Podcast Summary: Uncensored CMO - "Why Advertising is Broken & How to Fix It" featuring Tom Goodwin
Podcast Information:
- Title: Uncensored CMO
- Host/Author: Jon Evans
- Episode: Why Advertising is Broken & How to Fix It - Tom Goodwin
- Release Date: July 14, 2025
Introduction
In the 200th episode of Uncensored CMO, host John Evans welcomes back one of his favorite and returning guests, Tom Goodwin. Evans expresses his admiration for Goodwin's unique perspective on the marketing industry, highlighting his ability to stay fresh, relevant, and offer distinct viewpoints. This milestone episode delves deep into the current state of advertising, its inherent problems, and potential solutions, setting the stage for an insightful conversation between the two marketing veterans.
The Current State of Advertising
Tom Goodwin opens the discussion by candidly addressing the dire state of the advertising industry today.
"I don't want to be dramatic here, but I think everyone's completely lost, like, unbelievably lost." [00:56]
Goodwin emphasizes that despite having unprecedented access to data, technology, and understanding, the advertising realm is facing significant challenges. He points out the paradox of the era: brands are more important than ever, yet the consumer experience is deteriorating. Examples include poorly targeted connected TV ads and irrelevant advertisements flooding platforms like Instagram and Facebook, leading to consumer frustration.
Problems in the Industry
Goodwin identifies several core issues plaguing modern advertising:
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Performance vs. Brand Advertising:
- The industry has split into two tribes: brand-focused and performance-driven advertising. Contemporary advertisers, often smaller direct-to-consumer brands, prioritize measurability and short-term gains over long-term brand building.
"The entire industry has sort of shifted, not on brand, but on performance." [03:30]
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Obsession with Metrics:
- An overemphasis on metrics like Return on Ad Spend (ROAS) leads to short-termism, where actions are driven by immediate data rather than long-term brand equity.
"We are completely obsessed with measuring things which are preposterous and wrong." [04:10]
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Fraud and Waste:
- Goodwin laments the rampant fraud and inefficiencies within digital advertising, estimating that up to 75-80% of advertising spend is wasted.
"I think the amount of money that's wasted in digital advertising would be closer to 75 or 80%." [21:03]
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Loss of Competence:
- There's a general decline in industry competence, where reliance on complex technology stacks and performance hacks overshadows creative and strategic excellence.
"No one seems to call out the disconnect between click-through rates and meaningful outcomes." [26:24]
Short-Termism vs. Long-Term Brand Building
The conversation highlights the detrimental effects of focusing solely on short-term performance metrics. Evans echoes the sentiment by referencing the Barrett-Ehrenberg-Bass (BEB) 955 rule, emphasizing that most consumers are not actively considering purchases but are influenced over time.
"If you have been optimizing bottom of funnel, which you don't get thanked for... you're being focused on yesterday's results and up against tomorrow." [06:25]
Goodwin advocates for a shift back to long-term brand building, where investments are made in creating enduring brand equity rather than chasing immediate returns.
The Obsession with Metrics and Performance
Goodwin criticizes the industry's fixation on measurable metrics, arguing that it undermines the true value of advertising.
"We've fallen in love with everything we can measure and, at the same time, everything that we can't measure we presume is entirely irrelevant." [05:29]
He challenges the notion that performance metrics like click-through rates should dominate advertising strategies, noting that they often do not correlate with meaningful business outcomes outside direct-to-consumer contexts.
Fraud and Waste in Advertising
A significant portion of the discussion revolves around the prevalence of fraud and inefficiency in digital advertising.
"The amount of money that's wasted in digital advertising would be closer to 75 or 80%. And nobody seems to care." [21:03]
Goodwin attributes this waste to an over-reliance on complex technologies and performance-driven tools that promise personalization and trackability but often fail to deliver genuine results.
The Role of Customer Centricity
Both Evans and Goodwin stress the importance of placing the customer at the forefront of marketing strategies. They advocate for integrating customer service into the marketing function to better understand and address consumer needs.
"Marketing is the only function in a company that faces the customer. And therefore it's pretty much... the only role in a company that really matters." [12:31]
Goodwin suggests that customer-centric approaches can lead to more authentic and effective advertising, moving away from purely data-driven tactics.
The Importance of Creativity
Despite the technological advancements and data-driven approaches, both speakers emphasize that creativity remains paramount in successful advertising.
"Make ads that look beautiful... Perhaps we need to make ads just really nice and simple." [31:03]
Goodwin laments that the industry's pivot towards an "arithmetocracy"—where success is measured predominantly by numbers—has devalued creative efforts. He reminisces about the timeless appeal of Grand Central Terminal versus the often lackluster nature of modern digital ads.
The Future of Advertising
Looking ahead, Goodwin envisions a return to basic advertising principles—focusing on compelling visuals, clear messaging, and emotional resonance without overcomplicating the process with excessive technology.
"Let’s go back to the basics and let's be really confident in our conviction and our instinct." [08:56]
He also highlights the potential of AI as a tool to enhance creativity and competence rather than just another metric-driven component.
Conclusions and Recommendations
In wrapping up the conversation, both Evans and Goodwin advocate for a fundamental reassessment of current advertising practices. Their key recommendations include:
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Prioritize Long-Term Brand Building:
- Shift focus from short-term metrics to strategies that build enduring brand equity.
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Reduce Reliance on Excessive Metrics:
- Embrace the intangible aspects of advertising that cannot be easily measured but significantly impact consumer perceptions.
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Combat Fraud and Waste:
- Increase oversight and accountability to minimize wasted ad spend and fraudulent activities.
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Enhance Customer Centricity:
- Integrate customer service with marketing to gain deeper insights and foster authentic connections.
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Revalue Creativity:
- Emphasize the creation of aesthetically pleasing and emotionally resonant ads over purely data-driven approaches.
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Simplify the Tech Stack:
- Streamline the multitude of advertising technologies to focus on tools that genuinely enhance creative and strategic efforts.
As the episode concludes, both hosts express optimism about the potential for the advertising industry to reinvent itself by adhering to these principles, ultimately creating more meaningful and effective connections with consumers.
Notable Quotes
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John Evans:
"Not everything that matters can be measured. Not everything you can measure matters." [05:29]
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Tom Goodwin:
"Advertising isn't logical. We don't really know how advertising works. And for a long time, we were quite comfortable with that ambiguity." [06:25]
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Tom Goodwin:
"There's nothing wrong with making ads that are incredibly useful or very funny and entertaining." [30:38]
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John Evans:
"Your number one job is to represent the customer where decisions get made." [13:50]
Final Thoughts
This landmark episode of Uncensored CMO serves as a critical examination of the current advertising landscape, highlighting systemic issues and advocating for a return to foundational advertising principles. Tom Goodwin's candid insights, paired with John Evans' thoughtful probing, provide listeners with a roadmap to navigate and rectify the fractured state of modern advertising. For marketers seeking to build brands that endure and resonate, the advice from this conversation is both timely and invaluable.