Marketing Intelligence by Iain Johnston

One of the best benefits of working in our industry is that you get not only to meet but to actually work alongside some of the most inspiring people around.

It’s not just the many unsung heroes across our businesses; I’ve written before about the amazing work of people like Richard Seymour (on tele three of the last four weeks) and Nick Talbot who pioneered the Aircruise phenomenom which went viral recently.

But it’s their Seymourpowell colleague Dick Powell who we had the pleasure to announce appointed as Chairman of D&AD, and a Seymourpowell client Will Whitehorn of Virgin Galactic who has now joined Loewy as Chairman.

Quite a fortnight

There must be something in the air. And I don’t mean an ash cloud.

Since February we’ve had one pitch after another, often two or three at once. Not only that, but there are some really quite exciting ones. Briefs which ask for an agency to really make a difference. ITT’s for significant major new brands. And clients who want help with some really complex and challenging communications problems. Excellent news.

It’s a bit like the old days again – constant buzz in the office, excitement around the next key deadline, some very long hours. The odd frayed sense of humour, and some inspirational thinking and ideas from colleages. Brilliant.

Except for one thing. There may be lots more activity this year compared to the year we all want to forget of 2009. But, it still takes an absolute age for pitches to become decisions to become contracts and purchase orders. For a while it was budget paralysis until the outcome of the General Election was known, but even so, the whole process seems to take twice as long as two years ago.

Am sure in many ways it’s a good thing – opportunities get much better scrutiny at earlier stages, making it a better brief, better focused on delivering real results for clients. All good. It can be a tad frustrating too, but then we’d best get used to it, it’s here to stay.

OK, I see the strategy now.

I wrote previously about how utterly terrible the Ignis advert was by Blackfriars bridge. Well, now I don’t know whether to laugh or cry. They have  compounded the problem by…..wait for it ………. throwing large sums of money at the campaign.

Nooooooooooooooooooooooooo.

The good news is that no matter how poor the campaign, blanket coverage in and on taxis, at stations and other sites all combine at least to build a sense of presence in the capital. They’ve even managed to produce an ever-so-slightly animated version for the video JCDecaux site on the main concourse at Euston. Good stuff. If they throw enough money at the campaign, they might even succeed with their target audience in establishing a lasting association between their brand and the phrase “we give our fund managers a licence to perform”. Job done?

No.

Ubiquity and huge expense do not a good communication make. Must track down the adwatch spend figures for it. Bet I’ll be stunned.

I’ve checked with a couple more fund management chums (statistically valid sample – two people who I happened to be at school with or meet for lunch), and they really don’t understand what Ignis are trying to say. Or at least are amazed that they are promoting freedom and risk in a market which is largely running scared from such currency. It’s a bit like promoting a transatlantic air route by saying “our pilots have such a laugh at 39,000 feet”. If the results of such licence are massive outperformance, then why not say so? But what about compliance? What about freeing staff to take risks with others’ money? Is the campaign even credible?

Rant over, for now.

So what is it with Fund Management firms?

Why when they have access to obscene amounts of money, do they skimp on the marketing? Why, oh why, oh why is so much fund management advertising complete rubbish?

Case in point: on my walk to the office each morning. Three poster sites, right next to each other on a very busy road junction. They must be premium priced sites given massive traffic volumes and often stationary vehicles mean people have time to take in the ads properly.

And yet the contrast between the use of the three sites could not be more stark.

First Mumford & Sons’ ad for their debut album (for those like me who haven’t yet encountered them they’re a West London band).

Simple, to the point, no fuss, direct. Good. Small site, horrendous backdrop, but good use of space. I imagine their audience get the point pretty quickly – if you know them, you probably want their new album.

Second, is this huge hoarding.

It’s colossal. You can’t miss it, right on the busy junction. Excellent site.
Terrible advert. Just terrible. I walk past it every day. I’ve studied it carefully, and for ages had no absolutely no idea what it was trying to say, to whom, or why. I assume “Licence to Perform” is some vague reference to James Bond, but then they feature a car in the picture (which is out of focus so we can’t really see from a distance what it is) which has no connection with JB – no Aston Martin or Lotus.

Ok so they are not targetting me (or are they?) as I am not a fund manager. So I asked my mate, who is, and he has no clue what the poster is about either, though he did start puzzling over exactly what model the out of focus cars are.

Only by getting up close could I even work out which so-called brand it was supposed to be promoting – bet you can’t from the picture above? By getting up close, you can make out in the top right hand corner a web address, and the actual company name is in the bottom right hand corner, although it is from most vantage points obscured by the palm trees (in London?) or the traffic lights.
It’s for Ignis – I’ve provided the link to help them as I am not sure they’ll get many leads from the ad. I have tracked them down on the web - at least their SEO is working - and if you go searching beyond the disclaimers you can unearth that they have at least attempted to explain on their site the idea behind the campaign.
We have all heard the adage “I know I waste half my advertising spend, but I don’t know which half”.

I am sure the intent behind this as was not to waste the whole 100%, but you have to wonder.

And the third one on my walk to work:

Brilliant. Simple. To the point.

So if you are running a creative business, or indeed any professional services firm, how should you spend your scarce marketing budget?

I suppose this begs the question: “what budget?”

We’ll have to suspend the normal subject matter of this column at this point. Here, we’re not talking about the £1-30m our clients spend every year. We’re discussing the normally hard-won and constantly under threat marketing budget for our own agency.

I have worked in a range of such businesses, but many of them have evolved a level of marketing budget at between 2% and 5% of revenues, typically towards the bottom end of that scale. So an established £10m revenue direct marketing business might have its own budget of about £200-500,000, whereas a small fast growth design business of £1.5m fees might still feel able to commit £100,000 to 3^rd party promotional activity and cost.

These numbers probably include the cost of 0-3 dedicated marketing staff, but exclude new business people.

The absolute level of budget should of course be a function of what the objectives are in marketing terms, in most cases driven by short term new business goals and longer term profile and reputational plans. Stable businesses without ambitious growth plans can probably achieve all they need with relatively limited funding and resource. More aggressive plans will inevitably necessitate deeper pockets.

So back to the “how to spend the budget” question. Conceptually, I view marketing activity as a 3-D sphere, with the essential non-negotiable activities right at the core, and the nice-to-have not so critical stuff around the outside. The marketing activities are a bit like the layers of an onion from core priorities at the centre, to more peripheral things further out.

Let’s assume I’m running a £5-8m creative business and I have managed to hire a good B2B marketing manager. I might now have £80-150,000 to spend as an annual investment.

In allocating priorities, I’d start at the core, and ask myself, “if I only had £10k, what would it go on?” I might decide a credible holding page on the internet was the minimum first step, plus some business cards.

Then I’d work on through each additional £10-15k, adding layers to my marketing budget onion, each time asking “what is the next priority”. Sometimes as you work your way outwards, you top up the budget on some earlier priorities. For example, you might decide after you have a credible presence on the web and some business cards, you next invest in a decent creds deck (£5k), a basic PR retainer (£20k), a contact database (5k plus subscription to marketing intelligence tools) and some outbound direct marketing (£10k). You might be up to £50k+ by now, and the next £25k you allocate to take the web site from digital brochure to interactive portal. Then you carry on adding more new activities (event attendance £10k, sponsorship £10k, some client dinners and hospitality £15k), and then top up PR £20k).

Easy to spend £150k, isn’t it?

I guess every business is different, but however you end up prioritising your budget in your business, I’d still urge you to test the budget in two more ways:

1. slice your onion straight through across all the layers of activity so you get in any one month a small slice of each activity: does each activity that month support the others, are they consistent, and do they build together?

2. ask yourself for each £10-15k, is there a better use of that money? What specifically do we hope to achieve from that activity and is there a more cost effective way of doing it?

By far the most effective business to business marketing events I have been involved with have been some which don’t actually cost very much money. Gaining a speaker slot at the right conference can be priceless in terms of exposure, reputation and even new business leads. Such things often cost just the time and expenses of getting the right person there to speak. Similarly many networking events can be superb for business development activity, and cost very little to do.

In most cases it is our time that is actually the biggest driver of success. The more we invest, the further the budget goes, and the more the activity is likely to deliver useful results.

As you might expect from someone who pitches an alternative approach to clients, I have strong views about challenging traditional media channels and priorities.

It never ceases to amaze me why we sometimes persist with a formula, no matter how well rooted in historic performance or current research, which simply takes what we spent last year and tweaks it up. Or in the case of the last year, down.

Nevertheless, with our clients, most of whom are typically spending £1-30m per annum in support of a brand, there is normally enough cash to go around. They can cover off all the basics (guidelines, internal launch, channel comms, PR etc), and after this core, the old approach used to be a question of whether to devote this % or that % to TV, events, DM, web etc.

Over the last few years, the mix has changed, and over the last 18 months, there have been some irreversible 2012-scale seismic disturbances.

Bye bye lots of TV, broad channel comms, and print. Hello social media, reinvestment in product and design, and (especially digital) PR.

However, the core components survive.

But when we look at how agencies spend their own marketing budgets, there don’t seem to be so many tried and tested formulae.

How should a design business organise its £250k spend between its own promotional and reputational priorities? How much should a PR business spend on its own PR? Indeed this raises another point: agencies can actually be very poor at doing for themselves what they preach so passionately to clients. Phrases like “look at the shoes of cobblers’ children” and “physician heal thyself” come to mind.

I’d argue in fact that most agencies should NOT do their own design/PR or indeed any marketing in-house:

1. if you build web sites and fully integrated online platforms for major global companies, are you really best placed (and most cost effective) to produce your own 10 page “creds online” effort? Surely you can do what is required technically, but are you really good at B2B channel comms which may be the key skill to get your agency known?
2. can you really be sure you will get the optimal service and priority as an internal client versus “real clients paying real money”
3. can you really be objective about your business, and distil out of your own culture, heritage, people, clients and products the essence of your brand?

Or actually, are you better off getting an independent agency to do this for you?

Forget The Apprentice, Design for Life is the next bit of so called reality TV to attempt to appeal to a wider audience.

Philippe Starck is the “guru” this time, though our own Dick Powell seems to be getting more air time and I would hope the audience can already see who is talking more sense

Think I’d rather be mentioned in the company of Thomas Edison (12 min 19 secs in if your IT hierarchy will let you stream 652mb).

Once again Dave Trott gets to the heart of the issue. The contestants on the show are labouring under the misapprehension that the challenge is about Design. Of course it isn’t. It’s entertainment.

Still, it’ll keep me going until the next instalment of the Sir Alan Show comes along.

As well as being a world famous product designer, and on the BBC again this week, Dick Powell also organised our latest Loewy Masterclass, this time the theme was Pitching.

Neil Christie of wieden & kennedy whose presentation was extremely well received, has beaten me to it and already summed up proceedings well here, and Wadds from Speed has already posted his take on the event.

In answer to the comment on Neil’s blog, this was a closed event, the second such event Dick has organised for us, and a raging success so far, based on:

1. the audience feedback forms (too many positives to ALL have been bribed).

2. the improvements in our win rate since the previous masterclass in June

My only concern about the whole thing was that I failed to apply the lessons of the previous and this masterclass to my own presentation. We tell our people not to pitch for a project that we haven’t got the time or bandwidth to do justice to. No excuses, I clearly knew in advance I was going to struggle to prepare properly for the event, and two weeks earlier had suggested Dick cut me down to just 15 minutes. As it turned out, I didn’t make enough time, and had to opt out at the first coffee break to get back to the joys of conference calls at the office. So I missed some of the star turns which followed.

Ok so the conference call went really well (about much more at a later date), but better to do one thing brilliantly than two things just about OK.

Still, over 100 people in the audience did get huge value from the whole thing, and they’re already asking Dick about the next one.

Huge thanks to Neil, Roger, Tim, Richard, Phil and Al for their excellent presentations, and of course Dick, Lucy and Hayley for organising the whole thing - superb.

We’ve moved.

We’re in our wonderful new home in Park Street, in the heart of the South Bank.

If you have read my previous 32 posts, you will know I believe the culture of an office and its setting in the local environment do have a material impact on how a business performs.

I’ve worked in all parts of London, and each appeal in different ways.

I’ve spent my fair share of time working in the City, that thrusting hotbed of deals and excess. I’ve been there in boom times (floating businesses in the late 1990s) and not so good times (client meetings more recently). During the day, I love the professionalism, the confidence, the not-quite-masters-of-the-universe-any-more-but-still-pretty-good projection of possibility, the can-do mentality. I like that everyone dresses that little bit smarter, business suits rather than jeans. But I’m not so keen on the City after about 7pm when the whole place becomes a ghost town.

I loved working in the West End, though admittedly it’s been 15 years since I was based there and a lot has changed. These days I still love the hustle of the area, the busy-ness, the buzz. I have mentioned the culture and new office environment of Speed Communications before. They are now right on Leicester Square in the heart of the West End, and some nights they have to fight with paparazzi when they leave work on a film premiere night. Their business seems to be really thriving in their new location, and after an initial settling in period, the noise and energy of the team is really building again. I must admit though, I do find the West End a bit touristy, and even outside of some of the less well trodden paths, it can be, well, I guess a bit seedy.

I worked in the heart of Westminster for a couple of years. We had a beautiful traditional office in Smiths’ Square, just off Millbank. It felt more sophisticated, more high-brow, and notwithstanding the prevalence of politicians at every turn, more respectable. Again we had to dodge the press (Tory Central Office was across the road), but at least we weren’t invited to buy theatre tickets or get two-for-one drinks every time we popped out for a sandwich. However, being the wrong side of Parliament for the rest of town, meant that we were trapped whenever there was a state visit/opening of parliament/security alert/over zealous police checkpoint or pregnant pigeon on the road. And it was, well, a bit quiet.

So for the last couple of years I have been based in Pimlico. Well, actually on the embankment, with my office facing the road noise at the traffic lights at Vauxhall Bridge. On my first day as CEO in May of last year, I made two decisions. Firstly I decided to cancel the Christmas Party (more on this in another post). Secondly, I announced we would be moving out of Pimlico. I couldn’t at the time say when we’d be moving, but I was determined to get our really bright and energetic young team out of an area that felt as though it had retired already. It didn’t help that our offices were a rabbit warren of nooks and crannies, staircases and hallways, corners and cubbyholes. In fact they were a major barrier to creative collaboration, reinforcing silos rather than wider team working.

Pimlico is “nice”, it’s quiet, it’s one of the more residential areas of central London. But it lacks spark, where’s the excitement? We did create our own little pocket of irreverence while we were there, but I don’t think any of our people have been sad to have moved away.

Which brings me back to Park Street, and the South Bank. The office are great, modern, spacious, with acres of open plan space. So much space in fact that while we wait for the other half of The Team to move over from their old office in Southwark Street we have been using half of a floor as our table football arena (I’m currently languishing in mid table mediocrity, a bit like Liverpool). And, yes, we were discussing yesterday how we could turn a couple of tables over as goals and play 5-a-side in the currently unblemished open plan space.

The surrounding area is superb. In complete contrast with Pimlico, we have restaurants, coffee shops, the odd deli, great sandwich shops, even Paul Smith. Best of all is Borough Market, which is just a peach of tradition. No wonder we have film crews here all the time working on the next Bridget Jones or Love Actually. But what I really like is that you can come out of a restaurant at 11pm, and the place is still buzzing. And it’s the locals that are still out, making it a great sense of community.

I look at the smiles on our peoples’ faces around the offices here. It just feels great.

3. “Satan fronts church campaign” <checks to see if it is 1st of April, then realises its about a church in Detroit, so anything’s possible>

Looking at the second one above, it does of course take courage and commitment to spend scarce marketing dollars advertising against someone who is trying to sell your products. Credit to Dermalogica for that. It’s good to have principles. I’m one of the first people to applaud a business that has a strong sense of its brand and how to protect it.

However, this for me smells like old style advertising. The sort of advertising we used to have in markets where you could control things. Where you could prevent people getting messages which didn’t tell your story. Advertising from the age before the internet, mobile media and self-forming user communities. The Stone Age in other words.

I can remember at business school hearing about the rules for price discrimination. One of them was you have to be able to build strong and defensible barriers between groups of consumers that you want to screw discriminate between. It is essential that in price discrimination, the different buyers have incomplete knowledge and can’t talk to each other. In classical economics terms, an imperfect market. The sort of markets that hardly exist anymore.

I feel for Dermalogica’s customers. Wonder if they’re thinking “why can’t I buy this product at Boots if it suits me?”.

A bit like when consumers find out the marketing they’ve been peddled is bollox. Or even very high quality and genuinely intentioned innovation gets twisted on receipt. Customers become cynical, they distrust the brand, and they rebell against the company. Like when this piece of brilliance, spawned these two (and many other) parodies.

But the guy from the third piece explains a pragmatic approach. In answer to the question “why is the church promoting Satan?”, Adam Dorbland, the church’s youth pastor, said that ‘Jesus wants us to be creative’ and ‘use whatever it takes to reach people’.”

All good stuff, but only if the message is rooted in fact, is based on some fundamental truth.

By taking an ad out to shout to the world they’re in the middle of a row with an influential distributor, Dermalogica are in an interesting position.

Why aren’t they focusing on their own positive agenda about the brilliance of the product, rather than airing their dirty linen in public? It could of course be another bit of “any publicity is good publicity” routine. And the risible £500 reward they are offering to distributors who blab on how Boots are getting hold of their product has all the hallmarks of a stunt.

But focus on the consumer. The company wants the consumer to think the product is exclusive, only available through high-end Spas and the like. But I think consumers like choice, and they resent restrictions, they want to be treated as grown-ups. So the ads are just as likely to drive more traffic to Boots stores. Hope that’s what Dermalogica intended, but I suspect not.

I’m not sure I would want to reach my customers with the message that I don’t trust them to make informed decisions.