A History of Marketing

A History of Marketing / Episode 56

Yoram “Jerry” Wind has spent six decades at the frontier of marketing. He has won virtually every major award a marketing scholar can receive, and his CV is more than 100 pages long.

In B2B marketing ,the shift from single leads to buying groups is framed as a new revelation (see my interviews with Kerry Cunningham & Jon Miller). But Jerry Wind mapped organizational buying centers in 1966 and developed the BuyGrid model in 1967.

I was almost angry when I discovered this. “We’ve all known about buying centers since 1966, and marketers are still chasing individual MQLs?!” I had to ask Jerry about this directly. It’s where we kick off our conversation.

We then shift gears to one of my all-time favorite case studies: Courtyard by Marriott.

Like Moneyball, it’s a case study of taking on the old guard (hotel industry veterans trusting their gut) and using data (conjoint analysis on traveler preferences) to build a modern system. Jerry and his collaborator Paul Green used marketing research to reshape the physical world, creating hotel layouts and room designs we still see today.

Jerry’s foresight is just as impressive. More than 10 years ago, he was writing and presenting on AI and its coming impact on marketing and education. Last year, at age 87, he published Creativity in the Age of AI.

We also cover:

* The RAVES framework and balancing cognitive data with emotional appeals

* Why the CMO role must evolve to orchestrating all customer touchpoints

* How to spend a career challenging mental models

* Why most marketing lectures fail and how to fix them

For me, this conversation felt like a return to form for the podcast. It’s in a class alongside my interviews with legendary professors like Philip Kotler, David Aaker, Jag Sheth, and George Day.

I learned a lot from Jerry, and I find his prolific career inspiring. I hope you like it too.

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng of Syracuse University for reviewing and editing transcripts for accuracy and clarity.

In case you missed it, play the “Date the Ad” marketing history game. Learn more.

The Wharton School in 1967: Bridging Theory and Real-World Practice

Andrew Mitrak: I want to start right at the beginning of your career as you were entering the field of marketing. Can you describe the scene of what marketing looked like as a field back in 1967 around the time you first joined Wharton?

Jerry Wind: Marketing was a little different, but it was the beginning of kind of what we see today. And I think one of the great things about Wharton is Wharton had the orientation that we still have, which is marketing theory and methodology has to have practical value. It started with Wroe Alderson, who was basically the founder of this practical approach to marketing. And with Paul Green, who really was the main figure in the Wharton marketing since the early ‘60s, but he joined the department. I joined in January ‘67, primarily because of Paul Green and Ron Frank. I liked their orientation and approach, and at the time Wharton Marketing also had the Marketing Science Institute that was actually launched because of the work of Wroe Alderson, that convinced Scott McCabe from Scott Paper to start an institute that will bring industry to academia and academia to industry. When I joined Wharton, I almost immediately joined some of the projects at the Marketing Science Institute. So the environment at Wharton was really a little different than the rest of the field. We were very much, especially because of the influence of Paul Green, focused on new methodology. Reavis Cox was still at Wharton at the time and he was kind of one of the leaders in the marketing theory area. I think it was an ideal place to be in. It probably was the most advanced of most of the other marketing departments at the time.

Andrew Mitrak: One of the names you mentioned a couple of times, I was wondering if you’d bring him up, is Wroe Alderson, because I did a whole episode on Wroe Alderson. I interviewed his son, I interviewed Stan Shapiro, and I interviewed a scholar named Ben Willis Croft who had studied the life of Wroe Alderson. I think Wroe would have probably just passed away in 1966, right before you joined.

Jerry Wind: Correct. I never met him. All I know about him is really through Paul Green.

The Influence of Wroe Alderson

Andrew Mitrak: Could you speak to him as a figure? Because it seems like he’s one of those figures who had a lot of influence in marketing, but kind of—I don’t want to say he was forgotten, we’re talking about him here, but his impact, maybe because he passed away right in the 1960s as marketing was taking off and growing as a field. I’m wondering if you have any comments or would want to speak more on his influence.

Jerry Wind: Well, Wroe actually had a consulting firm, was very active, and it’s still very insightful to read—I think it was called Cost and Profit, the short publications that he issued. He really influenced a lot of us, definitely Paul Green, who then influenced the rest of Wharton marketing and the field. It also legitimized to a large extent consulting. For many years, consulting was viewed as: you could say you have one day a week you could do some consulting. Most of the consulting people did was really lecturing to industry. Lecturing is not really consulting. The real consulting that Wroe epitomized, and that Paul Green and I did a lot over the years together, were actually solving business problems. A lot of the developments in marketing over the years, especially on the methodology side, came because we had to solve problems of real companies who faced them. Conjoint analysis, multidimensional scaling—all of these are great examples of developments that came because of needs of industry and the need to address specific problems.

Organizational Buying Behavior: The Buygrid Model and the Buying Center

Andrew Mitrak: That actually is a nice segue to organizational buying behavior. This is one of the topics you researched. For context, I am a marketer and I’ve almost always worked in B2B marketing. The way that organizations buy is really interesting, and I think that the way things are sometimes set up and measured today are flawed and don’t really take into account the dynamics of organizational buying behavior. I want to start just by asking you about that and why did you start researching it? What was the scene of the status quo of the way people thought about the way organizations buy, and how did your research help change that?

Jerry Wind: I started because, first of all, I was curious. It was curiosity as to: how do organizations buy? How do they make the buying decision? The literature at the time was not very helpful. Luckily, one of the faculty at Stanford at the time was Bob Davis, who chaired my dissertation committee, who also worked as vice president at Varian Associates, which was an industrial firm. In discussions with him and with Ron Frank and Bill Massy, who were basically the lead faculty at Stanford, Bob Davis suggested, “Why don’t you start speaking with some of the people at Varian and get a feel for what’s happening?” That led to actually studying them and studying another company, Motorola, that had major operations in Las Vegas at the time. So the motivation was fundamentally: how do they buy? How do organizations buy? How do they make the buying decision? Since very little was known at the time, I thought it was a bright field to start, and it was a great start. Also, it reinforced the belief that was developed later on when I moved to Wharton of the importance of working with industry.

Andrew Mitrak: Did you visit Las Vegas and Motorola in the late ‘60s or early ‘70s?

Jerry Wind: Spent a lot of time. This was in the ‘60s. I worked on the dissertation from primarily late ‘64, ‘65, and ‘66. I got it from Stanford. My doctorate at Stanford was two years; it was ‘65–’66.

Andrew Mitrak: What was Las Vegas like in the ‘60s? Was there the Rat Pack era?

Jerry Wind: A little different than today, but still glamorous and very hot.

Andrew Mitrak: As a young scholar visiting a company and learning about the way they buy, what was that like? Were the people at Motorola like, “Who is this person? Is this strange?” What were the dynamics like? What kind of questions did you ask them or what were observations you had there?

Jerry Wind: I was lucky. I got an introduction through Bob Davis to introduce me to Varian, and Varian introduced me to Motorola; they had some relation between the two of them. They were very open. They were actually curious and tried to find out what I could find out about the way they behave. When I developed the buygrid model, which was recognizing that there is a buying center that makes the decision, so not the individual; that there is a buying process; and that the buying process is conditional on the buying situation, whether you’re buying something for the first time, repeat buying, or modified rebuy. The whole conceptualization, I presented it to them and they loved it. They said, “Yeah, makes sense.” It represented what they were doing. The interesting thing: it was a real breakthrough in the field because nothing like this existed before. Also, we did one other thing in my dissertation, which was quantitative analysis of brand loyalty. Brand loyalty at the time was viewed in the consumer behavior area, but never applied in the organizational buying behavior area.

Andrew Mitrak: That’s really interesting. Of course, I think there’s a lot of brand loyalty dynamics within an organization. The concept of the buying center and how the buying center changes depending on the dynamic of what’s being purchased—like you said, a first-time purchase in the category, a new vendor in the category, a repeat of the same vendor—that dynamic is so interesting. If I were to characterize it, please correct me if I’m wrong. Because previously, there’s a thought of, “Oh, you just go to the single purchasing agent, the person with procurement in their job title, just find them and they’ll procure it for you.” But it’s more complicated than that. Can you speak to sort of the before and after what people thought about B2B purchasing, prior research, and how your research expanded on that and added more nuance to the way businesses buy?

Applying the Buygrid Model to Consumers

Jerry Wind: I think the buygrid model is still relevant. Later on, I actually suggested that a lot of this applies also into the consumer behavior area, because consumers don’t buy individually. There is a buying influence. If you’re thinking about any purchase, a person doesn’t just buy a car by itself; you consult with your wife, the kids, neighbors, their influencers. So a buying center exists also in the consumer behavior side, but that was not really formalized as such. I think there is a lot of the concepts that we developed in organizational buying behavior that apply to the consumer area. Similarly, there are a lot of concepts and methodologies that we use in consumer that can be applied in organizational buying behavior. So there is a lot of synergy between the two. In today’s environment, with what’s happening with AI, and especially agentic AI, there are changes that have to impact both of them.

Andrew Mitrak: Absolutely. That’s absolutely right. As a consumer, especially if it’s a larger purchase, but even for things around the house, I’ll consult my wife, I’ll kind of think about my space, I’ll look at YouTube videos, I’ll look at the internet and reviews, and now I’ll ask an AI about it. In a way, all those things collectively—I might be the decision maker or the person with a credit card making a purchase at the end of the day, but I’m consulting a number of resources somewhat similar to how a company would have multiple stakeholders influencing the decision.

Jerry Wind: Today, basically no one is making any decision without checking some type of online source. That really requires companies to start thinking about themselves as omnichannel companies where the consumer journey really has to go through a seamless experience online and offline, which has a major, major implication to any marketer.

Andrew Mitrak: As an impact of that, do you think that the practices of a B2B marketer versus a B2C marketer should be converging or overlapping more than they do because of these sort of similar dynamics? Or do you feel like B2C is becoming a little more like B2B or vice versa? How do you think of those in practice as disciplines?

Jerry Wind: I think that we see in more advanced companies that you have the interface between the two. The same concepts and methods that are used in one are being applied in the other. Again, we have to look at this in the dynamic center of what’s happening today. Until two years ago, a few years ago, if you asked me in terms of what really drives decisions, I would have said that to a large extent emotions dominate even in the B2B world. This was actually an early finding: that B2B is not only rational, that there are actually a lot of emotional aspects involved in the decision. But the entry of agentic recently is changing this, because agentic relies primarily—when you market to a machine as opposed to a person, they’re looking at the data, they’re looking at the cognitive elements. In the last two or three years since the proliferation of ChatGPT and all the other platforms, we have more of a balance and need to focus more on both the cognitive and the emotional. My answer, which two years ago would have been based on a lot of research that showed that emotional appeals are by far more powerful than cognitive, will not be true today. Today, you really need the balance of the two.

Flaws in the Funnel: Why B2B Marketing Gets Buying Groups Wrong

Andrew Mitrak: I want to circle back to the buying center and your work on that for one more question. Because I mentioned how I’m a B2B marketer today, and something that frustrates me is that so many things are still built around tracking individual leads. A lot of our systems kind of think of a funnel, and there’s a lead, and that lead is an inquiry and becomes a marketing qualified lead and a sales accepted lead, and that lead turns into a sales opportunity. So many things are still set up to track the individual lead level, as if it’s still a purchasing agent and somebody with a title called procurement. I look at your research and it just reminds me people have known that’s not the case for 60 years. Your research 60 years ago shows that this isn’t the case. It kind of makes me mad in a way, because I feel like I have to explain this at work: like, no, actually there’s a buying group, there’s a buying center, you have to engage these different stakeholders. It’s not just about us doing lead generation; it’s about finding the different personas, reaching them, influencing them. There’s more nuance than just measuring the number of leads marketing delivers. So I feel a little frustrated about it because we’ve known this for 60 years. Does this ring true for you that this hasn’t been fully internalized by marketing practitioners and businesses? If you agree, do you have a sense of why? Is it just that it’s complicated to track different people, or why has it not been fully adopted if we’ve known about this dynamic for so long?

Jerry Wind: I love your observation. I think you’re representing the current situation in many cases. There are a few exceptions, obviously, but you’re absolutely right. I would suggest that this is partly a function of the power of the status quo bias: just continue—my work in mental models—doing what’s convenient, you’ve done it before, and the available technology that makes it easier to go through this individual tracking. I think that the companies that are doing a little better are the ones that are focusing on account strategy and insist that the sales people and other people in contact with the customers actually complete the information needed in the data about the company. The problem is the sales people typically viewed that reporting back on the call, especially if the call was not successful, is a burden, and they kind of skipped it or said two words and moved to the next assignment, as opposed to realizing that building the data, the information about the company—who are the people involved, what are their motivations, what have their experiences been, and others—is a very important part and they should be rewarded on this. The problem with traditional sales force management is that many of them don’t reward the sales people or others involved in this. So you have to go back to the organizational structure, the reward system that they have. Hopefully, people wake up and realize that you have to have this better understanding: who are the people involved in the decision, what are their considerations, and try to design a strategy that addresses it. But account strategy is the hope, and I think that advances in the technology that companies use for tracking is also the hope.

Andrew Mitrak: That’s right. I think that there’s the systems and the structure, and a lot of it comes back to incentives. I also think that your observation on the type of purchase it is—you listed a number of things there, and I think also that gets simplified often into: is it new business or renewal? That’s it, and that’s maybe the extent of the type of purchase it is, and they’ll have a new account executive sell if it’s new business and then they’ll put it on an account manager who will sell it for renewal. But there’s even more complexity than that that I feel like isn’t accounted for. Is this their first time entering a category, or are they—is it a takeout of a competitor? Sometimes that’ll maybe get captured somewhere in a sales call or something, and it’s not really like marketing and sales together don’t quite go to market that way as far as the nuances of types of purchases it is. It just seems like your research uncovered this a long time ago, and still today, even with how far we’ve come with data and technology, it’s still not fully adopted and it seems like a miss. It seems like something we should have gotten right longer ago.

Jerry Wind: At the minimum, companies should realize that it’s not only new task and repeat, but there is the in-between category that I called modified rebuy. Modified rebuy is the most common one, actually, and the one that offers the opportunity if you’re an outside supplier to enter an account by creating the need for perceiving that things have changed. You perceive it as saying that leads to a modified rebuy. But you’re touching on another point, which is the separation between marketing and sales, which are viewed as two silos in the organization. That leads to my current work, which is really in the area of orchestration. In a sense, when you look at the role of the CMO, there is hardly ever a CMO that has responsibility for what we teach in marketing as the four Ps: product, price, promotion, and place. I have never seen a CMO that has responsibility for all four. They have responsibility for branding, some aspects of advertising, and perhaps a responsibility for understanding the consumer, the marketing research and consumer research aspects. To succeed, what the company needs is they need to orchestrate all the touchpoints a company has with a customer and create an integrated approach. That’s a different role. That’s a role of an orchestrator and not the head of the marketing department. It really calls for rethinking, reimagining really what marketing is.

Pioneering Market Segmentation: From Demographics to Conjoint Analysis

Andrew Mitrak: You mentioned the four Ps, and another concept is segmentation, targeting, positioning. I want to talk about segmentation. Segmentation is another field where you’re one of the defining pioneers of market segmentation theory and the methodology. Can you share more about where segmentation was as a practice when you started researching it and diving into it?

Jerry Wind: The major work in segmentation was the book Market Segmentation that Bill Massy, Ron Frank, and I wrote, published in 1972. So a long time ago. A few years later, I edited the special issue of JMR on market segmentation. At the time, the motivation for writing the book was that most markets still viewed markets as homogeneous. At the time, when you think about the ‘60s, most companies viewed the market as a homogeneous market, have an offering, go to the market. A few companies, the more advanced ones, realized that the markets are heterogeneous and started looking at how to segment them. Most of the segmentation at the time was on demographics: consumers were male, female, or age, or some other demographic, easily observable characteristics. There were beginnings at the time of research that showed the value of psychographics, and the value of what we brought to the table at the time was focusing on behavioral-based segmentation: your behavior, loyalty is a great base for segmentation; the frequency in which you buy, how much you buy. A lot of the work moved away from demographics to much more detailed psychographics or behavioral-based segmentation. This was one development at the conceptual level. The major development was methodologically, because there were huge advances in methodology: multidimensional scaling and clustering, because segmentation was also linked to a lot of my work later, especially with Paul Green, on positioning, focusing on segmentation and for the given segment what will be the most effective positioning of the product, the reason people will buy the product. That’s where multidimensional scaling and clustering came into play, as well as simulations. Then, when we did a lot of work in the new area at the time, conjoint analysis, conjoint analysis provided another basis for segmentation. All the work that we did in the ‘60s, ‘70s, ‘80s, ‘90s had relevance to segmentation in terms of as we had better understanding of how consumers buy, their buying decisions, and then using this as a basis for segmentation.

What is Conjoint Analysis?

Andrew Mitrak: You mentioned conjoint analysis a couple of times. Can you share more about what that is and what that unlocked in marketing?

Jerry Wind: The key book on conjoint analysis was Multiattribute Decisions in Marketing with Paul Green. The work actually started with joint work that Paul started—I joined him a little bit later on this—with Bell Labs. The idea behind conjoint analysis is to get more accurate and valid information about consumer preferences, how consumers make decisions, as opposed to asking them, “How important is the color of the pen in buying the pen?” Conjoint analysis was based on: don’t ask people to try to rationalize the importance of each component—the color, the shape, the design, the material, the durability of the ink. Give them a number of options to look at and compare, and just tell me if you prefer A or B. I will design the different options based on experimental design of all the relevant characteristics. If you tell me you prefer A over B, knowing the characteristics, I can infer the relative importance of each of the attributes involved. This was the breakthrough. It’s a very simple idea, very, very powerful. We’ve done tons of studies in almost every conceivable product and service category using conjoint analysis.

Andrew Mitrak: That’s really interesting. Basically, as a researcher, you should not expect the consumer to accurately break down the attributes point by point and measure them; you need to just present them the whole.

Jerry Wind: They don’t know. They have no idea.

Andrew Mitrak: They just know why they like it, but if you present them the whole and a series of them, you can then derive the attributes that make one more preferable than the other and rank those attributes in importance.

Jerry Wind: Correct. They can either rank or rate them, but the important thing analytically is you’re inferring what is the relative importance of each attribute that you have. There have been tons of studies that we and others have done and validated this over the years. It’s generally accepted. It’s still accepted today. It’s still used today by many, many companies, and there are different software packages that help people use it. But the breakthrough was in the thinking: how do we basically deal with a multiattribute phenomenon such as a product or service and get reliable and valid information from consumers?

Andrew Mitrak: Are there limitations to it? Does it work in any product and service category where you can perform conjoint analysis?

Jerry Wind: I’ve not seen an area that it cannot be applied to. I think the limit on whether to apply it or not is the creativity of the researcher. We used this in pharmaceuticals. We used this in many service areas. We used this in designing a hotel, the Courtyard by Marriott. In every one of these, the beauty of the approach is that the design is flexible and we can modify the way we are asking questions. Originally, it was viewed the limit would be how many attributes can you deal with because you have to compose the hypothetical product. It was viewed originally like five, six attributes. But then you come up with structural designs. In the Courtyard by Marriott that I mentioned, we had 10 different categories like indoor, outdoor characteristics, the bathroom configuration, and others, and for each one of them a lot of variables within it. We were able to design a very large, integrated conjoint analysis where then you put all the components together. The idea is sound and it’s really up to the creativity of the researcher to be able to deal almost with any situation.

Andrew Mitrak: I was going to ask about Courtyard by Marriott. Let’s go straight to that now, because this is such a great case study and example. Can you share the story of how you initially came into contact with Marriott? Where were they in the ideation or development phase of Courtyard by Marriott? Can you walk me through that story from the beginning?

Jerry Wind: I was called by the director of marketing research at Marriott, who either read one of our papers or heard me in a presentation. He said he was intrigued: they’re thinking about developing a new hotel, which will be a Marriott-style hotel for smaller markets that do not justify the large Marriott. Their current thinking was that they would like to create a mini-Marriott for the other markets, but he was intrigued with the presentation or the paper, and can we apply this to try to test the idea? I said, “Yeah.” We started talking, and eventually we got the architects and the economists and all the other people from Marriott on the team to sit together and agree on what are all the decisions that have to be made in designing a hotel. For example: should you have a restaurant or not? Should you have a motel-type entry where people can leave their car outside and go directly to their room? What should be the configuration of the bathroom? Tons of decisions. We listed all of them and we created basically a model that allowed us to do it. The objective was to try to attract two markets: the business market, people who travel for business, including women as a market segment; as well as people who travel for leisure, the family and combination of the two. We designed with the team all the decisions that had to be made, and then designed a study to see how consumers would evaluate different combinations of these different options. It led to the Courtyard by Marriott. There were a lot of surprises and it was not a mini-Marriott. We tested it against simulations testing against: what if we were just to create a mini-Marriott compared to this? And the Courtyard by Marriott won hands down.

Andrew Mitrak: This is amazing. I think it’s so cool that market research could have such an impact on a new product and service that has such a physical footprint in the world, that the world is physically different as a result of this research. That’s just really inspiring. When you’re presenting the idea of conjoint analysis to me, you show me two pens and how they’re different and you can pick one versus the other. But you can’t do that with a hotel that’s not built yet. You can’t just build a whole hotel and build a different hotel; that wouldn’t be feasible. As consumers, they don’t know the answer to where they want to park their car and pick up their keys. They can’t think that way exactly; they just know it when they see it or know when they feel it. How do you construct the conjoint analysis for them to be able to experience those things and make their preference in such a way where you can derive what the attributes are that they care about? How did that study work at a tactical level?

Jerry Wind: A combination of pictures, drawings, and words. You explain to them, so they see a picture of a hotel and they can see a picture with cars in front or a hotel where you have to enter through a major area. The reason, incidentally, for the way the Courtyard by Marriott is designed as it is, is because women, especially who travel by themselves, had a very strong preference to have the central control point and not distributed. The hotel room configuration that has the bathroom split into two—where you have the bathtub, shower, toilet in one area, and then outside of this a door, and then outside of it is the counter with the sink where you can make up—was purely a result of the study. No one did it before, and there was a very strong preference for having this because two people can be ready at the same time by using the two facilities. Simple things like this came up from the study. Incidentally, another study we did where we had to go even more extreme was E-ZPass. We tested the viability of E-ZPass before it existed. The only way to communicate it to consumers, we created videos showing driving with E-ZPass or without E-ZPass. You have to provide them visualization so they can actually relate to this.

Andrew Mitrak: For a listener, E-ZPass would be a toll booth system—an electronic scanner where you don’t have to stop and take out your coins and pay a toll booth. But if that’s all you ever knew, that would be a pretty big jump. If you’ve only ever known taking out your coins and paying something physically and stopping, and that’s just how it is—you stop and pay the toll versus drive right through—that’d be a lot to take in. Even Amazon did a series of groceries where it’s just walk out, and that’s been in a pilot for a long time still and hasn’t fully adopted that way because you’re just used to stopping and scanning and paying, and there’s a ritual to that and habits. It’s an interesting one to have market research and be able to show that to them.

Jerry Wind: The only way to do it was by visualizing, creating videos with and without, and giving them the choice with these different options.

Andrew Mitrak: I want to go back to Marriott. Courtyard by Marriott—it does seem like they’re a pioneer as far as soliciting market research to do this. If I was to picture a large hotel chain and a large company, they have their systems, they have designers, they have architects, they have people who’ve been in the hotel industry their whole lives, and they might be thinking, “Why do I need some analysis to tell me how to make a hotel? I’ve done hundreds of hotels.” Did you run into any stakeholders—kind of back to buying groups and buying centers—who were hesitant to believe the research or were skeptical that this type of conjoint analysis and methodology could lead to a better decision? Did that come up at all, and if so, how did you overcome it?

Jerry Wind: All the time. All the time. It’s human nature almost to object to anything that is new. The good news is that the Marriott leadership was courageous enough and willing to experiment. We did not launch right away the whole chain. They started with a few test locations based on the results. Luckily for us, the test locations were successful, and then they launched it. Had there been less courageous leadership, they would have said, “Forget it, let’s just go with our intuition and our expertise.” That would have created the mini-Marriott, that would have based on our research been a failure. But they had the courage to experiment, and that’s what we encourage everybody in every one of the studies we’ve done. Paul Green and I probably done hundreds of studies over the years with all product and service categories. Almost in every single one of them, there’s resistance to implement, and our recommendation is: experiment with this. Take the results, experiment, experiment against the other model you have, and see what the results are.

Andrew Mitrak: That’s great. I love this case study. It reminds me of—I’m not sure if you’ve read the book or seen the movie Moneyball, where the idea was the baseball people: there’s a whole group of old baseball people who say, “Oh, that player looks like a star. I like the way he looks. I like his girlfriend.” They’re just judging based on: “I’ve been a scout for decades and I know.” Then somebody comes in with the numbers and is able to make an argument. And it takes courage. The whole movie is about overcoming the status quo and using data, but also being willing to stand by convictions and a belief that there’s a better system and being able to change it. This story of Courtyard by Marriott sounds like one of those stories. I like to hear it a lot.

Jerry Wind: Yep.

Andrew Mitrak: What was your first time walking into a Courtyard by Marriott?

Jerry Wind: It was one of the experimental units. I don’t remember where it was at this stage; it was a long time ago. It was, “Wow, it happened. It’s here.” I think they’ve done a terrific job in implementing the recommendation. Before, we had a concept, and now suddenly you see it, so it was a real high. The same is true with every project that we’ve done where you see the results later on. It gives you kind of a feel: yeah, it works.

Breaking the Status Quo: Mental Models and the RAVES Framework

Andrew Mitrak: I think this theme is very closely related to mental models. This is something you brought up earlier in our talk. As I was researching your work, in the YouTube videos and presentations you’ve given, you highlight this idea of mental models and you’ve argued that for decades, the greatest barrier to innovation isn’t a budget or technology; it’s outdated mental models. Can you talk about mental models and why they’re such a barrier?

Jerry Wind: The book we wrote about this is The Power of Impossible Thinking from 2004. The idea is people feel very comfortable just continuing doing what they’re doing. It’s kind of the status quo bias. Yet the world is changing. The world is changing dramatically all the time, whether it is technological advances, political reality, demographics, wars—you name it. There are continuous changes in the world. Why can we or should we assume that what worked for us yesterday will work tomorrow if the world is changing? The whole idea here is that we have to challenge the status quo, challenge the way we’re doing things now, and explore whether there are better alternatives. There is a whole set of approaches to challenge mental models. In my more recent book, Creativity in the Age of AI, the premise is that everyone—every individual, every organization, every society—can enhance their creativity if they use a number of approaches to enhance creativity. Each one of these approaches can be turbocharged if you use AI. In the book, we described 12 different approaches to enhance creativity. The first approach is really challenging your mental model. The last approach, the 12th set of approaches, is the need for courage and persistence—the point we talked about in the context of Marriott, the courage of management to change and do things differently. Between these two extremes, the first and the 12th set of approaches, all the others are different approaches for enhancing creativity, many of them to challenge mental models. I think it’s absolutely critical, whatever you do, especially with the change in the environment, to ask yourself the question: are the bases on which I base my decisions still valid in today’s environment, or do they need a change?

Andrew Mitrak: First off, I love that you have all your books close by. For listeners who are listening and not watching, it’s great to see them, and I’ll link to all of them in the blog and the show notes that accompany this episode. It is amazing to see how prolific you are and how you’ve contributed to ideas throughout your career, including AI, which is something you’re actually way ahead of the curve on AI. I saw videos of you from more than a decade ago talking about the importance of AI. It’s great that as recently as last year, you’re publishing books on it. On this topic of mental models and bringing it to marketing: are there mental models you’ve seen that were commonly held by marketers over the years that eventually broke down and went away? Or are there things that you feel like marketers continuously misunderstand about their mental models that you’re frequently correcting? How would you sort of characterize common gaps in mental models within marketing?

Jerry Wind: Unfortunately, huge, there’s a huge gap in this area. Marketing really needs reimagining, reinventing. We talked before about the four Ps, that no CMO has responsibility for all the four Ps. Yet we continue teaching marketing with the four Ps. I think we have to go back in marketing to Peter Drucker, who’s probably the greatest business philosopher that we had, who defined business as being marketing and innovation. It’s marketing from a consumer point of view: understanding how consumers view products and services. If you’re a firm, you have to start by understanding the consumers. I think the problem of academic marketing—actually, two colleagues of mine, Dave Reibstein and George Day, and I just wrote two papers on the problem with academic marketing, that we have created two silos. One is the consumer behavior area. PhDs in marketing are either in the consumer behavior area or the quantitative area, and they left out marketing strategy: the why, why are we doing it? What is the reason, what is the problem we’re trying to address, that you should bring both consumer behavior and modeling to it? I think that’s part of the problem of academic marketing. A lot of the marketing publications are viewed as being totally irrelevant by a lot of practitioners, which is a shame because there’s a lot of advances in methodology and in theory that can be relevant. An example of an area that’s missing is the research that we’ve done on the future of advertising. We published this in a book, Beyond Advertising, which was the result of interviews and discussions with over 100 leading marketing and advertising experts asking them about how they view the future of marketing. The heart of the book was: we created a model called RAVES that suggests that every advertising or every marketing offering has to meet the RAVES criteria. What are the RAVES criteria? R is Relevant and Respectful: make sure that whatever you’re doing, the advertising message or the product is relevant and respectful of the consumer. A is Actionable: that you can do something about it. V is Valuable, and there are three dimensions of value: cognitive, emotional, and monetary. We discussed before that the entry of agentic AI to the picture leads to the need to equally balance between the emotional and the cognitive. E is Experiential: what is the experience? Part of the experience economy is that what people are really buying, they’re buying products not necessarily for the product itself, but for the experience that they’re sharing. S, which is very important, is a Sharable Story: that there is a story behind it. What is the story of the product or service you’re trying to sell, and is it attractive enough, engaging enough, that you want to share it with others? If you look at the RAVES criteria, still most of marketing today ignores many aspects of it.

Visionary Leadership vs. Interdisciplinary Teams

Andrew Mitrak: One of my flaws in mental models of marketing is: you’ve talked about all of your amazing collaborations, your collaborations with Paul Green, and you mentioned Dave Reibstein and George Day, both of whom I actually interviewed on this show in prior episodes as well. I, as a marketer, sometimes think of marketers as individuals. If I think of the best marketers of all time, I might think of Steve Jobs, or think of Walt Disney, or think of P.T. Barnum. You kind of think of individuals, but often I think the best marketers are small teams and organizations, and that it’s not about marketers as individual contributors, but as people who attract the best talent to collaborate with and find the right partners. I wonder if that rings true for you at all, the importance of collaboration with contributing to marketing or having a long career in marketing, whether it’s on the practitioner side or on the academia side. Because I probably overindex on myself wanting to be a good marketer and underrating teamwork and collaboration.

Jerry Wind: You really need both. You need the visionary leader who can make it happen. Steve Jobs was really a visionary leader and he made it happen. We need people like this who are changing the world. Think about all the people who came with—I don’t remember all the names—but think about the people who invented Uber, Airbnb, all the innovations that changed our lives. There were individuals behind them, the leaders who had the vision, the courage, and the persistence. The same is true in innovation when you look at the innovators of the COVID vaccines: there are two individuals who basically were persistent despite 20 years of rejections, laughter, and ridicule, but they persisted.

Andrew Mitrak: The week that we’re recording, that underlying technology just finished a stage-three melanoma vaccine using that mRNA, which is incredible. That’s something that’s chipping away at this thing that’s always seemed like the holy grail, and we’re seeing glimmers of being able to get that on the basis of that underlying technology that was locked out of the room for 20 years.

Jerry Wind: So you need the individuals, but at the same time, you need the teams. You need the teams to work, and many of them are either innovative as a team or definitely helping implement. Ideally, you have interdisciplinary teams. I cannot emphasize enough the importance of interdisciplinary teams and interdisciplinary education. There’s no problem that can be solved with a single discipline, and it’s really critical to understand other disciplines that have relevance to the challenge you’re dealing with, and also bring people from other disciplines. I’m a great believer in interdisciplinary education. I helped co-found Reichman University in Israel. At the time, it was the Interdisciplinary Center, and the original name actually suggested the core value of the university was an interdisciplinary university. We tried to focus on interdisciplinary studies and move away from the superficial dilettante-type approach, and try to move toward truly the Renaissance person who understands enough about multiple disciplines and can bring them together.

Rethinking How We Teach Marketing

Andrew Mitrak: This is touching on some of the future of marketing and marketing education. I’ve interviewed a number of CMOs and executives on this podcast, and I’ve interviewed a lot of legendary professors like yourself and others you mentioned. That theme does always strike, because the gaps in marketing education—I think that both sides recognize this and the need for closer collaboration, like you’ve exemplified in your career, between the academic world and the real business world. I know this topic is a big one. The future of marketing education and what needs to change. You probably have a lot of ideas, and this could be an hour-long interview just in itself on this topic. But if you were to pick one area or one key idea that you’d want to change in marketing education, what’s the one you’d most lean into, or what’s the most important thing that needs to be corrected?

Jerry Wind: Forget the traditional classroom lecture. It’s totally ineffective. The level of comprehension from lectures, depending on the studies that you look at, is somewhere around 20%. Why are you wasting the time of the students? What is much more effective is to move toward the approach of a hybrid or flipped classroom, which is really effective, especially with technology. There is no reason why we cannot teach on your smartphone or any other device the content that you’re trying to deliver in the lecture. The students can get the material, listening to it 24/7 in any language, because you can translate this at their convenience. If they’re a fast learner, they can do it really fast; if they’re a slow learner, they can go any number of times over it. Then bring them together to try to implement the idea, to test the idea, and provide them feedback in real time. With the flipped classroom, we can provide them feedback as they learn in real time; you can give them tests and they can learn it. I think that we have to rethink the whole educational approach and leverage technology in trying to do it, and be courageous in experimenting with this.

I’ll give one example for a very innovative university, which is Minerva University, which is ranked as the number one most innovative university in the world. They totally rethought the undergrad curriculum. They don’t have a fixed campus. For the first year, they teach them the integrated concept of critical thinking and creativity, and then they take them every six months to a different city around the world to implement the ideas in different contexts. That’s what we need in marketing education in general: we need more creative approaches and the courage to do it.

Twelve years ago, I started with QS, which is the world-leading university ranking organization, a program called Reimagine Education. We run an annual competition for the most innovative pedagogical approaches in higher education. We get about 1,500 entries every year from about 90 countries. We have an annual meeting and give tons of awards, but the reality is that most of these entries that we get are minor improvements. They’re not really rethinking the way we are educating and the way people learn. So we desperately need to rethink education.

Andrew Mitrak: I agree. When I’ve given guest lectures in classes, whether virtually or in person, I know everything doesn’t land. You maybe get five minutes or so, and then they might be on laptops; if it’s virtually, good luck, who knows what they’re doing and they’re not listening. Also, if I think about this podcast: one, I’m hoping to contribute to the body of work that somebody can listen to on demand by featuring people like you, where they can use their phone and listen to this. When I was thinking of this podcast, I had considered going back and getting an MBA for some time, but I thought: what if I just did a podcast and got to read things and read books and then interview experts like yourself? The way that I’m learning is through my phone, reading things directly or watching things directly or listening. Sometimes I’ll listen to an AI summary of a research paper—I’m not going to read all 100 pages of a paper published 30 years ago, but an AI summary I might listen to or read. You get all that and then you have an interview, and you want to show up and speak intelligently and know that you’ve done some research. I learn a lot that way, and I think it’s somewhat similar to a model that other marketers could do, where they’re pursuing the things they want to pursue and reading the sources the way they want to read it, but also having some in-person connection where you’re having a back-and-forth and a dialogue which holds you accountable. Something like that could work for a lot more marketers, so maybe more marketers should start more podcasts and do things like that.

Jerry Wind: I think it’s a great idea, and what you’ve done is you created your own personalized learning approach, which is great. That’s absolutely perfect, what you’re doing. Incidentally, when you’re lecturing, let me suggest an approach that I know works because I’ve done it many times. Give a short lecture, let’s say you have an hour: give a short lecture of 10 to 15 minutes, and then divide the group into small groups and give each group a challenge based on your lecture and tell them, “Come up with an experiment to implement this idea.” Let them work in small groups so everyone is engaged and involved, and then ask randomly a number of groups to present it to the entire group. Then have a general discussion, and ask them at the end to write down a memo to themselves or to someone at their firm in terms of what they learned from the session—a to-do list. This way, you get everyone’s involvement and engagement, as opposed to having a 50-minute lecture and then 10 minutes Q&A, and you have three people: one of them wants to make a statement and two ask dumb questions, and if you’re lucky you get one good question. This way, you engage everyone in the discussion, and I’ve done it with groups as large as 500 people.

Andrew Mitrak: That’s great. I’m going to do that next time, because the last time I did that 50-minute lecture and the 10 minutes, that’s exactly what happened, and I knew that people tuned out after 10 minutes in. The discipline of a 15-minute lecture and smaller groups is a better one, so that’s very actionable.

The Long Game: Building a Meaningful Marketing Career

Andrew Mitrak: As we wrap up: when you sent me your CV, or when I went to Wharton’s website and saw your full CV, it’s more than 100 pages long and you’ve won virtually every noteworthy award that somebody in your field could win in marketing. If you were to reflect on how to make a career in marketing feel meaningful and worthwhile, and making contributions that you’re proud of and contributing for a long time, what would your advice or reflections be for somebody who’s listening and is in a career in marketing?

Jerry Wind: It’s a great question. I would say: be curious. Follow your natural curiosity about things that you’re interested in, and have the courage to challenge the way they’re currently being done. Explore areas that you’re interested in, find out how they’re being done today, and try to challenge them: what if I had to challenge them? What if I did the reverse? What if I did something different? And then have the courage to experiment. There’s nothing like continuous experimentation.

Really important: keep up to date with what’s happening in the world. You have to monitor the changes in the world and address them; you cannot just live on the past. When AI came or started years ago, what are the implications? What are the implications of augmented reality, virtual reality, mixed reality? What are the implications of quantum computing? What are the implications to the deterioration of democracies around the world? How do we deal with them?

We talked before about orchestration. My current project is working on orchestration in many areas, not only in the role of the CMO. I just finished a paper on the orchestrated university: what would a university look like if they were to reimagine who they are, and added to the current focus on expertise in specific areas a whole set of programs that focus on orchestration across disciplines, across technologies, human-machine interaction, and the like? Also, you can apply it in different areas. You can apply it in the political area. I know it’s away from marketing, but think about marketing of political candidates: what if the two parties selected a candidate who, as opposed to appealing to the extreme, appealed to the four ignored segments: to the liberal Republicans, to the conservative Democrats, to the independents, and to the people who are not voting because they gave up on the system? If any one of these two parties had the courage to select a candidate that ignores their base and goes for those four, they will win the next election. Probably they don’t have the courage to do it.

Andrew Mitrak: Yes, for sure. I know i was asking a wrap-up question, and I don’t want to get into my own politics at all. But I like to say I directly agree with a lot of what you’re saying, and it makes a lot of sense. Whether it’s politics or whether it’s understanding organizational buying groups, there are things you can recognize 60 years ago, and there are things that to everybody seem obvious and known, and things about how education should be better. Politics moves slow, academia moves slow, business habits move slow, and yet technology moves so fast and ideas of a better vision are there. You continuously advocate, write intelligent books, and propose a better path forward, and yet still the change to do that is spiky at best or nonexistent in other areas. Staying optimistic and continuing to work and advocate for a better way anyway, whether or not that change happens and is adopted—it seems like a tough challenge that you haven’t given up on and you continue to work on it.

Jerry Wind: There’s really no option. You’re not going to give up. You’re part of the system; you want to improve the system. As long as I’m in marketing, you want to improve, you want to get other people to get excited about what they’re doing. Marketing is an amazing field. It focuses on understanding human beings, understanding consumers, and making their lives better. It’s creating value. This was the theme of the Beyond Advertising book: creating value through all customer touchpoints. The question is: how do we create value, and how do we create value for all stakeholders? It’s no longer just the shareholders; we’re really dealing with stakeholder society. How do we do it in an effective way? I believe marketing can do it if you’re open-minded, if you challenge the mental models, and if you’re willing to experiment with new approaches.

Andrew Mitrak: That’s a great place to wrap up, Jerry. I found this conversation so inspiring and I find researching your career very inspiring. I want to thank you for everything you contributed and thank you for your time talking with me. I feel like I learned a lot and I feel inspired to be a better marketer, so thank you so much for your time. I really enjoyed it.

Jerry Wind: Thank you, and thank you for starting this history of marketing podcast. I think it’s a great idea. There are great minds, and you definitely selected some great people that I admire. Looking forward to listening to some of the podcasts. All the best, and continue to learn and grow.

A History of Marketing / Episode 55

Kathleen Schaub spent thirty years as a marketing executive and CMO, and nine years running IDC’s CMO Advisory practice, where she counseled CMOs of the world’s most influential tech companies. Her book, Marketing in the (Great, Big, Messy) Real World, takes aim at a dream the industry has chased for over a century: marketing as a vending machine. Put a dollar in, get predictable revenue (or pipeline) out.

Kathleen argues it was never like that. She traces the pursuit of certainty back to Frederick Taylor, one of the first management consultants, who ran around steel mills with a stopwatch looking for “the one best way.”

Scientific management built the 20th century factory. But the stopwatch approach was never well suited to marketing, a function that sits where the company meets the messy real world.

That doesn’t mean marketers are off the hook for goals and measurement. Here’s my favorite excerpt from the conversation:

“Marketing influences, but it cannot control or predict.”

What you can hold marketing accountable for, she argues, is building the systems that give the company its best shot at turning intention into revenue.

We cover:

* How marketing inherited Frederick Taylor’s stopwatch, and why the funnel still runs on it

* Whether the marketers who promised certainty were fooling their bosses or fooling themselves

* The CMO interview problem: why the candidate who promises certainty gets hired… and is often gone before measurement catches up

* Judged numbers, attribution, and why the forecast that lands closest is the one you can’t back into the data

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng of Syracuse University for reviewing and editing transcripts for accuracy and clarity. And to Jon Miller, whom you may remember from episode 35 of this podcast, for introducing me to Kathleen.

The Book Schaub Wanted to Read but Couldn’t Find

Andrew Mitrak: I’m excited to speak about Marketing in the (Great, Big, Messy) Real World. So, I wanted to start by asking you what led you to write the book.

Kathleen Schaub: This is a topic that I’ve been thinking about for decades. I mean, I’ve been a lifelong marketer. I was a CMO and ran product marketing for a couple software companies. And then I was IDC’s CMO Advisory, and so I have a lot of background in this. But at the same time, I’ve always been interested in science and other things that are going on in the world. And very early in my career, I started learning about systems thinking, and I was easily applying it to marketing, but I noticed that very few people did. And so when I decided to leave IDC and I wanted to write a book, this was the topic that really jumped out at me because it explains so much—the whole complexity science and how to act in an uncertain world. It explains so much about the way that marketing works, and yet it is something that not a lot of people know about. And so I wrote that book because it was a book that I wanted to read and I couldn’t find it. So, that was what led me to believe that I could talk about this.

Andrew Mitrak: Running a CMO advisory sounds like a really fun, interesting job where you might learn things. And so, did some of that inspire the book? Or were conversations you were having with CMOs where they were planning things a certain way but it didn’t quite match up to reality—did some of that inspire what you wrote in this book and just sharing examples of that?

Kathleen Schaub: Oh, all the time. And the book is full of stories, both from my own personal experience as well as experiences that I got from clients. You know, I did a lot of consulting as a part of that book as well—or, excuse me, as part of the CMO advisory service, where we were transitioning from something that wasn’t working to something that worked better. And a lot of these themes always served as a sort of background for us. So, people’s stories are just a fantastic wealth of demonstration that, yes, the world is indeed messy.

Andrew Mitrak: And so IDC, for listeners who might not be familiar, is an analytics firm, an analyst firm, and sort of a market research firm that provides data.

Kathleen Schaub: Yes, yes. International Data Corporation. So, yes. And it was serving the tech industry, so we had huge, huge companies all the way down to startups as our clients. So the fact that I had all of this data that was available to me, and I had the opportunity to go out and get more data to answer specific questions, that was just like a treasure trove. But I always fed it in, and I think most analysts—most good analysts—do, is you feed it into this kind of humble view that you really don’t know everything, and tomorrow something’s going to pop up that’s going to change everything, and you just don’t know what it’s going to be.

Andrew Mitrak: That’s right. Yeah. And this gets to the heart of what a lot of the book is about, that the book is about this transition from—we use the term deterministic, seeing marketing as deterministic: you put dollars in, and you get revenue out or pipeline out. And the real world is something more complex than that. So before we talk about the complexities, and the book does a great job of breaking down how to think about these complexities, let’s talk about that deterministic era of why it became viewed as deterministic. So why do you think initially, as marketing was constructed, it was set up in this deterministic way? What was sort of the seeds that led to marketing as a function growing that way?

How Marketing Inherited Frederick Taylor’s Scientific Management

Kathleen Schaub: Okay, well, I’m going to go back a little ways, then, if you don’t mind. So back to the early 20th century with Frederick Winslow Taylor, who is considered to be the first management consultant. And he was brilliant. And if you think about what was happening around the late 1800s, early 1900s, that was the peak of the Industrial Revolution, and so many machines and everything were coming online, but work was not keeping up with the machines. So work was still being done in sort of a cottage industry way. And Taylor had this brilliant insight: what if we could treat work like it was a machine? And so for the first time—we’re talking about data—for the first time, things were being measured. And he used to run around to steel mills and things with a ruler and a stopwatch, and he developed what he eventually called the “one best way.” Or that was what he was looking for. And the efficiency absolutely exploded, and people all over the place—not just all over industry, it was just hugely, widely adopted, but also in our schools, the way our schools are with standardized testing and grade levels and all that kind of stuff, that was all scientific management. So Taylor and his—over the next few decades, there were people that became his followers. The reason why we could ramp up for World War II was because of Taylor. Hugely, hugely influential and had a lot to do with why the United States, but also other parts of the world, became successful during the 20th century. So marketing was part of that. And as companies, who were industrial powerhouses, wanted to become bigger and bigger brands, they needed to industrialize, if you will, or apply scientific management to their outreach efforts, to their go-to-market efforts as well. And so the—actually, what is now the American Marketing Association was founded for the purposes of bringing scientific management to the marketing world. So the idea of measurement and all that kind of thing in marketing became prevalent in the first part of the 20th century.

And that lasted for a long time, even though in the middle of the 20th century, science and math—so kind of maybe more tucked away into the more academic world—was starting to see that there were places where this didn’t really work. The closer that you got, or the farther that you went away from the very routine kinds of, like, assembly line types of factories, the more difficult it was to find this “one best way.” And finally in the ‘60s and ‘70s, there started to be—really with the advent of computers—we started to see the math and the science behind why things continued to fail. And yet, business in this case was really lagging.

The idea of complexity has started, maybe starting in around the ‘90s, started to be understood in things like Agile software development, where we get Agile, and all that kind of stuff, and even in manufacturing, where we had Lean manufacturing and things like that. But marketing just really didn’t keep up. I’m not throwing the marketers under the bus; this is a business kind of a focus that is just still working, for the most part, in that 20th-century way. We don’t want to throw away everything that—I mean, there was so much good about scientific management, but it just does not apply in all situations.

Andrew Mitrak: Yeah, that makes a lot of sense. So I’m not super familiar with Taylor. I looked him up a little bit prior to this episode. You don’t see a lot of his work on marketing specifically. But marketing at the time he was working wasn’t really called a job function. People did the work that we now consider marketing, like a lot of those activities were there, but marketing at this time in the 1910s, early ‘20s, there wasn’t usually like a marketing department per se at most companies. But then the AMA—sorry, American Marketing Association, I think—is that the ‘30s or something that that kind of gets started?

Kathleen Schaub: Around the ‘30s. And sales, too. Sales really started to really professionalize. And IBM, I think, was one of the very first ones to professionalize their sales force. So yeah, around the ‘30s.

Andrew Mitrak: Yeah. And I think a lot of Taylor’s work, you kind of mentioned it, within marketing, there’s sort of the supply side, the demand side—or the production side, then the consumption side. And you could measure a lot of like, how can we produce a little faster? How can we have these assembly lines structured in such a way? But then forecasting consumer demand is just a little trickier to apply those methods to. And that’s, I think, that’s sort of where a lot of the tension was, is on sort of the, how do you influence people, and how do you really gauge stuff? And is it as simple as put stuff into radio marketing or advertising or television, and then suddenly sales happen as a result? It’s a little more complicated than that.

Marketing Sits at the Edge of the Company

Kathleen Schaub: Oh yeah, it’s a lot more complicated than that. Because marketing and sales and customer experience, if you will, or customer service, all sit at the edge of the company, which is where the company meets the rest of the world. So, unlike other functions that started to get automated then during the latter part of the 20th century, where we’re talking about like finance and HR—those are, for the most part, although they do have some extensions into the outside world, those, for the most part, are internal functions. So marketing and sales, they meet the complex world in a daily fashion. So companies have always known that marketing and, to a certain extent, sales, too, had a lot of uncertainty around it. But there was this idea, I think, in a lot of companies that, “Ah, if we only had enough data, if we only had the right technology, then we could control it, we could predict it.” And so when marketing automation started producing all of this data, there was an expectation, I think, both in marketers and in their C-suite partners, that, “Oh, we’re going to be able to hammer this down now, aren’t we?”

Andrew Mitrak: Yeah.

Kathleen Schaub: But all it did was really show us, “Nope, it’s even more uncertain and more complex than we thought.”

Andrew Mitrak: Do you have like a specific, really concrete example that you point to where sort of conventional marketing thinking or viewing marketing as deterministic really clashes with the real world?

Kathleen Schaub: One of the most prevalent is in the way that the pipeline is measured. So again, going back to the fact that we have all this marketing automation, so there’s been a creation of the marketing pipeline, marketing sales pipeline, as being like a factory, right? So you’re going to manufacture demand that is going to be fulfilled. And we have made it into stages, and then there’s handoffs, and then you’re using very hard and fast rules like attribution modeling as to first touch, last touch, multi-touch, whatever, to try—and by the way, there is some value in the attribution data, but not the way that it’s being used in most companies. And so that factory orientation of the way the pipeline is managed, that has been instrumented by marketing automation, is failing. I mean, it’s been failing ever since, and people cannot understand. People are getting fired because of it, overcommitting, overexpectations, when the reality is that each one of those is always a probability. And they’re not—they’re not thinking about the way that the market really works and being focused on maybe too much demand, as opposed to building up the type of what I call market system health and agility that is needed in order to be able to act in that way. You can still use the data, by all means, but that would be a really prevalent place where that deterministic area fails.

Andrew Mitrak: Yeah, that’s right. I’ve had two conversations related just on this topic. Jon Miller, who actually is the person who recommended I speak with you.

Kathleen Schaub: Love Jon Miller, yeah.

Andrew Mitrak: He’s great, founder of Marketo and speaks a lot about the downsides of MQLs and the traditional demand funnel. And Kerry Cunningham, who was at SiriusDecisions, which was the company that basically invented the MQL and the demand funnel and all that. And as a B2B marketer, this is a place where I spend a lot of my time, and it’s just one of those things where, gosh, how do you unstick this situation? Because you have all of the things you highlight, and then on attribution, it’s sort of this weird all-or-nothing or multi-touch, hybrid, kind of fractional attribution-type thing. It’s like, because if you go to sales saying, “Hey, we, marketing, delivered this account,” and it’s like, “No, you didn’t, sure they downloaded some form, but I’ve known that person for years, and that’s like a personal relationship I have.” And they’ll laugh you out of the room. But then also you have to claim something, though. You can’t just say you’re not doing anything, because that’s not good either. I align with all the highlights of the flaws with the funnel. I haven’t seen a perfect solution that fixes them, though, and I haven’t been fully persuaded by, like, what is the best method to fix that.

Kathleen Schaub: I’m not sure that there is a best method. And the way that I present the book is, what I did was go out to the messy world, to other industries, as well as to the companies I know that are working at least at the edge of what we’re doing, and try to translate those things into what might work for marketing. So software development, healthcare, first responders, military places that are going—and there’s a bunch of books out that are about uncertainty and management in general, for business in general. So I tried to get a lot of those as well, and then translate those into marketing. But I don’t—I don’t say this is a recipe. I don’t think we’re going to get to a recipe where like, “Hey, do these five things and then you will be happy.” I think what I do is try to set up directional perspectives. If you start looking at the world in a way that’s compatible with its natural complexity, then you’re going to start seeing things differently, and every day when you make your dozens of decisions, you’re going to steer slightly towards that. You’re going to see opportunities or places that don’t work. And over time, it’s going to change. And I do give some specific—it’s not like everything is like, “Whoo just think about things in a different way.” But it’s that change in intent and the change in perspective that is going to five years from now, make a huge, huge difference. And the way that complexity works, if you start now, that’s one of the cool things about complex systems—this comes from the science—is part of their baseline of what they are is sensitive to initial founding conditions. So, that’s the whole idea of the butterfly effect. Right?

Were Marketers Unaware, or Just Playing Along?

Andrew Mitrak: If the old worldview was that marketing was deterministic and that was kind of the old mindset and framework, and in reality, the world is messy, volatile, and uncertain, it kind of implies that either marketers for a very long time were just unaware that marketing didn’t match reality, or that they were aware and lying or performing, and kind of pretending that it was. And I guess like which of the two do you think it is, or is there a third? Were marketers just somehow knowing, “Oh, we know that the world’s uncertain, but we have to behave in this deterministic way just because of that’s the way it is, and that’s how marketing’s been getting along for decades”? Or do you feel like this is a fundamentally undiscovered worldview that’s brand new, that they had never arrived at previously? How do you sort of think about that?

Kathleen Schaub: Well, I think I have to go to the reaction that I get from people as I get reactions to the book, as well as before, because I started a lot of these ideas before, and even my own experience. Every once in a while, you just hit something and you go, “Oh my gosh, that really explains why things are the way they are.” So, the reaction that I often get is one of recognition, like, “Oh my gosh, this is my world.” And so, I do think that pretty much everybody in the world knows that the world is complex. I do occasionally find people who still think that maybe somewhere out there there are rules that we just don’t know yet. And there are definitely lots of things—I mean, science is not going to stop, you know. We’re going to learn something in the next few years that’s going to blow us away again.

And by the way, I do not think this is an issue of “marketers are so wonderful they understand the world, and CEOs are stupid and they don’t understand the world.” Because I get the same when I talk to CEOs, COOs, CFOs, they’re kind of like, “How come no one told us this before?” It’s that kind of a discovery thing for—although there’s a fair number of people, particularly if they’ve been in Agile or systems thinking or something, that are already at the stage where they’re saying, “Well, duh of course the world is this way.” So, no, I don’t think anybody—it’s not crummy CMOs or liars or anything like that. I think it’s just the way of discovery. We’re just keep learning new things. And I think with all of the science and stuff that has been—and AI is going to help us, because AI is actually built on computers that work more like the real world than the old CPU and RAM deterministic kinds of things. So, I think AI may be a forcing factor to helping people understand the way systems and probabilities and things work.

No Marketing Plan Survives Contact With the Customer

Andrew Mitrak: One of the frameworks you introduce in the book is VUCA. Can you introduce VUCA for listeners, where you came across it, and kind of why you adopted the VUCA framework to sort of describe how marketing actually behaves?

Kathleen Schaub: Yeah, so I love the term VUCA. It comes out of the military, and I was first introduced to it by Stanley McChrystal, General Stanley McChrystal’s book, Team of Teams. And I think that’s maybe—it was, I don’t know, sometime in the mid-2000s. Anyway, great book. I really understand, for those people who love history and military and stuff, but it also explains how McChrystal took a failing adventure, if you will, a military adventure in Iraq, and how he reshaped it to make it more reactive. And the term VUCA, which is an acronym, stands for volatile, uncertain, complex, and ambiguous, came out of the US Army War College. And during the ‘90s, they were finding that the idea of this sort of mechanized tank-heavy, everybody marching in formation-type thing, never didn’t work. And so based on some of the business work actually that was done in the ‘80s, they came up with this term VUCA. It better described what reality was finding. I mean, military has always been complex. You know, it’s the famous German—I can’t remember what his name is—but anyway, he said, “No plan survives first contact with the enemy.” And so this idea that you need to be very agile and you need to be adaptive in order to be able to manage in a military situation, which is the same as what you have to be when you’re meeting customers—hopefully, they’re not enemies—but that’s where the—where VUCA came from. And Team of Teams is just an excellent example of conversion from a very factory-oriented, deterministic, heavy, planned—not that you don’t do planning, you still do planning—but handling of just like the metrics in a different way. So, that’s where that term came from, and it’s very evocative.

Andrew Mitrak: Yeah, for sure. I looked it up real quick. I would not have known this. “No plan survives first contact with the enemy” originated from the 19th-century Prussian military strategist, Helmuth von Moltke. So, I’m sure I’m not pronouncing that right.

Kathleen Schaub: Thank you. I did have that in my book, but I don’t always remember names.

Andrew Mitrak: Yes, I know, especially 19th-century Prussian military leaders.

How the World Gets Complex

Andrew Mitrak: So, it came from military, and then how does it apply to marketing? Why do you feel like marketing is volatile, uncertain, complex, ambiguous? What are kind of the mechanisms where that translates from the military or other areas into marketing?

Kathleen Schaub: Well, it might be useful to just talk a little bit about how the world gets complex, or how any natural system economies, ecosystems, beehives, whatever you want to talk about, neurons, is that they get that way because of interactions. And the interactions sometimes billions of interactions if you’re talking about an economy, create feedback loops. And those feedback loops then affect other things. And so, the rules and things that people make decisions on are not necessarily all that complex. But out of the simplicity of making some basic decisions comes this huge amount of complexity, and markets are semi-predictable within the confines of probability and time. They’re not—they’re not random in that sense, but they are more complex than anyone can, any brains or any group of brains can figure out. So volatility means how much sort of up and down it is, how extreme it is. Uncertainty, I think we know what that is. Complexity is what I was just talking about, about the way that complex systems work. And then ambiguous we communicate through language, whether it’s body language or spoken language, and there’s a huge amount of ambiguity in every kind of communication. So we all are interpreting things differently than perhaps they might have been intended.

Andrew Mitrak: I totally am persuaded by marketing being like VUCA. Like all those things, I think, describe both the real world, the markets, and how we have to adapt and understand it. However, I imagine that many of the CMOs I worked under, or CMOs I’ve seen outside, they need to be very confident, or they project confidence. And I also imagine that the system probably rewards confidence. And if, like by an example, if I’m a—if I’m a candidate and I’m interviewing for a CMO job, and I say in the—they’re interviewing me and I say, “Oh yeah, marketing, it’s—it’s volatile, it’s uncertain, it’s complex, and it’s ambiguous, and it’s—it’s hard, but I’m going to manage through it.” But then the next candidate comes in and says, “Oh, I’m going to make marketing a well-oiled machine. We’re going to hit targets predictably.” And that, I assume, the CEO who’s interviewing is going to like that second candidate. Maybe they get the job, and then maybe two years down the line, they get their next CMO job at some other company before they have to actually deliver on everything. And I kind of wonder if that pattern happens a lot. Do you see the system sort of rewarding the leaders who are overconfident, and are less likely to kind of acknowledge sort of the VUCA dynamics they’re really dealing with?

The CMO Who Promises a Predictable Revenue Machine

Kathleen Schaub: Well, I think it’s on a spectrum with any kind of worldview, if you will. And again, this is not—this is not my idea. I’m translating a more general movement, if you will, towards the understanding and acceptance of systems and complexity. There are people who, for whom this is like, “I never heard of this, this is ridiculous.” But I don’t think that’s—that’s prevalent. I think that it’s more kind of in between, in a middle stage where there is some general kind of knowledge or awareness. I think that if you have a CEO who’s completely rejecting it, then yes, the scenario that you described is probably true. I would never recommend for a CMO to walk in and say, “Hey, things are complex, so I can’t be accountable for what’s going on,” you know. You can’t make CMOs accountable for an outcome that they cannot control. Marketing influences, but it cannot control and predict. But you can hold marketing accountable for creating systems that give the company as many tools as they can to get their intention realized in the form of revenue. And I think if I was a CMO and I met the CEO who was completely in the deterministic camp, I’d probably walk away because, to your point, they’re going to—they’re going to be out on their, on their ear here in a year or two because they’re not going to be able to deliver that.

I would be looking for someone who is willing to work with me on how to create an agile system that is one that can provide the company with as many tools as they can, use that data to give it as much of a chance as you possibly can, with the knowledge that it’s all a probability. It’s—it’s not necessarily, it could be an easy conversation depending on the CEO, it could be a challenging one. But I think the natural next question, if you do start to talk about the fact that it’s—it’s a changing world and we have to be adaptive, the next question would be, “Well, how are you going to do that?” And that’s a question that I think, if you’re going to have the conversation about adaptability and complexity, you should at least have some idea about how you would go about managing that.

Andrew Mitrak: Yeah, for sure. I think that’s a natural next place to go to is like, some of the if a marketing department fully adopts the worldview in this book and kind of adopts like, okay, the world’s uncertain, but there are things we can do to influence it, sort of what—what should the goals of a marketing department be? Like, how do goals change or target setting or things like that change, or what—how does what they’re being held accountable to change? And then what sort of practices also change with that?

Transitioning to Agile Planning and Measurement

Kathleen Schaub: Well, I often recommend that you start with the measurement piece, because—well, there are really two. One is sort of more intentional and planning-oriented, and I give some specifics about how to, like, change your planning so that you are doing this giant, monolithic “Here’s our plan, we are going to stick to it no matter what’s happening in the world,” move from that monolithic kind of a plan into a pace-layered one, where you’re changing the flexibility as you get closer and closer to the market. Where certain things may last for five years, but then you might change other things every quarter. So you can start to change your practices so that the adaptation to the market becomes—becomes easier. And then, you also need to then start looking at your—your measurement in a less hard-coded way. And no change, and anybody who’s gone through—Andrew, you’ve probably gone through some organizational changes and some transformations and stuff, and I think we all have once you have at least a reasonable number of years of experience.

It never works to just like one day try to, like, cut over or anything. You have to do it at least somewhat incrementally, and that doesn’t mean the whole organization changes at the same time incrementally. You have pilots and you have work that you do in a—in a workshop type of a situation. You create enablers. And again, I talk about some of this in my book, including the last chapter, which is all about leveraging complexity. There are some cool things in leverage in complexity that allow change to happen in even a better way and a more sticky way. But using that measurements, and there’s a bunch of different ways that you can take measurements and start looking for things like, “We’re going to look for trends. We’re going to look for patterns. We’re going to look for—” like in the case of causal AI, “We’re going to look for the persistent, what is likely to persist in what we’re doing as a success factor, even though things are changing.” And so, you’re going to—you’re going to sort of do the bottom and the top, and work towards it. But at the same time, you may still have to keep the the old tires on the road while you’re—while you’re working simultaneously. There’s some overhead to this, there’s no question. It’s not a real efficient way to work. But at the same time, the least efficient way to work is to just keep banging your head against a wall that never gets you there.

Does Data-Driven Marketing Favor Short-termism?

Andrew Mitrak: You mentioned that it starts with—with measurement, and let’s talk about like the time frame for measurement, because on the one hand, I think marketing is more of like a long-term function. The activities I’m doing in the first half of the year turn into pipeline in the second half of the year, for instance, or maybe it can even go from one year to the next and so on. But then also you want to be adaptable, too, right? And having a shorter time frame target is—is useful for being adaptable and kind of adding—adding new targets in. And so how do you kind of balance—gosh, this is—you have these mindsets in your book, the—the navigator mindset and the investor mindset, and I feel like the investor mindset is a little more long-term oriented and might be helpful to have longer-term targets, and the—the navigator mindset’s probably a little more towards like short-term, like incremental targets. Gosh, how do you—how do you think about balancing those things within marketing organizations?

Kathleen Schaub: I’m going to fall back a little bit on some of the guidance that we see in—in data. So when you see very large—there’s been a few very large scale looks at what—and and even on the stuff that we were doing with at IDC when I was there, we did a lot of work on measurement, and in general, I think it’s probably a good just stake in the ground to start with like a 50/50. And that might be a little different from B2C, from B2B, and say invest half your budget in things that take a long time to go about it and half your budget for the incremental. Did you want to say something?

Andrew Mitrak: Oh, I was going to say there’s a long paper on this by, I think it’s Les Binet and Peter Field.

Kathleen Schaub: Yes.

Andrew Mitrak: Called The Long and the Short of It. And that’s what they—this is basically their thesis, like the—something like 60% in brand, 40% in performance, I kind of—or maybe, I forget which one’s which, but something like that, of that balance view, which seems a little bit maybe convenient, or maybe kind of a rule of thumb versus like a hard science. I’m not sure exactly where that landed, but—but that’s like—that was kind of the idea, is that sort of like, in line with sort of what you’re—sort of speaking to?

Kathleen Schaub: Yeah, I would say at the state of measurement today, that’s probably a good place to start thinking about it, but then you may want to vary it in accordance with what your specific business orientation is. In other words, if you’re a small company who is looking to be sold in five years, you might have a different goal than if you’re a mega brand that dominates the industry. You know, you’re going to measure things differently and you’re going to divide your budget up a little bit differently.

But there has been a move in later, in most recent years, towards an over-dependence on performance marketing, and you know, into that short-term kind of thing, and let me—I think people will respond, or you know, you know if you have a 401(k) or whatever the equivalent is in your country or whatever that—that if you put money in when you’re 30, it’s better than if for your retirement than if you put money in when you’re 60. Right? That you’re going to—that it compounds over time, and I explain in my book how that applies to marketing.

But if we go up to the adaptive piece of it, there’s—it’s a little bit more, a little bit more nuanced. So, it doesn’t mean adapting doesn’t mean just stay in your lane where you are right now and just keep shifting lanes, although to a certain extent it is. You have to build a platform, if you will, a way of working. Your organizational structure, the data that you have, needs to be primed for your ability to adapt. So, it’s not exactly a short term and a long term, but I think you’re accurate in the sense that investment, a lot of it has to do with making an investment and then doing things to make sure that managing so that it comes to fruition, and then that ability to act more in if not real time then certainly in close time. But they both require structure in order to be able to make those successful.

Andrew Mitrak: That’s right. I feel like a trend I’ve observed is that as measurement became like, “Oh, let’s be a data-driven marketing organization,” very often, I feel like that is biased a little more towards short-termism. Do you sort of—

Kathleen Schaub: 100%, I don’t think I could say it any better. So, yes. No, I agree with you, and I think it’s a pretty natural human thing that you—you want it to be predictable and you want it to be controlled.

Andrew Mitrak: Yeah, you want it to be predictable, you want it to be controlled, and you don’t want your testing to last forever, you know? And it’s like, okay, if you set up shorter-term testing, it’ll lead you to shorter-term activities. If you could do a multi-year brand study, sure, but that means like it’s going to—you’re going to have to do multi-year investments and all all of that as well, and in where it’s just such a quarterly or annual type of business rhythm, that it’s kind of hard to break out of that.

Smoke Alarms and the House That’s Already Burning

Kathleen Schaub: That is—that is the reality of the way that business is run today, and in some ways it’s helpful, and in other ways it’s destructive. I’m not going to deny that there is a little bit of faith in this. But I have tried to look at, again, the math and the science, and whatever I could find in terms of grounded studies, that—that the faith is not something that is just being made up, that there’s a reason behind this. We may or may not like the fact that that is true. You know, it may not—like I had one head of sales tell me one time that to tell him that the reason why he was having sales problems was because he had not made an investment several years ago in the reputation, you know, making sure that his customers had, that the company had a good reputation with the customers. And he said, “You know, Kathleen, that’s just like you’re telling somebody whose house is burning that, you know, they should have installed smoke alarms.” And it’s kind of like, “Well, yeah, that is kind of true. You still have to deal with the fact that, oh, the house is on fire.” You know, “You don’t have the revenue that you need in order to be able to make the—” you still have to deal with that, but it’s not going to prevent the fire. So it’s like, what is the old, you know, the best time to have planted a tree was 20 years ago, the next best time is today. You know, you end up with what you end up with, and there is a little bit of faith in it.

Andrew Mitrak: You could probably tell I’m very bought into the worldview of the book, that things are unpredictable, the dangers of short-termism, the flaws with attribution, and the flaws with traditional pipeline. If I was to kind of give the steel man defense of the other, or something that I have observed, is that when annual targets are set or quarterly targets are set for, say, a pipeline number, at every organization, even though, like, I don’t always trust the attribution model, I don’t always trust the data, I don’t fully trust like the demand funnel, somehow consistently the numbers always get pretty close. That you’re able to almost like, very often hit the number, and I suspect that there’s a lot of sort of individual actors, like kind of like sort of getting numbers sort of fudged at a certain—not fudging, but like, kind of getting things aligned in a certain way that map to the number, and and hitting it. But like, it is like there’s some alchemy to it that seems like, “Wow, even though this is really complex, even there despite all these flaws, even though it’s like a big organization, or even at a small organization, I’ve seen like usually like marketing can get kind of close to that pipeline number.” Which either leads me to think that something’s working a bit, or maybe that’s even more of a reason to distrust it because because it’s almost eerie how often we’re able to get to that number as well. And I’m wondering if you’ve ever kind of observed that as like a rebuttal that people like, “Oh yeah, I know it’s flawed, but it somehow kind of works.” And do you have any reactions to that?

Kathleen Schaub: Yeah, it actually does, and I think you—you kind of alluded to that, as you have a lot of individual actors. I mean, we don’t—we’re not like pulling the numbers out of thin air. And there are a lot of people, and in particular, I think I use an example of this with one job that I had where I was—my job was to sit down with the sales people and try to say, “Like, well, what can marketing do to make them more effective?” And sort of be a liaison between between sales and marketing. And sitting down and listening to sales managers put their projection together was just hysterical because of the, you know, it was all—each one of those sales managers had deep, individual knowledge about what was going on in their sales force, and who the people were, and who the customers were, so this was in a B2B company. And they always came up with a number which was very, very close. They call it a judged number. But they could never back that into the data. The CRM system and the judged number didn’t really ever really jibe. The same thing, if you have this very chopped-up, you know, “Oh, MQL to SQL and opportunity,” those kinds of things, at every level, you get somewhat of a disconnect, but people are not stupid. You know, your sales people are not stupid, your marketing people are not stupid, your product people are not stupid. They all have private information as well as public information, and collectively, the group can, to your point, get pretty close, unless you have a very, very volatile situation. You know, if you have a company where one sale, you know, makes the the quarter, and that moves to the next quarter, or it falls apart for whatever reason, or, you know, you have a supply chain issue that prevents you from delivering or whatever, those kinds of volatility things you can’t control. But no, you’re absolutely right. It sometimes works.

AI: Bringing Clarity or Pouring Gasoline?

Andrew Mitrak: It sometimes works. Works kind of in quotes. So you mentioned AI earlier, and I’m wondering kind of looking forward, how does AI fit in? Does it bring opportunities for clarity and making sense of the VUCA dynamics, or does it just pour gasoline on the fire of the VUCA dynamics where everything’s even more volatile and and even more ambiguous as a result?

Kathleen Schaub: Well, I think in the short term, probably more the latter, because right now, what AI is being used for is just to produce more stuff. And it’s being kind of, you know, like, “Oh, now I can do four emails instead of one,” or you know, it’s just—and it’s being done, I think, where we’re we’re using it to create the same old stuff faster and cheaper. So another thing that AI is going to add to is that as we start to introduce agents into the formula, and agents are going to be making decisions for buying or searching or whatever, with different criteria than humans. So I think there is going to be a lot of confusion as those get introduced into the whole commerce value chain. But I think in time, there are some really very, very interesting things that AI is going to be able to do. For one thing, AI can take these patterns of data and different kinds of data, and look at them in new ways. So we’re going to be able to see some trends, like we’ve been mentioning causal AI as a as a way to do this. I think we’re going to get some really interesting information. You’re going to be allowed to maybe go back in time, take data sets that are much bigger in time. So I think there’s going to be some cool things. I think that’s more of interest than in than some of the “create a new set of content.”

Andrew Mitrak: Yeah, for sure. I think coming full circle, too, I wonder if there’ll be some type of Taylorism-style rethinking of how businesses operate in the era of AI. I feel like we’re kind of entering that era right now. I think the tech is there, and businesses need to adopt to it. So, I think like almost having that Taylorism-style mindset of like re-measuring things, re-optimizing things, now that we have these new tools for us is kind of a an exciting era that we’re we’re entering into.

Kathleen Schaub: Yeah. And I do not want to say that we need to throw everything that Taylorism did or it’s the things that came after it. There are things like for example, you can—one of the things that makes you more agile is if you can break things into smaller components that can be reassembled like Legos. That came out of the Taylorist. So, it’s not—it’s not an either/or. I think the—the improv idea of “yes, and” isreally a better way than an either/or view.

Andrew Mitrak: That’s right. Yeah. “Yes, and.” Aside from buying your book, Marketing in the (Great Big Messy) Real World, where would you suggest that your listeners find you online?

Kathleen Schaub: Well, I do have a website, so kathleenschaub.com. But I’m also really active on LinkedIn. So, happy to link in with anybody and continue the conversation there.

Andrew Mitrak: That’s great. Kathleen, thanks so much for joining me. This is a really fun conversation.

Kathleen Schaub: Andrew, thank you so much for having me, and yeah, I look forward to staying connected and seeing what else is on the docket for you.

A History of Marketing / Episode 54

Few people have challenged how I think about marketing more than Professor Byron Sharp. His book, How Brands Grow, might be the most influential marketing book of the contemporary era. It told a generation of marketers that much of what they’d been taught was wrong, and it had the data to back it up.

Sharp is the director of the Ehrenberg-Bass Institute, the world’s largest center for marketing science research. You may remember my conversation with Professor Rachel Kennedy that covered the institute’s history and the two researchers it’s named for: Andrew Ehrenberg, who discovered law-like patterns in buying behavior, and Frank Bass, who believed marketing could be studied like any other part of the real world.

This episode picks up that story, straight from the man who carried their work to a global audience. It’s a conversation that spares no sacred cows: Kotler’s STP, brand purpose, behavioral science, and personalized advertising all take hits.

We cover:

* How a young academic in Australia took on giants like Philip Kotler, and why marketing had the data to become a science long before it acted like one

* The difference between looking scientific and being scientific

* A round of overrated / underrated: Sharp’s hot takes on positioning, brand purpose, behavioral science, and personalized advertising

* Whether AI opens new questions for marketing’s most famous empiricist

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Nick Asbury, who you may remember from episode 53 of this podcast, for introducing me to Byron.

Andrew Mitrak: Byron Sharp, you’ve been at the top of my list of people to interview since before I started this podcast. So I’m looking forward to a conversation with you about marketing history and “the arrival of science.”

Byron Sharp: (Laughs) That’s not true because you interviewed Philip Kotler first.

Andrew Mitrak: Yes, well, I’ve interviewed a lot of people. I feel like I’ve had a chance to do my homework prior to interviewing you. Of course, I read and re-read How Brands Grow and then, for the first time, I went through How Brands Grow: Part 2. So that was excellent. So I feel like I’ve done my homework prior to speaking with you, between that and the other interviews I’ve done.

Byron Sharp: Excellent, excellent. At the end of your Philip Kotler podcast, he said, you know, “an inquiring mind” and “read a great deal of things,” and he was excited for the next revolution in marketing. He’d like to be part of it. I don’t know, when was that recorded? When did you record that with him?

Andrew Mitrak: I recorded that in October of 2024.

Byron Sharp: Okay, well, gosh, there has been a revolution. He’s obviously missed out on it.

“Have you looked?”: The Shift to Marketing Science

Andrew Mitrak: Let’s talk about that. So let’s talk back to sort of the Kotlerian era of marketing, and when you first encountered marketing, when did you realize that the prevailing marketing wisdom wasn’t sufficiently evidence-based?

Byron Sharp: You know, when I did my master’s by research, I read a lot of the American literature and things, and it was researchy. You know, it’s researchy. But it’s not terribly—it’s not the sort of science that we learn when we’re at high school. There was sort of, I don’t know, it’s weird. It’s a weird thing in the—I mean, Andrew Ehrenberg wrote this amazing article, published it in Nature, right? The world’s most famous scientific journal, called “Even the Social Sciences Have Laws.” And in there, he said that there was this sort of belief that you could not have scientific laws that concern human beings or crazy things like advertising and stuff. And it’s a great line from Andrew. I don’t know if it was ever published, but when people said there can be no laws in marketing, he would say, “Have you looked?” You know, if you don’t look, you’re not going to find. Because that’s always been—I mean, science is actually quite a new thing, and it’s only a few hundred years old. And it was just people looking systematically, taking systematic measurements of things. It’s not actually rocket science.

In the podcast with Philip Kotler, he talked about how—what was it?—in his time, finance was seen as science and marketing wasn’t. But even he is not talking about science; he’s talking about engineering. He’s talking about using numbers and spreadsheets and things like this, which is just not science. Science is repeating studies over and over and looking for repeatable patterns and then building—then when you find those, you can make predictions, and you can start to understand how the world’s working. And you can start to—you realize that some explanations work, fit with those laws, and some don’t. And you find weird things because the world is weird. There is only one science, right? People often say, “Can marketing be a science?” I’m like, “No, there’s only one science, it’s called science.” Science studies the real world. It can study marketing. It can study turtles. It can study whatever is in the real world.

But it follows a method that is designed to establish laws that are so reliable that we don’t, you know, I always joke, no engineer asks, “So what’s Brazilian gravity like?” We know. And that repeatability—so a lot of academia was always about new things, new words, or just coming up with new titles. “Social marketing” we’ll call it, as if people in charities didn’t realize that beforehand. I don’t, yeah, or buzzwords and things.

Applying Scientific Method to Marketing

Andrew Mitrak: So was there ever a moment where you were in some marketing lecture or reading a marketing book and just realizing, “There is no science here”? Like, what was the spark or the initial moment where you felt like, “Oh, this is not sufficiently science-based and therefore I could actually be part of the movement to make it more science-based”?

Byron Sharp: I don’t know. I think because I read philosophy of science, and I read writing by people like Frank Bass and Andrew Ehrenberg, and Andrew was actually doing it. And so I was very keen on replication, and I started a journal. I was advised, “Do a journal, it’ll be really widely cited.” It wasn’t. But I invited Andrew Ehrenberg onto the advisory board and then started working with him, and then sort of the rest is history, I suppose. But I came from the Phil Kotler school. I always liked how Phil Kotler was quite down to earth. He wasn’t like the Cannes crowd that I’ve just been with, you know. He was quite skeptical of the idea that advertising could manipulate people. There is a famous line about, you know, “People don’t have garages full of cars they don’t drive and fridges full of food they don’t eat” and things. They are quite experienced. And I liked that down-to-earth thing. So I sort of rebelled a little bit about the mystical part of marketing, the sort of magic advertising that subtly changed people’s psychology and things like that. I was quite skeptical about that. And at the same time, I thought, “Why aren’t people talking about memories? Why aren’t they talking about what we now call mental availability?” It seems that this is really underplayed. And that sort of got me doing research and discovering stuff.

The Pareto Law That Wasn’t 80/20

Andrew Mitrak: Do you have any hypotheses as to why it was that marketing was not more scientific, or stayed unscientific for so long? Or do you have any instincts, or have you looked at why—why wasn’t Phil Kotler more science-based, or why weren’t the folks of his era more science-based? Was there some bottleneck preventing them from being more scientific? Did they not have access to the research or the tools and processes to be more scientific, or do you feel like there was just something that went wrong very early on and they kind of went down the wrong path?

Byron Sharp: Academia is very competitive, quite vicious, particularly in the North American schools. Incredible pressure to be “new, new, new,” even if the new isn’t that new. It’s just what we call old wine in new bottles. Like today, people don’t talk engage. If you’re in an advertising festival like I was, they don’t talk about engagement much anymore, but they talk about attention instead, and it’s the same thing. So, yeah, there’s incredible pressure for that. So the leading North American journals are quite anti- if someone blatantly says, “This article is—so-and-so did a really interesting study, but we don’t have any idea, really, about how does that generalize, where does it generalize to? We need to do more studies. And so I’m going to do, first of all, a very close replication of it just to check that they haven’t made mistakes.” If you send that to a leading journal, they’ll go, “Well, no, we don’t publish close replications. No.” And particularly, “How dare you question that an article that we published in our journal might not actually be correct, that they might have made a mistake,” which is deeply unscientific. So, yeah, the lust for new—”new, new, new”—is, I think that is, yeah, it is deeply unscientific. Prestigious journals are deeply unscientific, too. I mean, we shouldn’t—you should be judged not by which journal you get into. If we judged Einstein by which journal he got into, he’s a total loser. We judge people on discoveries. Some guys won the Nobel Prize a while back for discovering graphene, which had always been—it’s graphene, it is only one molecule thick. It’s amazing. It’s spawning a multi-billion dollar industry. And they discovered it by putting graphite—you know, the stuff that is in lead pencils—between some sticky tape, and shearing the tape off over and over, and each time it sort of removed layers till they got down to one molecule thick. I think if someone sent that to a marketing journal, it would get rejected just by being, “That’s just too simple.” So, it is a cultural thing.

Our journals celebrate style over substance, rather than a discovery. So, when Jenny Romaniuk and I, and Andrew Ehrenberg, published on Pareto law—and we, before we published, right? So we looked at the Pareto law, you know, that the top 20% of customers should give you 80% of your sales. And we asked two questions. One was, is it law-like? Because we were already interested in laws, right? So does it—is it law-like? Does this cover a lot of different things, different categories, services, durables, is it law-like? And is it that the top 20% generate 80%? And we discovered, yeah, it is remarkably—it is actually remarkably law-like, once you account for time period of analysis and things like that, which had already been quite well documented. But it’s not 80%. It’s never near 80%; it’s much closer to 50%, which has quite profound marketing strategy implications. And we wrote that up and sent it to a friend of ours who was the editor of a journal called Marketing Science. There’s a journal called Marketing Science in America. And he went, “Oh, that’s fantastic, that’s so interesting. In fact, I’m off to a class, I’m going to use that in the class, like this afternoon.” And I went, “Oh, great, so do you think, you know, Marketing Science might be interested in publishing it?” He went, “Oh, no, no, it’s—you’d have to do some sort of optimization routine or...” In other words, some statistical gymnastics. He went, “That’s just a discovery.” And a physicist would never say that, I don’t think. I don’t hope. I hope. So, I think that’s—I think that’s the answer to your question. A culture developed that looked scientific but wasn’t.

The Long History of Marketing Proclaiming to be Science

Andrew Mitrak: So, as you’re looking at marketing becoming more scientific, but you mentioned that there is already a journal of Marketing Science, right? And there’s this long history of marketing and advertising presenting itself as scientific. You know, like Claude Hopkins publishes Scientific Advertising, which is more than 100 years old. And so—

Byron Sharp: Which was all just a set of case studies and musings of a consultant, yeah.

Andrew Mitrak: Exactly. So as you’re wanting to make marketing more scientific—

Byron Sharp: It was definitely Andrew Ehrenberg who was the first to, and that’s because he—no one told him not to. And he hadn’t been—he didn’t have a PhD from a North American school. He—so he just applied sort of high school science, and he never thought that was a big deal. He didn’t—I remember him saying to me, he thought his actual greatest contribution was his work on—most original contribution, sorry, was work on presenting data, which is actually not so well known. But, yeah, he didn’t think it was—he just did basic follow the scientific method. “Well, you know, you see something, you go, does this hold a second time? Does it hold? Does that hold for a different product? Does it hold in a different country? Does it hold like, you know, how regular is this? And then can we build an explanation on that that fits?”

“Don’t Trust Me. Don’t Trust Anyone.”

Andrew Mitrak: Yeah, that’s right. So kind of given that you’re actually being scientific and that you’re actually following the scientific method, how do you distinguish yourself and the work of Andrew Ehrenberg and your colleagues—your body of science—to sort of the pseudoscience that presented itself as science to begin with, right? How, as you’re communicating to the marketing world, was there a worry that people might roll their eyes like, “Yeah, people present marketing as science before. How are you any different this time?” Were you kind of conscious of that you’re going into a field where it’s often presented itself as scientific even when it’s not?

Byron Sharp: By plainly showing the data and not hiding behind—Andrew used to call “showing off our secondhand statistics,” you know, when you have these marketing journals that look as if they’re mathematics journals. He did do—I mean, he was—the Royal Statistical Society made him a fellow, which is a very rare honor. He was a real statistician, but he didn’t feel that, “I’m working in marketing now, and I don’t need to—I’m not at the forefront of mathematics. I don’t need to show off that stuff.” So, the amount of times I visit a company—I mean, I did several companies in Paris recently—and they would say to me, “Oh, I’ve got to show you. We’ve looked at our own data to see if your laws apply.” And it’s like, “And did you find anything?” And they’re like, “No, it applies everywhere. It’s amazing.” And so, that is science, right? Don’t trust me. Don’t trust me. Don’t trust anyone. And certainly don’t trust anything that’s trying to hide behind—a while ago, I actually had to use AI to, “Can you take this article and can you translate those coefficients there and turn them into an elasticity, you know, what we’d be used to: 1% change in price, what change in sales?” And it did it for me. But I thought, “That is so hidden in the paper. It’s ridiculous.” So, the real world loves discoveries about the real world. And if you can show them a discovery that’s reliable, to the point where they can go, “Well, why should I trust you?” “Well, go get your own Nielsen data, do a survey, whatever. Just gather the data the same way and see if it applies.” That is—you don’t have to convince anyone. They’re just like, “Wow. Wow.”

Andrew Mitrak: As you were kind of getting started or in the earlier years of sort of evangelizing, you know, your work and the work of Andrew Ehrenberg, were there any early customer wins or early sort of businesses, or how did you kind of get businesses to sort of take you seriously and look at the data? Was that easy because the science sort of sold itself, or was there initial kind of evangelism you had to do to even kind of market your own ideas?

Byron Sharp: Well, Andrew Ehrenberg had already always had some supporters. I mean, companies before he went into academia, big companies like Unilever and things like that, he had a little consultancy where they would give him the first panel data they had and then sort of say, “What does this mean?” And so he had supporters for that. And then when I sort of took that over and running that for Andrew, we sort of practiced what we preach and went, “Well, we need to be much more mass marketers and then much more easier to buy, and more friendly.” And we spent an enormous amount of, I think, very good work in working out what things mean and how to present that. Andrew quite rightly always said, “The D in R&D takes a lot longer than the R.” So, yeah, so there were some evangelists inside companies. But no, the book How Brands Grow was a huge breakthrough in the sense that it’s become the best-selling—that is, according to ChatGPT etc., that is the best-selling research-based book in marketing of all time, which, yeah, I don’t think we expected.

Andrew Mitrak: Yeah, that’s amazing. And there might be some listeners who haven’t read How Brands Grow yet. They certainly should.

Byron Sharp: Yeah, the marketing world is sort of divided into those who have and those who haven’t, I think.

Lightning Round: Overrated or Underrated

Andrew Mitrak: I thought to kind of introduce some of the concepts of it, we could play a game called overrated or underrated as kind of a lightning round. It’s a game that I stole from Tyler Cowen, an economist. I’ll share a concept and you can tell me if marketers—traditional marketers—sort of overrate or underrate it. And if you want to explain, that’s also fine, too. So—

Byron Sharp: What the science says, yeah, okay, okay.

Andrew Mitrak: Okay, positioning. Overrated or underrated?

Byron Sharp: Oh, overrated, yeah.

Andrew Mitrak: Why would positioning be overrated?

Byron Sharp: Well, I just heard because I was just listening to your podcast with Philip Kotler, and he said, “So you do segmentation analysis and you work out that there’s heterogeneity, there are segments.” And then he says, “You know, you can’t go for all segments, so you need targeting.” And that’s like, well, you might need some targeting, but you can actually go for all segments. And the science is very clear: when brands grow, they pull from all segments. Isn’t that weird? Right? I mean, it’s like—so, but he goes, “No, no, no, you do positioning, so you appeal to a particular segment.” Well, if that were true, when brands grow, they would not pull sales from all segments, and when you looked at where they shared customers, they would not share customers with all the other brands in the market, which is a scientific law that just keeps on holding. And so, this is where you go, “Oh, so targeting is misunderstood, and positioning, yeah, really quite overrated.” Yeah.

Andrew Mitrak: I asked the follow-up on that one. So I’ll go back to the lightning round version of overrated/underrated. That’s a helpful explanation on positioning, though.

Next one: Creativity.

Byron Sharp: That’s a complicated one because I would say it’s sort of underrated or underutilized, in that we have a lot of boring stuff in marketing. Right? Even in the sexy areas of advertising and things, it’s astonishing how much boring stuff there is. So you sort of think, “Well, we could do better than that.” That said—because I’ve just been, I’ve just come from the Cannes Lions, where, you know, it’s a celebration of creativity, and you’re not allowed to question the religion that creativity is everything and that more creative advertising must work better—that’s not true. That’s not true. Right? The job of advertising is to lay down memory structures, and sometimes creativity can really help that, and sometimes it can completely get in the way. So it’s not a simple message.

Andrew Mitrak: Here’s an easy one: brand purpose.

Byron Sharp: Oh, well, the evidence is pretty clear, right? It’s just, it’s pretty—it’s sort of a dud marketing strategy, yeah.

Andrew Mitrak: Behavioral science.

Byron Sharp: Oh, way overrated, yeah, for marketing, definitely.

Andrew Mitrak: Survey-based research.

Byron Sharp: In some ways, underrated because people don’t realize just how reliable surveys can be, in the sense that, you know, you measure something, and 17% of people say they do something, whatever. You do another survey, and it’s still 17%. You do another one, and it’s still 17%. It’s like, “Oh.” You know, it’s like, “Wow, my measurement is actually working.” And so I push back on people who say things like, “You can’t trust what people say,” and things like that. There’s some truth in that, but no, people actually find it quite hard to lie. It requires a lot more effort to lie. So, and we know a lot about the responses. So no, survey research can be very, very, very useful to us. As long as we don’t get the surveys filled in by bots. We do need real data from real people.

Andrew Mitrak: Yeah, not synthetic data.

Byron Sharp: Yeah, that’s when you just let the bots go completely wild. You don’t even let a human—you feel like only bots can fill in the survey.

Andrew Mitrak: Last one, hypertargeting and personalized advertising.

Byron Sharp: Okay, the evidence so far is that it’s not really needed that much because it doesn’t seem to have a big effect. Tons of hype, though, in—that is not what people think. People seem to think it will be super powerful, “If only I can unlock personalization.” And they worry—their problem at the moment is so much hype and people say that they can do it. People just blindly say, “Now in this age of hyper-marketing, how it’s so possible.” Yeah, really? Is it possible? Is it? It isn’t; it’s actually very difficult to do. But the evidence of when you do do it, when you do like control trials—so you have got personalization—is it doesn’t seem to have a big effect. So I am slightly puzzled, given that evidence, why people are trying so hard to get it to work if it’s not going to give a—if it’s going to be really hard to do and give quite a miserable return. It’s amazing there are people who believe stuff just because, I don’t know, persuasive salespeople keep saying it over and over. I like to remind people, we don’t even have smart traffic lights yet.

Andrew Mitrak: It’s wild that we don’t. You’re right.

Byron Sharp: It’s so obvious, you know, stick a camera on the traffic light so it knows not to stop traffic when there’s nothing coming the other way. It’s like, really, that would speed up cities so much. All the tech’s there now, but obviously, it is a lot harder than I’m making out. So when people say that they can do this magic with online data, it’s like, “Can you, really?” The tests have been pretty miserable on that.

Andrew Mitrak: Well, yeah, thanks for playing that game in that lightning round. I do think it’s, obviously, there’s a whole lot more to the book, but I think it was somewhat instructive of how the work in How Brands Grow is different than sort of the Kotlerian view of marketing.

Where does this all leave Kotler and STP?

Andrew Mitrak: My last Kotler-related question is, where do you think it leaves those models? Like, are they entirely without merit? Should marketers still learn them even as a reference point? Or what’s your overall take on where they belong—like sort of pre-How Brands Grow type marketing? Where does it belong in a marketing education, or how should marketers even think about those, if at all?

Byron Sharp: Well, the Kotlerian STP, you know, in his books became quite cookbookish, you know. “Do this, then do this, then do this.” And we now know that’s—no, there are actual real problems with that. I mean, it’s not how brands compete. It’s not how buyers buy. And it would mean investing a whole lot of time into things that were never going to pay off. So, no, I think we do need to say, “Understanding that consumers—there’s some heterogeneity in the client base.” Great. Okay.

Then we need to, but then we need to practice sophisticated mass marketing. There’s not—when Phil said on your podcast, “Oh, we can’t, we can’t reach all the segments,” it’s like, well, no, that’s your job. That’s your job! And you can. And it might need some tailoring, right? You might need to tailor and have different sort of shops for some people and different channels. But that’s what you’ve got to be striving for all the time. So the real danger of STP is that it sort of waves a white flag immediately and says, “No, our brand doesn’t sell to those sort of people, it only sells to these sorts of people.”

Andrew’s Case for Teaching the Evolution of Marketing Thought

Andrew Mitrak: Here is how this case for the reason why marketers should still learn it. I’d make an analogy to something like cognitive behavioral therapy, which is like a more evidence-based form of therapy. And like for CBT to exist, it needed to kind of build on and react against prior forms of therapy. And if you’re taking a psychology class or learning that, you’d kind of at least still learn about Freud, even though Freudian psychoanalysis is pseudoscience, right?

Byron Sharp: Yes, yeah.

Andrew Mitrak: I look at how my boss or marketers before me might have learned the Kotler in school. I need to understand that and speak their language, and I also need to learn the “How Brands Grow” school to explain to them why there’s a new way of thinking that’s even better, right? That would probably be my argument for the merits of learning both.

Byron Sharp: Yeah, look, I have a lot of sympathy for that. And of course, that’s what I went through.

So you sort of want other people to go through it, too. I think, yes, I think when I see young marketing scientists, their knowledge of the sort of the old STP and things helps them—I think it motivates them, right? They’re part of a scientific revolution.

That said, I see more lazy undergraduate students, and they hate it, with their, “What? You spent a whole hour telling us about that and at the end you told us it was wrong? Why are you wasting our time?”

Andrew Mitrak: Oh, fair enough.

Byron Sharp: Lack of intellectual curiosity, perhaps, but—

Andrew Mitrak: Yeah, okay, that’s a fair point. Some people just want to get to the—get to the right way to do it. “I don’t need all the work that came before it.”

One Page on Behavioral Economics

Byron Sharp: Yeah. When we were writing our university textbook, I know I had to have a chapter—I had to have some stuff on behavioral economics, behavioral psychology. But I ended up, I think it’s one page. It’s like a table of, well, there are all these heuristics that have been identified that show that consumers, you know, use heuristics. Yeah. But I didn’t torture the students with the whole chapter because it was like, well, actually, in the end, they’re not actually terribly relevant for marketing, and they’re quite weak effects, and they’re not persistent, right? If you—like, a lot of the experiments that they’re based on, the ones that weren’t faked—and there are a lot of faked, but only did the experiment like once or twice. But if you do it with the same respondents multiple times, the effect disappears. So, you know, you have to cover it, but I hopefully covered it with a proportional thing. It’s possibly more useful for salespeople, you know, knowing certain persuasion things, but its relevance to—yeah, you had Rory Sutherland on, right, on a podcast. And Rory is a huge fan of it, which I think is sort of odd because Rory works in advertising, and its implications for advertising—its implications for how you show prices or something, yes, but for advertising?

Andrew Mitrak: It is surprising how often Rory’s things seem so unrelated to advertising.

Byron Sharp: Well, maybe it’s his hobby. I think it’s his hobby.

Andrew Mitrak: It’s his hobby, yeah.

Byron Sharp: Because he has to work in advertising, and so, yeah, he’s interested in these other things in the world.

Logo Simplification and the Risk of Losing Distinctiveness

Andrew Mitrak: I wanted to ask about sort of trends in marketing practice and how they sort of intersect with some of the thesis in How Brands Grow. Your work emphasizes distinctive brand assets. Sometimes these graphics kind of go viral on social media where it shows the trends of brands getting more simplified over time.

Byron Sharp: Oh, yes. Yes, yes.

Andrew Mitrak: If you look at like the logo of Pepsi, or McDonald’s, or Starbucks, there are all these flourishes to their early designs. And overall, as the decades progress, all those flourishes get stripped away and you get sans-serif typography, and you lose a lot of some of the things that make them—well, I’m wondering, it is certainly simplifying. Are they losing their distinctiveness as they’re simplifying? Is that trend a mistake, or what’s sort of your reaction?

Byron Sharp: Well, the danger is—and that’s the problem that we use outside—we use design agencies, right? And obviously, they go through fashion cycles. And they obviously copy each other a lot, because you see this big trend towards, yeah, sans-serif fonts or something. And then it’ll go the other way. And you can almost look at old print ads, and you can tell by the typefaces and the colors and the things what vintage it is.

Andrew Mitrak: Yeah.

Byron Sharp: Which is a little—yeah, that is a little scary because the science says that brands are important to consumers, but not for falling in love or deep emotional attachment, but rather because—most of your buyers are so incredibly infrequent, and they screen—they want to just get on and make their purchases. They screen most things out, and they need to see you to be bought. So you need to look like you.

Byron Sharp: So anything that makes you look like the other guys is potentially dangerous, and anything that makes you look not like you. So any change is potentially dangerous. So, yes, you’re right. Those fashion trends, yeah, they come with risk.

Byron Sharp: It’s so weird, isn’t it, though, that people go, “We’ve modernized, here it is, it’s new,” and you’re like, “You mean it’s new just like everyone else.”

Andrew Mitrak: Exactly.

Byron Sharp: That’s like high school students, you know, the day they are allowed—we have in Australia, I think they call it Mufti Day, you know, when they don’t have to wear their uniform.

Andrew Mitrak: Okay.

Byron Sharp: And then people will joke they’ve swapped one uniform for another uniform, and that they’re all wearing the same casual clothes. But—

Andrew Mitrak: Yeah, that’s right. They all kind of get the same haircuts or they’re, “Yeah, I’m unique like everybody else.”

Byron Sharp: Yes, yeah, I think that’s part of being human, which is being tribal or something. But I think what you’ve highlighted—that may be very well for getting on with your friends, etc., and that’s how fashion works. But that shouldn’t be the way you run a brand.

What About Facebook? A Case for Segmentation and Targeting

Andrew Mitrak: Right. That’s right. I have a couple of questions I label this section “what abouts” because I’ve listened to interviews with you and people always ask, “What about brand X?” and “What about brand Y?” I’m sure this must be a little annoying for you, and I’m really sorry to do it to you. I’m going to limit it to two examples, though, okay?

Byron Sharp: Okay. Okay.

Andrew Mitrak: I started in startup marketing, B2B marketing, and one of the books that was helpful for me was Crossing the Chasm, this Geoffrey Moore book. It’s about like, hey, you start with a small target market, you jump to the next one, but you do a bowling pin approach. And so my “what about” to illustrate this is Facebook. They started with Harvard to build their initial network. They jumped to the Ivy Leagues. Then they jumped to Stanford, eventually they went to all colleges. Then they went to high schools, and then they went to everyone. And I’m wondering if—if, you know, Mark Zuckerberg had read How Brands Grow before starting Facebook, I’m not sure that he would have taken that approach. And I’m just wondering if that strategy sort of tracks with some of the thesis in the book, or how does that sort of line up with it?

Byron Sharp: Yeah. The book presents the availability theory, the market-based assets theory, that brands and companies become more valuable when they have more—these two assets: mental availability and physical availability, purchase availability. But it didn’t talk about how you need those overlapping. There’s no point getting distribution in a store if 99.9% of the people who go into that store just don’t see you on the shelf because they don’t know what you are, they don’t—you know, you have nothing, no memory structures. And likewise, there’s no point building memory structures for people who are there, but they never buy you because you’re just difficult to buy, right? You’re not in their stores. And so, this helps us answer that question of should a new brand start small and scale, or try to go big straight off. And it depends on can you get overlapping mental and physical availability. And if you don’t have the resources and you can’t, then you need to start somewhere where you can, and then build from there. But whenever you’ve got the resources and you can do it, you should try to, because otherwise, competitors will see what’s happening and someone will sort of, you know, gazump you.

Byron Sharp: In retrospect, you look back and go, the iPhone launched tied to one cellular network. That was a dumb decision of Apple, right? That was a dumb decision. But that’s with the beauty of hindsight. Why did they do that? Because they were brand new to the mobile phone industry, and there were huge players—the Nokias and Motorolas already. And they worried that those guys would just tie up the physical distribution with the networks, right, and in the network stores, and they wouldn’t be able to get in at all. And so, they went, “Well, at least if we sign—” was it T-Mobile or someone? They signed an agreement with one of them.

Andrew Mitrak: It was AT&T. They launched with AT&T, and then some years later they started with Verizon, which was the biggest. But, yes, it was AT&T to start.

Byron Sharp: And now, the idea that you would—”What? You can only buy an iPhone in some places, and it can only work on some network, but I don’t use that network. I mean, are they trying to push me away?” You know, like, that seems bizarre. But it was—the strategy is you’ve got to go with the resources you have. And Apple, remember, was nowhere near the size company it is today back then. And they were against very big competitors who might have locked them out.

Overlapping Mental & Physical Availability vs. Targeting

Andrew Mitrak: So, the earlier point and like the Facebook thing and the need for overlapping mental and physical availability, especially as you’re early, it sounds to me a lot like targeting. And I know that there’s probably nuance to it, and that’s overly simplistic.

Byron Sharp: Yeah, yeah, no. Targeting’s appropriate, but it’s to be used strategically of like, “Okay, I do not have the ability to do that. Well, then find somewhere where you can.” Or, the example I always use is, you know, in the United States, you have a significant portion of the population that speaks Spanish, and in some areas, you might go, “We should put some ads in Spanish as well.” But that’s targeting to expand and to cater for heterogeneity where it’s really important. But it’s not making the decision of saying, “We won’t play in the whole market, we’ll just ignore some customers or try to turn them away.” I mean, you can do that if you want to, but only if you want to be a really small brand.

What About Nvidia? A Case for Heavy Buyers

Andrew Mitrak: I said I had two “what abouts.” And my other “what about” is about Nvidia. I feel like the hero of How Brands Grow—or one of the heroes at least—is the light buyers. To grow through penetration, you need to get more light buyers. I feel like light buyers are somewhat underrated, or there’s a bias for marketers to, “Embrace your heavy buyers.” But you read this book and think, “Oh, wow, those light buyers are really important.”

But Nvidia is a very heavy buyer company. I think SEC reports say four—just four—customers make up 60% of their revenue. And they’re now the largest market cap company in the world, and so much of their revenue is very much from their heavy buyers and not from reach and acquisition of light buyers. Do you have just a general reaction to the largest company in the world being a heavy buyer company?

Byron Sharp: Well, they make very specialized chips, right? I mean, I’m not going to buy them; you’re not going to buy them. So they don’t have many potential customers. I’m sure they have got lots of lighter buyers, but light probably still means only orders a billion dollars’ worth a year. It’s just the market. It’s like if you build nuclear power stations, you know, you don’t have many customers. And the smallest amount you can buy is one. You can’t buy half a nuclear power station. So—

Andrew Mitrak: So, is it that even within that, they’ve built a highly specialized, very high-margin, very expensive tool? It’s also scarce right now; there’s always a chip shortage, there’s a backlog. So, the thesis—the reaction would just be like they’re just in a relatively small market of buyers, and so the concentration and the heavy buyers would make sense there?

Byron Sharp: I’m sure they have lighter buyers, but they make an ingredient that can only be sold to people who have massive scale. So, who’s going to knock on their door and say, “Hi, can I buy two chips?” That kind of customer just doesn’t exist, I don’t think. So.

How New Categories Grow: A Strategy to Skip Double Jeopardy

Andrew Mitrak: I think most of the book is also about sort of growth inside of a category, or most of the examples of how brands grow focus inside a category and not how new categories are made. And I think Nvidia also might somewhat be sort of reflective of a new category being made—

Byron Sharp: Oh, yeah, absolutely.

Andrew Mitrak: —or AI broadly. I think like OpenAI was tiny five years ago, and when the new category was created, it presented an opportunity to maybe skip double jeopardy. Have you ever studied category creation, or is that an area of research—

Byron Sharp: We’ve studied category growth, yes. But a brand-new innovation creates a brand-new category, and then that category grows according to the laws, right? I mean, it grows largely through increasing penetration as the size of the customer base grows and grows and grows. There’s quite a lot of controversy here in Europe at the moment that—was it one in five European homes has air conditioning? It’s crazy. They have more heat deaths than in any other place and have had for a long time. So, you know, the market is expanding and growing because people visit other countries and go, “Wow, this air conditioning, you can have it just in your home as well. We don’t have to go to Galeries Lafayette to get air conditioning.” So, it’s growing in the same way that any category does grow, and that’s acquiring new users, which is even more extreme than the light users’ story, isn’t it? These are non-users. They don’t use the category at all, and you’ve got to get them to buy.

Is the US Lagging on Evidence-Based Marketing?

Andrew Mitrak: In my last section of questioning, it’s kind of about expanding scientific marketing and adopting it. And I’m based in the US, and it does strike me that many of the leading proponents of marketing effectiveness and evidence-based marketing come out of Australia and the UK.

Byron Sharp: You’re not the first person to notice, yes.

Andrew Mitrak: Yeah, exactly. I’m wondering, why do you think the US has lagged behind in producing and adopting this? And even just like—not even on the researchers, but I’d say who shows up in my LinkedIn feed, actually, who listens to this podcast, frankly, is surprisingly overrepresented with Australia and the UK. So, I’m just wondering, what explains it, and what can the US do better? Or how can I, as an American, help spread the word to get more of it over here?

Byron Sharp: Yeah, there’s a degree of serendipity. There’s also sort of a belief—there is a bit of parochial—all countries have a degree of parochialism, don’t they? But no, actually, that’s not true. Well, sort of, I think Australia would be much more—we used to joke we’re much more famous in New York and London than in Australia, right? Because in Australia, they sort of can’t believe that Australia could be producing, you know, the leading institute in marketing science. So, in Australia, it was sort of a reverse of what is in the US, which tends to think, “Well, no, but surely we know everything already. This is the US.” So, yeah, there is a bit of that. I mean, but now, our North American advisory board, which we just had, had the CMOs of companies like General Motors and Coca-Cola. So, we are reasonably well-known. But I would agree with you, marketing science has taken off slower in the United States. And that’s in both knowledge of the research and also practitioners learning how to do it. But the US will catch up pretty quick. That’s the thing: science, I do believe that science always sort of outs, you know. Darwin and Wallace—that was sort of famous. But who was Mendel who did the pea genetics stuff? He was like a monk in a monastery. That’s pretty obscure. But it got out. Real discoveries—they eventually, people hear of them.

“The Dogs Bark, but the Caravan Moves On”

Andrew Mitrak: I’m a marketer—say I’m a middle-management marketer, and I’m not the CMO who can remake a company overnight. How can marketers internally advocate for the principles of How Brands Grow to change organizations kind of from the inside? Or how can marketers embrace it in their daily practices, if they’re not the CMO who has the magic wand to kind of change marketing for a whole org just as they wish? How can marketers who practice sort of embrace the principles of the book?

Byron Sharp: Well, by learning, by reading the book, giving the book. That’s what it was written for, right? It was to encourage that sort of dissemination. And just—it’s exciting, but don’t expect everything to change all at once, because that’s not how the world works. It takes time. But it is happening. There’s a lovely quote from Frank Bass—who was at UT Austin, he’s the Bass in Ehrenberg-Bass Institute. And he said, when people say there’s no need for the science in marketing, he had this lovely Middle Eastern expression, which is something like, “The dogs bark, but the caravan moves on.” The caravans are moving, and you might not like it, but the fact is it’s happening. It’s going to happen. It’s happened in every other discipline, right?

Andrew Mitrak: Yeah, that’s a fair point.

AI Can’t Fix Bad Marketing Literature

Andrew Mitrak: My last question is around AI. You’ve mentioned using AI a bit. How are you using it either at the Ehrenberg-Bass Institute or in your research? Does it open up new areas of research? Does it change how you’re performing research? Obviously, you mentioned synthetic data is a bad path to go down, but how are you broadly sort of thinking about how to employ AI?

Byron Sharp: Well, our researchers use it for coding and things and on massive sets of data. It’s a lovely, lovely tool. But we’re also—because the Ehrenberg-Bass Institute provides non-artificial intelligence, really, that’s what our sponsors get when they financially support the Institute—so we’re looking at how on earth we curate knowledge so that AI tools that are used by other people in marketing understand the science. That’s not just simple; you don’t just sort of whack a whole lot of literature into ChatGPT and suddenly it becomes this great marketing scientist, because it doesn’t. I think everyone’s learning this with AI: to make it really powerful, you need experts to do very careful curation of material, and then it becomes super powerful. I’m sure people are building AI to help heart surgeons and things, and they’re doing it carefully because AI’s not that good at handling if there’s a huge weight of—which there is in marketing, right?—there’s a huge amount of weight of things that have been said that are wrong. Well, it thinks they’re right because, you know, “Well, Phil Kotler said it. It must be true.” So we’re working on that. It’s moving very, very quickly, but it’s very complicated, yeah.

Andrew Mitrak: Yeah. Byron Sharp, I hope listeners, obviously, read How Brands Grow and its sequel. You’re easy to find online and on LinkedIn. Are there any other places you’d point listeners to to learn more about your research and your work, and the work of the Ehrenberg-Bass Institute?

Byron Sharp: Check out the Ehrenberg-Bass website. There’s a lot of resources there, even if you aren’t a sponsor. There’s a lot of resources, and of course, there’s great podcasts like this.

Andrew Mitrak: Yeah, and that’s marketingscience.info is the Ehrenberg-Bass—

Byron Sharp: Which I now follow. I now follow A History of Marketing.

Andrew Mitrak: Oh, yeah, thanks. Yeah, marketinghistory.org. Thanks for plugging this own podcast as well. So, this was so great. Byron Sharp, I really enjoyed this conversation. Thanks so much for your time.

Byron Sharp: Thank you.

A History of Marketing / Episode 53

Nick Asbury is a creative writer, one half of the design partnership Asbury & Asbury, and the marketing industry’s most persistent critic of brand purpose.

He’s the author of The Road to Hell: How Purposeful Business Leads to Bad Marketing and a Worse World (And How Human Creativity Is the Way Out). It’s a title that tells you exactly where Nick stands.

For 15 years, “Purpose” was an idea marketers weren’t supposed to question. It dominated creative briefs, advertising awards, and TED Talk stages. Brands from chocolate bars to social networks climbed what Nick calls “the ladder of abstraction” until they settled on something like: “we’re here to make the world a better place.”

The Road to Hell is a rarity: most marketing books tell you how to do something right. Nick wrote one about why a whole movement got it wrong. He also argues there’s a way out: human creativity, lateral thinking, and humor.

In this conversation, we cover:

* How the 2008 financial crisis kicked off the capital-P Purpose era, and why the 2024 election may have ended it

* Why even Dove’s Real Beauty, the most celebrated purpose campaign ever, doesn’t hold up to scrutiny

* Why the most prominent purpose advocates are late-career marketing legends

* Why AI can’t make the lateral leap behind slogans like “Just Do It,” and why that’s good news for human creativity

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.

Why Write a Whole Book Against Purpose?

Andrew Mitrak: Nick Asbury, we’re here to talk about your excellent book, The Road to Hell. I love this book, I read it cover-to-cover in one sitting, and I hope marketers everywhere read it. And it’s all about how purposeful business leads to bad marketing and a worse world, and how human creativity is the way out. And I wanted to ask you about this because most books about marketing focus on how to do marketing the right way versus why a certain approach is wrong. And so I’m wondering, why focus on why the purpose movement was a mistake? Why write a whole book about this?

Nick Asbury: Yeah, that’s a really good question and first of all, yeah, thanks, thanks for reading it, thanks for having me on to talk about it. Yeah, I think, I think first of all, there is a, I hope, a kind of noble tradition of books that argue against something rather than for something. Like, I know Bob Hoffman has done some brilliant stuff against ad tech and advertising. You can even look at books like No Logo by Naomi Klein—books that are kind of polemics against prevailing wisdom. And I, I guess I would put this book in that category. I mean, it is arguing ultimately for something, in that the last of the five sections is arguing for creativity and humor and humanity. But yes, most of the book is an argument against purpose.

And I guess it’s just been a kind of, you could almost say a kind of unfortunate fact of my career, I think, that I happen to be working at a time where I do think this huge idea of purpose has dominated the industry for, well, you know, 15, maybe even 20 years. I think you could say that period is, is waning now. But, yeah, I just found it was a very omnipresent idea that was affecting almost every kind of brief coming across my desk and was dominating industry awards, industry conversations. So, it felt like a—and I guess, one thing I’d add is it also felt like something you weren’t meant to question that much. There was a slightly taboo feeling about, you know, how could anyone be against this? And I guess when I sense that taboo, I do almost feel drawn to challenging it. Not for its own sake, but just because—

The Risks of Challenging the “Purpose” Orthodoxy

Andrew Mitrak: Yeah, it still somehow, to me, it feels a little bit riskier than something like No Logo, which was sort of like punching up. It’s sort of like taking aim at the brand bullies, or something that is anti-tech. Like there’s so much anti-tech, or is sort of more consensus to, like I feel like there’s more people to nod along. This one somehow feels almost a little bit riskier because how could you, how could you have an argument against purpose? Purpose sounds so nice. And did you worry at all that this might alienate potential clients or colleagues who had embraced the purpose-driven marketing?

Nick Asbury: I guess, maybe on one level, I think I am, I’m maybe fortunate in that it’s fairly low risk for me because I’m basically a lone traveler in the industry. I’m a self-employed writer. So, it’s not like I work for a big employer who might be unhappy with it. I, ultimately, as a writer, only need enough work to keep one person busy. So, if a few clients don’t call me because of the purpose position that I have, then, you know, there will equally be clients who do call me because they like the arguments being made.

But I didn’t really write it as a, as a kind of strategic business career move for myself, really. I just felt the urge to write it because I felt there were important things to say. I guess on that kind of punching up, punching down thing, which, you know, I, I would definitely think of it in my own mind as a kind of punching up exercise in that—and this kind of brings us on to the whole subject—but I see purpose actually as quite a big corporate, top-down kind of movement. I kind of consider myself, I guess, arguing for the smaller businesses and the consumer who kind of often gets slightly patronized by some of this stuff, I think. So, yeah, I would see it as kind of challenging an orthodoxy imposed by powerful people.

The Origins of Capital-P Purpose

Andrew Mitrak: Yeah, fair enough. And let’s, I think that is how it comes across, it’s just that at a high level, it seems like such a sacred thing. But as you’re saying, let’s get right into it because I think that, taking this sort of historical lens, you start with a moment as you’re seeing purpose and typing it out. And I’m wondering, when in your mind does this, does purpose become a movement? When does it become sort of the big behemoth omnipresent thing that you’ve experienced?

Nick Asbury: Yeah, well, I think the simple answer is I see the kind of purpose with a capital P movement, I think, started after the financial crisis of around 2008. So, I think—and that’s not to say that none of these questions ever existed before that, I think you can see purpose as the latest manifestation of very old arguments about kind of stakeholder versus shareholder capitalism arguments that Milton Friedman was having back in the 1960s. You can basically take it as far back as business itself, really. People have always argued about the ethics of business and, you know, how they relate to the—can capitalism be ethical? You know, there’s all these big philosophical questions that have been debated for a long time.

But I think the purpose movement in advertising, and in the kind of corporate boardroom, really did take off post-2008 when, I think, the story I would tell was there was kind of a reputational crisis for big business. A lot of people were turning against business, kind of blamed them for the excesses that led to the crash. And, you know, you had the Occupy Wall Street movement, kind of quite a large, widespread, anti-corporate kind of feeling in the world. And I think, I definitely sensed this at the time, even in some of the clients I was working for, was there was this sense that, oh, we need to tell a better story about business. Rather than people thinking of us as the enemy, we need to kind of tell a story about how we can actually be a powerful ally to important social causes.

And I think that became a really persuasive, powerful thing that people wanted to believe in. There was this whole mantra of “do well by doing good,” which was kind of the slogan of the purpose movement, I guess. But this idea that you could, yeah, do good things in society, and that would, through a kind of virtuous circle, it would lead more consumers to buy from you because consumers, so the argument went, consumers are more concerned about ethical issues these days than they have been before. And therefore, the more good you do in the world, the more profit you will make. And that really was the argument coming from TED Talk stages and the industry press and, you know, no doubt many podcasts as well. So, yeah, that’s where I think it came from.

Before Purpose: When Ads Were Absurd

Andrew Mitrak: Yeah, so the great financial crisis, it happened right when I was sort of a graduating senior in high school and then just entering into university. And I kind of, I do remember this moment, and I do remember sort of the vibe shift, you know, with TED Talks taking off. And I feel like things got much more serious. And if I recall, I’m wondering, did this feel like a counterreaction to anything that came before it? Because if I also think of the ads that came before it, there was sort of this era of the Old Spice “The Man Your Man Could Smell Like“ that was all very silly, you know. There had been a Betty White Snickers Super Bowl commercial where, you know, an old woman in her 90s was tackled by a football player. And there was this era that in hindsight feels pretty brief, but there was this moment where ads felt very silly and irrelevant and random and absurd. Skittles had surrealist ads. And I’m wondering, did you feel like this seriousness, of course there’s the great financial crisis, but does it feel at all like a counterreaction to you to what came before it, or do you want to speak to what immediately preceded the sort of this capital P purpose movement?

Nick Asbury: Yeah, I think, yeah, it’s an interesting point. And I guess I don’t explore that much in the book, but I think you’re right that the kind of early 2000s, and certainly the 1990s, were full of a kind of, yeah, as you say, often quite absurdist, postmodern kind of advertising. A lot of humor, a lot of larger-than-life kind of stuff. A lot of which was very good and worked very well.

But I think you’re probably right that there was a yearning for, well, two things, really. I think one was, you know, advertisers are always looking for something, some new angle. Because at the end of the day, you know, a lot of the great ideas have been done in the ‘60s, ‘70s, ‘80s. And there are only so many ways to sell beer or chocolate or washing powder. So, I think partly when purpose came along, it was a relief to people to think, oh, we don’t actually have to talk about your teeth being whiter than white or something. We can talk about, you know, mental health or something instead. So, there was that kind of aspect to it where it just felt like a different thing to do, I guess.

And I think also there’s always been this kind of angst within the ad industry that, oh, are we really doing anything serious here? It’s all talking animals and catchy jingles and memorable characters and slogans, and it’s all great, but sometimes, I think maybe particularly kind of older generation people in advertising think, oh, is this all there is? You know, I’m a serious person, I want to do serious things. And so maybe there was a bit of that as well, wanting advertising to seem like a more noble thing to talk about at a dinner party or whatever.

Simon Sinek, Jim Stengel, and the Books That Built the Purpose Movement

Andrew Mitrak: Yeah. Let’s talk about that. When purpose first showed up, there were, you know, there were people who were proponents of it. And I don’t think it’s any one individual’s fault to blame. I don’t think you assign like this is the single person. But if you were to speak to, how did it show up in the market and who was sort of promoting it most, and what are some of the key cornerstone examples of purpose sort of becoming a thing? Who would you say is sort of behind that? Where were you first observing it and who were you hearing it from?

Nick Asbury: Yeah, I think you’re right that there’s no single author of it, really. It’s not like it all came from one influential book or intervention by some one. I think there were a kind of a cluster of people in the early 2000s who were starting to use this purpose word. So, it was kind of there in the ether when the financial crisis hit and people kind of grabbed onto it.

I think purpose has never been just a marketing and advertising movement, but it’s surprising how much of it has roots in that world. So, you know, certainly Simon Sinek, for example, he came originally from the advertising world. And his TED Talk, you know, still one of the most viewed ever, and the whole “Start with Why“ ethos, that certainly played a role in this kind of purpose, kind of grandiose idea that you need to be driven by a larger mission and, you know, it just so happens we make computers, or whatever it is, but really we’re driven by this grand, grand mission in life. So, that was one of them.

But I think also you had a guy called Jim Stengel. You may have talked to him before, I’m not sure, but he was at Procter & Gamble. He wrote one of the more influential early books around the same time as that Simon Sinek book, a book called Grow, which was making this case for the commercial effectiveness of purpose-led marketing. And it made, very specific and sweeping claims about how purpose-led companies outperformed non-purpose-led. But it was, you know, it was almost immediately dismantled by some quite smart writers. Byron Sharp, actually, way back in 2012, I think it was, wrote a deconstruction of it. So did a guy called Richard Shotton, really good article.

Andrew Mitrak: The gist was that he had like kind of cherry-picked certain companies that were the top performers and it’s almost sort of like a confirmation bias type thing, like, oh, you, you pick the top ones and just attribute it to purpose. And there is like, you know, you can almost do that at any point in time in the market, you can like pick certain things as the winners, and then if you play it forward, well, hey, we should just invest in that portfolio. Oh, it happened and turns out you don’t really beat the market that way, right?

Nick Asbury: Yeah, no, absolutely. It really was as simple as that, really. He just picked the, I think, 50 best-performing companies and then went looking for anything in that company that you might call a purpose, and said, well, it must be because of that. And he never even looked at the, you know, the 50 worst-performing companies to see if they also had something called a purpose. So, there were all sorts of flaws with it.

But I know the back of that book had a glowing tribute from Martin Sorrell, who, certainly at that time, was the most powerful person in advertising in the UK. So, I think the ad industry really did get behind it and really wanted to push this story to their clients. I’m certainly not saying it all came from the ad industry, but I think that was a big part of it. And we’ve seen it in the ad industry kind of institutions as well. I think, you know, Cannes and D&AD and places like that have all pushed this narrative pretty hard as well.

Andrew’s Awkward Run-In with Simon Sinek

Andrew Mitrak: As an aside, you mentioned Simon Sinek and I have a funny Simon Sinek story I’ve never told before.

Because his whole idea is you start with “why”, right?

I was at a conference and it was actually in London, and it was a pretty small conference. It was a fancy exclusive thing called Founders Forum. And Simon Sinek was among the people there. And I was at a technology startup doing some fundraising. And he came by our booth for a demo and me being a marketer for the company, I’m like, “Oh, I’ve got to, I’ve got to talk to Simon Sinek, not just about the company, but I also want to tell him about myself, and I tried to start with ‘why’ for myself.”So I’m like, “I’m here, and my purpose is to tell stories that really connect…” And it just felt like everything came out so jumbled.

Then I felt, “Poor Simon Sinek, people must always be coming up to him telling him about their why, right?” Because I must not be the only one who’s trying to start with “why” with my own story as I’m greeting Simon Sinek.

Nick Asbury: Yeah, it’s probably only in paragraph five that they say, anyway, I’m a dentist, or whatever it is. They spent the rest of the time talking about how they’re driven by improving health and well-being for everyone or something.

Andrew Mitrak: I still cringe when I think about how awkward I was about it.

Nick Asbury: Oh well.

The Ladder of Abstraction: Why Purpose Makes Brands Sound the Same

Andrew Mitrak: But yeah, so, so one of the things I also want to dig into is you sort of break down why it leads to bad marketing and positioning for a company. It leads to everything sounding the same. And could you sort of make that articulation of why is it that purpose leads to things sounding the same, or what are sort of like the key reasons why purpose is actually sort of detrimental to marketing and to business and to advertising?

Nick Asbury: Actually, one of the earliest things I kind of wrote about this whole subject, I used this phrase, “the ladder of abstraction,” which I think is what brands tend to climb up when they start thinking about purpose. So, you’ve got your kind of mundane product, which is, you know, a bar of chocolate or something. And in order to get to your purpose, you have to keep asking more and more abstract questions. So, you know, it’s not really about chocolate, it’s about delivering a tasty experience. But then it’s not really about that, it’s actually about delivering a tasty experience you share with someone else, so it’s actually about community. But it’s not totally about community, you know, it’s about X, Y, Z.

And you, you kind of end up in a place where just about every brand is saying, “We’re here to make the world a better place,” because that’s where that ladder kind of ends, in a way. It just ends in this kind of, yeah, we’re here to make life better and happier, and we just happen to do it by selling bars of chocolate, or we just happen to do it by selling toothpaste, or whatever it is.

And it may sound unfair or simplistic to say that that’s exactly how it turns out for every brand. But I think on a kind of mass level, if you consider all the millions of brands in the world, I think it is this big pressure that’s pushing them in that more generic direction rather than a more specific direction. Because often the most interesting thing about a brand can actually be something quite quirky or very specific to that brand, something about the product itself. And that kind of gets lost a bit, I think, when you go in search of this higher purpose. So, yeah, I think that is, it’s not the only reason that I would give against purpose marketing, but I think it is one of the big ones, yeah.

Andrew Mitrak: Yeah, that everything ladders up to making the world a better place, in some combination of happiness or some connection or shared experience. You give examples of Airbnb and Starbucks and other major brands, like Nike, that all just kind of, if you read their purpose, it almost sounds the same, even though they provide totally different services, totally different products. There are different reasons for going to them, but if you look at their purpose, it’s connecting the world, right? It’s like, oh, that just sounds the same.

Nick Asbury: Yeah, no, I used to have a slide when I did fairly frequent talks about this, and one of the slides was exactly that. It was taking the purpose statements of Airbnb, Starbucks, and Facebook, and putting them all together, taking the brand name away. It really was very hard to tell them apart or tell what they did, you know. Yeah, it’s a strange thing for marketers to do.

Andrew Mitrak: Well, this also applied even to startups because again, at this time, I was at the same company I was at when I told my Simon Sinek story. I was at a startup and I was doing our pitch decks, and there was all this pressure to add like, “But why are you making the world a better place?” to your deck. And there was even this TV show on HBO called Silicon Valley and they had this episode where every startup that’s doing their pitch is like, “We’re making the world a better place through optimizing data centers,” or, “fine-tuning your targeting algorithm, we’re making the world a better place.” And there’s even competition like, “Oh, I don’t want anybody else to make the world a better place before we make the world a better place.” It’s a silly thing that was just part of the whole ether of like, “Oh, you can’t just raise to make money and have a good product. You have to make the world a better place.”

“Purpose” Theater in Startup Pitch Decks

Nick Asbury: Yeah, but the irony, of course, is that all of this is happening in a context where you are raising to make money. You’re literally telling a story to venture capitalists trying to get them to give you the next round of funding. But yeah, in order to get that, because it was in vogue at the time, everyone is telling these kind of moral, societal kind of stories. It’s been a really distinctive part of the culture. What’s gone on at WeWork, what’s gone on with Elizabeth Holmes and Theranos, and all these people with incredibly grandiose ideas of their purpose and then it falls apart pretty dramatically.

Kendall Jenner’s Pepsi Ad and Other Purpose Disasters

Andrew Mitrak: So, do you have any favorite examples? Sure, there’s WeWork and Theranos, but are there other examples within advertising or marketing where it goes obviously wrong? What are some of the key points where you can, because when people see a certain ad, they’re like, “Oh yeah, I get that. That’s why purpose is bad.” Any favorite examples of yours?

Nick Asbury: There should almost be a game show where I have to answer that question without mentioning Pepsi. Because it is always the one that gets mentioned, and you know, I’ve mentioned it myself, but I think it is such a good example of the genre. It came out in 2017. It was this ad featuring Kendall Jenner. It actually only ran for one day because it was withdrawn because of the outcry. But yeah, it was basically projecting this story about a protest march, and then Kendall Jenner hands a can of Pepsi to the police officer and defuses all of these tensions. It was just an almost charmingly ridiculous ad looking back in a way. But it did cause an outcry at the time and I think that showed some of the dangers.

And there was a wave of stuff around that time. This is like the earlier purpose years, 2017 kind of time. There was one for McDonald’s. It may have only run in the UK, but it was a young boy and his mother, whose father has sadly died as part of this script, and the boy is eating, I think, a Filet-O-Fish at McDonald’s, and his mom says, “Oh, that was your dad’s favorite.” And there’s this kind of bonding moment. And it’s meant to be a story about how McDonald’s stands for so much more than food—it’s about connection and memories and family. But it actually just came across as so crass and manipulative.

So, those were early examples. There’s obviously been countless ones since. I mean, just most recently, certainly in the UK, there’s been a wave of—it’s like everyone in the ad industry has decided that toxic masculinity is the subject du jour, right? And everyone has started doing ads about it. One of our biggest telecoms companies, EE, is doing a campaign about boys and men at the moment. McCain Foods, who are a big supermarket cooking brand, are doing something similar. John Lewis, you know, their annual Christmas ad is one of the big events in the UK, that was all about a father-son relationship.

And it kind of fascinates me in a way that—and I guess it goes back to this question of why brand purpose tends to lead brands in a similar direction—because another dimension of it is brands tend to latch onto whichever socially purposeful issue is currently in vogue. So, they’re all doing toxic masculinity ads right now. But in a couple of years’ time, it might be ads about girls’ mental health—or I guess we’ve already done that with Dove and so on, but they tend to flock to the same issues at the same time.

The Case Against Dove’s Real Beauty Campaign

Andrew Mitrak: I was going to ask you about Dove as well, because I think that one came out at a time where, if you think of magazines from the 1990s, the models were just absurdly thin, and there was photoshopping. There was a lot of attention around that, and I think that the Dove Real Beauty—which you, I think is great that you take aim at it in your book because you’re almost like taking aim at the king there. That’s one that I feel like is revered and has gotten so much attention, and is very recognized and awarded over the last 25 years. It is one of the ones that you kind of highlight in the book, I think because you don’t want to just make a straw man argument, you want to find the best examples. So, how would you sort of describe where even Dove Real Beauty is wrong? What is sort of the argument against that one?

Nick Asbury: Yeah, no, you’re totally right. That’s really why I tackled it, because you could write a book just making fun of Pepsi ads or something, but those are kind of easy targets. I think the more interesting question is apparently successful campaigns like Dove. And you’re right, it is continually cited as the outstanding example of a long-running purpose campaign. There are multiple things I find interesting and kind of objectionable about it. Obviously, with all purpose marketing, you’re kind of asking two questions. One is, did it work commercially? And the other is, is it actually delivering on the social purpose it claims to be delivering on? So, those are two questions to have in mind, I guess, while talking about it.

But yeah, I find with Dove, first of all, you’re right that it came on the back of lots of ads with photoshopped, almost anorexic models, and there was a reaction to that, which is a perfectly worthy thing to have in mind if you’re a beauty brand. But it was quite clumsy at first. One of the earliest executions was a series of posters where they would have—there was certainly one with an older woman, maybe in her 60s, and it had two options: wrinkled or wonderful. And the idea was you had to pick which one she was. Which, maybe at that time felt progressive in some way, but actually, you’re still putting a woman’s face on a billboard and asking people to judge her by her appearance. And I believe there was even an interactive one in Times Square where people could vote and, predictably, trollish people voted for the wrinkled option.

And then they did other ones where they did a kind of purported social experiment where there was a door marked “ordinary” and a door marked “beautiful,” both entrances into the same office building. And they kind of monitored which door women chose to go through.

They read a lot into the fact that women were walking through the ordinary door because this was somehow scientific proof that they weren’t beautiful enough or didn’t consider themselves beautiful enough. But actually, again, I find that a pretty manipulative, kind of pop science stunt, really, that doesn’t tell you anything about what women really think about themselves. It might just be that they have no self-esteem issues, but just don’t want to appear vain and show off.

But yeah, there were lots of the Dove ads where I kind of think the overall vibe is that you’ve got this brand which thinks of itself as extremely important and morally upstanding. And it’s kind of talking down to its customers and, you know, sitting them down in these cavernous rooms, making them the subject of these social experiments and kind of teaching them a lesson. You get women kind of weeping at the end when they realize, “Oh, actually I am beautiful. I didn’t realize it.” And it’s all like the wise, all-knowing voice of Dove has kind of taught women that they need to have more confidence and more self-esteem and so on. I find it—and I know I’m not the only one because there’s been a series of articles, especially by women journalists over the years—there’s lots of people who find this stuff very uncomfortable. Because it’s doing that purpose thing of kind of saying, “Hey, your looks aren’t important, beauty is not just about how your skin looks,” whatever. And yet, it’s all with a goal of selling more beauty products, because that is just structurally what Dove is and what it has to do. Marketers can kind of convince themselves there’s no contradiction there, but I don’t think consumers see it that way. They still think, “Yeah, you’re still trying to sell me soap, though, aren’t you?” I find it a really interesting case.

Andrew Mitrak: I think it’s a really interesting case. One of the criticisms of purpose is that it’s so navel-gazing and inward-looking, and that brands are kind of thinking, “What’s my purpose?” instead of being customer-focused, instead of thinking, “What does my customer need? What do they need to hear?” And to this campaign’s credit, I think that it is a little more customer-focused in that it is interviewing women who are their target market. It does feel like it is a little less inward-looking for Dove, at least. That said, it’s almost like adjacent to Dove. It’s almost like looking at something that’s not really Dove at all in some ways, because it feels so far removed from the actual product they’re selling. But to its credit, I think it is at least looking at the consumer and putting the customer at the center of the story versus putting Dove at the center of it.

And I think that, even though it’s manipulative and even though it’s skewing data, at least it’s telling a story with it. And even if the music’s heavy-handed, at least there is music that’s trying to create an emotion, where I think a lot of purpose stuff is so corporate and about ourselves, and is emotionless in a way. Those are, I guess, some of the strengths. Not that I have to defend a thing that already gets a lot of attention and awards, but I think if I was to take the other side of it, those are things that I think the ads sort of have going for them. Would you react to that, or any thoughts about that?

Nick Asbury: Yeah, no, I know I come across as the hardened old cynic. But I would dispute that they put customers in the focus of it, because I actually think the hero of every Dove ad is very clearly Dove itself. Dove is the wise, socially purposeful actor that is kind of using members of the public in a performative way to make a point, by conscripting them into these kind of contrived scenarios. You know, the one where the women sit down and describe themselves to a male sketch artist who draws them, and then I think the partners come in or their best friends come in and describe them and the sketch artist does it in a much more attractive way, I guess.

And that is supposed to be making some point about women, but I think that’s not listening to women. That is actually just manipulating them to take part in this story, this kind of brand stunt, which is all set up on Dove’s terms, I think.

There’s a fundamental lack of honesty about it, I think. Which, you know, maybe honesty is a strange word to use in marketing where we don’t expect every ad to be sincerely honest. Obviously, all marketing is about manipulation to some extent. But I think there’s a real difference between—you can have all kinds of exaggerations and manipulation and distortion in ads. You can say your beer is the tastiest one ever, or your biscuits are way better than someone else’s. But once you’re making ethical claims, I think it gets really uncomfortable. And I think when Dove is setting itself up to be a kind of social actor—because they really do, I know some people see this as a strength, but I think it’s a bit weird that they go into classrooms. They have classroom packs about how to teach girls self-esteem and this kind of thing. And this is a corporate brand, you know, from the same company, as many people point out, the same company that owns Axe and various brands that aren’t so progressive.

But you know, they’re kind of going into schools and teaching about really delicate issues involving mental health. And I think, by common consent, all those issues have kind of got worse over the last 20 years rather than better, which, you know, you can’t blame Dove, but it’s not evidence that it’s, despite all the plaudits in the marketing world, it’s not like it’s solved any problem. I think, if anything, it is raising the salience of this self-esteem idea which can have unforeseen consequences and can actually just spread that insecurity more than it actually fixes it. But yeah, I dig into it in the book in a bit more detail if people are interested.

Andrew Mitrak: Yeah, no, you’re right. And also, you just brought back a memory. I definitely saw the Dove advertising, one of their three-minute videos, in school—in high school probably at the time—because I think it was among the early sort of YouTube ads. I remember distinctly it being played in the classroom, and in hindsight, it’s like, “Wow, that’s weird. Why am I getting this ad?” Because it has this veneer of science to it, and that’s probably just not a good thing. How do you think it went down in the classroom?

Nick Asbury: Yeah, how do you think it went down in the classroom?

Andrew Mitrak: I don’t recall. I think at any school, it’s like, “Oh great, we’re watching a video instead of listening to the professor.” So, we probably enjoyed it for that. Maybe there were some tears in the eyes, I don’t remember, but it was seen as almost—it wasn’t seen as watching an advertisement, that’s for sure. It was seen as some research video or something like that that almost seemed like some other sort of documentary film you might see in a classroom. So, I think there is some perverseness to that.

Nick Asbury: Yeah, yeah.

Pepsi’s Protest Ad vs. Coke’s Hilltop: What’s the Difference

Andrew Mitrak: Yeah, it’s a strange one. I wanted to come back to this—was it Kendall Jenner or Kylie Jenner? It’s one of the Jenners in the Pepsi ad.

Nick Asbury: I think it’s Kendall Jenner, yeah.

Andrew Mitrak: Kendall, it was Kendall. It was Kendall. And I’m wondering with that advertisement, something that came to mind was comparing and contrasting that with the Coca-Cola Hilltop ad, which is also among the more kind of iconic ads.

If you Google some list of greatest advertisements of all time, that might be in the top five by some people. It seems almost like there’s actually a lot of similarities between those as far as the message: our soda is about bringing the world together. And very poorly executed on—Coca-Cola wasn’t tied to an ongoing protest that was sort of related to civil rights, it was more like just kind of... but there are a lot of common themes to it. And I mean, if Coca-Cola had released Hilltop within the last 10 years, it could very well be in your book about part of the purpose movement. I’m wondering, do you feel like you would put the same kind of criticism towards Coca-Cola Hilltop, or do you feel like it points to purpose being a kind of nuanced thing where a lot of it is in the details of how you actually execute the ad? Just any kind of reaction to that sort of comparison?

Nick Asbury: Yeah, it’s a really interesting one because I’m sure you know that ad was used in the last episode of Mad Men, you know, Don Draper kind of dreams up that ad, you know, within the series. And it’s a brilliant—it’s such a well-chosen moment, I think, by the screenwriter because he’s been going through this crisis of this emerging ‘60s hippie youth kind of culture, a kind of anti-commercial culture. And yet, he’s an ad man.

So, he’s going through this kind of crisis, and then he has this kind of Zen-like moment while doing the yoga and the meditation where effectively he works out how to commercialize this anti-commercial vibe. Where, you know, you actually embrace it and lean into it. And it’s a very, within the drama of Mad Men, it’s a very heavily loaded, symbolic kind of moment.

And I do think you can look back at advertising history and see that ad as a kind of precursor to the purpose movement, because it is, yeah, it is a kind of moment where a big brand is kind of doing that ‘if you can’t beat them, join them’ kind of thing. Let’s, rather than being worried about this kind of anti-commercial hippie kind of spirit, let’s embrace it and let’s lead the charge. You know, we can put a bottle in the hand of everyone who’s singing. So there is—there are, you know, all sorts of interesting philosophical points you can make about that.

I think what it retained though, because I actually noticed that Coca-Cola ad got—the Hilltop ad got remade, I think, just in the last few months, I think a new version came out. Maybe it’s the anniversary or something, I’m not sure.

But they reshot it, obviously with different actors. But it had a very different vibe because I think the thing about that original one was it was a communal thing, you know, there was no like lead singer or something. It was just a group of actually quite weird-looking people on a hill singing this song in unison.

Whereas the updated version is very—I don’t know, if you want to get into the kind of pretentious semiotics of it all, it’s got a very different feeling where there’s kind of a solo singer who’s singing very performatively, and the crowd are kind of joining in, but there’s a sense of kind of hierarchy in it that there isn’t in the original Hilltop ad. So, I think there’s kind of a thesis to be written on what’s happened in those years since.

All of which is a long way of saying I think you’re right that there’s interesting parallels to be made between, yeah, that Hilltop ad and the purpose movement. But I think, I guess, a key difference is “I’d Like to Teach the World to Sing“ is still occupying this kind of happy, apolitical, humanitarian, inclusive kind of vibe. It’s not Coca-Cola purporting to solve a social issue or intervene in politics in some way. It’s more just embracing a vibe of a generation, really.

Andrew Mitrak: And people, and they sing “I’d like to buy the world a Coke” at some point. So, it’s almost not hiding itself that it’s an ad. It’s like saying, it’s saying “I’d like to buy the world a Coke” and it’s not like hiding—it’s not trying to pretend to not be an ad, in a way. It is, so I think that is almost by acknowledging that it’s an ad, it kind of—it’s not like it’s pretending to solve the Black Lives Matter or Occupy Wall Street protest or whatever. It’s like, hey, at the end of the day, I want you to buy a Coke.

Nick Asbury: Yeah, there’s an honesty to that, which I think consumers actually, you know, respect, whether it’s like conscious or not. But yeah, you know, they’re—”I’d like to buy the world a Coke.” I’d like you to buy a Coke. You know, it’s, yeah, so it didn’t—it never forgot that it was an ad.

Can Small Businesses Do Purpose Better?

Andrew Mitrak: We did—we, you had mentioned startups and entrepreneurs like WeWork, Theranos. Although I don’t know if those two always belong in the exact same sentence together. Like, I don’t think they both crashed and burned, but you know, Theranos seemed to be a little bit worse than WeWork. But anyway, there are startup founders who kind of embraced the purpose movement.

But I’m wondering, like, do you feel like purpose has a place for like people who are newly founding a business? I think Unilever and Dove, it’s—or Pepsi, these are very like old brands where the people who are now embracing purpose, it feels like more of a management decision where they’re doing this kind of from strategic management, kind of inheriting a brand versus newly forming a brand and having a purpose with like... there’s a founder or a set of founders, they have a shared purpose to build a company. Do you feel like it could belong in either whether it’s a startup or even like a local small business that’s not necessarily like trying to raise a bunch of money? Do you feel like purpose has more of a place there? Or do you feel like it’s equally whether it’s a large company or small company or any... an old company or a new company, purpose can still kind of lead people astray?

Nick Asbury: Yeah, good question. I think I would definitely make a clear distinction between the kind of local family business and the typical startup. Because I think, as we were kind of saying before, startups are very much in that world of venture capital and, you know, they’re part of that self-reinforcing system where everyone thinks purpose must be important because everyone else does, if you know what I mean. So, VCs kind of ask, “What’s your purpose?” the startup founders kind of feel like they should have one. It’s just part of the kind of game everyone’s playing, really. So, I think if anything, startup founders are more susceptible to getting carried away by grandiose ideas of purpose in a way that can actually lead them to do some quite dodgy ethical things.

I think in the case of more just kind of down-to-earth local, privately-owned businesses, yeah, I think there is something more interesting there. I think, in theory, a privately-owned business can take decisions that put principle before profit, you know. They have the freedom to do that if they want to. If you’re a publicly-held company, you run into problems because if you’re continually overtly saying that you’re going to put principles and purpose ahead of profit, then the shareholders are probably going to have something to say about that. And, you know, ultimately, when the calls get tougher, you always end up having to put the commercial interest first.

But yeah, a smaller family business, I think, can maybe have more freedom to do that kind of thing.

But one thing I would say, certainly in the UK context, is you do see businesses that have a very good ethical record. There are various ones like Timpson in the UK, is a chain of franchise kind of operation where it kind of repairs shoes, cuts keys, all this kind of humdrum stuff. They actually have a very good record on employment practices, you know, employing former prisoners and this kind of thing, doing useful stuff.

But they don’t make it the center of their marketing. They just market the fact that, you know, they fix shoes and cut keys and they’re nice people. And so, you won’t go to their website and find a massive purpose statement claiming that they’re, you know, making the world a better place. Even though, arguably, they’re doing more on that front than some of these big purpose businesses.

And I think that’s not a coincidence, in a way. I think, if you are doing good stuff, you’re doing it because it’s good stuff, you know. You’re not doing it so you can make more money, necessarily. That’s the whole thing that makes it good in the first place, really. And I think this idea that you do something good and then you go and make it the center of a massive global marketing campaign, you know, it naturally makes people cynical about, well, what’s your real motive here? You know? If you’re so keen to tell us how good you are, that kind of makes me doubt the claim, somehow.

Is Elon Musk the Most Successful Purpose-Driven Founder?

Andrew Mitrak: I was asking about founders and entrepreneurs and one who comes to mind is Elon Musk, who I’ve avoided talking about him on this podcast so much because he already gets so much attention on so many things and he’s everywhere. But, kind of unavoidable. And with this, I would say, like, he’s probably the most single successful entrepreneur of the purpose era that’s covered in the book, if you kind of just look at the number of companies, the rise of those companies, the market cap of those companies, his general mindshare of things.

And do you think that he or his companies have purpose in some ways? Because if the reason that I ask about this is actually, you know, you tie purpose to like Occupy Wall Street. And SpaceX, my—I have a family member who used to work at SpaceX. And one of the employees have like a shirt that says, “Occupy Mars.” And the idea actually is like it’s also stenciled on, almost a play on the Occupy Wall Street movement. And people will say, like, “Oh, our goal is like, Oh, I’m working here because I want to make life multi-planetary,” which kind of sounds insane, but I think they kind of believe it a little bit, right? And, and of course, he also, you know, he’s become extraordinarily wealthy, and of any of his employees have, and that, you know, probably also helps them kind of stick around. But it does seem like there is at least some purpose tied to it. And I guess, would you, I don’t think he appears in your book at all, and I’m just wondering if you have any reaction to whether he has a purpose, or how, or if he’s bringing purpose to his marketing in kind of a different way.

Nick Asbury: Yeah, no, it’s a fascinating question because I think he’s been on, obviously, a very particular kind of journey in the last 10, 15 years. And, you know, I think anyone who called themselves a purpose advocate these days would be horrified at the thought that he’s an example of what they mean. He’s probably the exact opposite. But I do think he is quite—there’s a lot of heavy irony in it all because certainly if you went back to like 2010 or something, he would be seen as a kind of purposeful leader who was making a lot of money by selling, you know, pioneering electric cars and so on.

And I think at that point, lots of purpose supporters would say, “Yes, this is exactly what we want. We want big, successful business people to be purpose-driven, to bring their politics to the workplace, to not separate out these kind of business from making a kind of social impact.”

And obviously, he’s then been on a trajectory where, you know, he’s now been on the side of Trump and, you know, a much more kind of right-wing coded figure. And I think at that point, all these purpose advocates who have previously been saying, “Yes, bring your politics to work and, you know, enact your political beliefs through your businesses,” they would all suddenly say, “No, that’s not what we meant, you know.” Because really, the underlying, I guess, ethos of purpose is, yes, bring your politics to work, but make sure they’re the right politics, you know, with... it’s only the approved causes that we really want chief execs to be pushing in their work.

So, I think he’s become a kind of—you know, he long ago, I guess, became a kind of embarrassment to that purpose movement, and is now, you know, public enemy number one.

Why Ads Got Serious — and Why Funny Is Coming Back

Andrew Mitrak: That’s right, because, and I don’t want to like, personally, share any opinions on the political aspects of this, but like, purpose as it evolved, it also kind of coincided with like other broader trends that were sort of in the general zeitgeist of purpose. You know, there’s the rise of things like DEI, ESG, which is sort of purpose-related. There’s sort of, you know, the quote-unquote woke, there’s generally like, I’d say, like a decline in like the R-rated comedy movie, and sort of a rise in like prestige drama TV, and there’s all these—all these things that kind of come together in this era, and leads to ads also being sort of more homogenized as well.

And when somebody like Elon says, “I have a purpose,” he probably thinks he has purpose, his employees probably think they have purpose, but it’s a very different purpose than sort of the rest of that sort of, you know, zeitgeist stuff that was sort of tied with purpose. It’s like, well, is it purpose that’s wrong here, or was it more of all that other stuff? Could there be an argument for like, sure, have a purpose, but also like, you can, you know, as long as your purpose is original and distinct and not being undifferentiated, in a way, could there be a place for purpose to be successful?

Nick Asbury: Yeah, well, I think, yeah, you’ve made many good points there. I do think, I totally do think all of this, purpose within the business and advertising world, I think all of it is connected to that larger cultural shift that we’ve been going through over the last two decades, I guess. And I think you’re right that the same cultural shifts that have made Hollywood films or TV dramas kind of more serious and less funny... there are connections between that and the same thing happening with advertising where, you know, there’s a real urge to be, to be kind of more serious and to have a kind of some kind of purported political message in what you do.

Ironically, I think the take-out for marketers there should be, you know, consumers are craving a bit of light relief, I think, you know, in a very serious world, where, yeah, you know, everything from stand-up comedy to films to music to other forms of culture are getting more and more serious and more and more kind of tight about stuff. You can at the very least just have a few funny ads in the ad break. And ads that you can laugh at and enjoy, whether you’re a Biden supporter or a Trump supporter.

That’s, I think, ads can be actually quite therapeutic and, you might even say purposeful that way with a small p, in the sense that they just add a bit of entertainment to life, they create a bit of common ground that people can agree on. And, yeah, not everything has to be loaded with this very earnest sense of purpose, I think. And I think that’s where advertisers have really kind of let people down, I think, in recent years. I think it is turning round. I think there’s been a shift in the last year or two.

But, yeah, it remains to be seen to what extent or, you know, where that will evolve to next.

The Vibe Shift of 2024: Are we past peak “Purpose”?

Andrew Mitrak: Coincidentally, I think it did shift right around the time you published your book—maybe not coincidentally.

Nick Asbury: Oh yeah, it was all down to me.

Andrew Mitrak: I wanted to talk about that because I think there has been sort of the vibe shift, I guess, right around 2024. And I think it is hard to decouple whether that’s a marketing or business purpose shift, or more of just a general tone in a cultural counterreaction to what came before it, more broadly. Some people kind of call it the Overton window of what you’re allowed to say is kind of shifting open again. And I guess, do you have any thoughts on sort of, are we past peak purpose?

Nick Asbury: Yeah, I certainly think a lot of the power has been kind of drained out of the purpose movement by all sorts of shifts that have taken place. I think if some kind of historian of advertising or of business was writing about this in 100 years’ time or something, I think the basic bookends to the purpose era, if you like, would be the 2008 financial crash at one end, and I would say the reelection of Donald Trump at the other end in 2024. Regardless of your politics, I just think there was a real sense of that being a real marker culturally where people kind of felt, “Okay, certain narratives haven’t been working.”

And it kind of gave the lie to a lot of these things that were fueling purpose, you know, the idea that younger generations were craving businesses to get involved in politics and push progressive causes, and then it kind of turns out that more than half of them are voting for Trump, or certainly on the male side, and a large proportion on the female side as well, and the vote was increasing rather than decreasing.

So, there were lots of sobering realities that came home, I think. And I certainly think now, if you go into a boardroom and start talking about purpose, regardless of your position on it, it will just feel like a bit of an old, yesterday’s idea, kind of thing. Which isn’t to say—one thing I’m always very anxious about with this is that I don’t think that at all means that suddenly we should just not talk about ethics anymore, or trying to advertise responsibly, trying to do business responsibly. I think all of that is a permanent conversation. If anything, I would hope that conversation can happen more clearly and seriously and in a more grown-up way than this kind of purpose fantasy that people have been living in for too long, I think.

So, yeah, I do think it’s shifted, but I also just wouldn’t want to overstate it because it’s very much woven into the fabric of a lot of industry institutions. The award shows, you will still find, are full of purpose work—maybe not quite as intensely as they were, but certainly there’s a lot of of it still there. And a lot of people still fundamentally hold the same belief, even if they know it’s not quite as fashionable to talk about now. So, yeah, I don’t think the argument will go away, but I think the most intense period of it has maybe passed.

Why Are Purpose Advocates Mostly Late-Career Marketers?

Andrew Mitrak: A question I also wanted to ask about is, I think that you kind of alluded to this, that a lot of the people who are proponents of purpose tend to be a little later in their career. They tend to be maybe even almost retired, or kind of in a reflective mode. Maybe they’ve been very successful business leaders and have spent a lot of time in the office, and they might be thinking about their own purpose in life. They might be thinking, “Oh, well, I spent a lot of time making silly advertisements, did that do anything?” Maybe these advocates—and I don’t want to speak for any individual exactly, but they think that if they can inject purpose into business, it might give their life more purpose, as well, or justify their time spent on advertising.

I will share one example, and it’s somebody who I’ve interviewed on this podcast two times, who is kind of a mentor to me, and that is Philip Kotler, who’s in his 90s. He has written articles that say, you know, he’s famous for popularizing this idea of the Four Ps of marketing: product, price, place, promotion. He has written articles saying, “Oh, the fifth P is purpose.” He is a very accomplished person, who legitimately wants to make the world a better place, and has that top of mind. And I’m wondering—not just to respect our elders, but these are people who probably have some wisdom, or who knows, in several decades’ time, you might have some conversion yourself, who knows. Does who it’s coming from, or where they might be in life, does that change your view at all? Do you agree with the premise of my hypothesis here, and what is your reaction to that hypothesis?

Nick Asbury: Yeah, I think it’s a great point. And I would totally share the same observation that a lot of this has been driven by people closer to the end of their careers than the start. But I would take a very different kind of reading of it, I guess.

The way I would see it, like in the UK, for example, just looking at the advertising world, the kind of D&AD world—and this is not to personalize it too much, but just to give a couple of examples—there would be guys, the generation of kind of a Steve Henry, who’s a bit of an advertising legend through the ‘80s and ‘90s, and Tim Lindsay, same kind of generation, who’s now chairman of D&AD and has been a very vocal advocate of purpose. They and quite a few others come from a certain generation where they’ve actually had immense fun in their careers. They’ve flown around the world, making fun ads for Levi’s and inventing silly characters that have caught on, and just having fun doing commercial advertising, famous commercial advertising. And then, towards the end of their careers, there’s a kind of sudden discovery of conscience, in a way, where it’s suddenly like, “Oh, well, we personally now want to rebrand ourselves more as kind of guru-like figures at the end of our careers who are now going to impart some wisdom about the importance of being ethical,” and so on.

But I actually think there’s something a little bit, what’s the word, self-serving about it, in the sense that, yeah, fine, that may make a good positioning for you as a kind of elder statesman of the industry, but actually, in a way, you’re pulling the ladder up behind you. You’re saying, “It was okay for us to have fun. It was okay for us to make silly ads that were funny and enjoyable to make. But all you lot now, you need to be super serious, and you need to cut down your carbon emissions, and don’t make silly ads, make worthy ads, and otherwise you won’t get an award from us,” and that kind of thing. I’m putting it in a slightly simplistic way there, but I do think there’s been a real sense of that. It’s easy to say that now that you haven’t really got a stake in the game in the same way.

But having made your name, and made lots of money doing that kind of work, I think to then turn around and say, “Ah, but now everything’s different, you all need to be ethical and purposeful.” I just think there’s something a little bit convenient about that. And I’ve got great respect for Philip Kotler’s contribution over the years, but I do think this kind of—I know he’s written versions of that “fifth P is purpose” article. It first came out in 2013, and has come out every two or three years since in various forms. I just find there’s something a little bit opportunistic about it, if I’m being unkind. Which doesn’t undermine his previous work at all, but I think it’s maybe just an attempt to feel more relevant given the cultural climate, and it’s not really being done with the same rigor that he would have brought as a practicing marketer back in earlier times. So, yeah, and all of that may sound a little bit unkind, maybe. But I do think, given that the movement often portrays itself as a kind of youthful uprising, I think it’s surprising the extent to which it’s led by actually quite men getting on in their years, and kind of rebranding themselves late in their careers.

Andrew Mitrak: Yeah, for sure. And I think there’s almost sort of like a survivorship bias to it where, “Oh, we’ve made it this far, I’ve already done the hard work in my career, you can kind of give that advice later,” but it actually doesn’t work in the moment in the same way.

Nick Asbury: Yeah, yeah.

Andrew Mitrak: And it’s not what got you to where you are now in order to be in a position to give that advice. It’s kind of a post-rationalization, really.

Nick Asbury: So, but yeah, I do think there’s something. I actually, you know, I write my Substack, and I think I have had something in the drafts for a while that I never got around to finishing, but it was kind of about this issue of, I guess, the more psychological reasons that some people get into this stuff. So, yeah, maybe I’ll get around to finishing that at some point.

Human Creativity, AI, and Lateral Thinking

Andrew Mitrak: Yeah, I’d definitely read it. As we sort of approach the end here, you mention how about 80% of your book is more of sort of the takedown of purpose, and that’s where we’ve spent most of our conversation. The last half, as in the subtitle, is about how human creativity is the way out. And you specify human creativity, not artificial creativity. So, I guess on that last bit, and sort of on the more optimistic, forward-looking note, what’s so good about human creativity? Why is that the way out?

Nick Asbury: Yeah, I do think—first of all, I’m very glad you asked, because I know I can sound negative sometimes. But I hope there is a very positive argument in the book. And I think human creativity—if you go back to so many of the great brands, the real magic comes from moments of human creativity. Someone, somewhere, comes up with the line that defines the brand, you know, the “Just Do It“ or the “Beanz Meanz Heinz,” or whatever it is. And it’s a moment of human inspiration and lateral thinking, and verbal or visual creativity that actually gets endlessly post-rationalized. People build strategic arguments around things, but really it starts with a creative spark, I think.

It’s always been a difficult thing for the ad industry to talk about, because how do you quantify creativity and sell it without just sounding like some kind of hippie weirdo in the boardroom? But I think that is the truth about advertising: it’s quite hard to predict what will work, and it’s often the little lateral step, the little play on words even, that can end up building a billion-dollar brand.

So, yeah, I kind of think brands need to center themselves around that, really. I talk about purpose being a closed mindset and creativity being an open mindset, in the sense that as a business, I think if you’re defining your purpose in advance and you narrow in on it, it’s a goal-oriented way of looking at the world. Whereas I think if you put creativity first, it’s actually about being curious about all the little side routes you might go down, and what other opportunities there might be, and it just leaves you open to serendipitous things happening, in a way that I think purpose doesn’t. Purpose tends to squash you into a particular place where everything has to be very earnest and worthy. So, yeah, there’s a lot to say on that, but I essentially see creativity as the flip side to purpose, really. And, yeah, I think we should talk about it much more than we do as an industry.

Andrew Mitrak: A phrase that you used a few times was lateral thinking and taking lateral steps. I think that’s actually one of my favorite concepts, and I think it’s such a useful one. It’s also one where you kind of emphasize human creativity, especially looking forward in this current era of artificial intelligence. For all of how powerful and useful AI is, it’s not actually very good at lateral thinking yet, or bringing together disparate ideas. I think it might actually be, sometimes, how the models work. They are “thinking models” that kind of go down a train, and you can feed it a lot of disparate information, but I feel like humans are, at least at this point, the ones that are able to make lateral moves and lateral ideas, and kind of take side steps. That’s so much of where lateral thinking happens.

“Just Do It,” I think, was inspired by Gary Gilmore, a person who was about to be executed, saying “let’s do it.” No AI—I doubt it, I’d be almost worried if an AI was looking at execution records to inspire my ads. But it’s something that is so uniquely human. And as you say, AI models are trained almost on the purpose era of advertising. I think they probably are pretty good at helping your brand purpose if you wanted them to. But also, I feel like lateral thinking and creativity are ways to stand out now more than ever, both to differentiate from the purpose era and from the current AI era.

Nick Asbury: Yeah, totally. I’m a great fan of—there’s a book, which may be more famous in the UK than elsewhere, called A Smile in the Mind. It’s kind of a classic book that came out in the ‘90s all about witty thinking and lateral thinking in design and advertising, which I always thought was a brilliant book. Actually, in 2016, I was lucky in that I ended up co-editing a kind of updated edition of the book. But it’s all about that kind of work that relies on a twist of some sort, some kind of lateral leap.

I think that’s a really powerful way of looking at the business world and trying to—because so much of it is about taking familiar messages and trying to make them feel a bit new again. So, if you can think in that kind of lateral way, I think it’s really powerful. And I think you’re right that AI—in theory, AI should be good at it because it’s full of all these reference points; it knows way more than any human can fit in their brain. So, you would think it could generate more of these connections, but I think where it falls down—and I’m actually a big fan of AI, I think it’s quite exciting to be living in this period—ultimately, it is making statistical probability-based judgments about which word to put next. So, it’s never going to take the most surprising lateral leap. It’s going to take one that maybe has already happened somewhere before. So, yeah, maybe it will take humans to make those connections. Yeah, interesting times.

Where to Find Nick Asbury

Andrew Mitrak: That’s right. By the way, I’m a big fan of it too. I use it quite a bit in my work. But also, I think that, at least currently—and hopefully for a long time, as a humanist and a fan of humans in general—we’re at this moment where it’s sort of the humans plus AI that can do really interesting things. Maybe humans can still sort of find the lateral moves with AI as an amplifier tool. The combination of the two is really exciting to me today. When it’s all AI, you recognize it as slop. And when it’s all human, that’s great; it’s great that there are still humans doing things entirely. But also we’re at a unique moment where there’s a chance for the two to blend in interesting and surprising ways, and I agree it’s an exciting time to be in.

Nick Asbury: Absolutely.

Andrew Mitrak: You mentioned A Smile in the Mind, and I’m going to pick that up. I hadn’t come across that, so I’m going to order it. And also, you mentioned your Substack. Can you tell listeners where to find you online and read your work?

Nick Asbury: Yeah, at the moment, Substack is the best place. I’m not a regular poster, but when I post, I tend to go long. So, nickasbury.substack.com. And then LinkedIn is probably the one social platform where I’m most active, although for some reason, I haven’t been in recent months. But yeah, I’m quite often involved in all sorts of arguments on there if you want to go and join in.

Andrew Mitrak: Great. Yeah, listeners should definitely check out your Substack, and also find you on LinkedIn and read the book, The Road to Hell. I think, of all the books, just as far as how impactful it could be to how you think and see patterns, and how great it is as a marketing book—I hadn’t come across it until recently, I think I maybe saw Byron Sharp post about it as well, so it came across my feed and I was like, “Wow, this is actually really great.” I hope more people read it as well, because it’s a really exciting read. If you’ve listened to this conversation, you should definitely, definitely read that book. Well, thanks so much, Nick. It’s so great to connect. I really enjoyed this, and I feel like we covered so much ground. I learned a lot from you and feel very inspired by the conversation, so thanks so much for your time.

Nick Asbury: Oh, thanks. That’s very kind, Andrew. I appreciate being asked on. I know you’ve had some great guests, and, yeah, really enjoyed the conversation. Thank you.

A History of Marketing / Episode 52

Gian Fulgoni has spent 50 years as a pioneer in market research and audience measurement. From his work on scanner data at IRI in the 1970s to co-founding Comscore in 1999, Gian helped invent how marketing gets measured, first in supermarkets and then on the internet.

His career sits at the center of two transformations that reshaped the field. At IRI, he helped pioneer the use of supermarket scanner data and built one of the earliest controlled experiments in television advertising, a system that could send different ads to different households in real time, in 1979. Two decades later, he co-founded Comscore to bring that same measurement rigor to the chaos of the early internet, building the panels and tools that defined how digital audiences and e-commerce got counted.

Gian has lived through every major shift in modern marketing measurement, and he’s candid about what went wrong along the way. He has watched the industry get seduced by metrics that are easy to capture but don’t actually measure whether advertising works.

In this conversation, we cover:

* Why digital marketing metrics like click-through rates and ROAS are misleading, and why the industry keeps using them anyway

* How scanner data accidentally flipped CPG spending from advertising to promotion and handed power to retailers

* Why data shows that creative is the biggest driver of advertising effectiveness, and why the industry keeps ignoring that lesson

* What the dot-com era might tell us about today’s AI revolution

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Tod Johnson, whom you may remember from episode 51 of this podcast, for introducing me to Gian.

Andrew Mitrak: Gian Fulgoni, welcome to A History of Marketing.

Gian Fulgoni: Well thank you. Thanks for the invitation to be here today.

Andrew Mitrak: I want to start right at the beginning. You studied marketing in London and then moved to Pittsburgh to work in marketing. How was the marketing scene different between the UK and the US?

Gian Fulgoni: Well, you know, marketing was kind of viewed as having originated in the US, but that’s really not the issue that I was focused on. So my undergraduate degree is in physics. Right? And while I might have been good at it in high school, it was like going from the minor leagues to major league baseball when I got to university. I had no competitive advantage in physics. I was trying to figure out what to do next, and it was the beginning of marketing, actually, in the US and certainly in the UK. I did some research and realized that marketing might be a good place for me to be.

I did, I think, anticipate correctly that data and computers and the like, analytics, would become more important in marketing as time went by, which kind of reinforced my decision to major in marketing. I got a master’s degree in it. Then I got offered out of the blue. I got a job while I was still at school that took me to Pittsburgh, and it was a company named Management Science Associates that was started by a professor out of Carnegie Mellon who wanted to do research on things he was interested in. He started a company that was focused on analyzing data, basically. Processing and analyzing data. And that’s where I ended up.

Is Marketing a Uniquely American Discipline?

Andrew Mitrak: I want to follow up on, you said that it seemed like marketing had originated as more of an American field. It’s something that on this podcast I’ve actually encountered. Like I’ve talked to Phil Kotler, who is often called the father of modern marketing, and he kind of says that marketing is uniquely American or comes from an American tradition. And I’ve talked to folks though from abroad who reject that or they push back on that, and it’s just sort of like a North American bias. So it’s interesting as somebody who was in the UK, you kind of perceived it that way. Can you speak to that?

Gian Fulgoni: Yeah, I mean there’s no question in my mind. There’s no question in my mind. For example, where I got my master’s was the only university in the UK that had a master’s degree in marketing. That was in 1969. I mean, you could get a master’s degree in marketing in a bunch of universities at that point in time in the US. There were only two MBA programs in the UK at Manchester and London. You know, you had dozens of them. So, if you look at all of the people who pioneered marketing, they’re really from the United States. So I don’t think there’s any question that the US was ahead at that point in time and maybe to this day is still ahead.

Andrew Mitrak: So did you go into marketing knowing you wanted to go to the US eventually?

Gian Fulgoni: No. No, it was, I had done some research, talked to some other people who were going on to MBA programs when I was in my undergraduate final year. And that’s what I decided that marketing looked really interesting. As I said, I think I anticipated the data and analytics, computers, would become more important there. But I had no idea, no intention of coming to the US. It was when the job offer came along that I suddenly thought, man, this is the opportunity of a lifetime. I gotta do this.

The Early Adoption of Computers and Data in Marketing

Andrew Mitrak: You were really early to computers and data in marketing. Marketing as a field in the UK was early, and then attaching computers and data onto it. How did you make that connection initially?

Gian Fulgoni: I think in large part it was because the company I worked for, Management Science Associates, their business was helping companies use whatever marketing data they had. And that would involve taking raw data, if you will, and processing it, analyzing it, whatever data it was. It could have been panels of consumers, back in those days it was diary panels. Or it could have been shipment data that companies had, or it could have been Nielsen audit data, or another database was SAMI warehouse withdrawal data, or whatever data they had. And so I was able to learn the basics of what was available as data, how to process it, analyze it, how to improve it, and I think started to get a feel for what was not available that maybe could be a home run if it became available.

Riding the Technology Wave in Market Research

Andrew Mitrak: It strikes me, this is a little bit of an odd question, but have you seen the show Mad Men?

Gian Fulgoni: Yes. Yes.

Andrew Mitrak: It strikes me the analogy I was thinking of like people like you who adopted computers early. In that show, there is a character, Harry Crane, who adopted TV, and he became the head of television and sort of rode the wave of TV. And people like you were very early on to computers and data and sort of rode that wave. I feel like marketers who can identify the right technology ride a wave, it can propel you in your career. Do you think of it that way at all, like part of it is timing and finding the right technology and positioning yourself as the expert in it?

Gian Fulgoni: Absolutely. Oh, absolutely. I mean, I have often said I didn’t create any particular technology. I just took advantage of breakthroughs in technology that allowed for the creation of new applications and new products. But I think I did see early on that it just had to evolve, right? Computers, it was pretty clear, were getting faster, at that point bigger by the way, we hadn’t reached the trend when things were getting smaller. But you could see that the data that was becoming available, that was changing. The way that data was being analyzed, things that could be done with data that wasn’t available at the time. I mean, the emergence of scanner data was a great example, because that changed everything in how consumer packaged goods marketers operated. One truth at least that’s evident to me is that data, the availability of data, can change markets fundamentally. And I think there are numerous examples of that in history, if you will, certainly over the past 40 years or so.

The Founding of IRI and the Emergence of Scanner Data

Andrew Mitrak: Can you tell me the story of what led to you founding IRI?

Gian Fulgoni: Yes. Well, I wasn’t the founder. Let me say I was hired shortly after they had started the business. And as it happened, the person that started it, John Malec, had worked at Management Science Associates where I was at, so I knew him. And what they did was pretty amazing, even looking at it today. So basically, scanning was beginning to be installed in supermarkets, but it was nowhere near pervasive. And so what IRI did is they bought the scanners for the retailers in two small cities, Pittsfield, Massachusetts and Marion, Indiana. And they gave the scanners to the retailers with the understanding that the retailers would stock new products as they came along that IRI would bring to them, that they would only supply the data to IRI, and that they would accept an ID card from households who became members of the IRI panel. Alright? So that was the scanning part of it, and that was a breakthrough because then we were able to cover the entire city. And there was no other city in the US that you could measure.

Inventing the “Black Box” for Targeted TV Advertising

Gian Fulgoni: And then they did a second thing that maybe was even more dramatic. They invented a black box that sat on the television set of these households. In these towns, you couldn’t watch over-the-air television, the broadcast signals weren’t strong enough, so you had to have cable. They gave the panelists, with permission, a box that allowed IRI to change the television advertising in real-time without you knowing when that was occurring. Okay, so it was targeted advertising in 1979. Crazy to think about it today, right? And so what we could do is we could send one advertising campaign to one half of the panel and a different campaign to the other half then read the impact by looking at the scanner data and seeing what they were buying. It was a home run! … In 1979.

Andrew Mitrak: I have to ask. So this black box, how did that work? Did they detect there was a commercial break and change advertising was it just like almost any broadcasting?

Gian Fulgoni: Technically they way it worked is that we had an agreement with the cable company and so we had a studio at the head end of the cable system and so we knew when the ad was coming down that we had to change. So if we wanted to reduce ad spending, we would substitute a commercial for anti-smoking or something like that, or otherwise we would be able to ride the ad over another ad that the client owned. Okay? And then the box, we would direct the boxes that we wanted to see advertising A to get A, and the other ones would get B. But it all happened in real time. So if you were a panelist, you gave them permission for this to occur, but you were never aware of when it was actually happening. And as I said, it was a home run in terms of its ability to measure advertising effectiveness. It was just a beautiful A/B test design. Very profitable business. And we took the company public in 1983. So that was way before scanners had become pervasive. And then there’s a separate story around that as we built out the capability nationally.

The Tension Between Data Measurement and Creative Quality

Andrew Mitrak: It sounds just, that tech sounds way ahead of its time. It’s so ingenious. As you got all this data and you ran these AB tests, were there any myths about consumer behavior that IRI helped debunk or what were the key learnings that you found?

Gian Fulgoni: Yeah, that’s a really good question. So I’ll give you one example. I won’t mention the client, but it was a client that was spending a lot of money on television advertising. And they wanted to see if they could move the needle in sales. So they came to us and they said, we’re going to spend six times what we’re spending, and we want to do that as an experiment. And that was putting the equivalent of a ton of money. And so off we went. We ran the test for six months. I’m looking at the results and there’s no increment in sales. There’s nothing. Right? I’m thinking, oh, this is going to be trouble. I gotta go and present these results. And so before going to the meeting, I was talking to the head of research who had commissioned the study and I said, this is going to be really a problem, isn’t it? And he goes, no, no. And I go, why is that? He goes, well, six times nothing is still nothing. And his point was that the creative had never tested well. And so you put six times the money behind poor creative, and you get nothing. And that was a real learning point for me. Because it pointed to the importance of creative. And then we did other work that confirmed it. That basically, and others have done the same thing, it basically points to the fact that typically two-thirds to 70% of an advertising campaign’s impact is because of the creative, not the money that you’re spending or the media plan. And I think that lesson is kind of being forgotten today. It’s all become a question of how many impressions you shove at people.

Andrew Mitrak: I feel like sometimes, and I’m generalizing here, the creative people are almost at odds with the data people, or that they feel like they’re in different camps of marketing. But in this case, your data was supporting the importance of creative, and it’s sort of a better together type story.

Gian Fulgoni: Well, yes, except for the creatives who wrote the creative that we just tested. They probably didn’t like the results. Yeah, I mean, there’s always been that tension, and I suspect it’s probably still there. I mean, there’s just this feeling that they don’t like being measured. I don’t know whether it’s fear of failure, if you will, or just the ego saying, “Well, look, I came up with this great piece of creative. Why do we need to measure it?” I don’t know what it is, but I do know that it’s always been an issue. But as I said, I think one of the really troubling aspects of advertising today in the digital world is that we’ve gone to a point where the attention paid to creative is minimal compared to all of this automation that’s going on that I think is just trouble personally, but that’s my view.

The Pitfalls of Modern Digital Advertising and AI Automation

Andrew Mitrak: Yeah, for sure. That people just think, oh, just automate away your creative. It’s like, well okay, then your creative is going to look like everybody else’s.

Gian Fulgoni: Right. Exactly. And now we’re going to use AI to create the commercials. Right? And AI is going to decide where it’s going to run. And then we’re going to use synthetic panels that are AI-built to figure out the response. I mean, it just seems idiotic to me. But I think I know the drivers of this. I think the drivers are the technologies available, and there’s a need for speed and low cost. And that overwhelms sensibility sometimes.

Andrew Mitrak: Have you seen that story play out before at all? Or does it seem uniquely different? Like, you’ve gone through a handful of technology shifts and a lot of excitement around a thing where “this will change everything.” And of course, it does change a lot, or things change a lot, but maybe the changes might be misunderstood. Do you feel like this feels like a familiar moment to you, or does it feel like something different?

Gian Fulgoni: No, it does. It feels like an exaggeration of the availability of technology and maybe a lack of focus on, it seems to be technology’s ability to drive the metrics and the system, but nobody seems to be paying enough attention to whether those metrics are really meaningful or not, right? Or how to deal with them. I can talk a lot about that in a second, but I’ll give you one vivid example.

The Unintended Consequences of Scanner Data on Market Share

Gian Fulgoni: And it’s scanners, right? So at the time that scanners became available broadly in the US, if you were in the consumer packaged goods world, the only way to know what was selling at retail was Nielsen’s manual audits. So Nielsen would have 10,000 people or something like that around the country who would manually audit stores. They’d go in, they’d look at what was stored in the back room in the store, they’d get the invoices for what was ordered from the warehouse, and derive what was sold over a two-month period. And so marketers were using two-month data points. Alright? Now, if you use two-month data points, everything seems to smooth out, and it becomes, the lines of market share seem to look flat. There’s not a lot of variability in it. Well, imagine when one day scanning data became available, and it was measuring weekly sales movement. All of a sudden you saw those weekly sales responses that were hidden in bimonthly data. Right? And it was caused by the promotions that were running. Promotions in packaged goods had been running week to week. A manufacturer would pay a retailer to lower the price for a week, they’d get an in-store display, they’d run an ad in the newspaper, and then next week it would be another different manufacturer, probably in the same category doing it, right? Well, if the only database you had to measure the impact was two months of data, and these events were running week to week, you could never figure out what was really happening. And then scanning came along, and it was dramatic because in a flat world where change doesn’t seem to be occurring, advertising thrived. And typically, two-thirds of marketing spending in packaged goods went to advertising, television predominantly, and about a third went to promotion. When scanning came along, it reversed itself really, really quickly. Because all of a sudden the retailers could see what was happening, and the retailers had such power that they were able to demand more promotions. And the manufacturers had to go along with it. And suddenly all of their spending started shifting to promotion. And it went from 70-30 in favor of advertising to 70-30 in favor of promotion. And I’m not sure that enough thought was given to the impact on a company’s financials. And the retailers became much more powerful to this day.

The Short-Term vs. Long-Term Debate

Andrew Mitrak: As you do promotions, there’s sort of this race to the bottom, and then that led to this whole brand equity thing too, right, where companies started to say, “Well, you gotta, you can’t just measure sales week to week, you gotta measure your overall brand equity, and if these promotions are hurting it...”

Gian Fulgoni: Yeah, I mean it’s a real issue. I mean, race to the bottom, you know, is maybe a little bit of an exaggeration, but if price becomes the driver of people’s buying behavior, that’s not particularly healthy, I would think, you know, speaking as a marketer. So, speed was a big driver of it, and the data, the ability to understand what was going on. And you know, if you then fast forward through the years, things get faster and faster, and the ability to run promotions becomes faster and faster. And if you were to say to a marketer or a CMO or a CEO today, “Hey, I want you to run a campaign, an advertising campaign, but it’s going to be a branding campaign, I’m not going to be able to give you the results for six months.” They’d laugh you out of the room. Right? I mean, I can’t wait that long. I gotta know within a week or within a day what’s happening. And the moment you have that perspective, you know, I think you fall into the trap of fast digital marketing with metrics that are available but may not mean anything at all. And so I kind of trace it, you know, the evolution, at least in my lifetime, from the availability of scanner data through to today when digital marketing is pervasive, and the next step is going to be what does AI do to all of this.

How Scanner Data Favored Promotions over Creative Advertising

Andrew Mitrak: That’s really interesting. I don’t know if I’ve heard it articulated that way, that the scanner, of course I was aware that scanners were related to promotions, but that scanners were almost the causality of accelerating promotions and amplifying promotions, and that because this is something that’s measurable, you kind of over-index on this channel because that is what’s being measured. Right. And it’s just interesting, you’re somebody who’s made your career in this form of analytics, and just kind of hearing that you’re able to reflect on some of the unintended consequences or it kind of being taken the wrong way or going too far, is just kind of an interesting reflection.

Gian Fulgoni: Well, I mean, maybe I had too negative of a view of it. I mean, when all of this reality hit home, a new area of analytics emerged, which was trade deal evaluation, price promotion strategies. And the big consulting companies took it over, right? It wasn’t the market research companies that owned that. I mean, the charge for those big studies was way, way more than we would ever charge. And you had to have the credibility of McKinsey or Bain to be able to get away with it. But it did drive a lot of thinking about, you know, how do you run these promotions, you know, with these retailers, and, you know, what should your price strategy be, etc., etc.

The Early Days of E-commerce Measurement

Andrew Mitrak: So, you were early to adopting computers and data with marketing. When did the internet come on your radar? And what was your initial encounter with the internet? And as somebody who’s an early adopter of technology, what was your initial impression of, “oh, this is going to be big, this is going to be important for marketing”?

Gian Fulgoni: Yeah, I was probably not as early as I should have been in the impact of the internet. I was invited to join the board of a company called Yesmail that was doing email marketing, basically. Around 1999, it became clear that the internet was accelerating, I mean, we didn’t anticipate the dot-com bubble at that point, for sure, and that there was the opportunity to kind of replicate what we had done at IRI on the internet. Alright? And my business partner and I, who had been president of IRI, and you know, when I was CEO there, a gentleman named Magid Abraham and I started Comscore. And the idea was, there were two aspects to it. One was e-commerce was emerging, why don’t we build a system to measure e-commerce trends across all categories, not just consumer packaged goods? And as a byproduct of that, we’ll be able to measure the effectiveness of digital advertising on online sales. Easy to say, not too easy to build. There’s no UPC code. So we had to develop all these screen-scraping technologies to just pull the data off from the computer screen. And then you had to have massive panels of people. And we had to figure out how do you recruit 2 million people who will let you, who give you permission to put our measurement software on their machines. So we figured that out and started measuring e-commerce, and we were the only independent company doing it. So we’d get invited onto Squawk Box or Squawk on the Street, and during the holidays, Black Friday, we would always be on predicting what was or reporting on, you know, what had happened. Um, so you know, it worked out well, and we started measuring advertising effectiveness around the same time.

The Dot-Com Frenzy and 24-Hour Financial News Networks

Andrew Mitrak: So Squawk Box, was that CNBC or like Fox Business?

Gian Fulgoni: It was CNBC.

Andrew Mitrak: And this is like the rise of CNBC as well, as another part of the internet dot-com era, is that 24-hour news is a thing, and then all of a sudden 24-hour financial news and stock markets. And this is when people kind of, I feel like, an early wave of consumers sort of getting into the market and trading and all that. So you found Comscore, and you’re kind of a thought leader who’d appear on those types of shows?

Gian Fulgoni: Yeah, we always looked for that. I think one of the things we did pretty well was marketing ourselves. And you know, we knew that if we could get onto Squawk Box first thing in the morning when a lot of stock analysts and traders were watching it, and you know, eventually we were public, that’s going to be good for the business. But this was in the early days, this was like 2001, 2002. We went public in 2007. So this was before we went public, but we got the publicity, and you know, that just helped the business, that helped the customer base, if you will. We started getting a lot of inquiries from companies wanting to buy our information and so forth.

Bringing Market Research Rigor to the Wild West of Digital

Andrew Mitrak: Let’s go back to founding Comscore. Something that I’ve observed is that when a new technology paradigm emerges, often people kind of bring things in from the previous paradigm. Like, if you look at the very early movies, for instance, like the silent movies, they almost film it like it’s a play. A lot of movies just sort of point a camera at the stage. And then sometimes you see this with tech too, where early internet advertising kind of looks like newspaper advertising. It doesn’t sort of look like internet native, per se. Were there any things as you were figuring out and building Comscore that you’re bringing from IRI that did or didn’t translate into this sort of new paradigm?

Gian Fulgoni: Probably more in the area of the underlying technology than anything else. What I mean is, as opposed to us figuring out how marketing was going to evolve. I don’t think it was that so much, but we certainly did understand the importance of scale in our data collection platform. That it had to be scalable in a massive way because it was clear that we would need to measure more and more and more things. And remember, at the beginning there was no social media, there was no search, there was no video. All of those things emerged later, but we had to make sure that the basic technological infrastructure was able to handle it. We did also though, um, bring over analytical methods that had worked for us. I mean, we knew the importance of measuring individual consumer behavior at the individual consumer level and then aggregating it up. We also knew the importance of A/B testing. We understood clearly the difference between causality and correlation, which I still think haunts digital marketing to this day. So, you know, we built out a company that used a lot of what worked for us at IRI in terms of technology and analytical approaches. And you know, how do we market the company? And what’s the best way to build it and grow it, and what kind of people do we need and where we’re going to get them.

The Comscore Competitor Landscape

Andrew Mitrak: It’s an interesting story of a dot-com era company, that’s a startup being founded by veterans of an industry. You’re well into your career at this point, you have this long track record at IRI. Were there any competitors that were young, fresh out of college startups who didn’t really, maybe they knew the tech but they didn’t understand the fundamentals of marketing and running an analytics business?

Gian Fulgoni: Uh, that’s a really good question. I don’t think so. I mean, the two competitors, the two competitors I can remember, you know, was NPD and Media Metrix [See Tod Johnson episode to learn more about NPD and Media Metrix], right, who were the first to measure audiences. And then Nielsen was doing it. And neither of those companies were being headed by young executives. So I don’t think I, I can’t maybe I’m not remembering accurately, but if you were to say to me, so who were the competitors you were worried about at that point in time? It was Nielsen and Media Metrix, you know, no question. So that’s an interesting question. I’m wondering what the implication of that is.

Andrew Mitrak: It’s an interesting example because usually, very often when a new technology emerges, it paves the way for some new disruptor or somebody who’s kind of native to that category to have an opportunity. But it sounds like sort of the bigger, more established players, I guess Comscore was a new company, it wasn’t part of IRI, right? But it was founded by people who are veterans.

Gian Fulgoni: Yeah, Comscore was really new. You know what it could be, Andrew, as I think about it, is that where the young kids were going was into the, they were forming the companies that were executing things online, whether it was e-commerce or advertising or whatever. And the whole industry was still young and relatively small. And so the need to measure some of these things maybe wasn’t as obvious as it was to us, where we came from legacy businesses that were pretty big. Right? And maybe we were anticipating that as e-commerce got bigger and as digital advertising got bigger, the need for these measurements would just become more and more important.

How Cookies Inflated Metrics

Gian Fulgoni: Now, that’s not to say that there wasn’t a need for certain data elements at that point in time. And the one I will point to probably more than anything else is audience measurement. Alright? That was there because to get the advertising dollars, you had to show what, you know, how many people you were reaching. And that led to a big issue. A big, big issue. Because most of the website operators, the publishers let me call them, right, whether it was a newspaper or an e-commerce site or whatever, but you know, they wanted to get advertising dollars so they needed to show the size of how many people were visiting their website.

And so they would turn to their analytics, their website analytics. Could have been, I don’t know if Google Analytics was around at that point, but there were a bunch of different, I think Adobe had some. And the problem that we highlighted is cookie deletion. And so all of these analytical tools running on the website were basically counting unique cookies. Well, if the cookie, if Jack Smith visits the website, goes off, deletes his cookies, and comes back, he’s going to be counted as a new visitor. And the cookie deletion was prevalent. And so the audience counts were grossly inflated. And we came along with much, much lower numbers. And so the arrows were being fired at us at that point, but you know, I think we did a pretty good job of clarifying that issue and pointing to what the real numbers were.

Andrew Mitrak: Interesting. So the publishers have an incentive, because they want to charge more money to advertisers, to sort of raise their profile and say they have more numbers than they do. They kind of have an incentive to sort of overlook these cookie issues or other things. And you’re kind of coming in as a more neutral third party who’s calling balls and strikes and saying, “Ah, this is a different approach.”

Gian Fulgoni: I’m not saying that they were doing this on purpose knowingly, that their counts were inflated. I mean, a lot of them didn’t. Nobody realized it. Nobody understood the degree of cookie deletion. I mean, we at Comscore produced reports that showed how often these cookies were getting deleted. Right? And then what did that mean to the overstatement of the audience. But you know, not everybody liked to believe it, and so it became a kind of a rough time, if you will, because the advertisers wanted to know what the true numbers were. The publishers wanted the highest number possible. I mean, no surprise there, right?

Andrew Mitrak: Yeah, and at the time also, this is, I was probably a teenager or something like that at the time, using the internet, and if I recall on your browser, it was sort of just a hygiene thing. Like, “Oh, it’s running slow,” “Oh, whatever, delete your cookies, refresh.” And it was sort of just like a thing that you’d do. A listener who’s younger might not delete their cookies every day now, or cookies don’t really even exist anymore, right? So in some ways you’re vindicated about that. But it was just a behavior that you’d do, almost like defragging your computer, which you used to do or something like that. You just sort of like delete your cookies more often.

Gian Fulgoni: Yeah, but you were also, what you also needed to wipe off was malware that could have been on your machine. And so the systems you were using would do both. I mean, it would just clean, you know, very few people would say, “Well, delete the malware but leave the cookies on.” Right? And so everything got wiped off, and you could, as I recall, you could delete it as frequently as you wanted. And so we had these charts developed that showed according to the frequency of deletion how much the overstatement was of the visitor counts.

The Flawed Fixation on Click-Through Rates

Andrew Mitrak: Interesting. So something within this is that you kind of pivoted from doing more e-commerce tracking to doing audience measurement, right? Was this sort of a deliberate pivot for you?

Gian Fulgoni: Well, we always, so let me separate advertising measurement into two buckets, if you will. There’s the audience measurement part, and then there’s the effectiveness measurement part. We always were after the effectiveness measurement part. Because we had the sales numbers so we could do it. So we were doing that from the beginning. In terms of the market for the straight, you know, counts of how many people were visiting a website, that, the importance of that, I think emerged for us a little later. And you know, that’s when we went, you know, full tilt and introduced our product, which was built to scale and it was very successful. But yeah, I mean, we did know that there were multiple market segments that would emerge if we could capture the data, the variables for all of the elements that we were interested in. What we didn’t anticipate is the degree to which these computers were spitting out metrics that were irrelevant. But if you wanted to ignore that and leverage them, you could do that, and I’m heading straight down the path of identifying the click.

Andrew Mitrak: Yeah, click-through rates.

Gian Fulgoni: Pioneering work on that. I personally did a lot of it, where we basically showed that in a controlled test, so we’d look at click rates and then we’d look at the advertising effectiveness measured by an A/B test. There was no correlation. No correlation.

The “Punch the Monkey” Era and Misaligned Metrics

Andrew Mitrak: And it’s funny from this era as well, the advertisement that I have sort of a vivid memory of like on the internet was this “Punch the Monkey” thing where like it was a banner ad where like a monkey would dance around and it’d say “Punch the monkey,” and if you move your click over it or mouse over it, it says you just want to like click the monkey with something. And the trick of the ad is that anywhere you click on it, it works, whether you hit the monkey or not. But it’s just like, I don’t even remember what it was advertising. It was probably some scam or something like that, but it’s like it was everywhere at the time. And it was just purely designed to click on it. And it’s like, and they’re just like amping up clicks.

And I think a lot of ads that were display ads or banner ads that we now almost think of as like a type of like a brand advertising and not necessarily optimized for a click in the same way, at the time, you’re sort of forcing those into clicks because that’s what got measured. And so it’s just sort of like a lousy ad that was sort of hacky. And so people kind of played games like that.

Gian Fulgoni: Yeah, well if you were getting paid per click, you know, you’d want more clicks. Right? The problem was if you looked across the internet, the click rates were one in a thousand on average, right? And yet they were being used to evaluate the effectiveness of ad campaigns. I mean, the numbers were so small they were ridiculous, but then we provided more than enough evidence that it was irrelevant. Right? And here’s the problem, right? We could never get the entire industry to stop using clicks. Because they’re fast, and they don’t cost anything to produce. And I remember doing surveys of the industry, and I asked advertisers, publishers, and agencies, “How often do you use click rates to evaluate the effectiveness of ad campaigns?” A third of them said always. And this was after all this research had been published.

The Overstatement of Digital Advertising’s Impact

Gian Fulgoni: And I think if you fast forward now, you know, years later to look at what’s going on with digital marketing, there’s something really wrong with it, in my opinion and others, that the metrics that are being used are completely wrong, and they’re not measuring advertising effectiveness. It’s been said, you know, if you were to take and believe all of the studies that have been published about the effectiveness of digital advertising, the size of the US GDP would be double what it is today. And I think it’s a valid point. Not everything that can be measured matters. I forget who said that, it might have been Einstein, but it’s true. And unfortunately, in a digital world, these computers are throwing out digital markers all the time of likes and interest and clicks. And then the... I might be old enough to know the way that one should evaluate advertising effectiveness and the difference between causality and correlation, but I think the industry has gone crazy for these metrics that just don’t seem to be doing what they think they do.

So I’ll give you an example. There’s a metric called ROAS, return on ad spend, that you might be familiar with. Right? Well, when you look at “return” on ad spend, it suggests it’s measuring the effectiveness, right? And the incremental lift you’re getting, right? Well, there are so many stories circulating where a CMO goes into the CEO and says, “Oh, great news, you know, the ROAS on our campaign is fantastic, here it is, it’s 4.6.” And the CEO goes, “Well then you explain to me why our sales aren’t growing.” We are in my opinion, in a phase where the effectiveness of digital marketing has been grossly overstated. I’ll go on record as saying that. And I think the drivers are you got so many metrics that are available and it doesn’t cost anything to use them. And you need the results quickly. So speed is another driver. And you end up using approaches that don’t necessarily do what you think they do.

Andrew Mitrak: Do you think on net it’s overstated more because of bad practices and waste dragging it down or do you think it’s overstated because there are fundamental limits to how effective it can be?

Gian Fulgoni: That’s a really good question. I would say both. I’d say both, and I would add a comment on the second one, which is creative doesn’t seem to be getting a lot of attention in digital marketing these days, right? And if one believes that an AI system can create the kind of creative you want, good luck with that one. I mean, as you said, I mean, if one believes that then all the advertising that’s coming out is going to be the same, everybody’s going to be using AI applications. An interesting thought is one AI application going to be better than another one at creative things.

Andrew Mitrak: Yeah, for sure. It’s silly. There’s this Disney Pixar movie called The Incredibles. And there’s this villain in it, is this guy named Syndrome. And one of the things he says is he wants to give everybody superpowers. And he says, “If everybody has superpowers, nobody has superpowers.” And I kind of think of that with AI sometimes, of like if everybody has an equally capable AI to do all their stuff, well then how do you stand out in that world? Right? And play that. And I do think that the answer is actually that there is sort of a human element plus AI has to be part of the equation, that some “what are the things that I could uniquely make with AI, or AI could not make uniquely without me,” and then having some human touch. I just, maybe it’s just me being too sentimental for the value of humans, but I think that human touch has to be a part of it.

Gian Fulgoni: I think you’re right. I hope you’re right. You know, and maybe, maybe it’s the prompting that’s going to be the solution there. Or maybe some of the other data that you need to collect on your consumers. I think that’s the other thing that seems to be slipping is, you know, “Well, how much do you know about your buyers as human beings?” Right? You know, and that kind of leads to this whole thing of “are we going to get AI doing automatic buying for consumers?” There’s a big split on that today, right? Some people say it’s crazy. I’m probably in that bucket. You know, that maybe it’s because I’ve just been around buying measurement for so long that I know that it’s not as rational as we’d like to think it is. It’s not. I mean, people don’t, you know, a lot of things affect the decisions people make about what they’re going to buy. You know, so I find it hard to believe that an AI, you know, ultra-logical system is somehow going to emerge as the way that the average consumer buys. That’s just me.

Andrew Mitrak: Yeah, it’s funny. I am sort of in both worlds. I definitely am, I think it’s actually really useful to look at history and look at big trends and see what happened before. And then I am also like, I am very bullish on AI and a lot of things. But also, I don’t want to get over my skis, and I want to learn from things. Like you went through the dot-com crash, and it’s not to say that the internet wasn’t important, the internet was really important, but maybe it just got a little ahead over its skis. And I’m wondering, like, if you think of that era, are there lessons you draw from that? As somebody who navigated that, still had a successful business after that, probably went through some pains through it. Do you think of lessons from that era that you kind of have in mind today?

The E-Commerce Bottleneck

Gian Fulgoni: Yeah, no, I do, and I think it’s a good, very good analogy. Because if you look back at the internet and say, “Well, what happened with the bubble?” Well, it got way over its skis, right? The pricing and the valuations were crazy. I mean, you had companies that had no revenues, let alone no profits, were getting these crazy valuations, and then it was all hyped up, maybe inadvertently, but you know, and then it crashed, right? And a whole bunch of companies went out of business. Right? But what was left was a real foundation of technology and infrastructure, I think, that was then built on by the companies that either survived it or that then came along. And it became stronger than ever. And you know, if you look at, if you had bought a bunch of these stocks after they had crashed, you’d make a fortune given what happened to the right ones. I mean, a lot of the companies went out of business. But it is, it’s fascinating to me to see.

And the one example I’ll give you that people point to is Pets.com. “What a stupid idea that was. I don’t know what thought of that.” Well, all you gotta do is look at Chewy today to realize that somebody made a lot of money, you know, on that basic idea. So, I think a lot of the ideas maybe failed because the capital infrastructure needed for them evaporated and so they were gone. But they came back in a different form later. And I think that might well happen with AI. I mean, the amount of money that’s being pumped into it is such that I personally believe it’s got to lead to a whole bunch of companies failing. Right? The question is which are the ones that, you know... some of these applications just seem to me to be way out there.

Advice for Marketers Navigating Tech Revolutions

Andrew Mitrak: We’re looking at it kind of like on the company level or the sector level. Do you have any insights on like at the level of an individual marketer, or somebody who works in marketing and is thinking of like their career ahead? Are there any takeaways from that besides, I guess, looking at which companies will navigate it well and wanting to align yourselves with them, sure, but as a marketer are there any thoughts you have for an individual?

Gian Fulgoni: It’s a great question, Andrew. The one thing I will say that I think has been true in my time on this planet is that if you are running a business, it’s a lot, lot easier to reduce your costs than it is to build your sales. And I would say that my feeling is that I am no doubt that AI is going to reduce costs dramatically for a whole bunch of companies. Now, is it at the same time going to help them sell more? I don’t know about that. Because if everybody has the same capability, I mean, you go back to what we were talking about earlier, right?

What’s the competitive advantage that allows you to sell more than your competitor? I don’t know.

I’ve heard one theory say that, and I think this was referring to companies in the service world, whether it’s consulting companies or auditing companies or whatever, right, where their assets are people. And they could reduce their operating costs pretty significantly using AI, I have no doubt about that. But once that’s done, is everybody then at parity? And what are clients going to say? A client’s going to say, “Well wait a minute, I’m not going to pay you the same amount of money I was paying you before, if you’re now making three times what you were making before.” So, I’m not clear in my mind on the impact of AI on the sales end of industries. I’m very, very bullish on its ability to reduce costs, but I also think there’s been hype about it. You know, maybe I come from the analytical world, but man, we’ve been talking about AI and its analytical contributions for years now. This isn’t, you know, like the past two years, and I’m still waiting to see more evidence of these breakthrough analytics that weren’t possible before AI. I mean, I’ve heard of a few, but nowhere near what the hype would suggest. I am worried that the purity of the analytical methods that I kind of grew up with has been kind of laid by the wayside today. And we are just dealing with a lot of hype and a lot of exaggeration.

By the way, one other thing that I will go back to, just go back to the internet, that I think is important to realize that I didn’t comment on. If you look at the financial results of internet companies, you have to separate them into e-commerce companies and then advertising-related companies. The advertising ones are making a fortune, okay, the ones that survived. Maybe the newspaper industry was decimated by it, but if you look at the amount of money that’s being made through advertising, it’s mind-boggling, right? If you look at e-commerce, there aren’t many companies who can point to profitable operations if they have to ship products that are in any way, shape, or form heavy. I spent about 20 years on the board of a public e-commerce company that got around that issue called PetMed Express, and we sold pet medications. You had to have a prescription from your vet. But we were shipping products that didn’t weigh much. And so as Amazon forced retailers to go with two-day free shipping, and then, you know, the pressure’s on to do one-day free shipping, we were able to, you know, just survive and actually thrive in it, because the cost of shipping these light prescription products was not a constraint. And you know, maybe that’s another thing that will play out in some way with AI, is that depending upon the type of application of AI, you’re going to be making a lot of money versus not. I’m just kind of throwing that out as a hypothesis.

Anticipating the Next Bottleneck

Andrew Mitrak: That’s right, that you optimize up to the bottleneck, and with the internet and e-commerce, the bottleneck is heavy freight shipping, right? And that’s just a problem that the ones and zeros and digits of the internet can’t kind of solve the atoms and weight and things of the physical world. And that I’m wondering what there are blind spots of the optimization of where are the next bottlenecks, where it gets up to this point and then there’s something, and then how long do these bottlenecks last? It’s kind of an interesting one.

Gian Fulgoni: Yeah. No, that’s really interesting to think about. And I think it is also really valuable to look back and see what one can maybe decipher from the technological shifts that have occurred in the past.

Andrew Mitrak: Gian Fulgoni, I really enjoyed this conversation, and I think listeners will too, so I just want to thank you so much for your time and for your insights. I really had a good time.

Gian Fulgoni: You’re welcome. You’re welcome. Thanks Andrew. I appreciate the invitation.

A History of Marketing / Episode 51

My guest Tod Johnson, a market research pioneer who was among the first people to measure the Internet. He’s an inductee to the Market Research Council Hall of Fame and former chairman of the Advertising Research Foundation. Tod is President and CEO of the Board of the Metropolitan Opera and is a member of the board of the Lincoln Center for the Performing Arts.

Tod led The NPD Group for over 50 years, building it into one of the largest consumer research firms in the world. NPD became the company retailers like Mattel and Hasbro relied on to understand what was selling. In 1995, he founded Media Metrix, essentially the Nielsen ratings of the early internet.

In this conversation, we dive into:

* The era of pencil-and-paper diary panels, when consumer research meant tracking grocery purchases by hand and mailing the booklets back every month

* Why Tod’s analysis showed that brand loyalty is mostly a myth, long before anyone in advertising wanted to admit it

* How he accidentally discovered the internet was about to change everything

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Tod.

Why spend a career in market research?

Andrew Mitrak: I watched a speech you gave while accepting a lifetime achievement award. And at the start of the speech, you quipped that you’re tempted to aim for a second lifetime achievement award and do it all over again. I take that as a sign that you spent your career really doing something you love, and your career was in market research. So, what do you love about market research?

Tod Johnson: Well, I’ve always been a very quantitative-oriented person. I’ve loved numbers, I’ve loved facts supported by numbers, and I’ve always had an interest in psychology as well. In fact, I taught what today would be called cognitive psychology when I got out of graduate school for a while. Market research just puts those two pieces together very, very naturally. So it fit into what I really found exciting and wanted to do. I have to say, I never started out thinking market research was my career objective. I kind of fell into it by accident, but once I got into it, it was where I wanted to be.

Innovation and Innovation Models in Early Market Research

Andrew Mitrak: You were an academic doing quantitative analysis, and these were real-world business practitioners. Was this seen as new pioneering research that they could apply to their business? What was that dynamic like with them?

Tod Johnson: Well, the dynamic was interesting and different in those days. These companies had their own staffs oriented to innovation and development, and they were always open to new ideas. Today, that’s not so easy to get into a company with a new idea because there’s just too many of them out there. But back then, it was kind of open arms, wanting to explore new ideas. We were solving real problems like new product introductions with trial and repeat models, which hadn’t really been focused on much before, market structure work, and consumer packaged goods (CPG) companies had a curiosity to want to learn that.

The Era of National Purchase Diaries

Andrew Mitrak: Can you set a scene of what market research looked like at the time? Was it ever influencing a certain product launch, or a certain product strategy, or messaging or positioning type?

Tod Johnson: In those days, virtually every new product launch would go into a test market. We would set up a diary panel of consumers to record purchases in the appropriate category. We would do the trial and repeat analyses that would predict the long run success or failure of the particular product. That would be the most common application. On a national basis it would be more about consumer trends in those categories uh and how they were structured and what was changing.

The other thing that was very good, I’m now jumping ahead to when I became involved in developing NPD, was in the mid70s, General Mills started to diversify from CPG into a lot of other categories like food service, toys, apparel, jewelry, and I was fortunate enough to be the person they looked to to set up how to track those industries similar to how CPG had been tracked.

Andrew Mitrak: Amazing. They embraced the general in their name and kind of not so much the mills part of their name.

Tod Johnson: Well, the general went away about 10, 15 years later.

Andrew Mitrak: You mentioned National Purchase Diaries. What was the actual purchase diary? You mentioned like purchase diary panels and what does it look like? Walk me through the nuts and bolts of what a purchase diary panel would look like.

Tod Johnson: Well, it would be a booklet which was about 20 pages and each page had a couple of categories on it like toilet paper, facial tissue, and paper towels might all be on a page, and they’d be structured in a way that if you bought one of those items, you answered some questions.

The panelists would get a new booklet every month and mail the old booklet back in to us, which we would code up. Back then, it was pretty easy to get good representative samples because women typically weren’t working. They were interested in doing projects and interested in helping, and we made it clear how they were helping manufacturers make better products for them by providing this kind of information. That relationship with the consumer in market research just doesn’t exist anymore, but it was what a lot of the industry was based on in the ‘40s, ‘50s, ‘60s, and ‘70s.

Measuring Product Success and Consumer Loyalty

Andrew Mitrak: The consumers were part of the panel who had these diaries. They would kind of punch in their purchases for the week?

Tod Johnson: No, they’d fill them in by hand with pencil.

Andrew Mitrak: Do you have any favorite examples of how this data was used? Especially in the early years of these manual diary entries.

Tod Johnson: New product introductions, which were elaborate test markets for the most part back then, was perhaps the most common use. The other use was it was a way to track demographics. It was a way to track loyalty. I can remember in the ‘80s, I did a lot of publishing about how consumers weren’t very loyal because we’d see their purchase patterns. That was at a time when advertisers and advertising agencies believed in loyalty. You were always talking about their loyal buyers. It didn’t really exist, but that was the basic premise. I know I was swimming upstream for a while with those publications, but today, everybody accepts that as the truth and the fact, and that there’s enormous brand shifting and much less loyalty than once was thought to exist.

The Growth and Diversification of NPD

Andrew Mitrak: You joined when it was a $300,000 revenue company.

Tod Johnson: $400,000. Give me the full credit.

Andrew Mitrak: sorry, I also want to give you credit because it grew to a lot more than that. How did the small kind of regional firm that was doing 400,000 revenue a year over the course of your next 30 years? It became a global market research firm that the world’s largest retailers rely on. What were the major inflection points as far as it growing? How did you grow it?

Tod Johnson: Well, I mentioned one, and that was General Mills taking us into a bunch of general merchandise and food service categories. Our toy clients encouraged us to get into Europe. We worked with everyone in the toy industry, whether it was Mattel, Hasbro, or Lego—all the big players, all the smaller players. Mattel had a huge variety of products; it owned Fisher-Price, so that was a whole different set of products. They were a great client, are a great client, and had a wonderful mix of products. The toy industry has evolved a lot—electronics came along, how kids use time, and the definition of toys has evolved quite a bit from there.

Managing Industry Rivalries in Market Research

Andrew Mitrak: It’s interesting because advertising companies or advertising agencies have this concept of conflict. So, if I work with Mattel, I can’t work with Hasbro—that’s a competitor. But a market research firm actually could be more neutral and work with everybody in that, right? Do you ever run into things like conflicts where, if we’re doing this survey for Mattel, that might lead to some conflict of interest to do it for Hasbro? How does that work?

Tod Johnson: That’s a very interesting question because in the CPG world, that conflict orientation tends to exist even today. If you work for Coca-Cola, you don’t work for Pepsi. If you work for General Mills, you didn’t work for Kellogg’s typically. Now, the company might work for both of them, but the individual people don’t.

When you got into general merchandise, the client was much more interested in being sure that they were working with someone who really understood their industry. To understand an industry, you don’t learn an industry just by working with one company in that industry. Each of those general merchandise industries—whether it’s toys or consumer electronics or office supplies, which all have very different distribution structures—also had very different product structures. It took a lot of learning to understand it, so they viewed it as a benefit to work with someone who really knew their industry.

The Birth of Media Metrix and the Internet Lightbulb Moment

Andrew Mitrak: Can you tell me about Media Metrix and the introduction of software meters?

Tod Johnson: What happened was one of the categories NPD was tracking was software. This is in the early ‘90s, and software back then was shrink-wrap that you bought in a store. Our software clients were saying the purchase data is really interesting, but we’re wondering if you could get us usage data.

So, we developed a piece of software which we had 300 panelists download onto their PCs to see if we could track their usage. After a couple of months, they all sent us back that database. And of those 300, literally three of them had really strange data included on it, which it took us a couple of months to figure out what it was. But what it was was their internet surfing, which we were capturing frankly by accident.

In other words, this is 1994. 1% of consumers were on the internet—three out of 300. That was the lightbulb moment—the internet is really going to grow and this is a way to measure it, just like television was being measured then or radio or magazines. That led us to say there was a bigger opportunity to measure the internet than there was to understand software usage.

The Digital Landscape of 1996: Universities and Search Engines

Tod Johnson: We kind of switched our focus and published our first internet ratings data in January 1996. Just to give you a feeling for what the internet was like then, the top five sites were AOL, WebCrawler, Netscape, Yahoo, and InfoSeek. In the top 20 sites, actually four of them were universities. The internet was a very, very different place, and we developed Media Metrix and what we called the PC Meter to track the evolution of that business.

Andrew Mitrak: It’s amazing. You shared a slide with me of just these top 20. So, you mentioned the top five. The EDU ones are the University of Michigan, Carnegie Mellon, MIT, and the University of Illinois Urbana-Champaign. Why were universities ranked so highly?

Tod Johnson: This is a little embarrassing answer to me because of my involvement with Carnegie Mellon, which not only was I a student and teaching there, but I’ve been the longest-serving trustee and vice chairman.

Starting with the University of Michigan, my understanding is that NOAA published its weather data through Michigan.edu. So, back then, you went to the University of Michigan to get weather data.

Carnegie Mellon is my embarrassing answer. It was sort of the leading porn site on the internet back then. A graduate student, who I won’t name because he’s well-known right now, developed a methodology of mousing over something on your screen and moving it. He demonstrated that methodology by letting you mouse over a picture of himself and removing all of his clothes.

I’m not sure what MIT was, and University of Illinois, I think, related back to the history of Netscape, if I’m not mistaken.

Andrew Mitrak: Oh right, yeah, that would track. Interesting. It wasn’t like the CMU.edu homepage.

Tod Johnson: Some website that wanted people to see the technology. I don’t think CMU stayed in the top 20 for very long, but it was ahead of Penthouse Magazine, which was number 18 back then.

How the Internet Transformed Market Research Operations

Andrew Mitrak: Yeah. I was going to say there’s a couple that was not safe for work websites that I saw on there. It’s funny. We all know it’s like a big part of the internet, but it kind of usually doesn’t make these top lists these days too often anymore. But it’s out there, that’s amazing.

You saw this three-in-300 moment where it was like, “Wow, that’s strange.” And you see that they’re presumably using some web browser or spending a large number of hours using software. I imagine you had an early view into seeing this growth where it wasn’t three-in-300; it then went to six and then 12 and then 30, and you saw some of the exponential.

Tod Johnson: I think if I remember right, by the time we published the first report in January, it was up to about 35%. It really just skyrocketed during that period.

Andrew Mitrak: What did NPD’s clients do with this information? How did they respond to seeing this and getting an early view into “Hey, the internet’s going to be big”? Do you feel like they heeded the call and got on quickly, or do you feel like there was still some skepticism? Or how did people react? Because I’m always interested in when there is something new and somebody has compelling data that says something is coming but it’s not quite here yet. Do companies make the switch and start to act on it soon enough to really capitalize on the opportunity?

Tod Johnson: The key initial application was to sell advertisers on using your website. So you needed a currency or data to do that. Back then, the PC Meter data—Media Metrix data—became that currency which the websites used to show the size of their audience and the demographic profile of their audience as well. It was trying to make your internet site competitive with a television program or a radio station or radio program and things like that. That was the primary application.

The secondary application was understanding how consumers were surfing the internet and what you had to do as a website to both get someone to come to your site and stay in your site. People would look at competitors, how they were doing it, and adopt strategies that way.

Andrew Mitrak: I will ask broadly: How did the internet and this explosive growth change market research and change NPD?

Tod Johnson: At the time, NPD had two businesses: one was the diary panel business and the other was what was called a mail panel back then, or was really a survey research business. Starting around 2000, you had to become online interactive to be a successful business.

The first change it made is I made the decision that if we were going to make that transition, we weren’t going to make it well if we tried to transition both businesses simultaneously. So I sold one of the two businesses and just concentrated on the diary panel business at the time. Clearly, timing changed. You didn’t have a month to deliver information; you had to deliver it much more real-time. The presentation of the information changed; it was now presented on a screen much more often. It was more interactive and analytical, and you had to have the capabilities to do that. Pulling together disparate pieces of information, rather than just providing independent separate pieces, became much more critical and required a lot of investment and a lot of change.

A Legacy in Arts Patronage and Andy Warhol

Andrew Mitrak: I want to shift gears and ask you about the arts, because you’re also a major patron of the arts. You’re on the board of Lincoln Center and the Metropolitan Opera, where you also serve as the president and CEO of the board there. You alluded to your background, which I noticed were a couple of Andy Warhols, which I imagine are original. It’s really impressive that you have such great taste on your wall. When did you develop your interest in the arts?

Tod Johnson: I grew up with it. My family collected art. My aunt was a major art dealer—in fact, she was one of Andy Warhol’s primary dealers. So I was always exposed to contemporary art.

Andrew Mitrak: Warhol was from Pittsburgh, right?

Tod Johnson: Yes, he went to Carnegie Tech.

Andrew Mitrak: Oh wow, okay, I just put that connection together.

Tod Johnson: One of the benefits of having offices like NPD is I have lots of walls for art. There were like 40 Warhols in the NPD offices at the time I sold the company.

Andrew Mitrak: So when you sold NPD and the Warhols were on the wall, does that show up as a line item on the balance sheet or?

Tod Johnson: Oh no, I got all of them. It wasn’t part of the sale; it was an exclusion.

The Intersection of Entrepreneurship and Marketing

Andrew Mitrak: As you’re working with visual arts institutions like the Met and Lincoln Center, do you feel like you bring your marketing expertise to the table there on how they’re marketing themselves?

Tod Johnson: Marketing to some extent; probably entrepreneurial business acumen to a greater extent.

Andrew Mitrak: Do you distinguish between entrepreneurial business acumen and marketing a lot? Because when I think of actually a lot of the best entrepreneurs, they’re also talented marketers. What part of their success is marketing instinct or intuition and prowess versus entrepreneurial business fundamentals? It seems like they overlap a lot. Do you distinguish between those two?

Tod Johnson: I kind of think they go together. Marketing doesn’t necessarily mean entrepreneurial. I think entrepreneurial is more likely to mean marketing directionally.

Andrew Mitrak: To be a great marketer, you don’t necessarily have to be an entrepreneur as well, but to be a great entrepreneur, you have to be a great marketer.

Tod Johnson: I think you said it better than I did.

The Future of Data: AI and Real-Time Insights

Andrew Mitrak: I know this is kind of a history podcast, but I want to talk to you about the future because you’re the co-founder and managing director of Duo Partners, and that firm invests in and consults with early-stage information and data companies. Do you have a vision for the future of market research when it comes to investing in companies? Can speak behind your investment thesis and what do you look for when you invest in information and data companies, but presumably also companies that will impact the future marketing as well?

Tod Johnson: Well, my partner Karen Schornbard and I are looking for really disruptive technologies to measure things in new ways—to measure things more accurately that isn’t dependent upon what a consumer recalls or says. To do it much more in real-time, continuous types of measurement.

I can give you a couple of examples. One of our investments has developed really physical AI technology where you can attach a tag to a product. You can see when the product is moved, you can see how much of it is used at each usage. You know when that happens so you can contact the consumer at the exact moment that they’re doing something rather than being dependent on “can they recall what they did two days ago?” You just get different information that way.

Another has built a fabulous database of food trends by scraping over the internet various restaurant menus and delivery service recommendations, seeing what’s changing, what’s growing real-time, and just things like that. These are going to lead to new ways of getting better information, particularly since the old methodologies are starting to be constrained by consumers not really having the time to think about it.

Andrew Mitrak: When you find a company that has the right underlying technology and product, where does marketing fit in on your calculation as to whether to invest or not at an early stage? Does marketing and their ability to tell a story and find a market and take this to market, does that play a part or do you kind of assume “Hey, these founders will hire the right marketers and they’ll figure it out if we invest in them”? How does that enter your calculus?

Tod Johnson: People who are developing products like that are developing them to take to a particular market. They usually know where the clients are by the time we get involved. There’ll at least be enough of a business that they’ve proven that clients can respond, so it’s built into the organization at that time.

Andrew Mitrak: Tod Johnson, thanks so much for your time. I’ve really enjoyed this conversation, and I’m grateful for all of your wisdom and your stories. It’s just such a great pleasure to hear about how market research has evolved over all the years. I had a lot of fun.

Tod Johnson: Andrew, I’ve enjoyed doing this with you as well. Thanks for inviting me.

A History of Marketing / Episode 50

My guest Tod Johnson, a market research pioneer who was among the first people to measure the Internet. He’s an inductee to the Market Research Council Hall of Fame and former chairman of the Advertising Research Foundation. Tod is President and CEO of the Board of the Metropolitan Opera and is a member of the board of the Lincoln Center for the Performing Arts.

Tod led The NPD Group for over 50 years, building it into one of the largest consumer research firms in the world. NPD became the company retailers like Mattel and Hasbro relied on to understand what was selling. In 1995, he founded Media Metrix, essentially the Nielsen ratings of the early internet.

In this conversation, we dive into:

* The era of pencil-and-paper diary panels, when consumer research meant tracking grocery purchases by hand and mailing the booklets back every month

* Why Tod’s analysis showed that brand loyalty is mostly a myth, long before anyone in advertising wanted to admit it

* How he accidentally discovered the internet was about to change everything

Listen to the podcast: Spotify / Apple Podcasts

Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Tod.

Why spend a career in market research?

Andrew Mitrak: Tod Johnson, welcome to A History of Marketing.

Tod Johnson: Hey, thank you. Glad to be here.

Andrew Mitrak: I watched a speech you gave while accepting a lifetime achievement award. And at the start of the speech, you quipped that you’re tempted to aim for a second lifetime achievement award and do it all over again. I take that as a sign that you spent your career really doing something you love, and your career was in market research. So, what do you love about market research?

Tod Johnson: Well, I’ve always been a very quantitative-oriented person. I’ve loved numbers, I’ve loved facts supported by numbers, and I’ve always had an interest in psychology as well. In fact, I taught what today would be called cognitive psychology when I got out of graduate school for a while. Market research just puts those two pieces together very, very naturally. So it fit into what I really found exciting and wanted to do. I have to say, I never started out thinking market research was my career objective. I kind of fell into it by accident, but once I got into it, it was where I wanted to be.

Innovation and Innovation Models in Early Market Research

Andrew Mitrak: You were an academic doing quantitative analysis, and these were real-world business practitioners. Was this seen as new pioneering research that they could apply to their business? What was that dynamic like with them?

Tod Johnson: Well, the dynamic was interesting and different in those days. These companies had their own staffs oriented to innovation and development, and they were always open to new ideas. Today, that’s not so easy to get into a company with a new idea because there’s just too many of them out there. But back then, it was kind of open arms, wanting to explore new ideas. We were solving real problems like new product introductions with trial and repeat models, which hadn’t really been focused on much before, market structure work, and consumer packaged goods (CPG) companies had a curiosity to want to learn that.

The Era of National Purchase Diaries

Andrew Mitrak: Can you set a scene of what market research looked like at the time? Was it ever influencing a certain product launch, or a certain product strategy, or messaging or positioning type?

Tod Johnson: In those days, virtually every new product launch would go into a test market. We would set up a diary panel of consumers to record purchases in the appropriate category. We would do the trial and repeat analyses that would predict the long run success or failure of the particular product. That would be the most common application. On a national basis it would be more about consumer trends in those categories uh and how they were structured and what was changing.

The other thing that was very good, I’m now jumping ahead to when I became involved in developing NPD, was in the mid70s, General Mills started to diversify from CPG into a lot of other categories like food service, toys, apparel, jewelry, and I was fortunate enough to be the person they looked to to set up how to track those industries similar to how CPG had been tracked.

Andrew Mitrak: Amazing. They embraced the general in their name and kind of not so much the mills part of their name.

Tod Johnson: Well, the general went away about 10, 15 years later.

Andrew Mitrak: You mentioned National Purchase Diaries. What was the actual purchase diary? You mentioned like purchase diary panels and what does it look like? Walk me through the nuts and bolts of what a purchase diary panel would look like.

Tod Johnson: Well, it would be a booklet which was about 20 pages and each page had a couple of categories on it like toilet paper, facial tissue, and paper towels might all be on a page, and they’d be structured in a way that if you bought one of those items, you answered some questions.

The panelists would get a new booklet every month and mail the old booklet back in to us, which we would code up. Back then, it was pretty easy to get good representative samples because women typically weren’t working. They were interested in doing projects and interested in helping, and we made it clear how they were helping manufacturers make better products for them by providing this kind of information. That relationship with the consumer in market research just doesn’t exist anymore, but it was what a lot of the industry was based on in the ‘40s, ‘50s, ‘60s, and ‘70s.

Measuring Product Success and Consumer Loyalty

Andrew Mitrak: The consumers were part of the panel who had these diaries. They would kind of punch in their purchases for the week?

Tod Johnson: No, they’d fill them in by hand with pencil.

Andrew Mitrak: Do you have any favorite examples of how this data was used? Especially in the early years of these manual diary entries.

Tod Johnson: New product introductions, which were elaborate test markets for the most part back then, was perhaps the most common use. The other use was it was a way to track demographics. It was a way to track loyalty. I can remember in the ‘80s, I did a lot of publishing about how consumers weren’t very loyal because we’d see their purchase patterns. That was at a time when advertisers and advertising agencies believed in loyalty. You were always talking about their loyal buyers. It didn’t really exist, but that was the basic premise. I know I was swimming upstream for a while with those publications, but today, everybody accepts that as the truth and the fact, and that there’s enormous brand shifting and much less loyalty than once was thought to exist.

The Growth and Diversification of NPD

Andrew Mitrak: You joined when it was a $300,000 revenue company.

Tod Johnson: $400,000. Give me the full credit.

Andrew Mitrak: sorry, I also want to give you credit because it grew to a lot more than that. How did the small kind of regional firm that was doing 400,000 revenue a year over the course of your next 30 years? It became a global market research firm that the world’s largest retailers rely on. What were the major inflection points as far as it growing? How did you grow it?

Tod Johnson: Well, I mentioned one, and that was General Mills taking us into a bunch of general merchandise and food service categories. Our toy clients encouraged us to get into Europe. We worked with everyone in the toy industry, whether it was Mattel, Hasbro, or Lego—all the big players, all the smaller players. Mattel had a huge variety of products; it owned Fisher-Price, so that was a whole different set of products. They were a great client, are a great client, and had a wonderful mix of products. The toy industry has evolved a lot—electronics came along, how kids use time, and the definition of toys has evolved quite a bit from there.

Managing Industry Rivalries in Market Research

Andrew Mitrak: It’s interesting because advertising companies or advertising agencies have this concept of conflict. So, if I work with Mattel, I can’t work with Hasbro—that’s a competitor. But a market research firm actually could be more neutral and work with everybody in that, right? Do you ever run into things like conflicts where, if we’re doing this survey for Mattel, that might lead to some conflict of interest to do it for Hasbro? How does that work?

Tod Johnson: That’s a very interesting question because in the CPG world, that conflict orientation tends to exist even today. If you work for Coca-Cola, you don’t work for Pepsi. If you work for General Mills, you didn’t work for Kellogg’s typically. Now, the company might work for both of them, but the individual people don’t.

When you got into general merchandise, the client was much more interested in being sure that they were working with someone who really understood their industry. To understand an industry, you don’t learn an industry just by working with one company in that industry. Each of those general merchandise industries—whether it’s toys or consumer electronics or office supplies, which all have very different distribution structures—also had very different product structures. It took a lot of learning to understand it, so they viewed it as a benefit to work with someone who really knew their industry.

The Birth of Media Metrix and the Internet Lightbulb Moment

Andrew Mitrak: Can you tell me about Media Metrix and the introduction of software meters?

Tod Johnson: What happened was one of the categories NPD was tracking was software. This is in the early ‘90s, and software back then was shrink-wrap that you bought in a store. Our software clients were saying the purchase data is really interesting, but we’re wondering if you could get us usage data.

So, we developed a piece of software which we had 300 panelists download onto their PCs to see if we could track their usage. After a couple of months, they all sent us back that database. And of those 300, literally three of them had really strange data included on it, which it took us a couple of months to figure out what it was. But what it was was their internet surfing, which we were capturing frankly by accident.

In other words, this is 1994. 1% of consumers were on the internet—three out of 300. That was the lightbulb moment—the internet is really going to grow and this is a way to measure it, just like television was being measured then or radio or magazines. That led us to say there was a bigger opportunity to measure the internet than there was to understand software usage.

The Digital Landscape of 1996: Universities and Search Engines

Tod Johnson: We kind of switched our focus and published our first internet ratings data in January 1996. Just to give you a feeling for what the internet was like then, the top five sites were AOL, WebCrawler, Netscape, Yahoo, and InfoSeek. In the top 20 sites, actually four of them were universities. The internet was a very, very different place, and we developed Media Metrix and what we called the PC Meter to track the evolution of that business.

Andrew Mitrak: It’s amazing. You shared a slide with me of just these top 20. So, you mentioned the top five. The EDU ones are the University of Michigan, Carnegie Mellon, MIT, and the University of Illinois Urbana-Champaign. Why were universities ranked so highly?

Tod Johnson: This is a little embarrassing answer to me because of my involvement with Carnegie Mellon, which not only was I a student and teaching there, but I’ve been the longest-serving trustee and vice chairman.

Starting with the University of Michigan, my understanding is that NOAA published its weather data through Michigan.edu. So, back then, you went to the University of Michigan to get weather data.

Carnegie Mellon is my embarrassing answer. It was sort of the leading porn site on the internet back then. A graduate student, who I won’t name because he’s well-known right now, developed a methodology of mousing over something on your screen and moving it. He demonstrated that methodology by letting you mouse over a picture of himself and removing all of his clothes.

I’m not sure what MIT was, and University of Illinois, I think, related back to the history of Netscape, if I’m not mistaken.

Andrew Mitrak: Oh right, yeah, that would track. Interesting. It wasn’t like the CMU.edu homepage.

Tod Johnson: Some website that wanted people to see the technology. I don’t think CMU stayed in the top 20 for very long, but it was ahead of Penthouse Magazine, which was number 18 back then.

How the Internet Transformed Market Research Operations

Andrew Mitrak: Yeah. I was going to say there’s a couple that was not safe for work websites that I saw on there. It’s funny. We all know it’s like a big part of the internet, but it kind of usually doesn’t make these top lists these days too often anymore. But it’s out there, that’s amazing.

You saw this three-in-300 moment where it was like, “Wow, that’s strange.” And you see that they’re presumably using some web browser or spending a large number of hours using software. I imagine you had an early view into seeing this growth where it wasn’t three-in-300; it then went to six and then 12 and then 30, and you saw some of the exponential.

Tod Johnson: I think if I remember right, by the time we published the first report in January, it was up to about 35%. It really just skyrocketed during that period.

Andrew Mitrak: What did NPD’s clients do with this information? How did they respond to seeing this and getting an early view into “Hey, the internet’s going to be big”? Do you feel like they heeded the call and got on quickly, or do you feel like there was still some skepticism? Or how did people react? Because I’m always interested in when there is something new and somebody has compelling data that says something is coming but it’s not quite here yet. Do companies make the switch and start to act on it soon enough to really capitalize on the opportunity?

Tod Johnson: The key initial application was to sell advertisers on using your website. So you needed a currency or data to do that. Back then, the PC Meter data—Media Metrix data—became that currency which the websites used to show the size of their audience and the demographic profile of their audience as well. It was trying to make your internet site competitive with a television program or a radio station or radio program and things like that. That was the primary application.

The secondary application was understanding how consumers were surfing the internet and what you had to do as a website to both get someone to come to your site and stay in your site. People would look at competitors, how they were doing it, and adopt strategies that way.

Andrew Mitrak: I will ask broadly: How did the internet and this explosive growth change market research and change NPD?

Tod Johnson: At the time, NPD had two businesses: one was the diary panel business and the other was what was called a mail panel back then, or was really a survey research business. Starting around 2000, you had to become online interactive to be a successful business.

The first change it made is I made the decision that if we were going to make that transition, we weren’t going to make it well if we tried to transition both businesses simultaneously. So I sold one of the two businesses and just concentrated on the diary panel business at the time. Clearly, timing changed. You didn’t have a month to deliver information; you had to deliver it much more real-time. The presentation of the information changed; it was now presented on a screen much more often. It was more interactive and analytical, and you had to have the capabilities to do that. Pulling together disparate pieces of information, rather than just providing independent separate pieces, became much more critical and required a lot of investment and a lot of change.

A Legacy in Arts Patronage and Andy Warhol

Andrew Mitrak: I want to shift gears and ask you about the arts, because you’re also a major patron of the arts. You’re on the board of Lincoln Center and the Metropolitan Opera, where you also serve as the president and CEO of the board there. You alluded to your background, which I noticed were a couple of Andy Warhols, which I imagine are original. It’s really impressive that you have such great taste on your wall. When did you develop your interest in the arts?

Tod Johnson: I grew up with it. My family collected art. My aunt was a major art dealer—in fact, she was one of Andy Warhol’s primary dealers. So I was always exposed to contemporary art.

Andrew Mitrak: Warhol was from Pittsburgh, right?

Tod Johnson: Yes, he went to Carnegie Tech.

Andrew Mitrak: Oh wow, okay, I just put that connection together.

Tod Johnson: One of the benefits of having offices like NPD is I have lots of walls for art. There were like 40 Warhols in the NPD offices at the time I sold the company.

Andrew Mitrak: So when you sold NPD and the Warhols were on the wall, does that show up as a line item on the balance sheet or?

Tod Johnson: Oh no, I got all of them. It wasn’t part of the sale; it was an exclusion.

The Intersection of Entrepreneurship and Marketing

Andrew Mitrak: As you’re working with visual arts institutions like the Met and Lincoln Center, do you feel like you bring your marketing expertise to the table there on how they’re marketing themselves?

Tod Johnson: Marketing to some extent; probably entrepreneurial business acumen to a greater extent.

Andrew Mitrak: Do you distinguish between entrepreneurial business acumen and marketing a lot? Because when I think of actually a lot of the best entrepreneurs, they’re also talented marketers. What part of their success is marketing instinct or intuition and prowess versus entrepreneurial business fundamentals? It seems like they overlap a lot. Do you distinguish between those two?

Tod Johnson: I kind of think they go together. Marketing doesn’t necessarily mean entrepreneurial. I think entrepreneurial is more likely to mean marketing directionally.

Andrew Mitrak: To be a great marketer, you don’t necessarily have to be an entrepreneur as well, but to be a great entrepreneur, you have to be a great marketer.

Tod Johnson: I think you said it better than I did.

The Future of Data: AI and Real-Time Insights

Andrew Mitrak: I know this is kind of a history podcast, but I want to talk to you about the future because you’re the co-founder and managing director of Duo Partners, and that firm invests in and consults with early-stage information and data companies. Do you have a vision for the future of market research when it comes to investing in companies? Can speak behind your investment thesis and what do you look for when you invest in information and data companies, but presumably also companies that will impact the future marketing as well?

Tod Johnson: Well, my partner Karen Schornbard and I are looking for really disruptive technologies to measure things in new ways—to measure things more accurately that isn’t dependent upon what a consumer recalls or says. To do it much more in real-time, continuous types of measurement.

I can give you a couple of examples. One of our investments has developed really physical AI technology where you can attach a tag to a product. You can see when the product is moved, you can see how much of it is used at each usage. You know when that happens so you can contact the consumer at the exact moment that they’re doing something rather than being dependent on “can they recall what they did two days ago?” You just get different information that way.

Another has built a fabulous database of food trends by scraping over the internet various restaurant menus and delivery service recommendations, seeing what’s changing, what’s growing real-time, and just things like that. These are going to lead to new ways of getting better information, particularly since the old methodologies are starting to be constrained by consumers not really having the time to think about it.

Andrew Mitrak: When you find a company that has the right underlying technology and product, where does marketing fit in on your calculation as to whether to invest or not at an early stage? Does marketing and their ability to tell a story and find a market and take this to market, does that play a part or do you kind of assume “Hey, these founders will hire the right marketers and they’ll figure it out if we invest in them”? How does that enter your calculus?

Tod Johnson: People who are developing products like that are developing them to take to a particular market. They usually know where the clients are by the time we get involved. There’ll at least be enough of a business that they’ve proven that clients can respond, so it’s built into the organization at that time.

Andrew Mitrak: Tod Johnson, thanks so much for your time. I’ve really enjoyed this conversation, and I’m grateful for all of your wisdom and your stories. It’s just such a great pleasure to hear about how market research has evolved over all the years. I had a lot of fun.

Tod Johnson: Andrew, I’ve enjoyed doing this with you as well. Thanks for inviting me.

A History of Marketing / Episode 50

Fifty episodes felt like a milestone worth marking. So I wanted a guest who was, well, obviously awesome.

April Dunford is the authority on positioning for B2B tech companies and the author of the updated and expanded edition of Obviously Awesome. I’m a huge fan of April’s work and frequently reference her book, her blogs, and her frameworks in my daily work as a marketer.

April’s premise is provocative: positioning cannot live in the marketing department alone.

She argues that if the CEO, sales, and product leads aren’t in the room providing input, marketing is left guessing about what makes the product special and who it is actually for. Without their buy in, marketing will inevitably lose the “battle of opinions.”

In this conversation, we discuss:

* Building on Ries & Trout: The positioning pioneers defined the concept in their 1981 book, but they didn’t give a how-to manual. April does.

* The death of the “positioning statement”: Why filling out a template is not a methodology.

* Blind men and the elephant: How sales, product, and marketing departments each hold a different piece of the puzzle.

* Skip the parts people don’t read: April discovered that CEOs don’t finish books, so she cut her manuscript in half.

April is one of the most persuasive and grounded thinkers in the field. Here’s my conversation with April Dunford.

Listen to the podcast: Spotify / Apple Podcasts

Special Thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.

The Origin of April Dunford’s Positioning Framework

Andrew Mitrak: I have a confession to make. Every time I join a new company, among the first things I do is I visit aprildunford.com and I enter my new email address and I download one of your positioning templates. You probably have several of my old corporate email addresses cluttering your mailing list. Sorry about that.

April Dunford: I appreciate you jacking up my newsletter subscription numbers.

Andrew Mitrak: And a big fan of your work and I want to say congrats on the updated and expanded edition of Obviously Awesome.

April Dunford: Thanks. I’m super excited to get it out there.

Andrew Mitrak: For this conversation, I wanted to start back before you became the go-to expert on positioning, and when you were coming up in your career, when did you first encounter the concept of positioning?

April Dunford: That’s a good question. Pretty early, actually. My first real job in tech was at a little startup and I was brand new and junior, they assigned me to a product and the thinking was that product wasn’t doing very well and the plan was to shut it down. This is why I got assigned to it as the product marketer.

We didn’t end up shutting it down. What we ended up doing was looking at gathering some feedback from people that were using the product, and then we got an idea to reposition it. We didn’t know it was called positioning, we thought we were doing, we’re just doing a Hail Mary thing to see if we can make this unsuccessful product successful doing something slightly different.

We repositioned it, relaunched it, and it was super successful. Revenue started going up to the right, everybody’s happy, we’re making a lot of money on that product.

And then we got acquired by a big company in California and the big parent company assigned us a couple of products that weren’t doing very well and then said, hey, do that thing you did with the other one. I didn’t have really any idea what we did with the other one. I was worried about getting fired, I thought, okay, I better figure this out.

I did a deep dive into positioning. I figured out, A, this is what it’s called. B, I had a lot of conversations with smart marketers asking them about, how do you do positioning? If you were in this situation, what would you do? Do you have a strategy for that or a methodology for that?

I also read a bunch of books. There’s the classic positioning book, Positioning: The Battle for Your Mind by these guys Ries and Trout, written in the early 80s, but even back then was considered the book on positioning. And then I took a couple of courses and some post-grad stuff at a couple of universities just learning about positioning.

I dumped into this whole positioning thing pretty early in my career, and I was really interested in this idea, could we get a way to do positioning in a really repeatable manner so that we wouldn’t have this problem of, we launched the thing and it didn’t work and then now we’ve got to try and change it. Could I get to a point where there is a process for us to follow to, first of all, maybe do a better job guessing at what the positioning should be in the first place, and then secondly, if we do need to change it, is there a nice repeatable step-by-step thing we could follow to do that.

Is Product Positioning Intuitive or Learned?

Andrew Mitrak: You initially positioned or repositioned a product without even knowing what positioning was or knowing that it was called positioning that you were doing. And then you went to look at the literature. What’s your takeaway from that? Does that reveal to you that the fundamentals of positioning are somewhat intuitive or can be learned, or do you feel it was just dumb luck really? Or do you feel there were parts of it where this is just obviously the right thing to do for the product? How do you overall think about, can positioning sort of just be an intuitive thing, or is it best to look at the literature that’s out there?

April Dunford: Sometimes it is really intuitive. I would say that’s true. I would say a lot of the time when I talk to founders, they’ll talk about how they built the product in the first place, and they’ll be, we saw this need, we had this idea, we could do this in a different way than the existing products that are out there.

And we looked at it, we understood what the competition was, we built a thing that was demonstrably different, we understood what the value of that thing was because it was solving our own pain, we understood what kind of customers would want to buy that, and therefore what market we position in. It’s just, it is what it is, it’s super easy. And I think that happens a lot in the early stages of a company. Not for everybody, but I do think it happens a lot.

However, what also happens a lot is if you fast forward two or three years, the market’s changed. Maybe your competitors caught up with you and the thing that made you really different isn’t different anymore. Or maybe the way people buy or what they want to do has totally changed. Or maybe your competitors did an acquisition and that changes the whole way everybody thinks about this market.

Or maybe you and your product have changed, and you now do a whole bunch of other stuff that you didn’t originally do, and that enables you to get at a different kind of customer to deliver a different kind of value. Now how do you position it? That’s where people get messed up. Sometimes it can be quite intuitive at the beginning, but then a whole bunch of things change and it’s, okay, now the positioning needs to shift. How do we do that? Because we didn’t do anything the first time, it was just obvious. I think that happens a lot.

The other thing that happens a lot is you have this thesis when you launch the product and you said, okay, we saw this problem and this is what it’s gonna be and these kind of people are gonna love us for these reasons and here’s the competitor. Then we launch it, and it turns out our thesis was incorrect.

We get out there and we’re, man, we launched this thing and we thought banks were gonna love it, but it turns out we’re selling to insurance companies, we didn’t really build it for that, but they’re buying it like crazy. Now we’re in the insurance business, hello. And they love it, but there are some things they don’t love so much, and they’re comparing us to competitors we never really thought about. How do we position this thing because we thought it was gonna be something else.

And this is not unusual, to be honest. We call that a pivot in lean startup language. It’s not unusual for a company to build something for one market and then get in the market and find out, whoops, the market’s a little bit different than we thought. People are looking at our product a little bit different than we thought. We’re getting pulled into another market, so how do we position for that? And again, that’s when having a methodology for this would be helpful.

The B2B vs. B2C Divide in Positioning

Andrew Mitrak: You did your positioning exercise initially and then went to the books, went to Ries and Trout and the others. Do you find yourself as you’re reading the literature on positioning, was it confirming what you did, oh, that’s what we did was called, or was it saying, oh, were there things that you’re, oh, I wish I had known that to start, or what was the discovery process for reading?

April Dunford: No. And I was so mad about this. Here’s how this went. I went and I’m having all these conversations with people, I’m talking to all these smart heads of marketing, right? And I’m saying, how do you do this positioning thing? What do you do? And everybody’s doing it the way we did it, which was a little bit of trial and error, a little bit of getting some feedback from customers, a little bit of, let’s try this and if it doesn’t work we’re gonna adjust. A bit of messing around until you get something that works.

And that feels terrible when you’re the head of marketing because your head’s on the block, man. And if you don’t figure it out fast enough, everyone’s gonna get mad and you’re gonna get fired. And that was unsatisfying.

And then I took some courses and read the Ries and Trout book, which does an amazing job of defining here’s what positioning is, here’s why it’s important. And then they give you a whole bunch of examples. But the examples aren’t tech, this thing was written before the internet, man. I think they have printers, HP printers or something is the closest thing in there, not even software. And I’m selling databases, and they’re talking about repositioning the country of Jamaica, and I’m, this is different.

Andrew Mitrak: It is also very B2C oriented. I think the examples are Avis or Coors or beer. Do you find that both because of the tech gap with it and maybe the B2C bias that you as a B2B tech company...

April Dunford: The B2C bias is killer in this stuff. I took a bunch of courses too, and it was the same thing in the courses. All the examples were shampoo and toothpaste and makeup, and I’m, again, I’m selling 200 grand worth of database stuff to really smart technical people. I don’t think this is the same. It’s selling a vacuum cleaner. And I thought the B2C bias is terrible.

The other thing that you get in B2B tech that you don’t get in consumer is think about it. If I got toothpaste and I’m selling that toothpaste or hair shampoo to people that have dry hair or people that have dyed hair or something like that, right? And then if I decide I’m going to do a shampoo for babies or a shampoo for old ladies or a shampoo only for people with very, very curly hair, usually what you’d do is you wouldn’t take the same product and try to evolve it into that market. You would launch a whole different product and say, I’ve got this other thing, and that’s for the curly hair people, and this one’s for babies, and this one’s for people that dye their hair, whatever.

Whereas in tech, it is very normal for us to launch a product in one market and then reposition it a whole bunch in the future. Let’s take Salesforce. When Salesforce first launched, they were aimed at the very, very bottom end of the market. Their initial deal was they were focused on companies that had sales teams of less than 10 people and the first three seats were free. And why were they doing that? Because the top part of that market was absolutely dominated by a great big competitor, and they didn’t want to go compete there. So they started at the bottom.

But guess what? They inched their way up, and by the time they got to the mid-market, the big competitor had self-destructed and they were gone, and the top end of this market was wide open. And if you look at Salesforce right now, would you say that’s a product for very, very small businesses? No way, man, too expensive, too complicated, too everything. We just don’t have that in consumer products where you’re, it used to be this thing and now it’s this other thing and now it’s this other thing.

The other thing that you’ve got in B2B is that the positioning matters a lot because the stakes are really high. Especially if I’m looking at enterprise software, the stakes are huge. You’re going to make a recommendation to your boss to buy 200 grand worth of software. You make a shortlist. You don’t just walk into the store and pick the thing off the shelf and say, oh well, if I got it wrong, I just won’t buy that one again. You’re going to get fired if you make the wrong choice. You got to make a shortlist, and it’s positioning that makes or breaks whether or not you’re going to get on that shortlist.

And then once you’re on the shortlist, you got to survive long enough for them to take a real good look at your stuff. And if you get eliminated because often the shortlist is five, six companies these days or more, depending on whose data you believe. But let’s say there’s a shortlist of six, seven companies, you got to make it to top two. Otherwise, you don’t get considered. Your positioning is really important in that because the company hasn’t done a big deep dive into all your stuff yet. We just don’t have this in consumer. We don’t go out and buy a pair of shoes and make a shortlist and have a six-month process to figure out which one we’re gonna buy. We go out and we buy it and if it stinks, we just don’t buy that one again.

Navigating the B2B Buying Committee

Andrew Mitrak: One of the other elements as well from B2C versus B2B is often in B2B the buying decision maker or the buying committee is not the end user of the product, right? And there’s this abstraction between that. And that’s the other element is how do you market to both the end user and the decision maker.

April Dunford: Yeah, that happens a lot in B2B. The economic buyer is often distinct too, right? What you have is this committee of people and you’ve got someone who’s what we would describe as the champion. And that champion, usually it’s their boss or someone that said, look, we gotta buy a new accounting package, buddy, go figure it out. You go figure it out, look at all the accounting packages and tell us which one to build, which one to buy. And then that champion is gonna go do their homework, so your positioning really matters for that person.

But the champion also has all of these stakeholders around them that have to agree, otherwise the deal doesn’t get done. If the champion, let’s say the champion is on the business side and we’re buying technology, usually they got to go to IT and make sure IT is okay with it. IT can’t make the deal happen because they’re not in charge of selecting, but they can kill a deal by saying, oh I don’t like it, it’s too hard to manage, it doesn’t integrate with the stuff we have now, it doesn’t meet our compliance regulations, whatever, whatever, right?

Same thing with end users. Often the end user is not an end user making this purchase decision, but they can have a big influence in that. If they look at it and say, well the UI is this and this is terrible, we’re never going to get people to be able to use this thing, we’re going to kill it. Or sometimes they’ll do a pilot with some end users, and if the end users give it the thumbs down, then it’s no good.

And then you got to run it up to the economic buyer, which is generally another person too. And a lot of companies get really messed up with that and they’ll say, well the person that signs the check is the CRO, so that’s the buyer. And it’s, yeah, but the CRO assigned the whole purchase process figuring out who to buy to somebody underneath them. So you better figure out who that is because the CRO just says yes to whatever that other person suggests.

We don’t have that again in B2C. This isn’t it. Sometimes in B2C stuff where it’s complicated, let’s say you’re buying insurance or you’re buying a car or you’re buying a house. Maybe there’s a spouse involved, maybe there’s a financial planner involved, maybe you get a little advice, but it’s nothing like what a typical enterprise B2B purchase process looks like. It is way more complicated.

The Critical Distinction Between Branding and Positioning

Andrew Mitrak: When you write about positioning, you make a hard distinction between branding and positioning, and you’ve written that you’re not a fan of the term brand positioning, which is a phrase you hear sometimes. Why do you draw a line between the two or how do you make this distinction?

April Dunford: Well, here’s what I think. I think marketers like to make stuff up. I think marketers like to just redefine something for the sake of redefining it. And branding is probably the most poorly defined marketing term I can think of. When you say branding, you really gotta say, okay, what do you mean when you say branding?

At most of the enterprise B2B companies that I worked at, when we talked about branding, the brand of the company was a lot about how we showed up in the market in terms of, what was our tone of voice? What was our iconography look like? It was a bit like what was the vibe of us when we showed up? What were the fonts and the colors and the pictures we used, and the way we did messaging and text, tone of voice stuff. That was all kind of branding, which is very different from positioning.

Positioning is an input to that. If the big value of, let’s say I sell security software to banks, right? My branding should convey a lot of trust and solidness and authority because that’s what we’re trying to convey. If I’m selling software for daycares, maybe I can get a bit more playful because I’m talking about kids and moms and things. And I could use different colors and more playful images and maybe a bit more casual tone of voice and all that kind of stuff.

And so in my opinion, positioning should inform what the branding looks like. But now I’ve seen other people define branding in a way that it includes all the things that I would call branding, and it also includes positioning, and we’re going to just kind of munge those two things together. That’s okay, if that’s the way you want to define it, but I still see those two things as being distinct. You got to do the positioning thing first, and then the branding thing flows from that.

Why Positioning Must Go Beyond the Marketing Department

Andrew Mitrak: And is this somewhat related to how you argue that positioning should not just be a marketing exercise? That if the CEO and sales leads aren’t in the room, that the positioning won’t stick. Is that tied to why positioning is different than branding, is that it’s beyond marketing?

April Dunford: Definitely, it’s definitely not just marketing, right? What we’re trying to do with our positioning is we are trying to define why should a customer pick us versus the other guys. And we need to think about, first of all, who are the other guys? What’s the alternative to what we do? And we should all be in agreement on that. Sales should understand that, marketing should understand that, CEO, product should understand that. We should all understand what makes us distinct and the value we can deliver to a business that no one else can.

We need to get that in marketing, product management needs to understand that, sales needs to understand that. And then we all need to understand who’s a good fit for that, which is what are the kinds of companies we’re trying to target and therefore what’s the market that we intend to dominate. That is a strategic set of decisions in a way, and it’s very easy for teams to get out of alignment on that.

It’s very easy for sales to decide, we’re just going to sell to these big companies because we like doing these big deals, man. We need to decide, is it worth chasing those big deals? Are we actually going to win them? Or are we more likely to win if we’re chasing a deal in the mid-market, for example? Again, I think this is, we get this distinction between B2B and B2C. In B2B, when I’m selling a big ticket thing and there’s a shortlist of companies to look at, we really need to understand what makes us stand out and what makes us different so that we can help the whole buying team understand what that is and move this deal along.

If I’m just selling toothpaste, or makeup or a T-shirt, it often has nothing to do with the product and it has more to do with pure branding, right? This thing is going to make you look rich or, the Kardashians wear this thing so you should too or something.

Whereas, it’s not like it’s all totally rational when we’re buying enterprise software, we don’t, there’s often quite a bit of irrationality in there in that the champion is worried about making a bad choice. The champion will often default to a really safe choice because it’s not going to get them in trouble. Or if the champion has an opportunity to look like a hero, they might take that too because it’s good for them personally.

It’s not like it’s all totally rational, but at the end of the day, they do have to make a case to their boss. And that case has to say, look, we looked at the other things and we picked this thing for these reasons, and the reasons are narrow. This is either going to help you make money or is going to help you save money and that’s about it. We got to make that stuff super, super clear. Whereas, you’re buying a T-shirt with your own money, it’s fine. Maybe if you’re a teenager you gotta complain to your mom, but… [Laughs]

Andrew Mitrak: [Laughs] Totally.

The Conflict Between Sales, Product, and Marketing in B2B Tech

Andrew Mitrak: So I’ve also spent most of my career in B2B tech and on marketing teams, and whenever I run through positioning, I do find that there’s this issue where we have a number of stakeholders in product, and they tend to be biased towards product-led growth or if there is some land-and-expand model or some freemium model, they are biased towards what product can influence as far as growth is. And sales almost always is not interested in land-and-expand. They want big-ticket deals. They don’t hit their quota—

April Dunford: I think it feels good to land a big deal if you’re in sales. I think that feels good.

Andrew Mitrak: Exactly, exactly. And they want marketing to support that positioning. Marketing, we have our own ideas and customer research as well on what we think.

April Dunford: Well, we like the ones—we like the market that’s the easiest to respond to our marketing stuff, which is often terrible leads too.

Andrew Mitrak: Right. That’s an issue.

April Dunford: We love time waster leads. We love those. It looks good in our metrics and we’re like, I don’t get what’s wrong in sales. They don’t ever convert any of our beautiful leads.

Andrew Mitrak: Yeah, exactly. I feel like a lot of dynamic can be summed up to either: Sales wants more leads, okay, then marketing will get more leads.

But then sales says, “No, not those leads. We want better leads. Those aren’t high quality enough.” And then marketing adjusts and then gets fewer leads.

I feel like that’s a cycle that a lot of companies find themselves trapped in.

April Dunford: It really helps to have a clear definition of what a best-fit customer is and why. Not just that we think this is a best-fit customer because we wish we were doing deals like that. It should be: “This is a best-fit customer for us because we are the only ones that can deliver this specific value.” If you look at us versus the other things that a customer is going to compare us with, we are the only ones that can deliver this specific value, and these are the kind of people that really care a lot about that. That’s what we really need to get at the root of. And it shouldn’t just be that we like those companies because they’re bigger and they have bigger budgets. Well, guess what? If they’re bigger and they have bigger budgets, then that means we’re going to run into these competitors that can handle that. Do we actually serve that customer better, or are we better at something else? And so getting everybody together in a room to get really clear on that is going to help us with all those problems when sales says, “Well, we don’t like these leads.” It’s like, let’s sit down and talk about what an excellent lead looks like and why. It should tick these boxes because we are very likely to win those deals for these reasons.

Andrew Mitrak: In the dozens or hundreds of companies you’ve consulted with that have implemented positioning successfully, is it an equal split between partly marketing, sales, and product? Are they all like equal one-third owners of the process? Is it usually best if one is the owner of it and the other two are stakeholders? Does it need to be the CEO who is on top of it on the exercise? What’s the best model, or is there one right solution or ways to make multiple versions work?

“Marketing Never Wins the Battle of Opinions”

April Dunford: This is actually a great question. So I’m a big fan of doing a cross-functional exercise because, just in my own experience when I was in-house and working as a head of marketing, if I didn’t get everybody in the room together, I couldn’t go have a conversation with sales and think I had it and then take it to product because then they’d rip all that stuff apart and say, “No, that’s all wrong, it’s this.” Then you take it to the CEO and the CEO has got their own opinions and you end up with something else. So it’s just way more efficient to get everybody in the room together.

But if you’re going to get everybody in the room together, we can’t just have everybody in the room together just say, “Okay, why does everybody love our stuff?” then that’ll just be a battle of opinions, and marketing never wins the battle of opinions. So the way my process works is we start with this conversation around competitive alternatives. Now, what’s funny about that is the question is: if we didn’t exist, what would a customer do? At that step, I think sales’ opinion on this matters more than anybody else’s. But it doesn’t stop everybody else from having an opinion, but everybody else’s opinion is generally wrong.

Sales vs. Product Perspectives on Competition

April Dunford: So I’ll give you an example. Often what we’ve got, like when you go to product management and you say, “Who do we compete with?” they generally give you a way longer list of companies than sales does. Because product management is living a little bit in the future, right? They’re thinking about the roadmap, they’re thinking about where we’re going, and they’re looking at the superset of who could compete with us and who should compete with us. What they are not looking at is who does. Sales knows that. Sales knows that.

Now, if I go to sales and I say, “If we didn’t exist, what would a customer do?” they can tell me exactly who lands on the short list. They can tell me who’s causing us pain out in the market right now. They generally won’t consider the status quo as a competitor because a good salesperson, if they lose to status quo, they will say, “We lost to no decision.” And in the minds of a good salesperson, that is not a no; that’s a “not yet.” We’re going to get them someday, just not this week, man. And so if you’re doing this exercise, you have to pull that out of the sales team, but it’s very important for the product team to hear what the sales team has to say. Because the product team is thinking about a different set of competitors, which is fine, by the way. Because they’re building for the future, they need to be looking at that.

But when we’re talking about positioning right now, if the competitor is not causing us any pain, they may never cause us any pain. We don’t do a very good job of predicting the future that way. And the reality is if they do cause us pain next year or the year after, we’re going to adjust the positioning to take that into account. So step one, when I’m talking about competitors, I think sales’ opinions matter more.

And then we didn’t even talk about marketing. Marketing, if you say to marketing, “Who do we compete with?” they’ll list the people that are spending the most money on marketing. That’s who they worry about because that’s who they’re fighting for keywords and everything else. And they go, “Oh my god, these guys, they’re everywhere! We see them everywhere. Oh my god, they have the biggest booth. Oh my god, they’re all over the place.” But again, if they’re not causing us any pain in sales, well, maybe you’ve got some competitors burning a lot of money on pretty s**t marketing that isn’t doing anything.

The other thing you get is the CEO will have this opinion. Often the CEO was really involved in sales at some point, but maybe it’s been a couple of years. Or maybe they only see certain kinds of deals in certain situations, so they’re biased towards that. Again, sales understands the reality on the ground. So when we go to step one, personally, sales’ opinions matter more, but we’ve got to get everybody on the same page.

Then we get to step two: okay, if we didn’t exist, this is what a customer would do, this is what we’ve got to position against. Now we get to step two, and step two is all about: what have we got that the other guys don’t have? Who knows that the best? Product management, by a mile. Sales doesn’t know. They don’t even pitch stuff they don’t understand. Marketing doesn’t know because there’s lots of stuff the product does that marketing thinks is useless or they don’t understand or whatever. The only people that can really give you the straight deal on “what have we got that the other guys don’t” is product management. A good product management team knows all about that. So again, other people in the group might think they know the answer to this; product management knows the answer to it.

Then we get to the third step, which is value. This is where marketing comes in a little bit because only marketing understands even the concept of what value is. So they’re helpful in that respect. But here it’s a little bit interesting. Sales knows what a customer thinks is valuable and what they don’t. So they’re a good litmus test. If we come up with a value prop, sales is a good litmus test: does this sell? Sales can tell you generally because they know customers, they’ve been selling to customers, they know what flies and what doesn’t. Marketing understands what value is, so they know what a good value prop looks like and what it doesn’t. So this is where we see a lot of sales and marketing. But again, everybody’s got to agree on what this is.

Then we’re going to get to this segmentation, which is: okay, we’re the only people on the planet that can deliver this value, but not everyone cares the same about it. So what are the characteristics of a good-fit account? And that is kind of a little bit of everybody chiming in on: okay, if the value looks like this, what needs to be true about the account in order for that to resonate? Are they bigger accounts or smaller accounts? Is there something in their tech stack that makes them more likely to make that more appealing to them or not? Is there something about their business model or something about the team we’re selling into that’s different? That’s a group conversation with everybody. So we have this team together. We obviously need the CEO in the room, and the CEO needs to believe that this is important work and sponsor this thing. But when I run one of these exercises, everybody needs to chip in, and everybody’s opinion is important at different steps in the exercise. This is why this is so difficult to do when it’s not a team exercise. It’s like that old picture of everybody wearing a blindfold and they’re all touching a different part of the elephant. The guy on the tail says, “It’s a snake,” and the guy on the leg says, “It’s a tree.” It’s a bit like that. Sales knows something, product management knows something, marketing knows something, the CEO knows something, support knows something. We’ve got to pull all of that out together and then synthesize it into something we can all agree on, and we’re all singing the same song, and then we move forward.

Evaluating Positioning Success from the Outside vs. Inside

Andrew Mitrak: As an outsider, I like to evaluate a company’s positioning or try to understand their positioning. But if positioning is this strategic foundation and it’s not branding, it’s not messaging, it’s not even just marketing, how do you go about evaluating somebody’s positioning from the outside? How do I tell if a company’s positioned well or if they just have a really talented copywriter?

April Dunford: I’m glad you asked this because sometimes what I’ll see—and this bugs me a lot—I think I’ve been guilty of doing this in the past when I didn’t know any better. But sometimes what I’ll see, and I see this a lot on LinkedIn or social media, a random person like me will pull up some B2B website and say, “Isn’t this terrible? Who could understand what this is? Look at all that jargon! Look at all that stuff. Oh, this is terrible. This should be more B2C-like. This should be really easy and it should be exciting.”

And the first time I saw one of these that I thought was really funny, this was a company that was growing 200% year-on-year on about $100 million revenue. And I’m like, my dudes, it is working just fine. So here’s the thing: it is very difficult for you to assess how good copy on a homepage is working if you are not the target buyer and you don’t even know who the target buyer is. If I’m selling something to—I was working with a company that does this stuff with airlines and I’m selling a very technical thing to people that do maintenance on airplanes—like yeah, man, you’re not going to understand what that website is talking about. And that’s okay. What really matters is: is it working with a customer, and is it doing the job we want the website to do? So that’s one thing.

The second thing is, like you say, there’s copywriting and there’s positioning. If I look at a company’s copy, I don’t necessarily understand the strategy behind it. I don’t know exactly how they’ve defined a best-fit customer, for example. So I don’t know exactly who they think their competitors are. Therefore, I can’t tell: is it doing a good job of differentiating them from those competitors? Because I don’t know them, I don’t know their competitors, I don’t know who their buyers are. It would be very hard for you from the outside to figure this out. And so I don’t think doing a homepage teardown is a particularly good way to understand someone’s positioning. I get this a lot where a company will send me a link to their homepage and they’ll say, “Can you just tell us if our positioning sucks or not?” and I’m like, “No! Because I don’t know anything about it. I don’t know who your target market is, I don’t know who your competitors are, I don’t know anything.” And so it’s really hard from the outside to assess that.

Identifying the Signs of Weak Positioning

April Dunford: Now, on the inside, poor positioning shows up in a set of very distinct ways. So the way I used to assess it—let’s say I got hired as the Vice President of Marketing and then everybody wants me to just spin up a bunch of campaigns, and I’m like, “Okay, but let’s make sure the positioning is good before we do that because otherwise I’m pouring water into a leaky bucket.” So let’s have a look at positioning.

How I would assess that is I would walk over to sales—because I’m always working with enterprise companies that have sales people—and I’d be listening in on first-call conversations. Now, this is really easy because everybody records it with Gong, so you just listen to the Gong calls. But first-call conversation, weak positioning shows up like this: the customer shows up, the rep is there, and the rep’s doing their thing and they’re saying, “Hey, let me tell you something about us, and we’re this, that, and the other thing, and we do this and that for companies like you, blah blah blah.” And you can see the customer just getting super confused, like making this face: “What the heck are you talking about, man?” And usually what you’ll get is a few minutes in, and the customer will go, “Stop, stop, stop. Just back up. Back up. Go back to the beginning. I’m not sure I got it. Go back, say it again.” And the rep’s got to go back and repeat it again. Or they’ll get halfway through and the customer will ask a question, and the rep will be like, “Oh my god, the customer didn’t understand a thing I was talking about.” If you’ve got happy existing customers but a new customer is coming in that confused, that is usually a positioning problem.

The other one you’ll get is prospects comparing you to things they shouldn’t be comparing you to. That is a clear sign of bad positioning. So they’ll come in and say, “So you’re like a CRM, right?” and you’ll be like, “No, no.” Or they’ll be like, “Oh, so you’re just like Workday?” “No, we’re nothing like Workday, what are you talking about?” And then the rep has to back up and do it again. So this idea that the customer thinks they know what box to put you in, but you’re actually living in a different box, that’s a sign of weak positioning.

And then the other one you’ll get is a customer coming in and saying, “I get it, I get what you do, I get it. But I just don’t get why anybody would pay for that. Can’t I just do that with my accounting package? Can’t I just do that in a spreadsheet? Why would I just hire a couple of teenagers to come in and do that? That doesn’t seem...” and then in that case, what the problem is, your value is not clear and compelling. So inside we can assess it; outside, I don’t know.

The Pitfalls of Tech-Forward Positioning

Andrew Mitrak: It’s very tempting to be one of those LinkedIn people from the outside, but on the other hand, I was at a unicorn B2B freight tech startup. It was in the trucking industry and won a bunch of awards, raised a whole lot of money, and our marketing was great—everyone thought our marketing was great. But at the underlying thing, the positioning was often wrong. It was very tech-forward: AI, automate your freight, Uber for trucking type messaging. Everyone was like, “Oh, this is a no-brainer, let’s do this.” And I’d listen to Gong calls in sales and hear somebody pitching all this tech to a supply chain manager at a company in the Midwest, and it’s like speaking two different languages. The startup ultimately folded in a pretty dramatic way. But underlying it, there was just the wrong positioning. It’s easy to say this looks bad or great from the outside, but really you have to get inside the company before you really pass judgment on it.

April Dunford: Fundraising’s not revenue, right? Fundraising’s not revenue. But we are in crazy times right now where there’s so much excitement about certain parts of the market where things are emerging, like all this AI stuff is so cool and the potential for this stuff is so big. We see this with pricing models changing, and now we’re looking at usage-based pricing versus subscription pricing. It makes it a lot more difficult to figure out if this company is actually successful or not.

Positioning During Rapidly Changing Markets

Andrew Mitrak: Do you have principles for running a positioning exercise through a period of rapid change? It can feel like you’re building the foundation with positioning, but it’s moving so fast it’s like building the foundation on quicksand.

April Dunford: I have some opinions about this. Stuff is changing really quickly, but I think companies are going to have to be very clear in their messaging and positioning about what’s real and what we can deliver today versus what is vision and a direction, and where we want to go, and frankly, hype. We’re building the market. Because I think if you’re building an AI company right now, you’ve got to do both. You’ve got to hype the hell out of stuff that doesn’t entirely work today, that doesn’t do exactly what we know it’s going to be able to do in the future—and we might not even be sure when—but we also have to sell what’s on the truck that a customer can buy right now.

Those two things are often different. If you look at the one I think is the most remarkable to look at, it’s the vibe coding tools. If you look at what influencers from these vibe coding tools are talking about on LinkedIn and social media, it is super inspirational. You’re like, “Wow, that is so cool. Look at all the stuff we’re going to do.” Right now, there’s a bit of panic in the markets, like, “Oh my gosh, are we just going to be able to vibe code accounting software? Why should we even have accounting software? We’re going to vibe code a CRM. Sell Salesforce, man, that stuff’s just going to go away.” But then you go to their website, and their website doesn’t say they do that at all. Their website says, “Build a nice prototype,” because that’s what they’re actually selling today.

Now, they’ve got investors and whatever, and right now it’s very difficult to be heard in the noise without being super hypey about this stuff, so they’ve got to do the other piece too. They’ve got to show the vision. They’ve got to show where this is going. They’ve got to show it in order to justify the valuations. They want people to be mucking around with it now with the idea that we should start doing some stuff with this now because in the future we’re going to do way more stuff with this. So there’s this balance, I think, between where you’re at and what you can sell today, and being clear about that when you’re in a sales process. You’ve got to balance that with this other half, which is hyping the hell out of it. When I say it, I mean the future, So, I’m hyped hell out of where this is going and what it’s going to be able to do and what’s happening in the future and all that stuff. The hype stuff changes very rapidly. What we’re selling and what customers are actually doing with it changes about the same as everything else. You’re going to have to check in on it in six months and see if it’s different or not, but in less than six months, your positioning’s probably okay. If I look at the vibe coding tools, those sites haven’t changed much at all in the last year.

Andrew Mitrak: So overall, the act and the role of positioning doesn’t change in a period of rapid technical change. There might be new vectors for positioning; there might be new ways you can position within a new category.

Balancing Today’s Reality with Future Vision

April Dunford: What you should expect is to be very careful, and you should be watching your positioning, and you should be very ready to adjust it when it needs to be adjusted. In a normal market, when I was in-house as the VP of Marketing, we would do a check-in on positioning every six months. That was more than enough, and it was rare that we would check in and have to change it if the positioning was less than a year old or even less than two years old. It’s pretty rare we would do the six-month check-in and say, “Whoops, need to adjust something”. These days, especially if you’re in this AI world, you might want to do that quarterly, and you should be very ready to make the adjustment if you think that it’s needed. But do I think your positioning’s going to change quarterly? No, I don’t. But it wouldn’t surprise me if you changed it within a year. That wouldn’t surprise me at all.

Applying Positioning Principles to Your Career

Andrew Mitrak: I want to ask about how you’ve positioned yourself and positioned your own book. It feels like you’ve been very deliberate about your own positioning. You focus primarily on B2B tech, which is where you have your experience. Do you think that marketers should be applying these same positioning rules to their own careers?

April Dunford: Maybe. I don’t know if I’m a great person to give career advice, but it certainly worked out for me. When I was working in-house, you’re applying for jobs as the VP of Marketing and you’re up against everybody else, and you’ve got to answer the question, “Why me and not the ten other people you’re interviewing?” In order to have a clear answer to that, you have to be able to say, “What am I better at? What have I done more than the other people? What’s my edge over everybody else?”

For me, because I had done a lot of positioning stuff early, that kind of became my edge. I could talk about that in a deeper way. By the time I was at a company and then we got acquired, I had positioned a bunch of things at the acquired company. So by the time I came out of that one, I had positioned five or six products. That’s a lot, really. A senior marketer could go their whole career without repositioning anything if the positioning is working. So I thought I had that as an edge. In the later part of my career, if you hired me as the VP of Marketing, you hired me because you thought maybe you had a positioning problem. I could talk intelligently about how we were going to fix it, and that’s why you brought me on.

I wouldn’t be applying to jobs where what they were really looking for was something really outside of that and it wasn’t really in my deep skill set. Yeah, I know a lot about lead generation, and yeah, I know a lot about email marketing. Yeah, we’re doing SEO and whatever; I know a lot of stuff about that. But am I going to get that job versus the person that comes in and says, “I managed this ginormous Google Ad budget at the last thing and all we did was SEO and I’ve been doing SEO for 15 years, I’m going to yak your ear off on that”? I’m not going to win that job. So I’m trying to focus on applying to jobs that are a fit for my stuff and then making sure I’m positioned in there as the best person for that job.

That’s worked out pretty well for me. As a consultant, I’m trying to do the same thing. I’m trying to stay in my lane. I get tons of calls from companies that are B2C, or they’re B2B but they don’t have a sales team, or what they actually do is professional services. I’ve done a few services companies, but only if they tick the boxes. I’m pretty serious about who makes it through my filter, and that’s because I want to make sure we’re really, really successful. If it’s outside of my wheelhouse, I don’t know, I’m just kind of guessing. So I try to stay right in my zone of excellence so that if you make it through all my filters, then I feel pretty confident that we’re going to get a good result because I’ve done 300 other companies that look just like you. And you’re probably going to pay me more money to do that because I’ve done 300 companies that look just like you. Everybody else you’re talking to has done a little of this and a little of that, and it’s not like they don’t know what they’re doing, they do, but they don’t quite have the experience level in the little box that I do. So I try to stay in my little box where I can look you in the eyeball and say, “I’m probably the best person in the world to do this.” Not this, not this, not that, not this other thing—just in this little box right here. I think I’m the best in the world.

The Strategy Behind Positioning “Obviously Awesome”

Andrew Mitrak: Did you apply your positioning frameworks and methodology to your own book, Obviously Awesome, and could you share a little of that process?

April Dunford: Yeah, so I was really clear when the book came out on what I was positioning against. What I was positioning against was, first of all, the old positioning book, which is the book that came out in the ‘80s by Al Ries and Jack Trout. Again, I love that book, and I think that book’s really good at defining positioning. What it doesn’t do is give you a how-to: step one, step two, step three. So I positioned mine against that and said, “Look, we are very much in alignment, Ries and Trout and my stuff. We agree on the definition of positioning, we agree what it is, we agree why it’s important. I’m giving you the how-to; they are not.” That’s why you need my book and not theirs.

I was also positioning against the “positioning statement,” which was a common sort of folklore way of doing positioning inside a company. A lot of companies, if I went and said, “Have you done positioning?” and they said, “Yes,” what they’d done is filled out a positioning statement, which isn’t a methodology at all. But it was just kind of the thing that everybody did. So I was positioning against that as well. In the book, there’s a mention of the Ries and Trout book and the reason why I was frustrated that it didn’t have a how-to, and then it talks about the positioning statement and why I think that’s not a good way to do positioning. So I’m positioned against that.

When I look at what I’ve got that the other guys haven’t, it’s a methodology. It’s one, two, three, four, five, six. Nobody else has a methodology. I’m going to give you a methodology. I am sure there are other ones now but one, two, three, four, five, six. The value of that is being able to do it in a repeatable way. Even if you’ve got to muck with the process, even if this is just a starting point, you at least got something.

Designing Content for the CEO Mindset

April Dunford: Then the “who it was aimed at” was primarily CEOs of companies, but also, I would say my primary audience was the CEO of a tech company, but also at a secondary level, heads of product or heads of marketing. I did a lot of research with CEOs as I was writing the book about how they buy books, how they find out about books, and how they read books. That was super fascinating. The actual product of the book looks and feels the way it does because of that research. I talked to 50 or 60 founders, and here’s what I found out.

How do you find out about books? You find out from your friends, other CEOs. It’s all word of mouth. Nobody goes to the bookstore and says, “What am I going to read today?” and browses the stacks. That never happens. They get a recommendation, people start talking about it, it’s word of mouth. So you’ve got to figure out how you’re going to spark some word of mouth on this book.

The second thing that I thought was surprising is the CEOs don’t actually read books; they read half-books. Almost everybody told me this. I said, “How do you read?” and they’ll say things like, “Well, I’ll get on the plane, I’ll do my email for an hour, and then I’ve got two or three hours left in the plane ride, I’ll pull the book out and I’ll read and get to the end of it.” They’ll basically say, “I pull the book out and I read.” And I said, “But wait, you only got two or three hours, that’s only half a book. What happens?” And they say, “Well, if there’s bits I can skim, I’ll skim it and skip forward. You know, these business books are full of fluff. Sometimes there’s a whole chapter I can skim, or if they have a case study or something, I’ll skip that. You more or less get the gist of it in the first half of the book anyways because these books are so fluffy. So basically, I never read the back half of a book.”

So I decided, “All right, I’m not writing a typical business book that’s 80,000 words or 90,000 words that takes you six, seven, eight hours to read. I’m writing a book that’s half that, and you can get through it in three or four hours.” Then I’m going to make the bits that you could skim, like the case studies and things like that, very obvious. I’m going to put them in a shaded box so that if you want to skip it, skip away. So it’s obvious what the core stuff is and what the stuff is you could skip. We’re going to make it like In-Flight Magazine—that’s what I kept telling the book guys “This is the inflight magazines”. I thought that worked pretty well. The number one feedback I got on the book after I put it out was CEOs would come to me and they’d say, “Oh my God, it was so good. I finished it in one sitting.” And I loved that. Part of the reason they finished it in one sitting is my original manuscript was like 70,000 words and we hacked at that thing until it was half the size. So yeah, I did use my process for that book.

Andrew Mitrak: That’s so cool. Well, thanks for taking me behind the scenes of that. Congrats on the book and its success, and congrats on the updated and expanded edition of Obviously Awesome. I hope listeners, if any listeners enjoyed this conversation, they definitely enjoy the book; it’s available to order right now. Also, I highly recommend your podcast, Positioning with April Dunford. I’ve been listening to it to catch up and research prior to this interview and enjoyed it a lot. It’s super inspiring. I already mentioned your website, aprildunford.com, which has a lot of great resources as well. Is there any other place you’d recommend where people should connect or follow you? It seems like you’re everywhere.

April Dunford: I feel like I used to be everywhere and now I’m not. I don’t do a lot of social media these days, for example. Occasionally I’m inspired to post something on LinkedIn, but it’s not very often. The best way to follow my stuff is the newsletter, the podcast, the books—these are the main things. If you go to aprildunford.com, you see links to all that stuff.

Andrew Mitrak: They’re all great. I’ll link to it in the blog that accompanies this post. April Dunford, thanks so much and congrats again.

April Dunford: Okay, thanks.

A History of Marketing / Episode 49

Have you ever stood in front of a 500-year-old painting of a father devouring his son and asked yourself, “Who paid for this?” Me neither. Until I met Peter Van Wijnaerde.

Peter is a CMO based in Ghent, Belgium, and the writer behind a Substack that connects art history to modern marketing.

Rory Sutherland recommended I speak with Peter (which is as high a compliment as you can get in this field) after seeing his presentation on medieval branding.

Peter’s premise is provocative: art was the original marketing department.

Patrons funded paintings, statues, and tapestries not for beauty’s sake, but because they needed to project power, build legitimacy, and sway public opinion. The separation of fine art and commerce is a relatively recent development.

Peter brings a perspective that’s part art aficionado, hobbyist historian, and marketing strategist. He shows us that “stopping power” has been central to persuading the masses for a thousand years.

Here is my conversation with Peter Van Wijnaerde.

Listen to the podcast: Spotify / Apple Podcasts

Quick Update: Thank you to the thousands of marketers from around the world who have played The CMO Game! It’s been amazing to see the response and I’ve had a few marketing professors reach out to request using it in their classes.

Special Thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And thank you to Rory Sutherland for introducing me to Peter.

The Intersection of Art History and Marketing

Andrew Mitrak: You’ve written about so many topics connecting history, marketing, mythology, and art, and branding, and merging the past with the present in our work as marketers today. So how would you describe the content of your Substack and your perspective that you bring?

Peter Van Wijnaerde: I like to stretch out the history of marketing a little bit to before the 1950s. And I love art and I love looking at art and I love using those art pieces that were made to compel people to have stopping power. I use those to explain how marketing is really one of the oldest professions there is and what we can learn today of marketing. So not that there’s no surprises anymore in the current time, but my blog is about widening the scope of the time frame of marketing.

Andrew Mitrak: You mentioned one of the oldest professions. It is funny when Pompeii was uncovered – the ancient city that was covered by Mount Vesuvius. They discovered brothels but also they discovered artwork that would point people to the brothels. Right. So if prostitution is the oldest profession, there seems to be types of advertising to get people there. So they were very interconnected. So advertising does seem like an old profession.

Peter Van Wijnaerde: Exactly.

Andrew Mitrak: So what was your initial spark? How did you start connecting the past to the present?

Peter Van Wijnaerde: I was always a very visual person, liked to engage with things that are visual. But I think the spark happened my first time in Vienna in the Belvedere. I started to appreciate medieval art. And normally medieval art is something we laugh about. You have the memes with the medieval cats and there is full Instagram feeds full of that. But actually we should not laugh with medieval art, because it’s very communicative. Because it’s very symbolic. It says there are two guys and a child and the child is just a little human and this is happening, right? And so it’s basically like a cartoon. I started to appreciate it, started to look at it and then started wondering, that must have been expensive and difficult to make. Why were people making this?

Uncovering Medieval Marketing in the Bayeux Tapestry

Peter Van Wijnaerde: The moment that it clicked was when I was doing medieval travels through Europe. And I was in France and I was in Bayeux. Have you ever heard about the Bayeux Tapestry?

Andrew Mitrak: I don’t know about the Bayeux Tapestry. I’m not too familiar with tapestries in general.

Peter Van Wijnaerde: Well, it’s a 70-meter long tapestry that was embroidered in the year 1080, let’s say. They don’t know precise but it was embroidered there. And it’s a tapestry about the Battle of Hastings, about William the Conqueror kicking out the Anglo-Saxons out of England and putting in Nordic rule in England. And this guy, his brother, yes, this one.

Andrew Mitrak: For listeners, most people listen to the audio, but I am going to, because this is a visual conversation, I’ll pull them up on the screen, because I find it useful to hear and see what you’re talking about. So I’m sharing my screen and showing the Bayeux Tapestry.

Peter Van Wijnaerde: So what’s so interesting about the Bayeux Tapestry is that it’s a scroll of 70 meters, it’s about 40 centimeters high or something. And it tells the story about why William the Conqueror thought he had the right to conquer England and what the deal was and how they prepared for it and who they talked to and the whole story from beginning to end is on that tapestry. And it was made...

Andrew Mitrak: So it’s a really wide tapestry. Cause it’s like frame by frame. Cause it’s... wow, okay. Yeah.

Peter Van Wijnaerde: And you can roll it up too. And it was made by his brother, the Bishop Odo of Bayeux. And what’s so interesting about it, it was not a painting, it was not a statue, it was a tapestry. And there is actually really no other tapestry of that kind. But if you think about it, it was mobile, you could roll it up easily, you can transport it easily and put it out somewhere else also as easily. So it was actually a bit of a prop of a PR tour for William the Conqueror by his brother the Bishop of Bayeux. And then it clicked. And I thought, oh my god, they should give this Odo guy an Effie Award or something because he invented a completely new way of storytelling to convince the people that this king is their legitimate ruler. And you don’t do that by building a cathedral because a cathedral is only in one place. So I thought this is a 1,000-year-old marketing campaign in front of me. So this is when it started clicking even more.

Andrew Mitrak: It’s, and you mentioned medieval art almost looks like a cartoon sometimes because it’s a little more two-dimensional, they didn’t quite have the same sense of perspective and lighting and depth that you convey that you’d later see in the Renaissance. But and then also medieval art sometimes you see it in memes today. Like you see it in internet memes and you see it kind of translates kind of because it’s cartoon-like. And in a way memes are such a huge part of internet culture and the way people communicate now. And this artwork, this tapestry kind of reminds you of a comic book almost, or a frame by frame and it sort of takes that type of visual storytelling and it seems like it communicates that to the masses who mostly would be illiterate but would still appreciate a story.

Peter Van Wijnaerde: If you walk in front of it and you just go, it takes half an hour to see the whole thing. And there’s action scenes in there and little jokes in there. There’s a warrior showing his bare ass to another warrior, things like this. So it’s also made to entertain. And I think that’s beautiful actually. It’s not just, this is history, this is also, also very interesting fact: the guy who made it gave himself a very prominent role in the history as well. But he was the guy who commissioned it right? So he could embroider himself into history.

Andrew Mitrak: Okay, yeah, so sort of the marketer, the marketers being a little self-promotional in a sense, or at least the patrons being self-promotional. That’s great.

Inspiration Everywhere: Learning from the Past

Andrew Mitrak: So I originally heard about your work from my conversation with Rory Sutherland, and he mentioned that he loved your presentation on medieval branding. Which is a very high compliment. I mean, take that win because if Rory Sutherland complimented my work, that would be wonderful. So very cool. So that was my initial spark for reaching out to you. And you’ve already talked a little bit about medieval history or medieval artwork and how it relates to branding. So was this part of that presentation? The Bayeux Tapestry, was this part of the presentation or could you just share what the presentation was that Rory was speaking about that seemed resonated with him?

Peter Van Wijnaerde: Well, the insight that, so this was not about the Bayeux Tapestry. This was about some tactics that some brands do today that you can also see that kings and queens did in history. So it was actually, I think the title was ‘Medieval Marketing Lessons for Modern Marketers‘. That was the thing. And it all starts from this, the reason that if you are in power, you need to stay in power. And there are several ways that you can stay in power. And one of them is fighting. But that’s not a good thing for your resources, because you will lose a lot of men and you will lose the belief of your people if you lose too many men. So for efficiency reasons, the kings and queens looked for different ways to keep their power or make sure no one started fighting them. If people believed that it was not worth fighting you because you were stronger, because you had better allies, or you would end up in hell because this guy has the blessing of God. That’s also an important one. So they started making up all these stories. And what I did in this talk was picking apart some of those stories and translate how they are actually being used today. Just to show, not to tell people this is the way you should do marketing, but more to tell people, like, if you’re in marketing, if you’re in branding, open your eyes. Ideas are everywhere. That was more, and I look for them in history. Other people can look for them in kindergartens or whatever, because I assume a lot of real human behavior also happens there.

Andrew Mitrak: It is one of the professions where I feel like you can become a better marketer by opening your eyes to just about anything.

Peter Van Wijnaerde: Yeah, I really like Rory’s point. He said if you’re a, what was it, not an attorney, but something else...

Andrew Mitrak: An accountant.

Peter Van Wijnaerde: An accountant.

Andrew Mitrak: Yeah, this was actually coming back to the Rory presentation. He said if you’re an accountant, I doubt that you can get much better at your job sitting at a coffee shop looking at the world. But if you’re a marketer, you certainly can. Of course Rory said it in a more eloquent, witty way than I did, but...

Andrew Mitrak: He does.

Peter Van Wijnaerde: But also what he also did, like after he referenced me, he immediately started talking about Attention Deficit Disorder. So that started to worry me as well.

Andrew Mitrak: Oh yeah. Who was that guy who was all over the place at that conference? I’m sure that was just a coincidence.

Peter Van Wijnaerde: But he brought of course the example of Charlemagne to the topic. Like he was the first king to be coronated by a pope. That was a masterful move. No one would attack him after that, or you end up in jail or in hell of all places. Yeah.

The Medici Family and the Power of Storytelling

Andrew Mitrak: Great. So yeah, that’s right. So let’s talk about some of the specific examples in your presentation. You mentioned Charlemagne and being coronated by the pope and sort of a, I don’t know what you call that, a partnership marketing or influencer marketing or just aligning yourself, positioning... it’s a lot of elements of marketing to that. What were any other examples from that presentation from the medieval presentation?

Peter Van Wijnaerde: Well, we talked about the Medici Family. The Medici Family, if you walk... have you been to Florence? If you walk around in Florence, you see a lot of marble statues. And if there is a common theme among most of those marble statues that the Medici Family has commissioned, they liked their Greek heroes who liberated cities. Like how Hercules won against the monster Cacus, or The Rape of the Sabine Women. Also a story about how Rome came to power. So they really liked those stories. And one of the stories I like most about them, and this is the one that I put in the presentation as well, is the story of Judith, which is actually a biblical story from the Old Testament. And Judith was this woman who, her city was besieged by General Holofernes. And no one was doing anything about it. And Judith went to the tent of the general. He was drunk. She seduced him and then she beheaded him. That’s actually a very horrific story. Now I’m telling it.

So they had this statue with a lot of stopping power, actually, because there is a woman and she is beheading a man. So this was in the middle of their garden where all the rich people came, where all the influencers came. They were... by seeing this, there was a plaque on the bottom of the statue telling the people, this is Judith, this is what she did, and she is a bit like us, because we also freed the city. So they used all these stories of Hercules, of the Sabine women, of Judith, to remember the people that they were the ones who freed the city. The funny thing is, however, when other people took over Florence, they used the same statue and just changed the inscription on it. They said, the Medici are like Holofernes and we decapitated them. Right. The Medici, of course, they came back and they put the statue again in the middle of the square with another inscription: We freed the city from the revolutionaries, whatever it was. So yeah.

Andrew Mitrak: The danger of how you position your enemy is that later you could be positioned as the enemy by your replacement.

Peter Van Wijnaerde: Yeah.

Recontextualizing Art: Artemisia Gentileschi’s Judith

Andrew Mitrak: And on Judith slaying Holofernes, I was always more familiar... when I took art history class, this one, the Artemisia Gentileschi, I think painting of this one. And I always find it interesting to see the same scene compared in two different ways, right? The Donatello statue Medici one. It’s big, it’s public, it’s proud of it. And this one, it’s this painting, it’s happening kind of in darkness and it seems almost more secretive when it happened. And it’s funny to just kind of compare similar scenes and how they’re represented.

Peter Van Wijnaerde: But I get the chills when I see this painting. Because this painting was painted by Artemisia Gentileschi. And she paints a completely different Judith than all the others did. Because actually, if you want to know, and this might be a triggering subject, the guy that Judith is beheading here is actually a portrait of the guy who raped Artemisia Gentileschi when she was younger. So this is not a biblical story. This is a true story, or at least how it happened in the head of Artemisia Gentileschi.

Andrew Mitrak: Oh wow. I never knew that background to this. That brings a new perspective on it.

Peter Van Wijnaerde: Yeah, she is one of the biggest Baroque painters, and maybe the only female one we know of. And in a lot of her paintings, she brings a female perspective to a topic that was painted by a lot of men. So, but that’s going off topic, of course, but it’s...

Napoleon Bonaparte: Master of Public Relations

Andrew Mitrak: One of the other figures of history that you’ve spoken about or written about is Napoleon. And he is sort of a widely recognized figure in history. And I’m wondering what could Napoleon teach a modern marketer?

Peter Van Wijnaerde: Also to learn from history. Because Napoleon also had himself coronated by the Pope as the Emperor. He brought in Pope, who was it, Pope Pius VII. I’m not sure. To witness him coronating himself. That was the big difference. But he brought in the Pope. So that’s one thing. So he took a trick from the old books. And he did that a lot. Because he brought in all the neoclassical style, like the Roman coding of power he did. So he used a lot of old coding of power. He used a Pope for his coronation. He also, and this I think is the most interesting thing, not the most interesting, but the thing that I find very interesting about him, is during the French Revolution, there was this painter, you might have heard of him, Jacques-Louis David. And he is the guy who painted the coronation of Napoleon. It’s a really big painting. It’s huge, it’s detailed, it’s amazing, it’s theatrical, it’s...

However, Jacques-Louis David was maybe the star entertainer of the moment. Having your portrait painted by Jacques-Louis David was like having your face on Person of the Year on the Time (magazine) cover. So that was the impact that that guy had. This guy was commissioned a lot by Napoleon. He painted Napoleon over eight times. A lot of people when they think of Napoleon, they see Napoleon on a stud riding his horse over the Alps with the big wavy cape in red in the background. That’s the image that a lot of people have of Napoleon. That was also painted by Jacques-Louis David. So he painted him over and over and over again.

And what was so interesting, why the Pope was there, and this is not confirmed by academics, this is just my thought. One year after the coronation of Napoleon, Jacques-Louis David painted Pope Pius VII. So that Pope that was there. So probably that was part of the deal. I’ll catch you on the cover of Time (magazine) if you attend my party.

Andrew Mitrak: Yeah. So there’s kind of who you choose to be painted by is another layer of status that a figure like Napoleon or the Pope in this case would think about. Is sort of obviously there’s a lot of stature, you’re an Emperor or you’re Pope, but even further cementing it is I’m being painted by the most popular artist of the day. And therefore kind of I’m assigned a certain stature. I’m trying to think of who the equivalent would be today. Like who you choose to have your portrait painted by or your photograph taken by. I guess there’s Annie Leibovitz or somebody like that.

Peter Van Wijnaerde: But maybe you should take it in modern ways. It’s not having your portrait painted by, but maybe imagine having your biopic done by Ridley Scott. Or Steven Spielberg doing your biopic, you know?

Andrew Mitrak: Although I don’t think Ridley Scott’s biopic was the most flattering or frankly even the best movie he’s done.

Peter Van Wijnaerde: Well, there were statues made by Napoleon trying to flatter him that he had destroyed or put away in closets and stuff like this. There’s a lot more artwork of Napoleon going around that he didn’t want us to see.

Investigating the Money Behind the Masterpieces

Andrew Mitrak: So you said that when you stand in front of a painting, you’re asking different questions. You’re asking who paid for this? Why did they pay for this? And so could you talk about, we were talking about the artists behind the paintings, but could you talk about the money behind the paintings and sort of what were the motivations of patrons and how is that akin to funding a marketing campaign?

Peter Van Wijnaerde: Yeah. So when you are standing in front of a painting that is like a murder scene or something, then it’s a very healthy question to answer who wanted this made and who wanted to have this above the fireplace. Because by today’s standards, that would not fly. Your wife would say, “Andrew, no, we will not have this above the fireplace.” Right? So that’s the kind of dialogue that goes around in my head when I look at a painting that has a big murder scene. But I made a little series about horrific paintings and who wanted them painted and why. And Spanish kings were very good at collecting horror paintings and that had more to do with telling people something about yourself. Like if you believed in violence, because the stories you pick are the ones that you associate with. So people would see, damn, this guy, Philip IV, I think, he had Rubens paint Jupiter devouring his son. Why would you want to have that? It’s about power, it’s about destroying future power, it’s about punishment, it’s about all that. You don’t mess with a guy who hangs that above his fireplace. And he had this hunting lodge and it was full of these horrific paintings. Just telling the people that came into his place, this is how I look at punishment, this is how I look at power, and this is how I look.

Andrew Mitrak: Was this the Goya one, the Goya with Saturn devouring his son, or was this a different one?

Peter Van Wijnaerde: No, no, no. The Goya one was painted for private reasons because he was a bit mad. It’s the Rubens one. The Goya one is true horror. Rubens is still better actually, I guess.

Andrew Mitrak: That is pretty horrific too. But yeah, that is funny because when you think of Rubens, this is not what you think of, right? You think of full-figured women and happier scenes than this. I guess there is eating in this one, so there is that.

Peter Van Wijnaerde: Yeah, that’s true. But there’s also, this was Baroque time, right? So it was stopping power, shocking people, and whatever it took to get people’s attention was okay. Naked women, cannibalism, it was all good.

Andrew Mitrak: And just for comparison, the Goya one is also truly horrific. When I’m sharing these, sometimes art history really takes you to very dark places.

Peter Van Wijnaerde: It does. And that’s maybe why it’s good to ask why it was painted. You know, about, I think, there is this painting by Caravaggio. It is David beheading Goliath.

Peter Van Wijnaerde: And the reason why he painted that was because he wanted to get pardoned for a murder he did by a cardinal. So he painted that as a gift for a cardinal to get pardoned. And actually, he uses his own head. So the head of Goliath is actually a self-portrait of Caravaggio. And on the knife, there is an inscription on humbleness. So this was painted as an apology for a man in power. So imagine if you’re one of the most popular painters of the time to get something from a cardinal, a pardon, you send him a biblical story in this format.

Andrew Mitrak: Yeah. So if I’m ever in trouble as a marketer, I’ll see if I can do a marketing campaign for someone. You make a free campaign to get out of it. I’ll feature you on my podcast. I don’t know if that will work. I’ve got to get more sway.

Peter Van Wijnaerde: They need to pardon you. Yeah.

The Separation of Art and Commerce

Andrew Mitrak: So one of your arguments that you talked about is how the separation of art and commerce is actually sort of a recent invention, that it’s only from the last hundred or 200 years maybe that most of art history that art was commercial and that there’s a very clear relationship between the patron and the artist and the commercial nature of the art. So when did you come to this realization that for most of human history that art was a marketing department, so to speak?

Peter Van Wijnaerde: Well, it becomes very obvious, for instance, during the Reformation and the Counter-Reformation. When painters like Cranach the Elder was painting biblical stories but from this reformist point of view for Martin Luther, right? And you see a completely different way of looking at things like Adam and Eve or a completely different interpretation of the Three Graces, stuff like this. And then it goes back to Rubens again, who was a Counter-Reformist, and he paints it completely different, the same story, and when the same story gets told in a very different way, then there is someone who wants to sway you in one way or the other. So this is just one example of when it becomes very obvious you can put two times the same theme together right next to each other, and it becomes a completely different story because another brand is telling the story, the Reformation or the Counter-Reformation.

So that’s one thing. But it’s just like what I told you before with Judith or with Charlemagne, it’s all been marketing. It was the biggest visual thing that you could hang somewhere. People would look at it, you could tell a story about it, it was a conversation starter. So it had attention, and where there was attention, there are people wanting to do something with that. When there is a point in time where art freed itself from advertising in a way, or from marketing or branding in a way, I think that was at the point of the Secessionists in the turning of the 19th into the 20th century. You had artists in Munich, in Berlin, in Vienna, in Paris, in Brussels, and they were kind of fed up with how the powerful, the kings and the princes and the regents, were actually deciding what was art and what was not. And they wanted to paint because everyone was commissioned by those people. So you could only paint what you were commissioned for to paint at that point, or you could only show what the prince allowed you to show in the salons of that time. So you had the Munich Secessionists, the Vienna Secessionists, and the Berlin Secessionists, and they basically made a new business model around art because they lost their funding. They made a new business model, and that’s actually the point in time when art freed itself a lot from branding influences. But anything before that, the person who paid for it had a motive. And that motive was a lot of the time in the statue or in the painting or even in the architecture.

Addressing Skeptics: Is connecting art history and modern marketing too much of a stretch?

Andrew Mitrak: I’m sure there are listeners who’ve enjoyed this conversation like, oh, that’s really interesting perspectives on art, but maybe they’re still a little skeptical. Like, is this really marketing? Is it a bit of a stretch to call that marketing? Have you ever encountered anybody who pushed back on this or said, this is all interesting, Peter, I like your ideas, but marketing requires a market. And this is pre-capitalism, this is pre-mass production, and that there’s something different about a patron funding a work of art prior to that era versus somebody commissioning an advertisement today. Maybe there’s lessons, but it’s just too much of a stretch. Like, have you ever encountered that or how would you respond to somebody who had that perspective?

Peter Van Wijnaerde: Well, I have not encountered that question, but probably people were thinking that. A lot of people. First of all, I would always say don’t take it too serious, it’s a game you play in your head and you can learn a thing or two from the game that you’re playing in your head. So don’t take it too serious. But on the other hand, the need, like I said, marketing is one of the oldest professions. Even before capitalism, there were moments when people needed to gain trust of other people to get something done. Like the Tapestry of Bayeux, when William the Conqueror was taking over England, he did not spit out the Anglo-Saxons that were already having thriving businesses there. He embraced them. And actually, when you look at the tapestry, you would think that they would make fun of the enemy. No, no, no, the Anglo-Saxons are very much respected in the tapestry. So that’s kind of proof that this is a piece that was there to sway people into your way of thinking, into your direction actually. So as long as someone had to influence masses to get something done, I think this counts as branding. And this could count as marketing. Even though there was not a market, then it will have another word. Then call it public relations, which is basically maybe also fits in the marketing realm, right?

Andrew Mitrak: No, that’s right. I think it’s public relations. I think there is sort of a funny line when I did my episode on this man named Edward Bernays. He wrote a book called Propaganda and he also coined the term public relations counsel. Or, sorry, counsel on public relations. And he kind of popularized, I’m not sure if he invented the term public relations, but he definitely cemented and popularized public relations and sort of positioned it against propaganda. But there is a very fine line between the two. And if I was to think of the political advertisements of this, most of the ones that you cite are somebody in power cementing their power and reclaiming their power. But it’s different than when you think of a political ad today, like vote for me because I want the power, right? It’s more of an asking permission for the power, it’s helping anoint me to the power, and I guess it’s sort of pre-democracy somewhat, or sort of pre-political campaigns as we think of them today. So I’m sure there were political ads that were older, but it seems like a lot of them are more an authority figure confirming their authority, sort of persuading the masses so otherwise I don’t have to use violence to persuade you and less of used on their rise to power to build consensus.

Peter Van Wijnaerde: Or think of Napoleon who basically promised Pope Pius VII to be on the cover of Time magazine if he attended his coronation. So Napoleon also needed funds for his wars and people also needed to pay for those wars. So a lot of what he was doing was campaigning to get the power as well, but it had a bit of a different mechanism.

The Dangerous Myth of Progress

Andrew Mitrak: One of the essays that I think encapsulates maybe not your entire worldview, but a certain perspective that you bring is this dangerous myth of progress. I think this is something we fall into a lot, where, and this might be why marketing history is underappreciated by modern marketers, is that we think, “Oh, we’re so wise and know so much more today, and people back then, they have nothing to show us.” And so I think this essay really resonated with me. Can you talk about the dangerous myth of progress?

Peter Van Wijnaerde: Yes. It’s a big topic, because it’s also a dangerous topic. Because it’s all based on John Gray, which is a British political philosopher. And he just claimed that there is no such thing as human progress. We’re not better than the people in history. We’re just the same, in his words would be the same barbaric animals. We have lust and everything we do is motivated on lust, on gaining power, and this is John Gray’s way of putting it. It’s a very pessimistic way. I find it easier, I accept the idea that there is no such thing as real progress. I think that we are exactly the same human beings like our ancestors. I’m a romantic and I believe that people fall in love and people want to be loved and those are very strong drivers for people to do stuff, to get together, to make groups and stuff like that. So I also believe that, by just the idea that those people in history were just as complex as us, we don’t throw away history just like that. We don’t think of medieval people as people who were praying all day and being dirty all day. No, they also wanted to be someone and they also wanted to express themselves. They’re just as complex as you and me, which makes you look different at the people in history, which that strategic thinking was not invented in the 50s. It’s way older. It’s just a pair of glasses you put on, look at history like this, and then you start learning because those are just not previous versions of what we are. We are not the beta to their alpha, they’re the same. We’re just the same but we have Google and we have OpenAI.

Andrew Mitrak: And so the idea is that technology compounds, our ideas compound on each other. There are things that grow, there are systems that grow, there’s culture that grows. But we as individuals are sort of born at square one and have the same fundamental flaws or the same underlying desires that somebody from a previous era has.

Peter Van Wijnaerde: Yes. And John Gray would then argue that everything compounds. So we might have better health, we might live longer because of science. But then again, in the year 1000, there was no way to push on a button and to kill an entire city of people. So not only our wisdom compounds, but also our ways to destroy compounds as well. So to him that’s a bit of an equalizer. And maybe that’s why he has more of a pessimistic view on the whole thing.

Embracing the Messy Reality of Human Nature

Andrew Mitrak: I think that part of this myth could describe why marketing becomes more sterilized and almost too reliant on data, that maybe we think of consumers as rational actors, that we optimize for efficiency, and that sometimes we forget that human nature is irrational, it’s messy, we have desires, we want meaning, we want connection. And some of that gets lost. And is that kind of why you partly bring up this idea of, because when you look at some of the examples of artwork we’ve seen, they’re so primal, right? They’re violent, they’re lustful, there’s naked people, you know, there’s all these things. And...

Peter Van Wijnaerde: And that’s a bit of a different thing. But as soon as you start to embrace the fact that good things are messy, the world becomes way more beautiful. I was going through this personal crisis, I think, walking through Berlin and I went to the Berlin Wall. I’ve been in Berlin, I cannot count how many times I’ve been in Berlin. But at that point I was, no, no, Peter, you’re going to walk to Checkpoint Charlie, you’re just going to look at it. And there it struck me that I was very angry about all the noise in the news that I hear every day and all the opinions that you read everywhere, even about marketing, about our profession. It’s going to be ruined because of this and it’s going to be ruined because of that. And then I thought, like, you’re standing at Checkpoint Charlie and then you know that when you’re standing on the US side of Checkpoint Charlie, you know you’re standing on the good side. That’s what we learned to think, and that’s still true. You’re standing on the side where you are free, and that’s the noisy side. When you step over and you cross the no man’s zone and you go to the other side, that’s the silent side. And we think that peace should be silent. But peace is messy. We think that people should be structured, but people are messy. They have desires, it’s what drives them.

And as soon as you start looking at people as messy beings, then it becomes way more fun. You don’t look at people as a data set. That’s, I guess, it helps when you’re looking at a lot of people at the same time. But in most cases, you’re making a billboard not to address a thousand people, you’re making a billboard to address that guy in that moment or that woman in that moment. And it should appeal to them, and then it should also appeal to their lowest common denominator. Like, what is it that drives these thousand people? And that’s going to be something very primal. And that’s also the same with art history. You see cannibalism, you see naked flesh, you see the things that attract our eyes. We are attracted to two things. Pure biologically, we’re attracted to beautiful things, and we’re attracted to horror because when somebody yells “tiger”, you better pay attention and run, right? And that’s about it. And that’s why I think that primal is good, and messy is good, and this idea that we are progressed does not help us a lot, I think.

Andrew Mitrak: Well, thanks for talking about that visualization of being at Checkpoint Charlie and going from point A to B. I only visited Berlin for the first time in my twenties, but I remember when I first learned about the Berlin Wall, probably early in high school, I think. So I was probably 14 or 15 years old.

And when I saw pictures of it or I saw a video of it or I saw slide projectors in class and that there was a side with all the graffiti on it, where all the people had spray painted, and I thought, “Oh gosh, that was their side.” Then I learned, “No, that was our side. That was the side of freedom.”

That was probably the first time that I realized, “Oh yeah, that graffiti, that messiness, that thing that’s undesirable at times, that’s a sign of freedom and liberty and personal choice.” For all of the downsides of that, I think it’s still the choice that I’d make. I choose to live in, and the place I’d prefer to be is the side that has some of those downsides where people can spray paint a wall and not get executed for it. And that’s good.

I think that was among the memories I have in a classroom, probably among the bigger ones that actually stuck with me in a way. So I think it’s an important, instructive lesson somewhere.

Peter Van Wijnaerde: I remember also next to Checkpoint Charlie, there is a McDonald’s. And the other day I would think, “Did they really have to put a McDonald’s here?” But I think that’s the most important McDonald’s there is in Europe. So I went in and I got myself a burger, and I think it was the best burger ever.

Andrew Mitrak: You know, there is something about McDonald’s. McDonald’s in Europe are usually actually a little nicer than the ones in the US. Because I’ve gone to a McDonald’s close to midnight and had a coffee in Europe, and you don’t do that here. Pulp Fiction has a whole riff on that.

Applying Art History to Modern Marketing Campaigns

Andrew Mitrak: You personally, aside from your Substack, which is great, have you applied this historical perspective to your work? Are there pieces of art history or broader themes that you as a marketer or as an advertising person have brought to your commercial work that you can speak to?

Peter Van Wijnaerde: I think yes. I bring it up every day, I guess, because we work with a lot of people that bring in all the modern stuff, and I like to be a bit of a contrary. So I bring in the old stuff. And I will be the one that addresses that this is people first. That we should be talking, if you make an ad, are we listing the features, or then I’m going like, “Maybe we should talk about the aspirations of the people, and what are the aspirations of the people?” That’s one side, the subject you talk about, this is what you bring in from the old. What you also bring in from the old is make sure you keep having stopping power. Because if you would look at some people, they would put three USPs with a little V sign next to it. It has no stopping power. So what you also learn by looking at art is that you look for stopping power. So inherently it’s been baked in always. But I remember it was before Corona somewhere, I was working on a campaign to promote the Masters of Belgium, and those are Peter Paul Rubens, Jan van Eyck, and Hieronymus Bosch. Which is technically not a Belgian, but at least a lot of paintings in Belgium. And I was trying to promote Rubens museums and places where you can see Rubens in Belgium on Facebook. But my campaign got banned by Facebook because of nakedness on there.

Taking on Facebook: The Rubens Museum Campaign and “Titty Riot”

Peter Van Wijnaerde: Andrew, I got so angry. I remember I was in a meeting with the client, and it was the third time that we had to report no results because Facebook kept banning our campaigns for Rubens. And I got so angry, and I remember in the meeting just saying, “You know what we need? We need a titty riot.” In Dutch I said “tittenrel,” which is basically a titty riot. “Guys, we need a titty riot, and we’re going to do it.” And I took my stuff, I stepped out, and that was that meeting. A few weeks later we were at the office, we were like, “Okay, now we need to think of something.” And we thought of a campaign. Basically very simple because we were angry, right? We wanted it to be very simple. If you had a Facebook account, we banned you from certain rooms in our museums where there was naked people. If you were an American, you were banned. If you had a Facebook account, you were banned. Because according to your rules that you signed, this is inappropriate, you shouldn’t be looking at it. And we made videos of that. There was even an old woman flashing her boobs out of protest against the gatekeepers of the room. That really happened. And we released that video.

We made a statement with the museums, and Fox News picked it up. They actually sent a delegation to Belgium. We talked about it, and the rules were changed about naked paintings on Facebook. So I think that’s the closest that art and my daily job came together at that point.

Andrew Mitrak: That’s incredible. That’s a great example. By the way, this podcast has a clean rating, so I have to bleep. With Rory Sutherland, I bleeped a lot of his profanities. I’m going to keep in “titty riot” though. I’m going to see whether “titty riot” gets us an explicit rating or not.

Peter Van Wijnaerde: Sorry for the profanity.

Andrew Mitrak: That story though also is just incredible, that you kind of take something where nothing creates scarcity or gives you more desire than saying you can’t come in, and turning what could have been a failure into a big public relations win, and actually a great content win, and actually changing Facebook’s policies, which is a pretty rare thing to do. That’s just incredible. So that’s great. I was thinking though of when you bring in, if you’re riffing on ideas with other people on an advertisement, on a campaign, sometimes I feel old school bringing up the Pepsi Challenge or a campaign from 20 to 50 years ago. Or I feel very old school if I bring up a David Ogilvy quote or something. But I imagine you sometimes bringing up medieval art as a reference point in a brainstorming session and getting strange looks from your colleagues. I’m just wondering if those kinds of things ever come up.

Peter Van Wijnaerde: They are quite used to that. They are quite used to me. I also know, I have developed a skill that I can quickly see when people’s eyes are glossing over when I’m doing another of the medieval stories, yes.

Why Marketers Ignore History and Chase Trends

Andrew Mitrak: So I think we have a lot in common that we’re both unusual for marketers. I think we both take different types of looks at history and marketing and certainly try to learn from the past. But the industry overall is very obsessed with what’s trending at this moment right now. Most marketers don’t look to history. In fact, as I was making this podcast, one of the reasons I made it is that there wasn’t really one that was a podcast dedicated on marketing history. And I also do love what’s recent, but the fact is there’s a thousand podcasts or more just about marketing and artificial intelligence. And it’s a topic that I like, I just think that it’s so saturated that it would be difficult to break through. And I thought let’s look at history, because it’s important and nobody’s talking about it. But why do you think it is that nobody talks about it? Why do you think it is that we’re rare for marketers? What could it be?

Peter Van Wijnaerde: Well, first of all, the marketeers are the weird people here. Because if you look at the non-fiction book sales, history is always on top of it. Not like number one, but like for sure number three, number four. People just love history. And it’s just marketeers that don’t, I guess. So we are not the weird ones, we’re actually the normal ones, and all the other marketeers are weird. Let’s just agree on that.

Andrew Mitrak: On that point actually, Apple for 2025 named a podcast called The Rest Is History as their number one podcast of the year. And it’s a history podcast, right? A lot of people listen to podcasts. So you’re definitely right on that. Anyway, I didn’t mean to interrupt, but just wanted to reinforce your point.

The Shift to Digital Channels and the Loss of Historical Context

Peter Van Wijnaerde: So normal people love history. Marketeers are not normal people. And I think it’s normal, right? In the last 20 years, marketing has changed so much. So the internet came up, digital marketing came up. And marketeers were, instead of sitting next to your old creative director and learning from that guy, because sadly it was mostly a guy, learning from that guy how advertising worked, how it was to be appealing, how it was to be desirable, what people were desiring, right? So you would learn that skill from someone you were working with. But in the last 20 years, we were a bit distracted by learning about new channels and how to master those new channels. And there was new, new, new. First there was internet, then there was Facebook, then there was Twitter, then there was Instagram, then there was influencer marketing, which is basically, as we already agreed, a very old concept but that is happening again. So you have all these marketeers who actually just needed to handle a few channels, but a lot of thinking about people, and now they flipped it around. They have to think about channels. They have to think about technology. That’s one thing. It’s always the new thing, the new thing to follow. Also, marketeers are very biased to putting “new” on something. And putting “new” on it makes it important, right? Pay attention, this is new. And this is just how marketeers are trained to function in the last 20 years. And it’s not that it’s a bad thing. A lot of good things have come from it. A lot of things are more efficient now. But if you ask why marketeers are not busy with history, it’s that they’re always very busy with something that is possibly tomorrow or missing out on today. There is nothing more exhausting than trying to follow AI trends, right? But that’s what they are doing.

The Democratization of History and Storytelling

Andrew Mitrak: Sometimes I feel cautious about where I step as a historian because I don’t have academic credentials as a historian. And I in some ways am even more cautious than you are because I mostly just ask questions. I haven’t published too much of my own opinions on marketing history so much, at least not yet. But I’m always cautious to do so just because I know that there are academics out there who really study the history. And I don’t want to in some ways undermine their credentials or feel like anybody can be a historian. Because I don’t necessarily know if it’s true that anybody can be. But I guess I wonder if you have any feelings or thoughts on academia as gatekeepers of historical records and how you react to that, or why you felt brave enough to say, “Hey, I’m just going to step out and talk about history and that’s fine.” What’s your overall perspective on this?

Peter Van Wijnaerde: History is something, if you live where I live, I live in a medieval city called Ghent. History, first of all, is everywhere. So you grow up with history. There is a medieval castle in the center of my town. And you know that little boys, they all adore knights and fights with knights on horses and all that stuff. Well, we had the set for that in the middle of the city. So first of all, that’s already something different, that you like grow up with history. That’s one thing. So history is not just a thing that lives in books, it’s a thing that lives around you. However, academics are very boring because they list facts. And that’s good. There should be someone who’s listing facts. But the problem with facts is as soon as you start chaining facts, you create a story. And it becomes a curation of facts becomes a story. And there is this old saying that history is written by the victors. That was kind of happening. That was happening all of the time. Now today, thank you Google, thank you the internet, everyone has access to research papers. Everyone has access to a lot of stuff. Also, a lot of people who studied history have a place to tell their story. They’re not in dark rooms anymore with a lot of dust. No, they can tell their story on the internet and they have been doing that. So people have been chaining these facts into more interesting stories. And when only academics are doing it, you get a very clean version of history, which is true. But for instance, did you know that Belgium, where I live, once had a king that was a bigger monster than Adolf Hitler? A lot of people don’t know about it. At least, I never learned about it in school. I only learned about it maybe 10 years ago. That’s maybe being very generous to myself, maybe it was only five years ago. When other people who were not in the dusty rooms, but people of minorities were doing their own research in history, and they had means to make those stories popular. And telling them, “Hey guys, we have a very dirty colonial history in Belgium and we should know about this.” So this is not to roast the people at the academies, but this is just to tell that more people can tell the stories now based on the facts. Because whatever you do, it should be true. You can’t say that Jesus was sitting on a dinosaur, right? That’s just simply not true. But as long as you work with the facts, you can give parts of history that people were not thinking of. Just like what I did with you with the perspective on the Artemisia Gentileschi painting. By just giving you five more facts, your whole image of that painting changed.

Confronting Colonial History and the Power of Hidden Stories

Andrew Mitrak: Yeah, that’s right. You bring up Leopold II and sort of the Belgian Congo. It is something where I knew that story and I kind of knew it, but I had to look it up. Because I read Heart of Darkness back in the day. But in some ways that story hasn’t been told in the same way that resonates in the same ways that, say, so many stories about World War II. It’s sort of the defining global moment of the 20th century where that really influenced sort of the second half of the century’s media and art and film. And some of the best films of all time are World War II films or talk about The Holocaust. But because the stories that are written about the Congo, of course Heart of Darkness is a great work of literature, but it’s not sort of a popular book in the sense that even the adaptation of it is Apocalypse Now, which isn’t about the Belgian Congo, right? And not about Leopold II. So it’s kind of a story that because of the era or because of the documentation of it, or I don’t even know exactly why, it just hasn’t translated completely. But it just because the story is not told, people don’t know that history as well. So it is sort of incumbent on not just the fact-finders, but also the storytellers who can create something that really resonates with people, is that’s how the story becomes better known and how people better know their own cultural history.

Peter Van Wijnaerde: That more people can start telling history stories, and I think that’s amazing. That’s just more perspective on life.

The Future of History and Where to Find Peter’s Work

Andrew Mitrak: Any other thoughts on sort of the future of history?

Peter Van Wijnaerde: The future of history. You know what would be amazing? If let’s just assume that fact-checking will become more easy, and searching for facts will become more easy. Then I think a lot of history will be more personal. Because when people find themselves or recognize themselves in history, it gets a certain validation. “I’m here because I was always here,” or “I have a right to be here because I was always here,” you know? For instance, immigrants. History tells the story about the value of immigrants in a certain country. It validates them. So I think history can cure a lot in the future.

Andrew Mitrak: I think that’s a good note to wrap up on. Peter, I’ve really enjoyed this conversation. Where would you point people online to read more of your work?

Peter Van Wijnaerde: I would love it if they took the time to check my Substack. It’s peterVW.substack.com. That’s where I release my stories. They’re quite long sometimes. You have experienced that, but yeah.

Andrew Mitrak: They’re well-researched, well-articulated, and they’re full of great pictures as well.

Peter Van Wijnaerde: One of the things that I try to do on my blog since a year was never use artificial images, only art. And that’s a fun way because sometimes you have to look for a long time to find the right picture. But that’s also how I always get to the other subject that I want to write about.

Andrew Mitrak: Absolutely. That’s great. Well, yes, I will link to peterVW.substack.com in the blog that accompanies this post as well. So I hope listeners check it out. If you’ve listened to this podcast, I’m sure you’ll appreciate Peter’s work. So Peter, thanks so much. I had a lot of fun with this conversation, so I really appreciate your time.

Peter Van Wijnaerde: Thank you. This was also for me a lot of fun to do.

A History of Marketing / Episode 48

This week, I’m joined by Scott McDonald, who spent three decades in the research trenches of America’s biggest magazine publishers before becoming president of the Advertising Research Foundation (ARF), an organization now celebrating its 90th year of trying to separate marketing science from marketing spin.

Scott led consumer research departments during the Golden Age of Magazines. His insights helped launch Martha Stewart Living, tripled The New Yorker’s subscription price, and he saw the internet disrupt the business model he’d spent years optimizing.

Along the way, he picked up insights that still resonate. Including:

* The Strength of Weak Ties: How a core sociological concept explains networking and provides a framework for go-to-market efforts.

* The Power of Print: Why Steve Jobs insisted that every new Mac launch campaign include an ad in Time Magazine.

* Cultivating Authentic Brands: Behind-the-scenes stories of using qualitative focus groups when launching Martha Stewart Living.

* Scientific Marketing via the ARF: Including the empirical rule that cutting your share of voice during a recession will reliably cost you market share.

Listen to the podcast: Spotify / Apple Podcasts

Now here is my conversation with Scott McDonald.

Special Thanks:

Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.

And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Scott.

Connecting Sociology with Marketing Research

Andrew Mitrak: You got your PhD in sociology from Harvard University, and then you got into a career in media and advertising. Sociology is such a fascinating topic. I always enjoyed my sociology classes in college. At a broad level, how did sociology influence your career?

Scott McDonald: Well, my interest in sociology went back to undergraduate days really, where I was mostly in the historical comparative wing of sociology and interested in social movements and things like that. And then when I graduated, I graduated from University of California, Berkeley and was totally broke by the time I got out of school. I needed a job. I went to the job board and found a job that involved program evaluation, just kind of project work, evaluating educational programs for the California Department of Education. And it ended up being quite fascinating because it was the first time I’d actually thought about how you would address structured applied problems using the skills of social science. So I cut my teeth on that, doing projects for the Department of Education, for Bay Area Rapid Transit, for all these sort of public entities. And that drove my desire to go to graduate school in sociology to learn the quant side, which I had not really studied as an undergraduate.

So that’s really the main throughline to the work that I’ve had in advertising and media because I approached it very much through a background in studying statistical modeling, pattern recognition. I was particularly interested in graduate school in demography. And so demography sits at the border between sociology and economics. There are other borders in anthropology and psychology and other things like that. But I was mostly interested in the border between sociology and economics. And that carried through, I’d say, through my entire business side career. But also I had really fallen in love with doing applied work as opposed to sitting around theorizing at a university. So I was much more receptive to those job offers.

And one came to me when I was just rehearsing for doing job talks, going around to campuses and presenting myself as a soon-to-be graduate of a PhD program. And quite randomly, a good example of the sociological theory of the strength of weak ties, that a job at Time (magazine) came up where they were looking for an academic social scientist to try to crack a problem that they found intractable. Because a guy at Sports Illustrated in the Time Inc. portfolio had gone to high school in Chicago with the wife of my thesis advisor. The weak tie led to the referral. I went to New York and hit it off and decided to move to New York and work for Time Magazine instead of joining the faculty at the University of Arizona as a starting tenure track professor.

Andrew Mitrak: Can you define more so the strength of weak ties? Like what is that idea? I haven’t actually come across it.

Scott McDonald: It was popularized as the six degrees of separation concept. That it isn’t so much who you know immediately, but it’s who people that you know know. That’s one degree of separation or two. So most jobs actually come to people through those kinds of referrals. Not exactly the person that I know, but someone else that I might be able to help them actually discover an interesting job. The exception usually in sociology is recent immigrants. Why do you have Haitian taxi drivers or Indian newsstand owners or something like that? Because their networks are small and they’re very specific to immigrant communities. But once you kind of move out of that, and of course universities themselves are super important as drivers of social networks, and they allow people to expand their networks a whole lot. There’s a whole field of economics now that has to do with the life chances that come to someone just as a function of whether they grow up in a well-networked place like say Austin or a poorly networked place like Waco. Geographically they’re not that distant, but they have very different social networks and different opportunity structures. So sociology, you know, again this is like demography, pattern recognition. When you think of the way that you would discover some of these theories and test them, they’re similar to analyzing the influence of say a magazine compared to a social media influencer. You can graph that stuff.

Andrew Mitrak: It sounds like a concept that’s really applicable to marketing in a lot of ways. And we tend to as marketers think of it as just social networking or your second-degree LinkedIn connections or your alumni network, or how you might build an audience through reaching out to influencers and connectors. But it seems actually useful to look at concepts from sociology that have probably studied this in a more rigorous way and come up with things like the strength of weak ties to frame some of your go-to-market efforts.

Scott McDonald: I’ve always thought of sociology as being very, very flexible partly because it overlaps with all these adjoining fields. And it’s always scrambling to try, it doesn’t have one unifying theory as economics does. It’s got a bunch of theories. So—

Andrew Mitrak: Sounds kind of like marketing.

Scott McDonald: It is, exactly. Exactly.

The Golden Era of Magazine Publishing

Andrew Mitrak: So you got to Time.

Scott McDonald: My first big post-graduating job.

Andrew Mitrak: And this was in the early 80s or so?

Scott McDonald: Yeah, 1982.

Andrew Mitrak: So what was the portfolio of Time magazines? Obviously everybody knows Time Magazine, and you mentioned Sports Illustrated...

Scott McDonald: Yeah, so the big moneymakers were the weekly magazines. It was Time, Sports Illustrated, and People (magazine). And they all made boodles of money. It was sort of the heyday of the magazine publishing industry. There were also a bunch of monthly magazines as well. And of course, Time Inc. owned a bunch of other things. Book of the Month Club, a publishing imprint. I forget exactly which ones they had, but they had a lot of things. And importantly, HBO. And so there was already kind of a media empire. They owned some cable systems and stuff like that. And then a couple years after I joined, they merged with Warner Communications, which brought them a movie studio, a music company, and a bunch of other of those assets, the Turner Broadcasting System, and CNN, and all that. So it became more and more of a media conglomerate while I was there. A very interesting place to work.

Andrew Mitrak: Yeah, we’ll talk about your time there, your work there, and how it evolved while you were there. But before we get into that, I thought this might be an opportunity to talk about magazines more broadly. You kind of called this the Golden Era of magazines. And they were such a huge part of American media and culture in the 20th century. And we haven’t really discussed magazines at all on this podcast aside from occasionally we reference an iconic ad that would have appeared in a magazine. And iconic ads are so critical to the medium of magazines. Do you have any thoughts on the rise of magazines in the 20th century and how it impacted the way brands marketed themselves?

Scott McDonald: Well, a lot of magazines are aspirational. And people kind of put themselves into that. Many are vertical. Time was an example of a fairly broad magazine, and it competed with other leading news sources. But it was much more in-depth than say what you would get from broadcast television news or something like that. Much more the middle-brow intellectual version of news. It wouldn’t be The Wall Street Journal necessarily, but something that was very, you know, they broke stories and competed in news. So a high-brow, well-heeled audience at a reasonable amount of scale that provided, say financial companies, any company that was trying to influence opinion would be a reasonable target. So like Microsoft when it launched, Apple Inc. when it launched. As a matter of fact, Steve Jobs always insisted that any new campaign had to include Time Magazine. So he was from a generation that viewed this as a super important, influential medium.

And magazines actually were that. They were criticized sometimes as being gatekeepers. Editors had a lot of power in setting agendas or anointing. I worked for Condé Nast. Vogue (magazine) is famous for anointing a new designer. Someone that Anna Wintour likes gets featured in Vogue and they’ve made it. It’s like they’re on the blotter. That’s less true now because you have competing sources of influence, but the appeal to advertisers in part was always that. And when you do consumer research, you would see that very often the readers of those magazines believed that the ads were really part of the value of the magazine. So a September Vogue was evaluated partly by how thick it was. Well, the thickness wasn’t editorial copy. It was a lot of ads for September Vogue, and consumers would actually think that Anna hand-selected the ads.

How Brands Measured ROI on Magazine Advertising

Andrew Mitrak: Can you take us behind the scenes of who are the players when it comes to marketers at a brand? Let’s say Apple, Steve Jobs wants his ads for a new Mac launch in Time Magazine. There’s Time, there’s the publisher, there’s advertising agencies, there’s Apple and the in-house company. What is sort of the relationship between how an ad actually gets into a magazine?

Scott McDonald: Okay. So the publishers, and of course since I worked for Time Inc. and then WarnerMedia and Condé Nast across 30 years, my view is a bit, the lens that I apply is from the publisher side more than anything else. Publishers very much wanted to have a direct relationship with the brand, with clients. And a lot of the communications were direct there. So at Condé Nast, I would go present directly to L’Oréal, for example, one of the bigger cosmetics advertisers for the house. And this was somewhat in conflict with the agencies. Agencies were supposed to be planning media across the board, but they often were really confined more to managing the television side and later on the digital buying. So the publishers preferred that because sometimes they didn’t compete with more mass media like TV on reach, but they were more influential. Very similar to what we look at research now, podcasts don’t usually have the same amount of reach as some other media, but they’re much more influential. They’re persuasive to the people who listen to them. And so they have a traction that is in some ways very reminiscent to me of what you would emphasize in conversations with publishers about the value, why they needed to be in Vanity Fair (magazine) or whatever.

Andrew Mitrak: How were the brands measuring their Return on investment on their magazine advertising? As we’ve looked at this era of marketing metrics and analysis, a lot of it tends to be around TV, and it feels like there was a lot more scanner panel data and things like that that were almost tied to television sets and stuff. But I haven’t actually heard it brought up on how it applied to magazines and such.

Scott McDonald: It was harder to justify magazines in terms of bottom-of-funnel metrics because they don’t work that fast. They are much more about building Brand equity and upper funnel. So the big studies of that era needed to take a pretty long timeframe. They needed to be in field for a year or more to actually be able to demonstrate the value, and the value often was a brand equity value. It wasn’t pushing product. Newspapers worked fast. You know, that form of print media, you’d have the inserts before the weekend. It was mostly promoting sales, so eroding your profit margin in the same way that other in-store promotions would, and ultimately undermining brand equity. The point of good magazine advertising was to build brand equity and pricing power.

So like a classic campaign that ran for over 20 years, the Absolut Vodka ad, was to me a great example of what’s different about print advertising compared to television or digital in most cases because it’s not interruptive. It works by invitation rather than shouting. It’s like, you want to put yourself in the picture? Oh, I want to be on that beach. I want to take that vacation. Or by being clever and witty, there’s a puzzle to solve. What have they done with that damn vodka bottle now? And, I mean, vodka is vodka, you know. But to be able to charge a couple of extra bucks because it’s Absolut is hugely valuable to that marketer. And so the game is a long-term game there. It’s not, and thus much harder to measure. And I think to the disadvantage of many advertisers that rely upon that kind of pricing power, it’s harder to sustain those forms of marketing these days because there is such a pull toward transactional bottom-of-the-funnel short-term metrics because they’re easier to measure. And they tend to be misattributed sometimes to shorter-acting forms of media that might have been, why did I search for that brand? But the search engine will get more credit than the advertising that made me type that brand’s name in the first place when I decided I wanted to buy something.

Driving Brand Equity and Subscription Growth

Andrew Mitrak: I want to come back to where we were in the story. You joined Time in the early 80s, and you continued to work at Time Warner and Condé Nast, and always in consumer research and insights leadership roles. And so what was your role in doing market research for major magazine publishers? Was it more looking at their own metrics, or was it looking at metrics for the advertisers, or what was your job there?

Scott McDonald: I set up the first consumer research department at Time Inc. And so the focus was almost exclusively on the demand side, on stimulating demand for magazines, working with the consumer marketing function and with the editors. And so a lot of work in magazine development, starting titles like Martha Stewart Living, Real Simple. Those were some of the ones that I worked on at Time Inc. And then there was a lot of magazine development work at Condé Nast as well, along with cover testing and developing forecasting models. You know, you have a couple different ideas for what you might run on the cover of Vanity Fair, which one will sell more. And so that was a key part there.

Condé Nast also had The New Yorker probably, a super influential magazine, one I still read all the time, very loyal to it. But the job there involved reducing its dependence on ad revenue and building up the consumer side of that business. So it really involved gradually getting people used to paying $150 a year for it instead of $50. And that was strategically vital to a magazine like The New Yorker, which isn’t a behemoth in terms of reach. And so it requires kind of a different mix in the business model. But yeah, at Condé Nast I had responsibility for the advertising side, but they hired me primarily because of my reputation doing work on the editorial and consumer side.

Andrew Mitrak: I make a lot of The Simpsons references on this podcast because I grew up watching The Simpsons. And I remember one of the first ways I ever heard of The New Yorker was a Simpsons joke where Marge is going through her mail and one of the envelopes was a rejection letter from The New Yorker subscription department. And I was basically a little kid, I was like, I didn’t even know what The New Yorker is.

And I looked it up like, oh yeah, seems like it’s this magazine for rich smart people. And it’s funny to think of how a magazine sort of segments itself. The New Yorker is different than Time, but there are some overlaps, right? That Time is on every newsstand, it has broader reach, it seems like it’s more ubiquitous, and The New Yorker wants to be big and everybody wants to know the name, but not everybody necessarily reads it or pays for it or subscribes to it. And I guess can you speak to the different approaches you had for how growing market share and maintaining market share for a very large widely circulated publication versus increasing the brand equity and justifying price increases and higher subscription costs for a more niche publication like The New Yorker?

Different Approaches to Managing Print Media Brands

Scott McDonald: Well, to some extent, I mean, some of it really is respecting the editors that you’re working with and trying to find a way to help them with the particular problems that they face. So a demand problem for Time (magazine) really involves something like newsstand. The New Yorker didn’t depend upon newsstand sales; it was a subscription magazine. So it’s partly just kind of understanding the differences in those businesses. And Time was probably in more need in some ways of the kind of research help that I could make because it did depend on newsstand sales. And that’s something where the forecasting tools can be of greater use and a testing program, particularly if you’re out every week, you get a lot of data points that you can then reconcile to how it actually sold and refine your forecasts.

So, but then a whole lot of times there’s a lot of news that happens. It’s not debatable what will be on the cover. It’s like what was the big story of the week. So your point of influence is more a slow news week where there’s what we would lovingly call a thumb sucker article. Just something that’s a bigger, in-depth piece that’s been cooking for a while and they’re looking for the right opportunity to run it. And for those they would really want to know some, it’s risk management. Like, how much will this appeal to people?

Andrew Mitrak: Did the business interests of increasing reach of say Time Magazine for instance influence editorial decisions as like who would be on the cover? Because I could imagine that there might be certain figures that you put that person on and it’s more likely to buy news, more people will buy it, right? Or you might have data like, oh when we put handsome people on the cover, we get more than... Did that ever...

Scott McDonald: It always is the editor’s choice. I’m just giving information. So there never was pressure from the corporation to, you know, just do what Scott says. It wouldn’t work well. It wouldn’t be good for the working relationship with the editors. It’s their remit. And so the principle of church and state was pretty much intact all the way along, and that would be, that wasn’t something that it was useful to challenge.

But there’s a lot of financial, a lot at stake. Or at least there was during that golden era. I mean the advent of this thing, completely changed the game because attention moved entirely to the phones. It hasn’t really left there yet. And people were no longer killing time at a checkout stand kind of browsing a magazine rack to figure out something to amuse themselves for the three minutes, the 2.7 minutes that they were in line waiting to be checked out at the grocery store. Yeah, so the forecasting became less valuable as newsstand just as a category declined.

Surprising Insights From Magazine Cover Testing

Andrew Mitrak: Are there any general insights or truisms that you’d be able to share about what are the markers of like, say who’s on the cover of a magazine and like this type tend to lead to a larger spike? Like what’s the type of insight you would share with an editor that they would choose to use or ignore or...

Scott McDonald: I’d say the things that are sort of durable truths, they didn’t need me for. I mean, put a Kennedy on the cover of People (magazine) and you’re going to sell. You can still, you can run JFK’s assassination 40 years later and it’s still going to sell. So I mean they don’t need me. They know that. But of course, if People magazine does this all the time, it’s not a good thing. They’ve got to find new things. So and Princess Diana, same thing. So there are cover subjects that for People or Vanity Fair (magazine) are pretty timeless.

The I’d say the better examples would be the ones that were surprises. Where they had some other strong options, but there would be a surprise that came out that they wouldn’t have automatically assumed. And so a test that would highlight that would encourage an editor to take a chance on something. And this would be true even for just an unusual shot that doesn’t look like the usual cover of Vogue (magazine). So a model or an actress in an unusual yoga pose or something, would be, or pregnant. Just something that is startling and feels a bit like a risk. And then you give the editor some idea of what is the level of risk and the probability of success for something that is out of box. And so I think it was used more for encouraging innovation and risk-taking than moving always back to something that was kind of a hardy perennial or too predictable.

Andrew Mitrak: So there were the truisms that were obvious, the JFKs and Princess Diana’s of the media. And then the things that were non-obvious that were unique insights that you were providing, were those sort of more temporal where you do that trick and then it sort of fades? I’m kind of almost likening it to people who analyze what’s trending on TikTok and social media trends and sort of seeing what are the types of stories that are this week. But you can’t, you kind of gotta hop on it now and it’s, this isn’t necessarily useful advice five years from now. Was it kind of like that type of thing?

Scott McDonald: One example I can think of from Vanity Fair was Heath Ledger. So it was like a year after he died. And they put him into the mix on a cover test. It wasn’t my idea, it was the editor’s idea, but it was against some other things that going into the test you plausibly would say, well these other ones have a pretty good chance as well. There’s no particular reason to think that people are still that interested in Heath Ledger. But they were, and it was quite evident. Now doing it a year later, it probably wouldn’t be the same. So these are kind of timestamped and the value of them is in being able to do that probe at the moment and fit it to a model where you’ve got other data on other covers and you’ve studied the competition and you know what their newsstand sales were. And so you can get that data back from the distributor. So you’re able to build a more sophisticated model because you’ve accumulated more data. And it was all great until the whole newsstand business collapsed in response to this more transformative launch of a smartphone and major change in consumer behavior. It’s part of what interests us right now on AI of course, and trying to get an early bead on this next transformative change.

Building Martha Stewart’s Brand with Consumer Research

Andrew Mitrak: I’m going to ask you about the smartphone and the internet and AI. I have one more magazine question before I do though. Because you mentioned Martha Stewart Living. And I think Martha Stewart might be one of the greatest marketers of all time. And I actually haven’t discussed her that much on this show yet. And just that there’s a magazine title with somebody’s name, Martha Stewart Living, there’s not that many of those. It’s not that, and to build a whole, and it seems like a unique thing at the moment to build a whole magazine around her brand. And do you have any stories of the creation of Martha Stewart Living or what was that about?

Scott McDonald: It was fun. The most fun part of it really was doing qualitative work, we did Focus groups with Martha in the back room. And it was of a genre of qualitative research where we decided that we really wanted to study the fans. So like this had worked very well for Warner Bros., so my confreres out at the Warner Bros. Studio, had this property Superman, that had been kind of damaged by this campy TV series in the 60s. And it wasn’t, they wanted to bring out a Superman movie that really worked, and they did it by studying the hardcore fans of the comic, of the original thing. So that was the approach with, and they managed to succeed in reviving the franchise for the movie.

That was our approach with Martha Stewart, we really tried to identify the people that just loved her. And that we studied what was authentic about Martha. So my favorite exercise from it was asking Martha to just from her, come from her house in Westport and bring us some stuff that’s in her house, that we mixed in with other things that were expensive, or utilitarian. I was like gardening gloves, or a little trowel, or just stuff that from her house, random stuff, compared to other stuff. And we threw it all on the table and asked people to pick out which things were Martha’s and why they thought that. And they could do it. They could do it. They understood her taste, some of which might be Shabby chic, but it was her taste and they were spot on. And it kind of helped the editors because here was a situation where Martha hadn’t made a magazine before, so she’s contracting with Time Inc. to boot up this magazine. And she’s got some professionals in magazine design and editors and things like that that she’s working with, but it’s a new venture. And that really helped to refine understanding of what the secret sauce was and this sort of passion for Martha. And I think it was a good example of, again trying to provide some information, but respectfully. I’m not a magazine editor, and you just set up the occasion as an opportunity to understand and refine the description of that brand and what’s the flavor of that magazine.

Andrew Mitrak: Right. Yeah, it seems like part of the core insight is really doubling down on the core fan base because if you’re making a magazine, you could sort of take it in different directions. And you can expand, if you have a lot of pages to fill, you could sort of dilute it and add a lot more stuff in. But instead, be like no, let’s really focus on what does this core group care about and try to get it to be the essence of Martha.

Scott McDonald: You know, and it’s interesting too because as we discussed before, the ads in a magazine are a pretty important signal of who’s in the room, who’s allowed into this club. So if you’ve got tasteless ads in a Martha Stewart Living or in any Condé Nast publication, you’ve got a problem. And it’s an editorial problem. I remember once at Condé Nast, the corporate sales department did a big deal with McDonald’s. And they ran McDonald’s in like all of the Condé Nast publications. And we got consumer complaints. “This doesn’t belong in my magazine. How dare you.” So there is an interesting balance that takes place that just has to do with the signaling about what’s appropriate for this particular environment.

The Early Days of the Internet

Andrew Mitrak: When did you first realize that the internet was going to be a big deal?

Scott McDonald: Right off the bat. The World Wide Web itself, which became I know was invented in 1989, but the first real operational browsers and effective implementation of the Web was in ‘95. And it immediately created a sensation, even though we were dealing with 300 baud modems and screeching sounds and all this stuff. Just the reality of having that amount of sort of global access to all these documents, was very bewildering. And for about four or five years, there was just a whole lot of experimenting taking place across all media.

Time Warner at that point had already been investing in Broadband and trying to pilot Video on demand. So they basically switched video systems, and it was they were too early. The technology was too expensive still, but I got to sort of play around with that. But there was recognition that something big was afoot, and people just didn’t know exactly what to do about that. And that was, that was a pretty fun ride.

Andrew Mitrak: Yeah, I imagine. It’s quite a ride. And so as a publisher, as the internet comes along, you know it’ll be a big deal, how does that impact your role as a researcher?

Scott McDonald: In some ways it led to just some interesting new things I had to figure out how to do. So again, because I came out of academia, I would constantly look back to see how certain methods, for example, for doing analysis and or forecasts, might apply in this situation. So my job at Time Warner kind of morphed into trying to understand the internet and the effect it would have on businesses. And so part of what I was doing was studying like what there’s a lot of complexity and chaos and difficulty finding things, and there were no good Search engines. So you’d start studying how people were actually using the available tools, AltaVista for example. And so it introduced me a lot to usability testing, user interface diagnostics, because internally people were designing things like more complex remote controls for TV for cable systems. And for proliferating channels of content. You’d start studying the dynamics of search and what led to satisfaction with a search result or not.

Time Inc. was experimenting with a satellite model that said, okay, we’re going to provide simplification, kind of like what AOL was at the beginning, where it was simplified into some aggregate content areas and you relied upon AOL or Time Inc. to filter all this stuff and make it simpler to find things because you’d aggregated content into kind of a hub. And part of my frustration was I wasn’t able to effectively convince the management of Time Warner that that was a mistake, and that that wasn’t actually going to win. That people wanted, they liked the freedom of all of those of being able to pull in documents from everywhere, and they didn’t really place enough value in that filtering design and structure. So Google would win. And as soon as Google showed up, Google didn’t even have a business model yet, but it was clear from day one when you’re studying that space that this is a significantly better search result. And you could see immediately that this is where Time Warner should be focusing its attention and not Pathfinder or something like that that was. Or, and it was the AOL deal, when that was announced, the merger with AOL, that was when I decided I was going to leave Time Warner. Because it seemed to me to be completely contrary to what I’d been learning.

Andrew Mitrak: Seems to have been a prescient choice.

Scott McDonald: Yeah, personally it was fine. I had a lot of options that became very valuable in that transaction and I could exercise them and walk away a happy camper. But it seemed like a very bad business proposition.

From the Walled Garden to The Open Web

Andrew Mitrak: Yeah, for sure. And it seems like the Time Warner AOL merger and sort of their Walled garden approach as opposed to sort of embracing the open Internet it seems like it also kind of ties back to their own business interests in being gatekeepers. And that if there weren’t gatekeepers that has sort of knock-on effects that might be bad for the publishing industry that sort of played out over the next couple decades.

Scott McDonald: It’s the Innovator’s dilemma.

Andrew Mitrak: Yeah, exactly. Did publishers start to see the writing on the wall there or when did that, when did because I’m sure there was a moment where the internet’s like, hey this is a huge opportunity, this is more, you know, free distribution, we don’t have to pay for paper, things like that. But then there seems to be like, oh but what if anybody can blog and what if people stop going through the gatekeepers? Like when did that turn or did you see that turn?

Scott McDonald: That was more in the 2000s. So it was really when I was at Condé Nast, and Condé Nast was wrestling with the same issues. In some ways it had a pretty big portfolio of brands, but it ended up pruning those to the most distinctive brands that could be defended and that could operate as digital properties on a global scale. So they kind of shifted scale and integrated their international, like they used to license Vogue (magazine) in a bunch of different countries, and they kind of consolidated and it became a global brand more. And would be sold, the advertising would be sold on a different basis thus. So there were different forms of adaptation, they all needed to figure out how to do what they were doing on a lower cost basis because the impressions became more commodified in that market. Particularly once Programmatic advertising took place.

And you know the, I mean the big change, the biggest change in my view was that advertising was severed from editorial content. Ads came from Ad serving. Advertisers bought an audience, they didn’t buy a placement inside a medium. And so the whole model and the kind of special relationship that I described where I’d be going over to L’Oréal and talking about our view of their customers, trying to share insights about customers that are gleaned from studying them in the context of Condé Nast magazines, was irrelevant because everything was much more commodified through that digital model of advertising insertions. The same issues are with us now with AI and you have different companies trying to decide do I license, do I make a deal with OpenAI right now or do I try and sue them, you know like The New York Times is doing, and require a different payment model for access to my content. And these are still commercial and legal questions that are not yet resolved but they feel familiar because they’re just a different iteration of the same business issues that developed in response to the Web.

Applying Lessons from the Internet to the AI Era

Andrew Mitrak: Yeah absolutely. Are there any other lessons that you’re drawing or thinking about from having navigated the internet’s disruption to the publishing industry and as we’re now entering or in the midst of this AI era, what that means for advertisers and marketers? Like are there any lessons that you’re thinking about that apply?

Scott McDonald: Yes and no. I mean I think the in some ways this feels somewhat different. And I don’t know, you know the question of whether AI dramatically changes the consumer the labor market, and the ability of people to earn incomes that supports the advertising system is a fair question. Even though the history of all these tech innovations is that they generate enough new jobs to replace the ones that have been rendered obsolete. But I don’t know at this point whether whether I believe that this time around. So that’s a fairly big unknown that would be different in terms of the consequences of the innovation.

If I was still working at a magazine publisher and or a publisher in general, it could be a TV channel that calls itself a publisher now, or any content engine, then I’d still be wary of how I monetize that content when it becomes Disintermediation. My advice still would be pay a lot of attention to trust and pay a lot of attention to the shifts in consumer behavior because advertisers always follow the consumer behavior. And consumers don’t always do what we as publishers want them to do. So you’ve got to be realistic about that and keep your eye on the consumer. That’s certainly a lesson I think from my Time Warner days where I don’t think they did that sufficiently. So.

Andrew Mitrak: I don’t know if this is a lesson, but something to draw from the golden era of publishing is editorial taste, that as a marketer that uses AI products, the AI products don’t always have good taste, right? Or they kind of have sort of a median internet quality taste and like, you know, obviously they’re very powerful and all that but like there is an element of if everything kind of looks the same, and you can’t differentiate your AI output from my AI output, somebody’s editorial taste on refining and coaching and directing it kind of becomes more important. And I wonder if there’s sort of people embracing their inner editor and developing taste to sort of know what’s good and not...

Scott McDonald: You know, this remains to be seen but it’s my observation that as AI improves, which it continues to do with breathtaking speed, it depends partly on you as the user to tell it what you want. It wants to please. So if you, so like in the context of say marketing applications or insight extraction, if you just ask a simple question, you’re going to get a pretty simple answer. If you actually feed it say peer-reviewed academic articles that you want a theoretical framework to be incorporated into the answer, you’ve raised the bar a lot. If you tell it that you want it to pretend that it’s a McKinsey & Company consultant, it’ll do it. It knows what you mean, and it will change the answers in response to your inputs. So I don’t see any reason why you couldn’t do that with regard to some matters of taste. If you could train your chatbot to be like those focus group respondents in the Martha Stewart Living example. And it seems in principle that you should be able to cultivate that.

The Advertising Research Foundation (ARF)

Andrew Mitrak: So I want to ask you about the Advertising Research Foundation (ARF). You’ve been president of the ARF for about ten years or so. What is the ARF for people who have are not familiar with it already and how has it evolved over the years?

Scott McDonald: Okay. So the ARF is the Advertising Research Foundation. It is celebrating its 90th birthday right now. It was founded in February of 1936. As at the behest of the two founding members, the Association of National Advertisers, the ANA, and the American Association of Advertising Agencies, otherwise known as the 4A’s. And it was set up from the beginning as an independent foundation dedicated to furthering through research the scientific practice of marketing and advertising.

So from the beginning days it wrestled with the kind of public facing questions of how advertising works. What’s the best way of measuring the audience of a Life (magazine), you know? Of not just the circulation but all the readers per copy and the people who look at it in barbershops and whatever, you know. What’s the best way of measuring the audience for a radio program? We know how many radio sets are in American households, but how many people actually heard a particular show? And then in terms of advertising, what makes some ads successful and others not? What’s the optimum frequency? How long does it take to burn in or to burn out? Those questions have been with us from the beginning, and they’re still with us today, it’s just a much more complex and fragmented media landscape.

And so to some extent you need to update that all the time. And that’s still the kind of role of the ARF. It’s the power according to its bylaws, the power over the organization is distributed among marketers, ad agencies, media companies, and service providers, which would include all the measurement companies and everybody from Nielsen Holdings to little Neuroscience consultancies or brand consultancies or attention measurement companies, any of those things. And so ARF is kind of the Switzerland in the middle of that ecosystem that conducts research on basic questions of how advertising and marketing work, trying to stay as close as possible to the values of scientific inquiry. And that means, that doesn’t mean anything goes. And you’re in an environment where people make a lot of claims. All these campaigns do really well. You go to a lot of conferences and they’re all just like success story after success story. And you know not everything works, you know? And so trying to separate wheat from chaff and kind of build a body of knowledge about how to think about these things is the mission. To try to improve practice through the application of scientific methods. So.

Andrew Mitrak: How do you, how do you deal with that at a conference or just in marketing in general? Because I think every marketer wants to say that they’re scientific. They want to say that they’re data-driven, but also every they want to say that their campaigns are working, right? They want to say yes and our campaign was great and there’s sort of a grading their own homework type thing. And there are ways where you can cherry pick your numbers, like “oh, our reach was great,” even if your conversion was bad. Or “conversion was great,” even though you paid too much. And I guess how do you sort out navigate that?

Scott McDonald: Yeah, it’s difficult. Partly because, you know, the association itself, it’s a membership organization. So you don’t really want to offend your members. But on the other hand, at some level you might have to because not everything can be equally true. So that’s why the north star remains. And you try and set up... I mean a classic ARF study, we just did it around different aspects of attention measurement. This is a growing field. And you have different approaches, some of which rely upon academic understandings of cognition and memory and things like that. And others that really kind of just follow the development of tools that might plausibly be used as proxies for attention. So eye fixations, because we have Eye tracking and good cameras on our digital devices, on our phones, on our laptops. You’ve got information that’s used for ad verification purposes that would indicate that yeah, there’s a human there. There’s a hand on the mouse. You know? So that’s a proxy for some level of attention that is a signal not very expensive to collect because you’re already doing all this ad verification work, but how closely can we establish that that relates to any sort of formal definition of what we mean by attention? And by that are we talking about, you know, just eye fixations and Saccades? Are we talking about evidence of memory and recall around an ad?

So there’s a lot of tests around that. And the ARF exists kind of to help sort out the quality of those. We have an academic journal. We connect to people who have, you know, where they’re peer reviews. There’s competition to get on the stage for our events. So people have to compete before a jury to even get a slot. And so it’s, it’s sort of through that process, which is similar to how it works in the other sciences. I mean, the best examples, if someone really wants to make a strong claim for their research, then they would, we’ll do an audit for them. We’ll run through and see whether we can replicate their numbers. We’ll see whether they did cherry pick. We will, and then we’ll take their data and host it on our website and make it available for anyone in the world who wants to have a go at it, to anonymize the data and, which is the same like if California Institute of Technology wants to make a big claim in the physical sciences, they got to make their data available to the team at Massachusetts Institute of Technology to build legitimacy around it. It’s a very similar concept. So that’s the space that we operate in. It’s geeky but it has some value in this ecosystem.

Andrew Mitrak: Yeah. If I was to draw an analogy back to earlier in this conversation of you and your publishing days recognizing “hey there’s truisms that JFK assassination and Princess Diana, that always sells magazines at newsstands.” But like the real insights are sort of the non-obvious things that are more unique or maybe more time-bound. Could you draw parallels and find like what are sort of the truisms that the ARF has helped establish or that you’ve sort of recognized over the years in your role there, versus some of the more unique, non-obvious things that research is uncovering?

Scott McDonald: There are a lot of them, I would say. We codified some of them in our, so the ARF acquired the Marketing Science Institute, which is a more academically oriented entity. We did this a couple of years ago. And MSI has published something they call the Empirical Generalization series, which only will, so it will formulate like “X causes Y.” And here are the estimates of effects, within this range and these categories, you know that might be covariates. But it’s reduced down to things that we think there is compelling enough evidence. And their filter on it is wherever there’s been a meta-analysis in like the top three or four marketing journals. So very high level of peer review scrutiny. And only where there have been 60 or more studies confirming this generalization that would allow you to talk about say the if you’ve got like a budget to spend and you need to spend some of it on advertising and some of it on price promotion, for example, in-store promotion, like what are the trade-offs and how do we think about that?

So but I think for the ARF itself, probably the thing we’ve studied the most over the years, is anytime there’s a recession or a big disruption in the economy, the pandemic, September 11 attacks, any of these things that suddenly just have a big dramatic effect on markets and consumer behavior, there’s a tendency to cut marketing spend. Short-term marketing spend gets cut. So what’s the effect of that? Since we’ve studied it like from the Great Depression, World War II, the Korean War, any of these things that have these kinds of shock effects. And you’ve got a pretty good record of it. And the answer to it, I call it an empirical generalization, is that when you cut your share of voice, so you withdraw from the advertising market and don’t spend, so you’re not really getting a share of voice within a category, you lose share. And you lose it fairly quickly, and it takes about five years to recover, if you can recover. We have had whole brands that just kind of go away because they lost their position within a category.

That’s connected to another generalization and truism that I think is there and is likely to remain there for a long time, that being the dominant brand in a category, which usually involves at least 20% share of market, although in some cases it’s a lot more, leader in the category. That leads to all kinds of benefits. Any advertising that’s done for the brand leader in a category has stronger coefficients of impact, both short term and long term. And to the dismay of the second and third or fourth participants in a category, their advertising is probably going to actually benefit the category leader. It’s an unfair world, but people just mistake it. And a lot of, it’s another sort of truism that I think remains, a lot of creative ads that are so creative that they don’t tell you who the brand is, people love the ad and they assign credit for it to the wrong brand. Because that truism was ignored. It might have won an award somewhere in an ad creative competition, but it didn’t really work for the brand because they didn’t integrate the brand, make it clear enough to the consumer what brand was being advertised. So there are a lot of regularities and it’s hard to not be like a broken record sometimes when you’re responsible for the catalog of those things. But there are mistakes that we shouldn’t be making over and over again. And I think MSI in its most recent iteration of the Empirical Generalization series had like 175 things that rose to the level of, okay these are generalizations. There’s like enough evidence, there is consensus around it. And that’s kind of how in my view science works. It still doesn’t mean that those won’t change and evolve over time as other situations develop, but you build it on the back of a lot of evidence that’s been objectively evaluated and critically evaluated. So.

Andrew Mitrak: Yeah. That’s great. It’s great that your foundation is able to advocate for this research, make it available and share it. So let’s learn from science, let’s learn from history and not repeat the same mistakes over and over again. So Scott, I really enjoyed this conversation. For listeners who have enjoyed it as well, where would you point them to online so they could find out more about your work and more about the ARF?

Scott McDonald: thearf.org and msi.org.

Andrew Mitrak: Scott, thanks so much. It’s been a real pleasure.

Scott McDonald: Thanks Andrew.