You have said that customers are now Davids while marketers are Goliaths. What do you mean by that?
Traditionally marketers have spoken about how they would enable people, empower people.
But now you and I have smartphones with the same amount of processing power that was in the Space Shuttle.
So what happens is we already are enabled by our phone and our social networks connected to the internet. This technology allows us to bring down Goliath.
How well are marketers coping with digital transformation, on the whole?
They are in the stage somewhere between grief and anger. They no longer have denial.
The problem with grief and anger is that they are taking it out not on themselves but on anybody else. It’s one of the reasons why you are seeing so many agency reviews.
They are slowly moving to acceptance but that doesn’t mean there’s a solution there.
Which companies are thriving in this environment?
Look at Dollar Shave Club.
They realized they could market using Facebook and YouTube effectively by giving people value by selling blades made in the same factories as Gillette, without the overheads of Gillette’s advertising.
This means they give you the same blade for half the price and send it to you directly.
In return they went from no market share to 15% of the market and they got bought by Unilever for $1bn.
P&G is now going to have to write down the value of Gillette.
Similarly cab drivers used to give us problems and now they are very nice to us.
In the old days our bosses would tell us ‘you are well paid’. Now, with Glassdoor we can see when that’s wrong.
Entire industries are being revitalized.
Which companies aren’t coping well?
Most newspaper brands with the exception of the Wall Street Journal, Washington Post and New York Times. They failed to adapt.
And TV networks. The basic concept has died but they still don’t realize. People care about shows rather than networks. Or modern networks like Netflix.
Why hasn’t the TV industry realized that the model is broken?
Primarily because it’s been highly lucrative and successful until about now. They have to recognize that the spectrum is no longer valuable.
They have to think about the storytelling business. TV is the next big thing that will be restructured in a big way.
Magazines? Too late. Newspapers? Too late. TV had the opportunity but did nothing because they were succeeding because it was the last mass medium left.
They didn’t do any deals with the devil like Apple like the music industry did, but consumer behavior has moved. They no longer align with the consumer like Amazon and Netflix do.
What do marketers need to do to adapt to the new digital landscape?
The future does not fit into the mindsets of the containers of the past.
If you are trying to get into a different business using the same people, incentive system and structures you aren’t going to get there.
A bus does not fly however much the bus people want it to fly. You need pilots. And this applies to every company, not just agencies.
Are there any skills that still apply in this new digital world?
Insights and ideas matter. The ability to align with customers matters. Marketing still matters. Understanding and meeting people’s requirements.
Marketing works otherwise we would all be using Blackberrys and driving Yugos.
Marketing works when it has this combination of respect, trust, value and design as well as empathy and storytelling.
It’s not like throwing the baby out with the bathwater.
What does this mean for agencies?
The agency business is one of the few businesses that will survive very well. The rationale is not because I work in it, it’s because the only thing we have is people.
As the world changes we can change the people. We don’t have things like factories and assembly lines, TV spectrum and any sunk costs.
Our holding company went from 7% digital to 50% digital in seven years. We’re light. We are stupid but we’re light.
Our business is about some combination of automation and creativity. Storytelling for big brands and connecting machines requires people.
What does this mean for the CMO?
The future is about allowing people to access companies, to market to themselves.
When I’m looking for a product or service I’ll ask my friends, check out stuff on Facebook and Google.
We have to facilitate this self-marketing, so I suggested the Chief Marketing Officer becomes the Chief Facilitating Officer.
How will marketing evolve over the next five to ten years?
People increasingly want access rather than ownership. That changes the way you speak to people. It’s not one sale, you have to keep them happy.
You need a continued good experience. As a result of that you need more investment in utility services and a superior product and less in advertising.
If you have a superior product and service and fantastic content and storytelling you can get it distributed.
So spend more money on content, utility and services and less in messaging and media.
You are also going to have less arbitrage. You are going to have to work in a world of perfect information.
That’s going to impact a lot of companies. For our company, our clients wonder, ‘can we trust you to shepherd our money properly or are you double dealing?’. Most of us aren’t.
The reason there was any double dealing is because clients were saying ‘we won’t give you any fees so make it your own way’. So we worked out how to get paid.
We have to grow up and learn how to connect. Our industry may become smaller, but it will be more profitable and with better people.
How can agencies rebuild trust lost?
Most clients believe we are the sewage of the Nile. You have to convince them we are the jewel in the Nile.
If you do that with any arrogance you’ll get kicked out in 15 seconds. You cannot take people into the future if you are scared or arrogant.
You also have to address the ‘turd on the table’.
What do you mean by addressing the ‘turd on the table’?
A big part of leadership is addressing reality. There are too many meetings where nobody discusses the real issue. People do these dances. Accept reality!
Then there’s credibility and you can spend time arguing about the real problem: the shitty brown thing on the table, rather than ignoring it or pretending it’s chocolate cake.
At the moment clients have questions over whether they can trust us to allocate their money and whether we are double dealing.
After they get past that, clients are deeply insecure about their own future. Digital transformation is an issue that’s challenging everybody.
Well apart from Google and Facebook. Every other company that was unstoppable – AOL, even Apple – has problems.
Microsoft was unstoppable, Yahoo was unstoppable and both got into trouble.
What’s your advice to anyone starting out in marketing now?
Try to spend one hour a day learning new things. People always ask me how I stay fresh when I’ve worked in the same company for 30-40 years.
Every day I spend between 4.30am and 6am learning new things. Today I was reading a book called Magic and Loss by Virginia Heffernan.
Sometimes I play around with new tech like Samsung Gear VR. Sometimes I’m reading blogs or learning about new technology.
Or read poetry. I spend 90 minutes doing stuff that helps me grow but is not about work or email. That’s how we remain relevant in a changing world. You have to educate yourself.
Every day?! What time do you go to sleep?
10pm. I get up at 4.30am when I’m in Chicago, which is 50% of my time. 5.30am in New York, which is 15% of my time.
The rest of the time I do not get up.
So you travel a lot, how do you cope with jetlag?
I have three tricks. The first is luck. I know how to sleep on planes and I am relatively senior so I travel business class, which makes it easier to sleep.
Then I work out every morning, so my system recognizes that if I am working out I must be awake. It’s a Pavlovian sign.
Then I have coffee take-offs and alcoholic landings. Three espressos, exercise, sleep on planes, two beers at night. That’s what I do.
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