Transcript of a speech I gave to a conclave of marketing communication people:
The theme I address today is “The Renaissance in Advertising and How You Can Be a Part of It”.
Renaissance means rebirth. But did advertising ever die? Not really. But the thrill of advertising did fade away in the minds of many of its practioners. Creatively the 30 sec spot and the half-page campaign lost their allure as promo spots and discount sale announcements ate away at budgets. On the business side agency commissions started to drop until one day they ended in the retainer fee bin. A great campaign was no longer making money for the agency round-the-year, in some cases over years, and therefore of course there were far fewer great campaigns.
So what has changed some of you may ask? Isn’t it all just the same? Where is the renaissance?
A renaissance, ladies and gentlemen, always begins at the cutting edge. Today the best agencies and the best advertising people, and some of them are in this room, can feel the tide change.
Today I tell you the story of how this tide changed and how all of us can be a part of this turning around.
Of necessity I will talk in the broad outline, at the 30,000 feet level so to speak. To address the issue in full with people like you would require at least a half-day interactive workshop. Interactive because I am sure people of your seniority and talent would, at every stage, have a lot to say and contribute. Let me begin the story of the Renaissance by backtracking a bit.
Five decades ago as the US experienced the post- war boom; advertising was in the Era of the USP. This era, so winningly captured in the TV series Mad Men, was when consumerist trends were just beginning to shape society and there were no dearth of products with unique functional benefits. Advertising did a great job of selling USPs. The advertising people of those times of course all paid lip-service to brand-building but in essence it was all about USP projection. They didn’t need to do anything else in an era when USPs were plentiful and delivering a quality copycat was near impossible.
The era of the USP ended in the West in the eighties. In India it lived on to the nineties. Products in most categories, even in the newly invented ones, very quickly converged and USPs disappeared as with the coming of quality contract manufacturing, making quality copycats became easier and cheaper.
Marketing departments came under increasing pressure to find ways to move the goods and the Era of the Sales Promotion was born.
Cost-cutting became the norm. The share of BTL spends increased phenomenally and the thrill in advertising died.
Most TV and press campaign either became promo lead or were mindlessly “life-style” oriented shorthand for pushing either one or a combination of three related buttons – “Status”, “Sex Appeal” and “Fun”.
Even thick in the Era of Sales Promotion a few maverick brands like Nike and Apple had seen the light and genuinely built brands signalling the coming era. However most advertising and advertising people were stuck hopelessly in the Era of the Sales Promotion. The late Geoffrey Frost a legendary creative director and brand chief of Nike in his final days told me that he had research reports confirming his belief that the collective IQ and EQ of advertising people dropped more than 20% in this era!
Then came the revolution that is still in the making and therefore it is not surprising that some of you might not have noticed it.
It was lead most prominently by AG Lafley the legendary ex-Chairman of P&G, Procter and Gamble as a dear friend of mine in the Shiv Sena likes to call it.
P&G was before Lafley took over in a race to the bottom. Cutting price, cutting margins through sales promotion, fighting a losing fight with price warriors and private label.
Lafley took the bull by the horn. Lafley is a manager with an unusual history. He studied history and was well on his way to acquiring a PhD in Medieval and Renaissance Europe when he was drafted into the US Navy. In the US Navy he ran the retail operations of a 10000 strong Navy base in Japan. As he explains the assignment was a microcosm of the world of business and he loved it. When he got out of the Navy he got an MBA from Harvard and joined P&G. Thirty years later he was appointed Chairman. The rest as they say is history.
It is somewhat apt that a Renaissance scholar launched the Renaissance in P&G and thus primed the pump for a Renaissance in marketing and advertising.
The first thing Langley put into place is a culture of innovation. Every brand in every product category became a stream of innovation. Innovation that did not necessarily produce discontinuous change but in many quantum steps kept the product offering relevantly fresh and one step ahead of competition. In fact I am told that P&G has invested in design and innovation cells across offices on the lines of the iconic design & innovation agency IDEO.
The second step that Langley took was straight out of Marketing 101.
He put the consumer back at the centre of the P&G universe through three key seminal changes, one by a differentiated approach to consumer research, two by re-focussing brand strategy and three leveraging instead of lamenting the paradigm change in media consumption and leisure habits.
The results were astonishing. P&G was back on top of the charts. Before the revolution in 2000 P&G had 10 billion dollar brands, by 2007 it had 23 billion dollar brands.
With P&G’s stunning turnaround, six decades after the likes of Drucker, Kotler and Acker defined and pontificated about brands the era of brand-building had truly arrived.
And the fact is we have upon us the golden age of advertising and if you do not think so perhaps it is time you stuck your head out of the sand.
So what are those at the cutting edge in advertising doing to drive this Renaissance in Advertising?
I believe The Renaissance in Advertising is built on three inter-related commandments.
The first commandment is “KNOW THE CONSUMER BETTER THAN YOUR CLIENT DOES”
In the Era of the USP agencies armed with the 15% commission and flourishing business did invest to become better at consumer understanding than their clients.
David Ogilvy was a brilliant creative man. He was also an equally brilliant businessman. He was among the first to invest in consumer research and built himself a library of insights that won him many a pitch and more importantly help him create and sell great advertising. This library was called the Magic Lantern and created by a New York cell for global consumption. The Magic Lantern was a fairly simple exercise of factor analysis of advertising from across the world and its effectiveness massaged to produce dos and don’ts for a particular category. Fact is that clients did not have anything like it and they lapped up what the Magic Lantern had to say. In fact Ogilvy and his agency sold many a path- breaking not solely because they had great and persuasive personalities. The Magic Lantern played a crucial role. Other agencies also invested in creating unique trademarked strategic tools. J Walter Thompson worked out Bridge Positioning and the T-Plan. FCB had the FCB Grid and so on.
In the eighties and the nineties most agencies stopped investing in creating strategic tools. Not surprising at all in the Era of the Sales Promotion. The attitude to consumer research among agencies stuck in the era of the sales promotion, and there are quite a few of them still around, reminds me of an anecdote related by John Fowles, arguably the best writer of modern English that the language has ever seen.
Back in the 19th century a stable hand at an English country manor was infatuated by the comely daughter of the Lord of the Manor and would moan about how the girl would not even look at him. One such night, the stable master being a kindly man said that the first step in his quest should be to get the girl to at least talk to him. Next morning the stable hand was out in the front of the house with the girl’s horse waiting for her to come down for her daily ride. The girl came out bright and early, took a look at the horse and exclaimed, “Who painted my horse yellow”. The stable hand brightly proclaimed “ I did” and then promptly knelt down in the dust, took the girl’s hand and said “Now that you have looked at me and even spoken to me, can I take you out for a date” or whatever the 19th century equivalent of a date was.
In the era of the sales promotion, like the young stable hand, agencies sought to believe that a cursory understanding of the consumer was enough for them to get by.
However with the Renaissance that has begun in the second half of the last decade, the smart agencies are back investing heavily in consumer research and strategic tools. They know it is better to invest in creating these tools than in, for example, snazzy offices because all a snazzy office accomplishes besides an ego massage is have the client wondering whether he is paying you too much.
However consumer research today is not at all what consumer research was yesterday.
There has been a paradigm shift in both quantitative and qualitative research.
To explain the paradigm shift in qualitative research I will have to get a bit technical so bear with me. The last generation of quantitative research was all models based. Not the human kind but the mathematical kind. Data was collected and analyzed to either build models or validate them and once validated to use models to forecast etc. However two very basic things have changed in today’s world. Data streams have become humongous, numerous and readily available. Computing power is becoming cheaper by the day. The end result is cutting-edge quantitative research has moved beyond old-fashioned directed data collection and model-building. It has moved to what is loosely called ANN analysis short for Artificial Neural Network analysis. ANN analysis is much more robust than model-based analysis because in an increasingly complex world it analyzes complexity with complexity.
The great thing about ANN is it works with existing data streams and the analysis improves as the number and quality of data streams increase. Some clients practice ANN on the data streams available to them. Others don’t and some smart agency groups are putting together small ANN cells and offering ANN analysis at cost. The great advantage that these ANN cells offer these agencies is that working across clients and adding publicly available data streams to their analysis they provide cutting edge insights and prognosis much beyond what even the most advanced client has.
In India the level of available public and private data streams is not as numerous and humongous as it is in the West but it will, sooner or later, catch up and early investors in ANN will be at a great advantage.
Coming to the area of qualitative research the world has moved way beyond depth interviews and focus groups. The paradigm shift in qualitative research is again to do away with artificial forms of data collection and move to immersive insight gathering.
Consumer ethnography is the catch-all term for this form of consumer research. Ethnography gathers its raw material through participative observation of life within the culture or sub-culture being studied. Given the proliferation of communication and feedback avenues with the coming of the web, the mobile phone and the social media the opportunities for co-opting consumers into self-observation has also increased.
While the gathering exercise in consumer ethnography is eclectic, the analysis is rigorous using frameworks like semiotic analysis, NLP and even frameworks defined by theories from anthropology, sociology and history.
It is in the reporting that consumer ethnography is at its most exciting. The dominant output of consumer ethnography is the Narrative – an expertly crafted story or essay that describes a life situation, very often in the first person. The Narrative which in itself is a creative exercise quite often has the power to drive entire marketing and creative strategies. P&G under Lafley have become avid practioners of ethnography and the art of the narrative.
In fact ethnography cells and design and innovation cells on the lines of IDEO have a synergy in that both thrive in a multi-disciplinary environment.
The stories of consumer ethnography yielding powerful brand insights that drove strategy are legion within P&G. For a fabric wash brand for example the brand’s moment of truth was identified to be the point when the clothes come out of the washing machine and the consumer smells them. This new strategy started taking shape when the brand manager reading a narrative that was a first-person account in the day of a young woman and the woman relates how the smell of clothes freshly washed reminds her of her first boyfriend in school.
The smarter agencies have begun investing in consumer ethnography.
They are doing so by hiring ethnographers and building multi-disciplinary teams around them. They are doing so by running training programs for their key people. They are investing in ethnography because it gives them the most direct route to own a key business asset: a superior understanding of the consumer expressed through the unmatched richness of the narrative.
An agency, if it invests right in consumer ethnography will always be better at it than clients for three reasons. It will have a broader canvas in terms of cultures and sub-cultures addresses, two because ethnography is a creative art and agencies by definition foster the creative arts better and three because agencies are natural havens for multi-disciplinary teams.
The other form of qualitative research that is emerging is a cross of subtle promotion and insight gathering. Companies like Levers, P&G and Kraft Foods launch, maintain and promote websites that provide a paltform for consumers with common interests, like fashion-oriented teenage girls or diabetics, to interact with each other. Data from these sites are then mined for consumer insights. The sites are also used for subtle promotion.
Coming from the angle of research such sites are beginning to be known as Active Research and coming from the angle of promotion they are known as Self-owned Media
I know that a couple of global agency groups are looking at creating and maintaining such platforms. Coming to think of it such assets would be great for an agency group to own because of the wider canvas and the ability to generate and package better content. An agency would also be able to monetize the site much better.
So I have talked about over the past few minutes about how an agency can work towards UNDERSTANDING CONSUMERS BETTER THAN CLIENTS.
The second commandment for participants in the Advertising Renaissance is BUILD BRANDS AND BRAND COMMUNICATIONS FROM THE INSIDE OUT.
Before I speak about what are the implications of this commandment let me clarify that there is a rationale to the order of the three commandments. Action on the preceding commandment is a necessary pre-requisite for action on the subsequent. An agency cannot build brands and brand communications from the inside out unless it has a superior understanding of the consumer. In time of course inside out brand building will contribute back to a superior understanding of the consumer.
So what do we mean by building brands inside out?
Research has shown that the difference between a true brand and a wannabe brand is not name recall or even consistency in terms of quality and price of products. The difference between a true brand and a wannabe brand is Brand Authenticity.
The concept of authenticity has intuitive appeal. Think about the people you like and trust. What is the difference between these people and the people you don’t think much of? 99 out of 100 cases it will be because all the behaviour and attitude of people you like and trust springs from an inner well-defined core value or values while those you don’t like or trust, display a superficiality in behaviour and action that is engineered to suit different occasions. Sometimes you must have noticed that you develop a sneaking admiration for even a negative character in a movie because the character attitudes and behaviour have been scripted to spring from an authentic core. The opposite holds true for heroes and heroines who fail to win your admiration or sympathy.
So building a brand from the inside out is to define a core principle of the brand and then to make sure that every brand action and communication adheres to this core principle.
Let me give you example from two brands on which there is no debate on whether they are wannabes or whether in fact they are true brands: Nike and Apple
I have seen a brand mission document of Nike that clearly lays out this principle of authenticity not in those words but in the same spirit.
While I will refrain from stating the core principle of Nike in the exact words described in the document the spirit can be captured by the phrase “self-driven”. Now think back about every experience that you have had with Nike from two to three ago. Don’t you see how most of it sat well with the core principle of “self-driven”. Personally I think over the past couple of years there are signs in Nike’s marketing that indicates a slippage in this strategy of authenticity.
So what about Apple? The same Nike document that I spoke about took a shot at guessing the Apple core principle.
The phrase “self-sufficient” captures the essence of what the document has to say. With the brand Apple the principle source of brand communication lies in the design of the product and the experience of using them.
So do you think ‘self-sufficient” is the core principle that defines the Mac, the ipod, iTunes, the iphone or the ipad?
Or is it really not ‘self-sufficient’ but ‘self-fulfilled’? Believe it or not I have had an animated three way debate on that not very long go. But I am sure you get the point.
Brand Authenticity is all fine you say but how do I get into my brand communication strategy when the client has no such principle defined in his book?
I have thought about this and have three scenarios for which I have some advice to offer:
Scenario A: the clients understands brands, has a coherent brand strategy that they have communicated to you. Study that brand strategy closely and you will find in many cases a principle that may be termed something else but is very close to the brand authenticity principle. Adopt that principle and making the central governing principle of your work for that client
Scenario B: The client understands brand but his brand strategy has nothing resembling the brand authenticity principle. Bring out the big guns; use your superior understanding of the consumer and your global grasp of good advertising to impress upon the client the utility of the Brand Authenticity principle. 9 out of 10 times he will grasp it and became an adherent.
Scenario C: What do you do when you are facing a inscrutable Japanese or a beady eyed Marwari ( I am a Marwari but a notable exception I think) to whom the concept of brand is essentially alien whatever lip service they might pay to it. My advice is to stay away from any mention of the Brand Authenticity principle to the client but instead use it is a secret sauce to create what the brand needs in the guise of, as Bob Dylan says, what the client thinks he wants.
The subtle principle of Brand Authenticity leads on to the third and final commandment:
CELEBERATE FRAGMENTATION. KEEP SACRED INTEGRATION.
Over the decades media and leisure choices have proliferated. This fragmentation has been seen by many a marketer and advertising as an obstacle to be overcome. But as with the Renaissance the focus shifts to true brand-building, the fact that our consumer consumes many forms of media and that there exist media that are more and more tailor made for our customer is a big boon. Mass media cannot deliver brand-building. It can deliver propaganda and awareness build-up. Interacting with the consumer through multiple media forms – televisions, radio, press, web, social media, events, activation, in-entertainment gives a brand a platform to demonstrate authenticity while reaping the well documented media multiplier effect. Brand presence in a media that speaks at a more intimate level to our consumer – a gardening magazine or TV show to the green thumb, a culinary channel to gourmet – allow the brand’s authenticity to make the transition from being liked or admired to being a friend.
The fact therefore is that the much lamented scenario of media fragmentation is actually a never before opportunity to build brands.
However the cornerstone to doing so is the ability to integrate across all forms of media communication. To some extent this integration is delivered by how the effort across different forms of communication is organized. After nearly two decades of specialization it is no surprise that with the Renaissance in advertising and the dawning of the Era of True Brand-Building that integration is the new mantra among smart marketers and advertising groups. A couple of years ago P&G re-organized its outsourced marketing services under a brand agency. The brand agency had control over and was responsible for the output of all the other marketing services agencies. I do not have the details but my understanding was that the brand agency was chosen from among those who had grasped the brand’s core the best irrespective of the area of specialization and in this competition it were advertising agencies that emerged as winners in most cases again emphasizing that true integration comes from being lead by superior consumer understanding and a firm grip on the core principle of the brand.
That completes the triangle that leads to the resurgence and renaissance in advertising.
Build a superior understanding of the consumer, grasp the core brand principle and lead the propagation of the brand with authenticity intact across platforms.
Let me conclude with an anecdote. The anecdote is about the soldier and the old woman. Many of you would be familiar with it but it bears repeating in this context.
After a long, lonely walk in the dead of winter the young soldier spied a farmhouse in the distance. Very hungry, the soldier knocked on the door anticipating a warm welcome and some food. The door was opened by a bent old woman. She gave the soldier a suspicious look and refused his request for food and shelter. The desperate soldier asked her is he could spend the night in the courtyard and build a fire there to keep him warm. The old woman reluctantly agreed. After some time the soldier knocked and asked the woman if the woman would lend him a saucepan and a bucket of water. The woman was intrigued because the soldier said he wanted them to make some soup out of stones. Intrigued the woman consented. The soldier cleaned some stones, put them into the saucepan along with some water and after heating it for sometime tasted the water and smacked his lips. The woman who was looking from behind her door asked him how the soup was. The soldier said it was alright but would be better with some salt. She returned with some salt. The sequence was repeated until the soldier had added salt, some shredded onions and tomatoes and even some butter to his soup of stones. Finally he shared the delicious soup of stones with the client. In the years to come the woman became famous for her soup of stones and she would willingly share it with anyone who would listen to her story.
For all of us who have been in advertising for many years, the long lonely march in the winter is over, the farm house is in sight and the old woman is waiting to convince her about the miraculous soup made of stone.
Seriously I believe that there has been no better time to be in advertising than now. It is one reason why I wish I was three decades younger. Not the only reason but the only reason I can talk about in public. Thank you for being a great audience.
