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Mark Ritson - Electrical Marketing

April 30, 2019
Mark Ritson
Mark Ritson
Adjunct Professor, Melbourne Business School
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Mark Ritson is Adjunct Professor of Marketing at Melbourne Business School and a Visiting Professor at Singapore Management University. He has a PhD in Marketing from Lancaster University and has been a faculty member at some of the world's leading business schools teaching on the MBA programs at London Business School, MIT Sloan, and the University of Minnesota. He is widely acknowledged as one of the world's best marketing instructors and has been the recipient of MBA teaching awards at LBS, MIT, SMU and MBS.

Mark has worked globally as a private marketing consultant on projects ranging from brand strategy, market research, segmentation, CRM, marketing communications, brand acquisition, brand valuation and brand extension. His clients have included Baxter, Loewe, McKinsey, PepsiCo, Subaru, Eli Lilly, Donna Karan, Johnson & Johnson, De Beers, Sephora, Benefit, Amgen, Ericsson, Jurlique, Cloudy Bay, Unilever, KPMG and WD40. For thirteen years - from 2002 to 2015 - he served as in-house professor for LVMH - the world's largest luxury group - working with senior executives from brands like Louis Vuitton, Dom Perignon, Fendi, Tag Heuer, Dior and Hennessy.

He has written a weekly column on branding for Marketing Week for over a decade. On 3 occasions he has been judged the Business Columnist of the Year at the PPA Press Awards, the highest award for magazine journalism in the UK. He is also a columnist for The Australian newspaper. His more scholarly publications include articles published in Sloan Management Review, Harvard Business Review, the Journal of Advertising, and the Journal of Consumer Research. He was the recipient of the Ferber Award in 2000, one of the most prestigious prizes in Marketing, for his doctoral thesis. In 2001. His co-authored research on pricing was cited by George Akerlof during his Nobel Prize acceptance speech.

He is a Tasmanian by marriage and lives somewhere between there and the "mainland".

"The essence of strategy is deciding what you will not do"
~ Michael Porter

Show Notes

My Story

I have always done marketing, and I’m old enough for that to be quite unusual. I did my undergrad in marketing in the 80’s (which wasn’t easy to do back then). I did a couple of years’ work then got a scholarship to go and do an MBA, which turned into a PhD, in marketing. Then I became a very young and very useless marketing professor, teaching in America. I was very well-meaning, but not very practically experienced for the first 4 years of my career. Then I moved back to the UK (where I’m from) and I became a professor at the London Business School. At the time, London Business School (at the turn of the century, at least) was very applied, so I was thrown into executive teaching and consulting.

That began my turn towards being a more practical professor (if I can say such a thing). The main relationship was, I started a 15-year consulting relationship with LDMH, the luxury goods company in Paris, working across all of their brands globally and for their CEO teams. I’ve done all kinds of other work since and around it, but I began to get to work on proper brand strategy for proper big, billion-dollar brands globally at that point.

So, I’d been 20 years a professor, but with 10 years of consulting work. For the last 7 or 8 years - I’m only an Adjunct Professor now, which means I don’t do a lot of the research stuff. I still teach branding at the Melbourne Business School, but I run my own consulting firm which works with large companies on branding and I knock out a couple of million dollars a year of consulting work, with an employee of one. So, it’s good – the cost of goods is my life, as I like to say.

Adjunct, I think, is Latin for ‘not real anymore’ so, I don’t do any real research and I don’t do any service or admin. I come in and teach and then I leave and go and do work. That seems to just be perfect for me.

I’ve been at MBS for 15 years. I’m married to an Aussie and we came out to look for a suitable position. I loved London Business School and I’d also had a soiree at MIT and the Sloan School, both of which were great schools, so I was looking for a world-class school in Australia for various reasons, and I ended up at Melbourne Business School.

The great thing about MBS is, A, it is world class. We are ranked third in the world for marketing right now - just next to Kelvin, Indiana, and above LBS Wharton, MIT, and everyone – by the Financial Times. So, we are world class, although we are a smaller school. The students are world class, which is really important. But, also, they’ve been kind to me. They’ve let me do my thing, which isn’t always easy. I certainly give it back to the school in terms of support, but they’ve been very good to me. It’s been a good relationship, and why I think will see me out in the future. I don’t wish to go anywhere else.

There was a bit of negotiation, but I’m relatively footloose now. What’s been happening in the world of academia is professors of some standing have more power than they used to have. We were indentured to our business schools and they were the brands, but, it’s clear that there is a small number of well-known professors that I’m lucky enough to be part of, that are able to leverage that notoriety, not for money necessarily, but certainly to get a bit more freedom to do what they want.

I very much respect what my colleagues here and elsewhere do with respect to research publications, but I’ve always felt utterly disappointed in them. I think most of them are full of nonsense. I think they don’t have any impact on marketing practitioners. I think they state the obvious 99% of the time and no one reads them. So, my preference was always to write for marketers.

I began writing for Marketing magazine about 15 years ago (which is a big UK publication) and then switched in a ‘scandalous’ transfer move to Marketing Week, their arch-rivals, about 7 or 8 years ago. I’ve always written a weekly column for them, in the UK, which is very well-known, I think. And then, here, I’ve been writing for The Australian, for Darren Davidson, in the media column now for a couple of years as well, which is great because The Australian carries such influence, I cannot tell you. It’s obviously just a mass newspaper in one sense, but everyone in the top tier reads it. It’s stunning. They are my other two jobs, really. Writing a column for Marketing Week on a Monday in the UK, and for The Australian on a Friday here in Oz.

I write all this from Tassie. I can’t promise you I’m living the dream. I’m still spending far too many days on the road, but we are getting closer to it. I’ve got a family life in Tassie and am still able to work. I’ve stopped doing international stuff about a year and a half ago – with kids now, I’m trying to just base myself out of Australia because you just can’t keep doing that. I miss that a little bit, but not much. The goal is to have 2 days a week on ‘the mainland’ as we call it, and the rest of the time, very much working but doing it from home.

This sort of writing was sold to me when I started writing for Marketing as ‘You’ll get loads of client work”. And, the reality is, you don’t. But, what happens is, when you go into a room of marketers, they all know who you are, which makes life a lot easier. They already know what they’re getting, to some degree. The clients I’ve worked with for the last 5 or 6 years kind of tell me what they want me to do because they already know what I am good and not good at. So, that bit generally helps.

I’ve got really good clients (and I’m not just saying that) that I’ve worked with now for 7 or 8 years and I don’t need any new work – which is great – and I like staying with the same clients. Planning and strategy works better if we can do it over 3 or 4 years. You really build a way of working, so it makes me happy.

It is very satisfying to create something twice a week. It is the most satisfying thing I do. And, of course, with social media, the audience is dramatically enlarged now. It would not be unusual for me to get 400 or 500 comments in a week from one of my pieces – many of which are hugely opposed to it, by the way, and there is nothing wrong with that. I measure influence by, “Does anyone know who I am? Do they read my stuff? And, do they have an opinion about it?” It doesn’t have to be positive, but I want to be involved. I think more academics should be involved and it’s tragic that they’re not.

Advice To Self and Others

The overriding advice I would give anyone in the early years of their marketing career is ask dumb questions. I think there is a prevailing logic that, “I might look a fool if I ask these questions”. The reality is, the most experienced and the most impressive marketers I know are the ones asking child-like questions, which are either met with a simple answer or reveal something that no one understood.

There was a great story last month from the CEO of Restoration Hardware, one of the big retailers in the US. He is a big, wonderful, certainly confident CEO and his digital team wanted to double their search budget for search advertising and he said, “Why?” They said, “We’re doing such a great job, if you can double the budget, we can deliver even more people to the website.” And he said, “Well, how are you doing it right now?” They said, “You own these 32 words that are delivering 90% of the visits to the website”. He asked, “What are the words?” and the guy said, “Oh, it’s too complicated”. He said, “No, what are the words?” The guy said, “We don’t have them, but you wouldn’t be able to follow it” He said “No, no, let’s just postpone the meeting and come back next week and tell me what the words are. I want to see the words”. And, the words were the 30 different ways to misspell ‘Restoration Hardware’. So, what people were doing was putting in misspelled words or a typo and that was getting them to the website.

My point there is to say, “What’s going on here? Explain this to me like a child because I don’t get it”. That’s the best piece of advice I’d give anyone. Anyone that tells you, “I understand what’s going on with programmatic” or, “I’m completely on top of all the developments in digital media” is lying or they’re a fool. Nobody knows. People 3 times as smart as me and 10 times as experienced will tell you, “We have no idea what’s going on”. Someone turns up to my office each week, selling me a solution to a problem I didn’t even know I had until I looked at it. And, I’m like, “Holy smoke. I didn’t even know that was a problem”. That’s what marketing is right now. So, don’t be afraid to ask dumb questions.

Then, it’s find your trusted people across the spectrum by mixing up. Again, we have a problem here. I was talking to my students about it this morning. My wife is very into coconut oil and my dad, who has been visiting us from England, thinks it’s all nonsense. Frying in coconut oil is, according to my wife, very healthy and, according to my dad, not very healthy. So, to resolve this slight familial crisis, I went onto Google and typed in, “Is coconut oil good for me?” and I was reassured by the answers that it certainly was. And, just before I closed the website down, I typed in, “Is coconut oil bad for me?” and received a number of troubling confirmations that it was very unhealthy. This is the problem with these guys, Google and Facebook. They want all the money and they don’t want any of the responsibility.

You can’t do that to society. It’s not about coconut oil, it’s about democracy and gay rights and abortions and Russians and the complete lack of responsibility to supply the world’s information to the world. They offer the biggest crisis that we’ve ever seen in mass communications, make no mistake. We’re headed to a dark, dark place because of these guys. They’re not doing it on purpose, they’re just following the dollar (and there’s nothing wrong with that), but they need to be broken up. They need to be stewarded because we’re headed to a place now, with more than half the American population getting their news from Facebook and Google telling you the exact opposite message depending on who you are. We’re creating bubbles that will crash into each other.

I’ve worked with journalists for many years and they are a strange, unorthodox, certainly unprincipled sometimes, frequently drunk, politically incorrect people. But, it turns out they were the defenders of society and culture. That, beneath a right-wing or a left-wing journo or editor, is a societal responsibility to not tell lies and to take seriously what goes on a front page. If you’re a left-winger, that’s not true, and a right-winger, vice-versa, but it was true across the spectrum. The problem with Google and Facebook that will continue to haunt us for the next 20 years, is neither of those companies considers themselves to be a publisher and will actively deny the point, even though they supply most of the news to most of the developed world. That’s an untenable situation, and we’re only just beginning to glimpse the darkness it produces.

The Russians manipulated the American election and general democratic process using social media and advertising. If I said that a year ago in a podcast, you’d be closing it down now and running for your life. That’s what happened. According to a congress hearing and Facebook’s acceptance, that’s exactly what happened. We are in a very dark place. And, copyright has disappeared. I listen to all kinds of beautiful music on YouTube in the morning, not one of which I have ever paid for. Google hasn’t paid for it either, because they say, “It’s not our responsibility to pay for the music that’s on Google, it’s the people posting the music”.

It’s a terrible double-whammy at a time where social media has created ‘fake news’, they’ve also decimated the news media that normally disinfects the bacteria of lies that take place in society. But, those journalists aren’t there anymore. Not in the same numbers. So, we’re in a slippery place.

America is the poster child for all this right now. We have someone who is widely accused of paedophilia and looks likely to have a significant chance of getting in, in Arkansas. And, yet, he still has tremendous support. But, the reason he has tremendous support isn’t that people like paedophilia, it’s because their news sources are telling them he didn’t do it. So, where are we right now? That is probably the dominant theme for the next few years ahead. Sure, the digital duopoly will dominate advertising, clearly, but what they’ll do to society is a different question.

So, onto the point again. What would I say to a young marketer? First of all, ask lots of dumb questions. Second of all, ironically – in my generation, you went to Unilever or PM&G or Diageo, because these were the great companies for training. Some of us went to consulting firms, but most of us went to the big consumer goods companies. They gave you a great grounding. Most of the senior CMO’s that you encounter are usually Unilever, P&G, (inaudible), and so on. That’s certainly not the place to go now. These companies are still great companies, but you’d have to go to Google or Facebook. You’d have to head there. It’s the epicentre of everything – maybe Amazon. That’s where you should be aiming yourself because, by the time a 25-year-old is 45, they will be the dominant forces of everything.

Sure, they are already taking out 75-80% of all advertising revenues gone in digital companies. If you look at the data, in the US, they already take 70 cents in the dollar, but all the growth is going to those two companies. Digital marketing is a flatline business because all the growth goes to those two companies.

So, that’s now. If you look at what’s happening with voice, for example, P&G and Unilever are in a difficult place because they’ve spent most of their advertising dollars building brands so that, when you’re in the aisle you remember Marmite or Vegemite or Corn Flakes, but very quickly, we’ll be ordering through Alexa or whoever it might be, and suddenly they have the power. So, if you look at how they are going to be able to expand themselves into TV, Google isn’t going to kill TV, Google is going to get TV. They are already working with CBS to handle the digital advertising within TV. Google is going to get to run supermarkets. Amazon owns wholefoods and will do that. So, if you were a young marketer, you have to aim for one of those big corporations because, geez, they are going to be controlling everything. If you’re 25 now, and you can get into those companies, you’re into the cockpit for the next 25 years. These companies didn’t exist 10 or 15 years ago, but they’re the dominant players for our lifetime.

What’s going to happen, and is already beginning to happen is, when you tell your grandchildren how you bought groceries, they will laugh at you. So, you drove yourself 10 miles to the nearest grocery store and you walked up and down the aisles, looking at produce, filling a basket which you manually pushed around and then took home. And, even if you used search advertising to buy stuff it will be hilarious to your grandkids. When you order stuff from now on, you’re just going to not look over your shoulder, but while you’re baking, and you notice you don’t have any chocolate chips left, you’re going to tell Alexa, “Put some chocolate chips on my shopping list” and the chocolate chips will turn up. Now, which chocolate chips is an interesting billion, dollar question.

The research stuff out of America says that when consumers put their voice-operated shopping list together, the preponderance of brands is much less. That means either your settings or artificial intelligence or Google or Amazon will decide which brands they’re going to send you. And at that point, we have vertical integration into the consumer goods brands. We also have the end of advertising, because most advertising dollars are spent on low-involvement reminder advertising.

SEO is dead, it doesn’t matter about your keywords. Search dies. Google is vulnerable here because Google is a 2-step model. I’m going to enter what I am looking for in a search engine that will take me to the site. Amazon has the advantage of being a 1-step model. With voice activation, it will take me directly to the order. If there’s one thing we’ve learned, it’s that 1 step kills 2 step every time – especially with low-involvement categories. So, Amazon looks good, really good. But, Google has a good system of voice operation, too.

The interesting one is Apple, now, which falls behind badly. The days of Apple’s domination come rapidly to an end. So rapidly that no one’s really noticed it yet. Their own voice-operated system has now been postponed by 12 months. They cannot keep up. You can’t afford not to have a voice-operated system in place. Tim Cook has done a good job of holding the handle bars, but he’s been falling behind ever since he took over. There are no new, innovative developments, it’s all incremental. You can’t keep launching the iPhone 10, 11, 12, 13 and expect to stay buoyant against the digital duopoly. So, cash pile aside, Apple’s influence begins to dim. Quite visibly so.

The future of marketing

If you look at where we were even 15 years ago, marketing professors had this kind of dominant influence over thought and definition. The American Marketing Association every 5 years got a bunch of marketing professors together and they literally defined marketing. That wasn’t necessarily a good thing, but they certainly had control over it. And then, with the advent of social media and, frankly, the popularity of marketing, it’s attracted an enormously engorged following and leadership base and thought-leaders and so on. But, that’s got to be a good thing.

My problem with it is - not the democratisation of it because I’m uncomfortable with academics (remember ‘academics’ comes from ‘the academy’- it’s an exclusive operation). I’m very comfortable with democratisation. I’ve learned more from practitioners than from other professors – I do want, or prefer to see, the thought leaders in marketing have some sort of training in marketing before they start being thought leaders in marketing.

It doesn’t mean they have to agree with the previous corpus of marketing thought and knowledge and so on. But, it does mean that they have to know what they are before they start inventing things that have already been invented or contradicting things they don’t understand. That’s my problem. Democratisation is great, but it should be an educated democracy. Not necessarily at a business school or university, but they need to have studied marketing. We have a lot of philistines (and I use that word deliberately) who are listening to the sound of their own voice (which I certainly do as well), but they haven’t learned from anyone else and from the giants of marketing. We are 100 years old, the marketing discipline, and not necessarily correct all the time, but, my goodness, the basics and the fundamentals are more relevant know than ever before. I despair people like Gary V (Vaynerchuk). He is a delightful human being – very impressive with his impact and everything else – but, he is doing enormous damage to the field of marketing as we speak. I can see it happening.

Gary is the most influential marketer on the planet. He doesn’t have any formal training in marketing and he is proud of that. He says things that aren’t true, aren’t imperially correct, and misleads people, sending them in the wrong direction. I could pick on many things – and, this is not something I haven’t openly communicated to Gary. I’ve also asked him for a debate in America, where I could demonstrate the fallacies of many of the things he’s said. So far, he is definitely interested in a glass of wine, but not in the debate. To be fair to him, let’s give him time.

I’ll give you one example; Gary’s definition of marketing is communications. Communications, at a very optimistic level, is 10% of the marketing challenge. First, we must understand the market with research and diagnosis. Then, we must strategise around targeting, around positioning, around strategic objectives. We must work on our brand architecture. And, we have all the different practical challenges, which include communication, but also include pricing, product design, consumer experience, distribution channels, brand tracking, and so forth.

So, communication is part of marketing, but it’s not the main part of marketing. And, Gary and his legion of followers are all occupied demonstrably with tactics. Within tactics, just communication, and within communication, just digital communication, which makes no sense because there isn’t anything that isn’t digital anymore.

I just find it very frustrating that he has this responsibility to these young people that are following him, to teach them about marketing, but it’s hard because he himself doesn’t understand the discipline. That sounds patronising, but it’s heartfelt.

In the digital marketing realm, there are so many experts that have done something, that you see continuously advertising on YouTube the latest and the greatest and they are standing in front of Lamborghinis, and you’re thinking, “What’s going on here?” It’s a peculiar blend of personal branding and accomplishment and digital marketing in a sort of a soup. It’s troubling because (without wanting to get too pointy about it) digital marketing doesn’t exist anymore. It doesn’t exist anymore because everything is digital.

I was in London last month for the launch of (inaudible) digital ad exchange for outdoor advertising because more outdoor advertising is digital that non-digital in metro areas. In this country, we have addressable TV advertising on Channel 7 – different ads in the same program in different households, if they are watching it streaming. Digital radio is going like the clappers here. You struggle to name a non-digital medium. So, digital is more than 50% of spend, but that’s when we use these arbitrary definitions. Everything is digital, and this digital marketing obsession, I find very troubling, because the spirit of media neutrality, of integrated marketing, of strategy before tactics, is lost the minute you put the ‘d’ word in front of your marketing title.

I’m misunderstood and misrepresented all the time. I think digital tactics (if that’s what you want to call them) have tremendous value. What Facebook can do in segmentation is fantastic. Search is the biggest revolution in marketing communications history. But, we start with strategy and we integrate across many tools, many of which these digital marketers refuse to touch. So, I really find it a difficult space, but I have hope!

There is a new CMO who was just saying, “I’m telling everyone in my company I don’t want digital marketing, it’s just marketing”. He’s right. So, I think we are coming full circle, finally. Not without digital tactics, you can’t execute a brand without Facebook or Google these days, but recognising that marketing is still marketing.

I think there are 2 or 3 key tools that we are learning about the, so called, digital marketing tools or digital media. The first is obvious, but has not been made obvious, which is, Mark Zuckerberg launched exactly 10 years ago, got up in front of all the main advertisers and agencies in New York and announced that advertising was dead, we were now going to have organic conversations between brands and consumers, it was all going to be about dialogue, and so on. And, we all fell for that. Social media and all that nonsense. He was 23 years old, and that turned out to be nonsense.

Facebook’s advertising is fantastic, but it’s just standard advertising. First of all, no one has drawn a line between social media and digital media (which is just a standard advertising tool which has adopted different channels). We’ve somehow blurred those two together as if it is something different, which it’s not.

The second thing that disturbs me is the measurement issues. Let’s be honest at the start. Radio measurement, news media measurement, TV measurement – they are all extremely imprecise, but they are done within a margin of error, by independent companies without wall gardens, that we can believe in. If you look at the errors that Facebook has been making – Google, a little bit, but, particularly Facebook – they are egregious errors that are certainly not being done deliberately, but which tell you that there’s not a lot of clarity out there.

The problem with walled gardens isn’t that Facebook is behind there lying. That’s clearly not the case. They are making errors, but they’re not lying. The problem is, behind that walled garden is a system that cannot be cross-compared with other walled gardens. There’s an enormous problem for us, isn’t it? That has to end at some point with proper advertising exchanges, and we’ll get there eventually.

I’m not the only one accusing them of cheating, and that’s an important caveat, but when you mark your own homework, you use your own grading system and that’s not helpful for anyone. That’s where P&G and Pritchard are right.

Then, the last part, which isn’t digital’s fault directly, is that you can’t do digital marketing or digital media without programmatic – it’s physically not possible. There are hundreds and thousands of possible sites, it has to be done using a systematic advertising exchange-based, real-time (inaudible). But, programmatic has turned into an absolute disaster. Programmatic (commerce) is a catch-all term, now, for how you buy your digital media – because you are buying it across different target customers, you are buying customers rather than fixed-media sites (you are buying where they are at a real point in time), using an advertising exchange.

There are two programmatics. There is the theory of programmatic, which is the idea that we would identify the target audience, identify a bid price for reaching that target audience, and then, systems would be put in place which would buy digital medium in real-time on an auction, which would allow my ad (digital or display) to reach that customer. I’d pay per exposure and it would be efficient. It would be done in real time and it would be in the future.

That was the dream of programmatic about 5 years ago, and it sounded awfully impressive. The reality, in late 2017, is programmatic is a big, dirty box of turds and spiders. No one really knows what’s going on, but it’s pretty clear that everyone’s taking a massive slice of the clients’ money. It could be up to 70% of the dollars being spent on programmatic are going to companies offering a variety of services before it gets to work in media. And, then, even with that 30% that’s left, the proportion of non-human traffic might be as high (if we take the 30 as our base) as 10 or 12 or 15% because it’s endemic across the programmatic system.

So, you might be looking at a company that’s laid down $100 of programmatic spend and getting $15-$20 of working capital. That’s because everyone is being greedy, no one is being transparent, and because it’s the wild west. There are 300+ exchanges out there, many of them offering media that they don’t actually offer, and no one knows what the hell’s going on. The dream of programmatic versus it’s reality is a salutary lesson in where digital marketing is going – which is into a really bad place. There’s no doubt, we will eventually come out of that bad place and that some sort of automated buying where all media are sold on an advertising exchange, that universal system, at some point, will come into play.

So, if you’re going after 19-20-year-olds living in urban Melbourne that have an interest in (say) ice hockey, you are then able to buy, for various prices, an exposure to that customer across TV, radio, outdoor, Facebook, Google, everything. It might be 15 years from now, who knows? That will eradicate a lot of the problems, but we have to get there first.

Right now, it is an absolute disaster zone and clients who have never really known what’s going on all over the place. And, we’re talking about hundreds of millions of dollars of spend, which is where all the big audit firms are now getting interested because, A, they can advise them on where to spend their money, and B, introduce their own programmatic and exchange systems to take out the media agencies, who appear to have a very, very short future.

We have experienced democratisation and are now almost talking about going back to that aggregator level and maybe having a couple of big media houses or just one house. We certainly need less than the 300 or 400 that we have right now because that’s the problem. Within those 300-400 exchanges, there’s room for all kinds of fraud and transparency issues which aren’t fraud but just no one knows what’s going on. It’s hard to look that far out and see what it would look like, but it’s, fundamentally, a financial exchange, so, you would imagine if we base it off the kind of stock exchange models we know, if you could have one commodity exchange for (say) four pounds of oranges, then maybe something similar.

So, there could be an exchange for the different of the different channels or maybe there’s a single cross-exchange. Or, there’d be two or three competing exchanges. It’s really hard to say, but, clearly, that’s where we’d get to. And that’s a great thing. I think the analogy of the wild west is a great one because the wild west became the mid-west. The wild west was dangerous and full of crime and the mid-west is one of the safest, most profitable, places to be.

The future promise of advertising exchanges, digital marketing, programmatic, and so forth, is truly fantastic, but getting there at such speed is enormously problematic. It’s not as though we can pause, develop these systems, and then channel all the clients’ money in. Hundreds of millions of dollars will be pumped this year into programmatic buying that is fraudulent – sub-optimal. Frankly, not somewhere where companies should be spending their money. But, we can’t wait. The only way to learn is by spending money on it, so the wastage is quite phenomenal.

While all this is going on, we have this ridiculous slighting of ‘so called’ traditional media. Television is not dying. Television audiences are not dying. We are certainly watching less than we used to, but it is still the predominant source of video in this country. It remains the even more predominant source of video advertising in this country. Any which way you look at Google and Facebook’s total video audience, even among the younger, more digital audience, TV is still beating it for the number of TV advertising minutes per day according to all the Nielson data, all the comScore data. Never in the history of marketing have so many lies been told by so many people without any charge. It’s a stunning oversight.

With other traditional media, such as radio, if you look at audiences that are very bullish to radio - I don’t know about Australia next year, but, certainly in the UK radio is up 7% this year in terms of client spend. And, what I’ve seen in the data, here and in the UK, is that radio is basically at flatline. If you look at 10 years of media spend, the real story is the rise, obviously, of digital media, but only at the expense of news media and magazines. They have plummeted.

If you go back 10 years in Australia or in the UK, if you spent your money on direct mail, TV, and news and magazine media – that was about 75% of all advertising spent. What’s happened is TV remains predominant, but news media has plummeted and continues to plummet negative 10% each year. So, digital has, literally, pulled that money out of news media – and that’s a problem for society that we can get to later, perhaps. But, TV is as flat as a pancake. Radio is as flat as a pancake. Cinema is as flat as a pancake. And, (inaudible) prices aren’t declining that much either.

If you take outdoor, which is a great one to focus on, outdoor is very bullish because outdoor is now able to become a digital medium. We’re talking big outdoor signage on Swanston Street, airports, and so on. What’s happening is a couple of interesting things. Way more than 50% of the metro sites are now digital LED screens. That means a couple of things. Creatively, you can do all kinds of amazing stuff. It means you can respond in real time to stuff that’s going on. You can probably get 4 or 6 different advertisers into a minute of outdoor, rather than one, and yet, also, increase the eyes on screen for each of those advertisers versus one being there. So, it is tremendously profitable for the outdoor industry.

Digital is on fire. Everyone knows that the stock prices of the digital outdoor companies are going through the roof. It’s quickly moving to an advertising exchange model, and it’s being energised. TV is a bit further behind, but addressable TV, which is just starting to happen with Channel 7 here, and in the US with CBS, has more and more customers. And, ironically, they’re not moving yet. As more and more customers move to streaming options of TV channels, the chance to show them different ads, based on their demographics, increases.

The problem is people are moving to handsets, and they’re not moving to PCs. If you look at my favourite statistics (and these are all backed up by data) – Channel 7 offered an app to watch the Olympics on your handset or your PC, and I think a total of just under 3% of the Olympics coverage was watched that way and 97% on the TV. The same was true of CBS’s coverage in the United States. Then, NFL (the American football) has been experimenting last year with Twitter, live streaming the games - this year with Amazon Prime. In both cases, they’re reaching 200 – 300 thousand viewers using the streaming and around 15 million watching on TV.

My point is two-fold. First of all, why are those numbers so small, but, more importantly, why does no one talk about it? 3% of the Olympic audience watched it digitally. 97% on a TV. And, yet, they get up at these conferences and talk about the death of TV. It’s Nielson data. It’s in the public realm. It’s a great lie. Which, as all great lies have to be, is totally believed by those who are telling the lie.

It’s interesting. The Australian will make more from its digital subscribers than print subscribers this year. So, I think it’s a paradoxical message. The future of marketing is so digital that there’s no point calling it digital anymore. You may as well call it ‘electrical’. It’s over because everything has become digital. Outdoor, news media, television, radio. There is no dividing line and this word ‘traditional’ or ‘legacy’ is unhelpful. You can’t have media neutrality. You can’t have channel-neutral thinking until you get rid of the ’d’ word and go, “Right, here’s my target audience, here are my objectives, and here’s my position. Here’s my budget. What will give me the best bang for buck?” And, if it’s Facebook, my goodness, spend it on Facebook. But, my point is, open your mind and digital marketers can’t do that because there’s a big ‘d’ in there that stops them from having an open mind.

It works the other way. There are some traditional marketers that aren’t comfortable with digital, but there aren’t many anymore. I think that the future is so digital, it’s not digital. One thing I am certain of is in 10-years’ time when we look back at digital marketers and digital marketing, it will sound about as contemporary as the ‘world wide web’.

Inspiration quotes

The one that is most important to me is one – as I’ve got more senior, I’ve become more involved in strategy and away from tactics and so on. I’ve been lucky enough to do strategy for some very big brands, and I’ve struggled with it because I don’t really know what strategy is. I was trained as a marketer. We get trained in research. We don’t really get trained in strategy to begin with, but I’ve found myself with at least one of my hands on the wheel of some very big brands. So, I studied strategy, relatively late in life, I think the quote that sticks out is from Michael Porter, the great Harvard professor of strategy. “The essence of strategy is deciding what you will not do”.

I think that’s so important for Australia in the sense that everyone is going to do something. I see these companies with 7 strategic objectives – well, there are 7 objectives that won’t come true. I see these companies with brand positioning statements that have 7 slides or 42 words. None of that’s going to work. I see companies that have 12 segments and they’re targeting all of them – well, that’s not going to work. And, what I’ve learned in my consulting career, not from my PhD and all that nonsense, but just from watching companies go through these cycles, is that strategy is about making choices. And, what’s more, strategy is deciding what you’re not going to do.

It’s the segments that you don’t target. It’s the words that you don’t use in your positioning. It’s the objectives that you put aside for a year and ones that you focus on that produce successful companies. You make choices. Good managers make choices and their strategies can be described on a single page. Bad managers don’t make choices and have a 12-page strategy manual for the year. What happens is, bad managers don’t think about strategy for more than a day, then produce a 12-page set of strategic objectives for 2018. Great managers spend 4 ½ weeks thinking about strategy and the strategy itself is half a page. That’s what I look for.

If I’m successful – and there’s no guarantee I will be – the students will invariably tell me on Sunday evening that the class was great (hopefully), but also that it was common sense and simple. And, that’s entirely because I made it simple. If I wanted to make it complicated for them, I could do it just as easily. The point of strategy is the same. We must make it simple, so it can be executed. But, the process of making strategy simple is complex and requires choices. I don’t see that very often in Australia. I see the absolute absence of choice. Everything is doing everything all the time to everyone. That’s not strategy. That’s just random corporate bingo.

Recommended Reading

If you like the digital revolution and the scary and exciting parts of it by Scott Galloway called “The Four” which talks about Apple, Amazon, Google, and Facebook and describes the influence. The book that everyone should read, even though it’s not a page turner, is Byron Sharp’s book, ‘How Brands Grow’. That’s the book read by every senior marketer which has interesting messages that are revolutionary in content. The book I prefer is, ‘The Long and the Short of It’, by Peter Field and Les Binet, and that is a very strong book describing what makes for strong communication companies.

But, I think, alas, books are a thing of the past. Every month, I get a marketing professor or consultant sends me the gallows of one of their books to give a little quote for the back. More often than not, these books are about digital marketing, and I always take some time back to send an email back to the author to say, “You’ve written 400 pages on digital marketing, did it ever occur to you that every word of it should tell you that a book is highly inappropriate”. Books are not the way forward, I think. There are good books out there, but I doubt anyone who’s 25 will read them.

I think, good podcasts, content curated by people that you respect - LinkedIn has been very useful for me, I must say. I’ve really found that LinkedIn was originally keeping in touch with my students. Then it was posting some of my content. Then it was getting good content from some people I really respect. Now, it’s become my main source of insight. So, I’d actually say the best thing to do is to set up a limited – don’t have too many people because it gets diluted too much – but, I think a cadre of really good thinkers that are not these opinionators and not these super senior people who are, you know, frankly out of touch in a weird way, but just good people in the industry. That’s the way to go.

For me, those books are great, but I’d work on my LinkedIn profile. Find people that are interesting. Find people that can hold a contradictory idea. It’s so rare. Or, have two people that say the opposite to each other. I always respect people that stick it up me, but we can have a good chat about it afterwards. Byron Sharp is a good example. I differ on a lot of things, but I can always, at the end of the day, say that he’s a great scholar and a wonderful thinker. That’s important. It doesn’t have to be so personal all the time. So, find people who are pleasant, but who offer a different world view to yourself. Always a good idea.


I’d be delighted if anyone wants to follow me. I’m @markritson on Twitter, and I’m easily followable on LinkedIn as well. In both cases, I always post links to my columns. The Marketing Week one is free access. Interestingly, the Australian one is behind a paywall, quite deliberately. It’s fascinating how many people object to the fact that I’ve posted a link to an article that’s behind a pay wall and say, “Did you realise that this article is not accessible if you don’t have a subscription to The Australian?” and I go, “Yeah, I did”. Some people have come to believe that you can get access to a quality (well, my stuff’s quality) newspaper for free. That’s not tenable.

So, yes, for The Australian articles, you do need to pay the money. But, I’d say 80% of people that do pay the money for a subscription to The Australian are very satisfied with that subscription. So, please do that and support your local newspaper. But, either one. Twitter or LinkedIn is the way to go, and I’d be delighted to connect.




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