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Josef Najm, director of programmatic and partnerships at Thomson Reuters, and Mibbie Plouvier, head of global programmatic strategy at SAS, join The Current Podcast to describe how their partnership has evolved and how trust plays an important part in that evolution.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Ilyse: I'm Ilyse Liffreing, and welcome to this edition of The Current Podcast. This week, we're excited to be joined by two guests. Joseph Najim, Director of Programmatic and Partnerships at Reuters, And Mivi Plouvier, Head of Programmatic at software company SAS.
[00:00:17] Ilyse: Together we'll explore the publisher and advertiser dynamic at a time when some advertisers remain cautious about appearing alongside certain types of news. The business model for news is under pressure and publishers are looking for better ways to monetize their journalism with effective ads. We'll dive into why things may be changing for the better.
[00:00:36] Recent research indicates that it's safer for brands to advertise next to quality journalism, regardless of the news topic. Reuters, in 1851 and owned by Thomson Reuters, is one of the world's largest publishers, with journalists in over 200 locations writing in 16 different languages. SAS sits at the intersection of data [00:01:00] and AI.
[00:01:01] Delivering analytical insights to brands. We kick off things with Joseph and Miby describing how they first met and how their partnership has evolved since then.
[00:01:11] Ilyse: It's so great to have you here today. First off, how did you first meet and how would you describe how your partnership has evolved?
[00:01:20] Joseph: Great. Thank you so much for having us. It's a pleasure to be here. maybe and I met about five years ago when I joined Reuters coming from the buy side, I was just leaving a stint at Diageo and, coming in as the programmatic sales specialist at the time, maybe was working in Paris and she was, I believe, the global programmatic lead and everyone was just like, “Hey, programmatic guy, this is a programmatic person.”
[00:01:41] I think you should connect with them. And at the time, we were doing some business with SAS, or maybe a little bit. And hearing that she was from Paris. and also knowing that I had worked at L'Oreal. I wanted to connect with her from like a French connection perspective and also knowing that she was American.
[00:01:55] So I shot her an email reaching out and asking her some questions like how things were going.
[00:02:00] Mibbie: It was a fun connection. because I was new to Paris. And Joseph reached out and was telling me all these fun, French antidotes of how Parisians and French people are more like coconuts, and Americans are more like peaches. And it was a great analogy to start the intro, but we've had a great relationship
[00:02:17] Joseph has been resilient and calling on our business and the more in trust we built up, the greater the partnership has become and we've been able to do some really great things together.
[00:02:27] Ilyse: guess it is like a pretty small world programmatic,
[00:02:33] Ilyse: so it's no secret that the publishing industry is under quite a lot of pressure along with the eventual death of cookies. One issue publishers continue to come across are brands avoiding advertising on news for concerns around brand safety.
[00:02:49] Now, these concerns have been challenged as of a May study from Stagwell that found that even ads next to hot button topics performed as effectively as those appearing next to [00:03:00] news, like sports and entertainment. Can you give us some context around what you're seeing on this topic?
[00:03:07] Joseph: Yes, this is a very important topic, and being at Reuters now for five years, I've had the opportunity to see a lot of different brand briefs and questions that come in around
[00:03:17] how can we partner together? And in 2020, this kind of all came to a head when COVID and the pandemic took place. So what we found was, a lot of advertisers turn to the solutions that they have around. Advertising, ad tech platform, blocking tools like keyword lists, pre bid filters, monitoring tags, blocking tags, blocking words like COVID, China, Wuhan.
[00:03:38] And then it just precipitated after that. and almost The spiral effect because the news cycle and
[00:03:42] the realities of that was happening continued. So, just in the year of 2020, so much happened. whether it was George Floyd's murder, the beginning of the Black Lives Matter. movement. the, the election, as well. A lot of people forget the election took place there, too. And now, four years later, history is continuing in this really [00:04:00] real time. Just to kind of put it into a global perspective, two thirds of the world's democratic populations are going to the polls. this year, not just the U S and a lot of people just think it's the U S, but really important countries like Taiwan, for example. and we're covering that. and we're also covering two global world conflicts. Israel and Gaza, as well as Russia and Ukraine.
[00:04:18] when we're doing all this, it costs a lot of money and it's important to find brand partners that are willing, to support trusted journalism and at the same time understand that when they're partnering with news publishers, that audience that they're reaching is a really important audience, It's an attentive audience, an audience that's willing to engage.
[00:04:37] I always like to think back, like, when the pandemic happened, where did we all turn? We turned to the news. And I'm really appreciative of a lot of these studies that are coming out with Stagwell, for example, but even going back to 2020, released this Trust HALO report, 84 percent of consumers had a positive or neutral impact when they saw an ad adjacent to a trusted source. And I fast forward to now and folks are talking about Gen z audience and trying to reach [00:05:00] that audience. Gen Z cares about the facts. They care about trust. So, finding partnership with SAS and being able to present this audience and showing that you can have ad adjacency next to the hard news and reach that audience has been leading to successful business outcomes for both of us.
[00:05:14] And It's really been great partnering with Mibbie on those activations.
[00:05:18] Mibbie: and then from our perspective, I'd say I think it's easy to find comfort in blocking certain words. but. What we like to do is partner with trusted news sources and award winning news sources because we know that no matter what news they're reporting upon, our brand is going to be safe around it. And we know that we're
[00:05:35] going to be okay, no matter what the news is. And I think with the current news cycle and how constant it is, you could almost just go down a rabbit hole of blocking everything. So from our perspective, it was let's partner with key publishers, that we can trust and then we don't have to worry as much about trying to continue to block things or worry about. Being somewhere we don't want to be.
[00:05:55] Ilyse: and on that point though, even like the bad news,
[00:05:59] I don't think it, [00:06:00] it doesn't hurt your brand as research has shown. and brands are still very fearful about that. Was that your original, like, hesitancy in advertising or? It Okay.
[00:06:12] Mibbie: it's, we take the security and knowing how, brands how we're going to be around the right kind of content and Reuters reports on the news in a very fair way. So for us, even if it's bad news, we're okay with being there.
[00:06:26] it took a while to get there internally, but that was several years ago and I think it was around COVID when everybody was a little fearful of the news, but we're very confident with the partners we have. and for us, it was also how can we make these things happen programmatically. Because
[00:06:43] we can buy things a lot easier. and more smoothly if it's through our platforms. So that was, Reuters was very good about helping us out in that sense too. Yeah,
[00:06:51] Joseph: I think, it goes back to the consultative approach.
[00:06:53] when I first presented to SAS and to maybe, in team. It was always with the thinking of, okay, [00:07:00] culture. Just like Reuters. We have a history. They have a history of innovation too. And at the end of the day, as maybe said, the fairness of how we go to report that unbiased nature, it really creates, and fosters an environment for
[00:07:12] Trust with the audience, trust with the content. So when they have a trusted message, that they're really trying to deliver to that audience. we just knew that it was going to be a perfect synergy between the two. so I really never had. concerns, but I will say, and this is the importance of kind of stepping in and having that partnership with that publisher partner, that news publisher partner.
[00:07:30] If the situation gets a little bit out of control, from a hard news perspective, it's important for the news publisher to step in and say, hey, maybe we don't run this campaign right now, but we will come back and we'll make sure that the creative message is appropriate to what's taking place, but also at the same time, hey, we're going to, we're going to protect your brand.
[00:07:47] And I think in some cases, we're you know, it happened, for example, with Applebee's, running against the CNN, ad when, I think it was Russia and ukraine, combat was starting to happen.
[00:07:57] And, what came from it was some rhetoric [00:08:00] around, you know, we don't want to be around that content. and why, could that have been shut off? And I don't know the full schema behind it, but I really do think it wasn't the intention for CNN to run an Applebee's ads there.
[00:08:11] But that ad and went to supporting journalism and supporting that, that moment in time that if people a lot of people were looking at,
[00:08:16] And my hope is, like, a brand like Apple Lee's, we'll find a way to come back to running on news again and not say, Hey, we're gonna shut it down and continue not running there.
[00:08:25] Ilyse: saying, hey, we're to shut it down and continue. Yeah, I do think
[00:08:47] Joseph: Yeah, so I do think there's a little bit of foundation of a fear strategy here, and I think that strategy unfortunately comes from, the fear of the screenshot,
[00:08:57] for example, and what that might lead to. [00:09:00] and, when it comes to exclusion lists, I think one of the funniest things I recently heard was a certain agency had an exclusion list Or their exclusion list, which kind of speaks to a problem in itself, where if you're applying words like people's beliefs, religions, communities, whole countries, et cetera, you really run into a situation where Is that appropriate?
[00:09:21] For your media campaigns, and your paid campaigns? to me, understanding that brand, and like doing my research when I go to pitch, it's recognizing what is in your keywords doesn't really reflect what your brand is trying to promote from a communication style as well. but I think maybe he has some specifics if you want to share from your side.
[00:09:38] we've been chatting about this a little bit, but they're pretty good. They're relevant to the French culture as well.
[00:09:43] Mibbie: well. Yeah, I think it's, lose a lot of context when you block keywords. And at some point, when Notre Dame. you know, was on fire and burning. A lot of people were blocking Paris.
[00:09:54] They were blocking fire. and now if you don't go back and revisit those lists and you continue to just have.
[00:09:59] these long [00:10:00] lists of blocks, you're missing out on Olympics coverage. With the Olympic torch, with the flame, with even the Paris coverage. So there's a lot that if it's not completely maintained, I think it's a hard kind of road to continue to go down because you, there's a never ending way to go if you keep blocking and blocking.
[00:10:17] So I think that's where you should go more, the curvation route. And that's the route we've gone is to. Curate our sites, curate who we're working with, and so then it's not as fearful, and you don't get that email to your CEO, which had happened, and it comes down to you, if you're at the screenshot, and then you have to say, that's a good point.
[00:10:33] Why are we here? Why are we running there?
[00:10:34] so it, sometimes it says hard lessons that make you rethink how you're blocking things. and the approach you're going to have
[00:10:41] Joseph: want to bring up AI here because, in a sense, I feel like potentially it could help eventually with, something like keywords. Maybe with marketers, maybe it's a chance to like, actually use it to run through keywords really fast and see if it's, actually gonna [00:11:00] actually with terms that aren't like several years outdated or something like that.
[00:11:05] Ilyse: what do you think?
[00:11:07] Mibbie: I think it's only going to help our business and help speed the process to your point of going through those massive lists and staying active with what's constantly changing like the news. So I only think it's going to benefit us, but I think AI in general across the programmatic landscape is going to be a benefit instead of more of a hindrance that some people might think it might be.
[00:11:29] Joseph: Yeah, a AI is unique because there's generative AI and then there's AI. And I think in the programmatic space, we've been playing with AI a lot. like Machine learning, algorithms, the ability to, target the person, right place, right time, right message,
[00:11:41] that's all AI. And I think the tools that publishers are now getting, that maybe they weren't always accustomed to having, or the ease of being able to, check things, or recategorize things or work with their product leads to say, Hey, what is happening here in the bid stream? That's going to come out more to make a cleaner path, [00:12:00] and make sure that the buy side is really saying, Okay, let's triage it, maybe.
[00:12:03] Let's say, okay, if this is Reuters, and a trusted brand, and good to go. But okay, next word that pops up, Okay, maybe it's related to this, but because Reuters, still okay. I don't think those solutions exist.
[00:12:14] They're A little bit more potential blankets, but with AI you have to understand the risks too. And I think in a gen AI world, working at a news publisher, it's also really important to understand like I sit on the commercial side.
[00:12:25] So my uses of AI and generative AI are going to, be different than the editorial team.
[00:12:30] And it's important to make sure this is anyone that's on the new side like what is your AI and gen AI policies because you don't want there to be conflict with your editorial team and commercial team. But you do want to promote. innovation at the same time.
[00:12:43] Ilyse: now I want to talk a little bit about the campaign that you actually ran, and that you pushed through all that hesitancy for, and then maybe if you could share some of the results you saw from that.
[00:12:56] Mibbie: so we've been doing a lot of great testing with Reuters, [00:13:00] so the baseball campaign was a great example because we owned all their coverage of the World Series, which was great for us as a brand to know that. We're there all the way through the end, and it was a good series. But then we've also been doing some testing with Reuters with linked in. So they've been contextually making videos for us around a I specifically in our ads are surrounding that, and we've seen, massive increase in our click through rate, exceeding benchmarks, great view through completion. So it's partnering, in very smart ways And being able to test together that I think we've seen. a lot of great success. and we're also running on their YouTube. channel. So another great way to keep our ads in a brand safe environment on Reuters YouTube instead of all over the place how YouTube can be. So that was a new strategy that we tested together as well.
[00:13:45] And we also had audio with Alexa and Google Home. So, when you ask Google Home what the news is for the day. our ad would run before that. And that was a great, Great way of just getting our brand out there and getting some more awareness of who we are. And The great point of that too is [00:14:00] we were able to buy that programmatically. So a lot of these things that necessarily some publishers wouldn't let us buy programmatically. we were able to run with Reuters programmatically, so that made things a lot more smoother.
[00:14:10] Joseph: Because of Miby's ad tech stack, we have the ability to front the costs via the impression delivery and the cost per day for an activation. And then, as a publisher, behind The scenes, you just have to work. through your finance team to how you're going to fund those projects and support the teams. But The LinkedIn Wire program. It's a really great success story of how you can combine really great content from a news publisher, and this is all editorial content. So nothing was created bespoke It was just around the same coverage that our editorial teams would be doing for AI. The message that maybe was trying to deliver and SAS team was trying to deliver plus the LinkedIn data that was tied to it as well And All of those things, and I think this also comes into Challenging your partner is It came to a pretty high CPM and costs, but It's the old adage, of kind of, what you get what you pay for And I think the return and what they [00:15:00] saw in the engagement And how it compared was really great. And What I also like about being at a publisher for five years but also having this ad tech background is the way I approach a partner like sass is, hey, we're omni channel. Like you think omni channel and, infinite places, but you could work with one partner in an omni channel approach, and this is very much that and some. So, it's been really great partnering with Vivian sass to really test these different things and be innovative. It's fun.
[00:15:24] Ilyse: finally, to both of you, are you optimistic that news publishers are on the right track to fund, oh, Are you optimistic that news publishers are on the right track to fund journalism at this moment?
[00:15:42] Joseph: There's a lot That's being done in the right way in the smart way. But it's also
[00:15:47] important to, take stock of all the different revenue streams. So, subscriptions is very big. Diversification for news publishers. is very big gamification, right? All these different platforms. whether it be integrating [00:16:00] new, Sports solutions. or Content that's, again, related to lifestyle. But not every news publisher is built And runs their business in the same way. So it's important to recognize even the local hub news publisher who's covering the beat of something that's taking place. They're at risk to their risk of funding. And there's like this slippery slope where when it hits them, those impacts might not be felt when I'm living in New York City or in
[00:16:26] other places. But those local communities, So, I think the onus is on this industry of how we can get back out there. And There are definitely ad tech companies are trying to do that and funnel those dollars there. And You see even the promotion of like new technologies with that. Trade Desk and Adfuntus Media, which hopefully will drive those revenues to those smaller news publishers.
[00:16:48] But, you know, at the same time, we're challenged. Whether it's ads, coming from brands, but then even certain algorithm changes that are impacting business lines that had seven figure revenue streams. You're seeing it across [00:17:00] the board. So, I think the stress is real. I think The stress is real for a lot of people. But it's important that, you know, we keep innovating and finding brand partners like SAS to come to the table to speak about how we can is good and you can find opportunity in hitting that audience and driving ROI and driving performance.
[00:17:17] That will only help. and hopefully it trickles down to the small guys too.
[00:17:23] Ilyse: Joseph, what would you tell marketers who say it's not a brand issue? what would you tell marketers who say it's not a brand safety issue, but more that their audience just isn't there?
[00:17:40] That's a lot of, young readers, Gen Z ears are finding their news on TikTok and only TikTok. what would you say to them? I know it like can lion, for instance, a few months ago, McDonald's CMO. for instance, said that,
[00:17:56] get our audience there and we'll bring [00:18:00] back the money. We'll put the money there.
[00:18:03] Joseph: No, it's a great question, and I don't think they're wrong. I do think, however, the communication is not there, and, the insight that the Gen Z audience, whether it be Gen Z adults or younger Gen Z, are getting their information. from TikTok is very accurate. we've done that same report, at the Reuters Institute, which partners with Oxford, released that same study last year, and the new results are going to come out soon, to see how those channels are resonating with younger audiences.
[00:18:27] But, I asked a simple question, right? Like when the pandemic happened, where did people go? They went to news sites. They went to understand and get facts and information to inform the decisions that they were making, whether it be a mom who's worried about her children and going to school or the professional and the markets and how it's being affected.
[00:18:45] Now, Gen Z, just because they go to TikTok first doesn't mean they stop there. I'm sure they have their trusted sources. And I think the challenge is Hey, brands.
[00:18:53] You're only giving me 20 minutes to pitch, and it's very transactional right now when it comes to display ads [00:19:00] and video ads, audio ads, whatever it might be. Where's the opportunity to be consultative? Give us that platform. Let us have that. discourse. because Right now, the discourse that comes up is, we're just like, a no news. I don't think that's the case. If you ask any brand like, no, we support news. So how do we get them from saying, yes, we support news, but to, yes, we support news
[00:19:19] and the end is that should be filled in by us. How are we going to do something that's a little bit more innovative more creative to get them back into supporting that platform, But we all have the data to show those audiences are there, do we have the platform, however, to share that insight with them? That's something that needs to be rebuilt a little bit. And I think it's coming. there, though. And I think the events that happened in Cannes and the different studies that came out and rolled out are only going to help. And I really do appreciate that, that feedback. But, sitting as a challenger in that room, it's important to challenge.
[00:19:51] Joseph: It's very easy to say no, someone, no to someone who's like a friend. And getting that kind of feedback and going back and forth, that's good. That's where the discourse started.
[00:19:59] Ilyse: [00:20:00] Now, when it comes to advertising on news, what is the approach when it comes to a B2B company like SAS versus B2C or even D2C? How is it different?
[00:20:12] Mibbie: I think we just have to look at what we're trying to advertise and get our, awareness out there about, and we're selling a very high end software and for us, that relationship of. premiumness with publishers. and having that there. We're not chasing cheap clicks because we have a very long sales cycle. So when it comes to B2C, that somebody's going to see those shoes and go buy them, it's very different than making a long term decision to purchase the software.
[00:20:38] So for us, we want to have that consistency with the brands and longevity more so than being kind of all over the place searching those cheap clicks or cheap impressions.
[00:20:47] so We pay a little more just to to get that consistency, consistency to get that frequency, but also, we have to think about sales cycles. And So ours is very long, nine months to a year. So long enough to have a baby. so we really have to have that consistency [00:21:00] right of being in the same place and having that consistent message.
[00:21:04] Ilyse: And that's it for this edition of The Current Podcast.
[00:21:06] Damian: We'll be back next week, so stay tuned.
[00:21:09] Ilyse: The Current Podcast's theme is by Love Caliber. The current team includes Kat Vesce and Sydney Cairns.
[00:21:16] Damian: And remember, I'm Damian.
[00:21:18] Ilyse: I'm Ilyse.
[00:21:19] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.
United recently launched Kinective Media, the airline industry’s first media network. Its first-party data could change the future of people’s travel experiences.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian Fowler and welcome to this edition of the current podcast this week we're delighted to talk with Mike Petrella, the managing director of partnerships at United airlines. In June, the airline launched a new initiative named connective media, which is the airline industry's first media network.
[00:00:17] The network will use data from its customer profiles to create a personalized and immersive travel journey. This launch comes at a time when retail media networks have become one of the hottest topics in ad tech, allowing brand marketers to target consumers using retailers first party data.
[00:00:35] We start by asking Mike about why United wanted to move in this direction.
[00:00:40] Damian: United's the first travel focused company to develop its own media network called Connective Media by United Airlines, and how is this a boon for the company and its flyers?
[00:00:50] Mike: of course, so we consider ourselves a commerce media network, and we distinguish ourselves as a commerce media network. Given retail media, networks are typically point of [00:01:00] purchase, transaction based. The Commerce Media Network embraces the emotion, the journey, the feelings of all parts of the funnel.
[00:01:08] So when you think about our users at time of planning, time of travel,
[00:01:13] Damian: and signals
[00:01:14] Mike: time of destination, even when they're not thinking about travel, we have 108 million profiles. And the beauty of our data is it's incredibly accurate. You have to be Damien to get on a plane. Your name has to be what it is, your address has to be correct, your phone number, and all the other information.
[00:01:33] So the breadth of that information, coupled with the accuracy of it, gives us insights and signals that allow us to create these robust profiles of the user. And it's the user at all points. And the commerce nature of this isn't just a point of sale. We are not microtransactions on a consistent, on a constant basis.
[00:01:54] Rather, we think about The interaction of the user at the time of [00:02:00] planning, top funnel. At the time of trip, or even time of purchase in an ancillary mindset. Purchase path typically generates a significant amount of revenue. Be it airline tickets, upgrades, any purchase path.
[00:02:11] Regardless of whether it is airline ticket or if you're purchasing a ticket to an event, parking, whatever the case is. So for us, it's the ability to take that journey. To be able to identify when the right time to send the right message to the right user is. And that message could be an advertisement, it could be content, it could be nothing because it's not the right time.
[00:02:35] But in each of these cases, you can make a use case for any and every brand based on the scale and depth of our data.
[00:02:42] Damian: of our data. Fascinating. And you mentioned that long purchase journey, which is, sometimes it can be a long purchase journey, right? For air travel, or it could be short, but you do have a lot of scope within that context.
[00:02:54] Mike: It is. I mean, very few people spontaneously book tickets to destinations, right?
[00:02:59] And when [00:03:00] you're in that mindset, you're in a planning mindset, not only of the journey, but think about the insights and intelligence we can extract from the signals we receive to say, Well, this person happens to frequent a specific hotel chain, a car rental chain, a ride share company, when they land, they frequent a food delivery service.
[00:03:21] Endemic, but then you think the non endemic piece. And this is the beauty of what we do. The lines of endemic and non endemic are completely blurred. To me at least. Because I think about, when you get on a plane, you may be traveling home to return to normality. Which takes you to food shopping, which takes you to the pharmacy, which takes you to the laundromat.
[00:03:39] But my point is, I think the idea of always coupling a travel endemic brand or journey with the traveler is only a piece of it. be it on the road or at home.
[00:03:50] I may go see a music event. I may go purchase music. I might play music. I may eat pizza. I will eat pizza just to be clear. But my point is, my behaviors [00:04:00] There are some that are going to be unique based on my journey, and others that are going to overlap with when I'm traveling for leisure, when I'm home.
[00:04:08] And so, I love the fact that just, we can essentially meet the interests of the customer, which is the centric piece of this, and provide value to our partners as well.
[00:04:21] Damian: It's a very clear example of how non endemic works in a retail media network, I think, because, you know, when you think about other retail media networks, often think about the retailer and what it sells, but, you know, with United, it's a different story.
[00:04:34] Mike: Yeah, it's the breath of commerce, and that's what I enjoyed. That was like when I came here, it was eye opening. I had an idea, right? But just to see what we can do and really the validation of just how strong our data is and how valuable it is from a customer standpoint. When I say valuable to the customer, it is to spoon feed customers based on their interests.
[00:04:57] Cafeteria style doesn't work. There are too many choices. [00:05:00] So if you're in a planning phase and we can bring about certain things that are of, normality to you, booking a restaurant, booking a golf reservation, simply as getting my ride share, it makes the journey easier. It makes it feel like it's Damien Fowler's journey, not just a customer who purchased a seat in one of our planes.
[00:05:20] Damian: Yeah, I love that. And I just want to take that point a little bit further. Can you give some more examples of how, you work with brands, whether endemic or, when I say endemic, that would be travel related, right? Or not. and where that media might appear.
[00:05:34] Mike: Sure. So today we are, our media network extends from our dot com, our in app, we have digital signage within the airports, be it in our clubs and lounges, gate information displays, on our planes we have in flight entertainment, or we call IFE, or personal device entertainment on your phone, and so as part of United Next, we made an investment to purchase north of [00:06:00] 800 planes.
[00:06:01] And within each of those planes, they will be outfitted with the new IFE system. It's meant to be more of an OTT experience versus the current experience, which quite frankly is, it's legacy, it's the 1950s. It's a small screen with limited choices and it's not what we're used to. we envision this opportunity to have a very personalized experience in which you will have your interests displayed on that screen and every person's screen will be different.
[00:06:28] Based on that individual. And so, for us, we will be retrofitting our current fleet, with the exception of a couple planes that will be retired over time. And so, over time, we will have screens in all planes on a, personalized basis. And so, for us too, it's, you extend past that, you have email and such.
[00:06:47] It's a true omni channel offering, but most importantly, it's the engagement. We have an average of three and a half hour flight time. And so, when you're at home You can get up, use the restroom, go to the kitchen, whatever, if [00:07:00] a commercial comes on. You cannot do the same in a plane. At the same frequency. I mean, yes, you can get up, but the idea of having the ability to engage in an intimate and targeted manner with our users and to be able to show them things of their interest is huge.
[00:07:16] Right? And then you think more, in lounges and clubs, It's not going to be personalized. If Damien walks in, if you walk into the club, you don't want to see. Hello, Damon. How are you? Do you need a new green shirt? That's creepy, right? Yes. So again, there's you can think about. the business traveler travels from Monday at 5 a.
[00:07:35] m. to 11 a. m. and Thursdays from 4 to 7. So perhaps we put advertisers endemic to that audience. Families travel on weekends and these are generalities. But through research and through signals, we can begin to capture that. And again, the right message at the right time.
[00:07:50] Damian: What customer insights will help connect brands with United Flyers?
[00:07:54] Mike: So we capture over 120 targetable segments, or signals, I should say. And that [00:08:00] is, a mix of attitudinal, behavioral, lifestyle, and transactional. And today, our audience indexed to the highly affluent individual. Married, college educated, homeowner, household income of 250, 000 plus. And so you'll see in some of our launch partners, Bottega Veneta, which is a luxury brand, McAllen's, a higher end Scotch.
[00:08:21] Very good for that audience, but at the same time, we are very diverse in terms of who is on our plane. We, our launch partner was Televisa Univision. 25 percent of the Chicago population is Hispanic. Is it 63 million, Spanish speaking, Americans in the U. S., right? So the idea of just focusing on one demographic doesn't do anyone justice.
[00:08:45] very much. Right? Again, speaks to that scale of data. And so, we, there's a use case for every single brand, every single opportunity. We
[00:08:56] Damian: that nuance that you can bring to it, to [00:09:00] advertising, is obviously key to this. what strategies is Connective employ to personalize ads and offer that to these different segments?
[00:09:08] We are a very privacy centric, privacy
[00:09:10] Mike: privacy safe, conservative approach to what we're doing. We sit atop GAM. we work with, a number of clean rooms. any and everything we do is meant to uphold the integrity of that customer's data. we will never sell the data as a stand alone. It'll always be wrapped with media on a managed basis.
[00:09:31] And I say that because the sale of data opens up opportunity for bad actors. Then there are bad actors out there. So when it comes down to it You know, we want to ensure that we are keeping our customers, information, and privacy at the forefront. And then, any and everything we do is in a compliant way.
[00:09:51] Data collaborations through clean rooms, proper encryption at all specific times, proper measurement and verification. it's a textbook [00:10:00] approach, knowing full well that,
[00:10:04] Mike: party data is currency, you have to protect it, and you have to use it in the right manner.
[00:10:09] Damian: And it feels great, right? The work that we did is meaningful.
[00:10:20] Mike: It's been overwhelming, honestly. I used to work, I helped startup advertising. com a long time ago, and all its brand names up through Yahoo. And I was always the one vying for a brand's business. To work on a brand site now has been an eye opening experience because you have the problem of choice. And the reception to what we've been doing has been incredibly positive.
[00:10:44] and it feels great, right? The work that we did is meaningful. The work that we did is interesting. but we have to be smart in terms of who we work with. I would say the outreach from partners, we always want to maintain a very premium nature for any owned [00:11:00] and operated supply. I think it's important.
[00:11:02] Again, the brand integrity for United is paramount. but at the same time, as I said earlier, there's a use case for all brands. And we're always open to exploration and conversations. And then making the right choice based on United brand, based on the value for our customers and for the overall business.
[00:11:21] Damian: Now travel has skyrocketed since pandemic times, and that's been well reported. Can you describe the change United has seen more generally in people coming back to the skies?
[00:11:32] Mike: the largest airline in the U. S. right now. and it's, it's a great position to be in because people fly United for the experience.
[00:11:39] We do not compete with low cost carriers. That's not our model. People fly for the convenience, for the experience, for the opportunity to increase their loyalty status, for the journey in itself. Our app is the number one rated app in the, in, of all airlines, and if you, you know, I'm not sure if you're a flyer or not, Thank you.
[00:11:58] If you are [00:12:00] so you see that app is very intuitive in terms of my baggage goes here. My gate is here. And so against personalization, right? It may not be specific. Damien. This is your journey. Rather, you are flying at this airport. Here is where your luggage is. Here's where your gate is. And it's just it's taking those steps to just again lessen the hassle of travel.
[00:12:19] And then, as you get on the plane, our flight attendants, our ground crew, our pilots are just top caliber. it's the friendliness that you see. again, the experience extends beyond
[00:12:29] Damian: a traveler's standpoint.
[00:12:30] Mike: Connected media provides an opportunity for us to gather what we have from our three core pillars. Travel, loyalty, and media.
[00:12:39] And it's that flywheel. we are able to ingest signals based on the profiles that we have. And in doing so, you begin to see the traveler profile as it begins to matriculate to an actual loyalty partner.
[00:12:52] 39 million mileage plus loyalty partners. We have a co brand card through Chase. Right. We have our mileage plus [00:13:00] partnerships team, and we think about that from the Avis's, the Marriott's, from a travel endemic standpoint, non endemic, even like the away, I guess away luggage is not therabody, things to that effect.
[00:13:10] And so, the ability to accrue and redeem miles as transaction. And then, with the credit card, the ability to redeem miles, or accrue miles, I should say, through transactions. As you go through the flywheel, you come to the media piece, which is the connective tissue. To understanding the middle and lower funnel of that transaction, purchase point, brand affinity, options for our users.
[00:13:33] And then back to the first part, the emotion, and the journey, and the actual travel. And as we do this flywheel, we have more travelers, which means more signals, which means more opportunities for media, which means more, and it's a self fulfilling flywheel that essentially, again, with the customer in the middle, or the customer is the focus, it's Creates that opportunity to your point of why people are flying more with United.[00:14:00]
[00:14:00] Damian: What kind of feedback have you had from those customers? what are people's experience, what are people experiencing and how are they setting that back to you?
[00:14:08] Mike: think the best part is, they've come up and said I'm so excited you're doing this. Never would have thought of this. like you, you're hearing it from the horse's mouth, right? So there's, in an unbiased manner, what I'm most proud of is the fact that we've come out with a legitimate business with a very, very focused North Star, that is focused solely around the customer.
[00:14:31] that's unique. And to bring it to market at the speed that we did. With the help that we had from partners and the support that we've had from the industry has been just, has been amazing. Now the
[00:14:43] Damian: the idea now seems like a very good one. And you're describing, you're telling me, Mike, how quickly you brought it to market. What, in under a year, really? I mean, it's a good idea. Do you expect that other airlines are going to want to emulate, what you've done here with your media network?
[00:14:59] Mike: is [00:15:00] a very savvy airline. They're a great airline. they're doing certain things
[00:15:07] with the connect, that we're connecting. streaming from a device to their, seatback screens. They've done partnerships with Walmart Plus and such. Whether they come out with a full scale media network, I'm not sure. but, United and Delta are the top two airlines in the U. S.
[00:15:22] And they are a very savvy brand. So, if they come out, I would not be, surprised. I don't know about the others. You know, for me, it's not one's better than the other. It's just where I see the next. In
[00:15:35] Damian: In general, while we're on the topic of predictions, when you look ahead to the rest of this year and to next, as you build this offering out, what are the kind of trends you're looking for in terms of that merging of travel and media that you just talked about? The year into next, what trends are you all looking for?
[00:16:09] Mike: It's really, when you and I grew up, you had to pay for HBO, you had to pay for ESPN. it's a similar model, and you're seeing consolidation and M& A start in that sector. There's too many choices for consumers. Today, there's 273 retail media networks. That is not scalable, right? Marketers and agencies already have too many choices to make.
[00:16:30] and at the same time, the uniqueness of that data, depending on the sectors. It may not be all that unique. I do think there's going to be consolidation. There has to be. And for me, I would expect that. I think we're in a very good position just given the unique position that we're in. And quite frankly, like the three pillars, right?
[00:16:53] Scale, accuracy, and omni channel. And we can say we have that with confidence. I would say like, [00:17:00] to your point of expectations, there has to be consolidation. I think the introduction of AI, it wouldn't be a podcast without saying AI. I've already said flywheel, if there's another one I need to say.
[00:17:11] But I do think, the introduction of AI into not only the purchase path, but more importantly, the analytics. Right? Humans know which questions to ask. AI will figure out what other questions to ask. And as we constantly feed these models, you're going to have, just from an analytics standpoint, the ability to extract new data, new intelligence, new insights, and we want to be on the forefront there to ensure that, we modernize our offering at a pace that is quicker, than what the industry is seeing.
[00:17:44] Damian: Do you anticipate that your media network and what you're offering might have some kind of partnerships with some of those streaming platforms? I'm just thinking. Yeah, it's my job. So,
[00:17:54] Mike: So, like, I do. I think there's opportunity for partnership. Yeah. it's the many versus the [00:18:00] power of one.
[00:18:00] Damian: Yeah.
[00:18:01] Mike: You have to be selective, right? If you partner with everyone, you partner with no one. So, I think there's opportunities in the travel space. I do think there's opportunities in the non endemic space, too. We're at really early stages, so Honestly, platform side, I'm not used to this much attention.
[00:18:21] and I love it. And we brought friends in to build this business. I'm working with my friends. I absolutely love it. And so together we're kind of sitting down and putting our heads together and say, okay, like we got to the starting line. We bust out our asses for nine months and we got to the starting line. How do we run this race and always be the leader? Because there's going to be people coming up after us. And that challenge with one another is great because we're pushing one another to be better. And it's not intense in the sense that like, any conversations with emotion are meant for constructive and collaboration.
[00:18:57] And I think we're all being better because we're constantly pushing [00:19:00] one another. But more importantly, we're supporting one another.
[00:19:02] Damian: Yeah. you do see some relationships with broadcasters, with in flight entertainment, but I imagine this is going to go. To a different level.
[00:19:11] Mike: this is the early stage of the business. This is the exciting part. we're the bright, shiny object right now, and I think it's good to revel in that just to pat yourself on the back and say, Hey, we did it.
[00:19:22] But realistically, like complacency doesn't get you anywhere, right? So everyone else has got has gotten to the starting line. There's been 273 other companies that got to the starting line, and some are running the race faster than others, and some are not even on the same course anymore. so for us, I think it's about heads down, and just constantly push.
[00:19:42] And to be the best,
[00:19:49] Damian: is highly competitive. Do you feel the pressure?
[00:19:53] Mike: I don't feel the pressure from the industry. I feel the pressure to deliver. Like, me personally, I hold the bar very [00:20:00] high for myself, and I'm my worst critic. I know what it's like to be successful. I helped launch advertising. com and I can tell you those first five years were by far like the highlight of my life from a professional standpoint.
[00:20:11] these last nine months are on par with that. And if I can make the next four years and three months the same or better, I'm going to do everything I can to do it. And if there's 23 years, 18 more years to follow that, great. I hope to retire at some point in my life. But, um, I'm just excited because.
[00:20:30] This is real. And it's good. And, will be responsible for our success. So, yeah, I'm really excited about it.
[00:20:37] Damian: thank you so much for these insights. It's been great.
[00:20:40] Mike: to speak with you, Damian. Thank you.
[00:20:42] Damian: And that's it for this edition of The Current Podcast.
[00:20:44] We'll be back next week, so stay tuned.
[00:20:47] Ilyse: The Current Podcast's theme is by Love Caliber. The current team includes Kat Vesce and Sydney Cairns.
[00:20:53] Damian: . And remember, I'm Damian.
[00:20:55] Ilyse: I'm Ilyse.
[00:20:56] Damian: And we'll see you next time. And if you like what you hear, please [00:21:00] subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.
Wayfair Head of Brand Marketing Kara O’Brien joins The Current Podcast to discuss blending the in-store and digital shopping experience.
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian
[00:00:00] Ilyse: I'm Ilyse Liffreing
[00:00:02] Ilyse: And welcome to this edition of The Current Podcast.
[00:00:05] Damian: This week, we're delighted to talk with Kara O'Brien, Head of Brand Marketing and Analytics at Wayfair.
[00:00:11] Ilyse: For years, Wayfair has been an online one stop shop for people looking for everything from beds to couches to kitchen appliances. In fact, for those browsing home goods, the choices often seem endless.
[00:00:23] Damian: I know, because I've spent many long hours looking for the perfect bathroom cabinet to fit into my tiny New York apartment. But seriously though, one of the big draws for Wayfair has always been its reasonable prices for its products.
[00:00:35] Ilyse: Wayfair is famous as an e commerce platform, but now that's changing. In May, the company opened its first brick and mortar store. start by asking Kara about why the company made this move.
[00:00:47] Ilyse: First, I believe congratulations are in order because Wayfair opened its first brick and mortar store back in May.
[00:00:54] So, why don't you walk us through the decision to make the leap into a physical storefront?[00:01:00]
[00:01:00] Kara: Absolutely We are so excited about this milestone. It's something that's been a long time coming. I personally have been at Wayfair for 10 years, and it has been one of the peak moments of my time there to see our brand come to life physically. so why now? I mean, our ethos has always been to deliver the best possible experience for our customer, and now we want to really be able to do it however they shop and however they choose to shop.
[00:01:24] And so to be able to bring the It's a product to the customer. Let them see it in person, help guide them through the purchasing process. It's it makes a ton of sense. And, consumer demand has shifted so much during and since the pandemic, there was, pretty strong move to buying these more considered purchases online when people had no option to go in store.
[00:01:46] But, now we're seeing the pendulum swing back and the consumer preference is to have a mix, to have a balance, to be able to see things in person, but have the convenience of being able to shop and research from home.
[00:01:57] Ilyse: Yes, now I know I'm, I have an apartment in New York and i've spent too many hours on Wayfair, probably.
[00:02:03] Kara: - love to hear that.
[00:02:04] Ilyse: but why did you land on Wilmette, Illinois for this touch point? And how are you bringing the brand to life in store?
[00:02:12] Kara: Yeah, to start with Wilmette, I think there's two big considerations that ended up there. one is convenience. And so we really want to make shopping for your home as easy as possible. It's a process. It's something that's so important to so many people.
[00:02:25] And so we don't want the process itself to feel onerous. And so for us, we had found this wonderful space. It's in a revitalized shopping center. It's surrounded by suburbs with lots of young families who are really kind of our core customer. And then the access to the broader Chicagoland, uh, area was fantastic.
[00:02:45] So that's always been a strong market for us. But more on the business side, it's, It's very well positioned within our logistics network, and to kind of come back to that idea of convenience, we can ship products to, directly to customers home instead of trying to fit something [00:03:00] large and bulky in the back of your trunk.
[00:03:02] And so we're able to do that fast, free, easy, when they've seen something in store or if they've explored beyond.
[00:03:10] Ilyse: mortars follow or?
[00:03:12] Kara: I think that's the idea eventually, but I think one thing we're really trying to do is learn at being an e commerce company. First, there's so much one way conversation that you have with the customer through your marketing, through your site. This is an opportunity to have that two way conversation.
[00:03:28] And, we recognize we're new to the space. We're going to learn a ton and hopefully be able to apply that
[00:03:34] Ilyse: what
[00:03:34] Damian: to what extent does the physical store help build the brand perception? And I know you sort of touched on that, but what I'm interested in is, it's known as an e commerce platform, and here you are now building out a physical store.
[00:03:46] So What does that do? How does that help?
[00:03:49] Kara: Yeah, well, I think it's rooted in who we were as an e commerce company, right? We have so many different types of products. We have, tens of millions of products on site. [00:04:00] And so the challenge at hand was really how do you take that vast selection and put it into a box, right? You can only put a finite number of products in.
[00:04:08] And so for us, what we were really trying to solve for is how do you at Google Demonstrate that breadth, but still assist people through that purchasing process so that they can find that thing they were looking for, even if they didn't even know they wanted it. And so a lot of our philosophy was we want to be able to give you departments that are specific to a space, but we also wanted to have a through line that We're specific to your style.
[00:04:34] So the way you can shop the store, it's not, living room over here, bedroom over here, completely cordoned off. It's more of a choose your own adventure. So if I have multiple projects and I have a modern aesthetic with a little bit of a rustic twist. We have pathways to carry you through.
[00:04:49] If you are mission driven and just need a new set of pots and pans, we can get you there quickly too. and so then the other thing that's a component to that, given how much we have, is the [00:05:00] support needed along the way. And so we have our associates trained to help you find the things you want, if you want a different color, we can show you that through our e commerce platform, but then you know that the size is perfect because you saw it in the store.
[00:05:12] Damian: So you're connecting the in store experience to the digital experience.
[00:05:16] Kara: closely. The technology enablement was so important to us. We wanted to make sure people could understand again that endless aisle, but make it a very shoppable experience in store. we also are going to be launching new services like design services to help customers complete that project with confidence.
[00:05:31] and so very much want it to be an interplay. Now,
[00:05:40] Ilyse: back in March, which included a full omni channel activation featuring celebrity spokespeople and an updated logo. What were the most successful lovers within this campaign, and are there any surprising insights so far? Yeah, well, we
[00:05:54] Kara: Yeah, we were really excited to bring this to market. along with this campaign, we have a revised tagline [00:06:00] of every style, every home. And I think the whole goal in the campaign was to be able to show that, not just say that. And so by bringing in different personalities, some recognizable, some just relatable, we felt like we could showcase that breadth, but in ways that, a consumer looks at the ad, the campaign and says, Oh, I see myself in that.
[00:06:17] I know that I can get what I'm looking for. as it comes to the winds, it's still early days, just launching in March. Not a ton of time. But we're seeing really positive response to the casting to the breadth of personalities were showing. It's quite memorable as a result. So we're seeing good spikes in attention metrics.
[00:06:35] We know it's resonant, and we know that people are associating it with wayfair. So for us, that own ability was a really important goal in the campaign.
[00:06:43] Ilyse: TV spots during the Oscars. Yes. What was the impact of those pretty high profile ads?
[00:06:49] Kara: Oh, I think it was really nice as we went on this more of an evolution than a revolution of the brand. It was really nice to be able to showcase that in a big splashy way and have as many people [00:07:00] see it as possible. And then as you've seen and will continue to see over the course of the year, we're really building on that.
[00:07:06] So we have a few different spots. They all exist in this world of the waverhood and, that sort of, The sort of universal experiences that people have in their communities are the things we're trying to show in all different ways. Now beyond those
[00:07:19] Damian: Now beyond those big TV spots, are there other sort of digital channels that you're exploring?
[00:07:24] Kara: lot of this campaign was not just about the what, but the where. And so we've definitely taken an expanded lens to how we show up for our customers, and really trying to make sure we understand where they're spending time. We show up there and then as a result are additive to their experience, too And you know some of the newer spaces were in definitely moving more into streaming video Moving more into audio which we hadn't done before home tends to be quite a visual category So that's been a really exciting experiment for us and then working with all sorts of creators I think that's an emerging area [00:08:00] for us but really important for thinking about home and showcasing style and self expression
[00:08:06] Damian: a sort of Specific demographic. You mentioned young homeowners. That's interesting. And that perhaps predetermines which channels you might like to engage people in.
[00:08:16] Kara: Absolutely.
[00:08:17] we are a mass brand. We do have something for everyone. But at the same time, when you think about who's spending disproportionately on their home, who has more needs, it's definitely the folks who are going through these meaningful life events where their notion of home is changing. And so really the sort of bullseye of that are young families.
[00:08:36] you're getting married, you're moving in together, you're trying to merge styles maybe successfully, maybe less successfully, you have parents who are now thinking about safety and designing a nursery all the way through durability as the kids get older. And then, moving on up through to empty nesters.
[00:08:53] There's a very different set of needs. So we really want to start with that sort of nucleus of a starter family, a young family, [00:09:00] and grow the relationship from
[00:09:01] Damian: That absolutely makes sense. Yeah. Yeah.
[00:09:11] Ilyse: an e commerce company? That's
[00:09:13] Kara: that's a fantastic question. for us, we're longtime digital marketers. Digital is a very direct path to our site. And so a lot of the challenges when you're, telling a story and you're trying to guide towards that less direct path to get to site, how do you do so? And, help the customer understand what they should expect when they show up.
[00:09:31] And so for me, the things that I'm thinking about all the time are storytelling. Really trying to make sure that we are contextually relevant wherever we're showing up, again, something that we're tackling with the new distribution channels. and then really making sure that a company that has been so digitally minded is making that connection.
[00:09:50] And so, now under my purview is our on site team. Marketing team and thinking about when you see us in a TV ad, and then you show up on our home page. How do we make that feel like a [00:10:00] continuous journey? so it's definitely been a journey. I think it's an exciting one. Again, as somebody who's been with this brand for a long time, it's really exciting to see us lean more into that storytelling.
[00:10:09] Ilyse: So you've been with Wayfair now for over 10 years. In that time frame, How would you categorize and characterize the changes in the media landscape?
[00:10:20] Kara: I really think how the consumer expects to discover content has changed dramatically. Where they go, Who they go to, how they think about sharing. It's just, it's changing so rapidly and continues to do so. So for us, as we think about a category that is quite emotive, quite personal. Quite unique to an individual.
[00:10:43] We want to make sure that we can show up in a way that helps somebody discover what they're looking for or discover that perfect piece. And so, you know, insofar as the media landscape, it's not just turning to a single celebrity or a single friend. You actually have access to so much. And so, we want to be a [00:11:00] breakthrough voice.
[00:11:00] We want to help people parse through that and find that perfect thing, which ends up being then this ultimate combination of content and commerce.
[00:11:09] Ilyse: How does Wayfair go about measuring the impact of the users on its sites?
[00:11:16] Kara: yeah. So I mean, picking up on that thread of bridging the offline and the online, I think what's been, you know, a challenge faced by many brands is that you have to think about that total ecosystem that a customer is interacting with and how you can understand how they're moving through it, what they're seeing, what they're reacting to.
[00:11:34] And so for us, we've been on a little bit of a journey to expand how we think about measurement. we've Certainly done a lot of investment in multi touch attribution, especially being more digitally native. we're expanding to think about running different kinds of experiments, understanding, lift on brand metrics over the short term and over the long term.
[00:11:54] and then adding to our based model arsenal. what's great about being e commerce [00:12:00] first, though, is we do get a lot of first party data on our customers. We can see how they move around our site. We know where they've come from, largely, and we can start to stitch that story together so that we can serve them better through personalized mediums as well as an aggregate understand, where they're gravitating towards.
[00:12:17] Ilyse: What are some of the major KPIs that you try to hit or some of those analytics that you really strive for?
[00:12:25] Kara: Yeah, for us, we always just want to build a notion of impact. And I think what's been growing us as marketers is that's not a singular definition. And so it depends on the campaign. It depends on the goal of the test. when we're thinking about offline marketing or brand marketing, we're looking for immediate recall.
[00:12:44] We're looking for a lift in certain impression metrics. or, perception metrics, rather, depending on what we're trying to convey through the campaign, all the way through to more of the mid funnel and consideration, where are we driving visits? What share of those are from new customers versus prior customers?[00:13:00]
[00:13:00] And then how are those customers engaging on site? Are they purchasing right away? Did they come in because they saw a specific category or style? All the way through to how many visits does it take before you're comfortable making a large purchase? and so we follow them, you can call it a funnel, though it tends to not be quite so linear as a funnel.
[00:13:18] Um, yeah.
[00:13:19] Ilyse: in some cases, the funnel has kind of died with like e commerce. Yeah,
[00:13:23] Kara: it's much more of, I said the word before, an ecosystem, right? Like things are moving together non linearly and it's about telling that story, that narrative internally and then playing it back to the customer to give them what they're looking for.
[00:13:37] Damian: as we, you know, look to 2025, what are the things that are sort of exciting you in terms of innovation when it comes to marketing?
[00:13:44] Yeah,
[00:13:48] Kara: and back again, I think we really want to create a total experience for customers, and that'll be through storytelling. That'll be through working with different types of [00:14:00] partners, really thinking about how consumers want to do discovery, and, that's going to be a big focus for us.
[00:14:06] I think like many brands, we are exploring the right use cases for AI to power a lot of what we do. There's everything from the, the stuff behind the walls of how do you get more efficient in your processes all the way through, expanding the number of creatives you're able to put out in a given test.
[00:14:24] so that's very much an area of investment and innovation for us. and then, you know, as we continue to learn through the store, going back to where we started and understanding how we can just make customers lives easier, you think about expanding that to the entire delivery experience, any type of follow on customer service that's needed.
[00:14:44] There's a lot of places where we think we're quite differentiated and we always want to take a technology first approach to it.
[00:14:51] Ilyse: And that's it for this edition of The Current Podcast.
[00:14:53] Damian: We'll be back next week, so stay tuned.
[00:14:56] Ilyse: The Current Podcast's theme is by Love Caliber. The current [00:15:00] team includes Cat Fessy and Sydney Cairns. And remember,
[00:15:03] I'm Damian.
[00:15:04] Ilyse: I'm Ilyse.
[00:15:05] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.
Parbinder Dhariwal, VP and GM of CVS Media Exchange, discusses CVS’s self-service advertising offering and the future of DEI initiatives in retail media.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Ilyse: I'm Ilyse Liffreing.
[00:00:01] Damian: I'm Damian Fowler.
[00:00:02] Ilyse: welcome to this edition of The Current Podcast.
[00:00:04] Damian: This week we're delighted to talk with Parbinder Dhariwal, or Parbs as he's known by friends and colleagues. He's the Vice President and General Manager at CVS Media Exchange.
[00:00:14] Ilyse: Launched in 2020, the CVS Media Exchange, or CMX, helps brands and partners reach CVS Pharmacy customers and members of its Extra Care Loyalty Program through a variety of digital platforms, including social channels, programmatic display, and on cvs.com.
[00:00:32] Damian: There's been a ton of advertiser interest in the retail media space. In fact, it's become one of the fastest growing digital media channels.
[00:00:39] Ilyse: According to Group M, retail media networks are expected to grow revenues by 8. 3 percent in 2024. We start off by asking Parbs about this revolution.
[00:00:50] Damian: So, Parbs, we keep reading about the retail media revolution from retail media networks exploding to self service and data portability. What do you think the next phase of this [00:01:00] revolution is? Well, the
[00:01:01] Parbs: the retail media revolution is in full swing, isn't it? it's rockin and rollin right now. and, doesn't seem to be slowing down and letting up.
[00:01:08] I think the, Group M stat and growth that they're forecasting for this year is an interesting one. we also know that it's gonna be the fastest growing channel, right the way through 2027. If you look at the market to stats, we're gonna outpace linear TV in the next couple of years.
[00:01:23] So there is tremendous amount of growth. I think as we think about that revolution as we think about the way in which we operate as an organizer, as as an industry as a whole. measurement, transparency and clear campaign attribution are going to continue to be the driving force of the way in which we think about our business.
[00:01:42] this has got to be central for brands. We have an opportunity as an industry to really change the game there and we're very much leaving in. the other piece is, is around how do we continue to advance in technology, how do we continue to advance in, using AI, [00:02:00] machine learning, a lot of the analytics tools that are going to be available to us and build our capabilities so we can really start to compete with some of those larger platforms, within the industry.
[00:02:11] And then also, let's always not forget, retail media is nothing without the core brands that we are retail media networks, and a part of. So, in this instance, we're very much a retail media network. CMX is the retail media network for CVS, pharmacy. we operate under that guise, And what is most important to us within that capacity is for us to really understand and meet the needs of the consumer.
[00:02:36] If we don't understand the consumer, we can't meet their needs. If we can't service the consumer and help understand, whether they're in a store environment and how could we create a level of discoverability in the in store environment? Or how do we create that discoverability in digital environments?
[00:02:53] That's when we start to lose our gravitas. So thinking about the consumer first and then how do we add [00:03:00] to their experience as they're shopping through our stores, both, as I said, from a physical as well as digital and looking at it through the omni channel lens.
[00:03:09] Damian: and just off the back of that, you do have tremendous scale. What kind of customer reach are you looking at?
[00:03:15] Parbs: Yeah, it's a, great question. And you got to remember CVS, pharmacy is a national brand in the United States. And I'll give you some, this probably the moment for me to, throw a few stats at you, right? Like, let's do this. so first and foremost, CVS stores, there's 9, 000 locations in the U S.
[00:03:32] we are, part of CVS health, which is, The largest health and wellness, business in the U. S.
[00:03:39] Parbs: As you think about our stores in particular, we have close to 5 million interactions with our stores every single day from consumers. So, vast amount of traffic that comes through our stores and for various need states as well.
[00:03:52] from a digital perspective, we have almost 140 million, Users who are coming to the CVS. com site and again interacting with us [00:04:00] with various different need states. but shopping is a core component of that. And then the most important stats certainly from a CMX standpoint is we are predicated and built upon our loyalty program.
[00:04:11] And it kind of differentiates us a little bit from other retail media networks. Our loyalty program is 74 million extra care consumers. substantial. at scale, but also gives us that really strong purview of that omnichannel experience. So hopefully that sort of just helps you give an understanding of the scale that we operate within.
[00:04:33] Really?
[00:04:33] Damian: yeah, I mean, it's massive and we want to talk a little bit more about the Extra Care Loyalty Program.
[00:04:38] Parbs: Program. If there's anybody out
[00:04:39] Damian: further on. but you know, I'm not sure if this question if there's anybody out there right now who doesn't actually, subscribe to retail media. the power of retail media. But what would you say to such a person, an advertiser who believes retail media doesn't fit into their media investment?
[00:04:55] Parbs: Yeah, I say that to them that, you know, retail data, [00:05:00] the way in which we see the transactions within our stores, that level of wealth of proprietary data is an understanding of. Of behaviors and the way in which consumers are shopping between digital, physical environments when they're coming into store, the frequency by which they're purchasing product.
[00:05:17] That is a highly effective tool. And as a brand, if you're not leveraging that, you're missing out on an enormous channel. This is the reason why. Brands are leaning in heavily. They're becoming much more sophisticated in how they use retail media. I think they're also really pushing retail media as well to become more sophisticated in the offerings, more sophisticated in the way that we measure more sophisticated in the way in which we provide that level of transparency across our businesses.
[00:05:46] Closing the loop and building that attribution model is also really, really important. That sets us apart from any other platform. like that. There are some of the larger platforms that have continually [00:06:00] struggled to provide that level of closed loop attribution as I think about I saw an ad or I've engaged with an ad.
[00:06:08] And what has that driven me to do? And what is the outcomes as a result of that? That again is something that retail media is very much in an exclusive camp. And we've got to make sure that brands truly understand how to use them.
[00:06:21] Damian: that
[00:06:22] Parbs: And the other thing that we should, make sure that we, that we understand is that there's retail media networks that have enormous amount of first party data.
[00:06:33] And as a result of that first party data,
[00:06:35] Damian: not
[00:06:36] Parbs: it gives us the ability to leverage that consumer across the omni channel. But not just on our own owned and operated properties, but how do you leverage that data or that asset across the open web. Right when you're trading with, through be it through DSP environments or otherwise.
[00:06:53] How do you leverage that CVS data, the extra care loyalty program to continually [00:07:00] enrich your programs, your marketing efforts to drive more performance to drive more product to drive more engagement with the consumer. So we're sitting on a we're sitting on a massive opportunity. And it's in our hands, right?
[00:07:14] It's in our hands as the retailers to, To step up. It's in our hands to make sure that we continue to provide all of the things that brands are looking for and provide that level of transparency on how we're measuring our performance and more importantly, bringing brands in the industry along on this.
[00:08:38] We're, it's got to be additive to their journey, not disruptive. we want to, we don't want to put things in the way of the consumer getting to the products that they need. But we, what we do is we want to enable a level of discoverability through the retail media networks that gives them access to products that they didn't realize that they could buy at CVS.
[00:08:55] They didn't realize that they were, in the beauty counter. I think it's, I think those are really [00:09:00] important.
[00:09:00] Ilyse: really important. Yeah. On that note, last year, CVS is extra care. It was named one of Newsweek's best loyalty programs. How has CVS cultivated such a strong relationship with its customers?
[00:09:12] Parbs: Yeah, and look, extra care has been around for over two decades. The longitudinal latitudinal nature of the program gives us a really strong insight into the way that the consumers have been having and purchasing products with us. again, I'm sounding like a little bit of a broken record here.
[00:09:30] It's not my intention, but the consumer is at the center of everything that we do. Understanding the way that the consumer purchases, it enables us to deliver message, personalized message to those consumers in the environments within which they operate. We can understand certain need states and how that consumer is wanting to go, and work with us in the, in our environment.
[00:09:50] we will continue to build, that loyalty program for, with extra care. It's the foundation of CMX, we've talked about it at the top of this podcast. There's [00:10:00] 74 million of those consumers, they're swiping at really high levels. they're engaging with our, with our program as well.
[00:10:06] And, yeah. that's where the opportunity comes on. I was providing a level of service back to them with the ads business as well.
[00:10:12] Damian: self service. The
[00:10:13] Ilyse: On that note, no, separate notes. but along the line of service, CVS Media Exchange introduced the self service option for advertisers that was announced this past CanLion. why is launching a self service important for increased transparency? I know that's a popular buzzword around, the industry, but it's also extremely important.
[00:10:36] Yeah,
[00:10:37] Damian: transparency
[00:10:38] Parbs: Transparency is, it is a buzzword, but it's a it's an old. It's also an incredibly important foundational pillar for us as a business. and the way in which we operate. So I think that's the, I would say that. the, related to the self serve announcement, that we announced at CAN, it's actually more about, whilst the transparency is there, it's also about accessibility.[00:11:00]
[00:11:00] How do we provide a level of accessibility to our inventory, in, ways in which they can access that inventory through a DSP platform through a particular seat. So sell serve opens up how brands want to work with retail media. And we've only really been in market as a retail media network since 2020.
[00:11:21] We're developing this business. We're bringing it to market. I think we're doing it at speed. I think we're doing it very thoughtfully on The partners that we work with, in this instance, we're working with a trade desk on this self service program. trade desk shared our values.
[00:11:35] They share the way in which we want to innovate. They share the way in which we are looking at the consumer and driving that technology in order to continue to develop solutions for our advertisers. What I don't want us to forget is You know, as we think about that accessibility, as we think about transparency, how do we continue to iterate from here?
[00:11:57] How do we continue to develop innovation with [00:12:00] other tech partners, with the trade desk to, to further enhance how we're, bringing new solutions to our advertisers?
[00:12:07] Ilyse: Can you actually explain it a little bit more? Where, in using your self serve option, where can advertisers expect their ads to appear, or how are they accessing your data to, to drive
[00:12:23] Parbs: Yep. So we're going into a closed beta, with the trade desk. That will allow a certain number of select advertisers to come and work with us and develop programs, within our closed self serve beta environment. we're building audiences within those environments. The way in which it will operate is that the brand will use their Trade Desk C in order to activate campaigns through the Trade Desk DSP into the open web.
[00:12:52] So they have the ability to buy OpenWeb or CTV and all of the different products that are available through the Trade Desk [00:13:00] but accessibility to 74 million extra care consumers. It's the first time that we've made that available in a self serve capacity, with the Trade Desk. Now. , that's not always how brands wanna operate.
[00:13:11] Some brands want to go into the self-serve world and others want to just cont continue down the managed service route. So we will continue to offer managed serve as an option. so that product will remain and we have a strong team to support that. But we also want to create, again, accessibility options for the way in which brands wanna engage with us. Very interesting.
[00:13:34] Damian: Now, you wrote an op ed for The Current, this year, and in that op ed you said something, if I may quote you, creating a tailored customer experience across channels and pulling together data from various touchpoints, that being website visits, mobile apps, in store interactions, loyalty programs, and more.
[00:13:53] It can be a challenge, and I know we often like to talk about, opportunities and hand in hand with challenges. I wonder if you [00:14:00] could talk a little bit about the challenge you're referencing there.
[00:14:04] Parbs: Yeah, the challenge stems from, again, retail media is predicated on really closing the loop, so how do we attribute an action, right the way through to purchase. And if you think about, hyper personalization, for the consumer, to drive more engagement. That consumer is, it's, they're difficult to reach, but they're more importantly, they're difficult to make sure that we continually serve the right level of message to them in the right environments. Previously, retailers have struggled with, bringing that, the assets, the data components, and then how do you target personalized message to them within the channels that we want to talk to them as well. That's where, our first party data and the use of our first party data and as we're building our audiences really actually comes
[00:14:59] Ilyse: [00:15:00] the
[00:15:00] Parbs: its own.
[00:15:01] That challenge of, Understanding the consumer and how you can actually leverage that consumer in different channels That's really the driver to building a performance business for our brands
[00:15:15] Damian: a lot
[00:15:16] Parbs: We're seeing a lot of work around, whether it's through customer data platforms or other technology, to bring our consumers to life.
[00:15:23] We use data clean rooms to make sure that, we always drive the security of our, uh, consumer, that we're not passing any data, any information through to, consumers.
[00:15:33] Ilyse: tech
[00:15:34] Damian: to maintain
[00:15:35] Parbs: or through to any other platforms. We're maintaining that level of privacy. These are all obviously challenges. but it's important to mention that, as we think about propriety data, we think about precision targeting, we think about that real time optimization and that also the attribution
[00:15:51] Damian: attribution of
[00:15:52] Parbs: of an end to end reporting.
[00:15:54] That's where brands are really embracing retail media networks. That's where we've got to lean in as an [00:16:00] industry, and we've got to get better, we've got to get more transparent about how we're providing those solutions. because that, again, will grow the industry. And, look, we've seen the IAB come to the market with some clear guidelines on how we should be measuring, and what are the standardization of metrics.
[00:16:17] There's got to be more of that. Then there's got to be more of that lean in from retail media networks, because we've all got to move together to build a better industry, to build a better way in which brands can use our platforms, and give them options in the way in which they're talking to consumers.
[00:16:33] And, that's the exciting piece. It's phenomenal for retail media, right? Like It's a real moment.
[00:16:39] Damian: Yeah, you're writing them on the front lines of it. one aspect of retail data is that, advertisers can connect their digital environment with the physical shopping environment. And as you mentioned, CVS Pharmacy has all of these environments, physical environments across the United States.
[00:16:59] Why does it [00:17:00] matter that you connect those up?
[00:17:01] Parbs: connect those up? because the connection of the digital and physical environments, it's crucial because consumer shops, How they want to shop, depending on that current need stay or this particular situation that they're in at any given time, right?
[00:17:17] there's, if we think about that level of integration of data around online and offline buying behaviours, like advertisers are consistently trying to understand, first of all, how do you create a seamless experience between those two environments? But then more importantly how do you influence the consumer through that journey?
[00:17:37] Like we, we talk, for a number of years within this industry we've talked about our traditional funnel approach and there's no funnel anymore. retail media has actually condensed the funnel and you're, Point of delivery of message to through to point of purchase has shortened so much.
[00:17:55] it's it's almost an in. It's there's no awareness. There's no consider. It's just go [00:18:00] straight down to the bottom of the funnel and purchase from the moment that you see an ad. And so we've got to think about, how do we continue to add value in that process right the way through the digital and physical, experiences.
[00:18:14] There are some challenges there as well, right? Like it's, when we think about showing a, an ad to a consumer in a digital environment and then whether they purchase that product in digital or they, It's, buy online, pick up in store and send it to a store or they, go into a store and purchase, we see 52 percent of our, web and app users who start their journey in the digital capacity and then finish it in a physical capacity as well within 48 hours, right?
[00:18:43] Like that's the kind of thing. Yeah, and we've got to make sure that again, like working with the brands to to really surface those kind of insights so they can then be along that journey with that consumer as well through the experience. [00:19:00] Some of the in store activations when we got around about, we've got screens within our in store environments, at the pharmacy counter, we have digital audio, we have out shelf promotions and so on.
[00:19:11] Some of those are a little bit more difficult to measure. I think one of the challenges that we will face as an industry is how do we bring a level of measurability to those components and, I, there's a lot of, different outfits that are driving that. but with that, I think personalization needs to be consistent.
[00:19:27] Showing the value of connectivity between the digital and physical environments being with that consumer across that entire journey and every single touch point will also set you apart from the rest of the industry. ongoing. this is an evolution, right? As, as we continue to
[00:19:44] Ilyse:
[00:19:44] Damian: That's
[00:19:49] Ilyse: that in the retail media space as it stands today? And how do you think it can evolve since it's so new?
[00:19:58] Parbs: Yeah, I am passionate [00:20:00] about it, and I'm passionate about it because I've been in this industry for 25 years, and I have I think we can do better, as it relates to D and I, and As we give opportunity across all different layers of an organization, these are really important for the growth of our industry.
[00:20:26] And I'm not just talking about retail, I'm talking about the advertising industry, for us to build opportunity for more diverse voices within our business, for different ways of thinking, for the way in which we want to be change agents within the whole industry. And We've got to continue to do better.
[00:20:48] Where retail media comes into play is that as we build this industry from the bottom up, it gives us an opportunity to think about D& I a little bit differently. we're building teams that are new teams. we might [00:21:00] already have a blueprint from different organizations that we work with on what's worked or what's not worked.
[00:21:06] And as we've looked at CMX, we've built purposefully A level of diversity into our organization that gives us an understanding of not just the way in which we want to think as an organization, but it also gives us a relationship with how our consumers are. we have consumers shopping us from across the United States.
[00:21:28] They're consumers from various walks of life. And if we understand the consumer and we can share it. an understanding of who they are and live in their shoes because we have, then that gives us an ability to think a little differently about our businesses. And then how does that relate to retail media?
[00:21:47] I think we can do better. I would like us to do better. I do challenge the industry around there. but overall, I think, retail media can really pave the way for how we think about D and I initiatives and bringing more [00:22:00] diverse voices Into our industry, and we're definitely doing that in CMX.
[00:22:03] We can stand behind that.
[00:22:04] Parbs: And that's it for this edition of The Current Podcast.
[00:22:06] Damian: We'll be back next week, so stay tuned.
[00:22:09] Ilyse: The Current Podcast's theme is by Love Caliber. The current team includes Kat Vesce and Sydney Cairns.
[00:22:16] Damian: And remember, I'm Damian.
[00:22:18] Ilyse: I'm Ilyse.
[00:22:19] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.
Mark Penn, the chairman and CEO of Stagwell Inc., reflects on his extraordinary career, driven by his passion for politics and marketing, and offers insights on why this is a good year for marketers.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian Fowler.
[00:00:01] Ilyse: And I'm Ilyse Liffreing.
[00:00:02] Damian: And welcome to this edition of The Current Podcast.
[00:00:05] Ilyse: This week we're delighted to talk with Mark Penn, the Chairman and CEO of Stagwell.
[00:00:10] Damian: Well, first, as a political pollster, who's advised names like Bill and Hillary Clinton and Tony Blair.
[00:00:20] Later, he became Chief Strategist for Microsoft, before founding Stagwell, a digital first marketing and communications group.
[00:00:28] Ilyse: Mark's political background no doubt brings a much needed perspective to marketing. He argues that in today's real time, data driven world, brands must have a constant finger on the pulse of the American consumer.
[00:00:42] Damian: We start by asking him how these two worlds, politics and marketing, have always been bound together
[00:00:48] mark, it's no secret that you've covered the waterfront from being a political strategist to a poster to businessman and author. You know, can you walk us through a little bit about how you went from polling to politics to media? [00:01:00] That's a big question, right?
[00:01:01] Yes, I'm still trying to answer that question
[00:01:03] Mark: myself. How did I get here? Uh, you know, I kind of re strategize myself like every decade or so. And I said, well, okay, what is it that I really want to do? And, and so I, I kind of started actually out as I was going to be a lawyer. Uh, and then I detoured from law, law to polling.
[00:01:22] And then I was going to be a pollster working for the president. And I got to do that. So then I kind of detoured from there. And then at a certain point, and I love technology. So I was then kind of went to Microsoft and became chief strategy officer. And then I, I had this idea to say, why can't I take all my experiences in polling and campaigns and running bursts in Marsteller.
[00:01:45] And I ran Microsoft's advertising too. And I said, you know what? I could form a better holding company because it could be more digital first. It could be more freed from the legacy assets. It could be more innovative. And so I did exactly that. [00:02:00]
[00:02:00] Damian: Yeah, doing a little research on your background, it seems like your curiosity seems to have served you very well throughout life.
[00:02:06] Is that part of the DNA of, of what drives you or what, what keeps, what motivates you to keep going?
[00:02:12] Mark: Well, you have to do what you're interested in. You know, I always think, it's so funny. You know, my partner and I were going to be corporate lawyers. And, and then we decided, you know what? We like this polling thing.
[00:02:22] We have impact on campaigns and society. And we thought, oh, we're giving up this cushy life as corporate lawyers. And we, we did a lot better doing polling than we ever would have done as corporate lawyers. So, what I always tell people is, follow your passion. Don't worry so much. If you do something, do it.
[00:02:38] Really interesting. Really? Well, you'll, you'll figure out how to, you know, how to manage the, the reward side of things, and that's much better than doing something you don't really like that you somehow think is going to be rewarding.
[00:02:51] Damian: Now, Stagwell, as you mentioned, offices, big marketing network, let's tech driven, you know, as a leader in digital, you know, uh, how have you seen the [00:03:00] two areas move together, you know, the idea of digital marketing performance and creative, how do those two things.
[00:03:07] Mark: Well, I think they have to work together. I think that to the extent that you're creating a digital experience, that is a creative activity. That, that everyone remember, those of us who were not born digital, think of how we create a TV spot first. Those who were born digital don't think in that way. They think in how they're going to create a digital experience first.
[00:03:35] Right? And, and that takes the same kind of creativity, if not more so. Right? Because TV spots eventually had like a, they had like a, they had rules. Right? And they had a boundary and they were 30 seconds. And, you know, and you can be like, it's actually more of an interesting open canvas when it comes to digital creation.
[00:03:54] Ilyse: What would you say is one thing every brand or media buyer should be [00:04:00] thinking about today?
[00:04:01] Mark: Uh, every media buyer, I think, today is just thinking about how they get the, Find the right place for their brand.
[00:04:10] I mean, I, I think, I think it's, it's kind of the basic of who's your real target audience and, and how, how are you going to find that audience? And I think they just have to be open minded that it's, that there are so many new ways to reach an audience that they have to spread their wings a little bit.
[00:04:28] Right. I mean, I think we went from, it was just TV. to it was just TV and Google and Facebook. So now it's Google Tiktok and retail marketing and so many other things. And I think they just have to be open to experimenting to find where their target audience really is.
[00:04:43] Ilyse: Now it's no secret that the publishing industry is under a lot of pressure today.
[00:04:48] And Stagwell recently published a study called the news advertising study with the Findings that showcase that it's safe for brands to advertise next to news, regardless [00:05:00] of the topic, and that adds next to those even like controversial topics performed just as effectively as those within more like positive news environments, maybe like sports or entertainment.
[00:05:12] Now in your op ed for the current, you wrote that brands think there is less downside in those positive environments, but the opposite is true too. There is less upside. Can you tell us what you mean and why should advertisers care about these findings?
[00:05:27] Mark: Well, I think that I discovered, and I discovered this when I did the budgeting at Microsoft.
[00:05:32] A lot of companies have a huge hole in their media buy. And that hole is news. Uh, that they will be advertising in sports and they will be advertising in entertainment. And they will be blocking out news, or they will be subscribing to a service that in effect blocks them out. And what maybe started out as some good idea, you know, that your, the ad for your, for Boeing shouldn't appear next to a plane crash, really [00:06:00] somehow devolved into something affecting 25 percent of news articles.
[00:06:04] Seriously demonetizing journalism. And it's having unintended consequences far beyond that. And brand safety? Seriously? I mean, I've yet to see some brand lying in the curb because their advertisement appeared in the New York Times or the Wall Street Journal. It's a ludicrous notion to be blacking out legitimate journalistic publications for, quote, brand safety.
[00:06:30] Damian: In general, the business model for news journalism is sort of evolving and changing. You know, what else is new? What do you think can advertisers and publishers do to work together to make sure that journalism is thriving even as newsrooms shutter?
[00:06:42] Mark: Well, I think that there has to be a little bit of re education here with the CMOs and the media buyers.
[00:06:50] I think they're afraid that somehow they're going to trigger some backlash against their company. Yeah, certain, certain things have [00:07:00] triggered a backlash. But to go back to, I've never known that backlash to come from advertising in one of the major publications. And, and so consequently, I think that they can reduce some of their fear levels.
[00:07:12] And then also they have to understand that news consumers, right, in about 25 percent of the country, maybe 23 percent of the country, are what I classify as news junkies, right, who, who go in and, and, And kind of get updated on the news five times a day. That is a great engaged audience. They read stuff.
[00:07:32] Okay. That means they're more likely actually to kind of absorb your advertisement than someone who doesn't read stuff. Uh, and, and so I think they really have to rethink how some of their media planning and the audiences they're targeting and, and get out there and experiment with news. Cause I, again, I, I think, I think for the social problem here is that it's demonetizing news and putting journalists out, out of work.
[00:07:57] But just be greedy. Just, just go, you know, just [00:08:00] think about your brand. I think it will benefit.
[00:08:02] Damian: They shouldn't be on the back foot so much. Speaking of news, of course, this year is a presidential election year in the U. S. and elections all around the world. Um, what do you think are the top channels in today's media landscape for this year's U.
[00:08:13] S. presidential election?
[00:08:15] Mark: Well, I, I, I think that's, that's kind of interesting. Look, most campaigns spend most money on TV, right? So, but as I tell commercial advertisers, you know, if you have your customers in Ohio, well, Ohio is a less of a swing state than it was, but let's say Arizona or Nevada, Virginia.
[00:08:34] Good luck. Good luck buying media, you know, in the last few months here, because it is going to be jammed because there's more money than ever in politics, right? And so then, then politics is, is, is then going to go over to, to social media. Right? And I think spend a lot of money on on social media, uh, all being right.
[00:08:55] And you know, and you're going to find just from an age cohort, you're going to find people on X or [00:09:00] older and people on Tiktok or younger. And kind of, you have to kind of understand your audience and the medium. So it's interesting. You know, I came from a lot of old school TV advertising. Uh, I've yet to see how people as effectively drive a message.
[00:09:16] Right on social media. I think they've got to do more work. As I always say, the best digital ads in either politics or commercial have yet to be invented,
[00:09:27] Ilyse: you know, to that. effort, um, especially when connecting with, like, Gen Zers, do you think technology will play more of a role? Is that, do we see candidates still, um, sticking true to, like, social media or are there other channels you think they're playing even more in this year?
[00:09:44] Well, it's
[00:09:44] Mark: interesting that, you know, what does Trump really do? Trump does events, so his event strategy is then geared to create content that then gets distributed primarily through social media, right? And, and so it's [00:10:00] very interesting because, because it's almost, you know, we look here, you know, I'm, we're, well, we're, we're at something called Sport Beach, and so, so events are back.
[00:10:09] And events aren't a substitute for the media. They are, they generate the content that you really need. That's because people, people want content that's fresh, right? And they want to feel that they're in the moment. They don't want something that's old and that's canned. Uh, and so I think that's, that's really, really important.
[00:10:28] But we are seeing, look, we know that about 70 percent of budgets now have really gone online. And that is, that is, you know, back, when I was at Microsoft a decade ago, it was probably 2%. So that has gone beyond anybody's expectations. Of course, that was one of the reasons that I founded Stagwell because we saw that and we wanted to be ahead of that curve.
[00:10:51] And of course, that's one of the things that we, you know, work together closely with the trade desk on.
[00:10:56] Ilyse: Totally. Um, now personal politics aside, [00:11:00] what advice would you share with Biden's team and Trump's team? Where's the gap in each of their campaigns as, as it stands?
[00:11:07] Mark: Well, but I would really tell both of them the same thing.
[00:11:10] Uh, you know, I try to explain to people the math of swing voting, that if an election is 5 5 and it switches, one person switches, it becomes 6 4. Now, it takes two people in turnout to equal one person who switches. So, getting switchers is really the most powerful thing in politics. And getting switchers means appealing to people who don't agree with you, right?
[00:11:36] And so what I would say is get out of the politics of the base. Get into the politics of switchers. Reach out to the people who don't agree with you. Try to find compromises, uh, in policy that brings them in. And whoever does that most successfully will not only win, but we'll win in a landslide. And if alternatively they appeal only to their base, they may win.
[00:11:57] They may lose, but they will not have changed the 50, [00:12:00] 50 nature of the, of the country.
[00:12:04] Damian: Now, You know, you're known as a sage advisor. What's the best advice you've ever received? Yeah,
[00:12:11] Mark: well the best advice I ever received was at an elevator In which in which In which a guy told me he was a he was he was a stock analyst And he said, buy Amazon.
[00:12:33] He said, sell every other stock you have and buy Amazon because they will be the future of retailing. And this was like when Amazon was a peanut, I of course thought the guy was a nutcase.
[00:12:48] And so I did not follow that advice. Uh, I would say that, that though, seriously, the, um, You know, I've worked for a lot of incredible people and, and, and [00:13:00] I always try to pick up kind of, kind of what they do best, right. And, and, you know, I worked with president Clinton and president Clinton was just amazing at, at synthesis.
[00:13:10] You would, you would throw incredibly complex things at, at him and he would fit them all into, into pieces or, you know, or I worked, you know, with Steve Ballmer, who's a core investor. And I just thought he was like, I didn't understand how he had 110, 000 people and went home. Uh, and how his time management was so radically different than, than mine.
[00:13:31] So I always try to pick up things from whomever, whomever I worked with. Uh, and to see like, what's the special thing, some of the special things that, that really work well. Fascinating. Now Stagwell is no stranger to growth or acquisitions. And
[00:13:47] Damian: what does the future hold for Stagwell?
[00:13:50] Mark: Well, you know, I always explain, we started Stagwell eight years ago, you know, at zero.
[00:13:55] We're about two and a half billion in revenue now. We [00:14:00] continue to expand out, you know, globally and also globally. You know, building a series of tech, uh, of tech products. Uh, I feel that we're a teenager now, you know, we were a baby two or three years ago and, and, and we've got, we're, we're really now coming on as a challenger network, uh, and we're going to continue to challenge, but we think we have a lot of growth, a lot of growth ahead of us.
[00:14:23] Ilyse: Now there's a lot of things affecting the industry. A lot of major topics that are being discussed nonstop. What is your prediction for the end of 2020? 2024 and into 2025.
[00:14:36] Mark: Look, I think this is going to be a good year for marketing. It's going to be 12 billion spent on politics. So that's always helpful, uh, to, to, you know, and, uh, and, you know, I think we have a, we have a good, you know, uh, We have several companies that are in the political space.
[00:14:52] Uh, I think that, that advertising is growing, uh, generally. I think 20, I think tech companies [00:15:00] have a lot of work to do in terms of the competition now that's, uh, that's occurring on who's going to really dominate in AI, if anybody, or how are people going to have different flavors of AI. So I think there's a lot of exciting stuff going on.
[00:15:14] I think 23 was a year I couldn't wait for it to finish. You know, it was not the year that we were hoping for. But 24, you know, sitting here in mid year, it's looking good.
[00:15:23] Damian: And that's it for this edition of The Current Podcast.
[00:15:26] We'll be back next week, so stay tuned.
[00:15:29] Ilyse: The Current Podcast's theme is by Love Caliber. The current team includes Cat Fessy and Sydney Cairns.
[00:15:35] Damian: Cairns. And remember,
[00:15:36] Mark: A lot of companies have a huge hole in their media buy. And that hole is news.
[00:15:43] Damian: I'm Damian.
[00:15:43] Ilyse: I'm Ilyse.
[00:15:44] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report
Polaris’ Chief Customer Growth Officer talks with The Current Podcast about how many of the company’s customers are multicultural and have preferred style over performance.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:59] Damian: I'm [00:01:00] Damian Fowler.
[00:01:05] Ilyse: And I'm Ilyse Liffreing. And
[00:01:07] Damian: welcome to this edition of The Current Podcast.
[00:01:09] Ilyse: This week, we're delighted to talk with Pam Kermisch, the Chief Customer Growth Officer at Polaris.
[00:01:15] Damian: Polaris was founded 70 years ago with the invention of the early snowmobile in 1954. Polaris takes its name after the North Star, and it's meant to reflect the location of the company's first headquarters in northern Minnesota.
[00:01:34] Ilyse: These days, Polaris is the global industry leader in power sports. Offering everything from Indian motorcycles to its off road racers. And all the accessories that go with them.
[00:01:44] Damian: During the pandemic, the brands saw a surge of interest in its vehicles as people embraced outdoor activity. Although it started out as a specialized brand, it continues to build on its popularity through its marketing campaign. Think outside.
[00:02:03] Pam: Back in 1954, two brothers and a best friend decided they way, faster to get to their location. And they literally strapped a motor to the back of a sled and created the first snowmobile. It was ingenuity at its best.
[00:02:20] And when I think about Polaris today, We have recreational vehicles. We have motorcycles. We have off road vehicles. We have boats. We also have utility vehicles that help people do work smarter. And at the end of the day, it's really about getting people outside and helping to have a better way to do things, whether it's working smarter or on the recreational side, having the most epic experiences with your friends and family.
[00:02:47] Ilyse: Very nice. Now in 2019, the brand actually underwent a new rebranding with a new Think Outside campaign.
[00:02:56] Ilyse: I read that there is a goal to basically grow the base [00:03:00] by 50 percent by tapping into your existing base and finding new customers as well. What was your strategy around that and how has it played out to this point?
[00:03:11] Pam: Yes. So in 2019, We really took a look at talking to our existing customers, talking to potential intenders of our brands and talking to people we thought might be interested in what we offer. And we did some great consumer research. And what we learned is at the heart of it, we tapped into what they really care about.
[00:03:35] And what we found is what our current existing owners care about. More people could care about. We just had to find the right people. We had to reach out to them. We had to show them how this could fit into their lives and introduce them to our brand. And it's really been a huge effort the past few years. To find the right people and show them how this could fit in with what they already do and make it better. And on top of bringing in more new customers, it's also bringing in new people that look a little different than our core customers.
[00:04:11] Damian: Very interesting, because when you think what sell in a way, kind of very specialized, I don't know whether I'd it niche.
[00:04:22] Pam: you know, I think when you look at household penetration off road vehicles, for example, household - So you're right. It's not something where it's 70, 80, 90 percent of the market has one of these. But what I will say is if you think about some of the audiences. We do attract people love outdoor recreation. love being outside. They love adventure. They might do camping, they might do hiking, they might do fishing. We also think about the people who do property maintenance They're farmers, they're ranchers, They're hunters. So, when you think about those populations, they are much more likely to buy our products. But if you look at the penetration even within those, We don't have 80 90 percent of hunters, so there's still so much penetration opportunity within people who do the activities where it seems like they would really benefit from something that we could offer them.
[00:05:26] Damian: Was there a moment when you realized there was the potential to expand the audience? That's so interesting to me and I wonder how you found that opportunity.
[00:05:40] Pam: So I'm kind of a nerd, self admittedly kind of a nerd. And I really think that CRM and data and analytics played a huge role in this journey because prior to [00:06:00] having that type of capability, we actually didn't know how many customers we had. We had customers for decades, but we actually didn't know how many customers. We knew how many units we had sold, but units does not equal customers because you have people who have owned more than one over time. So going back a handful of years, we were able to Get CRM, take our data in, cleanse the data, de dupe our, people and, understand how many customers we had and set some goals and start measuring how many new customers came in each year.
[00:06:35] And when I say new customers, some were brand new to the category. Some had owned competitive vehicles before, but never bought from Polaris.
[00:06:45] Pam: some may have owned a used Polaris vehicle, but had never bought new from us. So It's not a flash in the pan sort of thing. This is a strategy that we really need to go after. And so it became very intentional to, of course, as the global leader, it's in our best interest to get existing customers and come back to buy again because we have the largest number of existing customers. But we also need to focus on bringing in new people and we've proven we can do it. So let's do it.
[00:07:17] Ilyse: And that first party data is huge to any brand. How is Polaris is actually getting your first-party data from customers? Can you explain that shopper journey a little bit? And may how that journey may be different from a traditional auto dealer.
[00:07:31] Pam: And Absolutely. So if you buy a car. It has to be warranty registered. So that manufacturer will know that you bought a car from them. So if anything should go wrong with warranty, that they are able to contact you. Very similar, when someone buys one of our vehicles and it gets warranty registered, we receive the customer information.
[00:07:54] And we certainly can use third party data to append that, but we know who owns that vehicle. [00:08:00] We also do have people who visit our website. In our dealerships, the majority of them, we call them multi line dealerships. So, they do sell Polaris, but they also may sell Honda, Yamaha, Kawasaki, Can Am. And so, you think of it very to being grocery store being in a cereal aisle, where you have all the competitors right there in the same you may think you're going to the cereal aisle to buy Frosted Flakes and Flip and buy multigrain cheerios.
[00:08:32] Pam: A customer can come to our dealership thinking they're going to buy a Polaris Ranger and that salesperson can flip to a Can Am Defender. And so when you think about it, it is in our best interest with marketing to try to get that customer as committed to which brand and which product they want as early in the journey as possible to make sure that they can't get flipped at the last minute at the dealership.
[00:08:59] Ilyse: You know, when it comes to digital marketing, because it's such a niche product, are there specific digital channels you've found to have more potential to reach the type of consumers you're trying to reach?
[00:09:20] Pam: You know, I would say it's less about it being one particular channel because at the end of the day, our, our customers are, they're all over the place
[00:09:31] in terms of their habits, their consumption habits, and whatnot. They're
[00:09:34] regular people. But what's more important to us is understanding the people who buy our products. So we do have our owners. We know who our owners are.
[00:09:44] And we can do third party data appending, we can do look alike modeling to understand. We can't afford to go after maybe everyone who loves the outdoors. That wouldn't make financial sense. We may not be able to afford to go after everyone who owns one or two or
[00:10:00] five acres of property or more around the country or the world. But what we can do is do look alike modeling and use that data with our media partners to try to get more narrowed in on: Who are the right hunters that we should be going after? Who are the right type of landowners? And part of it is not only being able to find the right people but understanding which populations which segments came to our ones ended up buying, and using that info to continually optimize. But also, lot of really, smart things these days where using our current inventory and using that our media to be able to reach out to the right show them this sportsman that you looked at recently is available right now at this dealer down the block and trying to [00:11:00] drive urgency there or using other types of data that we might have.
[00:11:04] whether they think they're shopping or not at that moment in time.
[00:11:08] Damian: I wonder how you're connecting this because adventure tourism is a big deal right. And that's a growig market. Is that something you're growing into?
[00:11:18] Pam: I, I Yes. So, several years ago we started something called Polaris Adventures. So certainly places rented off road vehicles in the past, but oftentimes they were the old ones kind of broken down and it was really important to us from a brand perspective. We're talking about if you're gonna do something from a brand perspective, build your brand. We wanted to make sure people were in the current vehicles, the most modern ones and the ones that we knew were going to give them the best experience. So we created something called Polaris Adventures. And you can go online and you can find Polaris Adventures and you can go to one of 270 locations. [00:12:00] 268 of them are in the United States.
[00:12:01] One is in Mexico. One's in New Zealand. And you can rent a Polaris Side by Side Razor. You can rent a Polaris Slingshot, which is a three wheel roadster. Think of a Batmobile. It looks like a Batmobile. it rides on road. You can rent an Indian motorcycle if you ride motorcycles. And so you can do that in all of these different markets. And I'll tell you, even though I work at the company, I have used Polaris Adventures. I've ridden in the dunes in Oregon. I've ridden in the desert in Arizona and Mexico. I've ridden in the mud trails of West Virginia, and all, all kinds of other markets. In each one of those is a different experience because the terrain is very different.
[00:12:42] Rock crawling in is completely different being in the and is completely different than being different than dunes in a
[00:12:59] Pam: It's an [00:13:00] amazing way to people experience it. And you know what? Not all go buy one some will never buy one. Some may buy maybe at a time in life when it fits them better. And others may just put it in their Instagram feed. And guess what? I promise this. If you were to do this activity and you were to put it, in your Instagram feed, it is the best FOMO ever. All of your friends are, you know, texting. Where are you? What are you doing? and they want a piece of that. So I think it's highly relevant in today's world. And I think we're just playing a part of this growing travel market.
[00:13:36] Ilyse: So, much fun. have fOMO right now. just even talking about and you know, it's
[00:13:48] Ilyse: You described your family not as the stereotypical sports kind of family, and I would imagine there's a bunch of Polaris customers that wouldn't qualify as the stereotypical power sports types of people. Are there any types of segments that you wouldn't expect that are interested in power sports vehicles?[00:14:00]
[00:14:08] Pam: So it's interesting if you think about maybe what you would expect to think about from traditional power sports customers. You know, you might think older white male and historically, maybe that's how the category had been, particularly with ATVs and whatnot. Like I said, half of our customers now are younger women multicultural. So let's blow that up right now. But what I will say is going back a number of years ago, We created a product called the slingshot Polaris slingshot.
[00:14:40] And like I said, it's a three wheeled vehicle. It rides on road. it's 5. 5 inches from the ground, open air cockpit. and it's very auto like, right? So now you can actually, get one that is automatic or manual. And, When we started with this vehicle, we assumed it was gonna be about performance because that's what a lot of power sports customers like.
[00:14:59] [00:15:00] And if you look at it, it kind of looks aggressive, so it looks like it's gonna go super fast. We marketed it. We even did demos on racetracks because it was all about performance. And it was doing okay, not phenomenal. And we actually looked at the data, and the data showed we had a much higher percentage of multicultural customers who own this vehicle, and that was really not typical of the industry.
[00:15:25] So we did consumer insights research to understand what brought them to Slingshot, why did they love it, and what we found was they weren't coming in because of performance. It was the style that really appealed to them and they loved that when they drove around in this slingshot heads turned.
[00:15:42] And when we said there's something to this, let's start marketing that way. First of all, I think the brand is 40 plus percent multicultural customers today. But on top of that, the white customers that are buying this love style, [00:16:00] The personalization. They love the same what's interesting is when you go slingshot meetups, a lot local groups, clubs that have organized and they all get together.
[00:16:10] When you at
[00:16:13] Damian: has
[00:16:14] Pam: diverse group of people you've ever seen. You multicultural, old, young, it might not be a group of people you ever would have imagined congregating, but they are loving each other and checking out each other's slingshots and talking about getting together and how much they love it.
[00:16:32] And it's this common community that has brought these people together. And so I think we've learned some great lessons about. Sometimes you think you know, and one of the number one rules of marketing is, you know, you don't know, don't make assumptions. You need to actually listen to customers, learn from them and be willing to adapt. And that's been an awesome learning and really opened our eyes to opportunity within power sports.
[00:16:57] Ilyse: that's a
[00:16:57] good
[00:16:58] Pam: the [00:17:00] things and to these there's of that look
[00:17:11] Damian: vehicles. And then that goes out on social
[00:17:13] Pam: is
[00:17:13] Damian: that a whole
[00:17:16] Pam: know, white Absolutely. You know what? You know what? Here's what I will tell you. Going back, I joined Polaris in 2015 and we had done some research on the Indian motorcycle brand and the path to purchase and
[00:17:32] back then, the number one way that people came in on the brand was word of mouth. And that's been probably for centuries and for decades, it's word of mouth.
[00:17:43] Pam: And in motorcycles, it might been, know, yes, your friends and family, but go to a truck stop and someone else there and you're checking out their bike you're asking they ask you how you like it. The beautiful thing today that definitely still happens a lot. But with digital[00:18:00]
[00:18:00] Ilyse: kind
[00:18:00] Pam: learn from and share with. People they don't even know. And so you see people when they're shopping for a vehicle, they will ask, how do you like yours? What do you like? What don't you like? And it's authentic word of mouth. And so from a brand perspective, if you create something wonderful and people love it and you make them feel valued and appreciated as customers, then hopefully they're the ones out there selling for you.
[00:18:28] Ilyse: You know, you mentioned social media, and typically, at least, the younger generation are on social media. Is it more difficult to inspire those younger generations. They're known for being tied to their technology, I know the pandemic at least many people looked to go outside more. Now that it's more safe, is it harder to inspire those generations to think outside?
[00:19:03] Pam: I don't think so. what I will say is getting outside with friends and family and sharing experiences. is something people, especially our younger people love to do. I think a lot of our younger customers will tell you that if they're new to the workforce or if they're in school, you know, they feel handcuffed to their responsibilities.
[00:19:26] Sometimes when you get outside, you put the phone in the glove box and you go out for a ride and you just you turn the tunes on. You have a great time. You'll get back to the phone later. No question. And you're going to stop and capture a lot of content and share with your friends on on Snapchat and whatnot.
[00:19:42] But it is 100 percent about sharing experiences, and they love that. But I will tell you, going back in time, Innovation has always fueled our category. That's just the new news. People always want the newest, latest thing. And for a long time, it was power, horsepower. Is it more [00:20:00] CCs? Is it, you know, bigger, better, stronger, faster? I will tell you, technology is playing a very large role now in what people are choosing to shop for.
[00:20:10] So, a couple proof are, we have something called Ride Command. So, I want you to think about it. If you were off roading or going on a snowmobile ride, you're not on roads. And a lot of times you lose cell service out there. One of the biggest fears people have is getting lost. You're out there in the middle of the woods and you get lost. You're out there in the middle of the desert dunes, you get lost. We have ride command technology that the maps will work even when your cell phone service doesn't work. And that's super helpful. It also has a, capability ride. So say I out with different,
[00:20:46] Ilyse: probably
[00:20:48] Pam: we want to ride together, but I don't want to ride so close that I'm inhaling your dust or your exhaust. So we out, but you might come to a fork in the road and take a left and I go to the right. Now we lose each other. [00:21:00] That's not fun either. The ride command has a group ride function where I can see all the other razors in my group. So we can ride together. I'm doing air quotes, but we can separate. And then I still know where everyone is. So technology, it's not technology for technology's sake. It's actually making the ride experience better. And I think that is extremely relevant to our younger customers.
[00:21:29] called group go five
[00:21:32] Ilyse: sales climb. as, as more
[00:21:43] Pam: want to spread for sure. You know, well, at my house, you know, at least in the beginning, I was Clorox wiping the groceries. So I think we all kind of have vague memories of those days and. Life wasn't very fun because you were trapped inside unless you could go outside on a walk or do something. And we saw our [00:22:00] business really sore because on one hand, from a recreational standpoint, it was something that you could do safely outside and actually think about off road riding. You could be riding with a bunch of friends and you could each be in your own vehicle. So you were safe. You're wearing a helmet. I spent that first summer of 2020. A lot of weekends out on our boat and out there, the world felt normal. So for sure we saw sales surge.
[00:22:27] And we were concerned, though, thinking, Okay, this is great. But when people have other options to spend their money on, are they gonna just trade in all these vehicles and flood the market? And suddenly we're not gonna have a sustainable, you know, healthy business that we've been having. It's not the case.
[00:22:47] We actually look very much at our repurchase rates, and we look at short term one year. We look at three year. We look at five year. We look at 10 year. When you look at the one and three year repurchase rates, they are [00:23:00] very healthy and the five year repurchase rate is very, very strong, which tells you that the customers we brought in in 2020, 2021, they aren't just abandoning.
[00:23:12] They actually have found something that really works for them and they're continuing to come back and buy again.
[00:23:18] And by the way, they're going to tell their friends and family. So we believe that, It's a, good example of I always say never waste a crisis. pandemic was tough for a lot of reasons, but it certainly gave our business a boost and brought in a lot of new customers. And it seems like it's a very healthy population we in.
[00:24:36] Damian: That's it for this edition of The Current Podcast. We'll be back next week, so stay tuned.
[00:24:42] Ilyse: The current Podcast theme is by Love and Caliber. The current team includes Kat Fessy and Sydney Cairns.
[00:24:48] Damian: And remember,
[00:24:49] Pam: find the right show them how this could fit in with what they already do and make it better.
[00:24:56] Damian: I'm Damian. And
[00:24:57] Ilyse: And I'm Ilyse. And
[00:24:58] Damian: we'll see you next time. And [00:25:00] if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.
Foxtel Media CEO Mark Frain dishes on how the customer and advertising experience are shifting amid the proliferation of streaming.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damien Fowler.
[00:00:01] Ilyse: And I'm Ilyse Liffreing.
[00:00:02] Damian: And welcome to this edition of The Current Podcast.
[00:00:05] Ilyse: This week we're delighted to speak with Mark Fra, the CEO of Foxtail Media.
[00:00:10] Damian: Foxtel Media is the advertising arm of the Foxtel Group, one of Australia's leading media companies, with more than 4. 7 million subscribers.
[00:00:19] Ilyse: Like many legacy broadcasters, over the last decade, Foxtel has reinvented itself for the Netflix era, building on its pay TV subscription model by adding in streaming platforms such as Binge and Kayo. It supports streaming services.
[00:00:35] Damian: And last year, Foxtel introduced an ad tier on the service, following in the footsteps of Netflix and Disney We started by asking Mark about the state of the television advertising model in Australia this year.
[00:00:46] Mark: Yeah, I mean, I think like the rest of the world, the TV market here in Australia is, going through significant change with the growth of, all of the streaming platforms with many of the, add tiers and add capabilities starting [00:01:00] to, launch in the Australian marketplace. Probably what is pretty unique, in terms of the Australian marketplace is that there's currently three major freeware broadcasters that all have their own, digital, platforms as well.
[00:01:14] so they're managing transition from linear to digital themselves, but at the same time you've just got this enormous groundswell of video inventory coming from the streaming player. So we're, certainly getting towards a tipping point in the trends in the Australian TV marketplace at the moment.
[00:01:31] Damian: Mark, could you just, put into perspective the growth of streaming that you've seen at Foxtel?
[00:01:41] Mark: Foxtel has been on an enormous transformation for last four or five years. And if I look, probably four or five years ago, just under 10 percent of our subscribers were streaming customers. And if I look at where we are today, that number is just under [00:02:00] 70%. So a quantum growth in the type of customer we've got.
[00:02:04] And critically, what that has also meant is that in the last four or five years, the Foxtel customer base Has grown pretty much close to 100 percent from where it was previously, and that's all been down to, the growth of streaming. And secondly, if I look at it from a Foxtel Media, advertising perspective.
[00:02:27] And probably only three years ago that seven or eight percent of our advertising revenue came from digital. As we go into the next financial year, that number will be just under 60%. So we're the beneficiary of that change in customer base from Foxtel, from traditional broadcast TV business to one now that is, is leading and driving streaming the Australian marketplace.
[00:02:51] Damian: Yeah, in terms of Foxtel, could you talk us through your relationship between, your existing linear model and [00:03:00] your launching of an ad tier on Binge?
[00:03:03] Mark: Yeah. So traditionally, Foxtel has been the, major pay TV provider. In the Australian marketplace, with numerous, linear channels from sport, entertainment, news, all the typical, pay TV channels you would have, coupled with, two digital platforms, Foxtel Now, that have really been the IP services of Foxtel.
[00:03:26] And then over the last four to five years, the Foxtel Group. Has launched heavily into streaming. Firstly, it launched KO, a dedicated sports streaming platform with over 40 premium sports, including both the major codes locally in Australia and a lot of the global content like Formula One, as an example.
[00:03:50] About 18 months, two years after launch of KO, we then launched Binge. which is K. O. 's sister if you like, entertainment [00:04:00] platform backed by a lot of HBO, NBCU, content. So, made a significant jump, into streaming in the last three to four years. And that has allowed the Foxtel group to pretty much double its subscriber count, from being a traditional pay TV company to now one that plays heavily in streaming.
[00:04:19] Damian: You know, in the streaming ecosystem, which we all know is highly competitive, right now, everyone's looking for subscribers and numbers, what's the competitive advantage that Binge brings to the table?
[00:04:32] Mark: Yeah. Yeah, you're right. I mean, number one, it's enormously competitive. I think table stakes now are a premium level of content. unfortunately from the global content producers that we work with, coupled with our local content, I think we've got a significant library of content that has debt. I think if you, scratch the surface on some of the content offerings, you don't get the depth of premium content.
[00:04:59] On [00:05:00] Binge, we've been very strict on running Four to five minutes of ads an hour on very tight on frequency capping just to make sure that, we give those customers that are buying into the value equation of subscription and advertising a very good customer experience, which includes both the content they're watching and also the advertising experience.
[00:05:22] Ilyse: would you say Binge competes with other streamers when it comes to like content acquisition, production, and then maybe like ad experience?
[00:05:33] Mark: Yeah. I think we're fortunate enough, that the way that almost the origins of the Foxtel pay TV business has given us relationships and longstanding content relationships with the likes of NBCU, Warner Brothers, Discovery, the BBC group, et cetera. So many of the big globally renowned, media businesses.
[00:05:59] [00:06:00] So that has allowed us to transition a lot of that content from the traditional pay TV channels. onto an on demand platform like Binge, and then we've been a significant investor in local content. So we've been able to both produce a number of Binge originals but at the same time leverage the existing local content we've already produced across the Foxtel group. Almost, I mean, we often describe it internally as one kitchen with many restaurants. and by that, I mean by the many different points of distribution, whether that be a linear paid TV channel, or whether that be a binge, on demand platform.
[00:06:45] so we talk a lot about, watchability as a term in our business and making sure that every platform that we represent, that the ad experience stacks up to be the most watchable experience for customers.
[00:06:59] Ilyse: And does the [00:07:00] content you have speak to specific audiences? Or are you finding that your audience is really across the board?
[00:07:11] Mark: There's no question. I think that's the beauty of the streaming platforms that various elements of kind of content bringing a very different audience. And we're in the streamer landscape, you're we're in this very much pause play mentality from a customer perspective. So if that content is so appealing for customers, they may come in.
[00:07:35] And binge on that content for X amount of weeks or months and then dip back out.
[00:07:40] Particularly with the under younger end of the market that come in and out and then maybe into another streaming platform where they've cited another bit of world kind of renowned content that's got heaps of social buzz with it.
[00:07:52] Ilyse: Mm hmm. Yeah, right? That's what I was gonna say.
[00:07:56] Damian: I think. Not to malign as a Gen X er. As [00:08:00] a millennial, I'm not
[00:08:03] Ilyse: anything. Um, and so, that's interesting when you talk about, content in that way. and that has a lot to do with, viewer retention, as you mentioned. Is there anything else that, Foxtail is envisioning or, strategizing? to really hold onto those viewers or attract new ones.
[00:08:25] Mark: Yeah, I mean, I, I think from our perspective, we've gotta, we've gotta continue to evolve, the customer and product experience. There is, there's not a moment to stand still in this streaming environment. whether that be improving the. The viewer quality from HD to 4K to 8K. I think customer expectations are so high.
[00:08:50] And whatever we do, in terms of the content experience and the ad experience, we just got to make sure that total value equation, stacks up.
[00:09:00] Ilyse: Yeah, you know, in the U. S. at least, bundling is very popular. especially if you're a major network like Disney that's bundling like three different of its like streaming services. What about when it comes to like partnerships with you guys? Are you looking into any of those types of offerings when it comes to like bundling?
[00:09:22] Mark: Or, or are you looking to like partner with any network or streamer? , is kind of partnership is embedded in our model. whether that be, as I mentioned before, that the content partners, the Warner Brothers, the NBC use, of this world. So we've had a long standing relationships and partners with them moving forward and going back to the earlier points upon the value equation.
[00:09:49] even in the core, Foxtel set top box business over time, we've continued to add, all of the streaming platforms to that service, whether it be Netflix, whether it be [00:10:00] Amazon, whether it be Paramount. So, customers have felt they were getting more of their content choices, more of their streaming platforms in, in one place.
[00:10:10] So there's been a level of partnership with the streamers right from the outset even, with the core set, top box business, and we've carried that on, to where we are. today, in the last, few weeks we launched, Hubble, which is our, new streaming ion business. and within that, platform we've got a stack and save, opportunity for customers where.
[00:10:33] to your point on bundling, the more subscriptions they have they get a bottom line discount and I think there's so many customers out there I put myself in that bracket that you sign up to numerous streaming services and half the time You don't know exactly how many you've got and how much you're paying for.
[00:10:50] Um, so we've actually centralized that into One platform, one invoice, with a stack and save, kind of discount position for customers that have multiple [00:11:00] streaming options. So partnership is embedded in our model, no question.
[00:11:03] Damian: Yeah, that's
[00:11:04] Ilyse: easy. I wish we had that here, honestly. Because there's not one, really.
[00:11:08] Damian: Yeah, right.
[00:11:09] Ilyse: Kind of have to look back on everything you're charging, and that's, your card, and that's, that's
[00:11:16] Mark: it doesn't take long for months to pass and realize you're still paying for Yeah,
[00:11:24] Mark: In terms of like your kind of customer research or, your audience first approach, what are you hearing from your customers vis a vis, ads, the ad, not the ad experience per se, but whether, ads are a game changer for them, you know, in this era of kind of subscription fatigue and all of that.
[00:11:43] Damian: Are customers receptive to that ad load you're talking about and is that basically a selling point for Binge and your streaming channels when it comes to advertisers and attracting advertisers to those platforms?
[00:11:57] Mark: in everything we do from a, [00:12:00] an advertising perspective to, respect our customers. We've got a very, customer first mentality within the Foxtel group. It's one of our, it's one of our values. And to your point, we test, the various levels. As I mentioned earlier, engagement and attention to our customers.
[00:12:17] in terms of their level of response to the content and the advertising. And we kind of, we've seen their perceptions of, the binge brand hold really strong as we've added advertising to that platform. And you've got to look at the economic backdrop here. disposable incomes are under significant kind of, pressure, the hike in interest rates globally over the last.
[00:12:43] 12 to 18 months have put enormous pressure on household spending. So I think the introduction of the ad tiers, not just the binge, but for a lot of the global players has been a, another, kickstart to, subscriber [00:13:00] growth levels, across the industry. And it just gives customers optionality.
[00:13:06] and probably what was interesting When we added advertising to the binge platform, clearly we've done some modeling on what might be the churn levels of customer out of that tier and what might be the spin up into the next tier without advertising. And in both kind of cases, number one, the actual churn level in terms of those customers pulling out the platform was well under expectations.
[00:13:39] in the zero point something kind of percent and a handful of more customers of spun up. So net, we were left with a scalable audience, even probably bigger than we actually modeled for our advertisers. So it was a really good story. So I think the research got us in the right place in terms of the ad experience we put forward.
[00:14:00] Ilyse: I know we've written quite a bit about how, like, streaming is democratizing, sports in a way for, maybe perhaps, smaller brands to get in on sports, versus in a linear environment where it's, More expensive, usually. is that what you're experiencing? Is there a difference in brands wanting to advertise on linear versus streaming? Or, and how is that like playing out?
[00:14:25] Mark: it's a good question. A lot of our, premium brands have transitioned into streaming at the same time to ensure they've got. Yeah. Brand presence and share a voice across both live linear and into streaming, but you're right that there's no doubt it's given opportunities for smaller brands to get on board and be involved in live sport, which historically may have been, cost prohibitive.
[00:14:52] and what I would say in almost summary of that trend, we've, on our, major [00:15:00] sporting, properties here in Australia, whether that be the cricket, whether that be the AFL or the NRL, which I've already mentioned, in the last couple of years, we've had a record number of advertising partners on all of those kind of codes.
[00:15:12] And that's been the blend of those big premium advertisers that have always been involved in sport, that have had the financial bandwidth to do so. Plus, A multitude of new brands that have come on, streaming. So we've got more, if you like major sports partners than you've ever had before.
[00:15:30] Ilyse: I feel like it's also pretty interesting because when it comes to live sports streaming kind of offers an environment where, I don't know you can watch them at any point. For one thing, and then two, we've, at least we've written about how some more like niche sports are appearing in streaming environments, versus linear, and I'm curious what you think about that. Pickleball.
[00:16:01] Mark: Great example. very timely, actually. last night I was, fortunate enough to be out with, wheelchair rugby Australia. and as an example, we brought, their content onto the KO platform, probably four years ago now. And what that has done to that code in particular, it's allowed them to grow exponentially in the number of teams that now play wheelchair rugby in the Australian marketplace, the number of participants they've got.
[00:16:36] the number of females that are now playing it, and across those three or four years, the quality of that team has meant that they've been able to, they've won the World Cup, they've won the World Championships, and they're off to, the Olympics, later this year.
[00:16:53] So, outside of the big ticket, sports, It's also great to show the impact you could [00:17:00] have on other sports that wouldn't be kind of, that aren't out there of competing for sports rights. It's a very different model about how you support them and their corporate growth moving forward.
[00:17:12] Ilyse: know, it, it seems, even in Australia, it's a very fragmented media ecosystem. How are you thinking about measuring audiences, especially now with the rise of, alternative currencies? what's, the Aussie gold standard,
[00:17:31] Mark: it's a fascinating question and I, myself and my team spend a lot of time, observing, reading, going to the U. S., the U. K. and observing the trends. And over the last probably three to four years, I mean, there has been a An explosion of alternate currencies in the U. S. when you look at the likes of, video amp and others taking the challenge to Nielsen, we observed that.
[00:17:56] And whilst I don't think we're going to get to the [00:18:00] same level of different currencies in the Australian marketplace, I think you will see, publishers Probably grab the accountability of measurement themselves. moving forward. in this market, we've got, post town, which is a kind of, Nielsen supported, service and from a Fox sale perspective, we're part of that.
[00:18:24] Industry standard, but we also recognize that we've got, set up box data with IP return path. We've got multiple streaming platforms. So a there's a role for us to make sure We leverage, that data probably more than we ever have. and that's not just to use it, internally in terms of retention and everything else you use your own data for.
[00:18:52] But how do we actually use that for not just targeted advertising? How do we use it as a currency [00:19:00] moving forward? Because the depth of that data is so strong.
[00:19:05] Now, While you were stating some of the various partnerships that you do have. And I'm just curious because it sounds like so many. how do you possibly manage all the partnerships? Especially with Foxtail's, yearly roadmap. I
[00:19:24] it's a great question. I think, fortunately, a lot of, the content deals that the Foxtel business has is, Number one, they're multi year agreements, and therefore, the actual, the start and renegotiation dates, a lot of, a lot of those content deals are spread out across multiple years, so that gives us an opportunity to probably manage the heavy lifting part of those deals, which is often the renegotiation, and the work to move forward to continue a deal.
[00:19:58] [00:20:00] But I think, this is not just, on the content side, this is certainly on the advertising side. One piece of feedback that we continually we get and probably more so than ever right now is the importance of senior relationships in the industry. Never have we seen probably an influx of such scale in terms of global streaming competitors coming to the market, particularly on The advertising and add to your side.
[00:20:35] And one thing that I think we can, that can continue to stand the same good state is the senior level of relationships that we hold in the industry. And that's not, that's not exclusive to Australia. I think that's in any market. and that's one part that. We take very seriously in terms of how we manage, our partnerships, whether they be content or advertiser [00:21:00] related.
[00:21:00] Damian: I guess we'd like to get a perspective of your, year in view. what's exciting you about the next six months?
[00:21:09] Mark: I think going back to the point of kind of competition, we'll have, Amazon Prime will launch, its, advertising service, from a streaming video perspective later this year. Um, Paramount Plus have just announced the launch of their, ad tier. So there's enormous activity and interest in the category.
[00:21:29] So our focus is number one, to be part of that growth curve in streaming video, if not leading in many, many areas, and probably one of the areas that I'm being truly honest, I wouldn't have forecast that it. Thank you. our involvement as a business, whether that be Foxtel Media or me personally, in audiences and in measurement, I've never been as personally involved, in that area.
[00:21:59] And [00:22:00] I think there's a, there's an opportunity to get that right. and most importantly, getting that stands us in great stead for future growth. So seeing an explosion in both currencies and measurement, attention, engagement, and new metrics. So that feels like the new battleground for us moving forward and one that from a Foxtel perspective, we want to make sure that we lead.
[00:22:27] Mark: And that's it for this edition of The Current Podcast. We'll be back next week, so stay tuned.
[00:22:33] Ilyse: The current podcast theme is by Love and Caliber. The current team includes Cat Vessey and Sydney Cairns.
[00:22:39] Damian: And remember I'm Damian.
[00:22:41] Ilyse: I'm Ilyse.
[00:22:42] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review.
[00:22:47] Also, tune in to our other podcast, The Current Report.
Chief Marketing Officer Kory Marchisotto joins The Current Podcast to discuss why the makeup brand e.l.f. Beauty decided to air a Super Bowl ad, and why other female-driven brands are missing out.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian Fowler.
[00:00:01] Ilyse: And I'm Ilyse Liffreing
[00:00:02] Damian: welcome to this edition of The Current Podcast.
[00:00:05] Ilyse: This week, we're delighted to talk with Kory Marchisotto, the Chief Marketing Officer at e.l.f. Beauty.
[00:00:11] Damian: Now maybe I'm the only one here, but I didn't realize that the word elf stands for eyes, lips and face. The brand was launched in 2004 and it filled a gap in the marketplace for inexpensive, high quality cosmetics.
[00:00:26] Ilyse: Twenty years later, and e.l.f. has become a powerhouse brand. It went public in 2016, and since then has seen spectacular growth. Its sales soared last year, driven by retail channels and some seriously buzzy marketing.
[00:00:42] Damian: We started by asking Kory, what gives the e.l.f. brand the edge in this very competitive marketplace?
[00:00:50] Damian: So Kory, how do you think of the e.l.f. brand in this very competitive field? And what's your competitive advantage as it were?
[00:00:58] Kory: I like to think about [00:01:00] e.l.f. as a brand of the people, by the people, for the people, created with the people. And for that to be true, we need to be totally in tune and have our finger on the pulse of what the people want, what they like, what are their unique needs, wants, and desires. So we really think about ourselves as stewards of our community's vision of e.l.f.
[00:01:22] And that's a very unique place to be standing. How much value and emphasis we put on that community. They're, citizens of the brand. They have a vote, they have a seat at every table, and that is by definition, a very unique competitive advantage.,
[00:01:41] Damian: speaking of competitive advantage, you've had tremendous, stupendous growth over the last five years. And I'm just curious to hear from you, what is supercharging this?
[00:01:51] Kory: Over the last five years, we've grown our stock price. 1, 567 percent to be exact, [00:02:00] making us the number one performing stock on the New York Stock Exchange out of 1, 600. and 15 companies. So I think that definitely deserves your tremendous stupendous.
[00:02:11] Damian: Okay, that's good. That's good. And what do you think, if you had to put your finger on two or three factors, what is it that is driving this upward, curve, as it were?
[00:02:24] Kory: There's quite a few things and in the essence of time, I'll distill it to the three I think are most important. But for your audience, I think it's really important to go back to the beginning to understand the ethos of the brand, because it's the ethos that powers the purpose that powers the people, That power the performance.
[00:02:42] So if you go back to the origins of elf in 2004, let's remember at this time Facebook hadn't launched yet. iPhones don't exist. Imagine this. Can you wrap your heads around that?
[00:02:56] And So so we're back in the dark ages folks [00:03:00] and our founders dreamt up the impossible and made it happen. So they had this crazy idea that they could create premium quality cosmetics And sell it for one dollar over the internet.
[00:03:13] So everybody told them, first and foremost, you cannot create premium quality cosmetics and sell it for a dollar. That's impossible. Second, you certainly can't sell color cosmetics over the internet. And third, even if you figure it out how to do number one and number two, you'll never make this a profitable business.
[00:03:30] And aren't we glad that our founders disrupted from day one. So they have this renegade spirit, this bias for action, this quest to do the impossible.
[00:03:42] One is our core value proposition, our very unique ability to deliver premium quality cosmetics at a jaw dropping value. The second is our powerhouse innovation,
[00:03:55] And then the third is our disruptive marketing engine.
[00:03:58] So our core value, [00:04:00] proposition, our powerhouse innovation and our disruptive marketing engine are definitely the drivers of our last 20 consecutive quarters of growth.
[00:04:08]
[00:04:09] Ilyse: I'm curious about your out of box marketing because you guys are known for that. You really are. how did you cultivate this approach when you came on board as cMO?
[00:04:20] Kory: at that time, there were some major shifts happening in the company.
[00:04:25] So, Every company goes through various stages of growth, especially in a 20 year history. And the stage that I had walked into was a transformation from investing in retail. into marketing. marketing and digital, so when I started the company in at the onset of 2019, we were investing 7%. Of net sales into marketing and digital. Fast forward. We are now up to 24%. So you can see that there's a big investment in the power of the brand and building brand equity and building Brand [00:05:00] evangelism and all the things that we've been able to do over time.
[00:05:02] So we see that as an enormous responsibility to make their time worthwhile.
[00:05:08] It's interesting you call yourself an entertainment company. Or you see yourself as an entertainment company. And I would assume like The new digital channels that you play in have really helped you become such a company in this day and age, especially if you're selling something to consumers online, in stores, etc. To extent would you say digital channels have really opened up these possibilities to you? And I guess, channels do you like playing in the best?
[00:05:45] We love all our channels equally, right? It's like our children. We love all our products. We love all our channels. I see all of our channels as learning opportunities. And the most important thing to remember is that they're all there to teach you [00:06:00] something different. And even if it's the same person who's coming to see you on Instagram and TikTok, they're actually on each platform for a different reason. So it's critical that we understand what is unique about the platform itself and what is unique about the reason that the person is coming to the platform. And that gives us a unique set of experiences and learnings.
[00:06:26] So I think you see the pattern here that every time. We enter into a new platform. We go in with a beginner's mindset. We ask ourselves, how do we create something that is going to add a tremendous amount of value to the people that are here on the platform at the intersection of what it is that we do great. So it's really always this trifecta of beauty, culture, and entertainment. And we're bringing the best of all three to the communities on each platform.
[00:06:56] Obviously you're known for your social media strategy, like [00:07:00] with this partnership with Liquid Death, but this year you also ran a national Super Bowl ad for the first time, which is always exciting for the first time for a brand. this one featured Judge Judy and cast members from Suits. So a little nostalgic on one hand. Can you talk about the strategy here? You obviously went into the humor category. What was the thinking behind this Super Bowl ad?
[00:07:27] So there's this big conversation in the beauty space about dupes and your audience can't see me, but I'm making quotes because that has really ignited this entire conversation about people talking to each other about judging for all sorts of things in, the beauty space. So we started to see this conversation really take off, especially around price and people judging each other for, paying for overpriced makeup. So then we looked at what was happening in culture and [00:08:00] entertainment, and there was courtroom drama taking off everywhere.
[00:08:03] Suits had its best year of viewership. Judge Judy was the number one program on Amazon Freeview. You had all things happening with Ronald from jury duty. so it was just this incredible cultural moment of all this courtroom drama coming together. And we said, well, that's pretty outstanding.
[00:08:23] There's a lot of drama about judging and makeup injustice happening in the beauty world, and there's this incredible moment of courtroom drama happening over here. So once we tuned into both of those things, then we said, Okay, now let's put our head in the
[00:08:38] stars and dream what could be possible. And only e.l.f. could dream big enough to say, what if we actually got the cast of suits? What if we actually went and got them? Judge Judy, what if we actually went and got Ronald and put him in our jury box? And these are really big lofty dreams, and that's how we love to operate at e.l.f.
[00:08:59] [00:09:00] So that was our first national spot, which we decided to do after we tested the year prior with a regional spot. And when we had done the regional spot the year prior, it had broken every record we could have ever imagined, which was the signal that we needed to tell us to lean in even harder.
[00:09:23] Ilyse: And if I'm not mistaken, that one also had some star power in it with Jennifer Coolidge. One of my favorite actresses
[00:09:31] Kory: major stars of that campaign, Jennifer Coolidge and Power Grip Primer.
[00:09:36] Ilyse: Yeah. What did you guys learn from the regional ad, specifically, if there are any lessons?
[00:09:41] Kory: So we had never done a TV spot before at that time. So to your earlier point, we grew up in digital or a digital native brand. When we started to invest larger dollars into marketing and digital, we expanded all of our digital platforms. [00:10:00] First, we learned all about creating short form, medium form and even longer form entertainment content. So we had been building that muscle over time, and we also saw that our awareness numbers were rising and we wanted to fuel the awareness and open the aperture to more audiences and expose more people to the magic of Elf. we decided to take Jennifer Coolidge and Power Grip Primer to the biggest stage that there is, which is the big game. And our hypothesis was on that particular stage, women were being underserved. you have at that time 115 million people viewing the big game, of which 75 percent said the number one thing that they like about Super Bowl Sunday is The commercials. So you have a highly engaged audience and 50% of that audience is women.
[00:10:58] So by every metric, it [00:11:00] was massively successful.
[00:11:02] Ilyse: That is very interesting. Especially because this year, women's sports, women's live sports, are definitely, on the upswing. And there's, it seems to be, like, more brands want to partake, more, networks want to show women's sports, more streaming, platforms want to show women's live sports.
[00:11:24] curious. If you intend to partake in any like women's specific sports in the future and how might that impact the e. l. f. brand?
[00:11:37] Kory: We're very excited about women in sports, and we've been in the arena for quite some time, and we believe very strongly in supporting This initiative and empowering young women to not only engage in sports, but also stay in sports. I don't remember the exact stat off the top of my head, but there is a large amount [00:12:00] of young girls who drop out of sports at a very young age, and we really want to work together with powerful.
[00:12:07] Women in sports to change that. So we've actually been working together with Billie Jean King, who is an extraordinary legend not only in tennis, but in multiple sports as well as in women's equality at large and Working together with her has been incredible. We're supporting her women's National Hockey League And when you start to get around all of these young women and watch their, watch them unleash their incredible talents and support them along their journey, it's real fuel to want to go further and deeper.
[00:12:45] We're also, we also worked last year with Catherine Legg, who's a female driver at the Indy 500. So there's a lot of bold. Disruptors like a Billie Jean King, like a Katherine Legg, that [00:13:00] we will continue to work with to empower women in sports.
[00:13:05] Damian: One thing you said earlier that was really interesting to me is that you really listen in to your community. And, when you launch initiatives like this, is this, do you see this as part of a sort of feedback loop that you tap into? And I'd just be curious to hear more about that audience first approach and that whole concept of listening.
[00:13:24] Because I haven't heard that from every marketer.
[00:13:27] Kory: I think it's fundamental and it's a service approach. And as I said earlier, when you're a brand of the people, by the people, for the people, you have to create with the people. This is their brand, not mine. I'm here to steward it for them. I'm here to shape it with them. So the only way I can do that is by listening very intently.
[00:13:47] And a lot of people in my position rely on reports. I've seen reports. I don't want to have a relationship with reports. I want to have a relationship with people. So as the CMO of the [00:14:00] company, I'm probably more connected to our audience than anybody in our company. And the reason I do that is to make sure that they're with me in every room I go into, whether it's the boardroom, or the C suite, or every meeting, I am there as a representative of them.
[00:14:17] And again, I take this back to, they're citizens and I'm their representative. And I'm here to legislate on their behalf.
[00:14:26] Another thing that I do is I go on TikTok lives And have direct conversations with them, especially if something surfaces. So for example, it was surfaced to us that our community was very unhappy that we had taken one of our limited edition collections off the market. And that was called Jelly Pop.
[00:14:45] It was a watermelon infused. And I was really curious about that because we had replaced it with Power Grip Primer and the reason we did that is very similar formula. The reason we did that is because we heard a lot of people say that they [00:15:00] didn't want to have fragrance in it. So we're like, okay, well, why don't we make it unscented? They love the sticky texture. We'll create this thing called Power Grip Primer and, it was wildly successful. But we still had this undercurrent. No matter what post we did, people were like, bring back Jelly Peps. Primer and I'm like, I need to understand more about this. So I went on a TikTok live to understand what is it that you don't have that you want and We really got under the hood to understand that it was an obsession with the texture, the format, and the scent.
[00:15:32] They wanted it pink and they wanted it watermelon. So, so once I found that out, I said, I, really appreciate you. Thank you for. Sharing your vote with me on what it is that you want next. Well, now you're going to need to come on a journey with me because it takes a lot to move a product through an organization.
[00:15:50] So I took our head of innovation and he was the next tech talk live, then our head of operations, our CFO. And then if they were convincing enough, which they were, they finally [00:16:00] got to the CEO. So our CEO came on tech talk live for our community to convince him to bring back jelly pop primer. And he folded in like 60 seconds. he saw the exclamation points, the capital letters, the, the nonstop thread, there was like 5, 000 people and they were all like, bring back jelly beans. It's okay. I'll bring it back over into 60 seconds. Done. So I think you get, I tell you that story because I think it gives you a unique flavor of how committed our organization is to the people we serve.
[00:16:31] Our CFO and our CEO are bringing our community to those Conversations because they're directly involved with them and they have their own stories to tell about the magic of that community.
[00:16:42] So, they're basically recognizing that they are a citizen of our brand.
[00:16:49] Damian: I love the, the way you talk about citizens of, the brand. it's a really interesting way of looking at the fan base, the customer base, or however you [00:17:00] would, [00:17:00] describe it
[00:17:00] Kory: Yeah, I don't love the word customer or consumer, because it signifies that you're only here to buy from us versus being a part of the thing that we're doing. And what I love about Citizen Is it showcases that you have a vote, that you have a vested interest and a deciding power in the thing that we're actually doing.
[00:17:23] And I don't find any other word that captures that in the same way. So they are citizens of e.l.f. and they do have a voice and they do contribute to everything that we do.
[00:17:38] Ilyse: about that citizen journey, there is quite a relationship between e commerce and in store experiences for you guys. How do. you leverage? your online audiences and then follow those citizens from app to store.
[00:17:56] Kory: What's really important for us is to recognize that it all [00:18:00] needs to be fluid. So if you think about all of the possible touch points, some people are on 100 touch points, some people are on 10, some people are on 1. The important part is for them, it's all one world. They're seamlessly going from Our Roblox game to the floor of Target to our app to our website.
[00:18:25] So what we need to do is make sure that we have an organization that [00:18:29] reflects that level of fluidity and that we don't have any friction points between those zones. So everything that we do has to be fluidly integrated across every touch point. So if we think about corpse paint, for example, we light up everything 360.
[00:18:47] It's going to go. Live on our website live on our app. We're going to make sure that there are, uh, you know, social across all of our social channels. We're going to light up our live stream and we had rooms [00:19:00] in Roblox. So we basically see this as every time we turn on an activation, we turn on every switch across our entire ecosystem so that wherever you're interacting with our brand, you're finding a consistent thread throughout.
[00:19:18] what are your priorities for 2024? What would you say is your guiding principle?
[00:19:24] We go where our community takes us. And if I just take you on a quick journey of that, we didn't end up on TikTok in 2019 by accident. There was a hashtag of cosmetics that we didn't create that we had nothing to do with that three and a half million people were showing up to every day, which was basically them calling for us to be there.
[00:19:46] We're hearing a lot that they want more from us in that regard. We actually did a pep talk series where it was all about these mini confidence boosts that we could bring to women. So [00:20:00] what's most important for me is not me making a decision or our teams making a decision about where we should go next, but rather going where our community guides us.
[00:20:11] So you're going to continue to see us. On that path?
[00:20:15] Damian: And that's it for this edition of The Current Podcast. We'll be back next week, so stay tuned.
[00:20:20] Ilyse: The Current Podcast's theme is by Love and Caliber. The current team includes Kat Vesce and Sydney Cairns.
[00:20:26] Damian: And remember, I'm Damian.
[00:20:28] Ilyse: And I'm Ilyse.
[00:20:30] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review.
[00:20:35] Also, tune in to our other podcast, The Current Report.
ADT’s EVP and CMO DeLu Jackson joins The Current Podcast to discuss how the company’s partnership with Major League Baseball’s Miami Marlins reinforces the impact of live sports. Jackson also touches on why the marketing funnel isn’t so much a funnel anymore as it is an “infinity loop.”
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian Fowler.
[00:00:02] Ilyse: And I'm Ilyse Liffering. And
[00:00:03] Damian: welcome to this edition of The Current Podcast.
[00:00:06] Ilyse: This week, we're delighted to talk with DeLu Jackson, EVP and CMO of ADT. [00:00:12] Damian: The home security's brand synonymous with its blue octagon logo, seen on front lawns and in windows across the United States, is turning 150 years old this August.
[00:00:28] In all those years, ADT has seen its customers needs fluctuate, technology has given more power to individuals, and the inconsistent housing market is turning out more renters than owners.
[00:00:40] Damian: Delu starts out by telling us what messaging the brand is leaning into as it reaches a new milestone
[00:00:49] Ilyse: DeLu, ADT is celebrating its 150th birthday in August. That little blue hexagon basically has been known for a long time and signs in front of front [00:01:00] yards and windows across America.
[00:01:02] How has the brand continued to evolve and how is the brand leaning into new messaging?
[00:01:15] DeLu: you know, monumental 150th birthday. And for us, that's a really great testament as much to all the things we've accomplished in that 150 years. But more importantly, what it means for the next 150 years, because all of that's been driven by a consistent commitment to innovation, insecurity, safety and now even smart home.
[00:01:38] So it's been the evolution of the definition of what it means to be safe, protected and connected. and for all of our history, we've been focused on making sure that we're the leader and providing that to our, customers.
[00:01:54] Ilyse: and I understand there's even like a new campaign coming out soon?
[00:01:57] DeLu: Oh, yeah. So part of this [00:02:00] innovation and this even history of it is recognizing that from our consumers always that, every second counts, right? That when we think about what we're doing, there's this tension between, living your life to the fullest
[00:02:14] and having the opportunity to travel and do amazing things because the things that you care about are protected.
[00:02:21] And so this idea that when every second counts, you can count on ADT and really always have is really exciting for us,
[00:02:29] internally And externally.
[00:02:31] It's such a Great manifestation of what we've always been and what we aspire to provide, going forward.
[00:02:40] Ilyse: On that note, I remember even like five years ago I wrote a piece for Ad Age about how the brand underwent a marketing transformation to drive the message home that ADT is much more than a home security provider. With your smart home integration and your mobile security options for small and large businesses.[00:03:00]
[00:03:00] How has that, moved the needle forward.
[00:03:02] What would you say is the perception of the brand today?
[00:03:05] DeLu: say the perceptions continue to evolve and I'd say that the one great thing is that the foundational relevance of safety and security are still super high for so many consumers. It's what they need. And as the space has evolved to be more smart home and connected devices and, video and cameras, we've continued to provide that and customers are programming and our messaging have continued to reinforce that. with partnerships and with our continued platform innovation to provide those capabilities. So it's been a big part of our continued innovation and commitment to innovation for safety and security.
[00:03:46] Damian: One of the things that's really interesting to me is your approach to ads in the campaigns that you launch. and I know that in 2023 switched from sort of more fearful or scary approach to a humorous [00:04:00] one. And I'm just wondering, you mentioned that tension between living your life to the fullest and also looking after things that matter.
[00:04:06] Could you talk a little bit about that tension and how it informs
[00:04:10] your
[00:04:10] campaigns.
[00:04:11] DeLu: I think it's really a really important one that we called the FUD or fear, uncertainty and doubt. And the YOLO, you only live once, and that's always been the tension that we see that the things that we protect customers from versus the things we protect them for. And we saw the insight that, That people really, lean into and get emotional about the things we protect them for.
[00:04:40] And it really shows the value we create
[00:04:42] when we demonstrate that, and we don't have to scare people to do that. We just need to demonstrate that we are really
[00:04:49] there to take care of those things. And if we're there and in place taking care of those
[00:04:53] things, then you can do some amazing things and live your life to the fullest.
[00:04:57] And that's really, what our customers,[00:05:00] celebrate. And that's really
[00:05:01] neat for us to know that we play a critical role
[00:05:04] Damian: That's, that's fascinating. And do you have any sort of specific examples of how, customers have shared those things that ADT has afforded them, insight into their best lives
[00:05:17] as it were.
[00:05:18] DeLu: Oh, really fascinating is,
[00:05:21] one of our big partners, looked on, just did web search and we looked at all of these great images of what people were doing with our signs in the background. So celebrating birthdays, celebrating my, first new business as an
[00:05:36] entrepreneur, Celebrating graduations.
[00:05:40] we had a video of a customer putting an alligator in a trash can in his front yard.
[00:05:45] And that sign is there.
[00:05:47] Sometimes it's in the background, sometimes it's in the forefront. But it's, been a part of all these big moments. and that's really interesting because it's just there and alive, out in the world every[00:06:00]
[00:06:00] Damian: Yeah. It's amazing. The power of that logo, actually, it's not something As prominent as, say, the Golden Arches. and at the same time, when you. think about it, it is ubiquitous. you see it everywhere, once you start
[00:06:11] noticing it.
[00:06:13] DeLu: like you said, if you go through neighborhoods and you start to really pay attention to it, you see how many places it's there, on a window, in a yard, on a business.
[00:06:23] it is so iconic, and so
[00:06:26] ever present.
[00:06:27] Damian: Eilidh just mentioned that five years ago she was writing about ADT. And one thing that just occurred to me when she said that is in the last five years we've seen tech, undergo especially ad tech, undergo a kind of boom. And I'm interested to know how that has influenced the way you
[00:06:44] approach your marketing,
[00:06:47] DeLu: it really speaks to the omni channel nature of marketing. It's not one or the other, where our sales motion historically had been,
[00:06:57] very much in the home,
[00:06:59] [00:07:00] physical interactions and interactions with customers. The digital capabilities in terms of information presentation, information gathering, research, And even purchasing online and being able to buy online and even install it yourself.
[00:07:15] All of that has transformed,
[00:07:18] consumers engage with us even purchase. So we're present in all those channels now and make sure that we provide the right information based on the context of those channels. So it's been exciting, in terms of the different ways to reach consumers and connect with, their, evolving needs for safety
[00:07:41] Ilyse: Speaking about your marketing, ADT has shifted from having an in house agency to now going back to an external partner. What basically inspired that shift back?
[00:07:54] DeLu: Yeah, I'd say it's an evolution, right? So a few years ago had an opportunity to [00:08:00] hire a lot of great talent and bring them in house.
[00:08:03] of build internal capabilities time we're really, leading capabilities as that continued to involve and partners start to bring new ideas. We started to add them to the roster
[00:08:14] and for initiatives and projects. And as we move forward, they start to
[00:08:18] bring bigger ideas and just through evolution and growth, our teams have added more of those back to our roster and expanded the team size. So now when you look up. it's more of an evolution than a revolution. We look up and we have a great internal team that drives certain capabilities. And then we've supplemented that With some leading partners just so that we can continue to innovate and deliver, on our customer expectations.
[00:08:43] Ilyse: That is interesting. are there any specific channels that you perhaps are just increasing spend and time and effort on?
[00:08:54] DeLu: Yeah, probably the one that's growing most is connected TV and streaming, you know, as more people go there, [00:09:00] but social is increasing as people consume more information YouTube, right? Those are continuing to grow because when we think about some people, when they purchase these types of solutions, they need more information.
[00:09:12] And sometimes advertising creates interest, but we have to go other places to find, to make the purchase decision or find all the collective information. So I would say is as much,
[00:09:22] communicating effectively as it is advertising and marketing. It's really the expansion of communicating effectively across all of those channels. I think that's a really
[00:09:31] important distinction for us because we think about it as part of our communication strategy or go to market strategy, not simply what we would call marketing. It's more comprehensive.
[00:09:42] Yeah, it makes a lot of sense that is your go to market strategy, though, tied to, in some ways, the health of the housing market, because presumably, you're looking to reach people who are buying homes, setting up homes. absolutely. people move, relocate or, [00:10:00] remodel homes, the
[00:10:02] self improvement craze, all of those things, those are, moments that are identified where people make the decision to upgrade a system, add a system, upgrade a system, or reactivate a system. So we definitely, are very present in those activities, online and in physical, channels.
[00:10:18] we've also seen things like, the growth in renters. So we have a, DIY or ADT self set up product. We also work in the multifamily space, where, more users, or builders and, property
[00:10:31] managers can support the, units and the, renters in those units. Again, Different needs, different need states, and leading brands like ADT are providing more options for consumers to protect
[00:10:45] Damian: That's interesting what you said about renters and the Renters leaning into using the self setup. you say a little bit more about that? What's the potential for that market right now? [00:11:00]
[00:11:06] DeLu: DIY solutions gives people the opportunity to, you Create more affordable solutions as well as they're portable, right? We can take them with me. and so, it's just part of the evolution of the nature of security, how technology has changed it and made it more accessible and more available to more people.
[00:11:26] So it's not just when you're in a home you own, it's in, The home that's yours, or what you call home, and that expanded portfolio has allowed us to provide protection to more families, small businesses, and again, more people.
[00:11:43] Ilyse: Now, when it comes to generational differences between homeowners and renters, how do you look at those different subsets of consumers and target to them effectively across channels?
[00:11:58] DeLu: Interesting, because we look at the need state [00:12:00] and the use cases. We call them demand spaces. And really, it's sort of life stage and there's some key things, right?
[00:12:07] How often do I relocate? Younger audiences tend to move more, right? Some even current
[00:12:12] generations just move more in general than historically. Then you have more stable where people buy a place and they stay in a place a long time. They have slightly different characteristics. But interesting thing When you're in the business for 150 years, we've been through so many generations
[00:12:28] of families who have started with us, grown up with us, grown old with us and pass it on to the
[00:12:34] next generation. So that's again, really interesting dynamic that we've seen over all those
[00:12:40] decades of presence, that those, those behaviors are really about life stage, affordability, and then. Portability and mobility, relative to those, generations. And so we look at all of those signals to provide solutions that work for consumers across those need states.
[00:12:59] Damian: it's very interesting [00:13:00] that there's a sort of generational handing down of the brand. And I hadn't even considered that in, the context of security.
[00:13:08] DeLu: We have so many people who would tell us that I grew up with it. was always there. And it was that, thing that I needed when I needed something, I knew to push the button, or I knew to call, or I knew how to set it, and I remember some of my first memories of setting it, when I'm home, or I'm watching a little brother or a cousin, and so it's a really fascinating, role it's played in so many lives for so and there's just many of those, insights
[00:13:37] Ilyse: Now, how do you go about measuring the impacts of the campaign investments that you are making?
[00:13:44] DeLu: Yeah, we use a number of but I think what's really interesting for our team is because we're a direct seller, we have the ability to measure, our investments right down to not just the sale, but to the installation.
[00:13:57] we can look in time at all of our investments in [00:14:00] our media mix and understand when we invest, have something in or out, or we change campaign or content, What's the impact through the entire funnel?
[00:14:09] And I'm fortunate to have a great team from advanced analytics to performance measurement that works together every day with our teams to literally measure that and look at the things that are happening and changing by the day over time. So we have a really interesting, rich body of insight to help us understand, the impact of every investment.
[00:14:30] Ilyse: one thing with omni channel environments is that a lot of marketers are saying, basically, that with, like, CTV and, commerce, almost like the funnel is collapsing in a sense. what would you say to that?
[00:14:44] DeLu: I would say it's less of a funnel than a little bit of an infinity loop, right? People are gathering information.
[00:14:52] Pre, during, post, even after they purchase, they continue to gather information, reaffirm, and right, [00:15:00] optimize their choices. So I think it's really, it's not a funnel that kind of goes to the bottom and people stop.
[00:15:07] I think people just continue to, consume information and insights. so I think we kind of have to be always on and again, omnipresent to meet those
[00:15:18] Damian: And speaking of omnipresent and this is a bit of a pivot, but I know you partnered last year with, Miami Marlins in a multi year deal. I'm curious to hear from you, On why sports sponsorships are part of your strategy.
[00:15:32] DeLu: Yeah, this was a really exciting one for us. And part of it was, beyond just sports sponsorships. This was the first time that they were doing, branded, advertising on major league baseball uniforms. What we liked about it was the context. And if you go to the stadium, you'll see when you're around third base, it says, Safe at Home.
[00:15:52] And when they score a run, it lights up and it says safe at home brought so really neat, right? Some people were thinking it was [00:16:00] really about impressions, right? How much visibility will the, brand visible? That's a really important one. But what we saw was this great context, safe at home.
[00:16:10] It's also a great family venue. It's great for employees. It's great for, And by the way, they play 81 games at home and 81 games on the road. So the brand travels. and then lastly, I would say really cool with the partnership, beyond the community work we do and the development of, of our philanthropy and, giving kids safe places and safe spaces to, grow up and learn sports and develop.
[00:16:36] we also, have the patches on both arms. So when you look at visibility, it's visible for most of the game, because if you're, a right handed batter, it's on the left sleeve. And if it's on the left hand, it's on the right sleeve. Same with the pictures so that the brand is ever present. And finally, I'd say what I loved about it is, as in the stands or on the road talk about it, they [00:17:00] knew the context.
[00:17:01] They said, well, they must need extra protection. And it's like, they understand context in which we operate. And I really love that is that it wasn't just a brand that was there. It was a brand that made sense being there.
[00:17:17] what was really great about that. I love building on that is that when we think about media and the concept of media, this was a big part of it. we use comparisons to what are the number of impressions, media impressions and back to context, contextual delivery of our messaging with these partnerships and each of them gave us the opportunity to get, a large amounts of media and visibility for the brand in a very specific context that reinforces the things that we want to home or safety [00:18:00] help communities stay safe and these are So when you look at that from a pure media perspective, live sports. And sports in general have, broad reach audiences. they have sequentially different audiences based on events and locations. And so give us a lot of great reach, uh, and in some cases great frequency, as I described with, baseball and, on the road.
[00:18:25] We also look at the media markets. Where do they play? You know, so really interesting when you think about it in the context of media versus just, as an event, impressions. worked environments. of [00:19:00] Sure. it really is the evolution you described I caught the tail of the digital revolution, if you will, in marketing. Where as technology started to transform the way we go to market, thought about consumers, thought about the paces which we operate. and the convergence of technology and what we call traditional marketing, right?
[00:19:31] Digital used to be a unique thing that's set between IT and marketing. And then, as you said, they continue to converge in terms of the way consumers engage with those spaces. So then the teams started to come together. And I've been fortunate to have opportunities to work across those different disciplines And bring those things together for organizations who were going through those transformations and help individuals of all help teams of all and help organizations evolve to [00:20:00] bring those things together.
[00:20:01] So my career has been one of sort of the brands you mentioned. amazing organization transformations around the world and really been, an exciting time to be part of marketing.
[00:20:13] Damian: And that's it for this edition of The Current Podcast. We'll be back next week, so stay
[00:20:18] Ilyse: The Current Podcast's theme is by Love and Caliber. The current team includes Kat Vesey and Sydney Cairns.
[00:20:25] Damian: And remember, I'm Damian.
[00:20:27] Ilyse: And I'm Ilyse.
[00:20:28] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review.
[00:20:32] Also, tune in to our other podcast, The Current Report.
Crunch Fitness' CMO, Chad Waetzig joins The Current Podcast to explore how Crunch is developing their on-demand workout streaming app, how they're leaning into performance marketing versus brand-building and why digital media is the best way to reach its gymgoers.
Episode Transcript
Please note, this transcript may contain minor inconsistencies compared to the episode audio.
[00:00:00] Damian: I'm Damian Fowler
[00:00:01] Ilyse: And I'm Ilyse Liffering.
[00:00:03] Damian: And welcome to this edition of the current
[00:00:05] Ilyse: This week, we're delighted to talk with Chad Waitzig, the CMO of Crunch Fitness, who leads the brand's marketing and communication efforts for its gym locations all over the world.
[00:00:17] Damian: Headquartered in New York City, Crunch serves 2. 5 million members with over 460 gyms worldwide and continues to expand in the U. S. and around the globe.
[00:00:28] While Crunch has built a community of fitness enthusiasts at its physical locations, it has also been on a mission of expanding its reach on digital.
[00:00:37] We start by asking Chad about how he'd characterize the gym's marketing goals.
[00:00:43] Ilyse: so Chad, how would you characterize the marketing mission for Crunch?
[00:00:48] Chad: It's really important for us, to both build comprehension around what the crunch brand experience is.
[00:01:05] And we think we've got a pretty unique offering in the high value, low price space and in fitness, but it's also to drive leads and it's to fill that, consumer funnel, with folks who are interested in exploring a fitness workout, And building that lead base so that our franchisees, our partners in our marketing journey, can invite them into the gym, give them a free trial, and encourage them to join and continue their fitness journey with us.
[00:01:32] so as we think about what we do day in and day out, I'd say that, 80 percent of what we do is focused on how can we introduce the brand to more people and drive leads into the system.
[00:01:41] Damian: Now, can you talk about your latest campaign and how that works? I know you're talking about, a kind of big campaign, but you're also then trying to target local gyms and gym spaces and demographics. Can you talk about how that relationship works?
[00:01:54] what about the new campaign? Feel good, not bad?
[00:01:57] Chad: Yeah. Yeah. So we're, really excited about feel good. [00:02:00] Not bad. we launched the campaign on December the 26th, which is, basically the start of our year, immediately after Christmas. and the, conceit or the gestalt of the campaign is to. recognize that as a country, we've gone through a lot of bad stuff, and, there's a lot of bad in the world, and we don't want to focus on the bad in the world, but we know that it's out there and how do we, recognize that a way to combat that is to feel good, and to feel good.
[00:02:31] You can do that through working out. So the whole campaign is focused on this idea of telling a story about the bad things that happen through silly, humorous, metaphors, banging your head on a drawer, getting stuck in a revolving door, waking up in the desert on a camping trip with a snake.
[00:02:52] Attached to your face, really absurd, silly things as a metaphor for the bad in the world, and that through working out and through [00:03:00] working out at crunch, you can get those endorphin rushes. you can escape from the world. You can forget all the bad that's out there and really focus on yourself.
[00:03:07] You can really lose yourself at crunch. so that's, the gestalt behind the campaign or the, idea behind the campaign. Now, the way we execute that campaign, and we do it in partnership with our franchisees, is through a mix of brand marketing, performance marketing, and retail marketing. And so we've designed, creative assets that kind of take you through that entire journey, whether it's television, radio, direct mail, or digital marketing assets, that really tell that story in a layered way as a consumer moves through the journey.
[00:03:41] Damian: Yeah, that's interesting. now you mentioned the campaign, the Feel Good, Not Bad campaign is one that really dives into humor to convey how fitness can be fun. We recently had on this podcast, the CEO of BBDO, Andrew Robertson, who talked about the importance of funny ads and why they're so important.
[00:03:59] [00:04:00] To building a brand's identity. I just wanted to get your thoughts on that. and why is Funny the right fit for you?
[00:04:07] Chad: Yeah, first of all, I would agree with his assessment. And, at our heart, we're storytellers, right? All marketers are storytellers, and we're telling the story of our brand and our business. And humor, leveraging humor, is one way to tell that story in a way that we think breaks through the clutter.
[00:04:26] We're a gym for goodness sakes, right? We're a place where people come to, to get better. whether that's more, more flexible, whether that's to build endurance, whether that's to lose weight, whether that's to gain strength and muscle, but we also don't take ourselves too seriously. And so we think that, our no judgments philosophy, the way we approach our members and the way we approach our experience, it really lends itself well to humor.
[00:04:50] But the other thing to keep in mind too, is that. Humor can work in almost any business. think about insurance. 20 years ago, if you had said, we're going to use humor to tell [00:05:00] the insurance story, people would have thought you were crazy. Maybe it's more than 20 years now, but, Geico really broke through the clutter and now look at everybody in that category, right?
[00:05:08] They all leverage humor for something that is not a very funny product. our product isn't funny, but our product and our experience is fun. And we think humor helps us tell that story.
[00:05:19] Ilyse: Now here we talk a lot about digital channels, obviously, programmatic, CTV, and, there's a Common philosophy or really it's just a fact at this point that, that's a good way to reach like younger consumers. is that what you are finding? Are you trying to reach millennials and Gen Zers specifically?
[00:05:44] Or are you looking at whole cohorts of people? Consumers, what is your approach?
[00:05:50] Chad: our core consumer is somebody that we call young strong on social, they are our north star. They're the group that we [00:06:00] focus on, for crunch, about a quarter of our member base is made up of. Of people 18 to 24, about a third of our member base are members 25 to 34, so the majority of our members are in that 18 to 34 age range, and that's our young, strong and social group.
[00:06:16] Now, we run, we have, campaigns available for our network, to target seniors, active seniors. boomers, Gen, Gen Xers like me, but really our focus is on the 18 to 34 and we do find that digital media channels, are really the best way to reach that audience, right? They, by and large, they're not cable TV subscribers.
[00:06:39] they watch a lot of YouTube. They're on social media. and we find that, one of the best ways for us to build awareness is either through CTV, or through YouTube. Uh, and those are the two channels where we are dominant.
[00:06:52] Ilyse: And I know you've also spoken about, TV itself too, a little bit. How has like this omni [00:07:00] channel like approach really benefited your brand?
[00:07:04] Chad: Yeah, for us, it's been a journey. today we've got 460 gyms and about 2. 7 million members, and we're celebrating our 35th anniversary, but, we're still a small business. when I joined Crunch seven years ago, we had about 125 locations and, obviously we were significantly smaller.
[00:07:21] So our dollars, We had to make a strategic choice back then, and our strategic choice was to invest in performance marketing almost exclusively at the expense of brand marketing. Now that we've grown, and now that we're bigger, and we have the, The resources available to us the critical mass. We have found that the omni channel approach for us has paid off in spades.
[00:07:46] Our brand awareness has tripled in the last three years, whether that's aided or unaided. And we find that then drives. more consumers to consider us. Our consideration is higher, which then [00:08:00] leads to greater lead production, and greater sales. And, the brand doesn't do it alone.
[00:08:05] Our franchisees play a big role in that, but if we had not made that strategic shift to really focus on the Omni channel, I don't think our results would be as strong as they are today.
[00:08:17] Ilyse: And today, are you mostly now looking at consumer retention or learning new members to join? It does seem, we talk a lot about streaming wars, but it does seem like there's quite a lot of gym wars out there now.
[00:08:31] Chad: Yeah, you know, the fitness industry is, really an interesting one. It is competitive. so today about one in five Americans belongs to a gym, a health club, the Y, or a boutique studio. Now, that number 10, 15 years ago was probably closer to 15%, 14%. The category itself is growing.
[00:08:51] So when, crunch wins, the whole category wins when our competitors, when the category wins, cause we are growing the category, but we do compete [00:09:00] for a lot of the same folks, people do switch gyms, they break up with their old gym, they, join a new gym. and so it is a mix for us on the acquisition side.
[00:09:09] To both bring new people into the category that maybe are just considering a gym for the very first time, but we're also trying to steal members from other clubs that without a doubt, and our competition would probably say the same. So in answer to your bigger question, how do we think about it is about retention is about acquisition.
[00:09:27] It really is both.
[00:09:29] Damian: It's interesting. you know, we did use the analogy of streaming, but there's a lot of churn in streaming. you turn off your subscription for one and then you turn it on for another. We just had some data recently that said, I think 30 percent of people who cancel return within a few months to the channel.
[00:09:43] So, it's an interesting game, I guess. Yeah,
[00:09:49] Chad: of our biggest sources of leads. we very much, look at our former members as potential future members, and they do come back.
[00:09:57] Ilyse: Very interesting. Yeah. And, speaking of [00:10:00] streaming, Crunch has its Crunch Plus platform and I know this was a big kind of trend overall, no matter what category you're in, during COVID and everything was to go digital, make sure your product is available where the people were, which is their living rooms at home.
[00:10:18] and now it's a little more than a year old. and it obviously it built on what you had before, which is crunch live. Can you tell us how this has been performing and how you would describe the divide between people going in person to the gym and potentially those working out at home now?
[00:10:38] Chad: Yeah, really great question. So you're right. We launched, crunch plus about a year ago, and we retired an old platform that we had that was called crunch live crunch live we were the first big box gym to have our own streaming workout product it launched way back in 2013, and it was browser based [00:11:00] only.
[00:11:00] Ilyse: Way pre COVID before it was cool.
[00:11:03] Chad: it was cool. Before it was cool. And during COVID, we saw our daily usage. Increased tenfold, with a fairly limited library of workouts. And so we clearly realized that we needed to reintroduce our streaming products and that's how we got to crunch plus. So now crunch plus is available on, just about every streaming device.
[00:11:23] And, we couldn't be more pleased with where we are today. versus our launch. and just this year alone versus where we finished, in December of last year, our user base on the platform is up 47%.
[00:11:39] we have over 600, Workouts available and we're adding the goal is to add one workout a day Either through live streaming or through pre recorded content to the library And we see crunch plus as really both a member benefit. So if you are a crunch member, You get access to crunch plus and basically a [00:12:00] 70 discount off the retail price.
[00:12:02] it's incredibly Affordable. It's 1. 99 a month. and so for our members, it's a way to take that brand experience outside the four walls of the gym, whether they're wanting to work out at home, or maybe they travel a lot and they want to take it on the road, but they can also take it right back into the gym.
[00:12:19] And so we've got workouts that, are on a treadmill or on a spin bike, or require the use of dumbbells and other equipment that you may not have at home, We've got in the crunch gym. And so we've really created this hybrid workout environment between in person in the gym and virtual on crunch plus, and now for our retail subscribers, those that are not crunch members. they pay 6. 99 a month. Again, it's, an incredible value relative to other products in the marketplace, and we think it's a great way to extend the brand and reach into markets where crunch doesn't exist yet. you can get crunch plus anywhere in the world. we've got 460 locations and [00:13:00] 360 of them are in the United States.
[00:13:01] So we have lots of growth ahead of us in terms of our physical footprint, but we love where our digital footprint has taken us.
[00:13:10] Damian: Yeah, that's a great move. I see people in the gym with, their smartphones looking at workouts and things. It makes sense for you to have that workout associated with, crunch, or the gym in question.
[00:13:21] Chad: that's exactly right. and we really have only started to scratch the surface of where we can take this. I mean, one of the biggest challenges for new people who have never worked out in a gym before is the intimidation that they feel when they come to the gym. And, Most people think about the intimidation as being the, I've got to lose weight before I join the gym mentality, right? the body image concerns. But think about this. If you've never been to a gym before and you walk in the door, you are seeing all kinds of foreign alien equipment with pulleys and weights and pins and benches that articulate in different directions.
[00:13:58] Where do I even [00:14:00] start? And what we think CrunchPlus is going to be great for is to give people who are completely new to the gym experience that introduction of how do I get started? What is the best workout for me? How does this piece of equipment actually work? If I'm concerned about how I might be perceived by others, let me watch this video and see how to set this up correctly.
[00:14:21] so we're real excited about where we're going to continue to take this platform as it continues to grow and mature.
[00:14:26] Damian: Yeah, that's a great point.
[00:14:27] Ilyse: could have used that for sure. Yeah, you
[00:14:29] Damian: and you see some of these, dudes in there, they're massive and they're making it look like, child's play. I'm like, what? This,
[00:14:36] Chad: Right,
[00:14:37] Damian: this is scary. Yeah.
[00:14:41] Chad: The great thing about those guys, though, is if you ask them for help, they're going to jump right in and help you. they're very proud to share. Here's, how you do this.
[00:14:48] Damian: Mm. It's a community, right? a fitness community.
[00:14:52] Chad: absolutely. Absolutely. It's the community. In fact, we just did a recent member survey, new member survey, [00:15:00] and we found that 46 percent of our new members, have actually made new friends or founded a community at crunch just by joining and getting to the gym.
[00:15:10] So we do think crunch is a great place to build community and our members that it's one of the reasons why they join.
[00:15:17] Damian: And speaking of community, you have recently teamed up with Amazon One. Can you talk about how that partnership improves the membership experience for your customers?
[00:15:28] Chad: we love our partnership with Amazon. it has gone really well. And they've been, as you can imagine, they're one of the largest companies in the world. They are very sophisticated in what they do. And, they've been a great partner to work with, for those, listeners that aren't familiar with the Amazon one product, it is a biometric device reads basically the palm of your hand.
[00:15:49] It is a touchless device. You basically hover your palm over their reader and it identifies you uniquely. So apparently the palm of your hand is as unique as your fingerprint [00:16:00] or your retina and, Amazon has piloted this in, I believe it's being rolled out in Whole Foods.
[00:16:07] I believe they have a partnership with Panera. And then they were piloting it in their own C Store concept for a while. We got together with Amazon to really be the first to bring it to the fitness environment. And the initial application or use case is to validate a member's entry into the gym. And What we found is I think a couple of things.
[00:16:32] there's a back office business case which reduces fraud for us. So we don't have members sharing their key tag with their barcode with friends, right? Because now I only can get in with my palm. So that reduces, that concern. But from the perspective of our members, it shows that we're progressive.
[00:16:57] We're forward thinking. we've got the latest [00:17:00] technology and we're bringing that into the environment. and we've seen adoption close to 80 percent in the locations where we've rolled it out. There are some folks that are still concerned about having their biometric data. read by Amazon, and we respect that and we'll still have the old way of scanning barcodes at the front desk, but for the vast majority of our members, it allows them to get into the gym quickly and get right to their workout.
[00:17:24] Damian: Mm. That is fascinating. I actually didn't know about Amazon One,
[00:17:27] Chad: Yeah, if you have a Whole Foods near you, next time you go to a Whole Foods, see if they've got it. it's how I use, it's how I check out at Whole Foods. it is faster than even, Apple Pay and Google Pay, I
[00:17:39] Damian: Wow. Mm.
[00:17:41] Chad: I think it's a pretty great service.
[00:17:42] Damian: in general, when it comes to partnerships, how important are those kind of brand partnerships for Crunch?
[00:17:49] Chad: they're really important and, you can think about partnerships for us, at least. We think about it in a couple of different levels. One is this kind of, Big strategic capability [00:18:00] enhancing partnership, which we have with Amazon, and we've got obviously have partnerships with some of the best, equipment manufacturers in the fitness space, right? Whether that's through life fitness or, TRX or the other, brands of the space, and we look at that as a way to enhance our member experience. We've got a really talented member experience team headed up by our chief experience officer, Molly long and, Molly and her team are thinking about ways that they can bring these kinds of big brand partnerships that are enablers.
[00:18:34] To bear on the member experience. But on the marketing side, we also look at brand partnerships as a way to enhance your existing membership. So we do partnerships where we provide our members access to crunch only discounts. So we have one right now with Crocs where members can get a discount on Crocs shoes that's proving to be very popular.
[00:18:58] And one of the ways in [00:19:00] which we talk about our membership, pricing with our members. and so one of the things that we like to say to prospective members is that if you take advantage of all the discounts that you can get through your crunch membership, all the retail discounts with our brand partners, your membership practically pays for itself.
[00:19:14] And so we like to think that because it is a membership, you are part of a community, you are part of a gym, you are part of a club. If we can give value back to that member, it only makes that membership more valuable to them. So for us, those brand partnerships are super important.
[00:19:30] Damian: we want to talk about first party data, of course, and we want to talk about that and how that informs some of your campaigns. And we assume, given that you have this great membership, global membership, it's not necessarily an issue for Crunch.
[00:19:43] But how do you go about, leveraging that first party data to inform your marketing efforts?
[00:19:49] Chad: so obviously our first party data even more so today than in years past is important to us and being able to leverage that data is [00:20:00] an important part of what we do both on the brand marketing side, but also are we work with our franchise partners for them to execute on their local marketing side.
[00:20:08] Our media agency of record is USIM, and through USIM, we have an identity resolution initiative with TransUnion, where we enrich our first party data anonymously, with the TransUnion data, and we use that for audience building, lookalike audience building, Former member, audience building, et cetera, et cetera.
[00:20:29] And a lot of that is used, through programmatic. it, it informs, what we do, in terms of, our targeting. the way in which we've structured our media approach, brand marketing happens through the Crunch marketing team. We also pick up search, on behalf of our network, just given the complexities of search and the ever changing, approach to paid search.
[00:20:54] we. We feel like we're in a better position to manage that on behalf of our franchisees than asking our franchisees [00:21:00] to do that. Really everything in between is through our franchise partners and we have four brand approved agencies that they can choose to work with And we work with them To make sure that they have access to first party data so that they can also enrich that data and do first party, audience building, et cetera.
[00:21:20] So for us, it's a critical component of what we do. And again, of, what we spend, I would say that, from. CTV all the way down through search, probably 90 percent of our spend across the network is digital.
[00:21:36] Ilyse: Very awesome. I actually have a question about first party data. Are you able to glean more, say from Crunch Plus? Because people are tuning in and you're able to see, what kind of workouts they're choosing, what kind of, when, they are actually working out.
[00:21:55] It must be very revealing, even more so than your regular, gym [00:22:00] customers that come in.
[00:22:02] Chad: it's actually, that's actually a great question and it is true because obviously we control and manage the crunch plus platform of the 600 plus videos or workouts that we have. We can see what the viewership is. We can, we understand the view through rate on each of those. We know what each subscriber is watching and what kind of workouts they're doing and the frequency with which they're doing that.
[00:22:26] and that's rich data that. We don't necessarily have easily accessed on the gym membership side. so from that standpoint, in terms of building out new workouts, as an example, we found that the 20 minute workout videos were the most popular in the group. And yet when we launched, we were launching with 30, 45 minute workout videos.
[00:22:51] We pivoted very quickly to doing more over 20 minute workouts. And what we found is. The 20 minutes were actually too long based on view through [00:23:00] rates. So we launched a number of what we call quickies, right? They're five minute workouts and the viewership on those has skyrocketed. that's where we've leveraged that first party data to learn on the gym side, it's a little bit more challenging, but we're actually building out more of a, first party data set around.
[00:23:16] utilization of the gym. We know when they check into the gym. If they book and take a group fitness class, we know that they're doing that because that's an online reservation system. we know when they buy a personal training package and when they take personal training sessions. And so the next level for us as an organization is to better activate that first party data so that we can do a better job on member retention.
[00:23:40] upselling into higher tier memberships, and cross selling into other parts of our business.
[00:23:45] Ilyse: And based off of that, and knowing that you guys are located in 41 states,
[00:23:51] Chad: Yes.
[00:23:52] Ilyse: you can probably tell me which states are the fittest in the U. S. in terms of attendance. I mean, I'm just [00:24:00] curious.
[00:24:00] Damian: just
[00:24:01] Chad: so that's a really good question.
[00:24:04] Ilyse: New York, I know.
[00:24:05] Chad: I, I can, I can say I can say that,
[00:24:09] Ilyse: work out a lot here.
[00:24:10] Chad: there are certain markets. the southeast is one of them where the number of visits per member is higher than the average. Obviously, we have an average, per month in the southeast. Really strong gym attendance.
[00:24:26] I'm not going to say whether or not they're more fit than
[00:24:29] Damian: Yeah, you can't know that.
[00:24:31] Chad: but utilization does vary based on, based on market. I don't know how much of that is driven by weather, or how much that's driven by lifestyle.
[00:24:39] Ilyse: who's the laziest
[00:24:40] Chad: in New York City, New York City, we have really strong, really strong utilization of the gyms, best ever, better than pre pandemic.
[00:24:48] Ilyse: Oh well.
[00:24:49] Chad: but we've seen that across the board that the utilization of our gyms post pandemic has been at a higher level everywhere than versus than pre pandemic.
[00:24:59] Ilyse: People [00:25:00] want to get out there again.
[00:25:01] Chad: I think people want to get out there. Yep. I think they recognize that the role of fitness in, in relieving stress and anxiety is important.
[00:25:08] Ilyse: How do you then tailor your messaging? Based off of location, especially if you're, talking to the fittest people in the U S versus the laziest,
[00:25:18] Damian: people in
[00:25:20] Chad: we wouldn't say that we're all about no judgments,
[00:25:22] Damian: no, of course.
[00:25:23] Chad: there, there is no one type, there is no one reason, there is no one way, for us at Crunch. but we do build out marketing assets that allow our franchisees, who are the closest To the member than we are here in the puzzle palace here in New York City, right in the ivory tower.
[00:25:42] and we make sure that we provide assets that, if your club is really strong in group fitness classes, that we've got the assets for you there. If your gym is really big into strength training, which is virtually all gyms. Now we've got lots of strength training assets, or if you're into hit workouts, or if you're into [00:26:00] Kids Crunch babysitting is important because you've got a lot of younger families and they need to have child care when they come to the gym and work out and we allow our franchisees then to use those assets to tailor their marketing communications based on their local needs.
[00:26:16] Damian: It's interesting. Now, you mentioned, maybe people in warmer climates and warmer states going to the gym maybe than others, but I don't know whether that holds true, but what I wanted to ask you about is what does the marketing calendar look like for a gym like Crunch? especially around key moments, we're here, A good third of the way into the year, but January's obviously got to be a big moment for gyms because everyone has that resolution to get fit again, New Year's resolutions, and then there's the summer, approaching, people think about, oh, I've got to be back on the beach, what should we do?
[00:26:50] How do you strategize around those moments?
[00:26:55] Chad: Yeah, there is certainly a seasonality to, to both visitation and [00:27:00] membership joins new members joining the gym. the first quarter of the year is the. The most important quarter of the year for us. it is our Black Friday and Cyber Monday and holiday season. and we do structure our spending accordingly, right?
[00:27:14] So we'll heavy up in Q1, in the months later in the year when gym memberships aren't as, The demand isn't as high. We will adjust spending accordingly. So we do balance that out throughout the year. So we do marry up spend with demand. Within any given month, we will run a series of national promotions that our franchisees can opt into.
[00:27:39] And they tend to be priced Price driven, because that's the category we're in, but we provide the support to the franchise network around the if they opt into that promotion to try to convert prospects in the system to becoming members. We do look at certain, events. So certainly we look at. New Year's resolutions, New [00:28:00] Year to you.
[00:28:01] We look at spring break. We look at the beginning of the summer. We look at back to school. and then we look at the, to school is the last big hit when you begin to hit November and December, most consumers are really focused on holiday shopping, holiday parties, family get togethers, travel, Wrapping up their year end of their job if they're on a calendar or fiscal year, And then we start right over again on december 26th, and that's when people are like, okay, let's get back to the gym so we do take all of that into consideration but every month has a cycle and every quarter has a cycle and then obviously there's a cycle to the year
[00:28:41] Ilyse: so there's obviously one of the biggest categories on social media is fitness. I would say there's so many fitness influencers out there these days.
[00:28:52] To what extent do you share a kind of like common goal to get people to the gym? Do you then access and use [00:29:00] these social media personalities?
[00:29:02] Chad: Yep. yeah, really good question. influencers in the fitness space are very important and we have worked with influencers. off and on over the past several years, we work with them today. And what we have found them to be most effective for us is around awareness building, introducing crunch to their audience.
[00:29:26] we have tried to activate, and I'm using air quotes for those, listening, obviously, we've tried to activate those influencers to try to sell gym memberships. And we've not succeeded in that. I think their audiences see through that.
[00:29:40] Ilyse: Hmm. Interesting.
[00:29:42] Chad: And so for us, it's more about the authenticity of we want to invite the influencers into our gym.
[00:29:47] We want them to get in a great workout. We want them to tell their story on that does more value for us. than them trying to sell a membership to their audience. And so we certainly work and we pay influencers [00:30:00] for some of that awareness building. But we also Work really hard to make sure that our member experience is an excellent experience for all of our members because we have influencers in our gym all the time that we may not even be aware that they're there and we want them.
[00:30:18] We wanted to organically. Work its way through social media, and we've actually had some great success with that. And so the success comes from our fantastic operators on running a great gym on the influencers who are already members are just telling the crunch story for us. They're evangelists on. You really can't put a price on that.
[00:30:41]
[00:30:41] Damian: And that's it for this edition of The Current Podcast. We'll be back next week, so stay tuned.
[00:30:46] Ilyse: The current podcast theme is by Love and Caliber.
[00:30:49] The current team includes cat fussy and Sydney Cairns.
[00:30:53] Damian: remember I'm
[00:30:55] Ilyse: and I'm
[00:30:56] Damian: we'll see you next time. And if you like what you hear, please subscribe [00:31:00] and leave us a review. Also, tune in to our other podcast, The Current Report.
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