Show 83 – Marketing & Advertising Trends – Cannes Lions 2019
PRCA members receive 10 CPD points for listening to this podcast if they log it on the PRCA CPD programme.
Our third episode from the 2019 Cannes Lions International Festival of Creativity concentrated on Advertising and Marketing Trends and featured:
1. Rory Sutherland, Vice Chairman, Ogilvy UK discussing his talk ‘Make Advertising Great Again’
2. Carla Buzasi, Managing Director, WGSN on the ‘Future Consumer 2021’
3. Ellie Norman, Director of Marketing, Formula 1 on ‘Revitalising An Ageing Brand’
Part 1 – Make Advertising Great Again
In this first part of this episode, recorded at the Cannes Lions Festival of Creativity, Russell Goldsmith was joined on the terrace just outside the media centre by Rory Sutherland, Vice Chairman at Ogilvy UK, ahead of his talk in the main hall of the Palais titled ‘Make Advertising Great Again’.
Rory said that advertising actually always had elements of greatness, but that a few things have happened, which he thinks make no sense in the advertising industry that he’s worked in for 30 years, one of which he said is really since about 1992, creative agencies haven’t been paid by media commission and yet still behave as though they are, and so limit their creativity and insights to deploying them really in communication solutions. He thinks that calling yourself a consultant is clever, because it more or less qualifies you to give advice in any field you choose. By contrast, he thinks there are hundreds of problems that we could solve with the kind of creative talent you see at Cannes Lions. However, he said they are never asked to solve them because people assume that, until they’ve got £500m to give to Rupert Murdoch, an ad agency wouldn’t be interested in talking to them and Rory said that strikes him as a very self-limiting belief.
Rory said that if you go back to what one might call the Don Draper era of advertising [see Mad Men] or more interestingly perhaps to really eccentric agencies pioneered by people like Howard Luck Gossage, what you can see was that as well as making advertising, the agency was a wider psychological adviser, it asked wider questions about the psychology of human behaviour. Had that back in the 1950s, you probably would have had an agency psychologist as a resident part of your payroll. What then seems to have happened in America in the 50s, Rory Said, was that after the Korean War, they got absolutely paranoid about brainwashing with films like ‘The Manchurian Candidate’, and was widespread terror about people who’d gone commie after being imprisoned by the North Koreans, for example, and the whole question of what you might call unconscious influence became taboo. And so, agencies who were making all their money, making TV commercials at the time just effectively said, “we don’t need to be in that game, it’s too reputationally dangerous. We’ll pretend it’s all about making ads”. Rory said that in the short term that was probably a sensible defensive measure, the trouble is we lost something, and we never got it back.
Coming up to date with the session he was presenting at Cannes, Rory said that almost by accident, the topic that particularly fascinates him is how do you market marketing? He said that if you look at the dominant business culture that prevails, not so much in heavy advertisers like Unilever, but the prevalent business culture in finance and in most areas of business activity, it is a narrow one of kind of neo liberal economics. He added that if you think about it the assumption of economics, people make decisions based on perfect information in an atmosphere of complete trust, but in such a world, marketing wouldn’t need to exist and so people who see the world that way tend to see marketing as at best a necessary evil or a cost to be minimised and not as a source of value creation. However, he thinks those in marketing also probably connive in this by using phrases like ‘added value’ as if the real value is inherent in the product and marketing can add a little bit of magic pixie dust on top, but it remains an optional extra.
Rory said that there’s another school in economics which doesn’t think like that at all, in particular the Austrian School of Economics believes that value is entirely subjective and that you are as much responsible for creating value if you promote something effectively or you presented effectively as you are if you actually make it well. He shared the phrase by Ludwig von Mises, where he said ‘there’s no sensible distinction to be made between the value created in the restaurant by the man who cooks the food and the value created by the man who sweeps the floor’ by which, Rory said, he explicitly means by the analogy advertising, and marketing being the man who sweeps the floor – if you have fantastic Michelin starred quality food but you try and sell it in a restaurant that smells of sewage, nobody will enjoy their meal and in the same way you can make a fantastic product, but if you don’t have enough impact on the human brain enough to make people understand it, make sense of it and want it, that product remains worthless. Therefore, Rory said that this view, which is much closer to his, is that value is created in the head and therefore economics really should be subordinate to psychology as a discipline.
This led on to the topic of trust, and Rory said that in his talk he was going to a film, which shows an experiment by two Melbourne comedians, Hamish & Andy, where they sat Ed Sheeran on a stool and tried to sell admission to a 30 second Ed Sheeran Peep Show and nobody was interested.
Rory said that examples is pretty much true for the financial services industry – it doesn’t really matter how good your product is, if nobody trusts you, they ain’t going to buy it. He thinks that there are whole areas, such as packaged goods, that have held up fairly well. He also doesn’t think there’s a crisis of confidence there but in a whole area of business activity, which he said financial services perhaps being the most acute, the real problem in the industry isn’t the nature of the product, it’s the nature of the perception.
Russell moved the conversation onto the behavioural science practice that Rory formed within Ogilvy, whose job, as described online, is ‘to uncover the hidden business and social possibilities which emerge when you apply creative minds to the latest thinking in psychology and behavioural science’.
Rory said that the only problem is that it’s much much easier to add value than it is to make money. The reason for that is no client has a budget for a problem they don’t realise they have. And so, part of the time what they do is they go in and say, everything you’re doing here makes logical sense, however at Stage 1, Stage 5 and Stage 7 you’re doing something which is psychologically catastrophic. He gave an example of a telephone call centre where people rang to cancel a subscription and the first question they were asked was, “can you please tell us why you’re cancelling your subscription?”. Rory said the only problem here is if you get people to reiterate a list of negatives, winning them back is going to be doubly difficult and therefore suggested that they should start by asking the question, “can you remind us why you subscribed to this product in the first place?”. In terms of the psychological effect, in terms of the meaning of emotions they arouse, they can be absolutely opposite.
Rory quoted anthropologist Pierre Bourdieu, who said that human emotion and economics don’t really tally very well. So, for example, giving someone a present is a good thing economically. Returning a present, however, is not an act of generosity it’s an insult and depending on the context in which something is done, the meaning and therefore the emotion we derive from it and therefore the behaviour can be inordinately different even if ostensibly there seems to be very little difference. Rory said they call these butterfly effects. Rory said that he has long had the belief that if telephone call centres, rather than making you wait for 15 minutes, simply offered to call you back, the entire emotional nature of that call will be different, the customer satisfaction will be vastly higher and the opportunities for upselling or cross-selling would be inordinately greater. When you make someone wait online, you’re treating them as a supplicant, which is you’re the person selling them something but you’re making them wait. If you ring them back, you’re treating them as a valued customer and so, although the nature of the phone call may change very little, the emotional resonance of that phone call might be completely different.
He shared an example of when someone from a political party rang up and asked him what his general view was on tax cuts. Rory said that psychologically, “the way you deliver tax cuts is crap!”. He then explained very simply that if you reduce the tax rate by 2%, people might notice a little bit in the short term, but within about two years they’ll simply become acclimatised to the new rate. They won’t notice it anymore. But keep the tax rate the same as it is but once a year pay them a rebate and now you’ve actually got something which is enduringly valuable. You’ve also got a lump sum and Rory would argue that a single annual lump sum payment is more opportunity creating for the recipient than a reduction in a charge. Rory’s final message was that before you pay the rebate, give people the option of donating 50% back to the NHS. His argument here is very simple. To an economist there’s no difference between writing a cheque for £500 to the NHS and receiving £500 less as a tax rebate. Those two things are basically economically identical. Rory’s argument and he said that of people like Dan Ariely as well, is that actually there’s an enormous difference between the two. Quite a few people would say, tell you what, just give me £500 and keep £500 for the NHS and those very same people would never sit down and write a cheque spontaneously. It’s a different kind of thing. And so, understanding those nuances, which don’t really exist in physics or in conventional maths, they’re highly nonlinear, seems to be increasingly important to the success of business. Rory argues that most of the really successful tech companies owe their disproportionate success not so much to the usual things that are told in the Harvard Business Review but that they stumbled on, as he said Uber did with the map, they stumbled on a bit of psychological magic trickery which just disproportionally appeals to the human market.
The final thing we discussed was Rory’s latest book, ‘Alchemy. The Surprising Power of ideas that don’t make sense’. Rory said that it’s an interesting book which he felt had to be written. He said that it’s a book about the fact that when you determine that everything that’s done must be consistent with economic logic, by the nature of economics you turn your back on the possibility of magic and if you don’t believe in magic you’ll never find it. His contention is there are lots of magical solutions out there waiting to be found, but people’s need to give rational justification for everything they do is preventing us from finding them because in everything magical there’s something a little bit present that doesn’t make sense.
Our second guest was Carla Buzasi, Managing Director of trend forecasters, WGSN who was presenting a session on their Future Consumer 2021 report, which looks two years ahead at how people will be behaving, what they’ll be thinking, what they’ll be feeling and therefore the way that brands and businesses should interact with them.
Carla explained that they look at some cohorts or tribes and define those to help people really target the products that they might be selling to those people.
Carla said that there were three tribes they were focusing on this year:
- Compressionalists – time poor individuals who are constantly bombarded by all the expectations that come with modern life. With the rise of wellness, people are making conscious decisions to cut down on the things that they try and achieve every day. So, whilst there’s a positive message, Carla said that is a tribe that they have real concerns about.
- Kindness Keepers – individuals who have grown tired of the lack of action from governments, big corporates and some businesses. Carla explained that this isn’t kindness for the sake of kindness. It is about fundamentally thinking about how you live your life and the impact that it has on others.
- Movement makers – quite a young demographic in areas like Southeast Asia, India and Africa, where there are rising youth populations which is in stark contrast to Europe, Japan and the US where there is a big polarisation because older people are getting older and they’re having fewer children. Carla said that we are seeing young people who are taking actions into their own hands and driving change through their own entrepreneurship and their own ways of giving back and supporting other young people.
Carla said that there are a few strategies that WGSN are recommending to brands to be able to engage with and market to these different tribes.
- Adopt a direct to consumer approach – there are very successful direct to consumer brands that have very refined offerings and for the compressionalists particularly, they don’t want endless choice. They want you to make it easier for them.
- Purpose – this can’t be about just standing for something for five minutes and then moving onto another cause. This is about thinking about how you as a brand make impact because that really will resonate actually with a lot of these groups.
- Demographics – or groups of individuals that have been largely ignored by brands, for example, Gen M – the rising Muslim Youth population. Look out of your comfort zone, look where other brands are missing out and go there because there are people ready and waiting to spend money with you.
We last spoke to Carla at Cannes Lions 2017, and at that time, we spoke about women in leadership roles. Since then, Carla has become Managing Director of WGSN but in that interview, Carla said: “People love talking about women in leadership roles but not enough companies and making that happen”.
In that time, Carla thinks that, the surface, it feels like things have changed, but she said she had been listening to [Facebook’s] Sheryl Sandberg earlier that day, who had been talking about the minuscule number of executive level positions that are held by women and the minuscule number of countries that are run by women. So, Carla said that there’s still a lot more to do and it’s something that she feels quite sad about that. She thinks that it’s more about equal opportunities necessarily than just putting women forward. It’s making sure that everyone, whatever their background or upbringing has a fair chance. She has wrestled with the idea of positive affirmation and forcing 50/50 shortlists and doesn’t like the idea, but think it has to be done. So, in summary, she thinks that yes, we’re talking about it and there have been some positive shifts but there’s still a lot more to do. She also doesn’t think companies should make a fuss making announcements about hiring, for example, their first female CEO, as she doesn’t think it generates positive headlines. They should just be, in her words, cracking on with it and should have done it years ago. They should be making the most of brilliant women who are out there, who are eager for these opportunities. They need to think about flexible working, ensure that roles are advertised that people know about them and encourage women within their organisations to go for roles that they might not be ready for yet, which she said is something she has done throughout her career.
Finally, Carla general trend to look out for in the next few months – Life Doulas, who she said are beginning to pop up in Los Angeles right now. Carla explained that “these are people who will help you with tricky relationship issues or tricky work issues but with a plenty of healthy dollop of spirituality and wellness on it”.
In our final interview from Cannes Lions 2019, we were joined by Ellie Norman, Director of Marketing at Formula One (F1), who was speaking at the festival on the subject of ‘Revitalising an ageing brand’, in relation to F1 itself.
Ellie started by explaining that the sport has been around since 1950 and [former chief executive of the Formula One Group] Bernie Ecclestone had done an absolutely phenomenal job at growing the sport from 1950 into what it is today. However, when Liberty Media acquired the sport in 2017 it was fair to say that actually the sport hadn’t progressed and stayed relevant to, what Ellie thought, was where society and particularly digital marketing communications was at. Coming into Formula One in 2017, Ellie’s role was therefore to establish and set up the marketing and communication function.
Ellie said what it was phenomenal to think that you can have a sport as widely recognised as it was without a marketing function was. She said awareness was everywhere in the world with half a billion fans. But fast forward to 2017 and where we are today, and she felt that there is fundamentally a role for marketing and communications. She therefore started by understanding what were perceptions of the sport and what barriers there were with existing fans, general sports fans or no fans at all as her job essentially is to work alongside the other directors within the business and to really grow the sport, grow the fan base, grow TV and digital audiences and grow attendance at races.
Ellie’s talk at Cannes was framed around inertia. She thinks it’s very easy for big brands and big companies to essentially get frozen because of the success they’ve had or the size they are at. Inertia sets in and there is this fear that the bigger you are the more you’ve got to lose. However, she said that there are lessons she’s learnt over the years and has already applied them in her time at F1 and feels that inertia is almost the most dangerous thing that you can let set in because it will essentially lead to decline and death. You therefore need to apply some of that growth hacker mentality of don’t ask, just do it and then test, move at speed, don’t be a purist, don’t think you always know what you’re doing and just keep going. She thinks it’s all about incremental gains and being able to set yourself free to try new stuff.
Russell said that he felt she had a challenge to win over those people who used to be fans and fell out of love with the sport as well as new audiences as well and Ellie agreed. She said that one of the biggest challenges is to step back and look at what you define as competition and the truth of it is what they came into was a motorsport rights organisation and when you look at the fans of today and the fans of tomorrow, they needed to pivot that to being much more of a media and entertainment brand, whilst holding onto the DNA of the sport, that soul of a race car driver.
In order to achieve this, Ellie said they had to break down those barriers and essentially produce content that resonated with that avid fan that was still engaged in the sport but also attract people those lapsed fans back to the sport too. For Ellie, it’s about how can they be packaging up some of the content that happens on the racetrack, the exciting moments within the races but importantly the human drama and the stories that are happening within the sport day in and day out. Therefore, going back to the breaking of the inertia, the first thing to really do was to not cut corners at the start. Ellie said that you have [get] to 100% under the skin of what you stand for and what those associations and perceptions are. She added that what they learned from spending time on that from was fans both old and new want to know who the drivers are, the teams and the people within the sport.
Ellie continued that the human emotional connection and what is driving that obsession to win on track is what was very very motivating and the essence or the notion of the best of the best. It is that aspiration and desirability that you still want to come through. She said that they will look to do that very much through a lens of man and machine pushed to their limits. Often, they will be opposing forces. But Ellie thinks that in F1, they work in absolute harmony – that’s actually where part of the magic comes from – and so it’s being able to find and extract that content and essentially take it to you in formats that work for you in the right place at the right time, because you may not have two hours to sit down on the Sunday to engage and to watch an entire race but it doesn’t exclude you from wanting to be a fan of the sport and be able to connect with it. It just needs to be in a way that works for you.
One of the new parts of this mix of content is a new 10-part series that F1 commissioned Netflix to produce called F1 Drive to Survive.
Ellie explained that Netflix has been phenomenal success. She said that Netflix are absolute experts at how to connect and tell long-form emotional stories and they’re the best in the business to do that with. She would at the same time argue that if you want to watch the race, then F1 themselves are the best in the business at producing the race footage. However, they needed to hand over that trust and that editorial and storytelling to Netflix and so in 2018 Netflix followed F1 for the year, attended a number of races and built up trust and relationships with the teams and the drivers. The resulting series tells that emotional story and for Ellie, the beautiful thing about it is that it focuses on the mid-field and delivers incredible narratives that you would never expect to be able to watch or to hear because it focuses on the team such as Haas, Renault, Honda and Red Bull. Ellie said that it’s those human insights that have meant people have fallen in love with the sport again or it’s reached a new audience that they haven’t been talking to as Netflix, with 300 million members, is able to get to a new audience to start thinking about F1.
Ellie said that the show has the same exec-producer [James Gay-Rees] as Senna and Amy and that it’s been so successful for both Netflix and for F1 that they got the Netflix team back filming this year with a view to a second series in 2020.
In terms of measuring all this work, Ellie said that first of all they look at whether they have delivered on their plan and the quality but then start to look at actually what those outputs were. She added that search is fantastic for measuring the salience and how much they are in fans’ mindset. This year search globally was up 17% organically compared to 2018 and in the US, it was up 104%. They then look at engagement rates on social alongside follower growth so that they’ve got the right type of fan that is engaging with them. Added to that are view-through rates on video and then ultimately being able to track that back into their long-term brand metrics and trackers, which they will look at twice yearly and subscriptions.
However, 100% of where the ultimate metrics and measures are is in viewing figures, attendance at the races and sponsorship and Ellie said that it’s actually how they look at the correlation between what marketing does into that and even better if we can actually look at causation as well. There are a few stages from engaging with marketing to then buying a ticket but it’s putting in the right KPIs along the way so that they can track and measure that journey and how they are moving fans from being primed and warmed up into triggering a reaction in the hope that they do watch it and start engaging on social media content. Do they then watch highlights, qualifying, buy a ticket, attend a race? So, whilst there are a a few steps in between, ultimately that’s where Ellie said it drives to.
With thanks to ICCO for hosting us at their House of PR for this final interview of this episode.
Finally, if you subscribe to the show, please can you give it a positive rating and review on iTunes in particular as this helps it up the charts!