's advertising. Now, again, this isn't the More, this is before Donahoe got fired.

[John Evans]

This is.

[Mark Ritson]

But I believe it was when they started to realize they had a problem earlier this year and they made a. Well, what do you think of the ad and what did you write about it?

[John Evans]

Well, this is an interesting one. I actually really like this ad as a consumer. Right. I was looking at it thinking, this feels like night going back. I mean, if anyone's not seen it, basically, it's called winning isn't for everybody. And you've got Willem Dafoe narrating this. Am I a bad person? And it talks through all those kind of mental mind games you have as an athlete is, I want to murder the opposition. I want to crush them. I want to. You know, it's the kind of thing that you imagine absolute elite athletes probably do in reality.

[Mark Ritson]

Certainly you were an athlete in your day.

[John Evans]

I mean, it's a long time ago. You can't tell now. But it's like if you're going to be that successful at something, you're going to have to live such an extreme life and focus so much and train so hard that actually what they narrated was, I think, a pretty powerful, pretty powerful insight. But what it did is it almost revealed. It took them. It took the veneer off of sport. Everyone loves to go, oh, the athletes are competing.

[Mark Ritson]

Anyone can be an athlete. Right?

[John Evans]

Yeah, exactly. Like, it's all about taking part and all that sort of thing that we all grew up being told, you know what I mean? But if you're going to achieve amazing things, you're going to go through some pain and you're going to have to have quite a, you know, So I think it hit on a. It was a real trick.

[Mark Ritson]

It was divisive, though.

[John Evans]

But it hit on a nerve and it hit on a nerve and a lot of people didn't like it. So we put it through the system, one test and it literally devised the audience and you see all this contempt and anger coming through in the response. And so column I wrote was just like, you know, the nicad isn't for everyone.

[Mark Ritson]

It's interesting that I read, I saw the data and I find it very interesting. There's also another point here that, you know, I was talking about yesterday, Festival of Marketing. Advertising needs to be emotional. And everyone reads that as being, you know, the puppy with the broken paw gets rescued by the orphan and taken to hospital. That's not what. It's a very narrow view of emotion. Emotion can be fear, it can be horror, surprise, you know, and I think we miss all of those other dimensions in the wheel. And when I looked at your brilliant data. I also thought exactly what you said. It's divisive. But also at the end of the day, some of that fear and anger and, you know, it may be emotion that one day turns into something positive. I know with Qantas, a brand I really respect, they're having a hard time in Oz. There's a lack of trust, there's a suspicion. But there's also, whenever I fly anywhere for, for most Australians, a desire to fly with Qantas. Do you know what I mean?

[John Evans]

Yeah, totally.

[Mark Ritson]

So I think Byron Sharp makes the point that we were guilty of maybe saying the goal is emotion. And I don't. I think he's right. It isn't. It's a, it's a carrier drug.

[John Evans]

Yeah.

[Mark Ritson]

For a bigger message. And with Nike, I think that in some cases half the market were, you know, horrified by it. Do you know what I mean? But that might be a carrier drug for where it took you to was if you want to have a pair of trainers that allow you to be better at this. Nike. Do you know what I mean?

[John Evans]

Yeah. Interestingly, their Paralympics ad actually got it absolutely spot on. The big, big difference. They did a really good job in the photo. We're going to come back to Nike because it may appear in your list.

[Mark Ritson]

It'S a hot brand for the wrong reason.

[John Evans]

Before we get to it, let's talk double D and KitKat.

[Mark Ritson]

Oh, my goodness, my favorite column. Can I say that about my homework? So I've been stalking Nestle, I would say, for four or five years. And I've been, you can ask the Nestle people to confirm this. In various places in the world, wherever I found a Nestle person, I've cornered them and asked them if I can please see how they position KitKat. Because I've smelled just brilliance. Yeah, I know it's great execution, but I wanted, there's plenty of well executed brands. I wanted to see the positioning of whatever they call it. Right. Of how they. At Nestle position KitKat. And a new guy took over. He's an old Nestle guy. YL took over and I read about him taking over. So he's a new guy. I can try like the global head of KitKat marketing. So I rang him up in Switzerland and I said, hi, Wael, my name's Mark Ritz. And he said, I know who you are. And I said to him, I'm ringing you because he said, I know why you're ringing me. And I said, I just want to see it and I want Your permission to be able to talk about it, if you let me see it. And from the goodness of his heart, and he is a spectacularly nice bloke, as they usually are. Right. When they're good. He said, okay. And we had a long 90 minute chat, not just about what the positioning was, but how difficult it was to maintain it. And. And I can tell you the positioning because the point I'm trying to make is it's tight, right? And it hasn't changed. So their positioning is a single word. A single word, but five words. KitKat believes brakes are good for you, but basically breaks.

[John Evans]

Yeah.

[Mark Ritson]

Take a break and then they have four distinctive assets codes, the logo, the pantone, red pantone, the four blocks, you know, and then take a break, take a KitKat, which is an old JWT creation in the 70s, which is now, you know, distinctively theirs. They don't have the snap, which many people have talked about, right or wrong. And the point then is that's how every brand should be positioned and no other brand is. We have forgotten that positioning is not an end in itself. Positioning is not a deck or a book or something. I'm going to present the team or the agency. That's not what it was meant to be when recent Trout kicked this off in 69. Positioning is the intended brand presence in the, in the brain of the consumer. Meaning we need the distinctiveness it needs to come to mind. So that's going to be captured. How are we going to come to mind distinctive assets? And then this is also when I come to mind what I think, when I think about the brand, which in this case is. Breaks are good for me, KitKat breaks, but the real. So first of all, it is exemplary positioning. I would encourage any listeners to do this because we have. I mean, positioning is a shit show, right? We have brand managers that need a PowerPoint chat to remember what their positioning is. Right. Your consumer does not have room for this. You know, all these concepts and all these words. But the other thing I'm very passionate about is relative differentiation. I think Michael Porter was wrong. Don't hear that very often. He talks about differentiation and finding something unique. I think that's wrong. I'm an inch taller than you. That means I'm different from you. It doesn't mean I've invented height, doesn't mean you don't have height. I just have slightly more of it than you. So we're different on height. And for me, positioning, relative differentiation is choosing the one, maybe two things that you can be relatively different on that really the customer cares about, and then spending 20 or 30 years reinforcing it. And note something, you don't have to have the most height to be perceived to be the tallest guy in the room. Right. There are other brands that could claim Break Flake, for example. Right. The point is, I'm going to focus on it. I'm going to make the decision to do it. I'm going to say it for 30 years with better creative and more money. I'm going to bake into the product and the distribution. That's why differentiation is so hard. But that's what it looks like. And so for me, I wrote that as a five year mission to say, first of all, let's celebrate KitKat. But more importantly, you need to do what KitKat have done and the proofs in the pudding. The latest ad you just tested. Right.

[John Evans]

Yeah, yeah. I mean, what I love about that as well is it's so clear you immediately know what you're going to do. Right. And I think that's the job of a marketer, is to make everything so clear. So all the tactics then become quite straightforward. Right. That was what Wales says, tactics get mixed up when you don't get the belt front sorted out.

[Mark Ritson]

And he talked exactly about that and about how it would have been easy over the years for the new guy to come in and go, oh, I think we can add a purpose and a personality. Right. But they've not screwed it up and they're very proud of, you know, his exact words, it would be an easy brand to mess up.

[John Evans]

Yeah.

[Mark Ritson]

So we're very proud that we haven't changed it and messed it up. Everything he said was right. And I find that to be probably. I mean, my module now on positioning that I teach on mini MBA literally starts with me in a cafe buying a KitKat and then breaking down why I bought it, how the positioning works. You know, it's my star brand. I think it's brilliant. Let's move on now. Right, now we begin. The Galloway is. It's hard to avoid for this now. Right.

[John Evans]

Sorry about that.

[Mark Ritson]

No, I mean, you can't go for a session like this without talking about Byron Sharp or Scott Galloway would be my sense. I believe that's distribution of some kind. So the compound interest of relationships was.

[John Evans]

Yeah, well, that was interesting because there were. He just. He just wrote a book and talked a lot about compound interest. So, I mean, the bit he quoted is if you'd write. If you'd bought Apple stock rather than an iPhone every year, the Average person would have $3 million.

[Mark Ritson]

Is that true?

[John Evans]

Well, a, you're picking a good stock. Well, if you imagine one iPhone costs, this is us, obviously, US$1,000 every year going back to the original iPhone. If you had bought stock rather than the iPhone, and with the growth of Apple stock.

[Mark Ritson]

It's interesting though, isn't it? Because that's an illustration of Galloway. Right. Normally these guys are all giving you these quotes and you're like, yeah, whatever, but that's all horseshit, blah, blah, blah. That's first of all a stunning thing to say, and second, it's true.

[John Evans]

And then it's interesting thing he followed up with is the compound interest of relationships as well in terms of your career, the people that can help you, the people that support you, the power of the network. I mean, it's like a compounding effect. The more relation, I mean, I found on podcasts, actually, just like the compound effect of the same this. We'll do the same interview today as we might have done three years ago, and there'll be 100 times more downloads today than three years ago.

[Mark Ritson]

Because I'm better looking than I used to say.

[John Evans]

The glasses as well, I think.

[Mark Ritson]

Glass aspect. Yeah, he's right. I mean, he's right in that sense that I didn't see this part of your interview. He's right in the sense that I know you feel it. I'm 54, 55. All my friends that I worked with in the industry, because I was very exposed very early to a lot of different companies, different people. Most of them have done very well, many of them. Some of them are CEOs of very big companies. And I don't do much consulting anymore. I could literally consult every day of my life just to people who I've met who rated me, and I rated them till the end of my days. Absolutely. You feel it, right?

[John Evans]

Yeah, 100%. And I mean, this is the first job I've ever done in more than four years, which is now either through getting fired.

[Mark Ritson]

It's not really a job. I'm trying to break into your mate. It's not really a job. You're not flipping burgers here. Exactly.

[John Evans]

But there's definitely something about the power of consistency. Now. It's got to be good, right? Obviously, the product's got to be good, but consistently applying something. And I think, I mean, this is what Andrew's doing, the work with the IPA at the moment on compounding creativity.

[Mark Ritson]

I saw it. I saw it. It's good stuff, you know, it's a hot area. And as usual, young Mr. Tindall has worked out a very fruitful, important niche to work on. Right. I think that consistency stuff that we all know, I mean of people of advertising, of agency, of, of code, of position back to KitKat.

[John Evans]

Exactly.

[Mark Ritson]

Has been so understated.

[John Evans]

Yeah.

[Mark Ritson]

Did he, did he stretch the point to partners in that in relationship sense or was it more professional?

[John Evans]

No, it was more creative. So what he did, he looked at the database and looked at where basically brands are stuck with their creative idea over time and they looked at brands where they changed the idea. And so originally he's going to call it cost of change.

[Mark Ritson]

Oh, that's Tindall's work.

[John Evans]

Yeah, he was going to do the downside basically, that when you change your creative all the time, you basically you end up sort of flatlining. Whereas actually we compound creative, it goes up. We know this from where in wear in versus wear out as well. That's another same thing, even the same creative over time.

[Mark Ritson]

Well, you just posted about Beyonce and it makes the point beautifully. Right. Everyone's talking about this Beyonce ad for Levi's. You beautifully put it. Head to head with Nick K, the late great Nick K, showing all of our earlier days. We were all what we knew would have been almost the same age. I'd have been like 16. You'd have been 13.

[John Evans]

Well, I, I bought, I bought the jeans, I bought the cassette, I bought the box shorts.

[Mark Ritson]

I literally did the whole.

[John Evans]

Honestly, that was it.

[Mark Ritson]

It changed our whole vision of sexuality, of masculinity.

[John Evans]

That was iconic, absolutely iconic. And the crazy thing is, 40 years later, as it is, 40 years later, that ad still scores over four star.

[Mark Ritson]

Smashed Beyonce in your head to head.

[John Evans]

Beyonce was 2.3.

[Mark Ritson]

Which makes your wear out point that you've brilliantly been making for a long time that absolutely no one has listened to. No one's. No one's listen to if Levi's. So I'm fascinated with this at the moment. Let's have a shout out, right? Bbh, who made the Levi's ad back in the day and Haagen Dazs, I've got back together after 30 years. It's one of my favorite campaigns of all time. The sort of sex and haagen Dazs campaign, 1991. And I had a couple of. I've talked to a couple of the team from Haagen Dazz who were very impressive, but each time I said the same thing to them, which is, oh, you're back with bbh, why don't you run the Ads again. I'm like, no, we've got to move on. And I keep hearing your voice in my head going, you better be good because at some point you guys will turn up and go, that's a nice new ad. But guess what?

[John Evans]

I first came across system one. I was marketing director, Lucas 8, and I discovered the database and they approached. I thought, this is incredible. And I just came up with a simple policy, which is, unless you can beat the existing work on the database, don't make anything new. And you can see the disappointment on everyone's faces going, it's the disappointment.

[Mark Ritson]

Right? Right. Well, It's BBH against BBH's. New creatives have got to go up against Hegarty 30 years ago. I love it.

[John Evans]

That's the bar.

[Mark Ritson]

And I'll tell you now, they won't beat them. Yeah, they won't. We both know it. Right. As good as they are, as brilliant as they are, you're not going to beat that campaign because it's literally one of the greatest ad campaigns in the world ever made. Right. Why go up against it?

[John Evans]

Exactly.

[Mark Ritson]

Run the ads. Okay, okay, where are we? Oh, you're a Mina.

[John Evans]

I'm back to you now. Okay, so we are back to liquid death and your.

[Mark Ritson]

Where's it gone? Where's he gone? Give us it back.

[John Evans]

No, it's coming back in. All right. Liquid death.

[Mark Ritson]

That the reason every marketing table everywhere in the developed world has a kind of liquid death upon it is because it's a can of water with great advertising.

[John Evans]

Correct.

[Mark Ritson]

It's the wet dream of every marketer. So let me explain a bit. We've great data from the CMO survey, both in the US and the UK, but they survey all the big CMOs. And one of the questions they ask them is, how much are you and your team involved in the four Ps? You know, sure enough, 95% are involved in promotion, in advertising. But when we get to product, it's 30%. When we get to price, it's 30%, we get distribution is 10%. So we need a reality check. When we say marketers, no matter what it says on their badge, on their LinkedIn profile, they're just advertisers 70% of the time. Now, if that's the case, you're kind of humiliated if you're a market because you don't do pricing anymore, you're not involved in product, you're just given a product to advertise. You don't do anything about distribution. So liquid death is your product because it's just a can of water with amazing ads, Right? So I wrote this, I think, you know, just because I got so tired of all these fanboys going liquid death this, liquid death that. And I also pointed out I hadn't made any money yet. It wasn't yet profitable. You know, and if you're going to pick a brand to say is the best brand in the world, let's pick one that makes money. Now, everybody again took this as being, you don't think Liquid Breath is any good. You think Liquid Death's a bad brand. They've got problems. And I kept saying to them, I don't. I think it's a great little brand. I think they're playing a great game. I think it could be a great brand. What I'm having a go at is you and your obsession with a product that exemplifies everything that's wrong with marketing right now. Right? We need to get back into pricing. We need to get back involved in production. I mean, you know, I know it's your business. I don't care that much about advertising. Everyone wants to talk about advertising. We've got an agency to do it for us, for F's sake. You know what I mean? Let's get back to the product. I'm particularly passionate about price. You know, I'm passionate about price because I know what we can do with a good marketing team that is involved in pricing, both the research and the communication and framing stuff. And I just look at billions and billions of pounds. Because what happens is you underprice. The finance boys will underprice. Cause they're gonna look at costs and competitors, both dumb places to look. And then they're gonna be conservative. Most finance guys set a price aiming for volume. And there's lots of research on this. They miss the value. Please. We could have a little bit less volume, tons more value. Right. And without marketers to do the research on consumers to get the true value and then to communicate and frame price properly, we are not. This sounds bullshit. We're leaving billions on the table.

[John Evans]

That's a really good point on price. Because if you go up, let's say, get 5% more pricing, all that margin, straight to the bottom, it has a way more than 5% impact on the bottom. And then where can you put that money? Put that money into advertising, put it into product development, put it into promotion, put it into distribution.

[Mark Ritson]

The Wharton study That they did 30 years ago confirms that. Exactly. They looked at about 2,000 industries. If you can increase your price by 1%, it averages about 9% increase in profitability because to your point, it's going straight to the bottom line and 1% improvement beats increasing sales volume by the same amount, decreasing costs, variable costs. They've done it across every industry. And you're absolutely right. It's all about profitability. Right. Not about revenue. The way to drive profitability is price. And the way to get a premium price is to have marketers involved with pricing. And it's not happening now ironically and to be fair to the liquid death boys, they've done their pricing well.

[John Evans]

They have now. By the way. I agree with all the points. The reason I like to my liquid death, apart from the obsession with the.

[Mark Ritson]

Because you're superficial advertising, apart from being.

[John Evans]

A superficial advertising, is from an innovation point of view. So can you think of any new water brands in the last decade?

[Mark Ritson]

Look, the only one I know about because I sort of compare it to liquid death a little bit is Fiji Water. Yeah, but we're talking more than 10 years and that was actually a distribution play.

[John Evans]

Yeah. So I think looking at the data, you look at the awareness they got consideration although the ratios are lower than say Fiji and established water brands, if you look at much from with limited resources and where they've got to in that time is pretty astonishing. So I think as a case study in innovating and I mean like the craziest idea is to call a bottle of water or cannibal liquid death. And he's like, despite the inbuilt constraint of a crazy name, they still got to.

[Mark Ritson]

You know my, my point will be I would, I suspect it will be very. As we both be very successful. It's building that niche now and it's going to get there. It's going to be sold to PepsiCo or someone else for multi billion dollar amount. All of that's true. And then someone's going to say you said it wasn't going to work.

[John Evans]

Yeah.

[Mark Ritson]

You know, you're wrong. And I'm going to just have to ignore the point that you know, I, you know.

[John Evans]

Okay, well I got this right. I wrote a column on, I think it might be marketing week. I wrote a column about why prime was how bad prime was. Right. You know, you know your prime was.

[Mark Ritson]

Like, it was marketing.

[John Evans]

I remember because I bought, I bought for my daughter like £7 for one bottle in Asda somewhere because like on, on Tick Tock that was the only place that stocked it. I mean it's crazy. And then a year later it's 30p in Tesco and a Big dumping, you know, I mean, it's just. It's just boom and bust. And anyway, so I went hard on them and, you know, said what a, you know, rubbish job they'd done. And then someone just commented on my post, said, yeah, I'm sure there's a couple of billionaire lads that created this are, like, going to worry about the George Best line.

[Mark Ritson]

You know, where did it all go wrong, Mr. Best? Right, let's get on to yours. All right, I can't read my own handwriting now. Oh, the outrage.

[John Evans]

Oh, the outrage.

[Mark Ritson]

Another Galloway point.

[John Evans]

Yeah, good.

[Mark Ritson]

Galloway point here was outrage was the new sex.

[John Evans]

This was an unexpected. Yeah, this was unexpected, actually. So, I know, it's great, isn't it? Like, all the. I mean, firstly, that episode had so much in it and, like, so many good quotes in it. But he said, outrage is the new sex in terms of. We used to say sex sales, but actually now it's outrage driving clicks and views and engagement.

[Mark Ritson]

Unfortunately, he's correct. Yeah, he's right.

[John Evans]

I mean, it's one of those things I don't want to be true. It's a bit. I guess it's a bit outside of marketing as a point, but it's a sad reality we've got to place in society where the entire algorithms are driven by generating negative emotion rather than positive emotion. Which is.

[Mark Ritson]

And to be fair, John, you and I both ride on it too, Right. I mean, you pick the data points that will cause more of a shock. Yeah. I write a column that, if it doesn't have an edge of controversy, I feel like it's not going to do as well. Yeah. And so we're all part of it too. Right. I mean, the only bit I'd add is you have to have that outrage, but you also have to justify it by actually believing it. I think when you get busted saying stuff that you don't actually believe, the outrage all seems very fake as well. And Galloway is a good example of someone that does believe what he's saying. And he's a human headline himself.

[John Evans]

Right.

[Mark Ritson]

I mean, he wanders around like he did it three or four times on your podcast.

[John Evans]

Yeah.

[Mark Ritson]

Just drop all over the place and off it went. So he himself, I think, is. You know, I forget who told me. I think someone was. One of the guys was telling me, you know, one of the things I do now is when someone has an opinion about me, I just go, that belongs to you and it's got nothing to do with me. And I think that's a good way.

[John Evans]

To really Good advice, actually, because it's really good. The other thing I noticed is I put all my episodes up on YouTube and his episode just did 10x. Any other episode just fame.

[Mark Ritson]

Right.

[John Evans]

Got into the algorithm, but the vitriol against him in the comments like, was next. It was incredible.

[Mark Ritson]

Well, I think it's logarithmic, right. So. And you get a multiplicative. Multiplicative as well, in the sense that two loonies talking to each other about Galloway is going to produce, you know, an incrementally large more amount of outrage than one loony on their own. And so when you get, I tell you, when I've experienced it most, if I ever write for the. I haven't done it for years. If I write for a national newspaper for something. Yeah, you always get one complete head case sending you a lunatic message the next day. And that's how you know you've reached true population. Right. Some lunatic sends you a mental message which is like, oh my God, who's this? That's how you know you've gone from, you know, 20,000 to 2 million.

[John Evans]

Yeah.

[Mark Ritson]

There are loonies out there there, aren't there?

[John Evans]

Yeah, many.

[Mark Ritson]

Right, right.

[John Evans]

So let's get to number one for your most read article of the last 12 months. Nike's big mistake. The four things they got wrong.

[Mark Ritson]

It's relatively recent, so it must have flown. I wasn't going to write about because everyone had already started to post, but I felt like it was kind of like everyone was whatever you're. If you're into like, you know, outdoor swimming pools. The reason Nike failed was they didn't have an outdoor swimming pool. Everyone was kind of hanging whatever they felt was, you know, the French call it the, you know, the bete noir. You know, it was like, whatever. I think if I, if I'm an anti alcohol person, I'll blame it on them drinking too much beer. And I really felt like none of them were getting to the point. And I really spent a long time reading a couple of things. An ex senior market had written a really good LinkedIn post. He'd already sort of called it before it had happened. There's two or three other data points I was able to find. And then I was able to say, look, the real reason Nike got it wrong was they went too hard on D to C. Sure enough, they cut back on the long. They sort of walked away from sports. It's crazy to just like have men's, women's and kids and all of that. I could tie back, especially D To C, to a really interesting point, which was mine, I didn't sit for anyone else. He took over the start of 2020 right in the middle of COVID And if you follow, and I wrote an article about this at the time, if you follow every societal trend from 2020 through to 2021, it completely changes completely, right? Buying suits went down, buying tracksuits went up, you know, for example, cinema attendances went down, DVD blah, blah, blah, right? And the one I point to at the time was the proportion of American commerce that was done online, which went ballistic. It sort of is going up and suddenly it goes through the roof. I think John Donahue was daft enough because just because he's a CEO doesn't mean he's daft. Was daft enough to take that 12 month Covid driven explosion of retail sales as a proportion and extrapolate it into a future that never happened. And he's going, oh, this is it now. This is the direct Internet, you know, explosion we've all been expecting. I'm going to get out of stores and go more and more D2C when in fact it was a much more simple thing. I can't go to the shops because I'm locked in my house. I'll go on Amazon instead. And I called the article back in the day, the boring brown line of consistency. It always snaps back to the mean. It doesn't go back to where we were in 2019, it goes back to where we would have been anyway. The only one that hasn't snapped back is working from home. It will.

[John Evans]

True, true, it will.

[Mark Ritson]

It's because people have moved away, companies have let it go and there's a lot of people don't want to get promoted because if they get promoted, they'll get a contract saying four days in the office, right? There's a funny feeling about it at the moment. I predict with great certainty that will snap back as well. But it will take much, much longer because it's not societal, it's contractual, right? It will get there. We'll get there. And so I wrote it about Nike, about the mistakes that were made and about the fact that I think he can fix it, the new guy, the Nike guy. But how stupid and silly can even the smartest CEO be on some of the most basic things? And I don't know, maybe I went to, you remember the column was not long ago, maybe I went too far. But I read it a few times before I said. And I thought, no, if, you know, this is, this is pretty dumb stuff.

[John Evans]

As soon as the reaction, of course, is higher, is promoting someone who's been in the business 20 years. So it shows. Yeah, well, someone who understands the long term trend.

[Mark Ritson]

And also, he'd left. He started out as an intern. He'd left the business when they didn't give him the CEO's job, which I found very interesting. And so, you know, he's a proper life. He's never worked for anyone else.

[John Evans]

Wow.

[Mark Ritson]

He's still got his work cut out because, of course, they've ceded a lot of distribution now. Right. But for me, I thought, yeah, a real. A real example. As Pete and Les will tell you, our stuff's pretty obvious. It doesn't mean companies are doing it. Right.

[John Evans]

Yeah.

[Mark Ritson]

I don't know many companies that are investing the right amount of their budgets in long term brand building.

[John Evans]

Yeah.

[Mark Ritson]

Okay, back to your. Oh, yeah, Airbnb. This is perfect. If we argue Nike went too far.

[John Evans]

There, we go short.

[Mark Ritson]

You wrote that beautiful thing about the office.

[John Evans]

This is it. So the most popular article I've written last 12 months has been almost. Actually was almost 12 months ago after meeting the Airbnb VP for marketing about how they actually. It's the.

[Mark Ritson]

It's a brilliant podcast. It's a brilliant podcast.

[John Evans]

I love it because it is literally the opposite of what I did. So in Covid, what they did coming out of COVID they put all. Well, not all their spend. They lost 80% of their business because of COVID Obviously. They were.

[Mark Ritson]

Obviously. Obviously. That's not a cultural change.

[John Evans]

I was surprised they kept 20. I'm like, where are these 20%?

[Mark Ritson]

Where are they going?

[John Evans]

What's that? So anyway, but what it did is it forced them to turn off all their performance and just invest in brand building while everything was dark, so to speak, and massively reap the rewards of that. So it was almost like a natural experiment. A bit like when you turn off search and then suddenly go, oh, people can still find us.

[Mark Ritson]

I think you're giving him a little bit too much credit. It wasn't a natural experiment. It was kind of a natural. You got really lucky and found out what you should have been doing all along. But credit to them, they learn from it. Right. They learn from that bit of serendipity I liked in your podcast, the way he spoke about it, the certainty that they were now going to continue with it.

[John Evans]

Yeah.

[Mark Ritson]

And I liked also the fact. And it was too subtle, I felt, and everyone missed the point. They're not. Not doing performance and surge.

[John Evans]

Yeah, yeah.

[Mark Ritson]

But they've now found the right balance and they're not going back. Exactly. And I just. Yeah, I thought if you put Nike next to Airbnb, obviously going in literally the opposite directions, you've got everything Les and Pete have tried to tell us for 10 years.

[John Evans]

Yeah. Yeah, exactly. Brilliant. Well, mate, that was a good year, then.

[Mark Ritson]

We've never written about the same thing.

[John Evans]

We haven't.

[Mark Ritson]

I think if I.

[John Evans]

Apart from Liquid Death.

[Mark Ritson]

Yeah, but it's two different stories. Yeah, it's very interesting. I think. I think if I see your stuff already, your Tyndall stuff already, I'm like, right, okay, move on. It's not a bad thing, is it?

[John Evans]

It's not bad. I'll take that.

[Mark Ritson]

Right, top 10.

[John Evans]

Awesome, mate. Let's get on to the Onto the next show. Thank you very much for listening or watching Uncensored cmo. I hope you enjoyed that. If you did, please do hit the subscribe button wherever you get your podcast. If you're watching, hit subscribe there as well. I'd also love to get a review. Reviews make a big difference on other people discovering the show. So please do leave a review review wherever you get your podcasts. If you want to contact me, you can do. I'm over on x at Uncensored CMO or on LinkedIn where I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time.