A History of Marketing

A History of Marketing / Episode 51My guest Tod Johnson, a market research pioneer who was among the first people to measure the Internet. He’s an inductee to the Market Research Council Hall of Fame and former chairman of the Advertising Research Foundation. Tod is President and CEO of the Board of the Metropolitan Opera and is a member of the board of the Lincoln Center for the Performing Arts.Tod led The NPD Group for over 50 years, building it into one of the largest consumer research firms in the world. NPD became the company retailers like Mattel and Hasbro relied on to understand what was selling. In 1995, he founded Media Metrix, essentially the Nielsen ratings of the early internet.In this conversation, we dive into:* The era of pencil-and-paper diary panels, when consumer research meant tracking grocery purchases by hand and mailing the booklets back every month* Why Tod’s analysis showed that brand loyalty is mostly a myth, long before anyone in advertising wanted to admit it* How he accidentally discovered the internet was about to change everythingListen to the podcast: Spotify / Apple PodcastsSpecial thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Tod.Why spend a career in market research?Andrew Mitrak: I watched a speech you gave while accepting a lifetime achievement award. And at the start of the speech, you quipped that you’re tempted to aim for a second lifetime achievement award and do it all over again. I take that as a sign that you spent your career really doing something you love, and your career was in market research. So, what do you love about market research?Tod Johnson: Well, I’ve always been a very quantitative-oriented person. I’ve loved numbers, I’ve loved facts supported by numbers, and I’ve always had an interest in psychology as well. In fact, I taught what today would be called cognitive psychology when I got out of graduate school for a while. Market research just puts those two pieces together very, very naturally. So it fit into what I really found exciting and wanted to do. I have to say, I never started out thinking market research was my career objective. I kind of fell into it by accident, but once I got into it, it was where I wanted to be.Innovation and Innovation Models in Early Market ResearchAndrew Mitrak: You were an academic doing quantitative analysis, and these were real-world business practitioners. Was this seen as new pioneering research that they could apply to their business? What was that dynamic like with them?Tod Johnson: Well, the dynamic was interesting and different in those days. These companies had their own staffs oriented to innovation and development, and they were always open to new ideas. Today, that’s not so easy to get into a company with a new idea because there’s just too many of them out there. But back then, it was kind of open arms, wanting to explore new ideas. We were solving real problems like new product introductions with trial and repeat models, which hadn’t really been focused on much before, market structure work, and consumer packaged goods (CPG) companies had a curiosity to want to learn that.The Era of National Purchase DiariesAndrew Mitrak: Can you set a scene of what market research looked like at the time? Was it ever influencing a certain product launch, or a certain product strategy, or messaging or positioning type?Tod Johnson: In those days, virtually every new product launch would go into a test market. We would set up a diary panel of consumers to record purchases in the appropriate category. We would do the trial and repeat analyses that would predict the long run success or failure of the particular product. That would be the most common application. On a national basis it would be more about consumer trends in those categories uh and how they were structured and what was changing.The other thing that was very good, I’m now jumping ahead to when I became involved in developing NPD, was in the mid70s, General Mills started to diversify from CPG into a lot of other categories like food service, toys, apparel, jewelry, and I was fortunate enough to be the person they looked to to set up how to track those industries similar to how CPG had been tracked.Andrew Mitrak: Amazing. They embraced the general in their name and kind of not so much the mills part of their name.Tod Johnson: Well, the general went away about 10, 15 years later.Andrew Mitrak: You mentioned National Purchase Diaries. What was the actual purchase diary? You mentioned like purchase diary panels and what does it look like? Walk me through the nuts and bolts of what a purchase diary panel would look like.Tod Johnson: Well, it would be a booklet which was about 20 pages and each page had a couple of categories on it like toilet paper, facial tissue, and paper towels might all be on a page, and they’d be structured in a way that if you bought one of those items, you answered some questions.The panelists would get a new booklet every month and mail the old booklet back in to us, which we would code up. Back then, it was pretty easy to get good representative samples because women typically weren’t working. They were interested in doing projects and interested in helping, and we made it clear how they were helping manufacturers make better products for them by providing this kind of information. That relationship with the consumer in market research just doesn’t exist anymore, but it was what a lot of the industry was based on in the ‘40s, ‘50s, ‘60s, and ‘70s.Measuring Product Success and Consumer LoyaltyAndrew Mitrak: The consumers were part of the panel who had these diaries. They would kind of punch in their purchases for the week?Tod Johnson: No, they’d fill them in by hand with pencil.Andrew Mitrak: Do you have any favorite examples of how this data was used? Especially in the early years of these manual diary entries.Tod Johnson: New product introductions, which were elaborate test markets for the most part back then, was perhaps the most common use. The other use was it was a way to track demographics. It was a way to track loyalty. I can remember in the ‘80s, I did a lot of publishing about how consumers weren’t very loyal because we’d see their purchase patterns. That was at a time when advertisers and advertising agencies believed in loyalty. You were always talking about their loyal buyers. It didn’t really exist, but that was the basic premise. I know I was swimming upstream for a while with those publications, but today, everybody accepts that as the truth and the fact, and that there’s enormous brand shifting and much less loyalty than once was thought to exist.The Growth and Diversification of NPDAndrew Mitrak: You joined when it was a $300,000 revenue company.Tod Johnson: $400,000. Give me the full credit.Andrew Mitrak: sorry, I also want to give you credit because it grew to a lot more than that. How did the small kind of regional firm that was doing 400,000 revenue a year over the course of your next 30 years? It became a global market research firm that the world’s largest retailers rely on. What were the major inflection points as far as it growing? How did you grow it?Tod Johnson: Well, I mentioned one, and that was General Mills taking us into a bunch of general merchandise and food service categories. Our toy clients encouraged us to get into Europe. We worked with everyone in the toy industry, whether it was Mattel, Hasbro, or Lego—all the big players, all the smaller players. Mattel had a huge variety of products; it owned Fisher-Price, so that was a whole different set of products. They were a great client, are a great client, and had a wonderful mix of products. The toy industry has evolved a lot—electronics came along, how kids use time, and the definition of toys has evolved quite a bit from there.Managing Industry Rivalries in Market ResearchAndrew Mitrak: It’s interesting because advertising companies or advertising agencies have this concept of conflict. So, if I work with Mattel, I can’t work with Hasbro—that’s a competitor. But a market research firm actually could be more neutral and work with everybody in that, right? Do you ever run into things like conflicts where, if we’re doing this survey for Mattel, that might lead to some conflict of interest to do it for Hasbro? How does that work?Tod Johnson: That’s a very interesting question because in the CPG world, that conflict orientation tends to exist even today. If you work for Coca-Cola, you don’t work for Pepsi. If you work for General Mills, you didn’t work for Kellogg’s typically. Now, the company might work for both of them, but the individual people don’t.When you got into general merchandise, the client was much more interested in being sure that they were working with someone who really understood their industry. To understand an industry, you don’t learn an industry just by working with one company in that industry. Each of those general merchandise industries—whether it’s toys or consumer electronics or office supplies, which all have very different distribution structures—also had very different product structures. It took a lot of learning to understand it, so they viewed it as a benefit to work with someone who really knew their industry.The Birth of Media Metrix and the Internet Lightbulb MomentAndrew Mitrak: Can you tell me about Media Metrix and the introduction of software meters?Tod Johnson: What happened was one of the categories NPD was tracking was software. This is in the early ‘90s, and software back then was shrink-wrap that you bought in a store. Our software clients were saying the purchase data is really interesting, but we’re wondering if you could get us usage data.So, we developed a piece of software which we had 300 panelists download onto their PCs to see if we could track their usage. After a couple of months, they all sent us back that database. And of those 300, literally three of them had really strange data included on it, which it took us a couple of months to figure out what it was. But what it was was their internet surfing, which we were capturing frankly by accident.In other words, this is 1994. 1% of consumers were on the internet—three out of 300. That was the lightbulb moment—the internet is really going to grow and this is a way to measure it, just like television was being measured then or radio or magazines. That led us to say there was a bigger opportunity to measure the internet than there was to understand software usage.The Digital Landscape of 1996: Universities and Search EnginesTod Johnson: We kind of switched our focus and published our first internet ratings data in January 1996. Just to give you a feeling for what the internet was like then, the top five sites were AOL, WebCrawler, Netscape, Yahoo, and InfoSeek. In the top 20 sites, actually four of them were universities. The internet was a very, very different place, and we developed Media Metrix and what we called the PC Meter to track the evolution of that business.Andrew Mitrak: It’s amazing. You shared a slide with me of just these top 20. So, you mentioned the top five. The EDU ones are the University of Michigan, Carnegie Mellon, MIT, and the University of Illinois Urbana-Champaign. Why were universities ranked so highly?Tod Johnson: This is a little embarrassing answer to me because of my involvement with Carnegie Mellon, which not only was I a student and teaching there, but I’ve been the longest-serving trustee and vice chairman.Starting with the University of Michigan, my understanding is that NOAA published its weather data through Michigan.edu. So, back then, you went to the University of Michigan to get weather data.Carnegie Mellon is my embarrassing answer. It was sort of the leading porn site on the internet back then. A graduate student, who I won’t name because he’s well-known right now, developed a methodology of mousing over something on your screen and moving it. He demonstrated that methodology by letting you mouse over a picture of himself and removing all of his clothes.I’m not sure what MIT was, and University of Illinois, I think, related back to the history of Netscape, if I’m not mistaken.Andrew Mitrak: Oh right, yeah, that would track. Interesting. It wasn’t like the CMU.edu homepage.Tod Johnson: Some website that wanted people to see the technology. I don’t think CMU stayed in the top 20 for very long, but it was ahead of Penthouse Magazine, which was number 18 back then.How the Internet Transformed Market Research OperationsAndrew Mitrak: Yeah. I was going to say there’s a couple that was not safe for work websites that I saw on there. It’s funny. We all know it’s like a big part of the internet, but it kind of usually doesn’t make these top lists these days too often anymore. But it’s out there, that’s amazing.You saw this three-in-300 moment where it was like, “Wow, that’s strange.” And you see that they’re presumably using some web browser or spending a large number of hours using software. I imagine you had an early view into seeing this growth where it wasn’t three-in-300; it then went to six and then 12 and then 30, and you saw some of the exponential.Tod Johnson: I think if I remember right, by the time we published the first report in January, it was up to about 35%. It really just skyrocketed during that period.Andrew Mitrak: What did NPD’s clients do with this information? How did they respond to seeing this and getting an early view into “Hey, the internet’s going to be big”? Do you feel like they heeded the call and got on quickly, or do you feel like there was still some skepticism? Or how did people react? Because I’m always interested in when there is something new and somebody has compelling data that says something is coming but it’s not quite here yet. Do companies make the switch and start to act on it soon enough to really capitalize on the opportunity?Tod Johnson: The key initial application was to sell advertisers on using your website. So you needed a currency or data to do that. Back then, the PC Meter data—Media Metrix data—became that currency which the websites used to show the size of their audience and the demographic profile of their audience as well. It was trying to make your internet site competitive with a television program or a radio station or radio program and things like that. That was the primary application.The secondary application was understanding how consumers were surfing the internet and what you had to do as a website to both get someone to come to your site and stay in your site. People would look at competitors, how they were doing it, and adopt strategies that way.Andrew Mitrak: I will ask broadly: How did the internet and this explosive growth change market research and change NPD?Tod Johnson: At the time, NPD had two businesses: one was the diary panel business and the other was what was called a mail panel back then, or was really a survey research business. Starting around 2000, you had to become online interactive to be a successful business.The first change it made is I made the decision that if we were going to make that transition, we weren’t going to make it well if we tried to transition both businesses simultaneously. So I sold one of the two businesses and just concentrated on the diary panel business at the time. Clearly, timing changed. You didn’t have a month to deliver information; you had to deliver it much more real-time. The presentation of the information changed; it was now presented on a screen much more often. It was more interactive and analytical, and you had to have the capabilities to do that. Pulling together disparate pieces of information, rather than just providing independent separate pieces, became much more critical and required a lot of investment and a lot of change.A Legacy in Arts Patronage and Andy WarholAndrew Mitrak: I want to shift gears and ask you about the arts, because you’re also a major patron of the arts. You’re on the board of Lincoln Center and the Metropolitan Opera, where you also serve as the president and CEO of the board there. You alluded to your background, which I noticed were a couple of Andy Warhols, which I imagine are original. It’s really impressive that you have such great taste on your wall. When did you develop your interest in the arts?Tod Johnson: I grew up with it. My family collected art. My aunt was a major art dealer—in fact, she was one of Andy Warhol’s primary dealers. So I was always exposed to contemporary art.Andrew Mitrak: Warhol was from Pittsburgh, right?Tod Johnson: Yes, he went to Carnegie Tech.Andrew Mitrak: Oh wow, okay, I just put that connection together.Tod Johnson: One of the benefits of having offices like NPD is I have lots of walls for art. There were like 40 Warhols in the NPD offices at the time I sold the company.Andrew Mitrak: So when you sold NPD and the Warhols were on the wall, does that show up as a line item on the balance sheet or?Tod Johnson: Oh no, I got all of them. It wasn’t part of the sale; it was an exclusion.The Intersection of Entrepreneurship and MarketingAndrew Mitrak: As you’re working with visual arts institutions like the Met and Lincoln Center, do you feel like you bring your marketing expertise to the table there on how they’re marketing themselves?Tod Johnson: Marketing to some extent; probably entrepreneurial business acumen to a greater extent.Andrew Mitrak: Do you distinguish between entrepreneurial business acumen and marketing a lot? Because when I think of actually a lot of the best entrepreneurs, they’re also talented marketers. What part of their success is marketing instinct or intuition and prowess versus entrepreneurial business fundamentals? It seems like they overlap a lot. Do you distinguish between those two?Tod Johnson: I kind of think they go together. Marketing doesn’t necessarily mean entrepreneurial. I think entrepreneurial is more likely to mean marketing directionally.Andrew Mitrak: To be a great marketer, you don’t necessarily have to be an entrepreneur as well, but to be a great entrepreneur, you have to be a great marketer.Tod Johnson: I think you said it better than I did.The Future of Data: AI and Real-Time InsightsAndrew Mitrak: I know this is kind of a history podcast, but I want to talk to you about the future because you’re the co-founder and managing director of Duo Partners, and that firm invests in and consults with early-stage information and data companies. Do you have a vision for the future of market research when it comes to investing in companies? Can speak behind your investment thesis and what do you look for when you invest in information and data companies, but presumably also companies that will impact the future marketing as well?Tod Johnson: Well, my partner Karen Schornbard and I are looking for really disruptive technologies to measure things in new ways—to measure things more accurately that isn’t dependent upon what a consumer recalls or says. To do it much more in real-time, continuous types of measurement.I can give you a couple of examples. One of our investments has developed really physical AI technology where you can attach a tag to a product. You can see when the product is moved, you can see how much of it is used at each usage. You know when that happens so you can contact the consumer at the exact moment that they’re doing something rather than being dependent on “can they recall what they did two days ago?” You just get different information that way.Another has built a fabulous database of food trends by scraping over the internet various restaurant menus and delivery service recommendations, seeing what’s changing, what’s growing real-time, and just things like that. These are going to lead to new ways of getting better information, particularly since the old methodologies are starting to be constrained by consumers not really having the time to think about it.Andrew Mitrak: When you find a company that has the right underlying technology and product, where does marketing fit in on your calculation as to whether to invest or not at an early stage? Does marketing and their ability to tell a story and find a market and take this to market, does that play a part or do you kind of assume “Hey, these founders will hire the right marketers and they’ll figure it out if we invest in them”? How does that enter your calculus?Tod Johnson: People who are developing products like that are developing them to take to a particular market. They usually know where the clients are by the time we get involved. There’ll at least be enough of a business that they’ve proven that clients can respond, so it’s built into the organization at that time.Andrew Mitrak: Tod Johnson, thanks so much for your time. I’ve really enjoyed this conversation, and I’m grateful for all of your wisdom and your stories. It’s just such a great pleasure to hear about how market research has evolved over all the years. I had a lot of fun.Tod Johnson: Andrew, I’ve enjoyed doing this with you as well. Thanks for inviting me. This is a public episode. 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A History of Marketing / Episode 50Fifty episodes felt like a milestone worth marking. So I wanted a guest who was, well, obviously awesome.April Dunford is the authority on positioning for B2B tech companies and the author of the updated and expanded edition of Obviously Awesome. I’m a huge fan of April’s work and frequently reference her book, her blogs, and her frameworks in my daily work as a marketer. April’s premise is provocative: positioning cannot live in the marketing department alone. She argues that if the CEO, sales, and product leads aren’t in the room providing input, marketing is left guessing about what makes the product special and who it is actually for. Without their buy in, marketing will inevitably lose the “battle of opinions.”In this conversation, we discuss:* Building on Ries & Trout: The positioning pioneers defined the concept in their 1981 book, but they didn’t give a how-to manual. April does.* The death of the “positioning statement”: Why filling out a template is not a methodology.* Blind men and the elephant: How sales, product, and marketing departments each hold a different piece of the puzzle.* Skip the parts people don’t read: April discovered that CEOs don’t finish books, so she cut her manuscript in half.April is one of the most persuasive and grounded thinkers in the field. Here’s my conversation with April Dunford.Listen to the podcast: Spotify / Apple PodcastsSpecial Thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.The Origin of April Dunford’s Positioning FrameworkAndrew Mitrak: I have a confession to make. Every time I join a new company, among the first things I do is I visit aprildunford.com and I enter my new email address and I download one of your positioning templates. You probably have several of my old corporate email addresses cluttering your mailing list. Sorry about that.April Dunford: I appreciate you jacking up my newsletter subscription numbers.Andrew Mitrak: And a big fan of your work and I want to say congrats on the updated and expanded edition of Obviously Awesome.April Dunford: Thanks. I’m super excited to get it out there.Andrew Mitrak: For this conversation, I wanted to start back before you became the go-to expert on positioning, and when you were coming up in your career, when did you first encounter the concept of positioning?April Dunford: That’s a good question. Pretty early, actually. My first real job in tech was at a little startup and I was brand new and junior, they assigned me to a product and the thinking was that product wasn’t doing very well and the plan was to shut it down. This is why I got assigned to it as the product marketer.We didn’t end up shutting it down. What we ended up doing was looking at gathering some feedback from people that were using the product, and then we got an idea to reposition it. We didn’t know it was called positioning, we thought we were doing, we’re just doing a Hail Mary thing to see if we can make this unsuccessful product successful doing something slightly different.We repositioned it, relaunched it, and it was super successful. Revenue started going up to the right, everybody’s happy, we’re making a lot of money on that product.And then we got acquired by a big company in California and the big parent company assigned us a couple of products that weren’t doing very well and then said, hey, do that thing you did with the other one. I didn’t have really any idea what we did with the other one. I was worried about getting fired, I thought, okay, I better figure this out.I did a deep dive into positioning. I figured out, A, this is what it’s called. B, I had a lot of conversations with smart marketers asking them about, how do you do positioning? If you were in this situation, what would you do? Do you have a strategy for that or a methodology for that?I also read a bunch of books. There’s the classic positioning book, Positioning: The Battle for Your Mind by these guys Ries and Trout, written in the early 80s, but even back then was considered the book on positioning. And then I took a couple of courses and some post-grad stuff at a couple of universities just learning about positioning.I dumped into this whole positioning thing pretty early in my career, and I was really interested in this idea, could we get a way to do positioning in a really repeatable manner so that we wouldn’t have this problem of, we launched the thing and it didn’t work and then now we’ve got to try and change it. Could I get to a point where there is a process for us to follow to, first of all, maybe do a better job guessing at what the positioning should be in the first place, and then secondly, if we do need to change it, is there a nice repeatable step-by-step thing we could follow to do that.Is Product Positioning Intuitive or Learned?Andrew Mitrak: You initially positioned or repositioned a product without even knowing what positioning was or knowing that it was called positioning that you were doing. And then you went to look at the literature. What’s your takeaway from that? Does that reveal to you that the fundamentals of positioning are somewhat intuitive or can be learned, or do you feel it was just dumb luck really? Or do you feel there were parts of it where this is just obviously the right thing to do for the product? How do you overall think about, can positioning sort of just be an intuitive thing, or is it best to look at the literature that’s out there?April Dunford: Sometimes it is really intuitive. I would say that’s true. I would say a lot of the time when I talk to founders, they’ll talk about how they built the product in the first place, and they’ll be, we saw this need, we had this idea, we could do this in a different way than the existing products that are out there.And we looked at it, we understood what the competition was, we built a thing that was demonstrably different, we understood what the value of that thing was because it was solving our own pain, we understood what kind of customers would want to buy that, and therefore what market we position in. It’s just, it is what it is, it’s super easy. And I think that happens a lot in the early stages of a company. Not for everybody, but I do think it happens a lot.However, what also happens a lot is if you fast forward two or three years, the market’s changed. Maybe your competitors caught up with you and the thing that made you really different isn’t different anymore. Or maybe the way people buy or what they want to do has totally changed. Or maybe your competitors did an acquisition and that changes the whole way everybody thinks about this market.Or maybe you and your product have changed, and you now do a whole bunch of other stuff that you didn’t originally do, and that enables you to get at a different kind of customer to deliver a different kind of value. Now how do you position it? That’s where people get messed up. Sometimes it can be quite intuitive at the beginning, but then a whole bunch of things change and it’s, okay, now the positioning needs to shift. How do we do that? Because we didn’t do anything the first time, it was just obvious. I think that happens a lot.The other thing that happens a lot is you have this thesis when you launch the product and you said, okay, we saw this problem and this is what it’s gonna be and these kind of people are gonna love us for these reasons and here’s the competitor. Then we launch it, and it turns out our thesis was incorrect.We get out there and we’re, man, we launched this thing and we thought banks were gonna love it, but it turns out we’re selling to insurance companies, we didn’t really build it for that, but they’re buying it like crazy. Now we’re in the insurance business, hello. And they love it, but there are some things they don’t love so much, and they’re comparing us to competitors we never really thought about. How do we position this thing because we thought it was gonna be something else.And this is not unusual, to be honest. We call that a pivot in lean startup language. It’s not unusual for a company to build something for one market and then get in the market and find out, whoops, the market’s a little bit different than we thought. People are looking at our product a little bit different than we thought. We’re getting pulled into another market, so how do we position for that? And again, that’s when having a methodology for this would be helpful.The B2B vs. B2C Divide in PositioningAndrew Mitrak: You did your positioning exercise initially and then went to the books, went to Ries and Trout and the others. Do you find yourself as you’re reading the literature on positioning, was it confirming what you did, oh, that’s what we did was called, or was it saying, oh, were there things that you’re, oh, I wish I had known that to start, or what was the discovery process for reading?April Dunford: No. And I was so mad about this. Here’s how this went. I went and I’m having all these conversations with people, I’m talking to all these smart heads of marketing, right? And I’m saying, how do you do this positioning thing? What do you do? And everybody’s doing it the way we did it, which was a little bit of trial and error, a little bit of getting some feedback from customers, a little bit of, let’s try this and if it doesn’t work we’re gonna adjust. A bit of messing around until you get something that works.And that feels terrible when you’re the head of marketing because your head’s on the block, man. And if you don’t figure it out fast enough, everyone’s gonna get mad and you’re gonna get fired. And that was unsatisfying.And then I took some courses and read the Ries and Trout book, which does an amazing job of defining here’s what positioning is, here’s why it’s important. And then they give you a whole bunch of examples. But the examples aren’t tech, this thing was written before the internet, man. I think they have printers, HP printers or something is the closest thing in there, not even software. And I’m selling databases, and they’re talking about repositioning the country of Jamaica, and I’m, this is different.Andrew Mitrak: It is also very B2C oriented. I think the examples are Avis or Coors or beer. Do you find that both because of the tech gap with it and maybe the B2C bias that you as a B2B tech company...April Dunford: The B2C bias is killer in this stuff. I took a bunch of courses too, and it was the same thing in the courses. All the examples were shampoo and toothpaste and makeup, and I’m, again, I’m selling 200 grand worth of database stuff to really smart technical people. I don’t think this is the same. It’s selling a vacuum cleaner. And I thought the B2C bias is terrible.The other thing that you get in B2B tech that you don’t get in consumer is think about it. If I got toothpaste and I’m selling that toothpaste or hair shampoo to people that have dry hair or people that have dyed hair or something like that, right? And then if I decide I’m going to do a shampoo for babies or a shampoo for old ladies or a shampoo only for people with very, very curly hair, usually what you’d do is you wouldn’t take the same product and try to evolve it into that market. You would launch a whole different product and say, I’ve got this other thing, and that’s for the curly hair people, and this one’s for babies, and this one’s for people that dye their hair, whatever.Whereas in tech, it is very normal for us to launch a product in one market and then reposition it a whole bunch in the future. Let’s take Salesforce. When Salesforce first launched, they were aimed at the very, very bottom end of the market. Their initial deal was they were focused on companies that had sales teams of less than 10 people and the first three seats were free. And why were they doing that? Because the top part of that market was absolutely dominated by a great big competitor, and they didn’t want to go compete there. So they started at the bottom.But guess what? They inched their way up, and by the time they got to the mid-market, the big competitor had self-destructed and they were gone, and the top end of this market was wide open. And if you look at Salesforce right now, would you say that’s a product for very, very small businesses? No way, man, too expensive, too complicated, too everything. We just don’t have that in consumer products where you’re, it used to be this thing and now it’s this other thing and now it’s this other thing.The other thing that you’ve got in B2B is that the positioning matters a lot because the stakes are really high. Especially if I’m looking at enterprise software, the stakes are huge. You’re going to make a recommendation to your boss to buy 200 grand worth of software. You make a shortlist. You don’t just walk into the store and pick the thing off the shelf and say, oh well, if I got it wrong, I just won’t buy that one again. You’re going to get fired if you make the wrong choice. You got to make a shortlist, and it’s positioning that makes or breaks whether or not you’re going to get on that shortlist.And then once you’re on the shortlist, you got to survive long enough for them to take a real good look at your stuff. And if you get eliminated because often the shortlist is five, six companies these days or more, depending on whose data you believe. But let’s say there’s a shortlist of six, seven companies, you got to make it to top two. Otherwise, you don’t get considered. Your positioning is really important in that because the company hasn’t done a big deep dive into all your stuff yet. We just don’t have this in consumer. We don’t go out and buy a pair of shoes and make a shortlist and have a six-month process to figure out which one we’re gonna buy. We go out and we buy it and if it stinks, we just don’t buy that one again.Navigating the B2B Buying CommitteeAndrew Mitrak: One of the other elements as well from B2C versus B2B is often in B2B the buying decision maker or the buying committee is not the end user of the product, right? And there’s this abstraction between that. And that’s the other element is how do you market to both the end user and the decision maker.April Dunford: Yeah, that happens a lot in B2B. The economic buyer is often distinct too, right? What you have is this committee of people and you’ve got someone who’s what we would describe as the champion. And that champion, usually it’s their boss or someone that said, look, we gotta buy a new accounting package, buddy, go figure it out. You go figure it out, look at all the accounting packages and tell us which one to build, which one to buy. And then that champion is gonna go do their homework, so your positioning really matters for that person.But the champion also has all of these stakeholders around them that have to agree, otherwise the deal doesn’t get done. If the champion, let’s say the champion is on the business side and we’re buying technology, usually they got to go to IT and make sure IT is okay with it. IT can’t make the deal happen because they’re not in charge of selecting, but they can kill a deal by saying, oh I don’t like it, it’s too hard to manage, it doesn’t integrate with the stuff we have now, it doesn’t meet our compliance regulations, whatever, whatever, right?Same thing with end users. Often the end user is not an end user making this purchase decision, but they can have a big influence in that. If they look at it and say, well the UI is this and this is terrible, we’re never going to get people to be able to use this thing, we’re going to kill it. Or sometimes they’ll do a pilot with some end users, and if the end users give it the thumbs down, then it’s no good.And then you got to run it up to the economic buyer, which is generally another person too. And a lot of companies get really messed up with that and they’ll say, well the person that signs the check is the CRO, so that’s the buyer. And it’s, yeah, but the CRO assigned the whole purchase process figuring out who to buy to somebody underneath them. So you better figure out who that is because the CRO just says yes to whatever that other person suggests.We don’t have that again in B2C. This isn’t it. Sometimes in B2C stuff where it’s complicated, let’s say you’re buying insurance or you’re buying a car or you’re buying a house. Maybe there’s a spouse involved, maybe there’s a financial planner involved, maybe you get a little advice, but it’s nothing like what a typical enterprise B2B purchase process looks like. It is way more complicated.The Critical Distinction Between Branding and PositioningAndrew Mitrak: When you write about positioning, you make a hard distinction between branding and positioning, and you’ve written that you’re not a fan of the term brand positioning, which is a phrase you hear sometimes. Why do you draw a line between the two or how do you make this distinction?April Dunford: Well, here’s what I think. I think marketers like to make stuff up. I think marketers like to just redefine something for the sake of redefining it. And branding is probably the most poorly defined marketing term I can think of. When you say branding, you really gotta say, okay, what do you mean when you say branding?At most of the enterprise B2B companies that I worked at, when we talked about branding, the brand of the company was a lot about how we showed up in the market in terms of, what was our tone of voice? What was our iconography look like? It was a bit like what was the vibe of us when we showed up? What were the fonts and the colors and the pictures we used, and the way we did messaging and text, tone of voice stuff. That was all kind of branding, which is very different from positioning.Positioning is an input to that. If the big value of, let’s say I sell security software to banks, right? My branding should convey a lot of trust and solidness and authority because that’s what we’re trying to convey. If I’m selling software for daycares, maybe I can get a bit more playful because I’m talking about kids and moms and things. And I could use different colors and more playful images and maybe a bit more casual tone of voice and all that kind of stuff.And so in my opinion, positioning should inform what the branding looks like. But now I’ve seen other people define branding in a way that it includes all the things that I would call branding, and it also includes positioning, and we’re going to just kind of munge those two things together. That’s okay, if that’s the way you want to define it, but I still see those two things as being distinct. You got to do the positioning thing first, and then the branding thing flows from that.Why Positioning Must Go Beyond the Marketing DepartmentAndrew Mitrak: And is this somewhat related to how you argue that positioning should not just be a marketing exercise? That if the CEO and sales leads aren’t in the room, that the positioning won’t stick. Is that tied to why positioning is different than branding, is that it’s beyond marketing?April Dunford: Definitely, it’s definitely not just marketing, right? What we’re trying to do with our positioning is we are trying to define why should a customer pick us versus the other guys. And we need to think about, first of all, who are the other guys? What’s the alternative to what we do? And we should all be in agreement on that. Sales should understand that, marketing should understand that, CEO, product should understand that. We should all understand what makes us distinct and the value we can deliver to a business that no one else can.We need to get that in marketing, product management needs to understand that, sales needs to understand that. And then we all need to understand who’s a good fit for that, which is what are the kinds of companies we’re trying to target and therefore what’s the market that we intend to dominate. That is a strategic set of decisions in a way, and it’s very easy for teams to get out of alignment on that.It’s very easy for sales to decide, we’re just going to sell to these big companies because we like doing these big deals, man. We need to decide, is it worth chasing those big deals? Are we actually going to win them? Or are we more likely to win if we’re chasing a deal in the mid-market, for example? Again, I think this is, we get this distinction between B2B and B2C. In B2B, when I’m selling a big ticket thing and there’s a shortlist of companies to look at, we really need to understand what makes us stand out and what makes us different so that we can help the whole buying team understand what that is and move this deal along.If I’m just selling toothpaste, or makeup or a T-shirt, it often has nothing to do with the product and it has more to do with pure branding, right? This thing is going to make you look rich or, the Kardashians wear this thing so you should too or something.Whereas, it’s not like it’s all totally rational when we’re buying enterprise software, we don’t, there’s often quite a bit of irrationality in there in that the champion is worried about making a bad choice. The champion will often default to a really safe choice because it’s not going to get them in trouble. Or if the champion has an opportunity to look like a hero, they might take that too because it’s good for them personally.It’s not like it’s all totally rational, but at the end of the day, they do have to make a case to their boss. And that case has to say, look, we looked at the other things and we picked this thing for these reasons, and the reasons are narrow. This is either going to help you make money or is going to help you save money and that’s about it. We got to make that stuff super, super clear. Whereas, you’re buying a T-shirt with your own money, it’s fine. Maybe if you’re a teenager you gotta complain to your mom, but… [Laughs]Andrew Mitrak: [Laughs] Totally.The Conflict Between Sales, Product, and Marketing in B2B TechAndrew Mitrak: So I’ve also spent most of my career in B2B tech and on marketing teams, and whenever I run through positioning, I do find that there’s this issue where we have a number of stakeholders in product, and they tend to be biased towards product-led growth or if there is some land-and-expand model or some freemium model, they are biased towards what product can influence as far as growth is. And sales almost always is not interested in land-and-expand. They want big-ticket deals. They don’t hit their quota—April Dunford: I think it feels good to land a big deal if you’re in sales. I think that feels good.Andrew Mitrak: Exactly, exactly. And they want marketing to support that positioning. Marketing, we have our own ideas and customer research as well on what we think.April Dunford: Well, we like the ones—we like the market that’s the easiest to respond to our marketing stuff, which is often terrible leads too.Andrew Mitrak: Right. That’s an issue.April Dunford: We love time waster leads. We love those. It looks good in our metrics and we’re like, I don’t get what’s wrong in sales. They don’t ever convert any of our beautiful leads.Andrew Mitrak: Yeah, exactly. I feel like a lot of dynamic can be summed up to either: Sales wants more leads, okay, then marketing will get more leads.But then sales says, “No, not those leads. We want better leads. Those aren’t high quality enough.” And then marketing adjusts and then gets fewer leads.I feel like that’s a cycle that a lot of companies find themselves trapped in.April Dunford: It really helps to have a clear definition of what a best-fit customer is and why. Not just that we think this is a best-fit customer because we wish we were doing deals like that. It should be: “This is a best-fit customer for us because we are the only ones that can deliver this specific value.” If you look at us versus the other things that a customer is going to compare us with, we are the only ones that can deliver this specific value, and these are the kind of people that really care a lot about that. That’s what we really need to get at the root of. And it shouldn’t just be that we like those companies because they’re bigger and they have bigger budgets. Well, guess what? If they’re bigger and they have bigger budgets, then that means we’re going to run into these competitors that can handle that. Do we actually serve that customer better, or are we better at something else? And so getting everybody together in a room to get really clear on that is going to help us with all those problems when sales says, “Well, we don’t like these leads.” It’s like, let’s sit down and talk about what an excellent lead looks like and why. It should tick these boxes because we are very likely to win those deals for these reasons.Andrew Mitrak: In the dozens or hundreds of companies you’ve consulted with that have implemented positioning successfully, is it an equal split between partly marketing, sales, and product? Are they all like equal one-third owners of the process? Is it usually best if one is the owner of it and the other two are stakeholders? Does it need to be the CEO who is on top of it on the exercise? What’s the best model, or is there one right solution or ways to make multiple versions work?“Marketing Never Wins the Battle of Opinions”April Dunford: This is actually a great question. So I’m a big fan of doing a cross-functional exercise because, just in my own experience when I was in-house and working as a head of marketing, if I didn’t get everybody in the room together, I couldn’t go have a conversation with sales and think I had it and then take it to product because then they’d rip all that stuff apart and say, “No, that’s all wrong, it’s this.” Then you take it to the CEO and the CEO has got their own opinions and you end up with something else. So it’s just way more efficient to get everybody in the room together.But if you’re going to get everybody in the room together, we can’t just have everybody in the room together just say, “Okay, why does everybody love our stuff?” then that’ll just be a battle of opinions, and marketing never wins the battle of opinions. So the way my process works is we start with this conversation around competitive alternatives. Now, what’s funny about that is the question is: if we didn’t exist, what would a customer do? At that step, I think sales’ opinion on this matters more than anybody else’s. But it doesn’t stop everybody else from having an opinion, but everybody else’s opinion is generally wrong.Sales vs. Product Perspectives on CompetitionApril Dunford: So I’ll give you an example. Often what we’ve got, like when you go to product management and you say, “Who do we compete with?” they generally give you a way longer list of companies than sales does. Because product management is living a little bit in the future, right? They’re thinking about the roadmap, they’re thinking about where we’re going, and they’re looking at the superset of who could compete with us and who should compete with us. What they are not looking at is who does. Sales knows that. Sales knows that.Now, if I go to sales and I say, “If we didn’t exist, what would a customer do?” they can tell me exactly who lands on the short list. They can tell me who’s causing us pain out in the market right now. They generally won’t consider the status quo as a competitor because a good salesperson, if they lose to status quo, they will say, “We lost to no decision.” And in the minds of a good salesperson, that is not a no; that’s a “not yet.” We’re going to get them someday, just not this week, man. And so if you’re doing this exercise, you have to pull that out of the sales team, but it’s very important for the product team to hear what the sales team has to say. Because the product team is thinking about a different set of competitors, which is fine, by the way. Because they’re building for the future, they need to be looking at that.But when we’re talking about positioning right now, if the competitor is not causing us any pain, they may never cause us any pain. We don’t do a very good job of predicting the future that way. And the reality is if they do cause us pain next year or the year after, we’re going to adjust the positioning to take that into account. So step one, when I’m talking about competitors, I think sales’ opinions matter more.And then we didn’t even talk about marketing. Marketing, if you say to marketing, “Who do we compete with?” they’ll list the people that are spending the most money on marketing. That’s who they worry about because that’s who they’re fighting for keywords and everything else. And they go, “Oh my god, these guys, they’re everywhere! We see them everywhere. Oh my god, they have the biggest booth. Oh my god, they’re all over the place.” But again, if they’re not causing us any pain in sales, well, maybe you’ve got some competitors burning a lot of money on pretty s**t marketing that isn’t doing anything.The other thing you get is the CEO will have this opinion. Often the CEO was really involved in sales at some point, but maybe it’s been a couple of years. Or maybe they only see certain kinds of deals in certain situations, so they’re biased towards that. Again, sales understands the reality on the ground. So when we go to step one, personally, sales’ opinions matter more, but we’ve got to get everybody on the same page.Then we get to step two: okay, if we didn’t exist, this is what a customer would do, this is what we’ve got to position against. Now we get to step two, and step two is all about: what have we got that the other guys don’t have? Who knows that the best? Product management, by a mile. Sales doesn’t know. They don’t even pitch stuff they don’t understand. Marketing doesn’t know because there’s lots of stuff the product does that marketing thinks is useless or they don’t understand or whatever. The only people that can really give you the straight deal on “what have we got that the other guys don’t” is product management. A good product management team knows all about that. So again, other people in the group might think they know the answer to this; product management knows the answer to it.Then we get to the third step, which is value. This is where marketing comes in a little bit because only marketing understands even the concept of what value is. So they’re helpful in that respect. But here it’s a little bit interesting. Sales knows what a customer thinks is valuable and what they don’t. So they’re a good litmus test. If we come up with a value prop, sales is a good litmus test: does this sell? Sales can tell you generally because they know customers, they’ve been selling to customers, they know what flies and what doesn’t. Marketing understands what value is, so they know what a good value prop looks like and what it doesn’t. So this is where we see a lot of sales and marketing. But again, everybody’s got to agree on what this is.Then we’re going to get to this segmentation, which is: okay, we’re the only people on the planet that can deliver this value, but not everyone cares the same about it. So what are the characteristics of a good-fit account? And that is kind of a little bit of everybody chiming in on: okay, if the value looks like this, what needs to be true about the account in order for that to resonate? Are they bigger accounts or smaller accounts? Is there something in their tech stack that makes them more likely to make that more appealing to them or not? Is there something about their business model or something about the team we’re selling into that’s different? That’s a group conversation with everybody. So we have this team together. We obviously need the CEO in the room, and the CEO needs to believe that this is important work and sponsor this thing. But when I run one of these exercises, everybody needs to chip in, and everybody’s opinion is important at different steps in the exercise. This is why this is so difficult to do when it’s not a team exercise. It’s like that old picture of everybody wearing a blindfold and they’re all touching a different part of the elephant. The guy on the tail says, “It’s a snake,” and the guy on the leg says, “It’s a tree.” It’s a bit like that. Sales knows something, product management knows something, marketing knows something, the CEO knows something, support knows something. We’ve got to pull all of that out together and then synthesize it into something we can all agree on, and we’re all singing the same song, and then we move forward.Evaluating Positioning Success from the Outside vs. InsideAndrew Mitrak: As an outsider, I like to evaluate a company’s positioning or try to understand their positioning. But if positioning is this strategic foundation and it’s not branding, it’s not messaging, it’s not even just marketing, how do you go about evaluating somebody’s positioning from the outside? How do I tell if a company’s positioned well or if they just have a really talented copywriter?April Dunford: I’m glad you asked this because sometimes what I’ll see—and this bugs me a lot—I think I’ve been guilty of doing this in the past when I didn’t know any better. But sometimes what I’ll see, and I see this a lot on LinkedIn or social media, a random person like me will pull up some B2B website and say, “Isn’t this terrible? Who could understand what this is? Look at all that jargon! Look at all that stuff. Oh, this is terrible. This should be more B2C-like. This should be really easy and it should be exciting.”And the first time I saw one of these that I thought was really funny, this was a company that was growing 200% year-on-year on about $100 million revenue. And I’m like, my dudes, it is working just fine. So here’s the thing: it is very difficult for you to assess how good copy on a homepage is working if you are not the target buyer and you don’t even know who the target buyer is. If I’m selling something to—I was working with a company that does this stuff with airlines and I’m selling a very technical thing to people that do maintenance on airplanes—like yeah, man, you’re not going to understand what that website is talking about. And that’s okay. What really matters is: is it working with a customer, and is it doing the job we want the website to do? So that’s one thing.The second thing is, like you say, there’s copywriting and there’s positioning. If I look at a company’s copy, I don’t necessarily understand the strategy behind it. I don’t know exactly how they’ve defined a best-fit customer, for example. So I don’t know exactly who they think their competitors are. Therefore, I can’t tell: is it doing a good job of differentiating them from those competitors? Because I don’t know them, I don’t know their competitors, I don’t know who their buyers are. It would be very hard for you from the outside to figure this out. And so I don’t think doing a homepage teardown is a particularly good way to understand someone’s positioning. I get this a lot where a company will send me a link to their homepage and they’ll say, “Can you just tell us if our positioning sucks or not?” and I’m like, “No! Because I don’t know anything about it. I don’t know who your target market is, I don’t know who your competitors are, I don’t know anything.” And so it’s really hard from the outside to assess that.Identifying the Signs of Weak PositioningApril Dunford: Now, on the inside, poor positioning shows up in a set of very distinct ways. So the way I used to assess it—let’s say I got hired as the Vice President of Marketing and then everybody wants me to just spin up a bunch of campaigns, and I’m like, “Okay, but let’s make sure the positioning is good before we do that because otherwise I’m pouring water into a leaky bucket.” So let’s have a look at positioning.How I would assess that is I would walk over to sales—because I’m always working with enterprise companies that have sales people—and I’d be listening in on first-call conversations. Now, this is really easy because everybody records it with Gong, so you just listen to the Gong calls. But first-call conversation, weak positioning shows up like this: the customer shows up, the rep is there, and the rep’s doing their thing and they’re saying, “Hey, let me tell you something about us, and we’re this, that, and the other thing, and we do this and that for companies like you, blah blah blah.” And you can see the customer just getting super confused, like making this face: “What the heck are you talking about, man?” And usually what you’ll get is a few minutes in, and the customer will go, “Stop, stop, stop. Just back up. Back up. Go back to the beginning. I’m not sure I got it. Go back, say it again.” And the rep’s got to go back and repeat it again. Or they’ll get halfway through and the customer will ask a question, and the rep will be like, “Oh my god, the customer didn’t understand a thing I was talking about.” If you’ve got happy existing customers but a new customer is coming in that confused, that is usually a positioning problem.The other one you’ll get is prospects comparing you to things they shouldn’t be comparing you to. That is a clear sign of bad positioning. So they’ll come in and say, “So you’re like a CRM, right?” and you’ll be like, “No, no.” Or they’ll be like, “Oh, so you’re just like Workday?” “No, we’re nothing like Workday, what are you talking about?” And then the rep has to back up and do it again. So this idea that the customer thinks they know what box to put you in, but you’re actually living in a different box, that’s a sign of weak positioning.And then the other one you’ll get is a customer coming in and saying, “I get it, I get what you do, I get it. But I just don’t get why anybody would pay for that. Can’t I just do that with my accounting package? Can’t I just do that in a spreadsheet? Why would I just hire a couple of teenagers to come in and do that? That doesn’t seem...” and then in that case, what the problem is, your value is not clear and compelling. So inside we can assess it; outside, I don’t know.The Pitfalls of Tech-Forward PositioningAndrew Mitrak: It’s very tempting to be one of those LinkedIn people from the outside, but on the other hand, I was at a unicorn B2B freight tech startup. It was in the trucking industry and won a bunch of awards, raised a whole lot of money, and our marketing was great—everyone thought our marketing was great. But at the underlying thing, the positioning was often wrong. It was very tech-forward: AI, automate your freight, Uber for trucking type messaging. Everyone was like, “Oh, this is a no-brainer, let’s do this.” And I’d listen to Gong calls in sales and hear somebody pitching all this tech to a supply chain manager at a company in the Midwest, and it’s like speaking two different languages. The startup ultimately folded in a pretty dramatic way. But underlying it, there was just the wrong positioning. It’s easy to say this looks bad or great from the outside, but really you have to get inside the company before you really pass judgment on it.April Dunford: Fundraising’s not revenue, right? Fundraising’s not revenue. But we are in crazy times right now where there’s so much excitement about certain parts of the market where things are emerging, like all this AI stuff is so cool and the potential for this stuff is so big. We see this with pricing models changing, and now we’re looking at usage-based pricing versus subscription pricing. It makes it a lot more difficult to figure out if this company is actually successful or not.Positioning During Rapidly Changing MarketsAndrew Mitrak: Do you have principles for running a positioning exercise through a period of rapid change? It can feel like you’re building the foundation with positioning, but it’s moving so fast it’s like building the foundation on quicksand.April Dunford: I have some opinions about this. Stuff is changing really quickly, but I think companies are going to have to be very clear in their messaging and positioning about what’s real and what we can deliver today versus what is vision and a direction, and where we want to go, and frankly, hype. We’re building the market. Because I think if you’re building an AI company right now, you’ve got to do both. You’ve got to hype the hell out of stuff that doesn’t entirely work today, that doesn’t do exactly what we know it’s going to be able to do in the future—and we might not even be sure when—but we also have to sell what’s on the truck that a customer can buy right now.Those two things are often different. If you look at the one I think is the most remarkable to look at, it’s the vibe coding tools. If you look at what influencers from these vibe coding tools are talking about on LinkedIn and social media, it is super inspirational. You’re like, “Wow, that is so cool. Look at all the stuff we’re going to do.” Right now, there’s a bit of panic in the markets, like, “Oh my gosh, are we just going to be able to vibe code accounting software? Why should we even have accounting software? We’re going to vibe code a CRM. Sell Salesforce, man, that stuff’s just going to go away.” But then you go to their website, and their website doesn’t say they do that at all. Their website says, “Build a nice prototype,” because that’s what they’re actually selling today.Now, they’ve got investors and whatever, and right now it’s very difficult to be heard in the noise without being super hypey about this stuff, so they’ve got to do the other piece too. They’ve got to show the vision. They’ve got to show where this is going. They’ve got to show it in order to justify the valuations. They want people to be mucking around with it now with the idea that we should start doing some stuff with this now because in the future we’re going to do way more stuff with this. So there’s this balance, I think, between where you’re at and what you can sell today, and being clear about that when you’re in a sales process. You’ve got to balance that with this other half, which is hyping the hell out of it. When I say it, I mean the future, So, I’m hyped hell out of where this is going and what it’s going to be able to do and what’s happening in the future and all that stuff. The hype stuff changes very rapidly. What we’re selling and what customers are actually doing with it changes about the same as everything else. You’re going to have to check in on it in six months and see if it’s different or not, but in less than six months, your positioning’s probably okay. If I look at the vibe coding tools, those sites haven’t changed much at all in the last year.Andrew Mitrak: So overall, the act and the role of positioning doesn’t change in a period of rapid technical change. There might be new vectors for positioning; there might be new ways you can position within a new category.Balancing Today’s Reality with Future VisionApril Dunford: What you should expect is to be very careful, and you should be watching your positioning, and you should be very ready to adjust it when it needs to be adjusted. In a normal market, when I was in-house as the VP of Marketing, we would do a check-in on positioning every six months. That was more than enough, and it was rare that we would check in and have to change it if the positioning was less than a year old or even less than two years old. It’s pretty rare we would do the six-month check-in and say, “Whoops, need to adjust something”. These days, especially if you’re in this AI world, you might want to do that quarterly, and you should be very ready to make the adjustment if you think that it’s needed. But do I think your positioning’s going to change quarterly? No, I don’t. But it wouldn’t surprise me if you changed it within a year. That wouldn’t surprise me at all.Applying Positioning Principles to Your CareerAndrew Mitrak: I want to ask about how you’ve positioned yourself and positioned your own book. It feels like you’ve been very deliberate about your own positioning. You focus primarily on B2B tech, which is where you have your experience. Do you think that marketers should be applying these same positioning rules to their own careers?April Dunford: Maybe. I don’t know if I’m a great person to give career advice, but it certainly worked out for me. When I was working in-house, you’re applying for jobs as the VP of Marketing and you’re up against everybody else, and you’ve got to answer the question, “Why me and not the ten other people you’re interviewing?” In order to have a clear answer to that, you have to be able to say, “What am I better at? What have I done more than the other people? What’s my edge over everybody else?”For me, because I had done a lot of positioning stuff early, that kind of became my edge. I could talk about that in a deeper way. By the time I was at a company and then we got acquired, I had positioned a bunch of things at the acquired company. So by the time I came out of that one, I had positioned five or six products. That’s a lot, really. A senior marketer could go their whole career without repositioning anything if the positioning is working. So I thought I had that as an edge. In the later part of my career, if you hired me as the VP of Marketing, you hired me because you thought maybe you had a positioning problem. I could talk intelligently about how we were going to fix it, and that’s why you brought me on.I wouldn’t be applying to jobs where what they were really looking for was something really outside of that and it wasn’t really in my deep skill set. Yeah, I know a lot about lead generation, and yeah, I know a lot about email marketing. Yeah, we’re doing SEO and whatever; I know a lot of stuff about that. But am I going to get that job versus the person that comes in and says, “I managed this ginormous Google Ad budget at the last thing and all we did was SEO and I’ve been doing SEO for 15 years, I’m going to yak your ear off on that”? I’m not going to win that job. So I’m trying to focus on applying to jobs that are a fit for my stuff and then making sure I’m positioned in there as the best person for that job.That’s worked out pretty well for me. As a consultant, I’m trying to do the same thing. I’m trying to stay in my lane. I get tons of calls from companies that are B2C, or they’re B2B but they don’t have a sales team, or what they actually do is professional services. I’ve done a few services companies, but only if they tick the boxes. I’m pretty serious about who makes it through my filter, and that’s because I want to make sure we’re really, really successful. If it’s outside of my wheelhouse, I don’t know, I’m just kind of guessing. So I try to stay right in my zone of excellence so that if you make it through all my filters, then I feel pretty confident that we’re going to get a good result because I’ve done 300 other companies that look just like you. And you’re probably going to pay me more money to do that because I’ve done 300 companies that look just like you. Everybody else you’re talking to has done a little of this and a little of that, and it’s not like they don’t know what they’re doing, they do, but they don’t quite have the experience level in the little box that I do. So I try to stay in my little box where I can look you in the eyeball and say, “I’m probably the best person in the world to do this.” Not this, not this, not that, not this other thing—just in this little box right here. I think I’m the best in the world.The Strategy Behind Positioning “Obviously Awesome”Andrew Mitrak: Did you apply your positioning frameworks and methodology to your own book, Obviously Awesome, and could you share a little of that process?April Dunford: Yeah, so I was really clear when the book came out on what I was positioning against. What I was positioning against was, first of all, the old positioning book, which is the book that came out in the ‘80s by Al Ries and Jack Trout. Again, I love that book, and I think that book’s really good at defining positioning. What it doesn’t do is give you a how-to: step one, step two, step three. So I positioned mine against that and said, “Look, we are very much in alignment, Ries and Trout and my stuff. We agree on the definition of positioning, we agree what it is, we agree why it’s important. I’m giving you the how-to; they are not.” That’s why you need my book and not theirs.I was also positioning against the “positioning statement,” which was a common sort of folklore way of doing positioning inside a company. A lot of companies, if I went and said, “Have you done positioning?” and they said, “Yes,” what they’d done is filled out a positioning statement, which isn’t a methodology at all. But it was just kind of the thing that everybody did. So I was positioning against that as well. In the book, there’s a mention of the Ries and Trout book and the reason why I was frustrated that it didn’t have a how-to, and then it talks about the positioning statement and why I think that’s not a good way to do positioning. So I’m positioned against that.When I look at what I’ve got that the other guys haven’t, it’s a methodology. It’s one, two, three, four, five, six. Nobody else has a methodology. I’m going to give you a methodology. I am sure there are other ones now but one, two, three, four, five, six. The value of that is being able to do it in a repeatable way. Even if you’ve got to muck with the process, even if this is just a starting point, you at least got something.Designing Content for the CEO MindsetApril Dunford: Then the “who it was aimed at” was primarily CEOs of companies, but also, I would say my primary audience was the CEO of a tech company, but also at a secondary level, heads of product or heads of marketing. I did a lot of research with CEOs as I was writing the book about how they buy books, how they find out about books, and how they read books. That was super fascinating. The actual product of the book looks and feels the way it does because of that research. I talked to 50 or 60 founders, and here’s what I found out.How do you find out about books? You find out from your friends, other CEOs. It’s all word of mouth. Nobody goes to the bookstore and says, “What am I going to read today?” and browses the stacks. That never happens. They get a recommendation, people start talking about it, it’s word of mouth. So you’ve got to figure out how you’re going to spark some word of mouth on this book.The second thing that I thought was surprising is the CEOs don’t actually read books; they read half-books. Almost everybody told me this. I said, “How do you read?” and they’ll say things like, “Well, I’ll get on the plane, I’ll do my email for an hour, and then I’ve got two or three hours left in the plane ride, I’ll pull the book out and I’ll read and get to the end of it.” They’ll basically say, “I pull the book out and I read.” And I said, “But wait, you only got two or three hours, that’s only half a book. What happens?” And they say, “Well, if there’s bits I can skim, I’ll skim it and skip forward. You know, these business books are full of fluff. Sometimes there’s a whole chapter I can skim, or if they have a case study or something, I’ll skip that. You more or less get the gist of it in the first half of the book anyways because these books are so fluffy. So basically, I never read the back half of a book.”So I decided, “All right, I’m not writing a typical business book that’s 80,000 words or 90,000 words that takes you six, seven, eight hours to read. I’m writing a book that’s half that, and you can get through it in three or four hours.” Then I’m going to make the bits that you could skim, like the case studies and things like that, very obvious. I’m going to put them in a shaded box so that if you want to skip it, skip away. So it’s obvious what the core stuff is and what the stuff is you could skip. We’re going to make it like In-Flight Magazine—that’s what I kept telling the book guys “This is the inflight magazines”. I thought that worked pretty well. The number one feedback I got on the book after I put it out was CEOs would come to me and they’d say, “Oh my God, it was so good. I finished it in one sitting.” And I loved that. Part of the reason they finished it in one sitting is my original manuscript was like 70,000 words and we hacked at that thing until it was half the size. So yeah, I did use my process for that book.Andrew Mitrak: That’s so cool. Well, thanks for taking me behind the scenes of that. Congrats on the book and its success, and congrats on the updated and expanded edition of Obviously Awesome. I hope listeners, if any listeners enjoyed this conversation, they definitely enjoy the book; it’s available to order right now. Also, I highly recommend your podcast, Positioning with April Dunford. I’ve been listening to it to catch up and research prior to this interview and enjoyed it a lot. It’s super inspiring. I already mentioned your website, aprildunford.com, which has a lot of great resources as well. Is there any other place you’d recommend where people should connect or follow you? It seems like you’re everywhere.April Dunford: I feel like I used to be everywhere and now I’m not. I don’t do a lot of social media these days, for example. Occasionally I’m inspired to post something on LinkedIn, but it’s not very often. The best way to follow my stuff is the newsletter, the podcast, the books—these are the main things. If you go to aprildunford.com, you see links to all that stuff.Andrew Mitrak: They’re all great. I’ll link to it in the blog that accompanies this post. April Dunford, thanks so much and congrats again.April Dunford: Okay, thanks. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 49Have you ever stood in front of a 500-year-old painting of a father devouring his son and asked yourself, “Who paid for this?” Me neither. Until I met Peter Van Wijnaerde.Peter is a CMO based in Ghent, Belgium, and the writer behind a Substack that connects art history to modern marketing. Rory Sutherland recommended I speak with Peter (which is as high a compliment as you can get in this field) after seeing his presentation on medieval branding. Peter’s premise is provocative: art was the original marketing department. Patrons funded paintings, statues, and tapestries not for beauty’s sake, but because they needed to project power, build legitimacy, and sway public opinion. The separation of fine art and commerce is a relatively recent development.Peter brings a perspective that’s part art aficionado, hobbyist historian, and marketing strategist. He shows us that “stopping power” has been central to persuading the masses for a thousand years.Here is my conversation with Peter Van Wijnaerde.Listen to the podcast: Spotify / Apple PodcastsQuick Update: Thank you to the thousands of marketers from around the world who have played The CMO Game! It’s been amazing to see the response and I’ve had a few marketing professors reach out to request using it in their classes. Special Thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And thank you to Rory Sutherland for introducing me to Peter.The Intersection of Art History and MarketingAndrew Mitrak: You’ve written about so many topics connecting history, marketing, mythology, and art, and branding, and merging the past with the present in our work as marketers today. So how would you describe the content of your Substack and your perspective that you bring?Peter Van Wijnaerde: I like to stretch out the history of marketing a little bit to before the 1950s. And I love art and I love looking at art and I love using those art pieces that were made to compel people to have stopping power. I use those to explain how marketing is really one of the oldest professions there is and what we can learn today of marketing. So not that there’s no surprises anymore in the current time, but my blog is about widening the scope of the time frame of marketing.Andrew Mitrak: You mentioned one of the oldest professions. It is funny when Pompeii was uncovered – the ancient city that was covered by Mount Vesuvius. They discovered brothels but also they discovered artwork that would point people to the brothels. Right. So if prostitution is the oldest profession, there seems to be types of advertising to get people there. So they were very interconnected. So advertising does seem like an old profession.Peter Van Wijnaerde: Exactly.Andrew Mitrak: So what was your initial spark? How did you start connecting the past to the present?Peter Van Wijnaerde: I was always a very visual person, liked to engage with things that are visual. But I think the spark happened my first time in Vienna in the Belvedere. I started to appreciate medieval art. And normally medieval art is something we laugh about. You have the memes with the medieval cats and there is full Instagram feeds full of that. But actually we should not laugh with medieval art, because it’s very communicative. Because it’s very symbolic. It says there are two guys and a child and the child is just a little human and this is happening, right? And so it’s basically like a cartoon. I started to appreciate it, started to look at it and then started wondering, that must have been expensive and difficult to make. Why were people making this?Uncovering Medieval Marketing in the Bayeux TapestryPeter Van Wijnaerde: The moment that it clicked was when I was doing medieval travels through Europe. And I was in France and I was in Bayeux. Have you ever heard about the Bayeux Tapestry?Andrew Mitrak: I don’t know about the Bayeux Tapestry. I’m not too familiar with tapestries in general.Peter Van Wijnaerde: Well, it’s a 70-meter long tapestry that was embroidered in the year 1080, let’s say. They don’t know precise but it was embroidered there. And it’s a tapestry about the Battle of Hastings, about William the Conqueror kicking out the Anglo-Saxons out of England and putting in Nordic rule in England. And this guy, his brother, yes, this one.Andrew Mitrak: For listeners, most people listen to the audio, but I am going to, because this is a visual conversation, I’ll pull them up on the screen, because I find it useful to hear and see what you’re talking about. So I’m sharing my screen and showing the Bayeux Tapestry.Peter Van Wijnaerde: So what’s so interesting about the Bayeux Tapestry is that it’s a scroll of 70 meters, it’s about 40 centimeters high or something. And it tells the story about why William the Conqueror thought he had the right to conquer England and what the deal was and how they prepared for it and who they talked to and the whole story from beginning to end is on that tapestry. And it was made...Andrew Mitrak: So it’s a really wide tapestry. Cause it’s like frame by frame. Cause it’s... wow, okay. Yeah.Peter Van Wijnaerde: And you can roll it up too. And it was made by his brother, the Bishop Odo of Bayeux. And what’s so interesting about it, it was not a painting, it was not a statue, it was a tapestry. And there is actually really no other tapestry of that kind. But if you think about it, it was mobile, you could roll it up easily, you can transport it easily and put it out somewhere else also as easily. So it was actually a bit of a prop of a PR tour for William the Conqueror by his brother the Bishop of Bayeux. And then it clicked. And I thought, oh my god, they should give this Odo guy an Effie Award or something because he invented a completely new way of storytelling to convince the people that this king is their legitimate ruler. And you don’t do that by building a cathedral because a cathedral is only in one place. So I thought this is a 1,000-year-old marketing campaign in front of me. So this is when it started clicking even more.Andrew Mitrak: It’s, and you mentioned medieval art almost looks like a cartoon sometimes because it’s a little more two-dimensional, they didn’t quite have the same sense of perspective and lighting and depth that you convey that you’d later see in the Renaissance. But and then also medieval art sometimes you see it in memes today. Like you see it in internet memes and you see it kind of translates kind of because it’s cartoon-like. And in a way memes are such a huge part of internet culture and the way people communicate now. And this artwork, this tapestry kind of reminds you of a comic book almost, or a frame by frame and it sort of takes that type of visual storytelling and it seems like it communicates that to the masses who mostly would be illiterate but would still appreciate a story.Peter Van Wijnaerde: If you walk in front of it and you just go, it takes half an hour to see the whole thing. And there’s action scenes in there and little jokes in there. There’s a warrior showing his bare ass to another warrior, things like this. So it’s also made to entertain. And I think that’s beautiful actually. It’s not just, this is history, this is also, also very interesting fact: the guy who made it gave himself a very prominent role in the history as well. But he was the guy who commissioned it right? So he could embroider himself into history.Andrew Mitrak: Okay, yeah, so sort of the marketer, the marketers being a little self-promotional in a sense, or at least the patrons being self-promotional. That’s great.Inspiration Everywhere: Learning from the PastAndrew Mitrak: So I originally heard about your work from my conversation with Rory Sutherland, and he mentioned that he loved your presentation on medieval branding. Which is a very high compliment. I mean, take that win because if Rory Sutherland complimented my work, that would be wonderful. So very cool. So that was my initial spark for reaching out to you. And you’ve already talked a little bit about medieval history or medieval artwork and how it relates to branding. So was this part of that presentation? The Bayeux Tapestry, was this part of the presentation or could you just share what the presentation was that Rory was speaking about that seemed resonated with him?Peter Van Wijnaerde: Well, the insight that, so this was not about the Bayeux Tapestry. This was about some tactics that some brands do today that you can also see that kings and queens did in history. So it was actually, I think the title was ‘Medieval Marketing Lessons for Modern Marketers‘. That was the thing. And it all starts from this, the reason that if you are in power, you need to stay in power. And there are several ways that you can stay in power. And one of them is fighting. But that’s not a good thing for your resources, because you will lose a lot of men and you will lose the belief of your people if you lose too many men. So for efficiency reasons, the kings and queens looked for different ways to keep their power or make sure no one started fighting them. If people believed that it was not worth fighting you because you were stronger, because you had better allies, or you would end up in hell because this guy has the blessing of God. That’s also an important one. So they started making up all these stories. And what I did in this talk was picking apart some of those stories and translate how they are actually being used today. Just to show, not to tell people this is the way you should do marketing, but more to tell people, like, if you’re in marketing, if you’re in branding, open your eyes. Ideas are everywhere. That was more, and I look for them in history. Other people can look for them in kindergartens or whatever, because I assume a lot of real human behavior also happens there.Andrew Mitrak: It is one of the professions where I feel like you can become a better marketer by opening your eyes to just about anything.Peter Van Wijnaerde: Yeah, I really like Rory’s point. He said if you’re a, what was it, not an attorney, but something else...Andrew Mitrak: An accountant.Peter Van Wijnaerde: An accountant.Andrew Mitrak: Yeah, this was actually coming back to the Rory presentation. He said if you’re an accountant, I doubt that you can get much better at your job sitting at a coffee shop looking at the world. But if you’re a marketer, you certainly can. Of course Rory said it in a more eloquent, witty way than I did, but...Andrew Mitrak: He does.Peter Van Wijnaerde: But also what he also did, like after he referenced me, he immediately started talking about Attention Deficit Disorder. So that started to worry me as well.Andrew Mitrak: Oh yeah. Who was that guy who was all over the place at that conference? I’m sure that was just a coincidence.Peter Van Wijnaerde: But he brought of course the example of Charlemagne to the topic. Like he was the first king to be coronated by a pope. That was a masterful move. No one would attack him after that, or you end up in jail or in hell of all places. Yeah.The Medici Family and the Power of StorytellingAndrew Mitrak: Great. So yeah, that’s right. So let’s talk about some of the specific examples in your presentation. You mentioned Charlemagne and being coronated by the pope and sort of a, I don’t know what you call that, a partnership marketing or influencer marketing or just aligning yourself, positioning... it’s a lot of elements of marketing to that. What were any other examples from that presentation from the medieval presentation?Peter Van Wijnaerde: Well, we talked about the Medici Family. The Medici Family, if you walk... have you been to Florence? If you walk around in Florence, you see a lot of marble statues. And if there is a common theme among most of those marble statues that the Medici Family has commissioned, they liked their Greek heroes who liberated cities. Like how Hercules won against the monster Cacus, or The Rape of the Sabine Women. Also a story about how Rome came to power. So they really liked those stories. And one of the stories I like most about them, and this is the one that I put in the presentation as well, is the story of Judith, which is actually a biblical story from the Old Testament. And Judith was this woman who, her city was besieged by General Holofernes. And no one was doing anything about it. And Judith went to the tent of the general. He was drunk. She seduced him and then she beheaded him. That’s actually a very horrific story. Now I’m telling it.So they had this statue with a lot of stopping power, actually, because there is a woman and she is beheading a man. So this was in the middle of their garden where all the rich people came, where all the influencers came. They were... by seeing this, there was a plaque on the bottom of the statue telling the people, this is Judith, this is what she did, and she is a bit like us, because we also freed the city. So they used all these stories of Hercules, of the Sabine women, of Judith, to remember the people that they were the ones who freed the city. The funny thing is, however, when other people took over Florence, they used the same statue and just changed the inscription on it. They said, the Medici are like Holofernes and we decapitated them. Right. The Medici, of course, they came back and they put the statue again in the middle of the square with another inscription: We freed the city from the revolutionaries, whatever it was. So yeah.Andrew Mitrak: The danger of how you position your enemy is that later you could be positioned as the enemy by your replacement.Peter Van Wijnaerde: Yeah.Recontextualizing Art: Artemisia Gentileschi’s JudithAndrew Mitrak: And on Judith slaying Holofernes, I was always more familiar... when I took art history class, this one, the Artemisia Gentileschi, I think painting of this one. And I always find it interesting to see the same scene compared in two different ways, right? The Donatello statue Medici one. It’s big, it’s public, it’s proud of it. And this one, it’s this painting, it’s happening kind of in darkness and it seems almost more secretive when it happened. And it’s funny to just kind of compare similar scenes and how they’re represented.Peter Van Wijnaerde: But I get the chills when I see this painting. Because this painting was painted by Artemisia Gentileschi. And she paints a completely different Judith than all the others did. Because actually, if you want to know, and this might be a triggering subject, the guy that Judith is beheading here is actually a portrait of the guy who raped Artemisia Gentileschi when she was younger. So this is not a biblical story. This is a true story, or at least how it happened in the head of Artemisia Gentileschi.Andrew Mitrak: Oh wow. I never knew that background to this. That brings a new perspective on it.Peter Van Wijnaerde: Yeah, she is one of the biggest Baroque painters, and maybe the only female one we know of. And in a lot of her paintings, she brings a female perspective to a topic that was painted by a lot of men. So, but that’s going off topic, of course, but it’s...Napoleon Bonaparte: Master of Public RelationsAndrew Mitrak: One of the other figures of history that you’ve spoken about or written about is Napoleon. And he is sort of a widely recognized figure in history. And I’m wondering what could Napoleon teach a modern marketer?Peter Van Wijnaerde: Also to learn from history. Because Napoleon also had himself coronated by the Pope as the Emperor. He brought in Pope, who was it, Pope Pius VII. I’m not sure. To witness him coronating himself. That was the big difference. But he brought in the Pope. So that’s one thing. So he took a trick from the old books. And he did that a lot. Because he brought in all the neoclassical style, like the Roman coding of power he did. So he used a lot of old coding of power. He used a Pope for his coronation. He also, and this I think is the most interesting thing, not the most interesting, but the thing that I find very interesting about him, is during the French Revolution, there was this painter, you might have heard of him, Jacques-Louis David. And he is the guy who painted the coronation of Napoleon. It’s a really big painting. It’s huge, it’s detailed, it’s amazing, it’s theatrical, it’s...However, Jacques-Louis David was maybe the star entertainer of the moment. Having your portrait painted by Jacques-Louis David was like having your face on Person of the Year on the Time (magazine) cover. So that was the impact that that guy had. This guy was commissioned a lot by Napoleon. He painted Napoleon over eight times. A lot of people when they think of Napoleon, they see Napoleon on a stud riding his horse over the Alps with the big wavy cape in red in the background. That’s the image that a lot of people have of Napoleon. That was also painted by Jacques-Louis David. So he painted him over and over and over again.And what was so interesting, why the Pope was there, and this is not confirmed by academics, this is just my thought. One year after the coronation of Napoleon, Jacques-Louis David painted Pope Pius VII. So that Pope that was there. So probably that was part of the deal. I’ll catch you on the cover of Time (magazine) if you attend my party.Andrew Mitrak: Yeah. So there’s kind of who you choose to be painted by is another layer of status that a figure like Napoleon or the Pope in this case would think about. Is sort of obviously there’s a lot of stature, you’re an Emperor or you’re Pope, but even further cementing it is I’m being painted by the most popular artist of the day. And therefore kind of I’m assigned a certain stature. I’m trying to think of who the equivalent would be today. Like who you choose to have your portrait painted by or your photograph taken by. I guess there’s Annie Leibovitz or somebody like that.Peter Van Wijnaerde: But maybe you should take it in modern ways. It’s not having your portrait painted by, but maybe imagine having your biopic done by Ridley Scott. Or Steven Spielberg doing your biopic, you know?Andrew Mitrak: Although I don’t think Ridley Scott’s biopic was the most flattering or frankly even the best movie he’s done.Peter Van Wijnaerde: Well, there were statues made by Napoleon trying to flatter him that he had destroyed or put away in closets and stuff like this. There’s a lot more artwork of Napoleon going around that he didn’t want us to see.Investigating the Money Behind the MasterpiecesAndrew Mitrak: So you said that when you stand in front of a painting, you’re asking different questions. You’re asking who paid for this? Why did they pay for this? And so could you talk about, we were talking about the artists behind the paintings, but could you talk about the money behind the paintings and sort of what were the motivations of patrons and how is that akin to funding a marketing campaign?Peter Van Wijnaerde: Yeah. So when you are standing in front of a painting that is like a murder scene or something, then it’s a very healthy question to answer who wanted this made and who wanted to have this above the fireplace. Because by today’s standards, that would not fly. Your wife would say, “Andrew, no, we will not have this above the fireplace.” Right? So that’s the kind of dialogue that goes around in my head when I look at a painting that has a big murder scene. But I made a little series about horrific paintings and who wanted them painted and why. And Spanish kings were very good at collecting horror paintings and that had more to do with telling people something about yourself. Like if you believed in violence, because the stories you pick are the ones that you associate with. So people would see, damn, this guy, Philip IV, I think, he had Rubens paint Jupiter devouring his son. Why would you want to have that? It’s about power, it’s about destroying future power, it’s about punishment, it’s about all that. You don’t mess with a guy who hangs that above his fireplace. And he had this hunting lodge and it was full of these horrific paintings. Just telling the people that came into his place, this is how I look at punishment, this is how I look at power, and this is how I look.Andrew Mitrak: Was this the Goya one, the Goya with Saturn devouring his son, or was this a different one?Peter Van Wijnaerde: No, no, no. The Goya one was painted for private reasons because he was a bit mad. It’s the Rubens one. The Goya one is true horror. Rubens is still better actually, I guess.Andrew Mitrak: That is pretty horrific too. But yeah, that is funny because when you think of Rubens, this is not what you think of, right? You think of full-figured women and happier scenes than this. I guess there is eating in this one, so there is that.Peter Van Wijnaerde: Yeah, that’s true. But there’s also, this was Baroque time, right? So it was stopping power, shocking people, and whatever it took to get people’s attention was okay. Naked women, cannibalism, it was all good.Andrew Mitrak: And just for comparison, the Goya one is also truly horrific. When I’m sharing these, sometimes art history really takes you to very dark places.Peter Van Wijnaerde: It does. And that’s maybe why it’s good to ask why it was painted. You know, about, I think, there is this painting by Caravaggio. It is David beheading Goliath.Peter Van Wijnaerde: And the reason why he painted that was because he wanted to get pardoned for a murder he did by a cardinal. So he painted that as a gift for a cardinal to get pardoned. And actually, he uses his own head. So the head of Goliath is actually a self-portrait of Caravaggio. And on the knife, there is an inscription on humbleness. So this was painted as an apology for a man in power. So imagine if you’re one of the most popular painters of the time to get something from a cardinal, a pardon, you send him a biblical story in this format.Andrew Mitrak: Yeah. So if I’m ever in trouble as a marketer, I’ll see if I can do a marketing campaign for someone. You make a free campaign to get out of it. I’ll feature you on my podcast. I don’t know if that will work. I’ve got to get more sway.Peter Van Wijnaerde: They need to pardon you. Yeah.The Separation of Art and CommerceAndrew Mitrak: So one of your arguments that you talked about is how the separation of art and commerce is actually sort of a recent invention, that it’s only from the last hundred or 200 years maybe that most of art history that art was commercial and that there’s a very clear relationship between the patron and the artist and the commercial nature of the art. So when did you come to this realization that for most of human history that art was a marketing department, so to speak?Peter Van Wijnaerde: Well, it becomes very obvious, for instance, during the Reformation and the Counter-Reformation. When painters like Cranach the Elder was painting biblical stories but from this reformist point of view for Martin Luther, right? And you see a completely different way of looking at things like Adam and Eve or a completely different interpretation of the Three Graces, stuff like this. And then it goes back to Rubens again, who was a Counter-Reformist, and he paints it completely different, the same story, and when the same story gets told in a very different way, then there is someone who wants to sway you in one way or the other. So this is just one example of when it becomes very obvious you can put two times the same theme together right next to each other, and it becomes a completely different story because another brand is telling the story, the Reformation or the Counter-Reformation.So that’s one thing. But it’s just like what I told you before with Judith or with Charlemagne, it’s all been marketing. It was the biggest visual thing that you could hang somewhere. People would look at it, you could tell a story about it, it was a conversation starter. So it had attention, and where there was attention, there are people wanting to do something with that. When there is a point in time where art freed itself from advertising in a way, or from marketing or branding in a way, I think that was at the point of the Secessionists in the turning of the 19th into the 20th century. You had artists in Munich, in Berlin, in Vienna, in Paris, in Brussels, and they were kind of fed up with how the powerful, the kings and the princes and the regents, were actually deciding what was art and what was not. And they wanted to paint because everyone was commissioned by those people. So you could only paint what you were commissioned for to paint at that point, or you could only show what the prince allowed you to show in the salons of that time. So you had the Munich Secessionists, the Vienna Secessionists, and the Berlin Secessionists, and they basically made a new business model around art because they lost their funding. They made a new business model, and that’s actually the point in time when art freed itself a lot from branding influences. But anything before that, the person who paid for it had a motive. And that motive was a lot of the time in the statue or in the painting or even in the architecture.Addressing Skeptics: Is connecting art history and modern marketing too much of a stretch?Andrew Mitrak: I’m sure there are listeners who’ve enjoyed this conversation like, oh, that’s really interesting perspectives on art, but maybe they’re still a little skeptical. Like, is this really marketing? Is it a bit of a stretch to call that marketing? Have you ever encountered anybody who pushed back on this or said, this is all interesting, Peter, I like your ideas, but marketing requires a market. And this is pre-capitalism, this is pre-mass production, and that there’s something different about a patron funding a work of art prior to that era versus somebody commissioning an advertisement today. Maybe there’s lessons, but it’s just too much of a stretch. Like, have you ever encountered that or how would you respond to somebody who had that perspective?Peter Van Wijnaerde: Well, I have not encountered that question, but probably people were thinking that. A lot of people. First of all, I would always say don’t take it too serious, it’s a game you play in your head and you can learn a thing or two from the game that you’re playing in your head. So don’t take it too serious. But on the other hand, the need, like I said, marketing is one of the oldest professions. Even before capitalism, there were moments when people needed to gain trust of other people to get something done. Like the Tapestry of Bayeux, when William the Conqueror was taking over England, he did not spit out the Anglo-Saxons that were already having thriving businesses there. He embraced them. And actually, when you look at the tapestry, you would think that they would make fun of the enemy. No, no, no, the Anglo-Saxons are very much respected in the tapestry. So that’s kind of proof that this is a piece that was there to sway people into your way of thinking, into your direction actually. So as long as someone had to influence masses to get something done, I think this counts as branding. And this could count as marketing. Even though there was not a market, then it will have another word. Then call it public relations, which is basically maybe also fits in the marketing realm, right?Andrew Mitrak: No, that’s right. I think it’s public relations. I think there is sort of a funny line when I did my episode on this man named Edward Bernays. He wrote a book called Propaganda and he also coined the term public relations counsel. Or, sorry, counsel on public relations. And he kind of popularized, I’m not sure if he invented the term public relations, but he definitely cemented and popularized public relations and sort of positioned it against propaganda. But there is a very fine line between the two. And if I was to think of the political advertisements of this, most of the ones that you cite are somebody in power cementing their power and reclaiming their power. But it’s different than when you think of a political ad today, like vote for me because I want the power, right? It’s more of an asking permission for the power, it’s helping anoint me to the power, and I guess it’s sort of pre-democracy somewhat, or sort of pre-political campaigns as we think of them today. So I’m sure there were political ads that were older, but it seems like a lot of them are more an authority figure confirming their authority, sort of persuading the masses so otherwise I don’t have to use violence to persuade you and less of used on their rise to power to build consensus.Peter Van Wijnaerde: Or think of Napoleon who basically promised Pope Pius VII to be on the cover of Time magazine if he attended his coronation. So Napoleon also needed funds for his wars and people also needed to pay for those wars. So a lot of what he was doing was campaigning to get the power as well, but it had a bit of a different mechanism.The Dangerous Myth of ProgressAndrew Mitrak: One of the essays that I think encapsulates maybe not your entire worldview, but a certain perspective that you bring is this dangerous myth of progress. I think this is something we fall into a lot, where, and this might be why marketing history is underappreciated by modern marketers, is that we think, “Oh, we’re so wise and know so much more today, and people back then, they have nothing to show us.” And so I think this essay really resonated with me. Can you talk about the dangerous myth of progress?Peter Van Wijnaerde: Yes. It’s a big topic, because it’s also a dangerous topic. Because it’s all based on John Gray, which is a British political philosopher. And he just claimed that there is no such thing as human progress. We’re not better than the people in history. We’re just the same, in his words would be the same barbaric animals. We have lust and everything we do is motivated on lust, on gaining power, and this is John Gray’s way of putting it. It’s a very pessimistic way. I find it easier, I accept the idea that there is no such thing as real progress. I think that we are exactly the same human beings like our ancestors. I’m a romantic and I believe that people fall in love and people want to be loved and those are very strong drivers for people to do stuff, to get together, to make groups and stuff like that. So I also believe that, by just the idea that those people in history were just as complex as us, we don’t throw away history just like that. We don’t think of medieval people as people who were praying all day and being dirty all day. No, they also wanted to be someone and they also wanted to express themselves. They’re just as complex as you and me, which makes you look different at the people in history, which that strategic thinking was not invented in the 50s. It’s way older. It’s just a pair of glasses you put on, look at history like this, and then you start learning because those are just not previous versions of what we are. We are not the beta to their alpha, they’re the same. We’re just the same but we have Google and we have OpenAI.Andrew Mitrak: And so the idea is that technology compounds, our ideas compound on each other. There are things that grow, there are systems that grow, there’s culture that grows. But we as individuals are sort of born at square one and have the same fundamental flaws or the same underlying desires that somebody from a previous era has.Peter Van Wijnaerde: Yes. And John Gray would then argue that everything compounds. So we might have better health, we might live longer because of science. But then again, in the year 1000, there was no way to push on a button and to kill an entire city of people. So not only our wisdom compounds, but also our ways to destroy compounds as well. So to him that’s a bit of an equalizer. And maybe that’s why he has more of a pessimistic view on the whole thing.Embracing the Messy Reality of Human NatureAndrew Mitrak: I think that part of this myth could describe why marketing becomes more sterilized and almost too reliant on data, that maybe we think of consumers as rational actors, that we optimize for efficiency, and that sometimes we forget that human nature is irrational, it’s messy, we have desires, we want meaning, we want connection. And some of that gets lost. And is that kind of why you partly bring up this idea of, because when you look at some of the examples of artwork we’ve seen, they’re so primal, right? They’re violent, they’re lustful, there’s naked people, you know, there’s all these things. And...Peter Van Wijnaerde: And that’s a bit of a different thing. But as soon as you start to embrace the fact that good things are messy, the world becomes way more beautiful. I was going through this personal crisis, I think, walking through Berlin and I went to the Berlin Wall. I’ve been in Berlin, I cannot count how many times I’ve been in Berlin. But at that point I was, no, no, Peter, you’re going to walk to Checkpoint Charlie, you’re just going to look at it. And there it struck me that I was very angry about all the noise in the news that I hear every day and all the opinions that you read everywhere, even about marketing, about our profession. It’s going to be ruined because of this and it’s going to be ruined because of that. And then I thought, like, you’re standing at Checkpoint Charlie and then you know that when you’re standing on the US side of Checkpoint Charlie, you know you’re standing on the good side. That’s what we learned to think, and that’s still true. You’re standing on the side where you are free, and that’s the noisy side. When you step over and you cross the no man’s zone and you go to the other side, that’s the silent side. And we think that peace should be silent. But peace is messy. We think that people should be structured, but people are messy. They have desires, it’s what drives them.And as soon as you start looking at people as messy beings, then it becomes way more fun. You don’t look at people as a data set. That’s, I guess, it helps when you’re looking at a lot of people at the same time. But in most cases, you’re making a billboard not to address a thousand people, you’re making a billboard to address that guy in that moment or that woman in that moment. And it should appeal to them, and then it should also appeal to their lowest common denominator. Like, what is it that drives these thousand people? And that’s going to be something very primal. And that’s also the same with art history. You see cannibalism, you see naked flesh, you see the things that attract our eyes. We are attracted to two things. Pure biologically, we’re attracted to beautiful things, and we’re attracted to horror because when somebody yells “tiger”, you better pay attention and run, right? And that’s about it. And that’s why I think that primal is good, and messy is good, and this idea that we are progressed does not help us a lot, I think.Andrew Mitrak: Well, thanks for talking about that visualization of being at Checkpoint Charlie and going from point A to B. I only visited Berlin for the first time in my twenties, but I remember when I first learned about the Berlin Wall, probably early in high school, I think. So I was probably 14 or 15 years old.And when I saw pictures of it or I saw a video of it or I saw slide projectors in class and that there was a side with all the graffiti on it, where all the people had spray painted, and I thought, “Oh gosh, that was their side.” Then I learned, “No, that was our side. That was the side of freedom.”That was probably the first time that I realized, “Oh yeah, that graffiti, that messiness, that thing that’s undesirable at times, that’s a sign of freedom and liberty and personal choice.” For all of the downsides of that, I think it’s still the choice that I’d make. I choose to live in, and the place I’d prefer to be is the side that has some of those downsides where people can spray paint a wall and not get executed for it. And that’s good.I think that was among the memories I have in a classroom, probably among the bigger ones that actually stuck with me in a way. So I think it’s an important, instructive lesson somewhere.Peter Van Wijnaerde: I remember also next to Checkpoint Charlie, there is a McDonald’s. And the other day I would think, “Did they really have to put a McDonald’s here?” But I think that’s the most important McDonald’s there is in Europe. So I went in and I got myself a burger, and I think it was the best burger ever.Andrew Mitrak: You know, there is something about McDonald’s. McDonald’s in Europe are usually actually a little nicer than the ones in the US. Because I’ve gone to a McDonald’s close to midnight and had a coffee in Europe, and you don’t do that here. Pulp Fiction has a whole riff on that.Applying Art History to Modern Marketing CampaignsAndrew Mitrak: You personally, aside from your Substack, which is great, have you applied this historical perspective to your work? Are there pieces of art history or broader themes that you as a marketer or as an advertising person have brought to your commercial work that you can speak to?Peter Van Wijnaerde: I think yes. I bring it up every day, I guess, because we work with a lot of people that bring in all the modern stuff, and I like to be a bit of a contrary. So I bring in the old stuff. And I will be the one that addresses that this is people first. That we should be talking, if you make an ad, are we listing the features, or then I’m going like, “Maybe we should talk about the aspirations of the people, and what are the aspirations of the people?” That’s one side, the subject you talk about, this is what you bring in from the old. What you also bring in from the old is make sure you keep having stopping power. Because if you would look at some people, they would put three USPs with a little V sign next to it. It has no stopping power. So what you also learn by looking at art is that you look for stopping power. So inherently it’s been baked in always. But I remember it was before Corona somewhere, I was working on a campaign to promote the Masters of Belgium, and those are Peter Paul Rubens, Jan van Eyck, and Hieronymus Bosch. Which is technically not a Belgian, but at least a lot of paintings in Belgium. And I was trying to promote Rubens museums and places where you can see Rubens in Belgium on Facebook. But my campaign got banned by Facebook because of nakedness on there.Taking on Facebook: The Rubens Museum Campaign and “Titty Riot”Peter Van Wijnaerde: Andrew, I got so angry. I remember I was in a meeting with the client, and it was the third time that we had to report no results because Facebook kept banning our campaigns for Rubens. And I got so angry, and I remember in the meeting just saying, “You know what we need? We need a titty riot.” In Dutch I said “tittenrel,” which is basically a titty riot. “Guys, we need a titty riot, and we’re going to do it.” And I took my stuff, I stepped out, and that was that meeting. A few weeks later we were at the office, we were like, “Okay, now we need to think of something.” And we thought of a campaign. Basically very simple because we were angry, right? We wanted it to be very simple. If you had a Facebook account, we banned you from certain rooms in our museums where there was naked people. If you were an American, you were banned. If you had a Facebook account, you were banned. Because according to your rules that you signed, this is inappropriate, you shouldn’t be looking at it. And we made videos of that. There was even an old woman flashing her boobs out of protest against the gatekeepers of the room. That really happened. And we released that video.We made a statement with the museums, and Fox News picked it up. They actually sent a delegation to Belgium. We talked about it, and the rules were changed about naked paintings on Facebook. So I think that’s the closest that art and my daily job came together at that point.Andrew Mitrak: That’s incredible. That’s a great example. By the way, this podcast has a clean rating, so I have to bleep. With Rory Sutherland, I bleeped a lot of his profanities. I’m going to keep in “titty riot” though. I’m going to see whether “titty riot” gets us an explicit rating or not.Peter Van Wijnaerde: Sorry for the profanity.Andrew Mitrak: That story though also is just incredible, that you kind of take something where nothing creates scarcity or gives you more desire than saying you can’t come in, and turning what could have been a failure into a big public relations win, and actually a great content win, and actually changing Facebook’s policies, which is a pretty rare thing to do. That’s just incredible. So that’s great. I was thinking though of when you bring in, if you’re riffing on ideas with other people on an advertisement, on a campaign, sometimes I feel old school bringing up the Pepsi Challenge or a campaign from 20 to 50 years ago. Or I feel very old school if I bring up a David Ogilvy quote or something. But I imagine you sometimes bringing up medieval art as a reference point in a brainstorming session and getting strange looks from your colleagues. I’m just wondering if those kinds of things ever come up.Peter Van Wijnaerde: They are quite used to that. They are quite used to me. I also know, I have developed a skill that I can quickly see when people’s eyes are glossing over when I’m doing another of the medieval stories, yes.Why Marketers Ignore History and Chase TrendsAndrew Mitrak: So I think we have a lot in common that we’re both unusual for marketers. I think we both take different types of looks at history and marketing and certainly try to learn from the past. But the industry overall is very obsessed with what’s trending at this moment right now. Most marketers don’t look to history. In fact, as I was making this podcast, one of the reasons I made it is that there wasn’t really one that was a podcast dedicated on marketing history. And I also do love what’s recent, but the fact is there’s a thousand podcasts or more just about marketing and artificial intelligence. And it’s a topic that I like, I just think that it’s so saturated that it would be difficult to break through. And I thought let’s look at history, because it’s important and nobody’s talking about it. But why do you think it is that nobody talks about it? Why do you think it is that we’re rare for marketers? What could it be?Peter Van Wijnaerde: Well, first of all, the marketeers are the weird people here. Because if you look at the non-fiction book sales, history is always on top of it. Not like number one, but like for sure number three, number four. People just love history. And it’s just marketeers that don’t, I guess. So we are not the weird ones, we’re actually the normal ones, and all the other marketeers are weird. Let’s just agree on that.Andrew Mitrak: On that point actually, Apple for 2025 named a podcast called The Rest Is History as their number one podcast of the year. And it’s a history podcast, right? A lot of people listen to podcasts. So you’re definitely right on that. Anyway, I didn’t mean to interrupt, but just wanted to reinforce your point.The Shift to Digital Channels and the Loss of Historical ContextPeter Van Wijnaerde: So normal people love history. Marketeers are not normal people. And I think it’s normal, right? In the last 20 years, marketing has changed so much. So the internet came up, digital marketing came up. And marketeers were, instead of sitting next to your old creative director and learning from that guy, because sadly it was mostly a guy, learning from that guy how advertising worked, how it was to be appealing, how it was to be desirable, what people were desiring, right? So you would learn that skill from someone you were working with. But in the last 20 years, we were a bit distracted by learning about new channels and how to master those new channels. And there was new, new, new. First there was internet, then there was Facebook, then there was Twitter, then there was Instagram, then there was influencer marketing, which is basically, as we already agreed, a very old concept but that is happening again. So you have all these marketeers who actually just needed to handle a few channels, but a lot of thinking about people, and now they flipped it around. They have to think about channels. They have to think about technology. That’s one thing. It’s always the new thing, the new thing to follow. Also, marketeers are very biased to putting “new” on something. And putting “new” on it makes it important, right? Pay attention, this is new. And this is just how marketeers are trained to function in the last 20 years. And it’s not that it’s a bad thing. A lot of good things have come from it. A lot of things are more efficient now. But if you ask why marketeers are not busy with history, it’s that they’re always very busy with something that is possibly tomorrow or missing out on today. There is nothing more exhausting than trying to follow AI trends, right? But that’s what they are doing.The Democratization of History and StorytellingAndrew Mitrak: Sometimes I feel cautious about where I step as a historian because I don’t have academic credentials as a historian. And I in some ways am even more cautious than you are because I mostly just ask questions. I haven’t published too much of my own opinions on marketing history so much, at least not yet. But I’m always cautious to do so just because I know that there are academics out there who really study the history. And I don’t want to in some ways undermine their credentials or feel like anybody can be a historian. Because I don’t necessarily know if it’s true that anybody can be. But I guess I wonder if you have any feelings or thoughts on academia as gatekeepers of historical records and how you react to that, or why you felt brave enough to say, “Hey, I’m just going to step out and talk about history and that’s fine.” What’s your overall perspective on this?Peter Van Wijnaerde: History is something, if you live where I live, I live in a medieval city called Ghent. History, first of all, is everywhere. So you grow up with history. There is a medieval castle in the center of my town. And you know that little boys, they all adore knights and fights with knights on horses and all that stuff. Well, we had the set for that in the middle of the city. So first of all, that’s already something different, that you like grow up with history. That’s one thing. So history is not just a thing that lives in books, it’s a thing that lives around you. However, academics are very boring because they list facts. And that’s good. There should be someone who’s listing facts. But the problem with facts is as soon as you start chaining facts, you create a story. And it becomes a curation of facts becomes a story. And there is this old saying that history is written by the victors. That was kind of happening. That was happening all of the time. Now today, thank you Google, thank you the internet, everyone has access to research papers. Everyone has access to a lot of stuff. Also, a lot of people who studied history have a place to tell their story. They’re not in dark rooms anymore with a lot of dust. No, they can tell their story on the internet and they have been doing that. So people have been chaining these facts into more interesting stories. And when only academics are doing it, you get a very clean version of history, which is true. But for instance, did you know that Belgium, where I live, once had a king that was a bigger monster than Adolf Hitler? A lot of people don’t know about it. At least, I never learned about it in school. I only learned about it maybe 10 years ago. That’s maybe being very generous to myself, maybe it was only five years ago. When other people who were not in the dusty rooms, but people of minorities were doing their own research in history, and they had means to make those stories popular. And telling them, “Hey guys, we have a very dirty colonial history in Belgium and we should know about this.” So this is not to roast the people at the academies, but this is just to tell that more people can tell the stories now based on the facts. Because whatever you do, it should be true. You can’t say that Jesus was sitting on a dinosaur, right? That’s just simply not true. But as long as you work with the facts, you can give parts of history that people were not thinking of. Just like what I did with you with the perspective on the Artemisia Gentileschi painting. By just giving you five more facts, your whole image of that painting changed.Confronting Colonial History and the Power of Hidden StoriesAndrew Mitrak: Yeah, that’s right. You bring up Leopold II and sort of the Belgian Congo. It is something where I knew that story and I kind of knew it, but I had to look it up. Because I read Heart of Darkness back in the day. But in some ways that story hasn’t been told in the same way that resonates in the same ways that, say, so many stories about World War II. It’s sort of the defining global moment of the 20th century where that really influenced sort of the second half of the century’s media and art and film. And some of the best films of all time are World War II films or talk about The Holocaust. But because the stories that are written about the Congo, of course Heart of Darkness is a great work of literature, but it’s not sort of a popular book in the sense that even the adaptation of it is Apocalypse Now, which isn’t about the Belgian Congo, right? And not about Leopold II. So it’s kind of a story that because of the era or because of the documentation of it, or I don’t even know exactly why, it just hasn’t translated completely. But it just because the story is not told, people don’t know that history as well. So it is sort of incumbent on not just the fact-finders, but also the storytellers who can create something that really resonates with people, is that’s how the story becomes better known and how people better know their own cultural history.Peter Van Wijnaerde: That more people can start telling history stories, and I think that’s amazing. That’s just more perspective on life.The Future of History and Where to Find Peter’s WorkAndrew Mitrak: Any other thoughts on sort of the future of history?Peter Van Wijnaerde: The future of history. You know what would be amazing? If let’s just assume that fact-checking will become more easy, and searching for facts will become more easy. Then I think a lot of history will be more personal. Because when people find themselves or recognize themselves in history, it gets a certain validation. “I’m here because I was always here,” or “I have a right to be here because I was always here,” you know? For instance, immigrants. History tells the story about the value of immigrants in a certain country. It validates them. So I think history can cure a lot in the future.Andrew Mitrak: I think that’s a good note to wrap up on. Peter, I’ve really enjoyed this conversation. Where would you point people online to read more of your work?Peter Van Wijnaerde: I would love it if they took the time to check my Substack. It’s peterVW.substack.com. That’s where I release my stories. They’re quite long sometimes. You have experienced that, but yeah.Andrew Mitrak: They’re well-researched, well-articulated, and they’re full of great pictures as well.Peter Van Wijnaerde: One of the things that I try to do on my blog since a year was never use artificial images, only art. And that’s a fun way because sometimes you have to look for a long time to find the right picture. But that’s also how I always get to the other subject that I want to write about.Andrew Mitrak: Absolutely. That’s great. Well, yes, I will link to peterVW.substack.com in the blog that accompanies this post as well. So I hope listeners check it out. If you’ve listened to this podcast, I’m sure you’ll appreciate Peter’s work. So Peter, thanks so much. I had a lot of fun with this conversation, so I really appreciate your time.Peter Van Wijnaerde: Thank you. This was also for me a lot of fun to do. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 48This week, I’m joined by Scott McDonald, who spent three decades in the research trenches of America’s biggest magazine publishers before becoming president of the Advertising Research Foundation (ARF), an organization now celebrating its 90th year of trying to separate marketing science from marketing spin.Scott led consumer research departments during the Golden Age of Magazines. His insights helped launch Martha Stewart Living, tripled The New Yorker’s subscription price, and he saw the internet disrupt the business model he’d spent years optimizing.Along the way, he picked up insights that still resonate. Including: * The Strength of Weak Ties: How a core sociological concept explains networking and provides a framework for go-to-market efforts.* The Power of Print: Why Steve Jobs insisted that every new Mac launch campaign include an ad in Time Magazine.* Cultivating Authentic Brands: Behind-the-scenes stories of using qualitative focus groups when launching Martha Stewart Living.* Scientific Marketing via the ARF: Including the empirical rule that cutting your share of voice during a recession will reliably cost you market share.Listen to the podcast: Spotify / Apple PodcastsNow here is my conversation with Scott McDonald.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Scott.Connecting Sociology with Marketing ResearchAndrew Mitrak: You got your PhD in sociology from Harvard University, and then you got into a career in media and advertising. Sociology is such a fascinating topic. I always enjoyed my sociology classes in college. At a broad level, how did sociology influence your career?Scott McDonald: Well, my interest in sociology went back to undergraduate days really, where I was mostly in the historical comparative wing of sociology and interested in social movements and things like that. And then when I graduated, I graduated from University of California, Berkeley and was totally broke by the time I got out of school. I needed a job. I went to the job board and found a job that involved program evaluation, just kind of project work, evaluating educational programs for the California Department of Education. And it ended up being quite fascinating because it was the first time I’d actually thought about how you would address structured applied problems using the skills of social science. So I cut my teeth on that, doing projects for the Department of Education, for Bay Area Rapid Transit, for all these sort of public entities. And that drove my desire to go to graduate school in sociology to learn the quant side, which I had not really studied as an undergraduate.So that’s really the main throughline to the work that I’ve had in advertising and media because I approached it very much through a background in studying statistical modeling, pattern recognition. I was particularly interested in graduate school in demography. And so demography sits at the border between sociology and economics. There are other borders in anthropology and psychology and other things like that. But I was mostly interested in the border between sociology and economics. And that carried through, I’d say, through my entire business side career. But also I had really fallen in love with doing applied work as opposed to sitting around theorizing at a university. So I was much more receptive to those job offers.And one came to me when I was just rehearsing for doing job talks, going around to campuses and presenting myself as a soon-to-be graduate of a PhD program. And quite randomly, a good example of the sociological theory of the strength of weak ties, that a job at Time (magazine) came up where they were looking for an academic social scientist to try to crack a problem that they found intractable. Because a guy at Sports Illustrated in the Time Inc. portfolio had gone to high school in Chicago with the wife of my thesis advisor. The weak tie led to the referral. I went to New York and hit it off and decided to move to New York and work for Time Magazine instead of joining the faculty at the University of Arizona as a starting tenure track professor.Andrew Mitrak: Can you define more so the strength of weak ties? Like what is that idea? I haven’t actually come across it.Scott McDonald: It was popularized as the six degrees of separation concept. That it isn’t so much who you know immediately, but it’s who people that you know know. That’s one degree of separation or two. So most jobs actually come to people through those kinds of referrals. Not exactly the person that I know, but someone else that I might be able to help them actually discover an interesting job. The exception usually in sociology is recent immigrants. Why do you have Haitian taxi drivers or Indian newsstand owners or something like that? Because their networks are small and they’re very specific to immigrant communities. But once you kind of move out of that, and of course universities themselves are super important as drivers of social networks, and they allow people to expand their networks a whole lot. There’s a whole field of economics now that has to do with the life chances that come to someone just as a function of whether they grow up in a well-networked place like say Austin or a poorly networked place like Waco. Geographically they’re not that distant, but they have very different social networks and different opportunity structures. So sociology, you know, again this is like demography, pattern recognition. When you think of the way that you would discover some of these theories and test them, they’re similar to analyzing the influence of say a magazine compared to a social media influencer. You can graph that stuff.Andrew Mitrak: It sounds like a concept that’s really applicable to marketing in a lot of ways. And we tend to as marketers think of it as just social networking or your second-degree LinkedIn connections or your alumni network, or how you might build an audience through reaching out to influencers and connectors. But it seems actually useful to look at concepts from sociology that have probably studied this in a more rigorous way and come up with things like the strength of weak ties to frame some of your go-to-market efforts.Scott McDonald: I’ve always thought of sociology as being very, very flexible partly because it overlaps with all these adjoining fields. And it’s always scrambling to try, it doesn’t have one unifying theory as economics does. It’s got a bunch of theories. So—Andrew Mitrak: Sounds kind of like marketing.Scott McDonald: It is, exactly. Exactly.The Golden Era of Magazine PublishingAndrew Mitrak: So you got to Time.Scott McDonald: My first big post-graduating job.Andrew Mitrak: And this was in the early 80s or so?Scott McDonald: Yeah, 1982.Andrew Mitrak: So what was the portfolio of Time magazines? Obviously everybody knows Time Magazine, and you mentioned Sports Illustrated...Scott McDonald: Yeah, so the big moneymakers were the weekly magazines. It was Time, Sports Illustrated, and People (magazine). And they all made boodles of money. It was sort of the heyday of the magazine publishing industry. There were also a bunch of monthly magazines as well. And of course, Time Inc. owned a bunch of other things. Book of the Month Club, a publishing imprint. I forget exactly which ones they had, but they had a lot of things. And importantly, HBO. And so there was already kind of a media empire. They owned some cable systems and stuff like that. And then a couple years after I joined, they merged with Warner Communications, which brought them a movie studio, a music company, and a bunch of other of those assets, the Turner Broadcasting System, and CNN, and all that. So it became more and more of a media conglomerate while I was there. A very interesting place to work.Andrew Mitrak: Yeah, we’ll talk about your time there, your work there, and how it evolved while you were there. But before we get into that, I thought this might be an opportunity to talk about magazines more broadly. You kind of called this the Golden Era of magazines. And they were such a huge part of American media and culture in the 20th century. And we haven’t really discussed magazines at all on this podcast aside from occasionally we reference an iconic ad that would have appeared in a magazine. And iconic ads are so critical to the medium of magazines. Do you have any thoughts on the rise of magazines in the 20th century and how it impacted the way brands marketed themselves?Scott McDonald: Well, a lot of magazines are aspirational. And people kind of put themselves into that. Many are vertical. Time was an example of a fairly broad magazine, and it competed with other leading news sources. But it was much more in-depth than say what you would get from broadcast television news or something like that. Much more the middle-brow intellectual version of news. It wouldn’t be The Wall Street Journal necessarily, but something that was very, you know, they broke stories and competed in news. So a high-brow, well-heeled audience at a reasonable amount of scale that provided, say financial companies, any company that was trying to influence opinion would be a reasonable target. So like Microsoft when it launched, Apple Inc. when it launched. As a matter of fact, Steve Jobs always insisted that any new campaign had to include Time Magazine. So he was from a generation that viewed this as a super important, influential medium.And magazines actually were that. They were criticized sometimes as being gatekeepers. Editors had a lot of power in setting agendas or anointing. I worked for Condé Nast. Vogue (magazine) is famous for anointing a new designer. Someone that Anna Wintour likes gets featured in Vogue and they’ve made it. It’s like they’re on the blotter. That’s less true now because you have competing sources of influence, but the appeal to advertisers in part was always that. And when you do consumer research, you would see that very often the readers of those magazines believed that the ads were really part of the value of the magazine. So a September Vogue was evaluated partly by how thick it was. Well, the thickness wasn’t editorial copy. It was a lot of ads for September Vogue, and consumers would actually think that Anna hand-selected the ads.How Brands Measured ROI on Magazine AdvertisingAndrew Mitrak: Can you take us behind the scenes of who are the players when it comes to marketers at a brand? Let’s say Apple, Steve Jobs wants his ads for a new Mac launch in Time Magazine. There’s Time, there’s the publisher, there’s advertising agencies, there’s Apple and the in-house company. What is sort of the relationship between how an ad actually gets into a magazine?Scott McDonald: Okay. So the publishers, and of course since I worked for Time Inc. and then WarnerMedia and Condé Nast across 30 years, my view is a bit, the lens that I apply is from the publisher side more than anything else. Publishers very much wanted to have a direct relationship with the brand, with clients. And a lot of the communications were direct there. So at Condé Nast, I would go present directly to L’Oréal, for example, one of the bigger cosmetics advertisers for the house. And this was somewhat in conflict with the agencies. Agencies were supposed to be planning media across the board, but they often were really confined more to managing the television side and later on the digital buying. So the publishers preferred that because sometimes they didn’t compete with more mass media like TV on reach, but they were more influential. Very similar to what we look at research now, podcasts don’t usually have the same amount of reach as some other media, but they’re much more influential. They’re persuasive to the people who listen to them. And so they have a traction that is in some ways very reminiscent to me of what you would emphasize in conversations with publishers about the value, why they needed to be in Vanity Fair (magazine) or whatever.Andrew Mitrak: How were the brands measuring their Return on investment on their magazine advertising? As we’ve looked at this era of marketing metrics and analysis, a lot of it tends to be around TV, and it feels like there was a lot more scanner panel data and things like that that were almost tied to television sets and stuff. But I haven’t actually heard it brought up on how it applied to magazines and such.Scott McDonald: It was harder to justify magazines in terms of bottom-of-funnel metrics because they don’t work that fast. They are much more about building Brand equity and upper funnel. So the big studies of that era needed to take a pretty long timeframe. They needed to be in field for a year or more to actually be able to demonstrate the value, and the value often was a brand equity value. It wasn’t pushing product. Newspapers worked fast. You know, that form of print media, you’d have the inserts before the weekend. It was mostly promoting sales, so eroding your profit margin in the same way that other in-store promotions would, and ultimately undermining brand equity. The point of good magazine advertising was to build brand equity and pricing power.So like a classic campaign that ran for over 20 years, the Absolut Vodka ad, was to me a great example of what’s different about print advertising compared to television or digital in most cases because it’s not interruptive. It works by invitation rather than shouting. It’s like, you want to put yourself in the picture? Oh, I want to be on that beach. I want to take that vacation. Or by being clever and witty, there’s a puzzle to solve. What have they done with that damn vodka bottle now? And, I mean, vodka is vodka, you know. But to be able to charge a couple of extra bucks because it’s Absolut is hugely valuable to that marketer. And so the game is a long-term game there. It’s not, and thus much harder to measure. And I think to the disadvantage of many advertisers that rely upon that kind of pricing power, it’s harder to sustain those forms of marketing these days because there is such a pull toward transactional bottom-of-the-funnel short-term metrics because they’re easier to measure. And they tend to be misattributed sometimes to shorter-acting forms of media that might have been, why did I search for that brand? But the search engine will get more credit than the advertising that made me type that brand’s name in the first place when I decided I wanted to buy something.Driving Brand Equity and Subscription GrowthAndrew Mitrak: I want to come back to where we were in the story. You joined Time in the early 80s, and you continued to work at Time Warner and Condé Nast, and always in consumer research and insights leadership roles. And so what was your role in doing market research for major magazine publishers? Was it more looking at their own metrics, or was it looking at metrics for the advertisers, or what was your job there?Scott McDonald: I set up the first consumer research department at Time Inc. And so the focus was almost exclusively on the demand side, on stimulating demand for magazines, working with the consumer marketing function and with the editors. And so a lot of work in magazine development, starting titles like Martha Stewart Living, Real Simple. Those were some of the ones that I worked on at Time Inc. And then there was a lot of magazine development work at Condé Nast as well, along with cover testing and developing forecasting models. You know, you have a couple different ideas for what you might run on the cover of Vanity Fair, which one will sell more. And so that was a key part there.Condé Nast also had The New Yorker probably, a super influential magazine, one I still read all the time, very loyal to it. But the job there involved reducing its dependence on ad revenue and building up the consumer side of that business. So it really involved gradually getting people used to paying $150 a year for it instead of $50. And that was strategically vital to a magazine like The New Yorker, which isn’t a behemoth in terms of reach. And so it requires kind of a different mix in the business model. But yeah, at Condé Nast I had responsibility for the advertising side, but they hired me primarily because of my reputation doing work on the editorial and consumer side.Andrew Mitrak: I make a lot of The Simpsons references on this podcast because I grew up watching The Simpsons. And I remember one of the first ways I ever heard of The New Yorker was a Simpsons joke where Marge is going through her mail and one of the envelopes was a rejection letter from The New Yorker subscription department. And I was basically a little kid, I was like, I didn’t even know what The New Yorker is.And I looked it up like, oh yeah, seems like it’s this magazine for rich smart people. And it’s funny to think of how a magazine sort of segments itself. The New Yorker is different than Time, but there are some overlaps, right? That Time is on every newsstand, it has broader reach, it seems like it’s more ubiquitous, and The New Yorker wants to be big and everybody wants to know the name, but not everybody necessarily reads it or pays for it or subscribes to it. And I guess can you speak to the different approaches you had for how growing market share and maintaining market share for a very large widely circulated publication versus increasing the brand equity and justifying price increases and higher subscription costs for a more niche publication like The New Yorker?Different Approaches to Managing Print Media BrandsScott McDonald: Well, to some extent, I mean, some of it really is respecting the editors that you’re working with and trying to find a way to help them with the particular problems that they face. So a demand problem for Time (magazine) really involves something like newsstand. The New Yorker didn’t depend upon newsstand sales; it was a subscription magazine. So it’s partly just kind of understanding the differences in those businesses. And Time was probably in more need in some ways of the kind of research help that I could make because it did depend on newsstand sales. And that’s something where the forecasting tools can be of greater use and a testing program, particularly if you’re out every week, you get a lot of data points that you can then reconcile to how it actually sold and refine your forecasts.So, but then a whole lot of times there’s a lot of news that happens. It’s not debatable what will be on the cover. It’s like what was the big story of the week. So your point of influence is more a slow news week where there’s what we would lovingly call a thumb sucker article. Just something that’s a bigger, in-depth piece that’s been cooking for a while and they’re looking for the right opportunity to run it. And for those they would really want to know some, it’s risk management. Like, how much will this appeal to people?Andrew Mitrak: Did the business interests of increasing reach of say Time Magazine for instance influence editorial decisions as like who would be on the cover? Because I could imagine that there might be certain figures that you put that person on and it’s more likely to buy news, more people will buy it, right? Or you might have data like, oh when we put handsome people on the cover, we get more than... Did that ever...Scott McDonald: It always is the editor’s choice. I’m just giving information. So there never was pressure from the corporation to, you know, just do what Scott says. It wouldn’t work well. It wouldn’t be good for the working relationship with the editors. It’s their remit. And so the principle of church and state was pretty much intact all the way along, and that would be, that wasn’t something that it was useful to challenge.But there’s a lot of financial, a lot at stake. Or at least there was during that golden era. I mean the advent of this thing, completely changed the game because attention moved entirely to the phones. It hasn’t really left there yet. And people were no longer killing time at a checkout stand kind of browsing a magazine rack to figure out something to amuse themselves for the three minutes, the 2.7 minutes that they were in line waiting to be checked out at the grocery store. Yeah, so the forecasting became less valuable as newsstand just as a category declined.Surprising Insights From Magazine Cover TestingAndrew Mitrak: Are there any general insights or truisms that you’d be able to share about what are the markers of like, say who’s on the cover of a magazine and like this type tend to lead to a larger spike? Like what’s the type of insight you would share with an editor that they would choose to use or ignore or...Scott McDonald: I’d say the things that are sort of durable truths, they didn’t need me for. I mean, put a Kennedy on the cover of People (magazine) and you’re going to sell. You can still, you can run JFK’s assassination 40 years later and it’s still going to sell. So I mean they don’t need me. They know that. But of course, if People magazine does this all the time, it’s not a good thing. They’ve got to find new things. So and Princess Diana, same thing. So there are cover subjects that for People or Vanity Fair (magazine) are pretty timeless.The I’d say the better examples would be the ones that were surprises. Where they had some other strong options, but there would be a surprise that came out that they wouldn’t have automatically assumed. And so a test that would highlight that would encourage an editor to take a chance on something. And this would be true even for just an unusual shot that doesn’t look like the usual cover of Vogue (magazine). So a model or an actress in an unusual yoga pose or something, would be, or pregnant. Just something that is startling and feels a bit like a risk. And then you give the editor some idea of what is the level of risk and the probability of success for something that is out of box. And so I think it was used more for encouraging innovation and risk-taking than moving always back to something that was kind of a hardy perennial or too predictable.Andrew Mitrak: So there were the truisms that were obvious, the JFKs and Princess Diana’s of the media. And then the things that were non-obvious that were unique insights that you were providing, were those sort of more temporal where you do that trick and then it sort of fades? I’m kind of almost likening it to people who analyze what’s trending on TikTok and social media trends and sort of seeing what are the types of stories that are this week. But you can’t, you kind of gotta hop on it now and it’s, this isn’t necessarily useful advice five years from now. Was it kind of like that type of thing?Scott McDonald: One example I can think of from Vanity Fair was Heath Ledger. So it was like a year after he died. And they put him into the mix on a cover test. It wasn’t my idea, it was the editor’s idea, but it was against some other things that going into the test you plausibly would say, well these other ones have a pretty good chance as well. There’s no particular reason to think that people are still that interested in Heath Ledger. But they were, and it was quite evident. Now doing it a year later, it probably wouldn’t be the same. So these are kind of timestamped and the value of them is in being able to do that probe at the moment and fit it to a model where you’ve got other data on other covers and you’ve studied the competition and you know what their newsstand sales were. And so you can get that data back from the distributor. So you’re able to build a more sophisticated model because you’ve accumulated more data. And it was all great until the whole newsstand business collapsed in response to this more transformative launch of a smartphone and major change in consumer behavior. It’s part of what interests us right now on AI of course, and trying to get an early bead on this next transformative change.Building Martha Stewart’s Brand with Consumer ResearchAndrew Mitrak: I’m going to ask you about the smartphone and the internet and AI. I have one more magazine question before I do though. Because you mentioned Martha Stewart Living. And I think Martha Stewart might be one of the greatest marketers of all time. And I actually haven’t discussed her that much on this show yet. And just that there’s a magazine title with somebody’s name, Martha Stewart Living, there’s not that many of those. It’s not that, and to build a whole, and it seems like a unique thing at the moment to build a whole magazine around her brand. And do you have any stories of the creation of Martha Stewart Living or what was that about?Scott McDonald: It was fun. The most fun part of it really was doing qualitative work, we did Focus groups with Martha in the back room. And it was of a genre of qualitative research where we decided that we really wanted to study the fans. So like this had worked very well for Warner Bros., so my confreres out at the Warner Bros. Studio, had this property Superman, that had been kind of damaged by this campy TV series in the 60s. And it wasn’t, they wanted to bring out a Superman movie that really worked, and they did it by studying the hardcore fans of the comic, of the original thing. So that was the approach with, and they managed to succeed in reviving the franchise for the movie.That was our approach with Martha Stewart, we really tried to identify the people that just loved her. And that we studied what was authentic about Martha. So my favorite exercise from it was asking Martha to just from her, come from her house in Westport and bring us some stuff that’s in her house, that we mixed in with other things that were expensive, or utilitarian. I was like gardening gloves, or a little trowel, or just stuff that from her house, random stuff, compared to other stuff. And we threw it all on the table and asked people to pick out which things were Martha’s and why they thought that. And they could do it. They could do it. They understood her taste, some of which might be Shabby chic, but it was her taste and they were spot on. And it kind of helped the editors because here was a situation where Martha hadn’t made a magazine before, so she’s contracting with Time Inc. to boot up this magazine. And she’s got some professionals in magazine design and editors and things like that that she’s working with, but it’s a new venture. And that really helped to refine understanding of what the secret sauce was and this sort of passion for Martha. And I think it was a good example of, again trying to provide some information, but respectfully. I’m not a magazine editor, and you just set up the occasion as an opportunity to understand and refine the description of that brand and what’s the flavor of that magazine.Andrew Mitrak: Right. Yeah, it seems like part of the core insight is really doubling down on the core fan base because if you’re making a magazine, you could sort of take it in different directions. And you can expand, if you have a lot of pages to fill, you could sort of dilute it and add a lot more stuff in. But instead, be like no, let’s really focus on what does this core group care about and try to get it to be the essence of Martha.Scott McDonald: You know, and it’s interesting too because as we discussed before, the ads in a magazine are a pretty important signal of who’s in the room, who’s allowed into this club. So if you’ve got tasteless ads in a Martha Stewart Living or in any Condé Nast publication, you’ve got a problem. And it’s an editorial problem. I remember once at Condé Nast, the corporate sales department did a big deal with McDonald’s. And they ran McDonald’s in like all of the Condé Nast publications. And we got consumer complaints. “This doesn’t belong in my magazine. How dare you.” So there is an interesting balance that takes place that just has to do with the signaling about what’s appropriate for this particular environment.The Early Days of the InternetAndrew Mitrak: When did you first realize that the internet was going to be a big deal?Scott McDonald: Right off the bat. The World Wide Web itself, which became I know was invented in 1989, but the first real operational browsers and effective implementation of the Web was in ‘95. And it immediately created a sensation, even though we were dealing with 300 baud modems and screeching sounds and all this stuff. Just the reality of having that amount of sort of global access to all these documents, was very bewildering. And for about four or five years, there was just a whole lot of experimenting taking place across all media.Time Warner at that point had already been investing in Broadband and trying to pilot Video on demand. So they basically switched video systems, and it was they were too early. The technology was too expensive still, but I got to sort of play around with that. But there was recognition that something big was afoot, and people just didn’t know exactly what to do about that. And that was, that was a pretty fun ride.Andrew Mitrak: Yeah, I imagine. It’s quite a ride. And so as a publisher, as the internet comes along, you know it’ll be a big deal, how does that impact your role as a researcher?Scott McDonald: In some ways it led to just some interesting new things I had to figure out how to do. So again, because I came out of academia, I would constantly look back to see how certain methods, for example, for doing analysis and or forecasts, might apply in this situation. So my job at Time Warner kind of morphed into trying to understand the internet and the effect it would have on businesses. And so part of what I was doing was studying like what there’s a lot of complexity and chaos and difficulty finding things, and there were no good Search engines. So you’d start studying how people were actually using the available tools, AltaVista for example. And so it introduced me a lot to usability testing, user interface diagnostics, because internally people were designing things like more complex remote controls for TV for cable systems. And for proliferating channels of content. You’d start studying the dynamics of search and what led to satisfaction with a search result or not.Time Inc. was experimenting with a satellite model that said, okay, we’re going to provide simplification, kind of like what AOL was at the beginning, where it was simplified into some aggregate content areas and you relied upon AOL or Time Inc. to filter all this stuff and make it simpler to find things because you’d aggregated content into kind of a hub. And part of my frustration was I wasn’t able to effectively convince the management of Time Warner that that was a mistake, and that that wasn’t actually going to win. That people wanted, they liked the freedom of all of those of being able to pull in documents from everywhere, and they didn’t really place enough value in that filtering design and structure. So Google would win. And as soon as Google showed up, Google didn’t even have a business model yet, but it was clear from day one when you’re studying that space that this is a significantly better search result. And you could see immediately that this is where Time Warner should be focusing its attention and not Pathfinder or something like that that was. Or, and it was the AOL deal, when that was announced, the merger with AOL, that was when I decided I was going to leave Time Warner. Because it seemed to me to be completely contrary to what I’d been learning.Andrew Mitrak: Seems to have been a prescient choice.Scott McDonald: Yeah, personally it was fine. I had a lot of options that became very valuable in that transaction and I could exercise them and walk away a happy camper. But it seemed like a very bad business proposition.From the Walled Garden to The Open WebAndrew Mitrak: Yeah, for sure. And it seems like the Time Warner AOL merger and sort of their Walled garden approach as opposed to sort of embracing the open Internet it seems like it also kind of ties back to their own business interests in being gatekeepers. And that if there weren’t gatekeepers that has sort of knock-on effects that might be bad for the publishing industry that sort of played out over the next couple decades.Scott McDonald: It’s the Innovator’s dilemma.Andrew Mitrak: Yeah, exactly. Did publishers start to see the writing on the wall there or when did that, when did because I’m sure there was a moment where the internet’s like, hey this is a huge opportunity, this is more, you know, free distribution, we don’t have to pay for paper, things like that. But then there seems to be like, oh but what if anybody can blog and what if people stop going through the gatekeepers? Like when did that turn or did you see that turn?Scott McDonald: That was more in the 2000s. So it was really when I was at Condé Nast, and Condé Nast was wrestling with the same issues. In some ways it had a pretty big portfolio of brands, but it ended up pruning those to the most distinctive brands that could be defended and that could operate as digital properties on a global scale. So they kind of shifted scale and integrated their international, like they used to license Vogue (magazine) in a bunch of different countries, and they kind of consolidated and it became a global brand more. And would be sold, the advertising would be sold on a different basis thus. So there were different forms of adaptation, they all needed to figure out how to do what they were doing on a lower cost basis because the impressions became more commodified in that market. Particularly once Programmatic advertising took place.And you know the, I mean the big change, the biggest change in my view was that advertising was severed from editorial content. Ads came from Ad serving. Advertisers bought an audience, they didn’t buy a placement inside a medium. And so the whole model and the kind of special relationship that I described where I’d be going over to L’Oréal and talking about our view of their customers, trying to share insights about customers that are gleaned from studying them in the context of Condé Nast magazines, was irrelevant because everything was much more commodified through that digital model of advertising insertions. The same issues are with us now with AI and you have different companies trying to decide do I license, do I make a deal with OpenAI right now or do I try and sue them, you know like The New York Times is doing, and require a different payment model for access to my content. And these are still commercial and legal questions that are not yet resolved but they feel familiar because they’re just a different iteration of the same business issues that developed in response to the Web.Applying Lessons from the Internet to the AI EraAndrew Mitrak: Yeah absolutely. Are there any other lessons that you’re drawing or thinking about from having navigated the internet’s disruption to the publishing industry and as we’re now entering or in the midst of this AI era, what that means for advertisers and marketers? Like are there any lessons that you’re thinking about that apply?Scott McDonald: Yes and no. I mean I think the in some ways this feels somewhat different. And I don’t know, you know the question of whether AI dramatically changes the consumer the labor market, and the ability of people to earn incomes that supports the advertising system is a fair question. Even though the history of all these tech innovations is that they generate enough new jobs to replace the ones that have been rendered obsolete. But I don’t know at this point whether whether I believe that this time around. So that’s a fairly big unknown that would be different in terms of the consequences of the innovation.If I was still working at a magazine publisher and or a publisher in general, it could be a TV channel that calls itself a publisher now, or any content engine, then I’d still be wary of how I monetize that content when it becomes Disintermediation. My advice still would be pay a lot of attention to trust and pay a lot of attention to the shifts in consumer behavior because advertisers always follow the consumer behavior. And consumers don’t always do what we as publishers want them to do. So you’ve got to be realistic about that and keep your eye on the consumer. That’s certainly a lesson I think from my Time Warner days where I don’t think they did that sufficiently. So.Andrew Mitrak: I don’t know if this is a lesson, but something to draw from the golden era of publishing is editorial taste, that as a marketer that uses AI products, the AI products don’t always have good taste, right? Or they kind of have sort of a median internet quality taste and like, you know, obviously they’re very powerful and all that but like there is an element of if everything kind of looks the same, and you can’t differentiate your AI output from my AI output, somebody’s editorial taste on refining and coaching and directing it kind of becomes more important. And I wonder if there’s sort of people embracing their inner editor and developing taste to sort of know what’s good and not...Scott McDonald: You know, this remains to be seen but it’s my observation that as AI improves, which it continues to do with breathtaking speed, it depends partly on you as the user to tell it what you want. It wants to please. So if you, so like in the context of say marketing applications or insight extraction, if you just ask a simple question, you’re going to get a pretty simple answer. If you actually feed it say peer-reviewed academic articles that you want a theoretical framework to be incorporated into the answer, you’ve raised the bar a lot. If you tell it that you want it to pretend that it’s a McKinsey & Company consultant, it’ll do it. It knows what you mean, and it will change the answers in response to your inputs. So I don’t see any reason why you couldn’t do that with regard to some matters of taste. If you could train your chatbot to be like those focus group respondents in the Martha Stewart Living example. And it seems in principle that you should be able to cultivate that.The Advertising Research Foundation (ARF)Andrew Mitrak: So I want to ask you about the Advertising Research Foundation (ARF). You’ve been president of the ARF for about ten years or so. What is the ARF for people who have are not familiar with it already and how has it evolved over the years?Scott McDonald: Okay. So the ARF is the Advertising Research Foundation. It is celebrating its 90th birthday right now. It was founded in February of 1936. As at the behest of the two founding members, the Association of National Advertisers, the ANA, and the American Association of Advertising Agencies, otherwise known as the 4A’s. And it was set up from the beginning as an independent foundation dedicated to furthering through research the scientific practice of marketing and advertising.So from the beginning days it wrestled with the kind of public facing questions of how advertising works. What’s the best way of measuring the audience of a Life (magazine), you know? Of not just the circulation but all the readers per copy and the people who look at it in barbershops and whatever, you know. What’s the best way of measuring the audience for a radio program? We know how many radio sets are in American households, but how many people actually heard a particular show? And then in terms of advertising, what makes some ads successful and others not? What’s the optimum frequency? How long does it take to burn in or to burn out? Those questions have been with us from the beginning, and they’re still with us today, it’s just a much more complex and fragmented media landscape.And so to some extent you need to update that all the time. And that’s still the kind of role of the ARF. It’s the power according to its bylaws, the power over the organization is distributed among marketers, ad agencies, media companies, and service providers, which would include all the measurement companies and everybody from Nielsen Holdings to little Neuroscience consultancies or brand consultancies or attention measurement companies, any of those things. And so ARF is kind of the Switzerland in the middle of that ecosystem that conducts research on basic questions of how advertising and marketing work, trying to stay as close as possible to the values of scientific inquiry. And that means, that doesn’t mean anything goes. And you’re in an environment where people make a lot of claims. All these campaigns do really well. You go to a lot of conferences and they’re all just like success story after success story. And you know not everything works, you know? And so trying to separate wheat from chaff and kind of build a body of knowledge about how to think about these things is the mission. To try to improve practice through the application of scientific methods. So.Andrew Mitrak: How do you, how do you deal with that at a conference or just in marketing in general? Because I think every marketer wants to say that they’re scientific. They want to say that they’re data-driven, but also every they want to say that their campaigns are working, right? They want to say yes and our campaign was great and there’s sort of a grading their own homework type thing. And there are ways where you can cherry pick your numbers, like “oh, our reach was great,” even if your conversion was bad. Or “conversion was great,” even though you paid too much. And I guess how do you sort out navigate that?Scott McDonald: Yeah, it’s difficult. Partly because, you know, the association itself, it’s a membership organization. So you don’t really want to offend your members. But on the other hand, at some level you might have to because not everything can be equally true. So that’s why the north star remains. And you try and set up... I mean a classic ARF study, we just did it around different aspects of attention measurement. This is a growing field. And you have different approaches, some of which rely upon academic understandings of cognition and memory and things like that. And others that really kind of just follow the development of tools that might plausibly be used as proxies for attention. So eye fixations, because we have Eye tracking and good cameras on our digital devices, on our phones, on our laptops. You’ve got information that’s used for ad verification purposes that would indicate that yeah, there’s a human there. There’s a hand on the mouse. You know? So that’s a proxy for some level of attention that is a signal not very expensive to collect because you’re already doing all this ad verification work, but how closely can we establish that that relates to any sort of formal definition of what we mean by attention? And by that are we talking about, you know, just eye fixations and Saccades? Are we talking about evidence of memory and recall around an ad?So there’s a lot of tests around that. And the ARF exists kind of to help sort out the quality of those. We have an academic journal. We connect to people who have, you know, where they’re peer reviews. There’s competition to get on the stage for our events. So people have to compete before a jury to even get a slot. And so it’s, it’s sort of through that process, which is similar to how it works in the other sciences. I mean, the best examples, if someone really wants to make a strong claim for their research, then they would, we’ll do an audit for them. We’ll run through and see whether we can replicate their numbers. We’ll see whether they did cherry pick. We will, and then we’ll take their data and host it on our website and make it available for anyone in the world who wants to have a go at it, to anonymize the data and, which is the same like if California Institute of Technology wants to make a big claim in the physical sciences, they got to make their data available to the team at Massachusetts Institute of Technology to build legitimacy around it. It’s a very similar concept. So that’s the space that we operate in. It’s geeky but it has some value in this ecosystem.Andrew Mitrak: Yeah. If I was to draw an analogy back to earlier in this conversation of you and your publishing days recognizing “hey there’s truisms that JFK assassination and Princess Diana, that always sells magazines at newsstands.” But like the real insights are sort of the non-obvious things that are more unique or maybe more time-bound. Could you draw parallels and find like what are sort of the truisms that the ARF has helped establish or that you’ve sort of recognized over the years in your role there, versus some of the more unique, non-obvious things that research is uncovering?Scott McDonald: There are a lot of them, I would say. We codified some of them in our, so the ARF acquired the Marketing Science Institute, which is a more academically oriented entity. We did this a couple of years ago. And MSI has published something they call the Empirical Generalization series, which only will, so it will formulate like “X causes Y.” And here are the estimates of effects, within this range and these categories, you know that might be covariates. But it’s reduced down to things that we think there is compelling enough evidence. And their filter on it is wherever there’s been a meta-analysis in like the top three or four marketing journals. So very high level of peer review scrutiny. And only where there have been 60 or more studies confirming this generalization that would allow you to talk about say the if you’ve got like a budget to spend and you need to spend some of it on advertising and some of it on price promotion, for example, in-store promotion, like what are the trade-offs and how do we think about that?So but I think for the ARF itself, probably the thing we’ve studied the most over the years, is anytime there’s a recession or a big disruption in the economy, the pandemic, September 11 attacks, any of these things that suddenly just have a big dramatic effect on markets and consumer behavior, there’s a tendency to cut marketing spend. Short-term marketing spend gets cut. So what’s the effect of that? Since we’ve studied it like from the Great Depression, World War II, the Korean War, any of these things that have these kinds of shock effects. And you’ve got a pretty good record of it. And the answer to it, I call it an empirical generalization, is that when you cut your share of voice, so you withdraw from the advertising market and don’t spend, so you’re not really getting a share of voice within a category, you lose share. And you lose it fairly quickly, and it takes about five years to recover, if you can recover. We have had whole brands that just kind of go away because they lost their position within a category.That’s connected to another generalization and truism that I think is there and is likely to remain there for a long time, that being the dominant brand in a category, which usually involves at least 20% share of market, although in some cases it’s a lot more, leader in the category. That leads to all kinds of benefits. Any advertising that’s done for the brand leader in a category has stronger coefficients of impact, both short term and long term. And to the dismay of the second and third or fourth participants in a category, their advertising is probably going to actually benefit the category leader. It’s an unfair world, but people just mistake it. And a lot of, it’s another sort of truism that I think remains, a lot of creative ads that are so creative that they don’t tell you who the brand is, people love the ad and they assign credit for it to the wrong brand. Because that truism was ignored. It might have won an award somewhere in an ad creative competition, but it didn’t really work for the brand because they didn’t integrate the brand, make it clear enough to the consumer what brand was being advertised. So there are a lot of regularities and it’s hard to not be like a broken record sometimes when you’re responsible for the catalog of those things. But there are mistakes that we shouldn’t be making over and over again. And I think MSI in its most recent iteration of the Empirical Generalization series had like 175 things that rose to the level of, okay these are generalizations. There’s like enough evidence, there is consensus around it. And that’s kind of how in my view science works. It still doesn’t mean that those won’t change and evolve over time as other situations develop, but you build it on the back of a lot of evidence that’s been objectively evaluated and critically evaluated. So.Andrew Mitrak: Yeah. That’s great. It’s great that your foundation is able to advocate for this research, make it available and share it. So let’s learn from science, let’s learn from history and not repeat the same mistakes over and over again. So Scott, I really enjoyed this conversation. For listeners who have enjoyed it as well, where would you point them to online so they could find out more about your work and more about the ARF?Scott McDonald: thearf.org and msi.org.Andrew Mitrak: Scott, thanks so much. It’s been a real pleasure.Scott McDonald: Thanks Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

I have an unusual update this week: I made a game! It’s called The CMO Game.You have 12 months and $5M to launch your product and climb from Director of Marketing to the C-Suite. But your CEO has aggressive goals and if you don’t meet them, it’s game over.It’s like The Oregon Trail, but for marketing (and with less dysentery).You can play it right now at cmogame.com.Why Make a Marketing Game?One thing I keep coming back to is how hard it is to teach marketing. Books, lectures, and podcasts are great resources, but I really learned marketing by doing. By making bets with incomplete information. By investing in long-term brand while hitting this quarter’s target. By navigating pressures from sales, finance, and the CEO.I designed The CMO Game with this in mind, creating an active simulation that complements other resources for marketing education.Like this podcast, it’s free and designed for marketers who want to get better.How The CMO Game WorksYou start by picking a product: soda, shoes, skincare, or software. Then you lock in positioning: premium, value, lifestyle, or disruptor. Each combination has unique marketing channels and tactics that work best.Next, you hire your team and make your pre-launch investments. And every single choice is a trade-off.Skip PR, and you’ll be caught flat-footed when a crisis hits later in the year. Over-index on data, and you’ll get great insights and better projections—but you’ll have way less money to actually run campaigns.Then comes the launch itself. You have to decide your strategy: Do you go for a massive, splashy launch to grab immediate market share? Or do you hold back, preserving your budget for a steady drumbeat of campaign spending over the next 11 months?Over the next 12 months, you face unexpected challenges, respond, and adjust your budget. Every decision has tradeoffs.The game models the tension between brand and performance marketing.Brand equity grows like compound interest, it’s invisible early but pays dividends late in the game. Performance marketing is efficient and immediate, but growth is linear and lacks long-term payoffs.Strategy, Luck, and the Messy Reality of BusinessNot everything is in your control. Some months you get lucky. Other times you face a crisis. How you respond matters as much as how you plan.Premium skincare, value sneakers, and enterprise software all require different approaches. The game rewards players who grasp this, and penalizes those who treat marketing as one-size-fits-all.And yes, the CEO can fire you. If revenue stalls, if brand equity craters, if you make too many bad calls in a row... you’ll end up #OpenToWork.What Marketers Are SayingI shared early builds of The CMO Game with marketers, professors, and friends who work in gaming.Elton X. Graham, CMO of Sur La Table, put it well:“Mitrak’s game sparks the right conversations by not giving you marketing answers, but better questions to ask... which is where real learning starts.”Brian Marr, a marketing executive and professor, plans to use it in his Advanced Marketing course, describing it as a “great way to break the ice in the first class.”This is what excites me most: that people might learn timeless marketing principles while having fun playing a game.Play It and Share ItThe CMO Game is 100% free. No login. No email capture. No in-app purchases. Just cmogame.com.A full playthrough takes 10-20 minutes, depending on how much time you spend considering your strategy.If you’re happy with your results, you can submit your score to the “Hall of Fame” leaderboard. If you think you can do better, play again with a different strategy.If you like The CMO Game, the best thing you can do is share it with someone: a colleague, a student, or a friend who’s curious about marketing. If you’re a professor, you are more than welcome to share the game with your class. I’d love to hear what you think, and I appreciate feedback on how to improve The CMO Game. Email me at hello [at] marketinghistory.org or find me on LinkedIn.Thanks!-Andrew This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 47In 1967, a 30-second spot at the very first Super Bowl cost roughly $37,500. This Sunday, for Super Bowl 60, brands are paying upwards of $8 million. That is a price increase of over 20,000%.So… Is it still worth it?For Professor Tim Calkins, who’s spent 22 years studying this exact question, the answer is an emphatic, ‘Yes.’Since 2005, Calkins has led the Kellogg Super Bowl Ad Review, where MBA students evaluate every ad that airs during the big game. It’s easy to say which ads are funny. It takes more work to determine which ads will be effective.In this conversation, we dig into how Super Bowl advertising has evolved: why brands now release their spots weeks early, why the creative has gotten safer as the stakes have climbed higher, and what the tone of these ads reveals about the American economy and political climate.If you’re planning to watch the game this Sunday (or just the commercials), this conversation will deepen your appreciation for the work that goes into making every second worth $266,667.Listen to the podcast: Spotify / Apple PodcastsWe also talk about Tim’s years managing Kraft Mayo and Miracle Whip (two surprisingly different marketing challenges), and the most common mistakes that marketers make when delivering business presentations. As you’ll hear, Tim is an excellent speaker.Now here is my conversation with professor Tim Calkins.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.The Kellogg Super Bowl Ad ReviewAndrew Mitrak: Professor Tim Calkins, welcome to A History of Marketing.Tim Calkins: Well, thank you. It is great to be here.Andrew Mitrak: We will be publishing this right before the 2026 Super Bowl, which is Super Bowl 60. I had a lot of fun preparing and researching some of your work and also watching some old classic Super Bowl ads. The reason I wanted to have you on for this conversation is that you started publishing the Kellogg Super Bowl Ad Review in 2005, so over 20 years now. Can you introduce this project for listeners?Tim Calkins: This is our 22nd year doing this event. Back in 2005, we began the Super Bowl Ad Review, the Kellogg Super Bowl Ad Review as we call it. I teach at Kellogg, I teach marketing at Northwestern University’s Kellogg School of Management. Before I was at Kellogg though, I was at Kraft Foods, and I worked in marketing at Kraft Foods for a number of years. When I was at Kraft Foods, now Kraft Heinz, with my team I would sometimes do an exercise where we would look at Super Bowl ads and try to think about what we could learn from what had happened on the Super Bowl.When I came over to Kellogg, I thought there was a similar opportunity there to do something around the Super Bowl where we get the Kellogg students evaluating these Super Bowl spots. So the event has now been running for 22 years. The format is always the same. We pull together a panel of Kellogg MBA students. Nowadays it is about 70 or 75 students. As the Super Bowl unfolds, as it plays, the students evaluate all the ads that run.What makes our panel different from a lot of other panels that are out there is that we are very focused on efficacy. We are trying to think about: will these spots, will these Super Bowl ads, build the business and build the brand? Ultimately that is what Super Bowl advertising is all about. A lot of panels, and a lot of Super Bowl rating things—there are lots of these—they will look at likeability, humor, which one did you like the best, which one was funniest. Our panel, we don’t really do that. That’s not really the question. The question really is, using sort of an analytical framework and process, how do we think about which ones of these will be most effective?Every year we come up with our ratings. We give a handful of advertisers As, and then Bs, Cs. On occasion, we give out an F if somebody really misses the mark. It is a really fun event, but it also is a lot of work because what you realize being part of it is that there are so many ads that will run on the Super Bowl. There are probably 75 official Super Bowl spots, but then there are all these other things that show up. You have local spots, you have network promo spots for different shows. It is a lot of evaluation that the students do. It ends up being a very draining experience.Andrew Mitrak: Can you walk me back to the beginning? You mentioned Kraft, which later became Kraft Heinz, which I will follow up on because I want to ask you about that too. When you first started paying attention to Super Bowl ads there, this might be an obvious question, but what stood out to you about Super Bowl ads? Why did you want to pay special attention to Super Bowl ads?Tim Calkins: Super Bowl ads are really unique things in the world of marketing. What is amazing is they become more and more unique as time has gone by. Even if you go back 25 or 30 years ago—so we are now at Super Bowl 60, so you go back to Super Bowl 25 even—the advertising that was running was really different than normal advertising. What happens on the Super Bowl is a few things. Number one, it is expensive, so the investment is high. Number two, you have a huge audience, so there is a lot of people who are watching it. But also, the expectations are different for a Super Bowl spot.You can’t turn around and run an ad that you are running on Survivor. You can’t turn around and run that ad on the Super Bowl. For most advertisers, you are creating a special piece of creative just for that event. People expect to see amazing Super Bowl spots. That is the expectation and companies are under a lot of pressure to deliver.The Framework Behind Super Bowl AdvertisingTim Calkins: The reason it is really interesting to study is that you know that for each one of these advertisers, they are putting forward their best thinking, their best creative talents. This is the pinnacle of their work. So much scrutiny is on these things. Given that, it is fascinating to see what they decide to do. Sometimes they do brilliant things and other times they really miss. But to understand what is happening there and really think about it as a marketer is a really unique opportunity and you can learn a ton.Andrew Mitrak: You mentioned how Super Bowl ads are kind of this unique thing. They are a little different than other ads. When you think about this project of analyzing Super Bowl ads, how does it connect to your broader work in brand and marketing strategy? Do you see these as really closely related where a Super Bowl ad is just the epitome of a brand and a marketing strategy wrapped into 30 or 60 seconds? Or do you feel like this is just a little bit of a different, kind of like a fun side quest that’s related to a brand, but it is a slightly separate, unique, different thing than the rest of the brand itself? How do you frame this work?Tim Calkins: I think a Super Bowl spot is very much at the heart of everything that I teach. I teach marketing strategy, I teach biomedical marketing, I teach influencer marketing, branding. Across all of those classes where I really spend a lot of time is trying to think about the strategy. What are the choices that companies and brands are making? Are they going after new consumers, for example, or are they going after their current consumers? Are they trying to skew younger? Are they trying to go older? Is it about repositioning a brand, getting people to think differently about it? What are all the choices that companies are making?So when we look at Super Bowl spots, and I look at a Super Bowl spot, I am really interested in pulling apart the choices that the companies have made. Your first choice: the decision to run an ad on the Super Bowl. Well, that’s a big decision. How is it that the company reached that decision and decided that was a good use of 8, 10, 20, 30 million dollars? That begins there. Then the question is, okay, well what products are they talking about and who do they seem to be going after and what’s the message they are putting forward? All of those are sort of strategic choices that the company is making.Ultimately it does get down to some creative execution things, and those are fun too. But I think a lot of the heart of a good Super Bowl ad comes from the strategic choices that are made in the development process.Andrew Mitrak: What is the first Super Bowl ad you yourself remember watching? Were you always interested in Super Bowl ads?Tim Calkins: Oh, I’ve long followed the Super Bowl. Like everybody, I watched the Super Bowl. As I was growing up and came through college and all of that, I would watch the Super Bowl and you’d watch the advertising, of course, a big part of the event. It was really only when I got to Kraft that I began to look at it with a marketing lens. That is a very different way to evaluate a Super Bowl spot. Beforehand you might be looking at, you know, what’s one of the early ones I remember... the Coke Mean Joe Greene ad that ran, which was one of the great spots. Or, of course, Apple’s spot that ran back in 1984, these old spots that ran.But it was very different for me when you begin to think about these as marketing investments and marketing tools. That is where all of a sudden it begins to change how you watch a Super Bowl ad. It is one of the things I try to do as I talk about the Super Bowl, is to get people to look at them a little bit differently. It is so easy for people to pass a quick judgment on a Super Bowl spot. “Oh, that was funny. That was great. That was stupid.” People are very quick to pass judgment on it and nothing to stop them from doing that.But when you really pull back and try to think about what is happening there, it totally changes how you evaluate it and how you think about it. You just have a lot more respect for the risk of these pieces of advertising and you have a lot of respect for how difficult it is to do. I think to do a great Super Bowl ad is really tough. It is a really difficult thing. So when somebody does it well, you have to have a lot of admiration for that team and really salute them.When they miss, it’s not for lack of trying. It’s not for a lack of intent or trying and effort. It is something went wrong. Sometimes your heart goes out to them because you are like, “Shoot, I don’t know exactly the people who were working on this, but it did not go well for them.” So I guess it makes you much more empathetic about this advertising when you really understand what is happening.Andrew Mitrak: Yeah, it is good to be empathetic. It is also kind of fun to dunk on the people who miss and all that, but you got to look at everybody trying their best, marketers taking a high-risk bet and kind of good on them for trying whether it’s a win or a bit of a dud.Evolution of the Super Bowl Commercial LandscapeAndrew Mitrak: You mentioned a few famous ads that I want to ask you about because you mentioned Mean Joe Greene, the Coca-Cola advertisement, which is a lot of fun. And then of course the classic 1984 ad, which is probably the single ad that’s come up on this podcast more than any other advertisement. I kind of see that as sort of a watershed moment for the Super Bowl ad where it was a 60-second spot, big budget, directed by Ridley Scott, released in 1984 and obviously has the tie-in to 1984.Do you see any other milestones beyond that one in Super Bowl advertising? If you look at moments as the stakes in the Super Bowl have gone up, the prices of an ad have gone up beyond 1984, do you see any other major milestones or inflection points for Super Bowl advertising?Tim Calkins: People often ask, what turned the Super Bowl into this marketing extravaganza? I think what happened is that it has been a step-by-step process over the years that have really led to this. There have been iconic spots that have run over the years. Mean Joe Greene back in 1980. Apple, that was 1984. Then of course 1993, that was one of the great spots for McDonald’s with Larry Bird and Michael Jordan shooting baskets for a McDonald’s meal. That was one of these great iconic spots, celebrity, the whole thing. That was a really big spot people remember.The Budweiser Frogs in ‘95. That was another spot that people remember that sticks in the mind.What really happens here in the Super Bowl is that it is a step-by-step growth and increase in the importance of Super Bowl advertising. Part of what is happening with the Super Bowl growing, what is happening at the same time is that all the other media properties out there are sort of fragmenting. So if you go back 20 years ago, the Super Bowl was a big deal, but a lot of other things were a big deal too. The Academy Awards were huge and people would watch those. The Baseball World Series was huge and people would watch that. The Olympics was huge.What has happened over the decades is that so many of the other big events, viewership has declined as audiences have fragmented and we have so many choices of things to watch. The one thing that has held up and even grown as the years have gone by is the Super Bowl. Which makes it then more and more important when it comes to companies and brands and when it comes to the advertising because now if you want to reach everybody in the US or a good chunk of people in the US, really the only way you can do that is on the Super Bowl.The Surging Costs of Super Bowl SpotsAndrew Mitrak: I looked up the price of a Super Bowl ad when they started. A 30-second spot at Super Bowl I (1967) was $37,500 back in 1967 dollars. By the way, that’s from Wikipedia, so I don’t know if it’s 100% accurate, but let’s say that’s the ballpark cost of an ad at that time. Inflation-adjusted about 10x that is $360,000, so more expensive. But that said, today in 2026 the reported cost is about $8 million. So that delta between $360,000 to $8 million, that’s the increase in cost.That would mainly be attributed to there being no other option. If you want to reach all of America, there are not many other places where you could do that. Would you say that scarcity and the breadth of that reach is what justifies the higher costs that advertisers are paying now versus then?Tim Calkins: There are a lot of things that go into the price, but certainly the price escalation has been extraordinary for Super Bowl spots. But you know, if I could today buy a Super Bowl spot for the 2035 Super Bowl, if I could do that, if there were a market that would allow that, I would do that because I don’t think the Super Bowl is declining anytime soon.Why do companies pay so much money? Partly it is the sheer reach of it. It is, if you want to get to a big chunk of the population, the only place you can go. But it is not just that. The other thing that has happened is that a lot of people when they are watching the Super Bowl, they are there, they are watching the advertising. Viewership of the Super Bowl, you might have 110 million people watching the Super Bowl, but the vast majority of those people, they don’t care about the teams and they, in many cases, don’t really care about football either. You just have to watch the Super Bowl though because that’s what everybody’s doing that night.Nobody counter-programs against the Super Bowl. You are not going to have a piano recital on the night of the Super Bowl. People would say, “What are you doing? You can’t have like a Scrabble party on the night of the Super Bowl. You are not going to do that.” No, everybody’s got to watch it. So people show up there, they are looking forward to seeing the advertising. That’s what they are paying attention to.The other thing though that is happening is that Super Bowl ads are very symbolic. That is an important aspect of this. If you are a company and you are going to go buy a Super Bowl ad, what happens now is you are going to put of course a big PR push around that and you are going to do all these other activities. You want everybody to know that you are buying a Super Bowl ad. Because what does that say? Well, that says that you believe in your business, you are investing in the business, you are an important company, you’ve got resources. All of that is really valuable for branding and it’s got this symbolic nature to it that is hard to quantify but is very real. So there is lots of stuff that brings people to this moment.You know one other thing that helps Super Bowl advertising is that the Super Bowl is early in the year. It’s in February. Which you would think, well who cares? But in a way that is really important because most companies, if you are on a calendar year fiscal year—January and February, what do you have? Budgets. You’ve got money. At the beginning of the year. In November, your money was either spent or cut or something happened to it, the money might not be available. But at the beginning of the year, all these companies have big budgets. In many cases they say, “Let’s get the year off to a good start. Let’s get on the Super Bowl. Let’s run this advertising, really give the business a jump start.” And that is going to propel us through the year. That is another factor that kicks in here to make it so valuable for firms.Andrew Mitrak: That’s a really good point, that timing within the year itself. Because also it sets up a campaign or an idea that you can build on throughout the year as well. If I think of the 1984 ad, at the start of the year, that’s great, 1984. If it was at the end of the year, maybe 1984 is kind of a lame pun. Like, “Oh, we’ve heard 1984,” it just happened over and over. So I think the ads themselves are fresh, it’s a new year, it’s a new idea. This is a campaign that you launch big and can iterate on or call back to throughout the year. So it’s kind of a nice big upfront investment in your brand spend.Tim Calkins: Well, and you’ll see that a lot of advertisers will use the Super Bowl to launch new campaigns. So that is when they bring out the new advertising. And then they follow it up. Either they take that Super Bowl spot and run it again, either as is or in a shorter format, or they extend the campaign idea and bring other executions around the same creative look and feel. You sort of put it in the mind originally on the one Super Bowl, the one big event, and then come back to reinforce that and to get some repetition. They do that in the subsequent months.Andrew Mitrak: Do you think that companies measure the impact of their Super Bowl ads differently than they do other ads? Do they measure ROI in terms of different types of uplift versus some other type of ad? Any thoughts on, you know, they spent $8 million on these ads, how are they measuring the ROI on that?Tim Calkins: Measurement of Super Bowl ads is really tough. It is really difficult to do. What happens is that every company is measuring the impact. You are not going to go invest 8, 10, 20 million dollars and not try to figure out the impact. The problem is that it is not easy to measure the financial impact of a Super Bowl spot. Some things are easy to measure. You can measure website traffic and you can figure out if anybody came to your website. You can look at search terms, did anybody do that. If you are selling an app, you can look at how many downloads did you get and what happened there. If you’re relying on influencers, you can see what kind of activity. So you can look at a lot of these diagnostic metrics.You can also ask people, do they remember your Super Bowl ad, did they like it? All of those, that’s all easy to measure. But financially, it is very hard to put numbers around it. The big problem is that valuing a brand financially is... people try to do it, but it is a very imprecise science. So in theory, if you get out there and run an ad on the Super Bowl, and if it’s a great piece of advertising, at the end of the day people will think better of your brand than they did before. They will have more positive associations with your brand and they might either know of it for the first time or have some... but it helped the brand.The problem is you can’t quantify the financial value of that. I can quantify how many people came to my website and things like that, but that’s a very small part of it. You are never going to justify a Super Bowl ad based on those kind of metrics. You are going to do it for the brand value and for the long-term impact that it is going to have.I have come to believe there is one way to know though if a company is happy with their Super Bowl ad. The one way you know for sure is whether they come back to do it again. Because you know that if a company runs an ad on the Super Bowl and then the next year they don’t, well then you know that clearly they didn’t think or they had questions about the efficacy of that. But if they come back and they do it again, then you know something.Sometimes you’ll see advertisers, they will run on the Super Bowl for a number of years and then they don’t. And then the question is, what happens next? Somebody like WeatherTech. They ran for many years, but then they took a year off. And then they came back. What that tells you is that they clearly thought that they were benefiting from the Super Bowl spot. And when they stopped doing it, they saw the problem.Andrew Mitrak: Sorry, which company was that? WeatherTech?Tim Calkins: WeatherTech. Yeah, so WeatherTech, they do floor mats. Very strange company. It’s a private company. And they have been running on the Super Bowl though for many years. They are back in 2026. They ran in 2025. I believe they did not run in 2024. But they ran ‘23, ‘22, ‘21, ‘20. But then you know.Some brands have been back and they have run for just many, many years. TurboTax has run, this will be their 13th year running on the Super Bowl. And you are like, wow. Squarespace, 12th year coming up. Michelob Ultra, 9th year. What you know is that these companies have clearly thought about this and have clearly decided that the Super Bowl is a good investment for their brand.Why Major Brands Left the Super BowlAndrew Mitrak: I’ll keep a closer eye out for WeatherTech; I hadn’t heard of that brand, but I’ll be watching for their ad as well. Are there any certain brands that you’ve noticed that left and stayed out? Do you think there are brands that said, “Hey, the way we win is by not playing,” and just chose to opt out of the Super Bowl? Are there any examples that come to mind of not because they went out of business or aren’t a successful company anymore, but they just choose to opt out of the Super Bowl?Tim Calkins: Oh sure, a lot of companies have. They come and go as Super Bowl advertisers. One of the great Super Bowl advertisers for many, many years was FedEx. FedEx eventually stopped running on the Super Bowl, and we haven’t seen them in recent years. They made the decision not to do that.Then there are other brands that really found magic on the Super Bowl and then stopped. Somebody like CareerBuilder. You might remember them; they ran some Super Bowl ads that were really distinctive with chimps. They had these chimpanzees, and it was these very funny spots about the workplace environment and, “Do you work with a bunch of monkeys?” I think was the thing. Maybe you should get a new job, and CareerBuilder was going to be a place to go find your new job. They eventually stopped running on the Super Bowl. There were a lot of reasons why.It is interesting, though, for a brand like that, you stop running on the Super Bowl, and then you do begin to see an erosion in brand awareness. Clearly, I haven’t seen their numbers, but clearly, that brand was top of mind when they were a big Super Bowl advertiser, and that is not the case at this point.Andrew Mitrak: I wonder which one preceded which. For CareerBuilder, it’s interesting because others have taken up the space, like Monster.com or obviously LinkedIn and other tools are massive within it. I wonder if CareerBuilder, if they don’t advertise in the Super Bowl because their budgets went down because of their impact, or if they stopped advertising in the Super Bowl and then therefore they kind of lost some market share and it was sort of a downward spiral from there. I wonder which one preceded which.Tim Calkins: My understanding of the story on that was actually sort of interesting. They were using the chimps, which were super memorable and distinctive Super Bowl ads, but then they got a lot of pushback from the animal rights activists who said it’s totally inappropriate to be using the chimps. They were very targeted. Some of the activists were very targeted and went after some of the senior executives at the company. The company eventually said, “We can’t really use the chimps. We’ve got to do something else creatively.”When they did that, though, what they found was that it was very tough to come up with a great Super Bowl spot. So they ran a couple of years, but they did not get anywhere near the distinctiveness or the lift that they had before. Then I think they said, “It’s a lot of money, the creative doesn’t seem to be working here, doesn’t make sense to keep doing this.” And then they backed away.Andrew Mitrak: Yeah, I guess if you’re going to use the animals, use something like frogs that work better as puppets or CGI or whatever Budweiser uses versus the real chimps.Tim Calkins: Yeah. I mean, the good news now, I guess, is Generative AI can create whatever we want right now.From Single Super Bowl Spots to Integrated CampaignsAndrew Mitrak: Exactly. Aside from the advertisements getting more expensive, over the course of the last 20 years since you’ve been—22 years now since you’ve been running this—have you noticed the ads themselves change themselves or the nature of Super Bowl advertising? How has the nature of Super Bowl advertising evolved since you’ve really started paying attention to Super Bowl ads?Tim Calkins: So it’s changed a lot. One of the big things that has changed is that more and more Super Bowl advertising isn’t just about the Super Bowl ad; it is about the whole integrated campaign. I think there are two factors behind this. One is the investments have become enormous, and so companies want to maximize the return on investment to make the most of the opportunity. The other thing, though, that’s available is now there are so many other digital tools that are available.You go back 20 years ago, and we didn’t have Instagram and Facebook and TikTok to play with. All of that has emerged over the years. Now what you see is companies put forward incredibly elaborate, integrated marketing campaigns around the Super Bowl. For most of these companies, it becomes a three-week—really a two-to-three-week—marketing push where they try to hit every lever during those two or three weeks. They pull out the PR campaigns and the influencer efforts and all of this different activity to try to make the most of it. So that’s, I think, really different. That’s one thing that’s changed.Why Brands Release Ads Before the GameTim Calkins: Related to that, another change that we’ve seen is that more and more of these companies now release the spots ahead of time. It used to be that the vast majority of Super Bowl ads would run on the Super Bowl, and that was the first time you would see them. Now, the majority of advertisers—the vast majority—will release the ads ahead of time. They’ll release them either the week before the Super Bowl or maybe two weeks in advance, but they get those spots out there ahead of time. There are lots of reasons to do that, by the way. That is the best practice. That’s a big change that we have seen. There’s a lot behind that we could go into.Andrew Mitrak: What are the reasons you would release your Super Bowl ad before the big ball game? You’d think like, “Hey, I want to make a big splash all at once. Let’s kind of hold the dry powder and go big all at once.” But is there some strategy to releasing beforehand?Tim Calkins: Oh, there are a lot of reasons to release a Super Bowl ad ahead of time. One of the big ones is that there’s just more time. So if you put your spot out there a week in advance, you’ve got a lot of time to generate viewership and to get views of it before the Super Bowl even happens. The Super Bowl goes by really quickly.The other thing that happens is as an advertiser, the Super Bowl is very unpredictable. You don’t know what’s going to happen. Maybe it’ll be a blowout and you’re running in the third quarter and nobody’s watching anymore. Maybe what happens is a different advertiser runs a spot right in front of you that is uproariously funny, and that overshadows your spot. Maybe the creative idea that you’ve embraced is copied by another company, and they’ve got the same sort of idea.These are all unknowable, unpredictable things. How do you hedge that? You get out ahead of time and try to get some viewership before the game even begins.Another big one, and maybe I think the most important one, is you know ahead of time if you have a problem. So on the Super Bowl, there is so much attention and viewership that it’s terrifying for companies because if you make a mistake and you run a spot that people find—even a small group of people—if they find it inappropriate or offensive or something like that, it can turn into a massive problem for the company. How do you avoid, how do you minimize that risk? If you release the spot early, there is time for people to come back and say, “Wait, that doesn’t look right,” and then you can fix it before the Super Bowl goes and before you offend millions and millions of people.So there are lots of reasons at the end of the day to get that spot out there. Holding it back for the surprise, you’ll see some advertisers do that, but that is not a common approach anymore. The stakes are too high. It’s too risky. There’s too much money involved. It makes a lot of sense to release it ahead of time.The Rise of QR Codes and Digital Calls to ActionAndrew Mitrak: The other change that I’ve seen probably in the last 5 to 10 years or so is the ads themselves having more distinct calls to action or digital experience within it. The QR code... I can’t remember which company it was that just had a kind of bouncing QR code on their ad for 30 seconds.Or ones where there’s also one from a year or two ago where it was just a big long URL or some secret code to enter in an app, and you had to find all the letters and type it all in.So it seems like there are more and more—in addition to being aware of the digital surround or pre-releasing on social media or on YouTube in advance—there’s also on the ad itself having more direct calls to action and making the ad more interactive itself. Is that kind of a trend you’ve been paying attention to?Tim Calkins: Well, there’s no question that companies are trying to leverage technology and take advantage of that. Whether it’s the QR codes that you see on some of these spots or on other platforms, you see that I think more and more.Super Bowl Ads as a Mirror of the US Economy and PoliticsTim Calkins: There are two other really interesting things to watch for, though, on the Super Bowl. One thing is who shows up and who advertises. And that’s a really interesting question. It tells you something about the economy. Because to go on the Super Bowl and run an ad, that means that you’ve got resources and money and you have a certain amount of optimism about the future. If you’re worried about saving money, if you think your company is going to be having some hard times, you wouldn’t run a Super Bowl ad. Those are the companies that are feeling good. So it’s very interesting to watch that and to see who shows up.The other thing is to watch the tonality of the Super Bowl spot. I think you can really learn something about the US economy and how people are feeling if you really look at Super Bowl ads. Because all of these companies, they study the environment, they study how people are feeling, they come up with creative design to resonate with people. So what these companies see is a really interesting look at what’s happening within the country. And you can really see that happen in many ways.You know, actually if you look even when it comes to politics, you can see trends develop there. So if you go back, what was it now, a year and a half ago to the... Was it a year and a half ago? Before the election. Yes. But if you go back and if you... The question was who was going to win? Would Joe Biden pull it off and his group and the Democrats, or would Donald Trump come back?But you go back and you look at the advertising that was running on the Super Bowl that year, and there was a real tone to some of the spots around people feeling that it was tough in the economy, it’s tough to move forward, it’s tough to get ahead. What you could see there, there was a real sentiment that people were not feeling good about how things were going. They weren’t feeling good about their futures.And when you look at that in hindsight, you’re like, “Shoot, there it is.” If people are really feeling that way, that is a very difficult time for an incumbent or an incumbent administration, an incumbent party, to get the win. And you just look at it and you’re like, “Oh yeah, that’s interesting.” So it’s always fun to watch what’s the tonality.Last year on the Super Bowl was interesting. We saw a lot of traditional values on the Super Bowl. What did we see? People in traditional families. People at the cul-de-sac. What did we not see? You don’t see people at the club. You don’t see people in an urban environment. You don’t see super diverse groups of people. Last year we saw this real sort of pivot to these traditional kind of values, which again, I think just reflected a little bit of where the country is at the moment. So the Super Bowl, it’s really fascinating to watch what people run and what’s the tonality.Are We Past the Era of “Peak Super Bowl” Creative?Andrew Mitrak: Do you think that we’re past peak Super Bowl at all? I mean, you mentioned how you’d still... if you could buy an ad for 10 years ago at today’s price, you would do it. But also if I look up lists of the greatest Super Bowl ads of all time, there aren’t that many that are from the last five years or so that make the list. Like I looked up one that had a hundred or so ads, and the most recent ones were kind of clustered around 2010.There was “The Man Your Man Could Smell Like“ from Old Spice.There’s “You’re Not You When You’re Hungry,” the Snickers one that really revitalized the last decade or so of Betty White‘s career.Then there’s “Parisian Love” from Google, which is an ad that I love.And those were all from around 2010, I think, which was 16 years ago at this point.Do you think that’s maybe just bias against recent ads and they just need more time to sort of marinate and be part of the culture? Or do you think there was something from, you know, 15, 16 years ago that made ads more memorable than they might be today?Tim Calkins: So I don’t think we’re at peak Super Bowl because the trends that have made the Super Bowl so powerful are still very much intact. You’re seeing the Super Bowl as an event remain incredibly important, and viewership is solid—viewership has been up in the past few years—and other options are beginning to fragment.It is true that some of the most memorable Super Bowl ads are older ones. I think that’s true, though, for a couple of reasons. One, I think, is that there’s no question that Super Bowl advertisers have to play it pretty safe. And more and more it’s become true that taking a big risk on the Super Bowl, creatively or otherwise, is really pretty dangerous to careers. And not sure you want to do that. So that may be one reason.But the other reason, I think, is that the overall standard of the Super Bowl spots is getting better and better. So when we began our whole journey on the Kellogg Super Bowl Ad Review, each year there would be some that were just really not good pieces of advertising. And now that seems to be less the case. It just feels like the overall average quality of this advertising is getting better and better.But I will say one thing you can be very confident of—I’m going to make one prediction for the Super Bowl this year—afterwards, people will say, “You know, the advertising just not as good as I remember.” And they’re going to say that. But they always say that because what happens? In our minds, we remember a few iconic spots. We remember Larry Bird. We remember the first of the E-Trade babies. We remember that Apple spot.What we forget is that there were like 500 other pieces of advertising that ran over that period. So our memories, we’re picking out the highlights of the past 20 years and comparing this year’s collection of advertising to the highlight reel. That’s not a fair comparison. It’s a little bit like having a football team play the All-Star team. I mean, it’s just not...But people will say that because they always say that.The one thing that might be a problem though for Super Bowl uh as a as a platform I think is streaming and how that unfolds. So you know right now there’s sort of the network broadcast you can stream the Super Bowl. The interesting thing is it’s not a given. My understanding is it’s not a given that the same advertising will run. And if I were in charge of the Super Bowl as a media property, I would insist that the same spots run on both because that way the advertising is seen by everybody and it can be the basis of conversation.Where the Super Bowl begins to lose its punch to fragment like everything else is fragmented. And then instead of getting this big pop of a hundred million viewers, you start getting, you know, 20 million that maybe saw your spot on streaming or 60 million that maybe saw your spot on the network broadcast. And then I think you begin to ruin the Super Bowl as a big event that advertisers are worth really focusing on. That’s the biggest watch out. I have to think people will be smart enough not to get caught in that, but I do I do wonder if that could be a problem longer term.Are High Costs and Risk Aversion Killing Creativity?Andrew Mitrak: You mentioned a lot of great points there, and one that I want to come back to is that advertisers are somewhat risk-averse with a Super Bowl ad, that you want to avoid being too controversial. I wonder if that’s partly just because of getting more expensive as well? Or it also is somewhat mirroring the phenomenon that we’ve seen in the movies, where movies are more and more—as movie budgets get more expensive—you see more Avengers type movies that try to appeal to everybody. You try to see the superhero movie that appeals to everybody, relatively inoffensive.In the meantime, comedies—there’s almost no comedies in theaters anymore. What is comedy? It’s somewhat controversial in a way. And if I think of “The Man Your Man Could Smell Like,” the Old Spice ad, kind of a weird ad. Really funny, but kind of a strange ad and pretty risky too. Or “You’re Not You When You’re Hungry.” People tackling an old 90-year-old Betty White, also a pretty risky ad in some ways, pretty funny. And I don’t know if that ad would get greenlit today or get approved today in the same way because it’s kind of weird. It’s kind of risky.I wonder if some combination of needing to appeal more as the prices get higher, really wanting to avoid too much risk if that kind of is all playing into why some of the ads might be a little less funny today as well. Do you have any thoughts on that?Tim Calkins: I think there’s no question that companies are very careful with what they’re running right now, and that does impact the creative. It’s partly financial, but I think it goes way beyond the financial aspects. The thing to remember is that Super Bowl ads get so much scrutiny, and everybody knows they’re expensive, and everybody’s got an opinion.So if you’re the CEO of a company, you know what you don’t want to have to deal with on the Monday after the Super Bowl? Is having to explain to everybody why did your company run that really either offensive, ineffective—call it what you will—piece of advertising. And I think a lot of companies and marketers will say, “We don’t want that kind of scrutiny. That’s a reason not to go on the Super Bowl.” You’ve got to be pretty brave to advertise on the Super Bowl, to be honest. And I think if you are on the Super Bowl, there’s still a desire to play it safe.I mean, I guess the advertisers, I suppose, it’s not that different than the players on the teams. And the teams always have to balance how risky do you want to play and how conservative do you want to be. And the advertisers are working with that same set of questions.Andrew Mitrak: It’s a really interesting tightrope to walk because you need to be risky enough that you’re able to break through and justify your spend and not be too boring. But also, if you are too risky, you can wind up really shooting yourself in the foot. I empathize a lot with these advertisers and everybody behind the budget and the approvals on it because you don’t want to make the wrong choice there.Tim Calkins: Just imagine the process of developing a Super Bowl spot and how tough that is to navigate. Begin with the fact you have all these hierarchies within companies. If the vice president likes something, but the senior vice president doesn’t, you have that dynamic. But then they are all working with the outside firms as well. So an advertising firm will come in and say, “This is going to be just an incredible idea. This idea we have is so creative and unexpected. It’s going to be the best.”But then the brand leader has to say, “Is that really the case or not?” If they don’t think it is, then you have to tell the creative person that it is not the creative idea they think it is. And the creative person is like, “No, I’m the creative person here, and you are not thinking big enough.” Then the brand person is like, “Yeah, but it is my brand and I don’t want to run something that creative.” But then the senior person says, “Oh, I think we should.” Just the complexity of it all is really tough to figure out. How do you end up with the creative idea that is going to run?Andrew Mitrak: It’s almost a miracle that anything gets shipped at all.Have You Ever Purchased A Product Because of a Super Bowl Ad?Andrew Mitrak: So just wrapping up with the Super Bowl, I wanted to ask you, have you ever made a purchase or changed your buying behavior because of a Super Bowl ad influencing you?Tim Calkins: The answer to that is yes, of course. Now, if you want me to pick exactly the example that I had, that is more difficult. That is a tough one. What did I buy? I did love the Kia Telluride spot that ran. That was an amazing piece of advertising.Andrew Mitrak: I was going to bring Kia up because I have an anecdote. I have a Telluride that is sitting in my driveway right over there. I had never heard of a Telluride before, and I had never even considered buying a Kia before. But I saw that super bowl ad and thought, “Wow, that actually looks like a pretty cool SUV. That is a Kia? Telluride?”I was driving a Prius, and then my second daughter arrived some time after the Super Bowl. I tried to drive my whole family home and thought, “Wow, this car is really cramped. I’ve got to upgrade.” I just started looking at reports of SUVs and I thought, “Oh, Telluride. That is well reviewed. Oh, I remember that Super Bowl ad.”I didn’t just see the ad and go to the dealer the next day, but it certainly made it cool. It gave Kia a little more brand equity where they used to be a punchline of a car manufacturer in some ways. In fact, I think The Simpsons and Principal Skinner would drive a Kia and it was a joke. It was kind of disparaging.Now it is a lot cooler. I think part of that—not the only thing, it is not a silver bullet—but part of that is that they advertise in the Super Bowl and they really try to use that as a mechanism to build awareness and reposition their brand.Tim Calkins: I think it is an example of just a really effective Super Bowl spot they ran. Very risky. That was one, “We are not heroes.” We are an amazing Super Bowl ad. You look at the spot and all of a sudden, shoot, maybe I should think about a Kia. Maybe I should think about a Telluride. That is the power of it.It is one of the things in marketing that I think people in general have to be careful of. When you ask people, “What brought you here today?” or “Why are you buying this product?” or anything like that, it is important to remember that people will never tell you it was the advertising. They will never say that. Or very rarely they will say that. They will say, “Oh, it was word-of-mouth marketing.” Or, “I saw something else.” Or, “I heard about it on...”People say that partly because if you say, “Oh, I bought this product because of the advertising,” it makes you look like somebody who is not thinking fully. You can be persuaded by advertising. Who is persuaded by advertising? So people don’t volunteer that. But there is no question that advertising done well has an impact on how we make decisions and how we evaluate products and services. Absolutely.Lessons from Managing Brands at Kraft FoodsAndrew Mitrak: With our remaining time, I wanted to ask you a few questions outside of just the Super Bowl. You mentioned Kraft Foods. You managed brands at Kraft Foods. I’m wondering just broadly, what did you learn from working at Kraft Foods?Tim Calkins: Oh, I learned so much about teams, businesses, consumers, and marketing. It was just a terrific training ground for marketing. It really launched my marketing career. Even now when I teach at Kellogg, I look back to those days working on these brands to try to think about it.What were some of the big things though? One of the things was just the challenge of delivering business results. Until you have been there and see the pressure of it, it is hard to quite understand exactly how that works. Just the need to bring in the results.The other thing that is really interesting is trying to understand your consumers and figure out great communication—figure out how to talk to them in a way that will resonate. That is just really interesting and complicated. It is really fun because to do that well, you have to get in there and try to think about what is important to people. What are their values? What are the insights that motivate their life? When you do it well, you can come up with advertising and marketing efforts that really are incredibly powerful. They connect with what people value, think about, and care about.But it is all hard because people don’t necessarily tell you what they care about or what they think about. Often people don’t even know what they really care about. It is interesting; people can’t express it sometimes. So that was fascinating, to understand and think about how you develop great pieces of communication. That was a big one as well.Then there was a huge piece around working cross-functionally. On all those businesses, there are a lot of different things that have to come together. There is an operations side of things, a sales effort, a finance effort, market research, advertising, and promotions. Pulling together the team and getting the team organized, aligned, and working cohesively is really fun, but also challenging to do. That is the key though for any business. Unless everybody—all the different functions—are working together, it is really hard to get things moving forward in an organized fashion.Brand Management: Kraft Mayo vs. Miracle WhipAndrew Mitrak: I noticed on your CV you went from being brand manager on Kraft Mayo to senior brand manager on Miracle Whip. It just seemed like kind of funny consumer bases to market to back-to-back. I’m wondering if there was anything that you noticed jumping from one product to the next, advertising Mayo versus advertising Miracle Whip? Because they are brands that are so familiar. You see them in the grocery store every time. I see these. I imagine that there is probably some passionate consumer bases behind them. So do you want to kind of compare and contrast marketing those two products?Tim Calkins: One of the great things about working on these products is you realize once you get in there just how different they are. You think about Kraft Mayonnaise and Miracle Whip and you are like, “Well, how different can they be?” They are both viscous products that come in the same jar, sold at a similar price point with similar usage behaviors.But then you get in there and you realize they are totally different. Kraft Mayonnaise is a decent mayonnaise. But we were going up against Hellmann’s and Best Foods. At the time it was Unilever. Huge company, huge budgets, dominant market share. So we were sort of the scrappy little brand. Didn’t have a lot of resources. We had to find some way to scratch our way to some market share and try to keep that business going well.But then you move over to Miracle Whip. Miracle Whip is totally different. Miracle Whip is this powerhouse of a brand. In certain parts of the country, it is a super high market share. The big thing about Miracle Whip is that it has no competition to speak of. No direct competition. There is a little bit of private label, but Miracle Whip is Miracle Whip.So that is a totally different marketing challenge. It is around how do you activate your customer base? How do you resonate with people who really like Miracle Whip? It is a super polarizing product. But people who like it, really like it. So you just have to tap in to that consumer group and try to motivate them and try to get them fired up. That becomes the challenge for Miracle Whip.It’s a really interesting piece. One of the interesting things about Miracle Whip that really helps that brand a lot is it is very tough to define what it is. What is it? You are like, “Well, it is a mayonnaise.” But then people will be very quick to say, “Well no, it is not mayonnaise.” It is a really different flavor than mayonnaise. If you like mayonnaise, you are probably not going to like Miracle Whip and vice versa. So you can’t call it a mayonnaise.It is technically a salad dressing. That is the technical standard. But what is a salad dressing? What do you do with salad dressing? You put it on salad. So if you wanted to compete with Miracle Whip, I guess you would launch a salad dressing. But what do you do with salad dressing? You put it on salad. And what do you do with Miracle Whip? Well, you put it on a sandwich. So then maybe you are going to launch sandwich dressing. But what is a sandwich dressing? I don’t even know what that is. So Miracle Whip is just a totally interesting product. Makes a ton of money. No real competition. But so different than Kraft Mayonnaise.Becoming a Better Business PresenterAndrew Mitrak: I also want to ask you about presentations. You’ve spoken a lot about this. You are obviously a great presenter yourself. You wrote a book called “How to Wash a Chicken,” all about presenting. My question to you is, what do marketers most often get wrong about business presentations?Tim Calkins: Presenting well is so important in the world of business because that is how you have an impact. That is how you get your recommendations put forward. What marketers get wrong about presenting, I think, sometimes they make things just way too complicated.The thing about the world today, especially in marketing, is that there is so much data. There is so much information that is available. So it is very easy to end up with a presentation or a recommendation that is very clunky, full of studies, full of data, full of analytics, full of all of this information. But ultimately, that doesn’t lead to a really strong recommendation sometimes.I think the challenge today is: How do you take all this information that we have and figure out which information really matters? And then, how do you lay it out in such a way that people can really follow the story? They can see the narrative and they can begin to understand what is happening on a business.Marketing is all about action, all about moving forward. It is about recommendations: “Here is what we should do next.” To get there, you have to take people on this journey from where we are today to how that plan forward is going to be the best path. To do that, you really have to think about all the results we are looking at today, all the information, all this data, and how does all of that get us to the recommendation of where we want to go forward? That, I think, is the role of the presentation.Andrew Mitrak: One of my tactics for presentations is I try to keep my presentations themselves pretty short, like 10 slides or fewer, but then I have a really long appendix. I kind of preempt because when I present—especially if I think of ones where I am presenting to a cross-functional team, we might have to influence somehow, or an executive I need to persuade—often they might even interrupt and start asking questions immediately. I want to show that I am prepared and jump to an appendix, but also not have all that information upfront because then, to your point, it becomes cluttered. There are too many different things.Is my thinking about that the right way? Of just showing my homework in the back end but keeping it tight upfront? Or do you have any other tactics or tips along those lines?Tim Calkins: The question I would always ask is: What will your audience need or want to see? So anytime you are doing a presentation, one of the first things you have to do is think about who are you presenting to. You think about what do they like and what are they going to want to see. If I am presenting to somebody and if I know that they are going to want to see a five-year P&L for the business, well then I am going to proactively go ahead and put that in because I just know they are going to be looking for that.So I think that is a really important step, to think about your audience and then make sure you deliver against what they are doing. Ideally, when you are doing a presentation, you don’t end up going to the appendix. Ideally. Because if you have really done it well, I think you have a sense about what is going to be the next question they are likely to ask, and then you try to address it there.An appendix is good to have though, in case you do get questions from out of the blue. Especially sometimes with cross-functional people who might ask something, and then some of that stuff might end up in the appendix. So I think it can be a really useful thing to have along with you. The bulk of the presentation though, that is always the question about: Okay, what do I need to put in here and what is all the stuff I can take out?The Importance of Narrative Over DeliveryAndrew Mitrak: In my work as a marketer, I would say I spend more time making business presentations and presenting them than I do on actual creativity or actual strategy on marketing. Sure, there is strategy that sometimes comes up in the course of making a presentation. If you are presenting the strategy, you have to have done the strategy beforehand. But I spend a lot of time in slides and making them and presenting.But also, if you look at the time I spent in school sort of learning presentations versus the time I spent on all the other stuff, I probably underinvested in learning presentation skills upfront. Is that a pattern that you see as a professor? That generally speaking, we underinvest in teaching marketers presentation skills?Tim Calkins: Well, I think it goes beyond marketers. I think generally speaking, we do a very poor job in the world of business preparing people to put together good presentations. And there are lots of reasons for that. Part of it is that that doesn’t fall into anybody’s responsibility area. It is not the finance department’s—the finance department isn’t going to teach people to write a presentation. And the marketing department isn’t going to teach that. And the accounting department is not going to teach that. And the leadership group... Nobody really teaches it. Or few people. There are some communications folks you will see who work on it.The other thing I see is though that very often when we do teach people how to put together a good presentation, we end up focusing very much on the delivery. We spend a lot of time teaching people how do you use hand gestures appropriately, and how do you move around a room, and how do you speak in a forceful voice, and things like that. It is the execution, the delivery. Which in my mind is fine, that is good, I think that is all great stuff.But the real opportunity is before that. It is: How do you put together the recommendation? How do you lay out the story? How do you work with your data and turn the data into a logical story that leads to your recommendation? That is the part that is not really taught very well, in my experience. And it is something that doesn’t come naturally to people.It is also something that generative artificial intelligence doesn’t do well. Generative AI will produce a list of pros and cons for you, and it can create a PowerPoint page showing a list of points or bullets, but it doesn’t really build a great narrative that leads you to this recommendation about where we want to go. That is the value add.I actually think if you write—if you put together a great presentation—the delivery becomes really easy. Because the presentation almost does itself. Back when I was at Kraft, I would remember sometimes we would put together this really complicated recommendation presentation. And then we would send the summer intern up to go deliver the presentation. And the summer intern would be like, “What? I can’t.” You are like, “No, it will be fine.” The slides were good enough and the story basically just goes through it. It is just going to tell itself.But all that work gets done before the meeting begins. And I think that is the opportunity for people, is to really think about how do you put together these stories, how do you lay out stuff that makes a lot of sense. If you do that well, the rest of it is going to take care of itself.Andrew Mitrak: Professor Tim Calkins, I really enjoyed this conversation. It was so fun to revisit Super Bowl ads. I know I am much more prepared for the big game on Sunday. And also it inspired me to brush up on my presentation skills as well. So as we wrap up, where can listeners read more and find you online?Tim Calkins: My website and sort of my blog and my newsletter, timcalkins.com. Also on TikTok, you can find me at marketingprof_tim. So I’m out there posting a little bit on TikTok these days around Super Bowl spots and presenting and all of that.Andrew Mitrak: That is awesome. We will be sure to paste links to those in the blog that accompanies this post. So Professor Tim Calkins, thanks again so much for your time. I had a lot of fun.Tim Calkins: All right, Andrew. Thank you. That was great fun. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 46David Reibstein has spent his career straddling disciplines that don’t always talk to each other: quantitative analysis and behavioral science, academic theory and management practice, marketing departments and finance teams. As a Professor of Marketing at the Wharton School of the UPenn and the co-author of Marketing Metrics, Reibstein is a world-renowned expert on how to measure what marketing actually contributes to a business.We discuss what David learned while under the mentorship of Frank Bass, a pioneer of bringing quantitative analysis to marketing and half the namesake of the Ehrenberg-Bass Institute. Then we trace David’s early analysis on brand switching through his current research on nation branding and cryptocurrency confidence.Along the way, we dig into why brand equity rarely shows up on balance sheets, why CMOs still struggle to justify Super Bowl ad spend, and what the Finance Minister of Saudi Arabia wanted to discuss over a private lunch.Listen to the podcast: Spotify / Apple PodcastsA few highlights from our discussion:* How Frank Bass transformed marketing from “think like a customer” intuition into a data-driven discipline* Why brand equity should account for both price premiums and volume gains* The surprising reach of nation branding research (and the heckler who said his data were wrong)* What crypto and meme coins reveal about confidence as currencySpecial Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Professor Reibstein.The Influence of Frank Bass on Marketing ScienceAndrew Mitrak: I thought I would start at the beginning of your career. One of the names that I saw you collaborated with and worked for was Frank Bass. I’ve interviewed a professor from the Ehrenberg-Bass Institute, and we’ve talked a lot about their work on the podcast. We haven’t actually talked about Frank Bass himself, so I thought I might just start there and ask you about Frank Bass and what you learned from working with him.David Reibstein: It’s a great place to start because that really is where my academic career began. He was known as basically one of the key people that was bringing quantitative aspects into the field of marketing. He was bringing meat into the whole category. He contacted me while I was in a master’s program. Frank started talking to me about, “You don’t need to finish that master’s program. Why don’t you come join the PhD program now?” I was three-quarters of the way through my master’s program, and I went and joined the PhD program, thinking if I go into academia, I don’t need that master’s. And I’ve never needed that master’s.Andrew Mitrak: So Bass was a pioneer in bringing this quantitative side of marketing to the field. Could you just describe the field before him? What was the status of quantitative analytics and taking more of a data-driven approach and measuring the impact of marketing at the time? Can you give us a picture of the before and after?David Reibstein: So if you think about what was marketing practice, it was “think like a customer.” There were a lot of consumer behavior aspects that were to it. Actually, when I was in my PhD program, I worked a lot with Jacob Jacoby, thinking about that. I had a minor in consumer behavior, but that was sort of where marketing had been. It’s now a major sector of the field of marketing.The Evolution of Data and EconometricsDavid Reibstein: But the quantitative side, if you think about the availability of data, it was 100% survey data with quarterly, at best, Nielsen data. We didn’t have a richness of data. Bass was looking at some time series data, how sales changed quarter to quarter. That’s sort of the field as it was at that time. He spent a lot of time, and some of the classes that we took with him—I say we, my fellow doctoral students—was thinking about econometrics as it applied to marketing. How sales changed over time with changes in marketing expenditures. That’s sort of where it is. If you think about where we are in 2026, the nature of data has exploded. You don’t need me in this session to talk about big data, but the abundance of data and moving away to a very large degree, but not entirely, from survey data has certainly been a prevalent part of how the field has evolved.Andrew Mitrak: Once you left your master’s where you were three-quarters of the way through and got started working on your PhD program under the guidance of Frank Bass, what did you learn from him? What did you collaborate with him on?David Reibstein: We spent a lot of time looking at brand switching behavior. It’s sort of related to brand loyalty issues versus just random behavior that happened to be there. He talked a lot about the stochastic man, that it’s all a stochastic process. There’s a probability of you buying certain brands, but what you bought last period doesn’t have an impact exactly on this period. There are different theories about how people switch, but a lot of what it is that I was working on with him at that time was looking at that switching behavior from consumers. That obviously would relate to frequently purchased goods (fast-moving consumer goods).Current models and thinking about customer lifetime value and how long you think they’re going to stay with you over what period of time—some of that early work really feeds into trying to think about customers and how long you’re going to have them as customers over time. We were trying to change the probability of choice. It moved from being deterministic, “Here’s what they’re going to choose,” to “Here’s the probability that they’re going to pick these particular items.” Predicting probability of choice, we’re much better at doing that than predicting specific choice.Andrew Mitrak: So this area became a thread throughout your career, tying marketing activity to measurable business impact. This is something that you worked on for decades afterwards, and it started back under your work under Frank Bass. Why did you see that this was the area to focus on for so long? Did you feel like there was a gap in this area where you could be the person to carve out your career here? What did you identify there?David Reibstein: I’m going to go back to your previous question and tie it to this question. A lot of what I learned from Dr. Bass, from Frank Bass, is really methodologies. Econometrics was a major part of that, but certainly how to deal with data, structural equations, and trying to think about all of that. But it turns out that rather than just be a methodologist, what I thought was important was to spend some time trying to think about actions that management takes and then relating that to particular outcomes using the appropriate methodologies.Bridging Methodology and ManagementDavid Reibstein: So when I left Purdue, I joined Harvard. I wanted to spend some time trying to think about, “So how do we use this stuff? For what purpose?” So as I’m at Harvard, it was all “Just think about management,” and less thinking about the methodology. I viewed myself in a position to try and think about relating these together. I wanted to look at actual management behavior in marketing and how that relates to outcomes. So I wanted to know how it relates to profit because that’s what they really care about. I wanted to use quantitative statistical methods in a rigorous way to try and address that particular question. I think that gets to your specific question.Andrew Mitrak: When you were studying under Frank Bass, would you say that the type of activity you were doing was more sort of large-scale, macro style—the quantitative side of marketing—or were you also working on some of the behavioral science, the micro, and the psychological side as well? Or did that come later?David Reibstein: So the answer is yes and yes. Which is, originally working with him, it was looking at all the macro. And then what I evolved to, and what I ended up doing my specific dissertation on, was looking down at individual customers and seeing what their specific behavioral patterns were. Could we predict what those individual behavior patterns were? Which is why thinking about... you can’t look at brand switching on the macro level. We’re going to get market shares and sales, but not down to the individual behavior. What I started getting into in my dissertation was trying to think about indeed that individual level behavior and how people switched, and could we predict what those probabilities of behavior would end up being.Andrew Mitrak: Really hard to do both. To be able to do both the large quantitative analysis and what I imagine to be lab work or very individual type of work with individuals and understanding psychology.David Reibstein: Actually, what’s interesting in today’s world—today, 2026—most doctoral students as they’re coming out, they declare “I’m quantitative” or “I’m behavioral.” We sort of ask them, “Which group do you really fall in?” I’ve always been a straddler. And it’s like, how do we take what we could think about on the behavioral side and quantitatively analyze that? So I’ve published in Marketing Science and the Journal of Marketing Research, but I’ve also published in the Journal of Consumer Research, trying to think about those two.The Role of Marketing StrategyDavid Reibstein: But I’m... most people will agree I’m an anomaly rather than a norm or a model that one should follow because you sort of are expected to fall into one of those buckets, one of those two buckets. And then I’m going to complicate it a little bit more because I also thought about the management side of that. So that sort of got me into marketing strategy, which is a lot of what I end up teaching now at Wharton, thinking about the marketing strategy side of that. So I’m going to add three legs to that stool.Andrew Mitrak: Yeah, exactly. Is that a mistake of marketing academia in general to put people into one bucket or the other? Does the world need more straddlers? Do you need the understanding of the micro to be able to interpret the macro and vice versa? Do you need a strategy angle to be able to actually put it into practice? Is marketing shooting itself in the foot by focusing on everybody? Or is that just a practical thing that we need where people are specialists to some extent and we excel with specialists?David Reibstein: So obviously I’ve got a biased perspective, right? As a straddler, I clearly have a biased perspective. But I think the argument could be made: you need to have depth. And it would be great if you had depth in some area. People generally don’t have depth as a straddler. So I was probably too shallow as a quantitative guy and too shallow as a behavioral guy, that the natural place was somewhere in the middle.Andrew Mitrak: Or you might just be being too modest right now.David Reibstein: Well, I’m rarely accused of that, but okay. But it turns out that I think we do need people that are quant jocks. And we need other people that are behavioral jocks. And I’m hoping that we need some people that can connect the pieces. There are several people that do that, but most are clearly within one particular camp. And I think we also need people to think about, “So how do we apply this and what’s the overall strategy of this?” I think those are important components as well.Andrew Mitrak: Was there a time when you first started taking what you were learning in a lab or taking what you were learning from data analysis and then working with companies and practitioners and putting it into practice in the real world? What were the first elements of that happening?David Reibstein: One of the things that we end up doing is we end up teaching executive education. And we end up being asked to work on particular consulting projects. And it’s like, “You’re great at doing that analysis. Help us with this problem.” And I go, “Hmm.” I actually think getting academics to do some consulting, or at least in the classroom with executives, is a really important thing. It’s not just we should shun it and think, “Oh, they’re just doing that rather than their academic stuff.” It really is asking people to be very focused on how do we apply this stuff.And I think because of having some of those consulting clients and having some people in the classroom say, “Okay, I understand this methodology that you’re talking about or this behavioral theory that you’re talking about. How would I use it to apply this particular problem?” I think that’s a very, very healthy thing. And I think that external exposure helped guide a lot of the research I ended up doing and some of the work that I continue to do.Defining and Publishing “Marketing Metrics”Andrew Mitrak: Jumping ahead a little bit, you published the book Marketing Metrics in 2006, and it’s now in its fourth edition. It seems like this type of external work—working with practitioners, getting their feedback, seeing how marketing theory works in the real world—would be really informative for which metrics to prioritize, which metrics matter, how to implement them. Was that part of what helped inform this book?David Reibstein: So some of the impetus for that book... and I have to give a lot of credit to one of my co-authors, Paul Farris, who was a major driver in all of this as well. But one of the pieces that was an impetus to that was I’d hear some people talk about one measure and some other people talk about that same measure but mean totally different things. And so, wait a minute, we need to have really clear understanding of what these particular measures are and to think about how could we use those. That was an important aspect of what needed to be done.So that sort of led to, “Okay, could we come up with...” And the title of the original version was 50 Metrics Every Marketing Manager Needs to Know. We wrote that book with, “Here’s the 50 metrics.” And then the next thing we know is people are coming back to us saying, “That’s great. That really was helpful and you helped us understand how we measure that and how we would apply that particular term. But what about this other measure? And what about these new things over here?” And so it was like, “Oh, so 50 seems like an excessive number, but there’s more and more aspects.” And we wanted this to be something broad enough that could be used in .com spaces and industrial goods and frequently purchased goods and durable goods and used across different contexts. Before you know it, we took the number off of the title because it started to mushroom as we continued to develop that.Andrew Mitrak: That’s right. And what’s funny, this book is very much the definitive book on marketing metrics and terminology. As I was researching your work, I actually saw a lot of Wikipedia pages where this book showed up as the top source for an entry into a given marketing metric. And for what it’s worth, I mean, that means a lot of people are using it. What does Wikipedia cite? It’s citing this book as sort of the definition of it.And I’m wondering, you talked about how there would be the same metric used for different things. I’m also sure that there were a lot of duplicative metrics or there were metrics that were sort of passing fads and didn’t actually matter. I’m wondering what your process is for assembling a book like this. Is it sort of a matter of curation, kind of seeing what’s out there and then running that against industry and seeing what sticks? What makes the book and what doesn’t? What was the whole process behind it?David Reibstein: I think you described it really well. So in spending time with organizations, with companies, what are the major metrics that they’re using? And in particular, what are the major ones they’re abusing or misusing was another thing. When they say one thing versus another. By the way, I ran into more than one industry, but people would say, “Here’s what my market share is.” And someone else say, “Here’s what my market share is,” in the same industry. And if you look at all the different competitors, those market shares would add up to well over 100%. And I’m going, “Wait a minute. Market share cannot add up to more than 100%.”Defining Market Share and Brand ValueDavid Reibstein: Well, they could if we define it differently or if we have a different denominator. My favorite example is thinking about one company that always would talk about their market share in the inkjet printer market versus somebody else thinking about their market share in the dot matrix market and someone else thinking about laser printing. And someone else talking about, “No, I’m talking about printing.” And it’s like, wait a minute, we need to be really careful defining nothing else with what that particular denominator is.And then huge confusion about the value of a brand. One of my favorite measures is trying to think about brand equity or the brand value. And often when I ask people, “So what’s the value of your brand?” they think, “Well, I’m able to charge a 10% premium over my competition.” And I’m thinking, “Okay, well that’s nice. But how much extra volume do you also get?” It’s skipping that part of it. Everybody wants to think about the value of their brand, but then coming up with a specific metric for that and a way to measure that, and thinking not just about price but also thinking about volume—I don’t see that very much. And so it’s a major component just to illustrate that there are different measures that people are using and thinking about it differently and some of it being, as I say, incorrectly applied. But to get back to your question, because I did wander off for a second. A lot of it comes from trying to think about what it is that people are using. And then also trying to bring some of my own insights into it, and that of my co authors thinking about. So what could be some of the measures that they should be using and trying to think about?Andrew Mitrak: You brought up how brand equity can be measured in price increases—charging 10% more because I prefer the Kleenex versus the Kroger whatever, the generic brand. Or it could be used for scale. I think that’s a really interesting way to articulate it because there are a lot of brands, say like Coca-Cola, a very well-known brand but doesn’t actually increase its prices because of its brand. It increases its scale. Or Nike as well. Nike maybe charges a little more than a generic but not as much as you think they could. They could probably go way, way higher end and even more luxury than they are given the brand equity they have. So what do people usually get wrong about brand equity? Can you speak to some of the trade-offs between scale and price increases?David Reibstein: So first of all, some of what they get wrong is because of academics who refer to brand equity in all sorts of different ways. “What is the purpose of the brand?” or “What’s the essence of the brand?” “That’s the brand equity. This is what it is that we’re known for.” So we as academics use the term brand equity in a variety of different fashions. And so I think I don’t want to just look at management and say that’s where the problem is. It’s right there. It’s within academia that we have some of that.But from my perspective, I sort of think of it as there’s a demand curve. And as you develop that brand, it shifts that demand curve outward. And so I want to look at any point on that curve and how much extra price can I charge and how much extra volume can I get. And so there are some brands that take it clearly in terms of a price premium. And there are others that take it only in terms of volume. So Coca-Cola for a long time was the number one brand in the world and took very little of it in terms of price. But they had a huge market share. And that market share was clearly attributable to their brand. And people would choose Coca-Cola over RC Cola. Do you remember RC Cola?Andrew Mitrak: I remember RC Cola. I’m not that young.David Reibstein: It may even still exist, but they would choose Coca-Cola over RC Cola and certainly over “Dave’s Cola” because it was Coca-Cola. And it wasn’t necessarily because of price because Coca-Cola wanted to have their price there and be competitive. But boy, they had huge market share relative to their competition because of that. And so we often leave that part out of trying to think about what that particular value is.Bridging the Gap Between Marketing and FinanceAndrew Mitrak: This is a bit of a tangent, but I think it all kind of fits into that thread of linking marketing to financial consequences—in this case, brand equity. And then also having marketing speak the same language as the CFO and CEO. I think that marketing metrics help with this, so a standardized set of metrics can help equip CMOs to speak to other executives and counterparts. Do you think that this standardization of marketing metrics helps elevate the role of marketing within organizations or gives it more political clout within orgs?David Reibstein: I would hope so. I would hope that if we had a common understanding, then there could be some communication not just marketer to marketer, but within the organizations as well. Since you used that particular title, “linking marketing metrics to financial consequences,” which was the title of an executive program that I ran here at Wharton for more than a decade. When I first started that program out, half the participants were CMOs, or at least from marketing, and the other half of the participants were CFOs or coming from the finance side.Finance was saying, “I don’t understand why marketers are wasting our money this way.” And the marketers were saying, “How do I communicate to the finance people the value of what it is that we’ve got going?” That sort of is what led to a lot of that particular effort, to try and get the two groups talking to each other so that they could understand, “Here’s what the value to the organization is.” Because many organizations today still look at marketing as something that we do, but I’m not sure what value it is that it produces.The Bias of Short-TermismDavid Reibstein: Actually, there sort of is this bias towards anything that generates short-term consequences. “Boy, I run a promotion and you saw sales go up.” But spending on anything that produces long-term consequences, people don’t think about what that particular value is. And that’s somewhat understandable because you don’t see it immediately. So part of what happens is when there’s an economic downturn, one of the first things that gets cut is marketing because, “What does marketing contribute? It’s what we do if we’ve got excess money.” And that’s a concern.Andrew Mitrak: Coming back to marketing metrics, I published a few podcasts and had a few conversations with CMOs and academics on some of the unintended consequences of metrics. Usually, the general gist of it is that marketing teams get fixated on the wrong goals. You alluded to short-termism and promotions, and that there’s a temptation to game the system that drives the metrics but doesn’t always drive the long-term value. Everybody wants to be data-driven as an executive or leader, but have you seen companies sort of take the wrong message or take the wrong approach to being data-driven? Are there common themes where people who intend to be metrics-driven and adopt marketing metrics wind up missing an important piece of the puzzle?David Reibstein: I think I was just alluding to that. I think what happens is I look at those short-term consequences and I put my weight there, on the short term. I run a digital ad and I look at that click-through rate and I look at, “Oh, that spending was good.” If I have another digital ad that helps create brand—oh, I’m going to start thinking about that brand, it’s going to be in my consideration set, and that over time I’m more likely to be buying it—that sort of gets washed out. People don’t give credit to that when maybe it’s contributing a huge part, but in a longer-term consequence. I think that gets way overlooked.Does Brand Equity Matter for Small Businesses and StartupsAndrew Mitrak: I think also—I’ve worked at a mix of smaller startups and had my own business, and now work at a larger tech company. I think especially at smaller companies or startups, that the investment in brand is especially hard because it’s existential. If they miss a quarter or a year, it could be existential to the business. There’s no brand equity for a company that’s gone out of business. But then at some point, you kind of go from zero to one on your brand where brand equity doesn’t show up on the balance sheet, and then all of a sudden it is there as an asset. Do you have a sense of when companies on their journey sort of start to have brand as an asset where they should start to care about brand equity? Is it only for the Fortune 500? Is it for the mid-market companies? Do startups have that if they’re at the right scale? How do you think about that?David Reibstein: Lots of people think, “Well, brand is only important for that Fortune 500.” And actually, let me narrow that down, for the Fortune 500 consumer goods companies. And I would say no. It’s not just consumer goods. For a long, long time, Intel was able to charge a huge premium and get incremental volume because of the “Intel Inside” campaign and the image of Intel. People were more likely to buy a computer that had an Intel chip versus not. Intel has run into their particular problems. But more likely to buy Cisco or more likely to use Salesforce.com. So let’s start with it’s not just consumers. That’s part of it. What was the first part of that question that you asked?Andrew Mitrak: You answered another B2B component of it. Yes, it matters both for a B2C and for B2B brands, but also just the scale of a company itself, like as far as how large the company is.David Reibstein: So it doesn’t have to be Fortune 500. Thank you for bringing me back to that. I would argue that my local florist—one shop—that my local florist has a great brand. She always has the best flowers. She always delivers on time. She is so good on that. And so if I’m going to order flowers again, I think, “Well, I could order them from any one of these different companies. Let me see what their prices are. I’m going to send a spring bouquet or a dozen roses.” No, I want to get it from this local florist. Really small company—I wouldn’t even call it a company, a really small shop. Does she have brand equity? Absolutely. So we don’t have to just think about it for a Fortune 500 company.I don’t know what it is today, there were Amos’ Cookies or David’s Cookies. They started small. They really developed a great reputation. Great cookies. You’re catching me after meals, so I’m sort of thinking about cookies. But oh my gosh, that guy who was selling those cookies or that woman who was selling those cookies really developed a brand and it started to spread. That’s what we’ve got.Andrew Mitrak: Yeah, that’s right. And if your local florist chose to retire—I hope she doesn’t, she sounds like she’s got a great business—but if she was to sell her business, the brand equity might show up in the price of her sale. So even if it’s not something that’s helping to pay her bills week to week or shows up as some publicly traded company stock price, it’s something that she might be able to use to her benefit at some point in the company’s life cycle.Does Brand Equity Show Up on the Balance Sheet?David Reibstein: Now I do want to address one of the questions that you raised, which is: when does that brand equity show up on the books? And I think the answer is most of the time it doesn’t. We’ve got this weird accounting system which says if you buy a company, you can put its brand value on your books. If you build a brand, you can’t put it on your books. And it’s like, seriously?I’ll give you a dated example now, but when Procter & Gamble bought Gillette, it said, “Here is the plant and the equipment and inventory that we’ve got, and here’s the value of the brand.” And that brand shows up on the Gillette books. Tide, Crest, Head & Shoulders—go through the list—they don’t show up on the books. And those are great brands. Those are great, great brands. And they don’t show up on the books.Andrew Mitrak: Yeah, that’s really interesting. It’s funny and a little bit of an aside, one of the startups that I was at—and I actually named the company when it went through a rebrand—wound up not working out. It basically went under, sold to private equity for less than the money they had raised. But the brand and the domain name wound up getting licensed to another company. It actually wound up being one of the most profitable parts—or not profitable, but of the things—the brand actually showed up and got some money for the private equity company where they actually got a pretty good deal on the brand and buying the company. So even for startups that fail, somebody can extract value for a brand and a name and a good domain name.David Reibstein: That’s a perfect example. And it started off, I assume it was a relatively small company.Andrew Mitrak: Yeah, it reached a peak of like 80 employees or so. It was software SaaS, so pretty small in the scheme of the global economy. But it had its moment. It could have been big, but it didn’t work out like most startups don’t. But the brand was still worth something.David Reibstein: Right.The Economic Impact of Nation BrandingAndrew Mitrak: I want to ask about Nation Branding as well. This is a thing where you started publishing the Best Countries list in 2016, and this will mark the 10th anniversary of this project. Could you talk a little bit about this project and the background of it and what the impact of it has been?David Reibstein: So it’s been one of the things that’s near and dear to my heart. I went to New York and I gave a presentation at an ad agency there where I was saying, here’s some of what my thoughts are about the brand of a country and how it contributes to the economy of that country. Thinking about a country that’s got a great reputation, people are more likely to buy products from them. Companies might be willing to build plants there and make other foreign direct investment. A country that’s got a great reputation might have more tourists that are there.I tried thinking about how the brand of a country contributes to the economy of that country. Just in the same spirit as we were talking about for cookies or for florists or for Intel or Coca-Cola, there’s some financial return to a country based on the image of that country. So my theory that I presented in New York was: it’d be great to go and measure the image of these countries across a variety of dimensions and then to see how related that is to the GDP of that country. Where foreign direct investment, foreign trade, and tourism are three major components to the GDP of a country. And sure enough, I see that the image of a country is highly related to the GDP of that country.The Country of Origin EffectDavid Reibstein: Let me just, you know, if we think about you got two pairs of shoes and one of them is made in Italy and the same shoe—looks the same, the materials the same—happens to be made in Bulgaria. Which shoe are people more likely to buy? And which shoe are you more likely to pay for and pay a premium for? The answer is clearly Italian shoes would be better than—and I don’t mean to be negative about Bulgaria, I could have picked any other country. Italy is right up there. French wine, right up there. So more likely to sell some products, particularly fashion-related products, because of the Italian brand image that’s there.David Reibstein: There are other countries that have negative images. And so if I told you there was a car—again to date me—there was a car called the Yugo. Do you remember the Yugo?Andrew Mitrak: The Hugo? The Yugo. No, I don’t know the Yugo.David Reibstein: How far back does this go? It came out of Yugoslavia.Andrew Mitrak: Okay.David Reibstein: Totally died. Totally died.Andrew Mitrak: Sounds like a fun name, Yugo, like “you go.” But yeah, I understand. The Yugoslavian car, you think of sort of the Eastern Bloc, probably not having the same appeal as say a German car or even an Italian car or something like that.David Reibstein: So actually, just thinking about that, I have a former student who started Harry’s Razors.Andrew Mitrak: Amazing.David Reibstein: Do you know Harry’s Razors?Andrew Mitrak: I think I’ve seen them at stores. I’ve seen them advertised online. So yeah, familiar with them.David Reibstein: You should know them better than me. But Harry’s Razors, if you look at their advertising, they don’t say “closer shave.” They don’t say “fewer nicks.” They don’t say “longer lasting.” Their advertising says: “We bought a German manufacturing plant. And that’s where we make our blades.” And it’s like, boy, Germany has got this great reputation for precision. Their trains run on time, supposedly. They’re actually known for some of their precision cutting and manufacturing. “We bought a German manufacturing plant. You should buy Harry’s Razors.” And so because of that image of that country, they’re selling those particular products.I gave a presentation in front of a group of 40 ambassadors to the United States. And it was about Nation Branding. The Swedish ambassador stood up and she said, “Come on, this is just a beauty contest. It’s just, who’s on the red carpet? What are the particular rankings?” And she said, “Why should we care about this beauty contest that you’re running?” And my response is related to what we were talking about: “You should care because how you are perceived relates to the economy of your country. And if you are perceived on these particular dimensions, you’re more likely to have people buy products from you. You’re more likely to have people invest in your country or come visit your country. You should care about your external image because it affects what people do with their money.”Nation Branding and the Automotive SectorAndrew Mitrak: When it comes to how countries have marketed themselves, you mentioned Yugo as the Yugoslavian car that I hadn’t heard of. But if you asked me also 20 years ago when I was first getting my learner’s permit and driving, “Would I ever want to buy a Chinese car?” I probably would have said no. I don’t really associate that country with cars. But I just was reading that BYD is now the best-selling electric car on the market. And I’m like, I’d kind of like to test drive a BYD. Those look pretty cool and pretty affordable.And that country, China, has obviously had a lot of changes there over the last 20 years, and automotive is one of them. And I’m wondering, should countries think about this as far as where to invest and turn around and build a market against all odds? Or should they sort of just focus on—if you’re Italy, just focus on shoemaking and lean into your strengths? How do you think countries have shifted their brands or how have they used tools like your Best Countries research and data to help change how they invest and market themselves?David Reibstein: BYD, what does that stand for?Andrew Mitrak: I don’t know.David Reibstein: I think it’s “Build Your Dream.”Andrew Mitrak: Oh, wow. Okay.David Reibstein: It’s in English. So in fact, BYD, those letters don’t exist in Chinese. Those are English characters that are there. Yet I’m still willing to bet that when BYD comes into the United States, there’s going to be hesitancy to buy the car because it’s Chinese. And actually, they want to have an English name and they want to disassociate that they’re Chinese because that’s going to have a negative impact on what the particular sales are of that particular product.David Reibstein: Actually, Lenovo. Lenovo is the number one PC in the world. They changed their name from a Chinese name to call it Lenovo. I hear the name Lenovo, I think, “Lenovo, what country is that from? Oh, Lenovo. It must be Italian or something.” I don’t know. But that’s because that country had a particular image and needed to overcome that.In contrast, by the way, look at what South Korea has done. South Korea has really, on the backs of Samsung, have developed a changed reputation of that country. We used to think products that come out of South Korea, they’re cheap and not reliable. And Samsung has come out with great products and have been able to help change the image of South Korea. And so we’ve seen Hyundai that has come—they again had this low price, low quality image. And they’ve got a great car now called the Genesis. And originally it was called the Hyundai Genesis. And they couldn’t sell very much relative to the quality of the car. They now just call it the Genesis and they’ve dropped the Hyundai name. And many people think of, well, Genesis, that sounds like an American car. It doesn’t sound like a Korean car. And they’ve been able to ratchet their price up. But in general, South Korea, off of a number of different dimensions, has been able to raise the quality image of their country and have been able to do really, really well with that.Global Reactions to Nation Branding and the “Best Countries” ProjectAndrew Mitrak: Through doing this Best Countries project, I’m sure you’ve gotten to meet leaders from a lot of countries and they’ve asked you questions about marketing and branding. What’s most surprised you? Are there any specific interactions you’ve had with countries or world leaders who are thinking about their brands? What are some of the most surprising interactions you’ve had as a result of this project?David Reibstein: I was giving a presentation in Israel. And I had a heckler in the crowd. Not unusual, but I had a heckler in the crowd who said, “Your data are wrong.” And I had to stop and I said, “This is what the data are. The data say this is how people perceive you. You have dropped the ball. And you need to change what those particular images are. If your product is better, if your country is better than the perceptions, then that’s an issue that you’ve got. It’s not that the perceptions are wrong. People invest or go on tourism trips based on what their image is, not necessarily what the particular reality is.” So that was one that really caught me by surprise.One that really surprised me was I’m at a conference at NYU and I get a WhatsApp call from some number I don’t know. And I pick up the call and the guy said to me, “Professor Reibstein?” I go, “Yeah.” He said, “I’m the Finance Minister of Saudi Arabia. Could you meet me in Washington, D.C. next week? I’m going to be there.” I have no idea why he wants to talk to me. But I thought I’m intrigued by it. I went down to Washington and I met him. And he has a private lunch for just the two of us. And here’s the Finance Minister wanting to talk to me about “Brand Saudi Arabia.”So first of all, you talked about marketers and finance. Well, here’s the Finance Minister of a country who’s worried about the brand of that country. And well he should be. And Saudi Arabia is doing a lot to try and change what their global image is. And I think they’ve done a pretty good job of helping change what that image is.Well, that was another huge surprise for me. The Minister of the Economy of Serbia just contacted me last week and asked me to come speak in Serbia. It’s like, gee, I’ve never been to Serbia—formerly Yugoslavia—and they want me to come talk about nation branding. So I’m really surprised at some of the reach, how far it’s gone, and that people do care about what the image of their country is. And I wish the United States cared a little bit more about it as well. I had to throw that in.Andrew Mitrak: No, I hear what you’re saying.Cryptocurrency as a BrandAndrew Mitrak: Another one, this feels like it couldn’t be any more different, but the Best Countries and nation branding, and then the Wharton Consumer Cryptocurrency Confidence Index and crypto branding. How did you get into cryptocurrency? What was the spark to start tracking the brand and consumer confidence of crypto?David Reibstein: Well, here’s this industry. You talk about, could small brands develop a brand? Bitcoin. It did start small. And boy, has its brand really grown. But again, by the way, it is a blending of consumer and behavioral science and looking at some quantitative methods. So what I’ve been doing on the crypto side is I’ve been looking at: could we measure consumer confidence in crypto? And then how that’s related to crypto prices.David Reibstein: There’s been crises that have happened. There’s been this person indicted in this currency that’s just going to hell. And then we have a President who’s endorsing it. All these different things that lead to this huge volatility. Well, has there been that volatility in consumer confidence? And is that related to the prices? And one of the things the quantitative side has sort of led me to do is: is confidence a lagging indicator or a leading indicator? Do people have confidence in crypto which leads to its price going up? Or as its price goes up, that people gain more and more confidence in it? And not to hold that behind the curtain, the answer is yes, it’s both. And then trying to parse those two apart of how much is leading and how much is lagging, I’m diving deep into some analytic methods to try and get to those distinguishing characteristics.Andrew Mitrak: It seems like something that would track pretty close to one-to-one, right? Like very, very positively correlated because if there’s no confidence in it, there’s no value in it. If you won’t accept my Bitcoin, then my Bitcoin has no value. Or that if I can’t exchange it in some way and there’s no confidence. You see a lot of this with the meme coins that are out there, that they’re basically entirely a brand, right? It’s a meme, they slap a thing on it, there’s no underlying technology that differentiates it. They claim it has a value, there might be a spike, and then everybody loses confidence and it basically drops to zero. Is that sort of the behavior that you see with it where it’s almost just the value is the confidence in a way? Those are so tightly coupled together.David Reibstein: So they are pretty highly correlated. But the question is which is leading which? And by the way, we refer to crypto as a currency. It’s not treated like a currency. We call it a crypto coin, right? And think of it as a currency. That’s not at all how people are thinking about it. People are thinking about it as a risky stock investment. It’s like, “I’m going to invest in crypto.” We don’t often as consumers say, “Oh, I’m going to invest in the dollar,” or “I’m going to invest in the Pound sterling.” No, it’s like this is not a currency. This is an investment. I ask people, “Do you want to get paid in crypto?” No, don’t pay me in crypto. That’s too risky. I want to get paid in US dollars.David Reibstein: And so part of what’s happened is as we hear more and more about crypto... the paper I want to write, I know the title, which is “Crypto Creep.“ That it continues to expand and creep and more and more. And as it creeps more and more people... I’m seeing crypto ATMs. And it’s like a crypto ATM? I want to get my crypto dollars out. But as we see this crypto creep, that contributes to confidence. And I think there are some people that are saying, “Boy, I keep hearing about the crypto prices going up. I don’t want to be left behind. And so I need to invest in that stock that’s going up.” Even though it’s got that volatility that we talked about.Andrew Mitrak: We’re veering a little bit away from the history side of marketing, but I’m going to ask you about stablecoins. Is that part of your research as well? Because there are USDC coins where people, I think also for foreign exchange or for remittances or things like that where it might be useful to bypass other foreign transaction fees and things like that. Where it’s pegged, it’s not supposed to be like Bitcoin where it’s going up. It’s hopefully pegged to the US dollar. And that seems like one where if there’s ever a gap between consumer confidence and that stablecoin, it might not be so stable. And that might be a bad thing. I’m just curious, I think they’re also one of the largest buyers of treasuries today now or something too.David Reibstein: That’s right. That’s right.Andrew Mitrak: So I guess, has that come up? Is there a risk that the unsavory parts of crypto might have brand damage to the stablecoins that are trying to be more legitimate?David Reibstein: The question you’re asking goes beyond what I’ve currently looked at so far. But I think I’m going to end up having to look at that. And I think any of the unsavory part or negative aspects of crypto, as you were just referring to, will spill over and have an impact indeed.The Challenge of Measuring Marketing ImpactAndrew Mitrak: I’m going to ask you a selfish question. You hosted Measured Thoughts for several years. This is a radio program where you interviewed CMOs and marketing leaders from across the world. You recorded this over many years so you have dozens if not more than 100 interviews. I’m just wondering, what did you learn from talking to CMOs around the world? And do you have any advice for a fellow marketing interviewer?David Reibstein: So my advice is when you’re talking to those CMOs and other senior marketing executives, push them. Because they all want to talk about, “Oh, this is what we’re doing and these activities.” The whole theme of Measured Thoughts was really sort of inspired by the book. And so I had this SiriusXM radio show where I wanted to know: how do you measure? What are your thoughts about how you measure the impact of your marketing? And we’d like to believe that in, again, 2026, that we’re so much better at measuring the impact of our marketing. And my response and what it is that I’ve learned is we’ve got so far still to go.One of the things I liked really doing was taking people, CMOs that had invested in Super Bowl ads, and say, “So you just spent $7.4 million on that 30 seconds. How do you justify that? And to hear all their flowery talk about, ‘Oh, it’s just wonderful and...’ How do you justify that to your CEO or to your CFO? That you just spent... That’s what the airtime cost. How do you justify that financially?” And it is shocking how in today’s age we still haven’t gotten there.Now, while I say that, I do this Facebook ad or I buy this on Google and I can see what the conversion rate is and ching-ching, I can count it. Does that mean that that’s more valuable? So I’m not saying Super Bowl ads are not worth it at all. What I am saying is, do we have a way of capturing what that value is? And we still have a ways to go. And trust me, it’s not an easy problem. But it is amazing to me how far we are from getting our hands around being able to say something concrete about that.Andrew Mitrak: I love that advice and that type of questioning because you’re just asking them to justify it, which they should be able to do if this is a highly paid executive who spent a lot of money. It’s not saying that it’s wrong, it’s just asking them to explain why. And also it’s a good note for someone like me because as a podcaster, I think podcasting is generally a friendlier conversation, right? I want to learn and I want to have a professional relationship. And it’s not like I’m a 60 Minutes investigative journalist trying to ask gotcha questions. But also, it doesn’t mean that we should just totally let people get away with saying anything either, right? That we should be able to ask hard questions. And we all benefit from debate. We all benefit from critical thinking. And it shouldn’t all just be kind of the glossy veneer that marketers are prone to do sometimes.David Reibstein: For sure. For sure.Andrew Mitrak: Professor David Reibstein, I really enjoyed this conversation. For listeners who have enjoyed it too and want to learn more about your work, where should they find you online?David Reibstein: Actually go to measuredthoughts.com and you can see a whole bunch of stuff that I’ve been doing and working on that. Or go to my Wharton web address as well.Andrew Mitrak: Absolutely. I’ve visited your website and your Wharton address and there’s a lot of great material on there. So I encourage people to go visit and listen. So thanks again so much for your time, David. I really enjoyed the conversation.David Reibstein: Andrew, thank you very much for having me on the program. Good luck with this. I think it’s great and you do a wonderful job. So appreciate it. Thank you very very much. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 45 Today marks exactly one year since I hit publish on the very first episode of A History of Marketing. I wanted to do something special for the anniversary, so I’m happy to share my excellent conversation with Rory Sutherland.You may know Rory from his Ted Talks which have been viewed by millions, or his TikToks which have been viewed by tens of millions. He is the Vice Chairman at Ogilvy and the founder of their behavioral science practice.I’m a big fan of his book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. As we discuss on the podcast, Alchemy is all about how marketers think, rather than just what we do.Listen to the podcast: Spotify / Apple PodcastsWe also cover:* The real David Ogilvy: Rory shares about meeting David Ogilvy, and the parts of Ogilvy’s life you won’t find in his books, like his stint as a British spy in Washington during World War II.* The “Capital M” vs. “small m” marketing mistake: Why the industry got marketing wrong by turning it into a department rather than a way of thinking.* Behavioral science and business: How to practically apply behavioral science and “nudge” to marketing strategies.Rory has a way of using history and behavioral science to reveal “unseen opportunities” that most traditional data misses. This conversation changed how I think about the role of marketing, and I hope it does the same for you.Special Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.And thank you to Paul Feldwick, whom you may remember from episode 30 of this podcast, for introducing me to Rory.Espionage, Aerophobia, and the “Hidden” Psychology of David OgilvyAndrew Mitrak: I wanted to ask you about David Ogilvy. I wanted to start with him because he’s such a big figure, and I love his books. I haven’t actually discussed him that much on the podcast, and you’ve worked at Ogilvy since the late ‘80s. I’m wondering if you have an element of David Ogilvy’s success that you’ve learned from working at Ogilvy that I wouldn’t have learned from reading one of his books.Rory Sutherland: I only met him once, and I can date it more or less exactly because it was after the Eurostar opened—the tunnel train tunnel between France and the UK. David was absolutely terrified of flying. In fact, in later life, he crossed the Atlantic by ship in preference to flying. He was absolutely paranoid about flying. I’ve met people who met him off flights, and he kind of emerged down the jetway as a kind of physical wreck. So, he was only really prepared in later life to travel to London after the train service opened. Consequently, I only met him once. I knew his wife, later widow, quite well subsequently because we used to have Ogilvy events and WPP events indeed at the Château de Touffou where he’s in fact buried.I think actually there’s a part of his life as well where he will emerge actually even more interesting than he’s believed to be at the moment. Part of his life, which was effectively with British Intelligence in Washington, D.C. during World War II, when he worked with, for example, Ian Fleming and a few other people.Andrew Mitrak: There’s the book about this called The Irregulars. It’s fantastic.Rory Sutherland: The Irregulars, which is absolute—yeah, which I think I might have actually discussed this with the author. Of course, he was, whether it was just discretion or he was actually D-noticed or had signed the Official Secrets Act, but I’m fairly sure that during his lifetime he wasn’t really allowed to talk about this period of his life. A large part of which, I think, was effectively persuading the US to enter the war in the very beginning of 1940-41, pre-Pearl Harbor. He was engaged in persuading the US to enter the war, and then presumably also persuading the US to enter the war in Europe before they fully embarked on the war in the Far East. So, a large part of that was probably involved with his previous experience with Gallup; he would have been effectively gauging public opinion and working out the right strategies for getting American support, which was by no means, certainly in terms of the war in Europe, by no means automatic, certainly before Pearl Harbor. It’s very similar to World War I, in fact, where obviously Woodrow Wilson—who bizarrely is my fourth cousin twice removed—where Woodrow Wilson effectively fought an election on the whole basis of isolationism and then had to do an about-face. So, I think there’s a whole part of his life which he couldn’t write about at all, which, being a showman, which he was—and I make no apology for that—he would have undoubtedly loved to have written about, but simply couldn’t.Ogilvy’s Psychology of LeadershipRory Sutherland: When I said I met him the once, he presented his work and gave a talk. Interestingly, we’d sort of heard rumors that he was slightly losing his marbles because this would have been—he would have already been in his 80s at that point. But he was completely lucid and fantastically clear in his presentation. I always remember a detail, which is that he’d pinned up a lot of his work, which was then laminated and stuck to the walls. Of course, he then needed it collected, and you had that little awkward social moment where nobody wants to be seen doing the—in a large group of people, no one wants to be seen doing the menial work of collecting the drawing pins and putting everything back in a bag. He simply made the point that he said the work has been pinned up on the wall by the European chairman of Ogilvy, so it shouldn’t be beneath anyone’s stature to help me take it down. So, there was that psychological astuteness, a very, very clever bit of behavioral science. Look, if the second most senior person in the room has pinned this work to the wall, none of you should feel any diminution of status by removing the drawing pins. So, he was clearly that sort of very astute psychologist even in his—I’m trying to work out the date, he was born in 1911, so he would have been in his sort of mid-80s, I’m guessing. He died in ‘99 [sic], I think, if I’ve got that right.The Limits of Traditional Market ResearchAndrew Mitrak: Yeah. So, you mentioned how he has this intuitive behavioral science sort of understanding. He also worked for Gallup, and he really preaches about research, research, research in his books. A lot of your work is sort of where does research fall short, right? A lot of your insights are about what is intuitive or psychological where people aren’t stating their preferences? Marketers are being intuitive and uncovering revealed preferences through behavior. I’m wondering, do you have a heuristic for where research falls short, or where you might disagree with Ogilvy on his take on marketing research?Rory Sutherland: I mean, we can overstate this, because it’s often taken, my view, that market research is a terrible thing because people don’t know why they do what they do, which is to some extent true. Now, this is not to say that a lot of research can’t be both useful and accurate. If people really hate something and they say they hate it, it’s undoubtedly worth taking that on board. You could learn an awful lot about what you’re getting wrong by simply researching your customers. There are also, which David didn’t have to the same extent, completely free sources of information like call centers, which I always think are a massively underutilized resource because they’re the place where you learn what you’re getting wrong, or what your customers can’t do online, or all manner of things. So, don’t get me wrong. He never said this famous phrase often attributed to him: that the trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say. That’s somebody else who said that. I don’t think David would have said it because he was undoubtedly a research advocate because he preferred the discipline of research to what he called sort of random creative self-indulgence.Tacit Knowledge and Entrepreneurial ArbitrageAndrew Mitrak: It’s funny because I want to pause on that line real quick because it’s in your book. It’s in Alchemy, but you say in Alchemy that you don’t think he ever said that, or you can’t confirm whether he ever said that. So you found out that he did not say that?Rory Sutherland: Well, certainly nobody, and several colleagues of mine had tried to find an accurate attribution. I think if you go to something like Quote Investigator online, it has been attributed to other people, possibly earlier than David. And by the way, I mean, that’s not completely true. A lot of the time we do actually think what we feel, and we say what we think, and we do what we say. What is important, though, is that the tacit information is disproportionately valuable because it’s there that you can find yourself either under a massive illusion about what people really want because it’s what they say they want. Lower prices would be an example. It would be very, very dangerous to take that literally because people always say it because it’s a rational-sounding answer. “I’d do this more often if only it was cheaper.” Well, that’s both true and not true, and in any case, there will also be a chunk of people who will never tell you that they’d do something if it were only more expensive. So, around price, for example, there’s an enormous amount of misinformation. Also, information that’s tacit, which therefore isn’t in the public domain, is disproportionately valuable because it’s a source of kind of entrepreneurial arbitrage. And you know, I mean, okay, if you—nobody when Steve Jobs came along was really actively saying, “I’d buy a computer if only they weren’t so f**king ugly.” Okay? Nobody was really saying that. And so, an awful lot of entrepreneurial activity involves a bet on something which you assume to be felt but not said. Because the things that are said are already in the public domain and there’s no competitive advantage to be gained. It’s a bit like the stock market; it’s already priced in.I’ll give you an interesting example of this because I’ve been campaigning recently that hotels should provide monitors in the room. Because my argument is, I spend much more time in hotel rooms working than I do watching TV. And so, if either you had a USB-C cable which enabled you to connect reliably to the 4K TV, or you had the option of paying for a monitor in your room, I think a lot of people would go, “That’s great.” What’s weird about that is that until I said it, which was a hypothesis, nobody else was saying this. Because it’s one of those things that’s obvious in retrospect, but because the consumer doesn’t expect there to be a monitor in their hotel room, nobody complains about there not being a monitor in the hotel room. So, you know, all these weird things. I’ve mentioned other things like it really annoys me when I travel with my wife that most hotel rooms either have naught or only one inadequate desk. So one of you always ends up trying to work by propping up a laptop on the bed or on some woefully inadequate table or having to sit outside on a balcony. And the interesting thing about these things is that there are these unmet needs out there in the marketplace, which are really unmet because they’re unsaid, and they’re unsaid because they’re unthought, and they’re unthought because they’re unfelt. However, if you provide these things, my hunch is—and we can disprove this very easily by just charging 20 quid a night for a monitor and seeing what happens—it’s very easy to test that hypothesis.Why Data Without a Hypothesis FailsRory Sutherland: Quite often, I think what we’re trying to do, and Roger Martin is the real guru on this—what we’re trying to do is use pre-existing data as the basis for making a decision. And the problem is pre-existing data is not representative; it’s often completely wrong, or it’s miscategorized, or it’s misunderstood, or it’s simply inaccurate. The proper way to do business is to develop a hypothesis, design an experiment to reliably test the hypothesis, perform the experiment, analyze the data to see whether it refutes or confirms what you believe, and then rinse and repeat. Or act on the information that’s derived. But that starts with a hypothesis, which is an act of imagination. So, David would argue completely—and I wouldn’t disagree for a millisecond—that if the data you already have basically rubbishes a hypothesis, then that data’s really valuable. Or if it likely confirms a hypothesis, then that data could be very valuable in helping you decide what to do next. What isn’t a safe thing to do is this idea of kind of theory-free science where you just rely on the data to tell you what to do.Rory Sutherland: I have a wonderful story about this. On the basis, someone told me this very lunchtime, fantastic person who works for The Times—that’s the proper Times, not The New York Times. And they invested a huge amount of money in a science publication because they had very reliable data that told them that their readership loved reading things about science, and all the most read articles in The Times were about science. So they went and spent a fairly large sum creating a new sister publication and creating an app for it and publishing—and it went nowhere. And it turned out when they investigated it, that what had happened was that all articles about sex and relationships had been tagged as though they were effectively science articles. Because nobody knew how to define them, so they defined them not as social science, I think they defined them as sort of human science or whatever it was. And so all the articles like “Sex in the Olympic Village,” which was the most read article of ten years, which was talking about sexual practices at the Beijing Olympics, were tagged as being science articles. Brilliant informants said that based on that information, we would have probably been better off launching a pornographic magazine than a science publication. Because people are very interested in sex.Andrew Mitrak: Especially among Olympians.Rory Sutherland: Particularly Olympian sex is, of course, massively—you can imagine, that’s the most click-baity, fantastic title imaginable. By contrast, she said, we had a huge success launching a thing called Sun Bingo. And the simple insight was from a single journalist who said, “As soon as they ban smoking in bingo halls, the demand for the online bingo is going to go sky-high.” Now, that was a single anecdotal hypothesis which made them a fortune. And so this idea, I think, this is a product of defensive decision-making. And this is something which is also attributed to David, which he didn’t say, but I’m sure he quoted a lot. It was, funnily enough, originally said by another Scotsman, which is, people use statistics the way a drunk uses a lamp post: for support rather than illumination. And I think what we’ve got to be very careful of is there’s this massive tendency to go, “If you start your presentation with ‘the data tells us...’” Does it mean you’re going to make a very good decision? No. It might help, but I mean, it doesn’t certainly. On the other hand, does it mean you can be absolved of any blame in the event that things go wrong? Yep, absolutely.Research vs. Showmanship: Hopkins, Ogilvy, and FeldwickAndrew Mitrak: You mentioned how David Ogilvy was a showman, and of course he’s a showman. We talked to Paul Feldwick about showmanship; that’s a big topic of Paul Feldwick. We also talked about Claude Hopkins and his book Scientific Advertising.Rory Sutherland: Which Feldwick is less sympathetic to that book than I am, I think. And that’s because he comes from above-the-line advertising, and I come from below-the-line advertising, even though we went to the same school.Andrew Mitrak: I want to get your reaction to this. This is the thing about why he’s sort of dismisses it partly, is that the book is Scientific Advertising and the book would be like: give facts about the product and don’t be frivolous. But then you look at what Lord & Thomas did at this time, and they were doing big publicity stunts like baking the largest cake in the world, which had nothing to do with the product, and they were doing showmanship, and preaching on the one hand facts and scientific advertising, and then doing very unscientific things in a way it was sort of using science as a way to kind of sell your agency, because that’s what your buyers wanted.Rory Sutherland: He tells this wonderful story about Sunny Jim, which is the character that was used to promote Force cereal. And the bizarre thing is they went away from absolutely jingle-led entertainment in the US because Lord & Thomas, I think it was, told them they had to be more scientific and talk about the product. In the UK, the marketing department clearly went rogue. In my own childhood, we had a—and by the way, that was not just an advertising campaign, it was a branded merch campaign, because you could send off a certain number of box tops and £2.50 and have your own cuddly Sunny Jim, who was a weird kind of 18th-century roué character whose sunny disposition came from eating large quantities of the product, presumably. And he makes the point that the brand absolutely succeeded in the UK where it continued with its entertainment-based jingle-led platform, whereas the imposition of scientific advertising in the US was something of a catastrophe for the business.Rory Sutherland: So it ended up being one of those weird things which survived much better in the UK with what you might call a looser advertising regime than in the US. Now, Claude Hopkins, a lot of what he says is absolutely true for bottom-of-the-funnel advertising, direct response, which is before someone can send off a coupon. Okay, it’s very boring to say this, but putting “allow 14 days for delivery,” telling people when to expect their product. In many cases, someone can’t actually buy a product without—they can’t buy a car without knowing how big it is, because they need to know whether it fits in their garage. So at the point of final irreversible commitment, there is a whole lot of factual stuff. And I don’t apologize for this. And by the way, I don’t think internet advertising is always very good at it. A lot of online advertising seems to fall between two stools; that it is neither entertaining nor informative. It’s just transactional. Quite often you go, “Is this thing dishwasher proof?” would be the kind of thing I might want to know before I spend 200 quid on an ice cream making machine. That’s the kind of thing which is really, really important.Rory Sutherland: So Claude Hopkins wasn’t wrong, by the way. He was just talking about a very particular kind of advertising which was off-the-page, which was obviously—but was Lord & Thomas based in Chicago or New York?Andrew Mitrak: I think they were Chicago.Rory Sutherland: Well, you see, there you go. Because Chicago is the world capital of direct marketing. All those great direct marketing powerhouses like Montgomery Ward and I think Sears Roebuck started as a direct marketing house. Chicago, because it was the rail hub, was the direct marketing capital of the US. And so it always had a kind of slightly more Midwestern practical, pragmatic tone of voice because its target audience was farmers. And also it was often doing off-the-page sales or direct marketing of some kind or another, where at that point in the customer journey, there comes a point in the deal where you go, “Okay, I’m happy to buy this car, but when will it be delivered? What color can I get it in?” All that sort of specific stuff. You can leave out of the upper stuff, upper-funnel activity. But at some point, you need to absolutely be clear: okay, what is the deal in which I am now engaging? What am I signing up to? What’s the absolute deal here? What’s the worst-case scenario? Because there’s the creation of desire at the top, you might argue, and there’s the elimination of anxiety at the bottom. And Hopkins was quite largely right, I think, about what you need to do to get someone over the line. There’s a point where you’re looking around a house and the estate agent can crack gags, but when it comes down to the fine print, even someone as frivolous as me would go, “Okay, we do need to get a bit serious about whether the washing machine’s included.”Andrew Mitrak: Yeah, that’s fair. I think also what I’m just putting together now is Claude Hopkins, David Ogilvy, and you, I think all started in direct response, right? And I think that’s a certain—Rory Sutherland: Claude Hopkins and David Ogilvy didn’t actually, but he always said that it was the best place to start. That’s what he said. He always said that the best place for an account person to start was Procter & Gamble, and the best place for a creative person or copywriter specifically, I think, to start would be to spend three or four years working in a direct marketing agency where you learn what works. And where also, by the way, you learn one of the things you learn which I think Hopkins is probably right about as well, I think all good creative people understand this instinctively, is that really small things make a huge difference.The Behavioral Economics of “Small Fees”Rory Sutherland: I was just reading a piece of behavioral economics by the great George Loewenstein at Carnegie Mellon. It’s a famous paper from quite a few years ago, and he’s identified the population basically divides into unconflicted spenders who spend basically pretty sensibly. Then there’s a group of people which is probably 30% of the population who are skinflints. They find the pain of parting with money at the moment of purchase so agonizing that they don’t even buy things that they should buy that would make them happier in the long term. And then there’s a 20% of people who are spendthrifts. Now, here’s one of the most extraordinary findings, which amazed even me, which is they did an experiment where people had basically won or were given as a reward for some piece of work a box set of their choice. It was kind of like Family Guy, The Simpsons, the first season of whatever it was, some DVD program like Breaking Bad or something of that kind. I can’t remember the details; might have been The Sopranos. And then they were told, “We’ll send this to you free within a month, but we can also rush it to you overnight for a fee of $5.95.” Now, that basically put off the majority of the skinflints; they went, “No way am I paying $5.95 to get it four weeks earlier.” However, if you phrased it as, “We can rush it to you overnight for a small fee of $5.95,” then a large number of the skinflints were actually happy to pay. Brilliant, brilliant experiment. To an economist, they would be pained by that because $5.95 to them is $5.95, but if you refer to it as a small fee, then mean people go, “Okay, it was only $5.95.” If you say a fee of $5.95, “No, I’m not paying that.” Now, that’s even by my enthusiastic adoption of behavioral economics, that struck me as pretty goddamn weird. But nonetheless, it may be that a certain group of people find paying for things really painful, and you have to almost mentally prepare them for the act of parting with $5.95 by saying, “It’s almost, I think the implication is, this isn’t the market price, it’s just obviously it’s just a mere bagatelle.” But I find that so interesting.Why Marketing is Fat-TailedRory Sutherland: By the way, I think that we’ve got marketing wrong because I think marketing is fat-tailed. We’re judging particularly performance marketing as if it’s thin-tailed, as if one unit of expenditure delivers a unit of value. Every quantum of cost has to be matched to a quantum of incremental value; otherwise, you’re not allowed to do it. That’s just marketing now defers to finance. And my argument is, I don’t think it’s like that at all. I think the reason you do marketing is because one time in 10, 15, 20—if you’re getting it right—every now and then, you just stumble on something which is a complete game-changer. And I would argue that the way to judge—not all of it, but the way to judge a portion of your marketing expenditure should be very close to, well, for example, a Silicon Valley investment fund, a film studio, a pharmaceutical research laboratory, a publisher, an A&R man in music.Andrew Mitrak: The big hits pay off for the duds, right?Rory Sutherland: The big hits render everything else irrelevant. But whereas if you’re in music A&R and you’ve signed The Rolling Stones, that’s basically your career taken care of. In marketing, if you do the equivalent thing and you sign the Rolling Stones, well, you just get to work for another six months, and then the credit for all subsequent revenue emerging from that breakthrough goes to somebody else. It’s just swallowed into the balance sheet under the line “revenue.” And so, as a marketer, you’re held responsible for every quantum of cost, but you can only claim a small part of the upside, which is exactly what Steve Jobs noticed when he first joined Pixar.Why Steve Jobs Hated Making CommercialsHe went into making commercials, because Pixar was too expensive to make a feature film using that technology. So he was making commercials. And very rapidly Steve Jobs went, “This is s**t. I don’t want to do this anymore because I can only lay claim to a small, finite and predefined portion of any upside I create. I create a commercial that sells $110 million of product, I get paid $300,000. That’s not the kind of business I want to be in.” And every marketer finds themselves effectively in the same position, and every agency also, by the way, finds themselves in the same position.Andrew Mitrak: Yeah. It’s funny, you mention these Pixar commercials. They did these Chips Ahoy! commercials, you know, those terrible chocolate chip cookies and all that stuff. And I still think of, like, when I think of Chips Ahoy!, I think of those commercials. And those are from when I was a little kid. And it’s like, that’s still playing dividends today for that company, even though they paid Pixar once.Rory Sutherland: If Jobs realized, “If I make a film, you know, if you make Toy Story, I’m still earning money from that bad boy ten years later—you know, they’re the DVD sales or the streaming rights and the da-da-da.” Whereas if I make a commercial for Chips Ahoy!, I get paid for making the commercial and the upside—well, actually, it doesn’t even go to the marketing function. It probably goes to the marketing department in the first instance for the first six months of uplift, but the fact that you’re still remembering that ten years later, no one’s getting any credit for that.Andrew Mitrak: Yeah, I think it’s like 25 years later, 20, 25, something like that. Those were before Toy Story, which is like, what, 30 years old now?Rory Sutherland: Crikey, you’re right. That is seriously old. Yeah, yeah, yeah. It’s really old.Why Humanities and History Matter More in a World of AIAndrew Mitrak: So, I want to ask you also about history, because a lot of your examples in your book, in your talks, they draw from history. Of course, there’s like the Frederick the Great potato example, and you have, you know, going through your book, there’s like pictures of a design of a fencing sword from hundreds of years ago. There’s the Parthenon, and you have a chapter called “There’s Nothing New Under the Sun.” I’m wondering, do you read history a lot to get marketing ideas, or is history underrated? What’s your interest?Rory Sutherland: I think that you’ll find that people with a humanities degree become weirdly disproportionately valuable in an AI world.Andrew Mitrak: Totally. I’d like to think so.Rory Sutherland: And you know, I think that we’ve overvalued technocratic skills in relation to creative skills very, very badly in all the Western—and probably everywhere else—education systems. And actually, people who do hardcore degrees like engineering would probably come to agree with that. Einstein actually made exactly that point, which is that it’s the imagination that ultimately is the magical quality that makes us human. Therefore, if we can to some extent automate all the other stuff, what we’re left with is really a massive need for people who can ask better questions rather than get reliable answers, because the second part has already been done for us. You know, that’s taken care of. It’s a bit like, is there any need in an—just as you could ask the question: is there really any need for people learning log tables in an age of electronic calculators? Is there any need for people—I still, I did quite advanced mathematics, I still have no clue what a cosine is. I can’t remember. Okay? I’ve never had to work out the surface area of a cone. But on the other hand, statistical knowledge, I think, becomes more and more valuable because that’s more nuance-ridden. You know, actually, if you’re a statistician with a bad nose for statistics, you can make catastrophically bad errors while thinking you’re being perfectly logical. And so, as technology, in a sense, takes care of one thing, my ability at addition becomes less and less important—I probably need to understand the principles—but whereas my ability in other fields then becomes more and more valuable. So, AI will also sort of, if you like, further move the goalposts a little bit in terms of what we need.Rory Sutherland: And also just general, by the way, the great thing about advertising—which I’ll defend working in advertising and marketing on this grounds alone—which is, if you’re an actuary, you don’t really become a better actuary by sitting outside a cafe and watching people, or going to see a French art-house film, or watching people in the pub, or having a chat with some friends. But as a marketer, anything counts. I mean, you seek inspiration from wherever you can find it. David Ogilvy himself said, a good copywriter is characterized by being an extensive browser in all kinds of fields. And it’s kind of pattern recognition at some level. So, the more parallel field—nothing excites me more than to meet a copywriter who’s into jet engines or trains, or indeed a brilliant copywriter I met in Belgium whose main interest is branding in the medieval era. So he’s absolutely fascinated by medieval history, creative director in Brussels. And he draws extraordinary inspiration from things like, you know, why Charlemagne the Great was the first king ever to be crowned by the Pope. Which was effectively a kind of branding exercise which meant that you no longer had to completely defend your position in combat because you were now effectively divinely sanctioned. And therefore, anybody who sought to actually undermine you was actually taking on God rather than—now, he was chatting to me about this. Now, this is the kind of thing which automatically I find wonderfully reassuring. To be honest, there’s probably a high degree of ADHD which you’ll find in a creative department. Because, funnily enough, being distracted—I mean, of course we mustn’t mischaracterize ADHD—it also makes possible extraordinary feats of concentration. But the capacity to be easily distracted is to some extent in that job, it’s a feature, not a bug. It’s more virtue than vice, I would argue.Modernizing Ogilvy’s ‘Rolls-Royce’ Ad for the EV EraRory Sutherland: And people find creative people frustrating for all kinds of reasons. You know, they tend to miss deadlines or they start—more characteristically, they start work late because they’re waiting to get lucky or they’re waiting for inspiration. Or they change the subject, or they obsess about something which seems completely irrelevant. E.g., David Ogilvy is writing an ad, the Rolls-Royce engineers hated that ad because they’d spent a whole load of time improving the drivetrain and the suspension, and David was writing about the clock.Andrew Mitrak: Yeah, the electric clock that’s quiet.Rory Sutherland: I was saying a similar thing, which is my 21st-century equivalent of the Rolls-Royce “60 miles an hour, the loudest thing in the new Rolls-Royce is the ticking of the electric clock.” I was talking to a bunch of people involved in climate change awareness and particularly the transition to electric cars. I said, you can talk about efficiency till the cows come home. But the best ad for—I don’t know, have you gone electric in your car?Andrew Mitrak: I’m still running on dinosaur juice.Rory Sutherland: You’re on dinosaur juice. It drives, by the way, petrol-heads absolutely insane when you call it dinosaur juice. But I said the best ad I got for my electric car happened when it snowed, and I drove about a hundred miles, and when I arrived, there was still snow on the hood of the car. Now, in any petrol car—now, that’s an ad for the inefficiency of an electric car in a way that humans appreciate because there’s zero waste heat. I was astonished myself, because every time you drive anywhere, you’ve got snow on the hood of the car, and you drive for 10, 15, 20 miles, the heat from the engine melts it, it slides off, it melts, it liquefies, whatever. And then I found myself in a car park and you look at the car park and all the electric cars still have snow on the hood and all the petrol cars, it’s all melted. And that’s a wonderful ad for the extraordinary energy efficiency of the electric motor. But it’s an ad translated into human perception rather than scientific notation.Capital M Marketing vs. small m marketing: How Rory became accidentally famousAndrew Mitrak: Something that really resonates with me is this interdisciplinary thinking you bring. You know, you call it alchemy in the book, and really there’s psychology, there’s economics, there’s design, salesmanship, showmanship, culture, history, of course. And something about my podcast, “A History of Marketing,” people say, “Oh, that sounds really niche.” It’s like, well, marketing is kind of everything. It’s kind of all these things, and everything that happened before this moment is history. I’m wondering if you kind of also align with that?Rory Sutherland: This is the big mistake that marketing made, is it became a department. And it defined itself by what it did. And so people think of marketing as crayons, or it’s the coloring-in department, as it’s often called. Or it performs services like producing marcoms or brochures or hosting exhibitions or doing PR. That’s Capital M marketing, which is a tightly defined discipline and function within an organization. Then there’s small m marketing, which is the application of psychology to wider problems. Which literally, the market for small m marketing is a hundred times larger than the market for big m marketing, and yet we’ve sold ourselves both as marketers and as agencies. And this is—this is why I became accidentally famous. I keep telling people this. I said the reason I became—and I mean accidentally famous, it wasn’t my own strategic genius or insight that led to this. It was simply that I ended up giving a load of talks to people who didn’t work in marketing, which marketers don’t normally do. When marketers talk to people who don’t work in marketing, they immediately adopt the language of finance, which is defensive. It’s the worst possible, I think, way in which to actually communicate the value of marketing, which is to say, “Honestly, some of this stuff actually works. Look, we spend X and we got Y.” And it’s a completely subordinated view of selling your discipline.Rory Sutherland: Now, what happened is I ended up talking to a load of people, like, I’d talk at a bloody procurement conference or a compliance conference, or I’d go on a podcast which is all about engineering. And pretty quickly I’d go, “Well, there’s no point about talking about ads incessantly.” I’d show a couple of ads because they’re funny and illuminating and illustrate a point. But you know, if I just become a “how to make an ad” person, these people are never—99% of these people are never going to have to make an ad in their life and I become irrelevant; they won’t ask me back. So I just change—I just changed the script without really out of necessity, really, not out of inspiration, which was: let’s not talk about what we do, let’s talk about how we think. And suddenly—and that’s what the book is about—I suddenly realized that’s what Alchemy is about. This isn’t about what marketers do, it’s about how good marketers think.And suddenly I discovered—I expected Alchemy to sell to, you know, people in, you know, creative businesses and marketing people and, you know, a few curious other people who wanted to get a job in advertising or whatever it might be. But instead, I got bombarded by, like, engineers contacting me, hedge funds, venture capital firms. “What the f**k’s going on here? Right, okay, I wasn’t—I wasn’t expecting this.” You know, I mean, I went on a radio show with Chris Evans, and the book was like, for the next three days, it was like in the top 30 books on Amazon. Not 30 advertising books, not 30 marketing books, top 30 effing books. “This is f**king weird, right?” My argument was it was an accidental discovery that the market for how and the, by the way, the strategic and corporate importance of how we think, which is to look at something as if you’re behind the pupils of a customer, with the mental apparatus of a customer rather than looking at something through the lens of a manager or a, you know, a business operator. Which therefore makes possible, because of the vagaries of human perception, this makes possible a solution to problems which seems intractable in the physical world can be solved psychologically by simply understanding the psychology of the consumer or the, you know, the customer, whoever it may be. Or indeed your own employees, by the way, or your colleagues.Rory Sutherland: And so, what I—again, I’ll be absolute clear about this, it was a lucky accident, you know, it was born of necessity. And then I suddenly realized we’ve been total idiots because we’ve spent the whole 30 years defending what we are—our existence on the basis of what we do and what we’ve done. Whereas the real story here is how we think. And you know, I’ll give you an example. I think that government is increasingly hated by the population. Not because government is bad on policy or it’s too left-wing or it’s too right-wing or any of those economic or legal things. I think government doesn’t know how to relate to people. I think it’s become so tied up with sort of economics and law that it simply doesn’t know—I’ll give you an example. In London, in London, they introduced 20 mile-an-hour speed limits. Now, generally popular with cyclists, popular with pedestrians, popular with the residents of the road, very, very unpopular with motorists. Now, I support that decision on the basis of life-saving alone, and by the way, there are arguments which say that if you got rid of traffic lights and replaced them with small roundabouts—I know you don’t do roundabouts over there, although Florida has a few, actually—you could actually speed journeys. You could actually reduce journey time because although people are actually traveling more slowly, they’re able to interact with other vehicle drivers without the dirigiste intervention of a set of traffic lights. In other words, you could have much more free-flowing traffic over long distances.Rory Sutherland: But I said, look, if you said two things, right. One, the fine and the punishment for going 25 in a 20 limit should be less than the punishment you get for going 85 in a 70 limit. That’s the first point. In other words, it’s ridiculous to find—and I’ve just been fined actually for going 25 in a 20 limit on a—on what was actually a dual carriageway. Now, if you said to me, “Okay, because it’s only 25 and because it’s in a 20 limit, you pay two penalty points rather than three and the fine’s 50 quid rather than 90,” what the consumer would go, “Okay, you’re meeting me halfway. You’re being reasonable.” Okay? The second thing I would have said is: we’re going to introduce these 20 limits but we’re going to get rid of speed bumps. Because, okay, look, Mr. Resident, you’ve already got your 20 limit, the cars are driving past safely, you know, the 20 limit’s being enforced. Don’t make people drive over f**king obstacles as well, okay? Now, if you’d done this quid pro quo, consumers aren’t so bothered by the size of the quid and the size of the quo as long as there is a quid—sorry, a quid for the quo. If you just impose a rule with no concession made anywhere else, I think for entirely understandable evolutionary psychology reasons, people view that as being demeaning. Nobody in a free market business would ever conceive of approaching someone with a deal in which the counterpart was only a loser. They might try a deal where you get not very much in return for quite a lot. They might try that on. But no one would try on a deal where you go, “You give me this and I give you f**k-all.” Right? I mean, even to the point where if you make a donation to charity, they give you a little sticker. Right? You get something. It signals. Yeah, I get a bit of signaling value and you know, I don’t get bothered by other charity people because I’m wearing the sticker.Rory Sutherland: And yet government is basically institutionally autistic. In other words, it just imposes things that it decides are optimal without considering the emotional effect on the person who’s disadvantaged by the legislation or by the policy. It’s completely unlike every other form of transaction that exists between humans on the planet. It’s like Domino’s Pizza going, you know, “Pay us some money and we won’t s**t in your pizza.” It’s kind of like, what the ===? Right? That’s not—that’s not a deal, that’s basically an imposition, okay, yeah. Domino’s, “Oh, yeah, yeah, okay, I’ll have the express delivery. Oh, pay us four pounds and we won’t s**t on it.” Right? That’s basically how government behaves. And then they go, “Nobody likes us.” But—and by the way, I don’t totally blame politicians. I think politicians who are elected have quite a good eye for and actually are quite instinctive marketers in many ways, and some of them are certainly. I think it’s probably the bureaucracy with which they’re dealing which is institutionally autistic. That would be quite fun to do as the experiment. That would be really good fun to do as an experiment. “Yeah, pay us five pounds and we won’t s**t in your pizza.”The Future of Tipping and Service IncentivesAndrew Mitrak: I sometimes feel that way when I’m offered a tip on a page, because everything offers a tip now, and I kind of think, oh gosh, if I don’t put the tip in, what’s going to happen, right?Rory Sutherland: By the way, I’m unusual for a Brit in that in many settings I’m pro-tipping, because I think it does provide an incentive to provide better levels of service and so on. It also gives you a discretionary amount with which you can provide financial feedback and so on. Obviously, for reasons of total self-interest, I like to tip in places where I’m a regular, because I don’t want to be known as “Stingy Rory.” So, there are rational reasons. But in the US, I kind of go—like coffee shops—this is getting a bit weird. I am not the guy in the Reservoir Dogs.Andrew Mitrak: The thing is, now with terminals, you’re presented with the tip option before the service has been rendered. I think it works well as an incentive after, like, “Hey, you’ve done a good job and I’m going to leave a tip after.” Even the Reservoir Dogs scenario is more about that. But now with these Square terminals or whatever, it’s before I’ve even gotten my sandwich from you, I’ve got to tip you 20 percent.Rory Sutherland: And you haven’t even made the—so a large part of restaurant tipping, the reason you didn’t tip in McDonald’s is you hadn’t got your meal yet, so it was too early to decide whether the actual experience was tip-worthy.And now as you said, you’re at the terminal and it’s kind of like.Andrew Mitrak: Are they going to s**t on it? Is that the thing that’s going to happen if I don’t give the tip?Rory Sutherland: I absolutely agree with that. I think there might be a really interesting technology around tipping which I’ve actually discussed with someone once. I would like a world where you could tip call center staff, because the best five to 10 percent of them are worth their weight in gold. And I think they deserve a lot more money and I don’t think they’re paid nearly enough. So, there are areas where I’d like a mechanism.This is my idea, you actually have a load of cards with a QR code on them, and you basically hand them the card, which is for an indeterminate amount. Then when you finally check out of the hotel, you can basically apportion a reasonable amount of tipping to everybody in proportion to the value they’ve delivered in the course of your stay, rather than tipping the doorman when you arrive on the fear that they’ll treat you like s**t if you don’t. It also encourages perverse behaviors, like that business of insisting on taking your luggage up to your room. For crying out loud, I can manage a wheelie suitcase and an elevator. I don’t want you to take my laptop. Leave me alone.Why Behavioral Science Struggles in Corporate MarketingAndrew Mitrak: I wanted to come back to something that you brought up that was sort of a lightbulb for me, which is “Capital M” marketing, which is more like marketing organizations and how marketing presents itself, and then “lower case m” marketing, which is a little more marketing in practice and marketing thinking. I’m wondering if this is partly why I don’t see behavioral science and nudge really showing up within a marketing org. I feel like it’s somewhat at the margins. It might be a little experiment, it might be a pilot project, it might be something you hire a consultant for, but I don’t really see it embedded into individual roles or into org charts at a company. Do you see that as sort of why it’s a little at the margins of marketing?Rory Sutherland: Well, I somehow think that I don’t think it’s salvageable with conventional corporate structure. I think the way to solve it in part—but I don’t know if this works or whether it would be any good—is I think businesses should have a customer board where you actually talk about value creation rather than cost control. Because at the moment, what is ostensibly a board meeting is really a kind of exercise in cost reduction. It’s not a proper strategic discussion because it doesn’t include either the customer or the future. You can’t really develop a strategy without considering those two highly nebulous variables.Rory Sutherland: Of course, people who are certainty-addicted, typically like finance, who are basically variance-averse, they want to live in a low-variance deterministic world. Those people hate discussing those things because of course they are nebulous. It’s rather like I always think that cost reduction is immediate and quantifiable, which is why McKinsey & Company is an enormous business. Whereas value creation is non-immediate, it’s deferred, and it’s to some extent unpredictable. Consequently, people who are variance-averse overweight cost-cutting activity and are never held responsible for the opportunity costs that are incurred. There’s a trade-off between being efficient and being effective. There’s a trade-off between being short-term stingy and long-term rich. There are all these kind of trade-offs going on, but if you turn the thing purely to a kind of financial exercise, I think you’re killing a business in the medium to long term.The Strategic Advantage of Family-Owned BusinessesRory Sutherland: When I was tootling around Texas, every time I encountered a really impressive business, I’d make inquiries as to its ownership structure. Nine times out of ten, it was either founder-led or family-owned. I suddenly realized the family-owned businesses have this fantastic advantage over publicly held companies. Because one, they’re free to decide their own time frame. Two, they’re free to decide their own metrics of success. I don’t think you can be a brand unless you can design some of your success metrics that are actually chosen by you, not imposed on you by some investment analyst aged 27.Rory Sutherland: In order to be a brand, you have to distinguish yourself or differentiate yourself in some way, or at least make yourself distinctive. You’ll only do that by following metrics which are unique to you. I’d apply that to your individual life. I think you’re only a free individual—I don’t know if you’re one of these people whose parents wanted you to become a lawyer or a doctor—you’re only really a free individual if you say, “No, I don’t regard being a doctor as a badge of success. I want to go into contemporary dance.” That’s the definition of a free individual, which is you don’t allow all your targets and metrics to be imposed on you; you devise some of them yourself.Rory Sutherland: So, that’s a really important distinction. I think family-owned companies can play different time scales; they can play to a one-year, two-year, three-year time scale. They’re not fixated on the next quarter. They can define their own metrics of success and their timeline of success. Also, they’re focused on the customer and to some extent their own staff, more than the narrow preoccupations of not of share owners, by the way, but of shareholders, the institutions that hold the stock. They aren’t there to distract them all the time.Why Observing Reality Beats Investment StatisticsRory Sutherland: The final point, which Dan Davies, a wonderful writer who you ought to have on the podcast, makes is that the big advantage of being customer-focused over shareholder-focused is that your customers actually live in the real world. So, you are spending your time actually observing what is happening in reality rather than devising some artificial statistics to keep the investor community happy for the next three months. You are vastly better off devising your inspiration from reality than you are effectively pandering to a bunch of economic theories which were probably considered slightly dated at Harvard Business School in 1971, but which nonetheless pervade the general preoccupations of investment analysts.Rory Sutherland: I went to Buc-ee’s and I went to H-E-B and I went to all these Texas companies. You go, “Wow, these companies are actually brilliant. What’s going on?” Fortnum & Mason in the UK is just a luxury store, but there’s something about it when you go there. It’s almost imperceptible—it’s not imperceptible, but it’s kind of something you feel as much as you can quantify—which feels that no, these people are actually interested in being themselves and helping me.Rory Sutherland: The contrast is the economist and writer John Kay, Professor John Kay no less, went out for lunch with a friend of his at a lunch venue which they’d frequented regularly for some years. One day they turn up and he goes, “Something here doesn’t quite feel right. It feels like it’s been bought by private equity.” Sure enough, one of them gets their phone out and sure enough, four months earlier, private equity. Here we go. They’re going to build it up, looking for a way to offload it in a certain time frame, and the customer can go hang.Why Big Ideas Require More Marketing EffortAndrew Mitrak: I love your ideas. I love your book and I love your way of thinking. I’ve had a hard time implementing it at scale or getting it through at a large organization. Do you have any advice for marketers like me who work at large organizations?Rory Sutherland: My contention is that what marketers understand that often tech people don’t is they think the bigger the idea, the faster it’s going to take on and the less marketing it needs. I used to think that. Then I suddenly, because I’m 60, I’ve lived through the mobile phone, I’ve lived through the air fryer, I’ve lived through all these kind of patterns of tech, the microwave oven, I’ve lived through the DVD player. What you realize very quickly is: one, actually the bigger the idea, the slower it is to take off and the more marketing it needs. That’s because the bigger an idea is, the more behavioral change it requires for its adoption. Humans find behavioral change difficult for all kinds of evolutionary reasons. We like doing what we’ve done before and we like doing what everybody else does.Rory Sutherland: So, there are certain things which marketers are right about, which I think the rest of the business world is too influenced by mainstream economics, which is almost, “If you build it, they will come” stuff. Nah. Everybody quotes this phrase, “If we build it, they will come,” approvingly. But the film, Field of Dreams, was about a mad person who builds a baseball stadium in a cornfield to attract ghosts. It’s not really the basis for business wisdom, is it? I thought his business plan was terrible. You probably had a catchment area of 27 people and you’re the middle of bloody nowhere. Not where you build a baseball stadium, generally.Andrew Mitrak: It’s an odd one where I think the quote is probably bigger than the movie at this point.Rory Sutherland: Exactly, yes. Yeah.Recommended Reading: Humanocracy and the Unaccountability MachineAndrew Mitrak: Rory Sutherland, it’s so great to speak with you. I really enjoyed it. I love all of your work, all your books, all your podcast appearances, and talks. Is there anything that I could point listeners to? I mean, there are so many places. Where do you point people to?Rory Sutherland: Oh gosh. There are a few books recently. Gary Hamel’s book Humanocracy, I’m going to plug. I like plugging really interesting books. I’m probably about three years late with that book, by the way; it’s quite old. Dan Davies and his book The Unaccountability Machine. Dan makes a really interesting point, which is not a bad point at which to end, which is: he said a business is an artificial intelligence. Once you create a structure for decision-making, you have created an artificial intelligence, which is not the same as natural intelligence within an individual human brain. It’s fundamentally artificial because you’ve done all these things where you’ve defined things, you’ve categorized things, you’ve tagged things, and so forth. Consequently, collective decision-making is artificial.Rory Sutherland: And yet almost no thought is given to how those information flows are designed. In particular, Dan’s book is called The Unaccountability Machine because the primary motivation of people within an institution is actually career insurance and risk mitigation—reputational risk mitigation—not the success of the organization. To prevent that, you need to design decision-making very carefully. You need to have reasonable symmetry of upside and downside reward and punishment. We’ve often created organizations where if you make a small mistake, you get fired; if you come up with a billion-dollar idea, you get a pat on the back and possibly a promotion in two years’ time. I don’t think the way in which we’ve calibrated organizational decision-making is that good.Rory Sutherland: My weird conclusion from years of behavioral science, which is supposedly about human irrationality—I mean, Amos Tversky met someone in, I think at Stanford, as it would be. And this person said, “I study artificial intelligence,” and Amos said, “That’s funny, because Daniel and I study natural stupidity.” Now, interestingly, my kind of hunch—which is a feel—having spent years looking at this stuff, is individual human beings, when they don’t have to justify their behavior, make surprisingly intelligent decisions. Which are surprisingly intelligent once you realize what they’re ultimately trying to do. What their ultimate, maybe unspoken, maybe unthought objective is in buying a pair of Balenciaga sunglasses; you actually realize that what they’re doing makes sense within the constraints of ecological rationality, even if it’s not economic rationality.Rory Sutherland: The thing I also think is that collective decision-making is incredibly vulnerable to collective insanity. We’ve allowed, for example—I don’t know how this has happened—but we’ve allowed HR and finance to have the right of veto over almost any form of business activity. I don’t know how this has happened; it seems to be universal in all organizations. We’ve probably allowed, for example, within governmental decision-making, we’ve created these entities in terms of environmental sustainability or diversity or whatever it may be, which are actually massive opportunity costs. In other words, they prevent lots of things happening or even being tried or even being experimented on. We’ve allowed this to happen and no one really is speaking up.Rory Sutherland: There’s another brilliant guy called Philip K. Howard, who’s written a book about “can-do.” Fundamentally, we need to get back to the idea of business as a discovery mechanism, not business as an efficiency mechanism. The efficiency tail has been allowed to wag the discovery dog. That’s a terrible analogy and an awful place on which to end, but ultimately the solution to these things has to lie in how we design institutional decision-making better.Rory Sutherland: My hunch is that AI—okay, this is a kind of gag, but it’s nonetheless telling—what happens with all these people in finance and HR and everything else and IT: they never downsize themselves. There is no way of measuring how efficient they are or what contribution they make to the organization, and yet they are deeply involved in assessing the efficiency of people doing the real work. Often front-line service workers who aren’t even that well paid. Now, my hunch is: it’s those jobs that should be replaced by automation, not the front-line service jobs, because they’re specific to the brand and the business itself. Those are generic jobs which are a kind of internal corporate oncology all of themselves.Rory Sutherland: The old joke used to be that the factory of the future will consist of a man and a dog. The man’s there to feed the dog, and the dog’s there to stop the man touching the machines. That was the old joke about automation. Now, my contention is: the factory of the future will actually be a man and a dog, then there’ll be four procurement people who are continually reducing the size of the food bowl. There’ll be three compliance people who are legislating about the safe use of the lead to which the dog is attached, and there’ll be five people in HR to make sure the man doesn’t misgender the dog. I don’t know how we’ve allowed this to happen in organizations, but it’s what I call Soviet-style capitalism. It’s a kind of command-and-control mechanism where almost the internal political—what you might call ideological purity—of the activity is more important than the value of the activity. How we allowed this to happen, I don’t know, and what caused it, I don’t know, but until we do something about it...Why Video Conferencing Remains UnderappreciatedAndrew Mitrak: Is history just a big sequence of over-corrections? That’s what I wonder. Are we just continuously doomed to be swinging too far in one direction versus the other?Rory Sutherland: Is this even correctable? I don’t know. By the way, a separate talk I’d love to give one day is I don’t understand why we’re talking so much about AI relative to the importance of, well, Google Meet. Because video conferencing is an enormously important technology because it makes physical co-location unnecessary to a discussion. It massively reduces the costs of interaction. It means, for example, that your staff could move not to a low-tax jurisdiction but a low-rent jurisdiction, which would be far better off for them. Actually being able to move to affordable housing would make a bigger difference than a 10% cut in the rate of income tax in some cases.Rory Sutherland: Now, what everybody’s doing is this stupid thing where they compare like with like. Just to take an analogy with electric cars: the reason I support electric cars is not because electric cars are better than petrol cars in 2025, although they are. Petrol—I think they are better, but we can debate all that. I’m totally happy to have people go, “I go on a skiing holiday once a year and there’s nowhere I’d get 600 miles.” Okay, I buy all that. But the real reason to support electric cars is that in 20 years’ time, electric car technology could spawn a hundred meaningful innovations, and internal combustion engine technology won’t do that because it’s run out of road.Rory Sutherland: Now, what we’re doing with video conferencing versus physical meetings—which, by the way, is another form of transportation if you think about it laterally—is we’re saying: is a video meeting better than a conventional meeting? Maybe it isn’t quite as good. I don’t generally want to smell our clients; I’m perfectly happy just to talk to them face-to-face. But no, there are a whole load of incidental conversations and serendipity in the workplace; I buy all that stuff. But the point is that video conferencing in five, 10, 15 years’ time, if you reorganize your organization around it, has the potential to be transformative, whereas insisting on physical location does not have the potential to be transformative because we’ve been doing it for a hundred years and we’re not going to get any better at it.Rory Sutherland: So it’s like evolutionary potential, effectively. That’s the way to look at those two things, not side-by-side comparison on the now. It’s what offers you the biggest optionality and opportunity to innovate. Not what is better right now. In the case of the internal combustion engine, not that much opportunity. Electric vehicles: you’ve got electric scooters, cargo bikes, you have micro-mobility, you’ll have driverless cars, you’ll have all this stuff, none of which could happen with a gasoline engine. So we should be optimizing for optionality, not optimality. Don’t look at short-term optimality; look at long-term optionality. The scope of what you might call the adjacent possible is much, much bigger for video conferencing than it is for everybody in the office in a bloody expensive bit of real estate.The Failure of the Open-Plan OfficeAndrew Mitrak: And also, I want to come full circle back to Ogilvy as well. He did all of his writing at home, right? He’s a work-from-home guy right from the beginning.Rory Sutherland: Right from the beginning. There are certain things you cannot do in an open-plan office. The open-plan office was imposed; it’s in some ways catastrophic to all sorts of things. It’s neither sociable nor is it solitude. I think to work well, you need sociability and solitude; you want a pub and a library. But actually, what we get is something which isn’t a pub and it isn’t a library; it’s just this sort of weird hinterland sort of thing. It’s a no-man’s land sort of DMZ useless zone in between the two possible spaces.Rory Sutherland: So my argument is, look, I think what will happen is that if you’re McKinsey, say, 20 people internationally can form a consulting firm with the ability to draw on the 200 people in the world who know more about a subject than anybody else on the planet, and they’re going to out-compete you. Because they’ve got an access to talent that you haven’t got because you’re insisting everybody has to be based here and commute into a stupid building five days a week.Rory Sutherland: So the point is you’ve got to look at what the technology makes possible ultimately, not what it does right now. And that’s why I find it weird that we’ve effectively invented teleportation and no one’s talking about it. We take it for granted. And that’s just because the technology was old. But all really important technology takes ages to reach its level of full adoption. The fact that the technology is old means we don’t talk about it because it doesn’t make us look very cool. But I mean, the fax machine was a hundred years old before it reached sort of 5% penetration.In Praise of Paul FeldwickAndrew Mitrak: Well, this has been great. I’m going to check out Humanocracy, The Unaccountability Machine, and your future talks on teleportation and AI and everything. So, Rory, I could talk with you for hours. This is a real pleasure to speak with you and meet you. Thanks so much for your time.Rory Sutherland: It’s been an absolute joy. Paul Feldwick recommended you very, very highly. Good name-check. So let’s also mention, if he was too modest, all of his books, including Why Does the Peddler Sing?, are absolutely astonishing.Andrew Mitrak: Yes.Rory Sutherland: They’re a tour de force.Andrew Mitrak: Excellent books, and anybody who enjoyed this conversation and enjoys your work would also certainly enjoy Paul Feldwick’s work because it’s excellent.Rory Sutherland: Oh, absolutely. Yeah. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 44 When I launched A History of Marketing at the start of this year, I had a vision of exploring the origins of our craft. But I never imagined that 2025 would be bookended by “The Father of Modern Marketing.”Dr. Philip Kotler kicked off the podcast as the first guest I interviewed. Now, it is my distinct honor to welcome him back to the show for our final interview of 2025.The Year in Review: 69,523 ThanksThis year has exceeded every expectation I had. To date, this podcast has been downloaded and streamed 69,523 times across YouTube, Spotify, and various podcast platforms.What started as my personal quest for knowledge has reached marketers on every continent (save for Antarctica). I’ve received notes from a wide range of listeners: from global CMOs and Ivy League professors to high school students and interns; from entrepreneurs who have scaled million-dollar businesses to self-described Marxists and lifelong marketing critics.To every one of you who has listened, shared, or sent a note: Thank you. This show has been like the best possible version of a self-directed MBA. I’ve learned, I’ve made new friends, and I’ve become a better marketer because of it.A Legend Who ListensOne of the most incredible moments of this year—and this interview—was learning that Dr. Kotler doesn’t just appear on the show; he listens to it. Much of the success of this podcast is due to Kotler’s early support. Phil was my first-ever guest, and his recommendation opened doors to other legends like Jag Sheth and David Aaker. As we wrap up 2025, I want to express my deepest gratitude to Philip for his mentorship and to you, the audience, for coming on this journey with me.What We Cover in This Episode:* The “Mount Rushmore” of Marketing: Kotler names the practitioners he admires most (and his answers might surprise you).* Addressing the Critics: His refreshing take on those who try to build their names by opposing “Kotlerism.”* The 4Ps vs. The 7Ps: Why Kotler sees “promotion” imoving toward a more expansive “Communication System.”* Marketing’s Mathematical Turn: The tension between “people people” and “number people.”* And much moreEnjoy the final conversation of the year with Dr. Philip Kotler. I’m looking forward to what we’ll discover together in 2026.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng of Syracuse University, who reviews transcripts for accuracy, adds helpful links for readers, and gives me feedback to improve the show. The Enduring Legacy of Philip KotlerAndrew Mitrak: I’ve recorded more than 40 interviews with marketing executives, academics, and authors, and you are the single name that is most referenced across all of these interviews, across everybody. Do you ever think about why your work has endured? I’ve seen so many other marketing frameworks come and go, yet 60 years on, folks still reference Philip Kotler and your work. Why do you think that is?Philip Kotler: Well, that’s a good question. I haven’t really thought about it until you asked it. By the way, I’m a watcher of all your programs, and I’ve learned a great deal about the history of marketing, and I tell others to also follow your work.Your question is, why am I still around in the marketing world? I did some thinking about that. I think a lot has to do with my textbooks. I have three textbooks: Marketing Management, Principles of Marketing, and Marketing: An Introduction. All of them are already in their 16th, 17th, or 18th edition. So therefore, lots of people around the world—in fact, those are books used around the world—know me that way.I’ve also published, besides three big textbooks, many other books on marketing like entrepreneurial marketing, transformative marketing, and so on. So I think that makes a difference. I have traveled a lot around the world, many countries, to upgrade them on marketing thinking. Particularly, it started with 12 annual visits to Sweden, 12 annual visits to Milan to say what’s happening in the field of marketing. And then I got a lot of honorary degrees. So for some reason, those all have added up to lasting in this field and enjoying it very much.Andrew Mitrak: So it’s accumulated over time—all of these degrees, these textbooks, all this work. And today you are often referred to as the “Father of Modern Marketing,” but it wasn’t always that way. There was a time when you were early in your career; there was a time when you were midway through your career and you were just publishing your first books. Did it ever feel like there was a turning point when you started to feel like a major name in the field versus feeling like an earlier career professional trying to establish yourself?Philip Kotler: What happened is every time I published a book, it had good reviews, and that meant getting more readers. I think that getting honorary degrees abroad—I received 22 honorary degrees abroad—in each case, I visited the university giving that award. All of that happened way before I was ever called the Father of Modern Marketing, and to this day I don’t know who first used that expression. It wasn’t that I created it and publicized it. So I’ve been very lucky to be recognized for my work in marketing.Andrew Mitrak: It didn’t strike me that you would have bestowed that title upon yourself… that doesn’t seem like your style. [Laughs]Kotler on Addressing CriticsAndrew Mitrak: One thing I’ve noticed since publishing this podcast and being, I think, more attuned to your work and how other marketers speak about you, is that there’s a common way that marketers will try to make a name for themselves or their ideas. They’ll define their ideas almost in opposition to Kotler, almost in opposition to you. They’ll say things kind of to the effect of, “Oh, Kotler’s principles, they don’t work in this segment,” or “They don’t work in this country, and you need my framework to succeed.”It almost reminds me of a boxer who is kind of trash-talking the champion to get publicity for himself or something. It seems like, “Oh, because you’re the Father of Modern Marketing, they’re trying to elevate their ideas to your stature.” I’m wondering, not to dismiss, I am sure their ideas merit a lot, and the tactics they use, if you’ve noticed this over the course of your career and how you’ve responded to it.Philip Kotler: Well, I relish those challenges. In fact, I’ve often said that I wish someone would replace my theory or system of marketing thinking with something better. One fellow from Ireland, he’s a professor in Ulster, Dr. Stephen Brown, really took to that position. He wrote an article saying that the specter of marketing is Kotler, or “Kotlerism.” It’s like Kotlerism is around too much. And he actually tried to explain my being visible because he thought I was following what Karl Marx did to become known. It’s a very interesting article.He also wrote a whole book of a fictional marketing department, and it was really about Northwestern University and my role in the marketing universe. So I get those things, and I find that’s fine. Recently, someone just wrote a book called Marketing is Dead, which is to say that they have a better answer to what it should really be. I welcome those things. As a matter of fact, my complaint is that marketing doesn’t have enough debates. A good field is going to have some real opposition about concepts and theories and measurements and so on, and we need more of that.Andrew Mitrak: That’s a great outlook. I’ll try to look up that article you were referencing and see if I can paste a link in the blog that accompanies this post. You mentioned how marketing doesn’t have enough debates. On this thread, what is your overall assessment of how marketing has evolved since you’ve been in the field? Let me ask in another way, if you’re, quote, “The Father of Modern Marketing,” how do you feel about how your child has grown up?The Evolution from Mass Marketing to One-to-OnePhilip Kotler: It turns out that I’ll start with the fact that the first big debate I really had with the rest of the profession is whether marketing is only a commercial subject of relevance to commercial firms, or it applies to all organizations and even groups and individuals. And I made the point that marketing is done by everyone in so many ways. A vote was actually taken on that issue by the American Marketing Association, and we won. That marketing is far more than just a commercial subject for firms.Marketing started pretty much with mass marketing as an area because of the image of Coke and McDonald’s and stuff like that. But then along came segmentation, targeting, and positioning (STP), meaning that you got to focus your marketing on a group with a very specific need to be solved by your solution. And that ushered in several decades of work—interesting work—the whole idea of what is a segment and how do you target and position it.Then the next stage, which we’re in now, is one-to-one marketing. We never thought that we need to have more than the geographical look of a demographic to not know the individuals in that demographic. But the fact is, now we can collect information on every individual, which allows us to customize and personalize our messaging so that it’s correct messaging at the right time and for the right purpose. So I’ve seen that happen.Now, how many companies are really going to do one-to-one marketing? Because we are in that stage of celebrating it. Not that—well, it’s interesting. The smallest companies tend to be one-to-one marketers, if I mean by that the small pastry shop where the French consumer comes every week and says hello and is greeted. They are into one-to-one marketing. But what’s impossible normally for large companies is to know each individual and have a nice way to greet them. But now they’re trying to do that. So that’s an interesting effort to get close to individuals even though you’re a huge company. Something must be lost in that process, but that’s where we are now, and we’ll see how far we can go with that.Andrew Mitrak: On that thread of something being lost in the process, do you feel like there were any inflection points over your career where marketing as a field took a wrong turn? Did the discipline ever get focused on what you feel is the wrong areas or the wrong priorities?Vance Packard and The Hidden PersuadersPhilip Kotler: I thought that some people writing about marketing were possibly leading us in the wrong direction, particularly Vance Packard. Vance Packard is well known for writing a book called The Hidden Persuaders. And implied in the book that the great marketers have hidden techniques. The audience is watching a movie, and they don’t realize this, but there’s a message coming through about how good popcorn is. So they get up during the movie and automatically go and get some popcorn. We don’t have those techniques and don’t want to use them.He went on to talk about that marketing creates a lot of waste. And by the way, he’s not wrong there. You remember the famous statement, “Half the marketing I do doesn’t work, I just don’t know which half.”Andrew Mitrak: John Wanamaker.Philip Kotler: Yeah, the department store guy. And he wrote a book, The Status Seekers, that we create classes by our marketing. Now, there’s some—it’s worth reading Packard, but if we took Hidden Persuaders seriously and found there are some messages where we could sell much easier by hypnotic effects on consumers, I wouldn’t want the field to go that way.Andrew Mitrak: It’s funny how many times Vance Packard and Hidden Persuaders has come up in the interviews I’ve recorded. Inspiring both—one person I interviewed recently was Jean Kilbourne, and she’s sort of a longtime critique of the portrayal of women in advertising. But she was inspired initially by Vance Packard. And then another person, Robert Cialdini, who’s an earlier episode, he writes all about persuasion, and he mentioned that early in his career he was inspired by Vance Packard. It’s interesting that you highlight that because I think it was written in the mid-1950s, and it really inspired a lot of people who didn’t necessarily replicate his work exactly or even went off and took it in different directions, but it was an initial spark and inspiration for them.Philip Kotler: Yeah, sure.The Rising Role of Math in MarketingAndrew Mitrak: If you place yourself at the start of your career, do you think that there’s anything that would surprise you most about how marketing functions today?Philip Kotler: Well, I think the thing that is a big surprise to everyone about marketing is that it is getting to be mathematical. What I mean by that is, in the business schools, students sort of divided themselves up between those who loved numbers and those who loved people. Those who loved numbers went into finance. Marketing was considered at least not formidable mathematically. Well, one big change is that it’s quite formidable mathematically now. We even have a journal, Marketing Science, and the articles are almost unreadable to the unmathematical person. Which means that they may have great findings, but they’re not going to reach the CMOs, the Chief Marketing Officers, for use.I am often asked by students what field they should go into. I often say, well, if you really love being with people and want to help make lives better, go into marketing. It’s the best access you could have to be helpful in that regard. If you like numbers better, it’s still going to keep you busy in finance then.Are the 4Ps still enough?Andrew Mitrak: I want to ask you also about the 4Ps, which you popularized. I’ve also noticed as a marketer, marketing is overwhelmingly just focused on one of those Ps, which is Promotion. So it sounds like you would agree with that assessment. I’m wondering if marketing primarily being seen as promotion is sort of a missed opportunity for the field.Philip Kotler: Oh, I think it would be bad for the field to be seen as only a promotional activity. It denies all the homework that was done by the marketer to understand the world he’s living—or he or she is living in—and how to make a good impression for the good in the world.So here’s the thing. You’re talking really about what we call the marketing mix, which in shorthand is the word for the set of tools that marketers can work with to have influence. And known as the 4 Ps originally. Originally, my late friend Dick Clewett at Northwestern taught Jerry McCarthy that there are three Ps and a D: Product, Price, Place, and...Andrew Mitrak: Distribution?Philip Kotler: Distribution. Product, Price, Promotion, but he used a D for distribution. Jerry made it a P for Place. Smart move. Four Ps. Okay. Now, do you realize that originally Neil Borden at Harvard University many years earlier said there are 12 elements to the marketing mix? Okay. So down to four is good.But I’m more comfortable today with seven. And I got to the seven in this way: When it comes to Product, you got to add a separate mix for Service. It doesn’t begin with a P, but if you have a good product and poor service, you don’t succeed. Then I also want Brand to be mentioned when Product is mentioned because you could have a good product, but it’s not a brand. It hasn’t attained a differentiation really—a value differentiation from other competitive offerings.So and then I took Price and said, you know, you never set just a fixed price. It moves around with new situations. So I think we have to add Incentives. Incentives and disincentives, basically. Because most often brands are at discount too. So we got to use that notion.And then I like to generalize away from the idea of the word Promotion. I really want to call it a Communication System. That marketers must manage a system where they can get to know and communicate effectively with people, which means knowing much more than what hot button to touch to get them to buy. It’s to really know what their lives are like and how to help improve their lives. So when your basic question was about promotion being the essence of marketing, I think it’s such a narrowing of what it’s all about.The 4Ps: Is Marketing Too Focused on Promotion?Andrew Mitrak: Yeah. Just to clarify what I’m saying, I’m just thinking of my own experience as a marketer who works mostly in B2B companies. When another department thinks of the role of marketing, they think of marketing as just, “Oh, that’s the promotion person.”There’s another product department, and of course marketing has to be aware of the product; there’s a field of product marketing.But with distribution, there might be a supply chain team, there might be some procurement team, there might be other teams.Pricing is often handled by some other strategy and operations group that’s outside of marketing. Hopefully marketing has a seat at the table, but if I think of the marketing organization I’ve worked in, there hasn’t been a pricing person who’s a marketer per se.I’m wondering if marketing in practice sometimes is being squeezed in that promotion box. At least the perception of others outside of marketing sees marketing as being squeezed into promotion.Philip Kotler: Well, you’re onto something. In the academic world, there’s been talk about how marketing should be in control of the 4 Ps, but they aren’t. Pricing is done by a financial guy.Andrew Mitrak: Yeah.Philip Kotler: Product is developed by a group without the help of marketing, and then marketing only comes in when they now say it’s ready to be launched. At which point the marketers say, “We wish you had included us because you left out an important feature that would be attractive, and also your price is much too high to command that price for that product. So we won’t be successful with what you did by not involving us in the decision-making process.”We’re going to change that. That marketers have to be present in the development of innovation. And innovation is so crucial. And to innovate without a marketing mind in the mix is wrong.Are “incentives” underrated by marketers?Andrew Mitrak: And one of the words you mentioned earlier that I want to come back to is incentives. And that’s something that within marketing, I feel like is a very underrated word. Or it’s under-appreciated. When I think of most of the problems that I encounter, well, maybe through life in general, but certainly in marketing or in business or in sales and relationships, it’s somewhat just misaligned incentives. And I find a lot of my job is just trying to identify where is there misalignment and how do I realign it to be better, and that fixes problems. So I think that’s an idea that I don’t hear talked about often enough, and I’m glad you brought that up.Philip Kotler: Right. We need incentives is potentially a very strong pointing out of what else can be done in successful marketing.The Gap Between Marketing Academia and PracticeAndrew Mitrak: I want to shift also to another thing that I’ve noticed. Over the number of interviews I’ve done, I’ve noticed a really wide gap between marketing academia and marketing practice. Several academics I’ve spoke to don’t seem that up to speed on how marketing is practiced today; they don’t actually seem all that interested in today. And a lot of them, frankly, I think they’re very critical of marketing—the practice or just the existence. And that’s fine, they can have their ideas, but it just seems like their title might be Marketing Professor, but it seems pretty removed—it seems very, very removed actually sometimes—from the marketing that I do in my profession.And also many practitioners aren’t interested at all in academia. The folks that I’ve interviewed who are executives and entrepreneurs and other marketers, they very rarely mention, if at all, any marketing academic work that’s influenced them. And I’m wondering—you’re nodding your head—it seems like you also perceive this as a gap that exists. And so why do you think it persists, and do you think it’s a problem?Philip Kotler: It is a problem. I encountered it at my university, and others have encountered it. The form it took is that our faculty was so—in the department of marketing—so incentivized to produce academic articles if they are to advance to—from assistant to associate to full professor—that they are needing to identify things where they can make an original contribution. And there is little time left to talk and mix with CMOs, Chief Marketing Officers, or other types of marketers who are in the real world.And that explains why if you talk to a lot of CMOs, they won’t mention names that the academics just respect so much. That problem is still going to stay around. We got to maybe have meetings between some academics and some CMOs talking about all these—how to get together better.Andrew Mitrak: Can I ask you a number of lightning round questions? Sort of shorter ones for you.Philip Kotler: Okay.Kotler’s “Mount Rushmore” of Marketing ExecutivesAndrew Mitrak: If you were to build a Mount Rushmore of marketing practitioners, what are some of the names that you feel like must be included in this?Philip Kotler: Oh, okay. And we’re talking about the practicing marketers?Andrew Mitrak: Yeah, so entrepreneurs, executives, marketers themselves.Philip Kotler: I think I would be more very careful answering the one about the best academic people because I don’t want to leave anyone out who is very good. But let’s stay with your question. Professional marketing, we know it when we see it, but there are some people who have done it so well. For example, Procter & Gamble has had many good leaders. One of them is just outstanding, his name was A.G. Lafley. And A.G. Lafley, you know, running a company that has so many brands and knowing all of them and knowing how to get the right response from employees is a big problem.Now, the same thing happened at Unilever, which I consider a very great company. I remember when I was in India, Lever was known everywhere for their work in India. But in any case, it was handled by Paul Polman recently for 10 years. Paul did a remarkable job. People now know Unilever for their work with Dove and all women are beautiful.The two things he did that made him exceptional is he said he doesn’t want to do quarterly reporting of marketing because that means he’s going to be either complimented or criticized if that quarter the results didn’t come through. He wants only annual reporting of marketing results. Very smart move because then he can be a long-range planner and get to do the right things.And then he also said that of the seven groups that are stakeholders in marketing—with of course customers being the first group and employees the second group—he says the last group are the investors. In other words, yeah, think of all your stakeholders, but the one you can pay the least attention to is stakeholders because if you do the others well, the investors will get a good return too. So we love the storytelling about some people like A.G. Lafley and Paul Polman as leaders. And I can name a number of others as well.Andrew Mitrak: I’m glad you mentioned those names because sometimes folks will go straight to Steve Jobs or maybe Walt Disney or David Ogilvy or some other name, but I’m really appreciative that you found names that you don’t see at the top of lists all the time. So that’s great.Besides your own work, is there one book you believe every student of marketing should read?Philip Kotler: I think that for inspiration, not only about marketing but about how to think well about the contributions of business to life itself, Peter Drucker is my favorite. And you could read in fact one of many of his books, but one is called The Essential Drucker. And it’s probably got marketing in it because—in fact, some scholar recently wrote how Drucker was the first marketer or major thinker in marketing.Advice for Early Career MarketersAndrew Mitrak: Is there a piece of advice that you most often give to people who are early in their careers in marketing or considering a career in marketing?Philip Kotler: Yes, I first want to be sure that they love working with people as well as numbers. But I would say that to be successful, they should go toward studying a niche of some kind. You know, it’s just like in literary work, everyone is doing a dissertation on Shakespeare, but we’ve overdone Shakespeare. So find something that has rich possibilities.Now, let me give you an illustration. I have great admiration for Hermann Simon, who is not only professorial but he also is engaged as a CEO. And he said that he noted—he was in Germany—and he noticed that there were a lot of companies that were not well known, but they were small, but they were specialized, and that they were making lots of money. And he says, “I think I’m going to study why should a small company make so much money? What’s the secret?” The secret is they’re making the best of something.And he wrote a whole book about—and his reputation started on that basis—that we turned to him. He knew each of those dozen companies that he was talking about. And so you as a new person in the field of marketing, observe something that triggers your curiosity and get deeper into it because there is so much now—data is so available on so many things. I think you can be a head start person.Andrew Mitrak: I’m going to ask you a follow-up on this one because a thing—I think that’s totally right focusing on a niche. If I was to modify it, ideally you can find a niche that can then expand. That you’re not going to be pigeonholed too much into a niche. Many companies, like Nvidia, which is a very big company today, started with the niche of graphics cards for video games, but then expanded to data centers and AI. Or Amazon started with books but then expanded to everything.If I also kind of even think of my own interest in marketing history, one of the reasons I chose it is that marketing history sounds very niche, right? And not a lot of people cover it. But when you think about it, a lot of things can be considered marketing, and a lot of things can be considered history, and so it has the potential to expand in a lot of interesting directions. And that’s something that I’ve thought about as well. Would you agree or disagree with that idea?Philip Kotler: Yeah, actually not only maybe study a niche, but study how a niche grew into a big firm. Because a lot of niches just die. So what was common to the success stories of niches that grew into bigger businesses? And there’s other ways to make a mark in marketing. Probably someone will one of these days list a set of problems that are still to be solved by marketers and get more people focused on those problems.Is marketing still a good career?Andrew Mitrak: Do you think that marketing today is still a good use of one’s career? If you were starting your career all over again today, would you still choose marketing as your place to work?Philip Kotler: Yes, I find that there’s no such thing as a master of marketing because every marketer is going to continue to be challenged by changes that are occurring in this vast area. So I would choose the same career I had. I mean, I can think far out to entirely different careers. I could have been into literary works and commenting on Shakespeare and all that, or been into music, which I love. But I would say that one good field that is enriching and not tiring often is the marketing field.I would say—now, you know, it’s interesting because when you take the field of law, I spoke to a lot of lawyers who are just tired of being in law, unhappy about having chosen—their father got them to become a lawyer. I’m not hitting lawyers because my wife’s a lawyer too, and she has her feelings about this. But the thing is, the field of marketing keeps changing and keeping you alive to new things all the time.Andrew Mitrak: Yeah. I’m about, depending on how you count it, 10 to 12 years, maybe a little more, into my career in marketing. And something that I love about it is that I can learn about marketing if I keep my eyes open and really stay curious. I can learn marketing lessons almost everywhere or see it in practice in everything. And it’s something where—and also you can kind of talk to a lot of different fields because it’s a discipline of disciplines. My wife’s a therapist and is deeper into psychology, and I can obviously learn a lot from that. And speaking to anybody at the companies I work at—of course sales and product and engineering and finance and operations, everything—marketing has sort of something to learn and something to say and something to contribute. And I just find it very enriching.Philip Kotler: Yeah, good. So you would choose the same field.Andrew Mitrak: Yeah, marketing is great. I’m a fan, and I hope other people can find as much pleasure in the field.Kotler’s Core Philosophy: “Customer is King”Andrew Mitrak: When future generations of students read the name Philip Kotler in their marketing textbooks, is there a single most important idea that you hope they associate with your work?Philip Kotler: I don’t know, but I would suggest they should think “Customer is King.” One possibility. Just to remember the focus of marketing: Customer is King. And I would say a belief in the fact that marketing is about trying to improve the life experience of people by exposing them to new possibilities, new wonder goods and services, and all about increasing their well-being as people and their happiness as people. That much of my marketing is about trying to make a happier and a healthier life for people as a purpose of marketing.Andrew Mitrak: I love the sentiment of those ideas. I think that in my own role when I market, I often think like I’m trying to advocate for the customer across the board. That different departments have different goals, and back to incentives, those goals may not be aligned with what’s in the best interest of the customer. Sales might have some near-term target they’re trying to hit and want to do tactics that might come off as aggressive and off-putting to potential customers. And marketing, of course, you need to support sales, but you need to also support the customer, and you need to sort of advocate for what’s in the best interest of the customer as well. So I think that’s a really actionable piece of feedback.Philip Kotler: You remember that some companies insist on putting an empty chair during their deliberations. And who’s in that chair? The customer. Just a reminder.Andrew Mitrak: Yeah, we need to figure out a way to do that on virtual meetings too, of having an empty little tile on your Zoom or your Google Meet for the customer.Andrew Mitrak: Do you have any advice for me as I continue my exploration into marketing history?Philip Kotler: Well, I’ve watched all of your 40 films, and I learned a great number of things. We might ask you to identify some of the people who are CMOs, Chief Marketing Officers, who do have an academic background too. You might talk about how their practices have been very informed about the findings of people because maybe that message being watched by other CMOs might help bring them into more consciousness of what to look for in academic work that might be of interest to them.The marketing that is done in different—quite different—countries would be very interesting. Especially if you find a country which says they do a very different type of marketing that is not mentioned. For example, the old idea is if I’m going to buy a rug –a carpet– in the United States, let’s say, there’s a price. If it’s in a department store, you don’t generally negotiate. But if it’s a carpet in Iran or somewhere else, it’s a game. You’re playing a game before you ever get to a price. So maybe a lecture or two on what is different about marketing in your country from what the textbooks say marketing is about. What is your marketing mix of tools?Andrew Mitrak: That’s right. I once bought a rug in Istanbul, and the process that I went through buying that was so different. It was nothing you’d ever read in any marketing textbook. I went in, the person served me tea and snacks, and I sat and they brought them out. And I paid way too much for this rug, which is now stored away in my basement somewhere. But I felt so obliged just based on the experience. It was almost like I was paying for an hour of entertainment or paying for an hour of the tea or meal or like the way you’d overpay for tea at some fine dining hall or something. And so I don’t necessarily feel ripped off in a way, even though the price for the rug that I paid makes no economic sense at all, but the price I paid for the experience of it makes a lot more sense. And I think there’s something—and also there were still things like haggling and there was friction in the process—and it’s something that you just couldn’t—that doesn’t appear in any Western marketing sources. So I’d be really curious to dive into that.Philip Kotler: There’s another thing that I noticed is they’ll show you some rugs and you say, “No, I can’t find anything interesting to me.” They’ll say, “Well, wait, we have another room here. We’ll show you some rugs.” And you get excited, but they’re more expensive. But still you don’t move. And then they say, “Would you really like to see the real rugs? I mean, just to show you what they are.” And they take you to a third room. And I’ve seen that technique work not only with rugs but that they take you—you really feel special to have seen the best.Andrew Mitrak: Yeah, there’s a special episode coming just on rug marketing. [Laughs]A Heartfelt “Thank You” to Philip KotlerAndrew Mitrak: Phil, you mentioned that you watch the show, and that just means the world to me. If I was just doing this for a viewer of one, I would do it. And also that you were the first person to appear, you shared a kind note about the show with your network, and you also introduced me to some really amazing guests as well early on.I just want to sincerely thank you so much for your support. You don’t need to do that, you don’t need to be as kind as you are. So I’m grateful to have met you through this project and to have your support throughout it and your viewership of it. I’ve learned so much from you. Thank you for everything.Philip Kotler: Thank you so much.Andrew Mitrak: As we wrap up, are there any recent publications or upcoming publications that you’d like to promote for listeners?Philip Kotler: Yes, we’re putting out books on transformative marketing, which is much more sophisticated. And I’m working with V. Kumar, who’s one of our great researchers in marketing, on what we call transformative marketing. So we will be coming out with material on that. Thank you for asking.Andrew Mitrak: Of course, yeah. I’m glad you’re continuing to collaborate with Professor Kumar. VK was a very fun interview to do and such a great thinker. So Dr. Philip Kotler, thanks again so much for your time. I really enjoyed this interview.Philip Kotler: Andrew, thanks to you for what you’re doing. We’re all benefiting from it. Keep it up. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 43 If you studied marketing in school, you likely carried Kevin Lane Keller’s work in your backpack.He co-authored Marketing Management, the all-time best-selling marketing textbook, alongside Philip Kotler. And with Strategic Brand Management, Kevin he defined how a generation of marketers understands brand equity. As a Professor at Dartmouth’s Tuck School of Business, he has spent decades bridging the gap between rigorous academic theory and elite corporate practice. He’s consulted for giants like Disney, Nike, and Ford, but perhaps his most interesting “field research” came from working with the Australian rock band, The Church.This conversation is a rare treat for our listeners. Despite his massive impact and the high regard of his peers, Kevin keeps a relatively low profile and seldom sits for deep-dive, long-form interviews. This episode offers unique insights from one of the primary minds to shape modern marketing.Listen to the podcast: Spotify / Apple PodcastsIn our conversation, we discuss:* The P&G Playbook: How he helped transform Pampers by connecting functional technology to emotional “brand mantras.”* The Art & Science: Why great branding requires both a philosophical “philosophy of consumption” and disciplined data tools.* Managing The Church: What he learned about marketing, fan engagement, and “continuity vs. change” while managing a legendary Australian rock band.Now, here is my conversation with Kevin Lane Keller.Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Collaborating with Kotler on “Marketing Management”Andrew Mitrak: Kevin Lane Keller, welcome to A History of Marketing.Kevin Lane Keller: Thanks for having me.Andrew Mitrak: I’m so excited for this conversation because like a lot of people, Marketing Management was my textbook in grad school, and your name was on the cover there right alongside Philip Kotler’s. So, how did you get involved with becoming Philip Kotler’s co-author?Kevin Lane Keller: It’s interesting. I actually used the textbook too when I got my MBA. I had the third edition, so it’s going back a ways. I think it was the fall of 1978. I have enormous respect and he is a legend, but was a legend back then when I was taking the course. But I had the chance to publish my own textbook on Strategic Brand Management. I had done that and that was really my area of interest, but I’ve always been a marketer at heart in a very broad sense. So the publisher was looking for someone to be a co-author, and because of my experience and some of the things I was interested in, it seemed like a nice fit. So I actually did the 11th edition. Phil and I worked together just to sort of try it out, kind of both sides, and it went well. I enjoyed it a lot. And so I think it made sense and starting with the 12th edition I was formally the co-author and have been a co-author ever since.Andrew Mitrak: When you write a book like that, that is so widely read and is sort of the Bible for a lot of folks who are just getting into marketing—if a professional marketer reads one book, that’s often the one that they reference—is there a lot of pressure when you write a book like that to make sure it’s accurate and up to date? Do the stakes seem very high for it?Kevin Lane Keller: It’s daunting. When you think about it, it’s an impossible task because you’re trying to capture all the richness and all the detail and manage to distill that down and package it and write it and source it and reference it and everything, and make it engaging and interesting. So it is difficult. I enjoyed doing that. I think the challenge of that. And you break it down. It’s a little bit like building a house. You think, “Oh my God, building a house.” Well, you’re doing rooms and within rooms there are certain things you have to do. So you really break it down. It is very modular in how to approach it. But the big challenge is really keeping it up to date and making sure that it captures what modern marketing is and, more importantly, maybe what it should be.The Challenge of Keeping Marketing Texts RelevantAndrew Mitrak: Yeah, I have a question around keeping it up to date because there are probably certain core principles that you want to keep tried and true. Things like segmentation, targeting, and positioning, I think, were in my version of the book. I’m sure the Four Ps were referenced in it and things like that. But then there are a lot of things that change. So how do you think about what changes versus what doesn’t change?Kevin Lane Keller: I think there is always continuity and change in marketing in general. I’ve worked with a lot of brands, I’ve worked with a lot of legacy brands, really strong brands, and that’s always the challenge: how do I move forward, but how do I move forward in the right direction and in the right way, at the right pace and all of that. It’s no different with a textbook. You are thinking about what are the new ideas and the new concepts. And sometimes new frameworks and new ways to organize and think about things. But yet at the same time, there are those core principles and segmentation and targeting in some sense, and positioning in some sense. It may change some how you think about those, but that notion and those concepts themselves at least at a high level are ones that are retained. But a lot of things change and especially with digital and with AI, we’re really trying to make sure the book reflects that.Andrew Mitrak: Yeah, I was thinking just about that example exactly. Like I’m sure SEO is covered in a book, right? It’s a very big thing. But then even the language around it is changing. Sometimes it’s called Answer Engine Optimization with an AI. Sometimes called Generative Engine Optimization, GEO or AEO with AIs. And then it’s sort of just you might just call it LLMs. And the language itself, especially at this moment when we’re recording here in November 2025, is changing so much where if you committed to something in a book very quickly it could be outdated. If that version is used for years, it could just wind up being a thing where you’re like, “Ah, kind of missed the boat on that one.” So how do you sort of think about staying relevant without becoming outdated too much?Kevin Lane Keller: Well, I think you think about updating more frequently. I think that is probably one of the answers because there is nothing you can do. You can only go and be as current as you can till literally the moment of publication. So you’re always having the final proofs and you’re looking at them and you’re literally making changes and edits to try to make sure everything is as up to date as possible at that point in time. But at that point in time, then you move on in some sense. It is a little more dynamic with publishing. You have more opportunities to do updates and bring that in. So that’s the advantage of the e-text and the more digital versions versus the hard copy, the kind of classic textbook version in that sense. But you are always trying to. And look, the AI, that is an area that is just exploding so much and changing so much that it’s going to be a moving target for a while.Andrew Mitrak: Oh yeah, keeps it interesting.Kevin Lane Keller: Yeah, it does. Yes.Collaborating with a Marketing LegendAndrew Mitrak: So what was it like collaborating with Phil Kotler?Kevin Lane Keller: I had known him some through the years. He had actually tried to recruit me as a PhD student to Kellogg at one point in time, wrote a very nice letter when I was just first getting my PhD and through the years. He’s one of these guys. I joked when they had at one point an event to kind of honor Phil at Kellogg at Northwestern, and I joked that there had to be like three Philip Kotlers and we only actually had one of them in the room and the others were busy doing all the other things that Phil Kotler does because he’s just remarkably productive. I mean, unbelievably so. And the way he gets things done. But he’s the nicest guy. His ability, his radar to pick up on what matters. His ability to synthesize that, clarify it, put it into context. It’s just amazing. So for me, I’ve learned so much, which is great. But I’ve also enjoyed it so much. So he’s made it fun. So it’s just been great. And he’s still heavily involved with the book. So he definitely is still providing a lot of input, a lot of feedback. So he’s definitely part of the book still.Andrew Mitrak: That’s amazing. Even into his mid-nineties. I think because he was the first interview on this podcast and he had a similar experience where he would just respond to emails so quickly and kind of be on top of things so fast. It’s amazing that he’s able to do it all.Kevin Lane Keller: Well, there are three Philip Kotlers. I’m convinced. But maybe if it’s just one, it’s even more extraordinary. I’d be amazed even with three.Andrew Mitrak: When you first started collaborating, him having this Father of Modern Marketing type legendary status in the field, were there ever any disagreements you had with him? Or did you feel like you could push back or evolve things? Or did you feel like because of that, his status, you had to be deferential to him and also he was sort of the original author? What was that dynamic like?Kevin Lane Keller: That’s a good question because that’s a big issue. A lot of times it’s just people, you know, we all have that issue. We’re kind of territorial or we just sort of kind of want to stick with what we’ve done and for whatever reason. And he’s been always really flexible and open-minded about that. So that has just not been an issue, which has been great. I think there are certain topics he’s reluctant to give up in the book that sometimes, maybe they’re not as important now as they once were. They’re still important, and I get the reasoning, but that’s the one area is just sort of in that space where it’s just always harder. It’s easier to add than subtract. That’s always the hardest thing is subtracting. And you need to do both. That’s the challenge. Is what do you not include when you’ve included it before? And maybe there’s a reason to still include it, but if you do that for too much, then the book gets too long.From Ad Retrieval Cues to Brand EquityAndrew Mitrak: Yeah, that makes sense. So along with marketing management, you’re best known probably for your contributions to brand. And one of your early papers in 1987 I think, was “Memory Factors in Advertising: The Effect of Advertising Retrieval Cues on Brand Evaluations.” And so you were kind of early in working on brand and sort of connecting advertising, memory, around brand. So what led you to researching this area of advertising, memory and brand?Kevin Lane Keller: That paper was my thesis paper. And that came out of my co-chair was Jim Bettman from Duke University. He wrote a paper on memory factors in advertising that had an example about Life Cereal and Mikey. It was a very popular ad, but people could not remember the name of the cereal so they weren’t getting the impact from that because the ad was working but not branding well. People liked it but didn’t connect. So they put a little picture of Mikey on the front of the package, framed it with a television set, and said “Try the cereal Mikey likes.” So I called those “ad retrieval cues.” And so I studied those. It made a lot of sense to me because it’s trying to make those connections that memory just aren’t strong enough in memory. You’re helping people out in retrieval.But back door that got me into branding because the question was, “What did Life Cereal stand for without the cue and how did it tap into or remind people of the ads?” So I did a whole lot about memory and advertising and everything. But that’s how I got into branding. And then my most famous paper was in 1993, which was a paper I wrote about Customer-Based Brand Equity. And it’s a paper, 30,000 or some whatever Google Scholar cites. And it’s taught in seminars to this day. And I’ve written a couple follow-ups on that. I’ve written a ton in branding. But even on that specific paper, I’ve revisited it in some instances. But that’s really kind of... it all came down to understanding how brands work for people and especially in their memory and their knowledge and what they learn and how advertising affected that, but then how everything... how just brand in general operated.The Explosion of Brand Equity in the 1990sAndrew Mitrak: So it seems like in the late eighties to early nineties, brand was sort of the right topic at the right time. This is just as the idea of brand equity was really gaining traction. Can you talk about that transition that was happening with brand in the era? What was it before and then what was changing at this time?Kevin Lane Keller: Yeah, I mean it was one of those things where it really came out of what was happening in the eighties—all the mergers, acquisitions. People were having to value, so the intangible value of brands. So people were starting to recognize that. Brands obviously mattered to the CPG, the packaged goods companies, the more traditional consumer products. But all of a sudden a lot of different people, services and different organizations were all starting to realize in different forms that their brands really mattered. And so it was an exciting time because all of a sudden people were thinking differently about their marketing and literally what they did. And so to be sort of at the front end of that, which I was with some others, and to be able to talk about it and work with companies and help them understand that, you know, was just a really exciting thing to do. So it really, really took off. And when I published my book in even ‘98, there was just so much interest. And so the book sold a lot in trade even though it was a textbook because people at that time, there weren’t that many branding books.Andrew Mitrak: If you look at a Google Ngram of the mentions of the word brand, it really explodes in the early nineties or so. And that brand equity just led it to be a more elevated word within marketing and business in general. Did you see that wave coming and place yourself there because it was the most interesting topic area? Or did you feel like you were just interested in it independently and it happened to coincide with this? Were you thinking like, “Oh this is a big wave that’s coming, I want to be at the forefront of that”?Kevin Lane Keller: A little bit of both. I was fascinated by the topic. I thought it was really interesting and important. And I certainly recognized that others were feeling the same way. Interestingly, and eventually it, where we are today, it’s like part of everyday vernacular. I mean everyone talks about brands now. That was not the case 40 years ago or even 30 years ago or 20. So it took a while for that diffusion. And there are still some industries that are a little still maybe not embracing brand as much as you might think. But it was a realization that this is something that’s really important. It hasn’t been studied much. It needs academic study. It needs rigorous research.Comparing Brand Equity ModelsAndrew Mitrak: I interviewed David Aaker twice for this podcast actually, and we talked a lot about this era of brand equity and his work in this area. Did you work with him at all?Kevin Lane Keller: So Dave, I met Dave in 1985 actually when I was interviewing for my first job. And he was at Berkeley and on the faculty there. And that’s where I joined the faculty. And at the time Dave had been doing a lot... he was known more as a quantitative sort of marketing person, but he had been starting to move into strategy. I was somebody who had been studying advertising and, as I was saying, in consumer psychology and memory, moving into branding. And so it was a natural thing for us to work together. So he, some of his first papers, some of my first papers in branding were together. And they were on brand extensions. So which was at the time a big area. There were a lot of brand extensions that were happening and sort of but there hadn’t been much research. So we were developing models and running experiments and things like that. So we worked together for a good almost five years or so. And then we sort of went slightly different directions because he started working on trade books and going to a more practitioner audience. And I was at Stanford, you know, in the process of getting tenure and publishing research and writing a textbook. So I went a little bit more the academic route, although, you know, there’s obviously a lot of overlap between what we did.Andrew Mitrak: That explains sort of your different models a little bit because I don’t want to frame it as competitive per se, but it seems like you’re both people in the field of brand who are introducing your Customer-Based Brand Equity model. He has his brand equity models. And I could see if I’m a marketer at the time wanting to learn about brand equity, I’m like, “Huh, which model do I use?” Was there ever sort of a competition for mind share among both of you in your models? Or what was that dynamic like?Kevin Lane Keller: Well, I think they’re complementary in some ways. I mean Dave’s is much more of a strategy... it’s a little bit more asset-based in some ways. And mine is much more rooted in consumer and consumer behavior, consumer psychology and all of that, and to develop certain strategic principles that come out of that. But a lot of our recommendations are the same. Even though because some of his assets are ones that are consumer behavior related and my consumer behavior, I make sure I drive that into more outcomes and other things that capture sort of more financial and asset sort of based things. So there is overlap in that sense. So there really wasn’t... I see them as complementary in a lot of different ways.Constructing the Brand Resonance PyramidAndrew Mitrak: Totally, absolutely. Can you walk through... as you created this Customer-Based Brand Equity model in 1993, what is the approach to building a model? I’ve never built a model before. And it seems like a model you have to be sort of broad enough to encompass a lot of things and a lot of different industries, but also specific enough that it’s really meaningful and actionable and all of that. And of course grounded in reality and actual behavior. So what is the approach... where do you start with a model?Kevin Lane Keller: You know, it’s funny. The model that I’m probably most well known for, there’s the Customer-Based Brand Equity sort of definition and concept. And then the actual framework is the Brand Resonance framework. And that’s one where it is very much the sort of looking at how to build a brand and thinking about the stages people go through in their development. But I think that that’s one where I really, I literally sat in the back of a room and tried to lay out sort of the questions that people would ask about a brand and sort of just really tried to be as comprehensive as I could be, but then as concise and cohesive I could be as part of that. And so I think that was really the key was to do that.Andrew Mitrak: What I like about this is that this pyramid has very plain spoken language. It’s: Who are you (brand identity), What are you (brand meaning), What about you and what do I feel about you, and that’s brand response, right? And then What about you and what kind of association and how much of a connection would I like to have with you, and that’s brand relationships. And sort of it’s very a natural flow of like, “Hey, I need to understand this one to kind of understand the next one.” And was building it in sort of a plain spoken way where it’s kind of simple and logical, was that sort of part of your idea behind... or was that part of your approach to making it?Kevin Lane Keller: Definitely. And I mean the goal with that, like I said, was to be comprehensive but also to be as clear and logical. And I was trying to capture everything that I knew about marketing and consumer behavior and how brands are built. You know, so there’s an awareness and image component which are fundamental to brand associations, fundamental to any model, including Dave Aaker’s model, my model, etc. So had that and then the judgments and feelings, the head and the heart. And then resonance where you actually the customer feels in sync with the brand. They really feel a connection. So deep, you know, sort of intense active loyalty relationships. But each level of that pyramid had a wrinkle that like salience at the bottom was about breadth and depth of awareness. It’s like how easily is my brand thought of and how often? Is it in all the right times and places and ways? And points of parity, points of difference the next level up, which is my positioning model that I developed with Brian Sternthal and Alice Tybout at Northwestern. A different way of thinking about how those that brand image level. So I tried to make sure it was comprehensive, covered the key concepts, but also was original in certain ways that I thought were important to kind of bring in.Andrew Mitrak: That’s right. Yeah. It seems like a model also has to be original enough to merit a new model, right? While also not being so radical that it’s you have to throw everything else out, right? You have to kind of build on what’s already there. So kind of meet people where they are with their existing marketing activities and but also offer something new that’s actionable for them.Kevin Lane Keller: That’s right.Applied Branding: Transforming Procter & GambleAndrew Mitrak: Let’s talk about putting this into practice because you’ve consulted with a lot of really amazing brands: Accenture, Disney, Ford, Intel, Levi, Nike, many more, the list goes on. And are there any case studies from your career that you’re able to share about where you took this model and helped a brand implement it and had sort of real world outcomes?Kevin Lane Keller: So the ones, I mean like I said, I’ve had the chance to work with an awful lot of the top companies and multiple engagements, you know, which has been great. And the one relationship I had that I think was one of the more productive was with P&G, so Procter & Gamble. And it was in the kind of the 2000s and Jim Stengel was their CMO. Brilliant guy, wonderful guy and very sharp. But he really wanted to upgrade the marketing there. And so it was a nice relationship because I worked with some of their thought leaders in improving their toolkits when it came to positioning. This resonance model I described became their tracking tool. It was called “Equity Scan” and they used that to measure the strength of their brands and their development of their brands around the world. So they operationalized this in a survey form. I helped them with brand architecture, like how to think of whether it was Crest or whatever brand where you’ve got this complex portfolio and sub-brands and extensions and how to think about architecture for growth. And it was just across the board. It was just a lot of fun. It really made I think a difference for them because it really helped to get them thinking in a rigorous, relevant way in many ways they’d done before, but it was as we were saying before, kind of bringing in some original thinking to put on top of that layer.Andrew Mitrak: Procter & Gamble, this amazing, iconic brand, the originators of a lot of the original thinking about branding back in the 1930s, really long legacy of brand, but they have this big portfolio of brands that they offer. So were there any specific examples of where you applied your model or worked with them within their portfolio of brands?Kevin Lane Keller: I had a chance to work with a couple different brands, but the one that was probably my favorite was Pampers. It was a really successful brand and they had a great team, so they were obviously doing really, really well. But they sort of embraced some of the thinking that’s reflected in the positioning model and the resonance model: the duality of a brand and especially the emotional and functional components and how to connect them. So coming up with a brand mantra, “caring for baby’s development,” which really took the functional benefit of dryness and absorbency and the fact that the baby sleeps better and feels better, but then learns and plays and develops. And so really made that connection functionally and emotionally, which is exactly what the model that I have talked about. And so we workshopped that some and got to a really good spot and business really took off. And all credit to the team because they had built this thinking and structure in place that allowed it to kind of go that next level. But it was just a great, for me, a personal experience where applying some of these models and working with a team and just seeing the outcomes in such a demonstrative way for their biggest and most successful brand to take that to the next level was quite a thrill.Andrew Mitrak: I love it. I’m kind of smiling here because the brands that you have referenced, I have three daughters and I have one who’s six months old, one who’s three years old, and one who’s five years old. And the five-year-old is obsessed with Life Cereal, and you were talking about Life Cereal. That’s her favorite breakfast by far. And then yeah, we have Pampers in our house for the six-month-old. And it is, you’re right, it is actually amazing technology behind diapers as well, how they work. But also that I don’t necessarily buy diapers because of the technology per se. I look at price and a lot of things, but also Pampers, you just sort of trust it. If you see that on a shelf versus sort of a store brand or something, you’re like, “Oh gosh, is that going to cause an itch? Is that going to be worth it?” And it’s like, let’s just stick with what we know.Kevin Lane Keller: Right. Yeah, no, exactly. Exactly. And it’s a great functional benefit, but there’s an emotional payoff that you always want to make sure people are aware of because it matters so much to their lives.Bridging Academia and Practice via the Marketing Science InstituteAndrew Mitrak: So you also worked with the Marketing Science Institute for years. Bill Moult was a previous guest on this podcast as well, and he sung your praises as far as your contributions to the Marketing Science Institute. So can you talk about MSI and where an institution like that sort of fits into your work on brand?Kevin Lane Keller: So they were really instrumental in so many ways. So I won the doctoral dissertation proposal competition in 1984, and I was just starting to work on my thesis and I wrote something up, submitted it, and I was one of the first two co-winners. And that was really important for me because I still wasn’t sure what direction to go. I had a math-economics background. So they helped point me in the right direction—as it turns out, the right direction. I got great validation. And then all the branding work, they were very supportive and gave that gave me a platform to work with others, to share my ideas. So they were a real catalyst for that for me and for the field of marketing. And then I got more involved after that. I became a trustee, eventually an Executive Director on the board for a long time. And it’s just a great concept. The organization is a great concept because it’s that bridge between academia and industry practice and bringing together thoughtful practitioners and practical-minded academics to talk about the most important problems and the most interesting and challenging decisions. So it’s just a great concept and great organization.Andrew Mitrak: Yeah, for sure. It seems like we need more of that connection between academia and practitioner because it is a gap I’ve noticed on this podcast even when speaking to both people on the academic side and then folks on the practitioner side. There is a gap there, so we need folks to work on closing it.The Art and Science of BrandingAndrew Mitrak: I want to ask about the phrase “Marketing Science” and how it relates to brand. Because I think, speaking broadly, when I’m at a company, the brand folks are a little more of the art folks. There’s a little more of a general sense that brand is something that’s intangible, a little more difficult to measure. You think of brand and creative as sort of going hand in hand. And then what I think of like the data scientists I work with, often they’re measuring individual channels or they’re doing ROAS, or they’re doing ROI of specific campaigns. And that’s a little more the science element. I guess, do you kind of agree that that characterization sort of broadly exists? Or do you have any thoughts about that?Kevin Lane Keller: Well, I think there is some truth to that. One, it doesn’t have to be that way, and two, it shouldn’t be that way. And so I actually think it’s an art and a science. I think marketing, branding, anything. And I think the more you bring those together and celebrate those, appreciate that, and either do it in a holistic way across an organization, but even within individuals and those who are able to bridge that. But I think it’s really important. And I worry on the branding side, I don’t want it to be seen and licensed to be artistic and not feel that you need to have the rigor and discipline and other things to really make sure that you’re thinking things through in the right way, even while being creative, that you’re still mindful of other kinds of things.So I always talk about having, when I talk about art and science, part of the art is having a philosophy of how branding works. So there’s creativity, but it’s like, how does it work? Because you’ve got to somehow, no matter what you do. And so having that philosophy. So I tell my students that’s the key to me for the art and science is: what is your philosophy? What assumptions do you make about consumers, about competition, about brands? How they work, how they don’t work, all that. And you build those over time. I’ve got certain philosophies. You grow brands through little steps. I have certain tenants that I have just learned through experience and research and etc. So that combined with the tools that you can apply, like the resonance model and whatever that might be, but you need the blend of those because just having the tools is not enough. Just having the philosophy is not enough. You need to have the two of them.Andrew Mitrak: I’m going to take the bait. What are some of the tenants that you’ve learned? Or what are sort of the core things that you’ve learned personally that just seem to kind of apply across the board?Kevin Lane Keller: I mean, just at the heart of a great brand is a great product. I mean, that’s one of the ones I fundamentally believe in. But not everyone does. I mean, there are people who really don’t think it matters as much and what have you. And so, that said, every brand contact matters, you know, because it all affects knowledge. It affects what people think and feel and learn. So you sort of develop these tenants of that kind. And balancing continuity and change, and innovation and relevance. Making sure you have innovation so you’re always moving forward at the right pace and in the right direction and in the right way, things we talked about earlier. So you kind of develop these and then they inform how you apply your tools.Andrew Mitrak: Yeah, for sure. No, I think that’s a totally true tenant and it’s something I’ve actually thought about in marketing in general is that who are the greatest marketers of all time? They’re the people who work on the best products. If you kind of think of the Steve Jobs of the world or the Disney or the folks who have kind of changed marketing itself, there’s always a really great product behind it. And if there’s a great marketer and you can have a brilliant campaign, but if the product’s not there, you’re kind of going to forget about it and it’s not really going to have the mark it has. So part of it is having taste and choosing the right products to market as a marketer.Kevin Lane Keller: Well, but also product is part of marketing. And that’s really important. When you think of the 4 Ps, everything about that. So all the marketing should inform and work with R&D and everyone else to design the product to satisfy customer needs and wants in better ways and all that. So that’s why I mean it’s just making sure you don’t take the product as a given and not constantly thinking, especially now where you’ve got these platform brands. Brands and products are platforms. And so the product is one part of that. So you got to really think about how you’re enriching it in different ways with services and information and whatever else you can experience, other things you can do.Rock and Roll Marketing: Kevin Lane Keller & “The Church”Andrew Mitrak: Changing gears here, you manage a band called The Church. They’re one of the biggest bands that’s ever come out of Australia. And it seems like such a surprising thing. I’m just wondering, how did you come to manage The Church?Kevin Lane Keller: Well, “manage” is a little maybe overstated. I have to be careful with that. I’ve definitely helped manage them, so at different times. Less so now for sure. So I’ve been executive producer for them for a number of albums. And what happened, it was just a fortunate coincidence in 1998 where I happened to see them in San Francisco, in Melbourne, Australia, and then over in London. And it was just, as luck would have it, and some other things. And I kind of realized as great as the band was, the music business is incredibly unforgiving and they just needed help of various kinds. And some of it was financial. So I was a little bit of a patron of the arts, if you will. And this is before all the different ways now exist online where bands can do different things to try to support themselves. That didn’t exist back then. So really kind of stepped up and then also got involved in trying to help them financially and beyond financially—business-wise, career-wise, etc. Incredible band, very talented. I’ve learned a lot about the music business in the process. And it is a tough business. There’s just no question about that. A very, very challenging business. But it’s been hugely enjoyable and it was just pure luck that I kind of fell into this and then played this, took this role at that time.Andrew Mitrak: Did you have any background in the music industry? Or was this kind of bringing some of your brand and marketing consulting to the table? What was it that sort of set you up to be able to help them out?Kevin Lane Keller: Well, my background was hundreds and hundreds of albums and records and CDs and cassettes and everything. And I was just a huge rock and roll fan. I was, it was 1967, “Summer of Love,” I was 11 years old listening to a transistor radio. So I just always loved music and I loved the 80s music. I loved a lot of different decades and genres. But I especially loved The Church. I just thought they were an incredible band and were always special to me. And I always thought that they were a band I did not want to see go away for any reason. And so that’s why I stepped in. But I followed it some. If you’re interested in marketing, interested in business, interested in music, you can’t help but be thinking about—I’m the same way with movies—just all aspects of the marketing and business side of that. So I certainly had that armchair view, but I never actually worked with anybody before.Andrew Mitrak: You mentioned movies. There was a, I think when I first heard them, there’s a movie called Donnie Darko that came out where the soundtrack was very popular. It had 80s songs and I think it had “Under the Milky Way“ on it. And I think that’s probably the first time I ever heard The Church. Were you involved with any of their placement on movie soundtracks or any of that?Kevin Lane Keller: Not as much as I would have liked because that was something we always strived for. And it happened some, but we just weren’t, we didn’t have our act together enough. We weren’t organized enough at that time. It was a pretty grassroots effort. And so we were relying a lot on just the sheer talent and love and respect that people had for the band, and the brand I guess, if you will, to sort of move it into different arenas, which happened. There was one ad, it was a famous ad for Volkswagen “Drivers Wanted” going back in the day where it was literally supposed to have “Under the Milky Way,” which is one of their famous, most famous songs from their most famous album, Starfish. And at the last minute, somebody subbed in, and the person loved The Church, but subbed in a Nick Drake, who is an English folk singer, a song, I think it was “Pink Moon“ or whatever it was, into the ad instead. And it was just very disappointing because it would have been, it had got a lot of exposure, a lot of attention. It would have been a nice little nudge if you will. But that’s the way it works in this business.Andrew Mitrak: It’s a missed opportunity. But at least they were replaced with Nick Drake, who’s pretty great and not some just kind of schlocky song.Kevin Lane Keller: It was hard to complain for that very reason, but it still stung a little bit.Marketing Lessons from the Music IndustryAndrew Mitrak: So did your expertise in marketing and brand, what did you bring from that to a rock band? I am sure a lot of things were brought in. Were there any specific things or surprising things that you were able to apply to working with The Church?Kevin Lane Keller: It’s funny. It’s one of the things I see with other, even with companies. There are times they make things harder than they need to be. It’s always hard enough as it is, so the last thing you want to do is make it harder than it needs to be. And with bands, it’s a little bit of, just as an example, your setlist when you tour. Touring is important. But like what songs do you play? And you got to, there are a set of songs people want to hear. You may feel like you played them enough. You may feel like you’re kind of tired of them. Doesn’t matter. And it’s funny, the band went through a period, The Church, where they did kind of have that hit a wall with some of those songs. Didn’t really want to play them. But they’ve gotten past that now and I’m so happy for them. They really appreciate how much that means to people and they put their heart and soul into it and they put on these great shows with a balance of the old and the new. It’s back to what we talked about: that continuity/change. But you got to make sure you balance that. And that’s again a lesson I see for a lot of companies. Don’t make it harder. Don’t make it more difficult, you know.Andrew Mitrak: They want to rebrand, have a new slogan, do some new messaging where it’s like, well, you’re seeing it all the time because you’re a marketer at the company, but your audience, they don’t see it as frequently as you do. So maybe stick with the campaign that works a little longer.Kevin Lane Keller: Yeah, or just when you’re thinking of decisions, you’re just talking yourself into all these different things where, look, there’s just a lot of times just focus on what matters in different ways. And I think to be honest, that’s where the tools and the frameworks, because a lot of times the compliment I love from companies is when they say that you make it so simple. “You do it, it’s been great working with you, you just made it so simple for us.” And I’m always thinking, well, sometimes you’re making it so hard. I’m just providing structure and clarity and just trying to get them to see and then be able to make the decisions in the right way.Andrew Mitrak: So did managing The Church or working with The Church teach you anything about marketing? Or were there any things you learned that you were able to kind of apply the other direction towards your work?Kevin Lane Keller: I mean the one thing, music has always had a community and a fan base and everything. And obviously brands have embraced that in a much bigger way. But this was something that music was way ahead of in some sense. And connecting with them and letting them be the advocates, if you will, which has been so helpful for the band. So they benefit from the again, the love and support of their most devoted fans. So I think that’s definitely a lesson and just in general about how finding ways, it’s about engagement and the right ways to develop that and cultivate that. But recognize that not everybody’s engaged and so you’ve got a more casual fan base and they’re really important too. So that’s kind of one of the real lessons I got early on that was really helpful was just learning about that.What Remains Constant in MarketingAndrew Mitrak: Wrapping up, we were talking at the start about Marketing Management, all the updates that need to happen and AI and all these things that are changing in tech and in digital and in marketing. But I’m also curious, what are the things that aren’t changing? Are there any things that have stayed consistent and will continue to stay consistent for decades in the future?Kevin Lane Keller: Yeah, I mean we talked before about segmentation, targeting, positioning. I think just the general strategy notion. I think the ways you execute and implement that obviously change. I think Integrated Communications. I think Omnichannel, integrated channels. The mixing and matching of how you go to market, both in what you say and where you sell kind of, or how you sell. It’s at that high level, but then there’s so many unique things that are changing underneath that about how you actually execute that, how you implement that, even how you plan a lot of that. So I think that’s where you see so many differences I think. But I think there’s some of those kinds of high level areas of marketing and tasks that have to be done that I think that are still sort of relevant today.Recommended ResourcesAndrew Mitrak: Kevin Lane Keller, I’ve really enjoyed this conversation. For listeners who’ve also enjoyed it and they want to dive into more of your work, where would you point them?Kevin Lane Keller: So I’ve got lots of articles and a lot of research that I published, but I’d have to go with my textbook. And I wrote it as sort of being and wanted it to be seen as sort of the Bible of branding, this authority. And it’s now co-authored with Vanitha Swaminathan who helped me out on the book. But I think that’s the one. It’s written to have the rigor and the relevance, to be comprehensive, lots of examples. It’s not too dense or too academic, I don’t think, in the treatment of the subject. And so I think that’s one. It is daunting because of length and all that kind of goes with that. But that would be the place I’d go for those who are interested in really diving into again, those more thoughtful practitioners who want to kind of get into different frameworks, different ideas, different concepts, different research advances, whatever. That’s captured in the book. But I think it’s packaged in as user-friendly way as I can. So that’s probably where I’d send people.Andrew Mitrak: And this is your textbook, Strategic Brand Management, which is now in its fifth edition?Kevin Lane Keller: That’s right. That’s right. And again, for those interested in marketing management more generally, just want to know the fundamentals, I’d go back to the Kotler book that has been around for decades and still I think is a really useful resource for what’s going on in marketing and how to think about different topics and providing structure and insight and all of those kinds of things.Andrew Mitrak: Yeah, for sure. If you’re listening to this podcast and you made it this far, pick up a copy of Marketing Management as well and just keep it as a reference because it’s just, it’s worth just having just because even if you’re already familiar, it’s something that a lot of other people will have learned. So it’s worth just having as a reference guide. So Marketing Management and Strategic Brand Management. And Kevin Lane Keller, thanks so much for your time. I really enjoyed this conversation. I had a lot of fun. And so yeah, thank you.Kevin Lane Keller: No, thank you. I enjoyed the opportunity to talk with you and good luck. I think it’s a great series that you have and looking forward to seeing who else you have on next. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Bonus Episode Earlier this year, I spoke with students at Syracuse University taking an “Essentials of Marketing” course. I shared stories from my non-traditional career in marketing that’s spanned filmmaking, virtual reality, robotics, trucking, and technology. I framed these stories into “five rules of thumb” for early career marketers.I’m releasing this as a “bonus” episode. I prefer to let the history and my guests be the star of the show, but regular listeners might be entertained by this personal detour and find some value in these takeaways.I want to give a special thank you to Xiaoying Feng for the invitation to her class and for being such a wonderful supporter of the show.Now, here’s the presentation.Listen to the podcast: Spotify / Apple PodcastsFive Rules of Thumb for Career GrowthI had planned to do a presentation on marketing history, but then Xiaoying asked me to talk about my career and journey.I realized you don’t just want to hear one thing after another. So I thought I would call it “Five Rules of Thumb.” So whether you are planning to be a marketer or just somebody early in your career, as you exit college and enter the “real world,” here are some things I’ve learned.I didn’t want to call them “lessons.” That felt a little too formal.So rules of thumb. For what it’s worth, they have worked for me, so hopefully, they work for you too.👍Rule of Thumb #1: Don’t Get ComfortableThe very first rule of thumb I want to start with is what somebody told me once, which is “Don’t get comfortable.”The story behind this one is that it was February of 2012, and I was going to a job interview. The job interview was with one of the biggest ad agencies in Seattle. I was 22 years old and feeling super confident. I actually had just won a Seattle ADDY Award for an advertisement I made for my university. I had also just released a 30-minute documentary that just won an audience award at a film festival. And I just graduated college a year early as well, and I was already producing videos for an investment company in Seattle. But I wanted to break into the ad agency world, which is why I was having this job interview. So I sat down for the interview, and the guy, who was the founder of this agency.He said to me, “I watched the first 10 minutes of your documentary. I didn’t understand what it was about. That’s not good.” I thought, Oh gosh, this is a tough start to an interview. Then he said, “I also watched your ad. I didn’t like it.” And he said, “What else are you working on?”I didn’t really have a good answer for him. I was like, “This is the toughest start to a job interview I’ve ever had.” I realized I wasn’t going to get this job. So, I just asked him what advice he had for a recent graduate who had a full-time job but wanted to get into advertising.His advice was: “Don’t get comfortable.”This guy was kind of a jerk, as you could tell, and I’m kind of glad that I never worked for him, but his advice was actually pretty good. I think what he was trying to say was: “When you are comfortable, you are not growing. Growth comes from discomfort.” The job I had at the investment company was a pretty comfortable job, but any growth I was going to have would come from pushing myself outside of my comfort zone. Even though this was someone I didn’t work with, I was grateful for the advice, and it stuck with me.Jobs, Side Hustles, Startups, and PodcastsTo place my career journey on a linear timeline, I would say the first era was being an undergraduate and I started making videos for the student newspaper. That turned into a job with UWTV; I made the first-ever student-produced TV show. While I was an undergrad, I was making 30-minute episodes a week. I was 19 years old when I started doing that, and all of a sudden, I was managing a staff of 15 people. I was the worst manager ever because no 19-year-old is a good manager, but I got a lot of practice making videos.Russell Investments reached out to UW and said, “Hey, who do you have can make videos? We need a video person.” And I got a job there. In the meantime, I was doing films and ads on the side as well. I always say I had a real job, and then that “don’t get comfortable” element was always doing side hustles or doing school on top of work or doing ads and doing freelance work on top of work. So that was kind of my “don’t get comfortable”. I was spinning multiple plates. I’m always doing a few things at once to try to learn more and more.The second era of my career was being a startup marketer, and I shifted from investment companies to startups because I just saw that startups have a lot of room for growth, and I’ll speak to this presentation on some of the benefits and also some of the risks associated with startups as well. While I was at startups, I started a side hustle during the COVID years. I realized I could take a lot of tactics I was doing for some of the startups I was working with, and do those first as a side hustle and then as a full-time job at my own agency.Finally, we’re at the present. I am now at Google, and it’s funny, I wanted to work at Google, right from when I graduated from college. I applied there when I was 22, 23 years old, and never got an interview. But then some of my startup opportunities, and some of my other networking and body of work, led to a role at Google. And I now lead demand generation for the SMB and startup segments for Google Workspace. It involves tools that I actually love and use every day. I’ve worked at companies where I’ve used competitive products, and I’ve used Google. I love Google’s products as well, so it’s really great to be at a really great company and then also marketing a product that I actually love and believe in.That ties back to how I met Xiaoying. I started this podcast called, A History of Marketing, because I always wanted to learn new things, become a better marketer, and apply some of my creative and media production background. I wanted to take those skills and my marketing skills, and see who I could meet to keep learning and exploring new things. At Google, it’s an amazing company, but I am really marketing one product in a more specific role, not doing the whole suite of marketing. I am not the CMO at Google or anything like that, and I’m really focused on one particular area, but I want to keep learning a lot of different areas about marketing. This podcast is a great way to continue being a better marketer, to continue to learn things.👍👍Rule of Thumb #2: Adopt Tech Early + Publish Your Work = Doors Open For YouThis takes me to rule of thumb number two, which is a useful lesson in almost any industry: If you adopt tech early and you publish your work, doors just open for you.This is true almost in anything that I can think of, if you are a young person, especially, you want to stand out. There are so many benefits to being early on the adoption curve of anything. There are so many benefits to publishing your work online or in some areas where others, your peers, future employers, other people on the internet, a PhD candidate at Syracuse, and people who can find your work. It’s just doors open for you. It’s something that I’ve tried to embrace over my career, and I almost just wish I had done even more of it over time. I’ll give some examples of this.It wouldn’t be a marketing presentation without some frameworks. Has anybody heard of the book Crossing the Chasm? It is one of the best B2B marketing books, and basically the gist of it is that you have this early stage with very innovative people who adopt things on the bleeding edge, then early adopters, the second chunk here, and they are the early folks who will adopt your new technology.And then there is this “chasm” that breaks from the early adopter phase to the early majority—or the mainstream public phase of adopting things is really hard, and a lot of products don’t make it there. You have probably seen products come and go that didn’t quite catch on. Virtual Reality might actually be an example of that.However, because of this chasm, as somebody who is an individual, whether you have a technical role, a media or film production role like I did, or a marketing role, being an early adopter is your competitive advantage because for a lot of people, it takes them a while to catch on, and they are looking to early adopters to publish things and create things.Especially in a B2B marketing role, I’d recommend it. But this is a framework, where once you see this pattern, you will see it over the course of your life, everywhere. You just gonna see, “That person is an early adopter. That person is a laggard. Or that product crosses the chasm and goes mainstream.”Here are some examples of this. When I was a student in 2009, I was producing that TV show. There’s me when I had a lot more hair. But also, look at this giant camera that’s there and all those film equipment. And here I am working on this TV show, and there are these big cameras out there and big equipment.What else was happening in 2009? I’m going to date myself here, but YouTube had just launched a few years earlier in 2006, and it was in 2009 that they started supporting HD (High Definition) uploads. Then, Canon released this product called the Canon EOS 7D. It was the first DSLR that was at a price point you could afford—maybe $1,000 or $2,000, expensive but still affordable, for a prosumer audience—that could record HD video in it.Before that, it’d have been recording to tape, mostly doing standard definition, and you didn’t have these interchangeable lenses. This together was a magical combination and it changed the media and film-producing landscape. All of a sudden, companies could hire a college student for a thousand bucks to film a high-definition video and upload it to YouTube, instead of hiring a big camera crew with professionals with big, giant, over-the-shoulder cameras.I was so excited to adopt this and it got me so many opportunities just by shooting these videos and publishing them to YouTube right in 2009 when these technologies were coming out.I spoke about Russell Investments, my first full-time job and I was an undergrad when I got the job with them initially. I made all these boring investment videos for them. Sometimes we did branded videos like this one that I shot.They found me just because I was doing videos.But what was cool about them, about Russell Investments, is that they let me use their camera equipment when work was over. I could use their lights, microphones, and DSLR cameras. What I did when I was at Russell, I learned about corporate culture and business and investing. But then on nights, weekends, and holidays, I would make videos.I made a video with Bigfoot—the story was about a guy who falls in love with Bigfoot. I was like, all right, let’s just try this out. Let’s just take a camera and film this thing. I worked with a YouTuber to make comedy shorts. I knew some musicians that I made these really artsy music videos as well.I experimented with things and with green screens and stuff like that. Sometimes the experiments got weird. I did this one by breaking the rules of a green screen. It was like green slime doing it. By the way, if you are ever going to ask somebody to do green slime on them, you have to do it to yourself first—leading by example, getting slime all over yourself and testing things out. So I had a lot of fun with it as well.One of the most fun projects was that I made a short film called One Way Single. We used those DSLR cameras to shoot it, but I got a whole crew involved - there were 30 people. I saved up my own budget and made it my short festival film. We actually built a whole train set, and there are Styrofoam seats and lighting. We built like a quarter of a train and filmed this video inside there, and then we destroyed it all for a crash sequence, so that was a fun project.“Maybe I should become a marketer!”Anyway, all those things I was doing while working at Russell and doing side projects. I was doing silly comedy videos of Bigfoot. I was doing experimental art stuff with slime and building a train. I also met a lot of folks who were in the Seattle advertising community, and I met marketers at Microsoft. I would do commercials and conference videos for Microsoft. So I was a producer on this one, which was at a big Microsoft Conference, and got to work with pretty big brands in the Seattle area and build a network.I also noticed that the marketers at Microsoft made a lot of money and didn’t have to haul around a bunch of film equipment all the time. I thought, Maybe I should become a marketer! I realized that while I loved filmmaking, Seattle is a pretty small filmmaking hub compared to New York or Los Angeles. I thought maybe marketing was the thing for me.The thing I was noticing is that these marketers at Microsoft made a lot of money, and they don’t have to haul around a bunch of film equipment all the time. Maybe I should become a marketer. Maybe their job looks pretty good. So that was in my head as well. Down the line, I love this filmmaking stuff, and it’s great, but Seattle is a pretty small filmmaking place. Everybody who makes it big goes to New York or Los Angeles, and I love Seattle. Maybe marketing is the thing for me. So that was in my head as I was making these videos.From Filmmaking to Virtual RealityThis is the interactive part. Does anybody have a guess at what this is on the screen?This is how virtual reality filmmaking worked in 2015. We are on the note of being an early adopter, you had to find GoPros, I am not even sure if you know what GoPros are these days, but obviously, these were the wide-angle action cameras, and they are relatively cheap. You would had to 3D print a mechanism for holding them all together. You’d have to film them all, you’d have to sync them all, you’d have to stitch them all together in the editing. That is how you did a 360-degree video.On this note of being an early adopter, I had been an early adopter on DSLRs. A few years into that, they had gone mainstream. It was like “Oh, sure, you have a DSLR camera, you can do your filmmaking.” Everybody’s doing that now. What’s next? A VR was one of those things that I was looking at, thinking, “Oh, what’s next as far as emerging technology?”One more interactive part: Any guesses on what is on my face in this one?That is right, this is the Microsoft HoloLens, which was their augmented reality—they called it mixed reality—prototype. It was super early. I think they discontinued it a couple of years after this, but I was at a Seattle VR meetup. I was doing these 360-degree videos, going to Seattle VR meetups, learning about new tech, building a community, or being part of an emerging community, and getting to try out new tech. That was a sort of experimental augmented reality tool from Microsoft.👍👍👍 Rule of Thumb #3: Startups can help you gain a lot of experience, fast.This takes me to my next stage, which is rule of thumb number three: Startups can help you gain a lot of experience really fast, in a short amount of timeIf you want to learn a lot of things about how a company works, a startup is a great way to do it because there is always more work than there are people to do the work. You get to do a lot of things. It is sort of a trial by fire.I am going to shift to my VR startup experience. I was at these meetups doing 360 videos, and I met this young person from Seattle named Jake Rubin, who founded this company with a vision to build a full-body, fully immersive Holodeck-type system. That was a crazy, ambitious vision. He was envisioning a full-body exoskeleton suit and haptic feedback. The idea is that if a VR headset is through your eyes and ears, and immerses you visually or in audio-wise, the next missing thing is touch and full-body motion. He was building these systems to do that.He was one of the sharpest people I have ever met. They had just hired Mark Kroese, who was the president of the company and had come from Microsoft. I thought, “Okay, ilet’s give this a shot.”Learning the Power of PRMy VR experience got me into this startup called AxonVR. That was what they were called at that time. Initially, they built this box, and you had to stick your hand inside a box and you put it out of your headset, to simulate motions and sensations of touch. We found early on that the best way to demonstrate it was with little cute animals in your hand. Because you could feel all four steps of a deer dancing around your hand or a spider in your hand, and if the deer rested and lay\id down, you could feel its whole body and things like that..I started doing a lot of public relations for HaptX (which it was later renamed) because the best thing I could do was find journalists, share the demo with them, and have them write about it.This is a really fun one. I was at this big conference called CES (Consumer Electronics Show). We had just built a new prototype, but also added warmth (hot and cold). The thing this journalist said about us was like the last day of the show, it was actually right as the show was closing, we got this journalist to come in, and I’m just gonna read this out loud. This is a really great piece of media we got. “This is my 10th year at CES. Every year I spend much of the show wondering why I put myself through it. And then maybe once per show, I get reminded of why I’m lucky to be doing what I do. Last night AxonVR reminded me that technology can be so absolutely magical when a tiny deer took a warm and fluffy nap on my outstretched palm.”He called it “absolutely magical.” We were the best part of the show, and it was spectacular. A lot of folks who haven’t tried our tech were really skeptical of it. Even if I describe touch to you over this call, what does it do exactly? I can’t transmit touch over Zoom, and you don’t know exactly what we’re talking about, but if you demo it to people and get them to write about it firsthand, you get more authority by it. People start to believe you. This is a journalist who’s spent 10 years covering this industry and has written a lot of skeptical pieces about tech. And here he is, like describing our stuff as “absolutely magical.”Rebranding AxonVR to HaptX, Naming a Company and its ProductsWe were called AxonVR at the start. Within the first few months, we got a cease and desist letter from a company called Taser, which rebranded to call themselves Axon. They do police body cameras and things like that. So we had to rename the company. I came up with the name HaptX. The idea is that it is “Haptic” and then “X” for experience, kind of like SpaceX, and X sort of is just a cool letter. I got to name a company and name a product.Then the things I also did which bringing back my storytelling and media production stuff. I worked with our game developers and software engineers to design a story as we were building our next prototype that showed off the best of the technology, hid all the shortcomings, and delighted anyone who tried it. We had this demo where you got this virtual farm and a little fox jumps onto your hand, a little diorama, you can grab the moon from the sky, and at the end, aliens invade and you have to defend the farm. They try to abduct your little fox, your tractor and defend your farm. It’s called the “Farm Defense”. This demo we wind up using for years. This is kind of what it looked like. This is one of the videos we did. This is where the person’s at the end of it, destroying these aliens that are invading as well.From Tech Demos to SundanceSomething wild happened. Farm Defense, this demo that I helped make and wrote the story, work with the game developers, and work with the team on it, got selected for Sundance Film Festival. It was so funny that after I had given up on filmmaking, all of a sudden I got into Sundance as a virtual reality marketer, exploring this new medium as part of this team.I thought it would be fun because I got to meet bunch of celebrities there. Unmute your mics if anyone wants to guess who the celebrities are. I thought that might be a fun game for us.(Class discussion ensues identifying celebrities)That’s right, the bottom left is Usher. Any guesses for the big picture on the right? It’s not Daniel Radcliffe.The big picture on the right is Elijah Wood, famous for playing Frodo in The Lord of the Rings. He was one of the nicest guys I have ever met; he came back twice to do the demo and stood in line with people, even though some celebrities may jump in the line or do stuff like that. Up on the left is will.i.am from The Black Eyed Peas. They had a virtual reality experience at Sundance. will.i.am is both a musician, and he’s also a media and tech personality and did some investing. So it was like a really fun experience that I could name out some other folks that we got to meet over the time, and it was amazing. I put so many hands in and out of this demo.It was a really funny thing, but it was also a wild experience, because the way they treat you, even though I just had a virtual reality experience, they treat you like a filmmaker there. You get to go to all these cool things. This filmmaker I’m a fan of named Darren Aronofsky, who made the film Requiem for a Dream and The Whale, he was there, and he had a VR experience there as well. So it’s just like this amazing time to meet a lot of the folks that I really admired through my time in film and just got to have a taste of that experience up close.But it was wild because I was in my mid-20s and there was this tech and it had to be demoed, and all of a sudden I had to travel the world and just show this off to people. And this is a conference in Montreal, and this is a video for a YouTube channel called Tested that got a bunch of views and went to Japan and to Europe, and across the United States, and this was an amazing experience with this tech. It was so much fun.The Jeff Bezos Demo That Changed EverythingI want to share the story behind this crazy demo to Jeff Bezos.One of the things happening at the company was that we had just had a really big layoff event and I am going to talk about some of the downsides and stories as well. We thought we had some money in the bank coming in; we hired assuming that was gonna hit and close, but the investor pulled out at the last minute. We had to do a snap layoff. If you’ve seen the Marvel, which Avengers one was it? Was it Endgame where half of the people disappear? That’s what happened to our company, so we call it the snap.The company seemed like it was going out of business, but we had just committed to this re:MARS event that Amazon was doing. We had put all this work into this really cool robotic project. If you can use gloves in VR, you can use them to control robot hands. There are sensors on the robots so you can feel what the robot feels.We were selected for this conference, and we’ve been invited to it. We pulled some favors to get into it. We were like “You know what? We’ve worked so hard on this really cool prototype, and we had partners from this other company that makes the robot hands, which was based in London. They were flying in. They were counting on us, and we thought, “Maybe it will be a last draw and let’s have some fun at this conference in Vegas.” And I’m like, “You what? Let’s go for it.” As long as we’re here, and we’ve shown up, and we have nothing to lose, we’re just gonna we’re gonna go for it.I am testing the robot hands here, and as we were setting up, everything kept breaking. We couldn’t get it to control. There were no safety features on it, and these robot hands are like $100,000. If you smack it into the table, if you do that, they could break. The conference organizers were looking at us with these massive robot hands, and like, “Do we have to kick you out of the conference? Your stuff is not working, and we are about to open”. And I was like, “No, it’s gonna work, it’s gonna work.”The organizer came to me and said, “Okay, I’m gonna try it.” I’m like, “Oh, gosh, the safety stuff is gone.” Not the safety of the person, but the safety of the expensive robot hands. What if she breaks it? So we do it, and she’s having fun with it, I could tell. “Okay, it’s actually working well enough, even though it’s not perfect.” And she said, “Okay, hey, take my camera, and you’re gonna record me as if I’m Jeff Bezos, and I’m gonna send it to Jeff and see if he wants to do it.” So I did that, and she said, “Okay, I’m gonna send it, I’ll let you know what he thinks. And I got a text later, “Hey, he’s gonna come tomorrow at 5. It’s a private demo, don’t tell anybody.” Of course, I find all the journalists, and I tell them, “Hey, Jeff Bezos is coming at five. You definitely want to be here.”I got these journalists to be right front and center when Jeff Bezos shows up to do our demo, and I didn’t get a great picture of him. At that time, Jeff Bezos was still very involved with Amazon. He wasn’t just like going and partying on yachts or whatever he does now. He was more like a tech influencer or person than he is today. So he comes and does it, and it is awesome. And then, the journalists that I planted there, they all cover it, immediately, they’re telling the stories, and all of a sudden it’s like trending on Twitter. He tweets about it, he Instagrams about it, and for years afterwards, that was like the top thing where I’d get notifications all the time, and he tagged us as well. He tagged us in his stuff, even though he didn’t have to.Because of that, the next week we got a big investment deal. The company was saved, at least for the time being. It was an amazing turnaround. So that was a super fun story.👍👍👍👍Rule of Thumb #4: If you are going to ride on a rocket, be sure to pack a parachuteThere is a famous quote from Sheryl Sandberg, who is a big tech person, and she was at Google and Facebook and wrote the book Lean In. She says:“If you’re offered a seat on a rocket ship, don’t ask what seat! Just get on.”I have been talking about the rocket ship part of the journey, but I’m going to go to my rule of thumb number four: If you are going to ride on a rocket, you should also pack a parachute.You should be sure to pack a parachute because not all rockets are successful. I hinted at some of the stories with HaptX having a snap layoff, which was really brutal. It turned into a fun story with Jeff Bezos, but these people I worked with lost their jobs with no notice.HaptX ultimately had more of those things, and I left shortly after the Jeff Bezos event in 2020. I had a really great four years there but also there were really brutal times where things didn’t work out, layoffs happened, and it was really tough. After HaptX, there was another startup in the Seattle area that was the hot rising star called Convoy. It was a trucking startup, an Uber Freight competitor. It got funding from Bill Gates. Then Bono joined Jeff Bezos and Bill Gates as investors. Al Gore was an investor. Google invested $185 million. They reached a $3.8 billion valuation.I joined them after the Google one, before the $3.8 billion one, and they were on the upswing. I thought, “This is the place to bet. If I’m joining this company and Jeff Bezos, Bill Gates, and Bono are investing, it’s a sure thing, right?”Well, it wasn’t. It shut down a couple of years ago. It fired a bunch of people without notice. It totally collapsed.I left before the collapse—that is the parachute thing. I was there for two years riding the upswing, but under the hood, especially as a marketer working with sales folks, you could see it was a weird deal. They were buying market share in a lot of ways and doing deals that weren’t good for them.If you can see those things happening, don’t get wowed by the big celebrity names backing a thing. They are prone to making mistakes too. Get a look under the hood at what is happening.The Power of the Startup NetworkAndrew Mitrak: The startup I joined after Convoy was actually founded by early Convoy engineers. The startup was called Glue—originally it was called Mystery, doing “date nights out.” Then the COVID-19 pandemic happened, and date nights out became illegal. You couldn’t do date nights out. So, they shifted to doing virtual employee events. The pandemic caused a boom in virtual events for companies because companies needed to engage their remote teams to avoid “quiet quitting.”It was a smart move, basically riding the pandemic wave. However, the story shifted for that company too. When “return to office” happened, companies started to cut costs, and team events are often the first thing cut from a budget. So, I was there for close to two years, had a lot of fun and led a marketing team, but that was one where it didn’t quite work out.In the meantime, I loaded this at the start and I had built a side hustle doing outbound marketing, basically lead generation. I founded that with another former Convoy employee. This was the next thing I was gonna try, which was running it full time as a company (Wolfscale). It was a really good side hustle. Running that full-time as an agency was tough.What is cool about this story is how that company, Convoy, led to a lot of other companies being founded beyond it. So what’s fun is that when you’re at a startup, even if it fails, you’re building this amazing network of other entrepreneurs who are startup-minded, and a lot of those companies became customers of Wolf scale. I worked at one of those other companies as well. And ultimately, Convoy is what led me to my job at Google. The person who hired me at Google was somebody I had worked for two years at Convoy. We had a very high opinion of each other.And so even if something, a startup can fail, the company can fail, but you can succeed, that if you position yourself the right way, or ideally, you kind of get out before things blow up, or you’re kind of thinking of your parachute or your next steps, before things go bad, you can kind of ride the upswing, get some of the benefits of the company, you learn a lot from the start up experience, while not, kind of protecting yourself from some of the downside as well. Well, of course, trying to help the company succeed, but sometimes a company, you know, success or failure is somewhat out of your control as a marketer.👍👍👍👍👍Rule of Thumb #5: It’s all about relationships.(And they matter more than ever in a world of AI.)Andrew Mitrak: This is my final rule of thumb before we open up for questions.At the end of the day, everything is about relationships. Relationships matter more than ever in a world of Artificial Intelligence.There’s a lot of uncertainty about what’s going to get replaced and what’s not. Whether you trust somebody or not, whether you work with somebody or not, whether it’s somebody who makes you happy at work, that’s something that AI won’t be able to replace ever. Basically, for all of human existence, it’s been about relationships.Every story I’ve told you here, everything happened because of relationships. My story and I wouldn’t make sense for me to talk about every individual person who got through along the way, but everything was because of somebody placing their faith in me, or hiring me, or trusting me to do some campaign, or working with me on something. All the jobs I’ve talked about, nothing ever happened because I applied online. Sure, maybe a job application through an online form was part of the process at some point, because it’s like a formality. But I always had someone. They’re either a personal reference or they’re directly at the company, or they’re directly the hiring manager, who was a reference in playing a part in beginning their role. So overall, all of this happens because of relationships.Your reputation is really everything. Are you capable? Are you ambitious? Are you a good person to work with? Those elements are always part of it. So the final takeaway is that everything is about relationships.By the way, a great way to build relationships is a podcast, because all of a sudden, you’re meeting all these amazing guests, and you’re building relationships with them. You’ve researched their work, and you get to meet people who, otherwise, you might not have a reason to meet with you, and you just get to say, Hey, I have a podcast, do you want to talk? And they’ll talk to you, it works that way. I could go on. I have more slides about the podcast and other stuff, but I want to stop here and open it up to Q&A from the group.Q&A: Big Tech vs. Startup CultureXiaoying Feng: I remember someone asking about the difference between working in a startup and working at Google.Andrew Mitrak: Going into Google, I am the happiest I have ever been. I love it and it is a really great place to work. Of course, there are tradeoffs with any big company. When I was at a startup, I reported to the CEO or the Board of Directors. I had a pretty big role, managed a team, and got to think about the large scope of marketing.A tradeoff at a bigger company is that you narrow your scope. You focus on a specific area. You are going to be much more collaborative, and you have bosses, and bosses’ bosses, and their bosses have bosses. You will be taking the orders. You always have a boss, even you work at your own company. Your clients will be your boss at the end of the day. You operate in a more well-defined space. There is a tradeoff. There is a lot to do within that space, and there are new skills I am building, but it is different than running wild and demoing to Jeff Bezos.I am personally grateful I had the experience of doing a startup before joining a big company. I can do a lot of things myself because I had to do them myself. There are people who have only worked at big companies who rely on agencies to do the job or other teams to get things done. I tend to just do a lot of things myself. I think that helps you stand out and that also shows that you have a lot of capabilities. Personally, I like the experience with several startups.Also, selling things matters. When I was an entrepreneur, even when I was freelancing, I had to sell. I had to invoice clients and negotiate. As a marketer, if you are able to sell something and understand what that is like, and if you are supporting the salesperson, you learn so much more about marketing. At the end of the day, you are marketing stuff, and it will lead to the salesperson closing the deal. If you can empathize with the salesperson and go through what they are doing, you will be much better at your job. There are a lot of differences and these are my top thoughts about the differences.Q&A: Balancing Work, Side Hustles, and FamilyXiaoying Feng: You do so many side hustles and have your main job. Do you ever sleep at all?Andrew Mitrak: I also have three kids—a five-month-old, a three-year-old, and a five-year-old. So, I haven’t gotten a lot of sleep since I had kids, to be honest!I definitely sleep overall, but I tend to like having a project at the end of the day. The biggest thing I gave up when I started the podcast was video games. I used to have a habit where, as my kids were falling asleep they’d want me to be next to them. And as they were falling asleep I would play my Nintendo Switch, mostly Zelda games.I just stopped doing that. Instead, I have my laptop open and I will edit or research as they falling asleep. I think it is a more productive use of time. I really enjoy video games, but it is easy to get addicted to them. I try to replace one addiction with another.I treat this podcast like a game: Can I get that guest? Is that going to be a good interview? Can I make the next one better than the last one? That is how I think about it.👍 Bonus Rule of Thumb: Learn to Send a Cold EmailXiaoying Feng: I have one more question connected to your podcast. How do you reach out to so many famous people? It is so difficult to start.Andrew Mitrak: This is actually going to be my Rule of Thumb #6.The number one guest I got was Philip Kotler. He is called the “Father of Modern Marketing.” He is in his 90s. I figured if I was going to talk to someone, I wanted to talk to a primary source. Who better than a person who’s widely regarded as the father of modern marketing? He seemed like the right guy to talk to, and he hadn’t been on that many podcasts. He isn’t really on the “podcast circuit.”This is literally how I reached out.My Rule of Thumb #6 is: Learn to send a cold email. Or just do cold outreach and meet with strangers. This kind of ties into building relationships, and a lot of marketing could be condensed into a cold email.He responded within two hours.There are a few things to unpack here. First, the podcast is called A History of Marketing. What guest doesn’t want to be part of history? If you are a marketer, the name itself lends itself to getting a guest. It isn’t “The Andrew Mitrak Podcast” that nobody would listen to and nobody wants to be part of.Second, I called it a “new podcast series.” I had never recorded a single episode before. If he hadn’t replied, who knows if I would have even launched it?Third, I showed that I had read his book. I flattered him. I’m not some random person. I’ve done the work.Fourth, I said “our listeners.” I knew I would have at least two listeners—me and my wife. I haven’t published my podcast yet but I didn’t say how many. I also talked about what I intend to do.Finally, the 45-minute request is a hack. If somebody agrees to 45 minutes, they’ll agree to an hour. If you say a half hour, somebody expects to get it done in a half hour. You say 45 minutes, they expect to get done 15 minutes after that. And so it’s a way to ask for as little as possible, but get the most possible.I also like the thrill of cold email. I had a lot of success early on, and then the thing that also happens after that, is a bowling strategy. You get one person, and then they get the other ones to knock down, right? Every other guest is like, oh, you talked to Philip Kotler? Sure, I’ll do it because Philip Kotler did it. That’s amazing. If you can find your first win, the next ones are a lot easier. Phil himself was like, “Hey, I talked to Andrew. He asks good questions. He sent off emails to a handful of other folks who became guests of early episodes as well. So, doing outreach, and if you’re a professional or young person, don’t just say, “Hey, could I grab coffee with you for 45 minutes to ask about my career?” People are busy, and they can’t do that all day, right?But if you have a project, I’d love to help somebody with a project. If you’re doing a course, if you’re working on something like a startup, if you’re trying to learn something or build something, people love to help people who are young. People love to help people build stuff. They don’t want to have somebody suck out their time and ask about how to help their career. They want to help you build a thing. So, finding what is the thing that you’re asking, how can you have a project that makes people want to talk to you? I am not saying everybody should start a marketing history podcast, but if you can find your own marketing history podcast or find your own type of project that can lead you to interesting people and to publishing things online, then that can just pay dividends for the rest of your career. ​​Andrew Mitrak: Thanks so much for having me. This was a lot of fun. I hope it was somewhat entertaining and useful. Xiaoying, thanks for inviting me. It was an honor to speak with you, and I had a lot of fun. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 42 This week, I’m sharing my excellent conversation with Geoffrey Colon, a creative strategist and author of Disruptive Marketing. Geoffrey is a self-described “hybrid” marketer with a career spanning the full spectrum of the industry, from running street teams for Red Bull to leading brand strategy at Microsoft, with stints at Ogilvy, Dentsu and his own agencies in between. He’s won Cannes Lions, Webby’s, and bylined articles in Fast Company and Advertising Age.In our conversation, Geoffrey draws a direct line between the first radio ads of the 1920s and the creator economy of today. He argues that the most successful marketers aren’t the ones try to invent something new, but those who embrace the art of the “remix” copying, transforming, and combining ideas from the past.Here is what you’ll learn in this episode:* The First Radio Ad: The story of station WEAF in 1922, and how a real estate promotion for apartments in New York City created the blueprint for interruptive advertising methods still in use today.* The Art of the Remix: Why Geoffrey believes we overvalue “originality” and undervalue the power of borrowing ideas from adjacent industries to create something new.* Guerrilla Tactics: A look back at the era of Red Bull street teams, and why physical, guerrilla marketing is making a comeback in a digital-first world.* The Power of Unlearning: Why the age of AI isn’t just learning new tools, but being willing to “unlearn” old ways without falling victim to sunk costs.Be sure to check out Geoffrey’s newsletter at Creative Studies and his popular TikTok.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.The First Radio Ad: WEAF and the Birth of Broadcast MarketingAndrew Mitrak: Geoffrey Colon, welcome to A History of Marketing.Geoffrey Colon: Thanks for having me.Andrew Mitrak: You wrote a book called Disruptive Marketing, which we’ll talk a lot about. The very start of the book talks about the first radio ad on WEAF back in 1922. Can you talk about this story and how did you kind of come across this?Geoffrey Colon: So WEAF was a station in New York City. At the time, radio was music and people talking on it. They would do things no different than today. They would maybe talk about what was happening in the world. That’s where most people were getting news, probably similar to how a lot of people get news on a news feed now on a social media app. You would turn the radio on and listen, I think as a group, to sort of figure out, “Oh, what’s going on?” and you would be entertained that way.And at the time, they had to figure out how to monetize radio. It was expensive. The technology to run it was expensive. And I think the station said, “Well, how are we going to make this work? Because we have to figure out how to pay for all of this equipment.” And one of the people there got the idea of, “Well, why don’t we talk about things that need to be promoted?” And they came up with an idea of, “Let’s promote this local housing that was basically available in the Bronx* where families could go live.” And that was really the first radio ad as we knew it.[*Correction: The neighborhood was in Queens, not The Bronx] And that, I guess, was the beginning of the end, if you want to look at it that way, Andrew, in the sense that all media always has advertising that invades it. So you have radio, you have television, you have the internet, you have social media, you have whatever comes next. But advertising always figures out how to invade these spaces where people pay attention to something.Andrew Mitrak: It’s a great story. I’m wondering, reading your book, it was published in 2016. It’s all here and now, future-looking work. And by the way, a lot of the future sort of, the things that you say in 2016 will happen in the future, happened in the future. So it’s very prescient in a lot of ways. But you start the book with this case study from 1922. What was your thinking? Why was that? Why did you feel the desire to start with this particular case study? What lessons did you want readers to draw from it?Geoffrey Colon: Yeah, there’s a tendency of us in marketing and many fields, we don’t really look back on really older history. We have a tendency of looking at things that have happened in the last two, maybe five-year cycle. And what I wanted to do is note like, hey, wait a minute. Here is a case of something that is 80-some years old and it basically explains how almost everything, what happens in every media space.So like when people say, “Oh, the world is about attention and capturing attention,” it’s like, well, that was the case back in 1922 when this radio station decided, “Oh, let’s use attention, people’s attention to promote an opportunity to live somewhere.” I mean, we’ve always been in an attention economy. I don’t think that’s new at all. And that’s what I was really trying to show. And I’ve always been a believer of like everything is a remix. If we go back and study history, it doesn’t necessarily, you know, what’s the phrase? It doesn’t repeat, but it rhymes. And that I think we’re not good as an industry of looking at how a lot of things are remixed and recycled from older eras that we just figure out like, “Oh, how do we make that fit the new era?” This concept of copy, transform, and combine.Andrew Mitrak: Yeah, no, it’s totally true. It’s a theme that we’ve covered a lot on the show of that there’s these things that feel like contemporary debates within marketing or advertising. Is it creativity or is it measurement? Is it storytelling or is it salesmanship? And these debates, they’ve been happening for like 150 years. It’s like a lot of the things, it’s like, “Oh yeah, you could just trace it back.” And it’s not new. And it’s like, gosh, wouldn’t you think like we would just acknowledge that or at least start like, “Yeah, these are debates that have happened. Let’s kind of move forward from there.”Geoffrey Colon: Yeah. Performance versus brand. I mean, a lot of people could say, wait a minute, that, you know, David Ogilvy was talking about that because he was always like, “If advertising doesn’t sell, then it’s not really doing what it’s supposed to do.” We have those debates now in this current era where it’s like, “Well, does it help sell?” It’s like, all right, we’ve been talking about this for 50, 60 years.Andrew Mitrak: Yeah, totally. So one of the things that I like about this WEAF radio case study story is that one of the things is that this idea of radio ads didn’t come from radio people. That it came from like telephone people at AT&T. And that it’s like there was an innovative thing at the time, right? It was radio and it was ads and it was selling stuff and that was a way to monetize it. So there was innovation there, even though it was also interruptive. But it was people borrowing ideas from an adjacent industry and applying them in a novel way. And it seems like that’s a theme throughout your work is that that’s an angle for creativity and for the eye. Can you speak to that idea of borrowing from adjacent industries and applying them?Geoffrey Colon: Yeah, I mean, I’ve always been a generalist, not to use that term, but you know, how do you look at the world that, you know, in a wide manner? And then say, “They’re doing this over there. How do we apply that in our area?” But again, remix it so it fits our area. I sort of cringe when people will sort of say, “We need to go out and get an expert to do this particular job.” And then the job isn’t really creative or the output from that job isn’t really creative. And then people will sometimes be frustrated and say, “Well, it’s not as creative as I thought it would be.” And it’s like, well, yeah, because you’re basically having people who are not really wide, they’re just deep. And they’re doing exactly what you expect them to do.I mean, there’s plenty of areas in marketing where I see this. Like if you market healthcare or insurance, you are probably doing a lot of the same things there. It wasn’t until a couple of years ago when you had organizations like GEICO and Progressive and State Farm said, “Wait a minute, let’s throw that old playbook out because they actually hired people who came from different industries to figure out what their marketing and advertising was going to look like.” So I think, you know, we should take more risk in terms of who can we get that is unique to basically apply their learnings to our field.We’ve seen this in lots of different areas. Even if people say like, “Well, you wouldn’t hire someone outside medicine to work on medicine.” The thing is doctors and scientists are still inspired by lots of areas outside of medicine that they then apply. This is why, you know, you have a lot of medical scientists now saying things like, “Hey, one of the best things you could do is actually fitness.” And fitness doesn’t necessarily fall into like medical science, Andrew. It falls into like, well, wait a minute, that deals with like VO2 max and basically walking and doing things that should really, you know, come natural to people. But, you know, the more you apply things from other areas, the more that actually can lead to some interesting outcomes for, you know, how we basically navigate life.Andrew Mitrak: Totally. You know, this is like another area that even within the guests that I’ve spoken with, I’ve spoken with real like, you know, marketing PhDs, experts, and folks who like are very, very deep into marketing as a discipline. And then I just had an interview that I just recently published with a historian at Nike. And basically the gist of the story was that, you know, their first head of marketing was their lawyer. Phil Knight was an accountant. Carolyn Davidson, who designed the Nike logo, was a student. And all these people who aren’t trained marketers, didn’t learn about the 4 Ps, you know, and didn’t get an MBA, but they just had good instincts, they had a passion, and they made many of the best marketing decisions of all time.And it’s just kind of a thing to square. Like what is it? Is it worthwhile to read a bunch of marketing books and really learn it? Or what does that say when so many like folks who seem like amateurs or are not experts but can make a lot of the same, the right decisions on it? So like, yeah, what’s your reaction to that?Geoffrey Colon: Yeah, I mean, I’m in the middle there. I’ve always been more of like a hybrid where it’s like, I think it’s bad if you’re a person who’s like, “Well, you shouldn’t study anything on marketing. You should just go do it and wing it.” I mean, like there’s a lot to learn from the science of marketing. I think like it’s important to study those things. That being said, I also think it’s good to not be mired in, “Oh, well, that’s the way to do it and that’s the only way to do it.” Because you don’t make up any ground that way, Andrew, when you sort of get stuck with the, “Well, this is how things have worked the last 60 years. That’s what we’re going to continue to do.” Because ultimately that’s what leads to fatigue from most audiences where they’re just like, “I know I’m looking at advertising or I know I’m being marketed to.” And then it becomes less effective.So I think it’s somewhere in the middle. I always tell students who are marketing majors, “Oh, I’m glad you’re doing that. But go build a business too. Go learn how to actually build a business, even if it’s like selling t-shirts online. Just go learn how to do something so you’re not a person that I call the professional managerial class, people who have advanced degrees, but when you say, ’Have you ever built anything?’ they’re like, ’Well, no, I’ve only managed things.’ I’m like, ah, I don’t know if you really, you know, I don’t know if that’s all that you need to do to make things really happen in life.”Andrew Mitrak: Or go sell something as well. Like building something and selling something, it’s like your empathy for a salesperson as a marketer changes so much if you’ve had to like sell and close a deal yourself or things like that where it’s like, yeah, you have to have like life experience to apply it as well.To kind of wrap a bow on the WEAF radio case study, it’s like on the one hand, this is a hundred years ago now and there are still radio ads and there’s still interruptive things. But then part of the lesson is like, can’t we evolve past that? Can’t we get past interruption? But then interruption still exists. And does that just mean that it’s been around for a hundred years, it’ll be around for a hundred more years and there’s that Lindy effect where it’s like it’s just existed forever and it’ll continue? There’s some reason to that? Or is the lesson like, no, we need to really think of how to break away from it? Do both of those things exist at the same time? Or what’s your thought about that?Geoffrey Colon: Yeah, I mean, I think if you didn’t have interruptions, you would just sort of have what we have with streaming nowadays. When I mean streaming, like when a streamer goes on YouTube and is on there for four hours or they’re on Twitch and you’re like, “Wow, like you’re not taking a break at all.” You just, ultimately the audience fades as well from scenarios like that. I’m not saying that everything has to have advertising breaks, but I think advertising when you do interrupt, you can decide what, you know, whether you want to take a break and not pay attention or you may happen to pay attention.I don’t know what the answer is there because I think if you integrate more advertising or more sponsorship into media, people start to get upset about that as well because they’re listening to you talk like you and I are talking and then all of a sudden they’re like, “Wait a minute, they’re talking about something and I think they’re trying to promote it.” And I don’t like that either. So it’s, you know, it’s, we’re in a weird world where we’re always trying to figure out the best way to sell or give awareness to something. And I don’t know what the right answer is.Andrew Mitrak: Yeah, sort of, I guess that’s part of the fun. It’s like an evergreen challenge and we continue to experiment.Guerrilla Marketing: From Ancient Rome to West PhiladelphiaAndrew Mitrak: And so, okay, shifting from that example, I also want to talk about some of the kind of historical moments of your own career because a topic that I haven’t covered at all in the show is guerrilla marketing. And can you just share when did you first start doing guerrilla marketing?Geoffrey Colon: You know, I was really, I got really into like graffiti and street art having grown up not far away from Philadelphia where graffiti actually, the modern graffiti I should say, was invented. If we look at, you know, where graffiti really originated from, there’s cases of it going back to ancient Rome and ancient Greece. But the modern version of it came from Philadelphia and then it was really...Andrew Mitrak: Like the opening of The Fresh Prince of Bel-Air [Laughs]Geoffrey Colon: Correct. Correct. No, that’s actually a good example. And then New York City took it and put it on another level. So I’ve always really been interested in guerrilla marketing because you are doing something out of context, out of the norm. You might be, you may see a blank wall somewhere and you’re like, “Okay, how are we going to take that over and paint it in a way that draws attention to what our product is that we’re doing?” It might be what we’ve seen recently with people setting up real-life versions of people in storefronts and getting people’s attention because they’re like, “Whoa, what is going on in there?” There was a recent case of a B2B product called Ramp that recently did this in New York City.So it’s, you know, guerrilla marketing does exist still. There’s just less cases of it because you can’t track it. You can’t really see what the effectiveness of it is. But it makes for good PR and it can be exciting because you can do stuff that’s just sort of out of the norm that we have usually been doing, I would say the last, you know, 20 years where we sort of stick to the playbook.Andrew Mitrak: It’s funny because you mentioned how you don’t see as much of it anymore. And it is one where as I became aware of marketing, I would hear a lot about guerrilla marketing, right? And I think that in the early 2000s-ish to maybe the late, early 2010s, I feel like I just heard guerrilla marketing as sort of a buzzword a bit. And then I don’t hear as much about it anymore. Is it because it’s been absorbed into normal marketing? Is it just like a PR stunt, I guess? Or is it that there’s actually less of it happening as the world becomes so much more digital? Or it’s not really a digital guerrilla marketing per se and that’s, and it’s not trackable and therefore so much marketing is digital that it’s just less guerrilla is part of it? Is that sort of, like why is it disappearing, I guess is my long-winded way of asking a question.Geoffrey Colon: I think we’ve, I think you hit the nail right on the head. I think we have over-indexed on digital. And so we don’t really put an emphasis on guerrilla marketing because that’s in the physical world, it’s in an analog world. The reason I think it’s starting to creep up again is because people are doing a lot more things in real life. But also a lot of that scales. Canadians actually were really big on guerrilla marketing. They, in Vancouver, they called it culture jamming. That, I mean, like Canada really sort of led the way. I think Kalle Lasn who wrote the book on guerrilla marketing is Canadian. So I don’t know what it is north of the border that made Canadians do that, but I think they saw something that said, “Wait a minute, let’s take advantage of the physical space and then figure out ways to draw attention to ourselves.” And then that’s just, that has spread across the world, you know, pretty much to every territory, every country now does some form of guerrilla marketing for brands.Andrew Mitrak: And as you were early in your career, you were doing some guerrilla marketing yourself. And I think, did you work with the Red Bull street team?Geoffrey Colon: I did. Yeah. That was pretty wild.Andrew Mitrak: What was that story?Geoffrey Colon: I was running sort of my own, this is early 2000s, my own influencer business out of my apartment in Brooklyn. And Red Bull approached me because I used to do a lot of street teams for music releases. Anytime there was something big coming out in the music world, street teams were the most effective way to call attention to that because you still had physical record stores. So you wanted to make sure people knew when something was coming out. And they said, “Hey, we want to hire you to figure out how to do this to get our product out to more people.”And Red Bull at the time was really only popular, the first area in North America that it was really popular was Miami because they sort of figured out how to get the product into nightclubs there. And then they said to the bartenders, “We’ll give you this product for free, but can you push it based on these drinks that you can mix together?” And then more people were like, “What is that?” And it’s like, “Oh, that’s Red Bull.” And that drove word of mouth that then got the beverage to grow off-premise. So it actually started to show up in like delis and grocery stores.But I ran, you know, street teams in New York for a while for Red Bull. And now we still see the cars out there with the can on the back that drive around. I mean, again, that’s a lot of guerrilla marketing as well. Like people will always ask me like, “What do you get from that?” But you get attention. You go to an event, people see things. Sampling was really big. So, you know, we would do a lot of things where we would actually get the can in people’s hands to try it. You know, I don’t see a lot of that anymore.Andrew Mitrak: I don’t know if I hang out in the areas where that might occur anymore. But I know when I was in college, I think that was the very first time I had a Red Bull, I think, was somebody with a car and a can and handing it to me. And being a poor college student, I’m like, “All right, sure, I’ll get some free calories out of this.” And that, I don’t know, I didn’t convert me. I don’t drink many Red Bulls, but you know, it got me to try it and be aware of it a lot.So how did you transition from having your own agency to working at Ogilvy?Geoffrey Colon: I sort of went from having my own to working at a couple of other places. And then, you know, Ogilvy had an opportunity and I was working at a really large digital agency before I went to Ogilvy. And I just was like, “Wow, it would be interesting to be at a big traditional agency at a time when they were really yearning for people with social media and digital experience.” And so, you know, I had a great boss there. She totally got it, was really a good social media marketer herself. And we just were able to apply a really lot of interesting strategy to the clients that we had. But I was also able to learn a lot from like the traditional creative directors there and how things were put together, you know, for what I guess we would consider old media. But I think, you know, when you understand that entire mix of how to buy media, how to make creative, what does that creative look like, what do these stories look like, what’s a customer journey look like? I mean, it’s a good education, I think, to be in an organization like that.David Ogilvy and the Hybrid Marketer: Balancing Creativity and FundamentalsAndrew Mitrak: Yeah, you were kind of talking about how you want to do both. You want to be a hybrid creative, but also you want to know the principles of marketing and you want to know the fundamentals. And it seems like that’s something you get out of a place like Ogilvy is some of the structure and discipline and kind of the big company thinking and almost understand which parts need to be disrupted in a way because you’ve kind of seen how a larger agency works firsthand.Geoffrey Colon: Yeah, and I mean, David Ogilvy is interesting because he has tons of case studies of things that I would consider to be disruptive for their time and place. I mean, a lot of times people are like, “Oh, that’s an old stodgy, you know, advertising agency.” But when you look at the case studies again, going back to how we look at history, it’s like, wait, what, you know, they did then could be applied now. And that can be quite disruptive. Putting an eye patch on someone who is, you get people to pay attention to the fact, “Oh, why does that person have an eye patch? Oh, that’s an interesting shirt.” You know, that’s, those are interesting tactics.Andrew Mitrak: Yeah. So how much, so you mentioned David Ogilvy and you worked at the agency Ogilvy and he had, he had probably retired in what, like the 80s and had passed away by the time you were at the company, right? But was his legacy still there? Like does his legacy a big part of the, you know, it still bears his name, so clearly it’s at some point it’s there. But do they still kind of like give everybody Confessions of an Advertising Man and have them like read Ogilvy on Advertising to sort of understand sort of some of the history of it?Geoffrey Colon: Your first day there, I remember, here’s Ogilvy on Advertising. Everybody gets that book who joins the agency. Yeah. So his spirit is definitely embedded there. There are quotes all over the walls there. I don’t think that I don’t think they’ve tried to move away from their historical legacy like a lot of other larger agencies have.Andrew Mitrak: Yeah, because a lot of other agencies, you know, the one of the names like Ogilvy just becomes an O, like an extra thing in like the big string of letters and it’s like it gets merged in and gets shortened and you kind of lose like who was that guy to begin with. So it’s cool that his legacy was still there. Like what, how was it sort of applied still? Like how does it go from like a wall or some quote to actually like showing up in materials?Geoffrey Colon: Yeah, I mean, every brief there is still originated from what his briefs were. So that hasn’t gone away. And if people are like, “Well, why don’t they update that?” Because it works. Like why change that? It’s because it’s simplified, Andrew. It’s really simplistic. And I think the issue with briefs is we make them so complex that when you get them back, you’re like, “This is 25 pages,” whereas it’s one page with three things that you’re basically trying to do.And I find in this day and age when everyone’s like, “Okay, let me do my hand talking here. Here’s the 70 things.” It’s like, no, no one’s going to remember that because people don’t have the time or attention to remember that. What’s the one thing you really want to get across? I think that’s important in terms of not just advertising, but like anything you’re trying to do in marketing. Whether it’s marketing a product, marketing someone who’s trying to run for office, or marketing anything, an idea. You really need to, you know, this is where the whole elevator pitch comes from. Nobody really wants to be in an elevator being pitched something that they’re like, “Yeah, I don’t understand what you’re saying.” They just want to know like, “Oh, by the way, I have an idea. It takes this and this.” And they’re, “Oh, yeah, let’s actually do that.” So communications skills, I think we’ve made them way too complex for the 21st century. And we can make them much more intelligent again.Andrew Mitrak: As far as the complexity, one of the truisms from David Ogilvy, his principles is like, if you have a successful campaign, keep running it. It’s like you’re not presenting to a standing army, you’re presenting to a marching parade. And the idea that if you have something that works, you don’t need to just like change it up every season just because. And I feel like there is a thing where it’s like people, you know, have the new holiday ad just because and totally rewrite everything just because it’s like a new year. And there probably could be a little more of just repeating a good message, sticking with a good slogan, not rebranding and having a new jingle or whatever. Like, yeah, do you think about that or are there other sort of like lessons that folks should sort of embrace still from Ogilvy?Geoffrey Colon: Yeah, I mean, that’s a big one. Like even modern thinkers like Mark Ritson talk about that. Like he will say, “Why are people running these new ads or why do they have a whole new campaign when they should run the this other one?” It’s one thing if you change a campaign because let’s say the company has new products or features of those products. But if you’re like, “Hey, let’s do a brand campaign.” It’s like, is your brand still based on what it is that you sort of laid the foundation for with this original campaign? Yes. Then keep running that because you’re, to your point, and I love the analogy, it is like a parade. There’s a lot of people who have not probably seen the messaging that you have to keep hitting and hitting and hitting until they realize like, “Oh, that’s interesting, that company.”And I think we’ve seen that in a lot of different areas, people taking that to heart. I just also liked David Ogilvy’s approach to the fact that, you know, he said like, “Your customer isn’t a moron. It’s your wife.” I think I have that quote correct.Andrew Mitrak: Yeah, it’s along those lines, yeah.Geoffrey Colon: Yeah, it’s like we have a tendency of thinking that our audiences are different from who they really are. And I think we’re actually going back to an era where if you understand who the audience is because let’s say you’re marketing something that you yourself use. So you’re like, “Oh, I know who the audience is.” Like that’s way more impactful than people who may say, “Well, this is who we want the audience to be.” That’s very different and that sometimes is delusional, if I may say that word.Andrew Mitrak: Yeah. No, exactly. It’s funny because when I recommend Ogilvy, I say, “He does use some gendered language at the time. Yada yada.” Like caveat, it was a different, I mean, I don’t know if it’s a good excuse, but it was a different time. But like there’s a lot of truth to that. And the intention behind it is actually, yeah, speak, don’t assume your customer is a moron. Like they’re actually intelligent. You don’t have to dumb things down that much.He also was a proponent of like actually having a lot of detail in your ads. And I don’t know if that works totally today on social and of course it doesn’t apply to every format. But in general, like just assuming like sometimes there’s a thing like, “Oh, everything has to fit in, you know, a three-word slogan and you can’t have a, you know, but it’s like actually sometimes you want to read a paragraph of like good copy about why this product is so great or that, you know, that Rolls-Royce ad about how it’s at 60 miles an hour, the loudest thing in this is the electric clock or whatever it was. Like these little things that just like, “Oh yeah, that like totally catches your imagination.” And he’s willing to write longer, which I also also like.Geoffrey Colon: Yeah. Yeah.From Agency to Big Tech: The Microsoft ShiftAndrew Mitrak: So you shifted from Ogilvy to Microsoft, and which is like a pretty big transition. So at this point you’ve been a solo agency owner, you’ve worked at leading digital agencies, you’ve worked at larger ones like Ogilvy, and here you are at like among the top few largest companies in the world and you do a brand leadership role for you. Like what was that like going to Microsoft and what was like sort of the big shift from agency world to, you know, big tech world?Geoffrey Colon: I mean, it’s a huge leap in terms of the learning curve because you’re going from outside a company and really being sort of an advisor because that’s really what agencies are, they’re advising their clients, to being in-house and having to learn everything about the brand. From like the history of the brand, every product at the brand, every failed product at the brand because that comes into play too in terms of understanding evolution. Every solution area that the company was involved in.I mean, there’s a lot to learn there, especially for, you know, when I got there, I think the company was around 40 years old, but it feels like 100 years old because there’s so many things that a company like Microsoft does. So yeah, it was a big learning. And I liked that though. I think, you know, drinking out of a fire hose is good for everyone to do at least once in your life where you don’t feel intelligent, you constantly feel like, “Wow, I don’t know anything.” And you have really, really smart people in the room around you at all times because that’s how you get smarter. That’s how you get better. You don’t get smarter or better by being around people who aren’t really good at their craft. So I think that was a great challenge. I looked back at that era and it’s, it was almost like having an advanced degree on steroids, Andrew, because you’re just like learning how to scale multi-billion dollar businesses.Disruptive Marketing and DisruptiveFMAndrew Mitrak: And so you wrote Disruptive Marketing while you were employed at Microsoft, right?Geoffrey Colon: Yes.Andrew Mitrak: And you’re publishing this and hosting a podcast called Disruptive FM while you were at Microsoft. And did you feel like, were you partly speaking and preaching to Microsoft employees trying to like evangelize a shift in thinking? Or were you more like and also speaking to people outside of Microsoft? Or what was your approach to sort of communicating both within your company and outside your company?Geoffrey Colon: Yeah, it was internal and external. I think what I identified is that regular people on the internet were going to have larger influence than what I guess you would call the mainstream media or journalists. At the same time, I also thought employees were going to have huge influence on how you sell products. And then you were also going to have a huge influence on the other people who work at the company in terms of inspiring them.I think what I identified early on is what you call, you know, the creator economy. This was 2013, 14 where I was like, “Hey, video is everywhere. This is, you know, how things are going to work.” And I remember someone going like, “No, no one’s going to watch video with like regular people or people who like work at a company.” And then I was like, “Hey, I think podcasting is going to be big and I think it’s also going to convert into like audio video like we’re doing right now.” And I remember someone saying, “Nope, that’s not going to happen either.”But the reason I look back on that and I realize why those people said that, these were people who were PR folks who were scared about change because if that changes, then their job, which was pitching people at the New York Times or Fortune or Wired, they don’t see that as relevant. And it’s like, no, no, no, no, you can adapt because you’re just going to be pitching to creators, these people who are all talking about different things on YouTube or TikTok. I just don’t think they could see that, Andrew, at the time. I think they see it now. But I think every company sees that now. So I don’t know. It’s sometimes lonely seeing some of these things, you know, ahead of the curve and at other times it’s pretty interesting. So...Andrew Mitrak: That’s right. I mean, because you’re also, you’re being a little provocative too. You’re talking about disruption and there are probably people where, you know, you kind of criticize MBAs a little bit. You probably work with a lot of MBAs, right? And you’re talking about this old way of doing things and Microsoft is probably doing a lot of those old things. Did that lead to any uncomfortable meetings at all or anything like that? Or what was that like?Geoffrey Colon: Yeah, I mean, I think that provocation, like if you look at how people provoke on the web now, a hot take gets people to, you know, “What? Why are you saying that?” You know, um, I think there were parts of the book that I, when I wrote it, I was like, “I’m going to say stuff that is controversial because otherwise no one’s going to pay attention.” And that’s sort of how the web operates for better or for worse. I don’t think it’s always a good thing that people do that.I think now if I rewrote the book or wrote a second book, I would take a different tone of that’s much more uplifting and has more of a collective leadership style. But at the time, that’s what you did to provoke people out of like a stupor. And yeah, those, I mean, sometimes people would be like, “Nah, this is not, you know, this is not where things are headed. This is always going to be relevant.” You know, that’s not necessarily something I always wanted to get into debates with people about. But, you know, I saw like, hey, there’s a need for creative technologists at these companies. There’s a need for people who understand APIs just as much as saying, “Well, I got my MBA from Northwestern or Wharton.” I don’t downgrade MBAs. When I wrote the book, I didn’t have one at the time. I went back and got one since. But like I think there’s much more of a need of just human understanding from folks that you may not get from an advanced degree.Andrew Mitrak: Totally. That’s right. And obviously the gist is the point of the book is not to like diminish MBAs or anything like that. But it’s to really advocating for this idea of creative hybrids and that there’s lateral thinking and having broad experience that’s not purely just MBA to management consulting to big tech and management with no experience actually building things and being hands-on and being able to draw inspiration from outside of a very specific worldview.Geoffrey Colon: That’s right. I mean, some of my best employees I worked with had like philosophy degrees. Some of the best UX people could also, you know, code or maybe they failed out of being like an engineer and did business. But like we’re in a weird, like to your point, Andrew, we have weird hybrid roles now that you can’t just say, “Well, I’m going to go and major in this.” It’s like you have to have a lot of different subjects and do a lot of different things and have a lot of range to really apply that to the world that we’re currently in or and the world that we’re like moving into.Podcast Marketing: From Niche to MainstreamAndrew Mitrak: I want to ask more about Disruptive FM because you, I’m relatively new to podcasting myself. I was a long, I was a very, very early like podcast listener like back in like when the Ricky Gervais Show was out in like 2005-ish or something like that. That was the first one I got into. But I mean, I’m sure you even predate me on podcasting.Geoffrey Colon: No, no, no, no. That’s about the time I got into things too. 2005-ish. Yeah.Andrew Mitrak: Right around that, yeah, right around then. But you actually were producing like relatively like way early like as far as especially business-wise, there wasn’t nearly as much business-related podcasting stuff. A lot of it was like comedy shows or things like that. But so Disruptive FM, you’re producing that. What did you learn about podcasting as you were doing it in those early days? Like beyond technical stuff or things like that, what was you worked on it for a long time, you’re still podcasting. What is it that you got out of it and what did you learn from podcasting?Geoffrey Colon: You know, the things that I thought people didn’t want to hear about when I would do episodes where I’d be like, “Oh, I’m going to, you know, interview this person who wrote a book.” I have a lot of authors that were on the show. You know, maybe the book wasn’t a bestseller or, you know, no one really knew who the author was. And I’m like, “All right, we’re going to do this. I doubt anyone’s going to really like this episode.” Those were the ones that always did really, really well. Like the niche topics. People loved hearing about that because they would always say the same thing to me, which is, “You know, hey Jeff, I wouldn’t know about that unless you told me about it.”Which made me realize that even in our algorithmic discovery world, there’s still a need for human curators, people who find things and tell other people about them because not everyone’s going to know about every single thing out there. And then when you make them aware of it, they’re like, “Wow, that is like a fascinating topic. I got really, really into that.” So that was a big learning for me early on, you know, before people said, “Oh, there’s tons of people out there who talk about micro topics.” It’s like, yeah, and a lot of them write books. People are really fascinated about that just as much as they are about, you know, the big authors.The Many Benefits of PodcastingAndrew Mitrak: For sure. Yeah, and reading somebody’s book and then getting to interview that person is a magical feeling too because when you read a book, it’s like you’re so removed from the author in a way. And in podcasting, you’d have no reason to really talk to me per se or spend an hour with me. I’m some guy with a podcast and all of a sudden you will and it’s amazing when you just reach out to people and be like, “Hey, I have a podcast. Do you want to talk about your book and talk about other things?” It’s kind of just a wonderful shortcut to get to meet people and have conversations that you otherwise wouldn’t get to have. And I just personally, I enjoy this and I also, I’m sure did you kind of experience that at all as you were just reading books and getting to talk to cool authors on stuff?Geoffrey Colon: Yeah, and in a lot of ways, I mean you bring up a really good point. It’s like exchanging business cards. I know that sounds wild, but when you’re like, “Hey, would you like to come on my podcast, we’re going to talk about this,” you then are connected to that person. It isn’t so much about the metrics as much as, “Hey, we talked, we got to learn some things from each other. This is really great. Now I know you and now I can actually talk to you in the future.” I mean, almost every person I had on, and I had a lot of guests on over the decade that I hosted that show, I mean I could reach out to almost all of them and say, “Could I ask you a question or could I run something by you?” And some of the people I had were nobodies at the time who are now huge. Scott Galloway, Steven Bartlett, Gary Vee, very early on when not many people knew these people. I had interesting CEOs on as well that most of them are retired but I think it’s interesting in terms of, I’m happy that people actually took a chance and said, “Sure, I’ll go on your podcast.” Some people I don’t even know if they knew what a podcast was when I would bring them on because it was audio at the time, audio only until later.The Evolution of Podcasting DistributionAndrew Mitrak: I didn’t think about that. At that time you were probably still having to explain what a podcast was like, “No, it’s not on the radio. No, it’s not a live webinar. It’s a recording.”Geoffrey Colon: This is how it’s distributed, you know, this is how people listen to it. It was at a time when Apple sort of ruled that world. Spotify didn’t have any podcasts, iHeartRadio didn’t have podcasts, Amazon didn’t have podcasts. I mean, it was still the wild west in terms of listenership and people taking a chance on that, but, you know, look at the medium now.Andrew Mitrak: Do you have any thoughts on how it’s evolved as a marketing channel itself? Like when you were starting, obviously beyond it just growing and there being more listeners and more podcasts in the world overall. Has it mechanically as a marketing channel or how brands or individuals think of it for marketing purposes? Has podcasting changed in your career working on it?Video Podcasting and Gen Z Listening HabitsGeoffrey Colon: Yeah. It’s gotten, I mean, some of the early podcasts I remember were almost three hours, like they were long. And you would just talk about everything. It actually reminds me a lot of FM radio. It’s like, “Hey, let’s just experiment and talk.” And they were minimally edited. You did not edit a lot of it because it just was for people to listen to. Now I find if you’re not doing video, you probably are going to have a harder time being discovered. Now, that’s at this moment. I’m starting to hear a shift from Gen Z listeners saying, “I don’t want to watch video. I want to be in my headphones again.” Now this is a, I haven’t scientifically researched this, but I’m starting to hear from more of the younger generation, they want to just listen to some things, but it still has to be theater of the mind. Meaning there’s two people talking, maybe then there’s something they shift to something else, then they shift to something else. So it’s like you have to still keep the audience engaged. And I think the same is true with anything now is it’s not a matter of being short, it’s a matter of like, is it interesting? Do you have interesting people? Are you talking about interesting things? I mean, that’s the biggest learning I think nowadays.The Shift to Fractional Marketing RolesAndrew Mitrak: You’ve had your own small agency, you’ve worked at large agencies like Ogilvy, you’ve worked in-house at Microsoft, which is one of the biggest companies in the world and you have your own practice again. You have your own agency again now.Geoffrey Colon: I do. Yeah.Andrew Mitrak: And how is marketing different across those environments? Just broad question, but what is the same and then what’s different across them?Geoffrey Colon: You know, most companies that I advise now and consult with, they really want people who are immersed in understanding what their company does. So they’re not so interested anymore in let’s hire an agency and they’ll do X, Y, and Z and then they’ll go away. They probably have an in-house team. So the in-house team does a lot, but they still need people who are outside in to keep them honest because if you look at some of the worst work that’s been done over the last five years, it’s been from in-house agencies that don’t have outside advisors. Because an outside advisor isn’t drinking the Kool-Aid of that company, let’s just say. And you need that. CMOs actually want that. They’ll say like, “Hey, we’re going to have a couple outside consultants.” And you know, you’d always be in-house going, “Oh great, we’re going to have this person who doesn’t know what they’re talking about.” But those people actually would just keep you honest about, like you said, “Hey, I don’t know that’s a great idea. Here’s why.” Or like, “That’s a great idea. You’re not going far enough with it to make impact.” So that’s what I’m starting to realize is that fractional work is really changing what our relationship is with marketing. I noted this in the book as well that most of us would be, let’s say, fractional temporary gig workers when it comes to marketing. And that doesn’t mean that all full-time jobs are going away. It just means that there’s probably less of those on the staff. And then everything else is supplemented with other people who may come on board and do something for five months and then they’re done with that particular project. So it’s almost like the future of marketing is the future of work, which is a lot like putting a movie together. “Hey, you’re going to be working on this. It’s going to take us four months to put it together. After that you got to go find whatever your next gig might be.” And I’ve been working like this now for the past year and a half. And I’ll be honest with you, Andrew, it’s scary, but it’s also exciting at the same time because it’s disruptive to make that point.The Power of Being a GeneralistAndrew Mitrak: It’s great. Everything you’ve talked about, I resonate a lot because I think of myself also as a very generalist type person. My background’s in video and in virtual reality production, things like that. And then startup marketing and I’m at big tech now but also do a podcast. And also have some creative outlet where I want to learn about other things. And my career is never like one thing at a time. It’s at least two things sort of. And you have more than two things. It seems like most of the time you have a lot of things going on, which is I think just good. It’s like a good way to have a rich experience in life and just embrace a lot of things and not like that you’re dilly-dallying and just sampling, but you’re doing a lot of things in a meaningful way, but also wearing hats which makes you better at the other thing. It’s like I do this thing here and that gives me an idea for this company over here. And that’s just I think a productive way to be a good creative and a good marketer, right?Geoffrey Colon: Yeah. It almost is like this, I saw this thing recently where someone said Dr. Seuss actually niched up instead of niched down, which is he was a really good writer, but he knew that just writing words wasn’t going to be enough. So he figured out slowly how to do illustration even though it wasn’t the best. But he figured that out and he became world renowned. That is like I think the way that I look at things now. It’s like someone might say, “Are you an expert in this area?” No, and I probably never will be, but I’ll know enough to be dangerous to get by on that with the other things that you need to blend together to make something happen in our sort of creative era that we’re in. That’s really how creators operate. When you talk to a lot of creators, like people will say, “Oh, you’re amazing at this.” And they’ll be honest. They’ll be like, “I don’t really know how to use that. I just sort of figured it out.” And that mindset, we need more of that, especially to solve I think most of the problems in the 21st century because you can’t just be like, “Well, we don’t know what to do there. Let’s just give up.” It’s like, no, you got to figure that out.Adapting to AI and Unlearning SkillsAndrew Mitrak: Yeah, no, totally. And also I think there’s, we’re at this moment of course with AI where a lot of things are like you have to unlearn and relearn things too. And if you have an experience at learning new things, it’s a little less intimidating to unlearn some things because you’re less attached to them. Because it’s only if your whole body of work has all been in one really specific area doing one thing in one specific way and then this new technology comes and changes that, it’s like, “Wow, I have all this sunk cost.” And I have a little bit of sunk cost across a lot of things, but I’m willing to kind of give it up a little more and change it. So I think it’s like overall a pretty healthy thing.Where to Find Geoffrey ColonAndrew Mitrak: Well, Geoffrey, I’ve really enjoyed this conversation. There are a lot of places where listeners can find you online. Where do you recommend people who have enjoyed this conversation find your work and follow you online?Geoffrey Colon: Yeah, I have a website, geoffreycolon.net. I spell my name with a G just for those who are listening. I’m also pretty active on LinkedIn and I have a Substack like so many people called Creative Studies. I’ve also been a lot more active on TikTok. I know that sounds wild, Andrew, but I don’t know, like sometimes I just like to talk about interesting things because you’re like, “Well, I’m just going to bring the phone out and do it and it doesn’t have to be polished.” And people sort of, they like that. They just join in on the conversation. They ask questions. You know, I try to talk about the things in terms of like, “Hey, everything is a remix. Here’s where this may have originated from and we’re seeing it again.” And I think younger people really love that. And I like that too. I think that that’s important in our era where, I think as a person who’s more advanced in my career, I think it’s important to give back to people who are new in their career, whether it’s through time or advice or just listening.Andrew Mitrak: That’s awesome. I love that, you know, you’ve inspired me. I should open up TikTok again. I’ve dabbled in it and I do get scared about it. But here I am, I’m telling everybody to unlearn and relearn. I’ve got to do it myself and get back on TikTok. So I’ll check out your work there and dabble as well. And it’s great. I know a lot of college students listen to this as well. So I’m glad that you’re there educating young people about your career. So yeah, Geoffrey Colon, thanks so much for joining me. I really enjoyed this conversation and it was just such a pleasure to read your book, to read your work, and I’ll keep following you online because it’s all great stuff you’re putting out.Geoffrey Colon: Thank you, Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 41 This week, I’m joined by Tracey Panek, the corporate historian for Levi Strauss & Co, a company that embraces its past as an active part of its marketing strategy. Tracey’s role sits directly within the marketing department. Among her many tasks is to mine Levi’s archives for authentic stories. “Authenticity” may be a buzzword we hear often, but Levi’s backs it up with primary sources, including patents, artifacts recovered from shipwrecks, and of course, jeans… lots and lots of jeans.Tracey walks us through the brand’s evolution from a dry goods wholesaler serving miners in the California Gold Rush to a globally recognized icon of American culture. This episode is a great case study in how a company can embrace its heritage without getting stuck in the past.Here is what you’ll learn in this episode:* The Patent to Trademark Pivot: How Levi’s transitioned from relying on the functional patent of the copper rivet (1873) to building brand equity through the “Two Horse” trademark once the patent expired.* The “Picks and Shovels” Reality: Why Levi Strauss was originally an importer/wholesaler, and how a customer letter led to the invention of jeans.* Cultural Chameleons: How the brand navigated the shift from John Wayne conservatives to the “dangerous” denim of the 1950s and the psychedelic counterculture of the 1960s.* Campaign Spotlights: The stories behind the sales-doubling “Launderette” ad of the 80s and the Walt Whitman-inspired “Go Forth” campaign.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Bridging History and Marketing at Levi’sAndrew Mitrak: Tracey Panek, welcome to A History of Marketing.Tracey Panek: Thank you for having me.Andrew Mitrak: I thought I’d start by asking you about the connection between history and marketing at Levi Strauss & Co. You’re a corporate historian. What is your relationship to other marketers at the company?Tracey Panek: Well, I’m actually part of the marketing department, so it’s a very close relationship. It’s actually a really great place to be because I can see what projects are coming up and what I can tie into that we can use and provide resources from the archives to. So, it’s a great spot to be in.Andrew Mitrak: One of my research sources for prepping for this interview was a book called Levi Strauss: The Man Who Gave Blue Jeans to the World, written by Lynn Downey. I saw that Lynn worked as a historian at Levi’s. Was she your predecessor? Did she help build this history department, and what did this history department look like when you took it over?Tracey Panek: Lynn was my predecessor. She worked at the company for almost 25 years. She was hired in 1989 to establish the archives. Her great contribution was to help start to tell the stories, was to help try to clear up myths about Levi in particular, but other stories that had been told that weren’t really accurate. She also scoured the world in search of pieces to add to the collection, to build the collection. So when I joined in 2014 at her retirement, there was a great collection in place.But one of the things that was missing is it was a very manual collection. And what I mean by that is it was not digital. If you wanted to use the collection, you had to come in person. There was the need to bring the collection into the 21st century. So I started in mid-year 2014. By the end of the year, we were doing the first photoshoot—we now do this annually—but we were photographing all of the vintage pieces on site. That has been the beginning of a much more digital collection. So we have the physical collection and the digital collection, adding new and exciting pieces along the way.Andrew Mitrak: If she was hired back in 1989, there is sort of a self-awareness about Levi’s place in history, that they know that they’re a historic brand and that for over 35 years now, they’ve embraced their place in history and kind of leaned into themselves as a historic brand.Tracey Panek: Yeah, definitely. Being able to have the archives and have the resources to come up with authentic stories. Today we use that word in marketing, and for me, what it means is that they’ve got to be accurate. They’ve got to be based on primary sources as much as we can, and having the collection allows us to do that.The Early Life and Resilience of Levi StraussAndrew Mitrak: I want to ask you about the life of Levi Strauss, because reading his story, I just felt grateful to be alive today. He fled and escaped Bavaria because of antisemitic laws. The trip across the Atlantic was super dangerous and it seemed miserable. Then once he got to the East Coast, he then traveled through Panama to get to California, and that was really dangerous as well. Do you think these hardships helped shape his character and made him and his company more resilient?Tracey Panek: Well, you’re very right in describing a lot of the hardships that he went through. He was the youngest son in a Jewish family. There were very few opportunities for him to work or to marry with all the restrictions and pogroms that they had. So his father dies when he’s still very young, he’s 15 or 16, and he and his mother and two older sisters decide that they’ll make their way to America. They looked with hopefulness and kind of an American spirit that today we look back on and we call the American Dream. And I think there was a bit of adventurousness and wanting to make a name for himself and his family.He definitely went through a lot, even changing his name when he arrives in America. He was lucky to have a couple of older brothers and they help him to learn about what will be his business, dry goods in the wholesale side of it. So absolutely. One of the stories I love to tell to describe how tough he was and how resilient he was—because you went through a lot and you just had to get up and move on—is 1857. Four years after Levi sets up his company. He’s only been in San Francisco a few years but has managed to be very successful. So successful that by 1857, he decides to send an amount of treasure—I want to say it’s like close to $80,000 in gold.But you can imagine, in 1857, it is worth a lot. And he’s going to send it back to New York where his family is and where Wall Street still is, it’s still the financial capital of the United States. He sends it by steamship down the Pacific down to Panama. It is then loaded onto a train, goes to the Atlantic side because of course there’s no canal at that time, and then another steamship, the treasure rooms are the contents are deposited into another ship and they head up to New York. But off of the coast of the Carolinas, the ship hits a storm and it sinks to the bottom of the ocean floor. And all of that treasure is lost.It’s a huge amount of money. And Levi just has to continue on and not dwell on it. Although I think it’s rather telling that in some of the invoices not long after that date, there is little notes: “Are you insured? Are you insured?” It’s a great story of resilience. I actually bid on and won a piece of that ship. The ship is called the SS Central America, “Ship of Gold” is what it’s referred to as because it’s this Gold Rush era ship. And we have in the archives now a piece of the copper hull plate that’s on display and that is a perfect example of what you point out. You had to be hardy. You had to get up and move on when you’re faced with obstacles and you had to be resilient.Andrew Mitrak: Yeah. That was one of the stories in the book that stood out to me. Like, oh my gosh, this shipwreck and he’s sending a decent chunk of his fortune back. And also like 400-something people die. It’s a really horrible tragedy, all this money lost, but also these people lost. And it kind of also speaks to just the hardships of operating a business at that time, making it to California and the West Coast in the first place, and that that was just how commerce was done, is how things were sent back and forth. Anybody who is coming to the West Coast, they’re making this perilous journey where they can sink, they can get horrible diseases.Tracey Panek: I’ll just mention one more thing about those early years. The other great story about Levi is a year after he arrives in the city, and he’s pretty successful early on, he donates a portion of his profits to an orphanage in the city. It’s still around today, that orphanage, Edgewood. In fact, I went last year to a big event they had there. It set a precedent for giving back to the community and also spoke volumes really about Levi, his Jewish values, his own values about, you know, you go through hardships, but where you can, you try to give back something.Andrew Mitrak: Yeah, that’s great.Levi Strauss: The Wholesaler and the Gold RushAndrew Mitrak: I think of Levi Strauss as the classic “picks and shovels” story, and that it’s not the people who search for the gold who make the riches, but it’s the people who sell the tools that get them wealthy. But also, when I learned about this story in grade school—I grew up in California and they teach you about the Gold Rush then—they taught me as if Levi Strauss was selling the jeans directly to the miners and they kind of pitched that as a story. But it was a little more complex than that. He founded the company in 1853 when he was only 24 years old, but then the riveted denim jean wasn’t invented until 1873. So he wasn’t really selling jeans until much later. So what was he actually selling the miners during the Gold Rush? Because it wasn’t the jeans yet.Tracey Panek: The Gold Rush was an important part of the company’s history. Levi wouldn’t have come to San Francisco were it not for the Gold Rush. He leaves New York where he’s learned from his brothers, but he comes out to make a name for himself. And you’re right, he’s not going to do it by looking for gold. But he recognizes an opportunity to sell, and within a month of his arrival in the city, he’s looking for a warehouse near the waterfront where we still are today, by the way. But Levi, he is prepared for a shipment of supplies that will come a month after his arrival so that he can set up his business very quickly.He is not manufacturing. As you point out correctly, in those first 20 years, he’s not manufacturing. He is importing and exporting and selling things that others are making. And we have an invoice from 1858. And on that invoice, there are things like fabric, drawers, gray flannel shirting. There’s hose, which would be socks, and you can get, I think each of the socks was $1.15 for some hose. And the Hardy and Kennedy wanted to get $128 worth of hose. All of the requests, the supplies that they want, add up to $1,600. 1858. That’s a lot of product. One retail customer. So imagine all of the business that Levi is doing. So you’re right in noting that Levi wasn’t manufacturing, but the Gold Rush and the time that he begins, it certainly molds who he is and his relationships that will be established throughout the West.Andrew Mitrak: The folks in the Gold Rush, they were certainly benefiting from materials that Levi’s imported and sold wholesale to retailers, but they weren’t buying jeans quite yet. That wouldn’t come until 1873. Can you tell the story of how Levi first encountered Jacob Davis and how the riveted denim jean kind of came into play?Tracey Panek: Well, let me first say that a lot of what people read and what you may have read in your own research is myth about Levi coming and bringing denim with him when he arrives in San Francisco and creating on his own, sewing on his own blue jeans. Well, that’s not what happens. He develops a very successful dry goods business within the first 20 years. And he gets a letter in 1872 from a customer in Reno, Nevada. Reno, Nevada is very close to Virginia City where the Comstock Lode silver load has been discovered. It’s a huge discovery. It will help fund the development and growth of San Francisco.And this customer is a tailor in Reno. And he writes to Levi about this remarkable innovation. And it’s so interesting because it’s tiny. A tiny little innovation that will eventually allow Levi to manufacture for the first time and will eventually revolutionize fashion. It’s just a little piece of metal. A little tiny piece of metal, a rivet that’s added to pockets of work pants. And in this letter from Jacob Davis, that’s the name of the tailor, he sends two samples of them and tells them that they are selling like hotcakes and he can’t keep up with the demand. And would the company be interested in taking out a patent to protect his idea? He just knows somebody’s going to steal it.Levi, he’s adventurous as you pointed out, he agrees. The company on May 20th, 1873 is granted a US patent for an improvement in fastening pocket openings. It is the birth of the modern blue jean or riveted denim pant. And in that patent, those patent papers, there’s a sketch with little dots at the pocket area and one at the base of the button fly where the original rivets were. And that’s the story. We celebrate at the company May 20th every year as the birthday of the blue jean or 501 Day, as that garment or overall would eventually be called.Jacob Davis and the Birth of the Blue JeanAndrew Mitrak: Yeah. This really changed everything. Because if you think of how annoying it must be for your pocket to break and rip, because if that’s the thing that gets ripped, if people are using these jeans or I should call them waist overalls, that’s what they were called then, right? They were using them to hold their tools. Maybe if you find some silver, maybe put that in there. And if it’s ripping, you’re just losing everything everywhere, right? And so this comes and they totally lean into this. I just checked the Levi’s I’m wearing, I checked them before I put them on like, it’s right there. Patented May 20, 1873.And it’s kind of unusual, thinking of this as a marketer, that most products, they’ll say the date the company was established, right? You’ll see that EST, such and such date. But it doesn’t say that. It says the date that this was patented. So was it immediate that Levi’s the company started manufacturing and leaning into this patent as sort of their differentiator?Tracey Panek: Yeah, and let me clarify that what you’re talking about is the branding on the rivets themselves. Which is amazing because these are tiny. This is like smaller than a thumbnail. And it’s a little tiny little bit of copper and on that little rivet it says PAT for patent, May 1873, SF CA, SF California, and LS & Co. And all that on the little rivet. Yes, it is on that rivet and that imprint is given to those first manufactured products in 1873, the first waste overalls, those riveted pants. So Levi and the company, they’re very savvy about their branding and know that if they put it on there, you know, it’s something you can recognize. And then of course the Levi’s buttons are going to be branded as well. And eventually they’ll also anticipate the end of the patent, which doesn’t last forever, and start to create something to differentiate between them. So yes, the company leans into it. Levi is still a wholesale dry goods dealer, so the wholesale part of the business still continues as usual. And those riveted denim products will be a part of his business, but they won’t become super popular and bring the business what will happen eventually until much later.From Patent to Trademark: The Two Horse BrandAndrew Mitrak: Yeah, let’s dig into that story. Because then when does it sort of start to emerge? Because you mentioned how patents expire, they don’t last forever. Trademarks, however, last a lot longer. And pretty soon you can see the Two Horse Brand patch that’s on the back and the red imprint on the leather that’s on the back of the jeans. So when did that start to come into play when they sort of evolved from relying on the patent to then sort of trademarking more of their IP around what’s on the pants themselves?Tracey Panek: So a patent doesn’t last forever. It lasts about 20 years. And the company wanted to create something that would be recognizable to customers who wanted to get a genuine pair of Levi Strauss & Company waist overalls. And they created this image of two horses facing opposite directions with a little pair of our overalls in the middle. And the idea is they’re so strong, even if you pull them, you’re not going to tear them. And that trademark was created in 1886. It’s one of the oldest continuously used trademarks in the world. Originally we put it on our garment, on our waist overalls, on the inside pocket. But only the wearer could see that. So then we wise up about that and we put it on the back patch of the garment so that others can see it, not only potential customers as well as our customers who knew us.It was important in a couple of ways. That image could be recognized by anyone who was illiterate, which would have been a number of our workers, our blue-collar workers who wore our products. It could have been recognized by somebody who didn’t speak or write English, because we had a lot of immigrants who were working as well. So it played a number of roles and it symbolized the strength and quality of the product. So it was a great way to easily let people know: look for the Two Horse Brand, and then you know you’ve got a genuine pair of Levi’s.From Trademark to Icon: Levi’s and the CowboyAndrew Mitrak: So, when did the waist overalls themselves, when did that become the majority of Levi’s business? When did they start to sort of divest from the rest of the dry goods part of the business and really lean into the waist overalls themselves?Tracey Panek: Well, it happens slowly. When they bring some of the first trained accountants into the company—this will be members of the Haas family who marry in, who have come with an accounting background in the late teens and early 20s—they start to recognize that this is a bigger seller than they knew. And by the 1920s, they start devoting some revenue to advertisements. So in the 20s, you’ll have advertisements with cowboys wearing our products and feature details being called out. And they’re being produced in a number of languages: English, Spanish, Portuguese, Chinese.And then it’s by the 30s, coming out of the Depression—because the Depression was hard for the company, but everybody around the United States and the globe—when we begin to recover from that, we focus on the cowboy as our marketing symbol and also on our denim, our riveted denim products. Which, by the way, almost immediately include riveted denim jackets, which will add to the line and other riveted denim products. We don’t really pull out of our wholesale business until after World War II. But we had recognized, beginning as early as the late teens, how valuable this product was and started to focus on that more. So it happens gradually. It doesn’t happen just immediately.Andrew Mitrak: When did it grow from primarily being sold to working people just for utility versus being more of a fashion statement? What were the first inklings of people wearing it for something other than just its pure utility and more for the image associated with it?Tracey Panek: Well, we get hints of it because it doesn’t happen immediately. But we get hints of it in the 1930s. In fact, one of the earliest examples of it is in 1935 in Vogue magazine. An article about dude ranching, having a dude ranch vacation, which becomes very popular in the 30s and 40s. People from the East, the East Coast, and even as far away as Europe will come to the West and stay on a working horse or cattle ranch. And they want to have a Western cowboy dude ranch experience, and so they want to dress like a cowboy.And Vogue magazine says, if you’re coming out and you’re a woman, get yourself a pair of Lady Levi’s. The year before, we had introduced the first blue jeans for women. Get yourself a pair of Lady Levi’s, wear them cuffed at the bottom once, with a Stetson hat, a silk kerchief, boots, and a great air of bravado, the article says. And if you can do that, you’re going to have a great time. But here you see people who are dressing not because they want to do tough work, but because they want to dress like someone else. In this case, cowboys or dudes from a dude ranch.And then, of course, you have movies. We’re in California to the south of us in San Francisco. You’ve got Hollywood coming out with leading actors, especially in Westerns, and they’re wearing Levi’s. John Wayne, for example, in 1939, he has his first leading role in Stagecoach and he’s wearing a pair of 501s. So there are a number of influences that will change and lead people to start purchasing not just for practical workwear. And by the 50s, we like to say that’s the decade when denim became dangerous. And a lot of customers will be from those who are joining motorcycle clubs and they want to have some tough clothes as well, but they’re going to get their Levi’s with a leather jacket perhaps, and that look of the rebel, which is implanted in people in the movie like Marlon Brando’s The Wild One.Levi’s and Hollywood: An Organic ConnectionAndrew Mitrak: You mentioned the movies and iconic actors like John Wayne and Marlon Brando. Levi’s, more than most other companies I can think of, is really tied to the movies in a way where there are so many just iconic characters, even very different types of characters, that are wearing Levi’s. You mentioned Stagecoach and how the Westerns were really popular and that presumably people on the East Coast were watching Western movies and seeing Levi jeans and coming to the dude ranch out West and then wanting to get their own Levi’s or their Lady Levi’s. Was Levi’s sort of intentionally making connections to Hollywood to sort of use product placement in a way? Or was it more organic where costume directors and wardrobe folks at Hollywood were just picking out Levi’s because that’s what looked good or what they thought would be good on the character?Tracey Panek: Not in the way we think about it today. Today we have something called the House of Strauss, where influencers, movie, film folks can come and be outfitted in Levi’s. We didn’t have anything like that. But we certainly had good relations with the studios. And we’re in California, our location certainly probably helped. But also, we have many people who are wearing Levi’s. By the 1960s, when you have this rising youth generation who are adopting denim and certainly blue jeans in a big way—thanks in part, I think, to the idea of the rebel and what they’re wearing—then there is a desire to look a certain way, to wear something different from your parents and your parents’ generation, and they do that through Levi’s.Plus, Levi’s are such a great canvas for self-expression. It’s just this lovely tough blue fabric. Even if it tears, you can repair it with embroidery or a patch and it’s going to look cool. So all of these influences will come into play when it comes to the popularity of Levi’s in pop culture and in other subcultures generally.The Shift from “Waist Overalls” to “Jeans”Andrew Mitrak: As we’re talking about this era, at some point, waist overalls become jeans. Can you tell the story of how that transition happened? When did waist overalls—which is just so funny that that was the phrase that was used, jeans just sounds like something that’s existed forever, but no, it’s actually relatively recent—so how did that happen?Tracey Panek: Yeah. So we, I mentioned briefly the rise of the youth generation. San Francisco is the headquarters, the city where our company is headquartered, and we’re a stone’s throw away from the counterculture epicenter, the Haight-Ashbury. And young people are flooding into San Francisco and they are adopting Levi’s and blue jeans and denim in a big way. It was in 1967 when we introduce our first zippered jean, the 505, which is slimmer and intended to be a product that this younger generation will like, that we switch the name on our advertising to “Jeans” instead of the “Overalls” that we had been using.So I think the story of that is, as a company, we’re observant. We are watching what’s happening in culture and we’re paying attention and so we’re responding to that. And that includes not just naming a product for what the young people are calling it, but using their music because that will be another way that they will connect with our products.Andrew Mitrak: Yeah, using their music. On YouTube, I found a radio ad of the Levi’s Jefferson Airplane song, which is amazing and so from the era.And so you’re leaning into this counterculture, but also there is sort of a dance between the John Wayne sort of conservative, actual using jeans for their utility purpose—that Levi’s has probably a large customer base that’s doing that—and then you have the Marlon Brando sort of greaser type motorcycle guy of the 50s, the hippies of the 60s, you even have like rockers and punks of the 70s. And there are different flavors of counterculture that Levi’s is appealing to even as it’s also appeasing sort of the mainstream. How does the company balance both?Tracey Panek: The great thing about Levi’s is its timeless appeal and those working-class roots, which make it a garment that’s not pretentious. If you want to fit in and not be somebody that’s making airs, then you’re going to want to wear blue jeans. So they become really something that so many different cultures and subcultures choose, as you correctly point out in your description of the folks that are wearing them. Even today, I’m pleasantly surprised when I learn about a unique group that I didn’t know about that have been wearing Levi’s and have been tapping into that.So the company, to some extent, works on creating timeless products. Our iconic product being the 501, that waist overall, and still having those products that have been timeless and that you can use and that won’t look dated. Let’s just say that. So you can wear them today, or you could have worn them in the 1800s and they look relatively the same. And in that way, you can use that as a basis for so many different age groups, genders, sexualities—because that’ll be another story in and of itself—who have worn Levi’s. And I think it’s one of the really amazing qualities is the versatility of our clothing.Levi’s Iconic “Launderette” CommercialAndrew Mitrak: One of Levi’s most iconic advertisements is their Launderette ad, which aired in Great Britain in the mid-80s. Can you tell the story of this advertisement?Tracey Panek: Well, by 1985, we’re well established as a global product. And the 501, which is the icon, it is a button-fly denim riveted waist overall—we call it jeans now—but that product, we wanted to give a little love, especially coming out of eras where there were other competitors. And so in 1985 on Boxing Day, which is the day after Christmas in the UK, we launched a commercial called Launderette. And in the commercial, Nick Kamen, who’s this very handsome young man, comes into a laundromat and the ad is set to the music “I Heard It Through the Grapevine“ by Marvin Gaye. It’s just a great song.And he goes into the laundromat and he starts taking off his clothes because he’s going to wash his Levi’s. And it’s busy. There’s other people at the laundromat and they’re looking at him, “What’s this guy doing?” And so there’s certainly a little sex appeal there, but there’s also surprise. He throws his Levi’s into the washing machine and washes them. And that is the ad. It is an incredibly popular ad. It, in estimates from people and reviews that I’ve seen of it and talking to people, it probably increased sales of the 501 by as much as 200%. Thanks to the music, thanks to Nick Kamen who is featured on it. It just hits the right notes in so many ways and it helps to re-energize the 501.Andrew Mitrak: So the creative behind it, BBH, and the person who made it is one of the creatives, is Sir John Hegarty, who’s... he’s knighted. And I don’t think he would have been knighted if it wasn’t for this ad. It’s like, there aren’t that many advertising people who get deemed a Sir and get knighted. And it’s like, he’s one, and it’s probably you could tie it to this Levi’s Launderette ad. He’s had an amazing career, but this, this ad is what he’s most associated with.Tracey Panek: He was a guest speaker just this past year for our marketing team. So it was quite an honor to have him talk a little bit about working with the company and working with a brand that was willing to be very creative.Andrew Mitrak: Oh, that’s great. I love his talks. He’s so inspiring. So that’s cool that you got to hear directly from him with your team.Walt Whitman and the “Go Forth” CampaignAndrew Mitrak: I want to ask you about my personal favorite campaign, which I saw probably around the time I was in high school. It was “O Pioneers!” and “America Go Forth,” and they’re both set to these beautiful poems by Walt Whitman.And they’re filmed in this very impressive cinematography type way that just evokes this feeling of Americana. I loved these ads when I first saw them. Can you share more context about these ideas?Tracey Panek: Those ads launched in 2009. One of the things I love about them is they actually used wax cylinder recordings of Walt himself. So you can hear his, you can hear him speaking, which I think makes it even more appealing and authentic coming from him. And you can hear his, where he puts emphasis on his words. It’s so beautiful, isn’t it? That poetry that you were referring to. And the imagery that they used in the ads was also to support those beautiful words that he says.It was really created as a campaign to inspire a pioneering spirit, the way that Whitman captures it in his poetry. And I think it did it really beautifully. And I recently watched some of those, just the beautiful images with his voice in the background. Just lovely to, and very different from some of the other ads that we’ve done, but very memorable.Andrew Mitrak: Yeah, that’s right. And I think this was one of the first ads that I remember seeing like really tying a brand to Americana. You know, it’s a historical ad. It’s very striking to hear a wax cylinder recording with music behind it. And it struck me that Levi’s wasn’t advertising the rivet, they weren’t even advertising the product. They were like advertising this idea and leaning into a shared history of people. And I’m wondering for you as a historian who’s also part of a marketing team, do you sort of see this trend of Levi’s from going to marketing rivets and marketing their product to marketing ideas like durability to then evolving their brand to talk about things like whole cultural movements and then ultimately shared history? Like, do you sort of see that evolution in how Levi’s has approached their marketing?Tracey Panek: Well, that campaign with Walt Whitman especially, was a nod to our Western roots, especially the old pioneer and coming out West and what it means to be, which really is all about our early history. You know, we were born here in the American West. And for a lot of people overseas or in other parts of the world, we represent what they think of when they think of America. So I think that we did it well.I think that, you know, we’ve used at different times what we’ve felt was relevant for that particular time period. You referred to the Jefferson Airplane and their “White Levi’s” song that you can hear Grace Slick singing. And that ad campaign was from 1967. And they just hit it perfectly. It was the year of the Summer of Love. And at that time, that made sense to do it then. So I think we look at what’s happening and relevant at any given time and try to do our best to respond to that.Discover More Levi’s HistoryAndrew Mitrak: Tracey Panek, thanks so much. I’ve really enjoyed this conversation and having this opportunity to go through Levi’s history and analyze their marketing in a new way. For listeners who want to learn more about your work and the history of Levi’s, where would you point them to?Tracey Panek: I do a series on TikTok called “Greatest Stories Ever Worn” and “From the Levi’s Archives.” You can look for me there. You can look for videos that I’ve done on YouTube. I narrate the YouTube “From the Archives,” the Levi’s Archives series. If you’re looking for more of a corporate kind of thing, you can look for me on LinkedIn and you can find a lot of my content there. And then of course, I also do a lot of the writing for Unzipped, our company blog. So, yeah, several different places.Andrew Mitrak: That’s great. I’ll paste links to all of those in the blog that accompanies this show. So Tracey Panek, thanks so much for joining me. This has been a lot of fun.Tracey Panek: My pleasure. Thanks for having me, Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 40Long before giant balloons floated down Broadway* at the Macy’s Thanksgiving Day Parade, a remarkable young woman with a prosthetic eyeball developed the beginnings of the Macy’s brand in the 1860s.Her name was Margaret Getchell. She was a marketing visionary who gave Macy’s its iconic red star logo, she captured customers’ imaginations with fantastical window displays, and she cemented the brand’s connection to the holiday season.Even though she was the first female executive of Macy’s, Margaret Getchell’s contributions were largely lost to time. That was until Stephanie Forshee rediscovered Getchell’s story began the work of restoring her legacy.Stephanie published Getchell’s belated obituary in the New York Times as part of their “Overlooked No More” series, and introduced her story to a new generation through her children’s book, Hidden Gems: Margaret Getchell LaForge, which is part of a series celebrating fierce females in business.It’s an inspiring story that gave me new appreciation for the Macy’s brand. Now, here’s my conversation with Stephanie Forshee.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Stephanie Forshee, welcome to A History of Marketing.Stephanie Forshee: Thank you. Thank you for having me, Andrew. I’m excited to be here.Andrew Mitrak: I’m so excited to speak with you and have a great conversation about the life and career of Margaret Getchell. That’s a name, Margaret Getchell, that I’m guessing a lot of listeners haven’t heard before. You’ve written a piece for The New York Times about Getchell, as well as a children’s book called Hidden Gems. So to start, how would you describe Margaret Getchell to someone who’s never heard of her before?Stephanie Forshee: Yes, I think you’re correct that most people don’t know the name. Margaret Getchell was America’s first female retail executive. She worked for R.H. Macy & Co. during the 1860s and 1870s. She worked with the founder, Rowland Hussey Macy, who was a distant cousin of hers. She started with the company in 1860 as a cash clerk, worked her way up to head bookkeeper, and then made history in 1866 when she was named Superintendent of the store. That means she was the manager of the store, overseeing about 200 employees at that time, which would have been a big deal, of course.Rediscovering a Retail PioneerAndrew Mitrak: As well as that managerial and executive experience, she had a lot of contributions to marketing that we will speak on as well. I’m just wondering, how did you first come across this story? When was the moment where you realized, “Wow, I need to help tell this story and make more people aware of Getchell?”Stephanie Forshee: Early in the pandemic, very early on, when we were still in lockdown, March 2020, I was a business journalist at the time and enjoyed reading about businesses, particularly retail companies. I was nerding out on this book about the history of Macy’s. Within the first few chapters, there was information about Margaret Getchell and some of the early employees of the store. That’s when I learned she was supposedly America’s first female retail executive.I had never heard the name, so I was very intrigued by her story. I was doing a little searching online, and I just thought maybe it was just my ignorance, silly me for not having heard of this woman, but I quickly realized that not a lot of people knew about her or had written about her. There was an encyclopedia.com entry about her and maybe two or three articles about her at the time. She was very uncovered in terms of what she deserved. I started researching her as much as I could and immediately became more and more intrigued by her story. I was very interested in the idea of uncovering information about this woman that very few people knew about. So that was exciting for me as well.Andrew Mitrak: It’s always an exciting rush of a feeling when you discover somebody who has an interesting story and realize it is relatively uncovered. You think everything is covered on the internet, and it is surprising, of course, your book is called Hidden Gems, when there is more to be told here. I’ve experienced that myself, and it is a good rush.Stephanie Forshee: Yes, I can definitely relate to that.Andrew Mitrak: Your background is as a PR professional now, but you had been a reporter as well at some point, so telling stories was in your wheelhouse as well.Stephanie Forshee: Yes, I was a business journalist for about 15 years and worked for various publications. I was always drawn to stories that were sort of off the beaten path. Finding Margaret fit into that narrative, even though it was something completely new to me—covering a historic figure and researching someone like this. That was a whole new process but used a lot of the same skills.From Schoolteacher to Retail ExecutiveAndrew Mitrak: Let’s walk through some of Getchell’s career. To start, how did she get her job at Macy’s? You mentioned that Rowland Hussey Macy, the name of Macy, was a distant cousin of hers. Was that the initial connection for her to start work there?Stephanie Forshee: Actually, they had not met at that point. She graduated high school at the age of 16. She was very skilled with numbers, so she became an arithmetic teacher for a school on Nantucket. Then she traveled to a couple of different cities in New Jersey and New York.Years earlier, she suffered an eye injury. It was a freak accident playing a game of tag with her sister. It was a gory accident where she injured her eye. She didn’t immediately lose her vision, but it was deteriorating over the years. When she was 19 years old, she finally had surgery to have her eye removed and replaced with a prosthetic eye. It is one of those incidents that changed the trajectory of her life.Andrew Mitrak: Just to pause on that—an eye injury. Today that seems gruesome, but in the 1840s or 1850s, just thinking of what eye surgery was probably like back then... there were probably not the same types of anesthesia or processes. It seems like a really horrific, traumatic, formational experience.Stephanie Forshee: I agree. That is something I’ve been researching the past few years—what that would have been like, that time versus today. You’re right, it is not something that anyone would want to endure. But it did shape her as a person and was something she had to deal with.So, when she was 19, she underwent this surgery. This was early in the summer of 1860. As she was recovering, the doctor recommended she should consider a change in career. She had been a school teacher at that point, and he was saying that grading papers by candlelight things like that was probably not too great for her eye. That’s how the story goes. In hindsight, the doctor was probably suggesting, “You’re 19, you need to be married and go about your life.”But she did take it into consideration to change her career. She had heard of her distant cousin Rowland Macy. They had both grown up, he was 20 years her senior, but they both were from the island of Nantucket. He was her distant cousin, even though they never met. She decided to apply there. The meeting went very well; she had an interview with him, she explained that she was skilled, so he hired her as a cash clerk to start, and she made her way up from there.The Humble Beginnings of R.H. Macy & Co.Andrew Mitrak: It’s funny that it all started because a doctor allegedly recommended this change in career. It’s funny tho, reading some of these old books, old biographies, how often doctors would recommend things like, “Go move out West” or “Go live near a lake.” Doctors don’t really prescribe that kind of treatment anymore. A lot of changes in medicine and doctors’ recommendations. Anyway, this may have been the starting point for her meeting with R.H. Macy. The meeting went well. Can you share a little more about R.H. Macy and about Macy, the department store itself in 1860? Obviously, I am guessing, it wasn’t the major brand that it later became. Where was it in its journey? Just started? Was a little more established? Where was it in its establishment?Stephanie Forshee: At that time, the New York store was only two years old. Rowland had other ventures—he really had a lot riding on this because he’d opened stores in Massachusetts as well as California, and Wisconsin, and those just didn’t pan out the way he had hoped. He was not the “Merchant Prince” at that time as he came to be known later.At that time, the store was on its way. Sales were okay; they were definitely growing and surviving. But when she came to the store, it was not a full-fledged department store by any means. It was a dry goods store. The advertising, the signs out front just said cloaks, millinery, silks, and gloves. They had select items, but it was just a small store. Over the years, it would expand greatly.Andrew Mitrak: Can you paint a picture of that time for women in business? Was it common for somebody like Margaret, a young woman, she was 19 or 20 at this time, to get a job at a store, or was this unusual just to work in business at all as a young woman?Stephanie Forshee: In New York, it would be pretty uncommon even just to have this job, much less what she would go on to accomplish. There were definitely women employed by the store, but it wasn’t that common at that point.What is interesting is that she was from Nantucket, so she came in with all the confidence in the world. Nantucket, if you ever visit there or even read about it, they are very proud of its heritage and history. They were known as the whaling capital of the world at that point. Most of the men, the majority of them, were out on whaling voyages for months or years at a time. The women, just like in many times when men went to war, women had to run things. It was like that early on. In Nantucket, they were having to run the post office, the schools, and pretty much the whole town while men were away on these whaling voyages.She would have grown up seeing that in her community. Roland, having that same perspective, knew that women were just as capable. So they were, in a way, in their own bubble thinking that women could do things and run businesses too. But to your point, that was not very common generally at that point. And that would be the 1860s, right before the war. So in the coming years, it would become more common.The Origin of the Macy’s Red Star LogoAndrew Mitrak: That’s really interesting. This connection to Nantucket, and you mentioned whaling, and this actually leads to one of the most iconic contributions that Margaret Getchell has was the Macy’s logo, which was a tattoo that R.H. Macy had, that was a whaling tattoo. Can you tell the story of the logo and how Margaret Getchell helped identify and create that?Stephanie Forshee: She started out as the numbers person, accounting and bookkeeping, and gradually became a trusted confidant of Rowland Macy. She was constantly coming up with ideas. She would say that she liked to “put a bug in his ear” for different things.One of her greatest contributions was the logo. She knew that he had a red star tattoo on his wrist. At the time, I think that he was actually kind of embarrassed by this tattoo or his past as a whaler; it wasn’t something that he was particularly proud of as he was trying to make a name for himself as a merchant in New York at that point. But she saw that and thought it would be a good idea to be an emblem or insignia for the store.She decided to put the red star logo on their letterhead and on each individual price tag and for items within the store, which we will get back to that as well. Macy was one of the first to have fixed prices. Before that, it was all negotiating and haggling on prices. The fact that they had price tags on their individual items was innovative at that time. The other thing is that they put the red star on columns outside the store, which still stand today. The original Macy’s is actually at 14th Street and 6th Avenue; that predates the famous Herald Square location.Andrew Mitrak: I use the word “logo” to describe this red star, but that is kind of an anachronism. It wouldn’t have been called a logo at the time. Logo is kind of a more common thing later. The red star emblem itself has been such an iconic part of Macy’s. Was that somewhat unusual for a company to adopt an emblem like that, or was that common or can you contextualize that decision for them?Stephanie Forshee: I wouldn’t say that it was common. It would have been somewhat unusual, but not restore our business, a logo like this, but it did exist for sure. One of Macy’s earlier ventures, he was in Haverhill, Massachusetts and his logo used a rooster as an emblem at that time in some of the newspaper advertisements. So it wasn’t unheard of by any means, but at that time, they didn’t think it was a “must-have” for a business.Andrew Mitrak: That’s right. If I were to think of them at the time, I haven’t studied this deeply, a lot of them tend to be much more ornate and much more detailed than have the names as part of it and it’s hard to remember. The red star logo or just a star itself, is such an instantly recognizable, simple type of emblem. You can see that Macy sort of wants to use it in different ways, where they’d like to use typography, and it kind of gave them some more flexibility on how to use it. So it seems like a really good decision as a logo and you couldn’t just do a star today cause it seems like so widely overuse. Also, it’s also claimed by Macy as a thing. It seems like it was a really good, prescient thing for Margaret Getchell to notice, latch onto, and embrace as well.Stephanie Forshee: Yes, at the time I think it was just a great idea that she had. To your point, the simplicity of it is what really stuck with people. As you know, it is still the logo today, so it must have been a success.Innovative Marketing Stunts and Store LayoutsAndrew Mitrak: Let’s talk about some of her other contributions to Macy’s, specifically around things like placement and displays. Do you have any favorite examples of her other contributions—clever tactics to help increase sales and attract customers?Stephanie Forshee: She loved thinking different innovations for the store. She was constantly coming up with ideas for different departments. It was her idea to introduce the toy department and the book department; at that time, it would be a bigger draw than today. Unfortunately, Macy’s doesn’t have a ton of books in its stores today.She always came up with new ideas for new merchandise. One of my favorite examples of Margaret’s innovations is that she loved a good publicity stunt. One of the things she did was bring cats into the store. She dressed them up in baby doll clothes and put them in little carriages, or prams as they were called back then. She put those in the window display. I’m sure passersby were wondering, “What on earth is going on?”They were so intrigued and enchanted by these cats. So many people came into the store that day, and they had record sales selling all these baby doll clothes, different accessories, and the dolls themselves of course. That was just one example of creative, out-of-the-box thinking.Andrew Mitrak: Just to comment on this cat thing, and it’s so funny when I read this. I’ve been to a few conferences where everybody has booths in these conferences, and it’s almost like a window display, and you want people to come to your booth. A thing that sometimes people will do is bring puppies. “Oh, we got puppies! Come play with puppies and hear about our company software, B2B SaaS product.” People will be like, “Oh my gosh, that’s so innovative. They got puppies there.” This is kind of just a riff on something that Margaret Getchell did 150-plus years ago. So it’s funny that sometimes, like these tactics that they can be from the past, but still see kernels of that almost today as well.Stephanie Forshee: Yes, I can only imagine this within the children’s department at that time, just hanging out with all the cats.Andrew Mitrak: In addition to cats, any other favorites of yours?Stephanie Forshee: Macy’s had a lot of ideas, and a lot of the New York department stores were following the lead of European department stores. Soda fountains were becoming all the rage. It would have been the late 1860s and the early 1870s. When they were becoming popular, Margaret knew that they needed a soda fountain at Macy’s. Her idea was to place it towards the back of the store so that customers would be eyeing other items as they were walking back and forth to the soda fountain. That is something that we know most stores do today, but at the time, it was a grand idea.Andrew Mitrak: Totally. Today, I think of grocery stores—essential products like milk are almost always at the back of the store. It’s the thing that expires, the thing you often need a refill of. Just thinking of, “What is the thing that will attract people in? How do I make them exposed to more of the products and merchandise within our store to increase sales?” Super clever.The ‘Customer-Obsessed’ PhilosophyAndrew Mitrak: She had this motto: “Be everywhere, do everything, and never forget to astonish the customer.” Do you have a sense of how she actually used that motto? Was it something she wrote down? Was it something she said to her employees? How did that motto manifest?Stephanie Forshee: It’s not exactly clear. It must have come up because many employees said that she had embraced this motto. I would imagine she used it in training, perhaps with the cash girls. I have mixed feelings about the motto. “Be everywhere, do everything”—it is true, if you want to astonish the customer, you do have to do those things. But I think she, as well as Rowland Macy and leadership within the store, were maybe workaholics for sure. From everything I read about them.Andrew Mitrak: To me, it has echoes of Amazon. I am in Seattle, and so Amazon is a big company– It’s a big company everywhere, but it’s one that’s so close to my home– and it sounds a lot like Jeff Bezos. He has this idea of customer obsession, and that’s in their culture. And of course, they are the everything store and so “Be everywhere, do everything, never forget to astonish the customer” seems like it echoes Amazon. And at the time, Macy’s was selling books and all sorts of goods, they were being an everything-type of store.Stephanie Forshee: That’s a great parallel. They definitely took the customer obsession very seriously.Establishing the Holiday Shopping SeasonAndrew Mitrak: I want to ask you about one more famous contribution she had: convincing Macy’s to have the store open on Christmas Eve. I think this was in 1868. Now Macy’s is so associated with the Christmas holiday and Thanksgiving through Christmas season. Can you just share a bit about this decision and the impact that had?Stephanie Forshee: At that time, she was wanting the store to stay open late. It started out on Christmas Eve and would later turn into the entire month of December, staying open late because, as we know, there are lots of last-minute shoppers. She knew that was an opportunity for the store to make more money if they would stay open late. They did, and they had record sales that day. It’s one of those things that today, in hindsight, some people who are working on Christmas Eve and throughout the Thanksgiving holiday might not love Margaret’s grand idea.Andrew Mitrak: There is a trade-off on your priority stack: do you prioritize the customer or your employees? It seems like that trade-off was for the customer at the expense of some of the employees who have to work longer hours as a result.Leadership Changes and Unfair CompensationAndrew Mitrak: Getchell is a pioneer in the business world and she is a pioneer of reaching the glass ceiling at Macy’s. She was promoted to Superintendent, she became second-in-command to Macy himself. But as Macy’s the brand grows, she becomes overlooked. Her time there was super impactful but relatively short, and was not a multi-decade career there. Why do you think it was that she became overlooked?Stephanie Forshee: There are a few things. We haven’t talked about her husband yet, but she did meet her husband, Abiel LaForge, at Macy’s. She was introduced to him through Rowland. He had been a soldier during the Civil War and met Rowland Macy’s son, helping him out. He became a close, trusted person of the Macy’s family. Abiel eventually comes to work for Macy’s years after Margaret started.He was very dedicated to the company, for sure, but he was not coming up with all these innovations and he was not giving the same type of contribution as Margaret. In 1872, Rowland Macy is thinking about future partners of the firm—what’s going to happen if he retires or passes away. He is looking at successors. For some reason, Margaret is completely overlooked in this equation. As much as she was given opportunities before and for the year prior, at this point, Rowland, he did choose Abiel LaForge, as well as one of Macy’s nephews, Robert Valentine. There is no exact reason given. I think simply because she was a woman. At that time, he gave her a lot of opportunities, but it seemed like there was a limit there.Andrew Mitrak: As an aside, she does marry Abiel LaForge. I’ve referred to her as Margaret Getchell, but her full name is Margaret Getchell LaForge, and it does seem like they’re kind of almost both used. I know your book is Margaret Getchell LaForge, but the New York Times’ piece just calls her Margaret Getchell. I wasn’t quite sure which name to use. Do I use LaForge or not?Stephanie Forshee: Yes, so they were married in 1869 and she did take his name. But I think that some people who would just say Margaret Getchell is because most of her contributions really to the store were before her married life. So it was out of respect for that.Andrew Mitrak: I’m going to quote from your New York Times article: “In fact, after her husband became a partner, her compensation was eliminated and she gradually stepped away from her work to care for her children. Having a husband who owned a stake in the business was considered sufficient, as he would support the family with his earnings.” It sounds like her compensation was eliminated before her job was eliminated. To all these points of Macy being tough on employees, that seems really unfair.Stephanie Forshee: When you think about it today, it is unbelievable. You can’t really think of someone not being paid for their job. In a lot of ways, Margaret was ahead of her time. She not only worked when she was married, but she worked through her pregnancies as well. That was really unheard of. She would have already had two children by 1872. When her husband was named a partner, but at that time, that was when her compensation was taken away. With Abiel being a partner in the store, everything was going to be the same pot of money, if you will.Andrew Mitrak: It sounds like that period from 1860 through the end of that decade, she really was full-time Superintendent, rising the ranks, having astonishing contributions. Then from 1870 onwards, it becomes a little less formal.A Legacy Cut ShortAndrew Mitrak: You mentioned that R.H. Macy had been doing succession planning in the 1870s. It is important that he was, because there are a series of tragic endings in a short period of time. R.H. Macy died in 1877, age 54. Then Abiel LaForge dies a year after that in 1878. And then sadly, Margaret Getchell dies in 1880 at 38 years old. Is there anything you’d want to share about her final years?Stephanie Forshee: It is really sad to think, she accomplished so much in the business world and started her own family. For anyone to pass away at 38 is devastating. The fact that she lost the two men she was closest to in her life—her employer, that she grew so close to and her husband—those few final years were extremely hard for her. She had some health issues, things like nerves pain and chronic pain. She ultimately passed away from a combination of heart failure and ovarian issues. As far as I know, it would have been ovarian cancer, though at that time they didn’t exactly know how to treat that. Those final years were definitely marked by tragedy.Andrew Mitrak: It also seems like, certainly tragic on a personal level, but for Macy’s the company, it leaves a leadership vacuum. The steward of the brand and marketing innovation is gone. The founder is gone. Abiel, considered one of the potential successors, is also gone. Who takes the reins at Macy’s, and do any of Getchell’s innovations survive this transition?Stephanie Forshee: A few people stepped in temporarily because it was a very quick succession with Macy and Abiel LaForge dying the next year, and even Valentine. When Macy passed away, Margaret’s husband Abiel and Robert Valentine had intended to and filed paperwork to rename the store “LaForge & Valentine.” So in some way, it is crazy to think of now because of all the tragedies that happened, because they passed away, the store was never renamed. It’s crazy to think that it would have been a completely different name.A few people stepped in temporarily over those next few years. Over the next decade, it was a shorter tenure. It was the Straus family who would eventually become in charge of the store for decades and innovate even further in the coming years throughout the early 1900s.In terms of her innovations and contributions to the store, surviving her legacy, I think in many ways they did. When Macy hired Margaret, because she had been so successful, that encouraged him to hire many more women and promote them to leadership roles. Even though, they didn’t quite get to the level that Margaret did—there were managers and head buyers—but the next Superintendent or two were not female. But there were some positives to come from that.The Enduring Spirit of InnovationAndrew Mitrak: It wasn’t until decades later in 1924 that Macy’s launched the Thanksgiving Day Parade, which is probably its most famous marketing event. Getchell obviously wasn’t alive to see it, but do you see any of her fingerprints on this event?Stephanie Forshee: In some ways, yes. There is nothing you can directly link to say she had the idea for a parade, but just the fact that she was constantly innovating and encouraging others to share their ideas. I think she would be in favor of it and definitely proud that Macy’s came up with this idea and was able to pull it off in a way they have. To see it today, I’m sure she would be very pleased.Lessons from Margaret Getchell’s LifeAndrew Mitrak: Wrapping up, as you reflect on Margaret Getchell’s life and work and you spent a lot of time on her biography, are there any top lessons that you’ve taken away? Are there ways you’ve applied her “astonish the customer” philosophy, or other ways you take her lesson to your own professional life as a marketer and PR professional?Stephanie Forshee: Absolutely. I think of that all the time. I feel inspired by her. I have been writing for the sake of other people knowing her name and learning from her, but I feel very lucky to have been the person to follow her journey and research her over the past few years. The “astonish the customer” philosophy—I am constantly thinking of that.I also put myself in her shoes a lot. I don’t know this for sure because it’s not something she wrote in her diary. I think she must have faced some forms of imposter syndrome or having doubts, being one of the only female leaders. I put myself in her shoes a lot thinking, “Okay, if she can do it, I can do it.” Those are the things that encourage and inspire me.Andrew Mitrak: That’s a really inspiring lesson to wrap up on. Stephanie Forshee, thanks so much for joining. I’ll be sure to post links to your piece in The New York Times as well as your book Hidden Gems in the blog post. Stephanie, I’ve really enjoyed the conversation. Thanks so much for joining me and sharing about the astonishing career of Margaret Getchell LaForge.Stephanie Forshee: Thank you so much. Thanks for having me, Andrew. It was great.*Footnote: In the intro, I mention balloons floating down Broadway. While the parade famously followed Broadway for decades, the route changed in 2009. Today, the balloons float down 6th Avenue, though they still end at Macy’s flagship store on Broadway & 34th. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 39A recurring theme on A History of Marketing is the tension between marketing as an art and marketing as a science.Lately, we’ve explored the former. David Gluckman shared how he invented Baileys Irish Cream in 1973 based on gut instinct and “the benefit of ignorance.” Scott Reames revealed how the team that birthed the Nike brand in 1971 had no formal training as marketers.This week, the pendulum swings in the other direction in my excellent conversation with Jim Spaeth, Ph.D.Jim’s career places him at the center of the industry’s shift toward rigorous measurement. From his early days at Young & Rubicam and General Foods, Jim pioneered Marketing Mix Modeling (MMM), a discipline designed to measure marketing’s ROI in financial terms and further optimize investments in marketing.* The Origins of MMM: How General Foods used early models to uncover granular insights to bridge the gap between marketing and finance* Connecting Ads to Sales: How the ambitious ScanAmerica venture attempted to measure actual SKU-level supermarket purchases to locally-aired TV ads* Standardizing Internet Advertising: His time leading the Advertising Research Foundation (ARF) during the dot-com boom, where he fought to standardize the chaotic new language of clicks and views* The Future of Measurement: How deep learning and AI are addressing the lingering challenges of causality and creative assessmentIf the last few episodes demonstrated the power of creative intuition, this conversation explores the discipline of proving that intuition actually works.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Defining Marketing Mix ModelingAndrew Mitrak: Jim Spaeth, welcome to A History of Marketing.Jim Spaeth: Thank you.Andrew Mitrak: I’m really excited to speak with you. Prior guests, Shelly Zalis and Bill Moult, both highly recommended speaking with you, especially on the history of marketing mix modeling, which is something that has been brought up on this show before, but we haven’t fully delved into.So, I thought I’d ask you about some of that. And first, I thought maybe we could define that for listeners. So if you were at a dinner party or having a glass of wine with somebody and you had to explain marketing mix modeling to them—to somebody who hadn’t heard of it before—how would you overall describe that to them?Jim Spaeth: I would describe it in a few ways. The simplest is just from what its goal is. It attempts to decompose the contribution to sales of all of the marketing and non-marketing factors that drive sales. And at its simplest, in some ways, it’s to prove that marketing is accomplishing something. To quantify what it’s accomplishing and to measure the return on investment. So, it’s a way for marketing and finance people to talk to each other. That’s kind of one part of it.But also, by understanding all of the factors that are driving sales, you can begin to think about how to optimally allocate budgets, which things are working, which things need help, how external factors that you don’t control impact your sales. So good examples would be things like the weather, the economy, competitive product pricing. You don’t control everything, but you need to react to certain things. So, in a way, conceptually, it’s the engine for an ideal dashboard for a marketer.Andrew Mitrak: And do you think of it more as a backward-looking dashboard analyzing results or more of a forward-looking model of where to apply things? Or is it a little bit of both?Jim Spaeth: It’s a little bit of both. It’s accused of being backward-looking because the problem is, typically marketing mix models need two or three years’ worth of data. So, what they learn or figure—learn tends to make it sound like AI, and these days there is AI in marketing mix, but not always, and certainly there hasn’t been—but what you can infer, I guess is a better way of saying it, from marketing mix is what the impact of those historical activities have been.So if you ran the same television campaign for the last 10 years, that’s what you’re going to understand about, that’s what your model is going to tell you about. It’s not going to tell you about this great new campaign and what it might do. Now, that said, you can use marketing mix to, as I said, optimize your spend going forward based on what historical responses have been. You can use it to forecast, and forecasting can be at a broad level or it could be at a very granular level to help, you know, production, inventory, things of that sort.But you always have to recognize that it’s based on history. So that’s why it has that backward-looking reputation. However, I would say any technique is backward-looking because any technique based on data is based on something from the past. I mean, it might be yesterday or last week or last month, but it’s something from the past. It’s just a question of how far back in the past you have to go.The Origins of MMM: From Marketing as Art to ScienceAndrew Mitrak: You mentioned earlier in your career, you were at General Foods in-house. And by the way, General Foods is probably better known today for the Post cereal brands, is that right?Jim Spaeth: Oh, it was the home of Post, Maxwell House, Jell-O, Tang that went to the moon, or at least in space, I can’t remember anymore. So, it was merged with Kraft, then Kraft has been merged with Heinz...Andrew Mitrak: And so really mass CPG products. Were you involved in marketing mix modeling there?Jim Spaeth: So that was kind of the beginning. GF was the beginning of marketing mix modeling, quite frankly. I would say the prologue is, before that, I worked for nine years at Young & Rubicam when it was a full-service ad agency. And those were the days of the 15% commission, so the agency had a lot of money to bestow many, many benefits and services upon their clients, and they weren’t always squabbling over every nickel and dime.So we had a big, big research department and we did a lot of different stuff. But these guys were thinking about how to use science in marketing. Marketing was an art. I mean, it was just all an art. It was judgment, it was creativity, it was... and it worked. You know, we just couldn’t really prove it, we couldn’t measure it, but you could see it work when well-marketed brands beat the crap out of the more commodity brands, and they could charge more money and get away with it because they seemed to be higher value. So we knew marketing worked, but it hadn’t really been measured and it hadn’t really been submitted to the science of optimization and all those kinds of things. So that work was beginning at Y&R.So, those are kind of the prologue days, really trying to bring science methods, econometrics, and such into the marketing world.An Early Insight: Connecting Stove Top Stuffing Sales with Potato PricesAndrew Mitrak: You worked at Y&R before General Foods. Did having this in-house and agency perspective on marketing mix modeling shape your views in any way? Did you notice sort of gaps or things that didn’t work? Because not everybody has the luxury of working at both.Jim Spaeth: Yeah, that’s a really good, really, really good point. Absolutely did. My knowledge from Y&R of how media is bought and sold made a big difference, because why do you need to learn something when you can’t act on it, right? So, you buy your television largely in the upfront market. While you have some flexibility, you’re pretty much, let’s say, 80% locked in. So, we’re not going to be able to change it anytime soon, whereas radio was pretty nimble, and if you learned something about radio, you could act on it over the weekend and make a change.So things like that, knowing how media really worked was very, very helpful. And then the view from inside the business, inside the food business, was amazing because you really got to see how it worked—both organizationally, how it worked, what the decisions were, when they got made, what the decision-making process was like.I came in initially into the market research department where we began to build an actual, honest-to-God marketing mix modeling practice, which meant, to boil it down simplistically, using econometrics. So using regression modeling and all the sales and marketing data you could lay your hands on. And in those early days, we built models for all of the GF brands.And they were very simplistic. They would just say, “Here’s my sales. To what degree is...” Now remember, we’re talking in the ‘80s now, right? “To what degree does television drive sales versus radio versus outdoor versus magazines? What’s the impact of pricing? What about my in-store promotions? What about my coupons?” So what I just named, seven or eight factors, maybe there would be 10 or 12 factors in a model. My personal big breakthrough was when I discovered that Stove Top stuffing did well when the price of potatoes was high. So, you know, starch on your plate could be Stove Top, could be potatoes. When potatoes were expensive, you go to Stove Top. When potatoes are cheap, Stove Top didn’t do as well. So, that was pretty sophisticated. That was a cross-elasticity in the model. So they were really, really simplistic.Who Actually Used Marketing Research?Andrew Mitrak: When you built those early models at General Foods, who do you present that to, and who makes use of that information? Is it to product groups as far as, “Okay, we’re going to change our products”? Is it to advertising agencies who then use it to inform their campaigns? How does that research actually get put into practice?Jim Spaeth: That’s a very, very good question because that development of that kind of organizational process has been equally, if not more, important than the development of data and statistical technique. In those days, we worked collaboratively. So every division had its own little research group and a head of research. And so we would collaborate with them because we wanted to be somewhat cohesive and consistent in our story. And then ultimately, we would report to the marketing director or the division president.Andrew Mitrak: The marketing director or division president, they are looking at all this information and then they’re using it to just inform their overall marketing strategies.Jim Spaeth: Right. Setting budgets, allocating budgets. That was the primary application, deciding what’s working, what’s not working. Back in those days, we weren’t able to break out creative, so we couldn’t really try to understand whether this particular campaign was working. That has only come very recently. That was a desire from the beginning, but not something we could accomplish.Andrew Mitrak: Did it feel like General Foods was early to this kind of practice? That this was sort of the frontier of using research and analytics?Jim Spaeth: My impression is back then, GF was clearly the first. And it disseminated from there. So one of the reasons mix modeling in its early phase was pretty much just a CPG practice is because people moved from GF to Pepsi, to Kraft, to Clorox, to wherever, and brought the practice with them.The ScanAmerica Project: “Ahead of its Time”Andrew Mitrak: After General Foods, at some point, you get involved with ScanAmerica and Arbitron. Can you tell me this story?Jim Spaeth: That was an early attempt at measuring both product purchasing and television viewing among the same households so that you could look at not the audiences among women, but the audience among Maxwell House purchasers, or frequent Maxwell House purchasers. That was ScanAmerica. That was actually a joint venture between Burke Marketing Services and Arbitron. So Arbitron did the TV part and Burke did the sales part, and they also had expertise in test marketing.So that was very, very exciting, and it didn’t make it. The first of a number of startups that I’ve been involved in that have not been successful but have been exciting and groundbreaking.Andrew Mitrak: It seems like a really ambitious project because this would have been in the ‘80s?Jim Spaeth: Second half of the ‘80s.Andrew Mitrak: The idea really was the ads you’re running, really connecting those to actual purchases and having a set of SKUs that are at a grocery market in an area that saw those ads, and really connecting end-to-end, which seems like a complex, ambitious challenge to solve. It still seems challenging today, especially 40, 50 years ago or so, it sounds like a really tough one.Jim Spaeth: Yeah, it was a little bit ahead of its time.Andrew Mitrak: I’ve worked for a handful of startups and it seems like there’s an interesting thing as a marketer to join a product as part of the vision, right? Where the product is not quite reality yet, but if you get enough people on board and it seems like it could cross the chasm and become real, there’s a big opportunity. So it seems like it’s important to just swing for the fences and try things out, even if they don’t work.Jim Spaeth: Absolutely. That’s been the story of my career. It’s like, when you see it, go for it. And we really, really believed in it. And we had clients who really, really believed in it. It was just too hard to do, too hard, too expensive to do at that time. And the other thing is you run into those organizational issues. That’s I think where I first learned, it may make complete sense, total sense, it might have demonstrable economic benefit, but before you really push too hard, make sure you understand what the industry or organizational constraints might be.Standardizing a New Frontier: The Internet and the ARFAndrew Mitrak: You mentioned the Advertising Research Foundation (ARF), and you became president of the ARF in the mid-’90s. What is the ARF for somebody who hasn’t heard of that before?Jim Spaeth: Sure. The Advertising Research Foundation is, I want to say the oldest... Now, I don’t know how far back the AMA goes, but the oldest or one of the oldest marketing-centric trade organizations in the United States. It was founded by the ANA (the Association of National Advertisers) and the 4A’s (the American Association of Advertising Agencies) because they needed something, they needed to stimulate better research.Andrew Mitrak: Yeah, and I think the AMA was the ‘30s or ‘40s. I’d have to look it up.Jim Spaeth: So I think the ARF actually predates it. And it was focused on advertising because it was the child of the advertisers and the agencies. So obviously marketing is a broader topic, but that’s what their focal point was. And again, many, many years later, ARF was still respected around the world as a preeminent authority with respect to advertising and media in particular, maybe not marketing more broadly or market research more broadly, because you had other organizations in Europe and in Asia and elsewhere. But it’s an organization with global stature that’s been around for a long time and does a lot of leadership. We’re doing some great work right now on this topic of marketing mix modeling.Andrew Mitrak: That’s awesome. By the way, it looks like ARF, based on Wikipedia at least, was founded in 1936, and AMA was founded in 1937. So it predates the AMA. [laughs]Jim Spaeth: Slightly earlier, all right.Andrew Mitrak: Why the jump to ARF after having a career at startups, at agencies, at large CPG companies?Jim Spaeth: The ARF was very important to me personally. The reason is, back when I was at General Foods, the head of research at GF was involved, I think he might have been on the board of ARF. They needed someone with some media expertise in a volunteer role. This was just early on. And he kind of volunteered—he went to my boss and he said, “I want to volunteer Jim for this job.” Which was great because I was a little bit bored, frankly.And I had very little exposure to the outside world. I’d been in my two companies I worked at and was fine and comfortable, but didn’t really get out a lot. So this kind of put me out in the outside world. And I will never forget being in a meeting with five or six legends of the day who were on this committee. They just didn’t want to chair it. And somehow, not because of me, but because of my company, I had the stature to chair it. So they gave it to me. And the kid walks in, not knowing what he was getting himself into, and suddenly I’m talking to these people who I’ve read their papers, I’ve read their articles, I know all about them. It was like... I was awestruck.And I will say, just without making this too much about me, it enabled me to find my footing. And I think that’s what ARF does for a lot of people in the industry. It really brings them on board, broadens their perspective. And a lot of my ambitions where maybe I had something that was innovative I really wanted to push, but the company I worked at wasn’t really quite ready for it, I could go... I had another gig. I could do whatever ARF volunteer work I was doing and kind of try to push the industry in a certain direction. My whole career has been about innovation. What better place to try to drive innovation? So that’s what brought me there.Andrew Mitrak: As far as driving innovation when you’re there, this is the late ‘90s through early 2000s that you’re president, and this is the dot-com bubble era. The rise of the internet and the rise of early digital advertising as well. As I was researching and prepping for this interview, I came across an article that was published in 2002, and I’m going to read you a quote. The article is all about how advertising measurement models are changing as the internet is developing. And I’m going to quote: “We’ve invented this jargon: clicks and ad views and page views,” says Jim Spaeth, president of the ARF. “We need to direct people to standard media terminology and get people to talk the same language.”I’m still talking about ad views... yeah, ad views and page views and clicks. Those are still used today. So I was just thinking of this, putting myself in this era. It’s like, okay, the internet’s developing, it’s brand new for everybody. There’s a lot of uncertainty around it. It kind of sounds somewhat familiar with AI today as well. But there’s new standards that need to happen, people are measuring different things, there’s uncertainty. And then you, as the head of ARF, need to help standardize, need to kind of bring people together. Can you just paint a picture of that era and some of the challenges and opportunities there, and who you needed to persuade to adopt the same language around things?Jim Spaeth: The internet was just happening. You had a lot of really smart people coming on the scene with absolutely no background in advertising or marketing, for that matter. And they were reinventing the world. Now, that’s great, they’re reinventing the world, but as you will appreciate as a historian, it pays to understand where this world came from and what the framework is you’re moving into. Particularly when you think about it from an ad spend perspective, digital was new. It was like novelty money, it was experimental money, it was some extra cash here and there. The bulk of the spend was still... we were spending more in outdoor advertising than in digital, right?But suddenly digital is reinventing everything. So we don’t have impressions, we have clicks, and we don’t have reach, we have uniques, and we don’t... It’s like, can you just stop confusing people? Do you want to be part of the scene, or do you want to have somebody have to have a special training course just to understand your vocabulary? And then by the way, what happens when you put your clicks into a media plan? Do we add them to the impressions or do we have to create clicks for television? It was like... it was kind of stupid, frankly. And it continues.Why Programmatic Advertising was Digital Marketing’s BreakthroughAndrew Mitrak: It continues. It is shocking how little digital was for as far as a percentage of marketing spend for as long as it was, but it grew at a rapid rate. Were there any milestones at standardization that you saw as big wins in this period?Jim Spaeth: I think the biggest breakthrough was programmatic advertising. Digital always had a problem because the audiences to any one thing you bought were so tiny that instead of going out and buying a 12-rated television program, now I got 12% of the country watching me right now. That’s it. Let’s put another one of these in. Let’s put 12 of these in. Now I’ve got a plan. You could do it on the back of a napkin. You could do it on an Excel spreadsheet for sure.But digital was tiny, and you needed to buy thousands and thousands of units to add up to anything. So it was manually prohibitive. Labor was prohibitive. It was not efficient for agencies to do at all until you could do it in an automated fashion, which was supported by the fact that digital is data-driven, right? So there’s metadata and so forth associated with it.So programmatic was possible for digital and absolutely necessary. And it took a while to get it to work right. And I’m not sure it still works right, but... and then we had some experiments trying to do television programmatically, and the early ones were kind of nuts because you didn’t... whatever, it’s a long subject, but they ignored some basic things that we understood from the beginning of time. Like, people pay a lot of attention to ads on primetime, so that’s important. They pay a lot less attention to ads in daytime because they’re busy, if they’re home, they’re busy around the house doing whatever they’re doing. So there’s different value propositions, and that was often not seen in programmatic. Now, attention has become an important variable, which I think is great, and that really differentiates the quality of impressions in a big way.So, automation, right? Sorry, long-winded answer. Automation was necessary and possible for digital. It made it more affordable, and then the other thing that happens is digital has more or less an infinite supply, right? So, as an economist, I would say when your supply is infinite, your price gets really low. So that’s why digital impressions are so inexpensive. “Oh, you want some more? We’ll make you some more.” It’s a little oversimplified, I will say, but that dynamic is at work. So they became cheaper impressions. It was good for advertisers because they were cheap. It was good for agencies because it was labor... it was not labor-intensive, it was efficient and profitable for the agencies. And now, of course, we’ve got television and out-of-home and other media, radio, going through that same kind of automation process now.Recent Innovations in Marketing Mix Modeling and the Impact of AIAndrew Mitrak: Kind of reflecting on this conversation in your career and the development of marketing mix modeling, are there any sort of remaining challenges with it that haven’t fully been solved yet? Or are there still things you would have expected to be more buttoned up and dialed in and more of a solved problem by now that still haven’t been resolved? Are there lingering things where you think, “Wow, more innovation needs to happen in this space that will \pave the way for it in the future”?Jim Spaeth: There’s always that. But you know, I have to say, marketing mix is, in some cases, conducted by bigger companies as a business, and like a lot of businesses, they’re really trying to drive costs down and profits up. Not to say they don’t do a good job, I’m not saying that at all, but it changes the orientation a little bit.And then there are a lot of modeling companies that are driven by entrepreneurs who are really motivated to do a great job. It’s one of the things I’ve enjoyed about being involved in this field is a lot of very highly motivated—and not just about making money, I mean, that’s obviously a good thing—but highly motivated to just advance the state of the art and do a great job.And just off the top of my head, I’ll call out Nancy Smith at Analytic Partners, who has created one of the biggest independent marketing mix companies in the world. I would call out Ross Link, who developed his company and then actually ran Nielsen’s company for a while and is back doing his own thing in his own way. And Steve Cohen at in4mation insights and his partner, Mark, who just keep pushing the envelope. I mean, these people just want to do great work, and it’s so refreshing to see. There’s real pride of their services and their products.Andrew Mitrak: That’s cool. It’s great that it continues to develop and continues to get better, and it’s an area where entrepreneurs continue to make an improvement for folks. Do you have any other kind of final reflections or takeaways on this conversation?Jim Spaeth: You know what is interesting? Kind of just go back to your previous question more directly. The practice, under the stewardship of those people I’ve mentioned and others, has continued to push in the directions I always, and my partner Alice, have always seen as where the benefits are—getting faster, getting more granular, more inclusive. And that just keeps happening, which is great.A big breakthrough was a few years ago, we finally started seeing creative being assessed through these same tools, which was really, really good. So that’s finally happening on a bigger scale, I think, than ever before. And then, the frontier right now is AI, which offers to make certain levels of analysis more possible, affordable than would be if it was all manual.But the other thing with AI and deep learning in particular is, mix modeling was always a bit of an art and a science. The science was the data and the statistics and the models, but the modeler had to look at the results and go, “That’s not possible. Everyone knows when prices go up, sales go down. So what’s wrong with the model?” Right? That was the art part. You had to have a common sense sort of understanding of how these things work because the model can come up with some cockamamie solutions, and you have to really make sure you’re looking at something that really makes sense from every angle.And deep learning—I have not practiced it, but as I’ve read about it and understood it—has a better grasp of causality and can give you more assurance that what you’re looking at is actual causality and not coincidence. I think that’s another important breakthrough. And I hope we see that spread quickly through the industry.Andrew Mitrak: Jim, thanks so much for your time. I really enjoyed the conversation.Jim Spaeth: Great talking to you, Andrew. Thank you so much. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 38“Why should all alcoholic drinks taste punishing and challenging? Why shouldn’t they taste pleasant?”My guest, David Gluckman, asked himself this question in 1973. It led him to develop what became Baileys Irish Cream, a liqueur that’s now sold ~2.5 billion bottles globally.In our conversation, David shares the remarkably haphazard origin story of Baileys along with the contrarian lessons from his career creating alcoholic drink brands like Tanqueray No. Ten, Cîroc, and Smirnoff Black.Listen to the podcast: Spotify / Apple PodcastsWe dive into the stories and insights from David’s book, “That sh*t will never sell!” David’s candid about his disdain for modern marketing practices, his frustration with Baileys’ brand extensions, and why he believes great ideas never come from middle management.I also ask David about how brands interact with unexpected internet memes, the ethics of marketing alcohol, and if cavalier marketers like him can succeed in an era when brands have become bureaucratized. Here is my spirited conversation with David Gluckman. Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.How a Tax Break Inspired Baileys Irish CreamAndrew Mitrak: David Gluckman, welcome to A History of Marketing.David Gluckman: Thank you very much. Nice to be a part of it.Andrew Mitrak: I loved reading your book, That Sh*t Will Never Sell, which is a really fun read. I’m excited to speak about your full career and all of the amazing products and beverages you’ve had a chance to work with. But I thought I’d start off with one of your most famous stories and case studies, and that’s all about Baileys. Could you share the story of developing Baileys?David Gluckman: It all happened very quickly and it happened pretty well seamlessly, as well. We got a brief on a Friday afternoon which said that the Irish government were looking for brands for export, and if they were successful, they’d get a 10-year tax holiday, which is quite significant. But it was just a telephone conversation late on a Friday afternoon.And the following Monday—we had just been in business on our own—my partner came in and I said, “What are we going to do about this Irish brief?” We discussed it and I said, going back to my previous career 10 years earlier, “Is there anything in my experience in the development of Kerrygold butter—branded Irish butter—which we could bring to bear on this?”My partner said, “Well, what happens if we mix cream and Irish whiskey?”So, being an action man, I said, “Let’s go down to the local supermarket, buy some cream, buy some whiskey, mix it together, and see what it tastes like.” There was no intellectualization, there was no identification of a target group or anything like that. We simply—the brief was hot off the presses, so we just started thinking.The mixture of Irish whiskey and cream was pretty disgusting. But I just figured there was something there. So we went back to the supermarket, looked around, and we bought some powdered drinking chocolate. Added it, added some sugar, and I think the realization dawned: Why should all alcoholic drinks taste punishing and challenging? Why shouldn’t they taste pleasant? And what we had with this mixture was a very pleasing, chocolate-flavored drink.I got quite excited by this because there’d never been anything quite like it that I’d come across. So I called up my client and said, “We have an idea in solution to Friday’s brief. Can we talk?”And that’s how it started, really. It was my experience on Kerrygold that was the trigger, if you like, that led to the first part of the solution, which was the product, the liquid.The Benefit of Ignorance: Developing a Drink with No TrainingAndrew Mitrak: Yeah, that’s right. It seems like such a jump. So this, to place this in time, this was the early 1970s.David Gluckman: It’s 1973. That’s right.Andrew Mitrak: 1973 that you’re developing Baileys. And you had worked previously with Kerrygold and on Procter & Gamble products. But it seems like jumping into you mixing the drinks themselves and coming up with a concoction, it seems like a jump. And you were also involved in the branding elements as well. So this is an example of the product being developed with the same people behind some of the branding of the product. I guess, could you speak to that experience of just developing a drink and developing a beverage itself? Did you feel like you had any training or authority to do that? Or what prompted you to actually develop the drink?David Gluckman: I think that not having any training and being fairly ignorant was probably a benefit. Because had we had some scientific knowledge, we would have been deterred by the thought that something that contained cream could survive in temperatures of 40 degrees above zero or 40 degrees below. If you have a certain element of ignorance, you can do anything. If you don’t know what you can’t do, you can do anything.And I think ideas start in different ways, and that’s how this one started. I can’t explain why. We didn’t start like this every time, but I wasn’t averse to mixing products up and changing things around.Andrew Mitrak: There must be so many lessons in this because it all starts with a tax incentive, which is—I wouldn’t imagine, it doesn’t seem like the best reason to start a beverage is because of for tax reasons, but why not? You do that. You mix it yourself with ingredients from the grocery store and it’s, I don’t mean this in an insulting way, kind of dumb. It’s just like, “Oh, that’s Irish cream, Irish whiskey, why not?” It’s not really over-intellectualizing it.And then you go on to develop the name and the brand and the bottle. Can you speak to the next steps of building everything that surrounds the liquid itself? What did that look like?From a Bottle in a Cab to the ‘Baileys’ Bistro SignDavid Gluckman: I was excited, so I jumped in a cab and took it over to my client. And he was just intrigued by what I had in a bottle in my hands. So, not allowing any foreplay, he grabbed it and tasted it and said, “Hey, this tastes really good. Maybe we should do it.”And that was the most important part of the whole procedure because had he turned to me and said, “Look, this is not our thing,” that would have been the end of the brand and the end of the story. But he bought the idea immediately. He just thought it was worth taking to his technical people to see whether they could make it happen.But then he said to me, because he was a man of some impatience, “We must now think about branding.”And I remembered... the best way to start branding is to start with a name, a brand name, because you can’t design a package without a brand name. And I remember talking to a gentleman, the late Tony O’Reilly—very famous businessman, he was for a while president of Heinz in America, worldwide, and also one of the most famous men in Ireland. He said to me over a drink, “If you ever develop a brand that requires an Irish surname, don’t use one like his.”So I said, “Well, why ever not?” I mean, O’Reilly’s, whatever it was, sounded perfectly normal to me. He said, “No, Irish family names have a tendency to sound whimsical.”So that lodged in my cortex somewhere. And I remembered that. Anyway, we were moving office, and as we arrived at our office, there was a restaurant below it called Baileys Bistro. And I think when you’re developing brands, you think about every aspect of the brand almost 24/7. It becomes a kind of an obsession. It’s always not too far from the front of your mind. And when I saw the name Baileys, I thought it was perfect.Baileys Irish Cream. It just seemed to fit. And so I called up my client and said, “Why don’t we call it Baileys?” And he said, “That sounds terrific. Let’s do that.” It’s an Anglo-Irish name. And that’s how the name began.Crafting an Instant Classic: The Design and Branding of BaileysDavid Gluckman: And from there we developed packaging. And I think that in the brief for the packaging, there were echoes of Kerrygold. I said to the designer, “Imagine Kerrygold with all that wonderful bucolic greenness that is Ireland, and build that in. But remember that it’s an alcoholic drink and people will pay a premium price for it. So it doesn’t belong in the chiller cabinet, but on the liquor shelf. So give it some status and some quality.”And he got it almost in one. But in effect, that was the Baileys story. There are one or two bits and pieces, but effectively that was it.Andrew Mitrak: The thing that surprised me is just the time in which this happened. 1973... I was born in 1990 and that, and so Baileys was around before I was born and certainly had been around by the time I became of drinking age. And it just seemed like one of the products that’s been around forever, right? That so many spirits and liqueurs feel like pretty old brands. And Baileys, for me, just seemed—I would have assumed that it was a hundred years old or more, not just invented today, like 50 years ago or so.Did you think about creating a history for Baileys or having it appear to be older than it really was and have some traditions to it? Or did you want it to be perceived as, “This is a new product, this is a new option for you, this is a new alcohol you can consume?”David Gluckman: I think we were governed by the kind of style that attached to alcoholic drinks at that time. You know, there was a lot of heritage, dates going back to the 19th and 18th century. There were idiosyncratic devices, like the bat on the Bacardi bottle. I think the convention was antique and conservative. Although there were brands that were emerging at that time that were much more modern, like Malibu, for example, which didn’t follow those rules.But no, I don’t think so. I think we just had a vision in our mind of what the label and the packaging had to say. And it was all about a celebration of Ireland’s green and pleasant land. And I was imbued with a certain passion for the country through working with O’Reilly and on Kerrygold, and that always stuck with me.‘Benefit Out’: Why Baileys Wasn’t Built for a Target AudienceAndrew Mitrak: You mentioned that there wasn’t a lot of, you know, target audience and persona building and things like that that went into it. Did that come down later, after you had invented it and passed it off? Did the targeting and demographics and how to go to market and where to target first—did that come later after you had handed off the product, or was it never part of it? Was it just a beverage for everybody to begin with?David Gluckman: Well, my belief, I think, is what I call “benefit out.” In other words, I think if you have a product that has something to offer, communicate that to people and it’ll find its own level. So I didn’t have any particular target archetype in mind. People were doing that kind of thing back then, but having been in this particular field for 50 years, I think most of that is bullsh*t.You design a product, make it available. The advertising and marketing people will fine-tune it if you like, but we handed it over the product as it was and left it to the companies. I think it’s one of the saddest things about my job is you develop a brand for which you have a passionate feeling, and then it disappears and perhaps isn’t developed along the lines you would like. But that’s life.The Creator’s Dilemma: Letting Go of a Brand You BuiltAndrew Mitrak: Yeah. So this is something I wanted to follow up with you about because you were a consultant, and you obviously had a massive part in Baileys, from the conception, the ingredients, the name, the bottle, so much of it. It’s you bringing this to life. And then you don’t own it at the end of the day. You hand it off. And you write, “I can remember being introduced as someone who, quote, ‘a man who helped out with the label design.’” And that rankled you a bit, but you let it go. And is it hard to let go of a product that you helped create?David Gluckman: Not really. I mean, I think that the remark to which you refer was made at the launch party in Dublin in 1974. And somebody... I think the Irish are very protective of brands that go out under their name, as they should be. And somebody introduced me not as one of the people who created the brand, but someone who helped with the pack design. Since I have absolutely no graphic skills whatsoever, that rankled a little.And then I think if you look back on things, you realize that for ideas to succeed, other people need to own them. In other words, what this guy was saying is, “This is my brand, not his,” and “I own it.” And I think that’s important. It’s a grown-up way of accepting the situation with brands. But if people start buying into it and feel ownership, then it’s very important.Andrew Mitrak: That’s an important lesson and something I think every marketer and brand person could keep in mind.What Explains Baileys’ 50 Years of Staying Power?Andrew Mitrak: So reflecting on Baileys, it seems like there are just so many spirits that have been introduced and come and gone and had various levels of success over the last 50 years. And why do you think Baileys has had the staying power that it’s had?David Gluckman: Well, I think what amazes me about Baileys is how it hasn’t been superseded by competitors. In other words, it’s sort of kept its position. And I think that’s largely through manipulation of price because Baileys, I think, sells for far less than it ought to. But I think that in that way, Diageo, because of the economies of scale, et cetera, are probably able to prevent any other operator from really damaging it. I don’t think that’s forever. I think that will happen.I hate Baileys’ advertising and I loathe Baileys’ brand extensions because I think they’re cheap and nasty and trivial. And I’ve been quite vocal in my comments along those lines. But that’s... it’s been a long, long dead for me as a brand.Andrew Mitrak: You’ve watched it from the sidelines over the last five decades or so since you handed it off. And they have, you know, Baileys candies and peppermint Baileys and all these new flavors of Baileys. And it’s just like, “Okay, that seems a little...” Parts of it seem a little gross, but it also seems to cheapen the brand and some of the core ideas that you helped develop there.When a Meme Takes Over: Baileys and the ‘Old Gregg’ PhenomenonAndrew Mitrak: The first time I ever came across the brand Baileys was in this viral video that was an early meme called “Old Gregg.”Andrew Mitrak: And I was a teenage boy, like probably 15 years old when this came out. And there’s this absurd sketch that has a line from this character named Old Gregg. And the character asks:“Have you ever drunk Baileys from a shoe?” And this was my first time, I’m like, “What is Baileys?” And still today, within a very small group of people who are give or take five years from me, if I’m at a holiday party or some gathering and there’s Baileys, someone might say, “Have you ever drunk Baileys from a shoe?” And it’s just a silly thing. And I’m wondering, did you ever come across this sketch at all? And do you know if anybody at Baileys had a reaction to this Old Gregg comedy bit?David Gluckman: I don’t. In fact, the first time I saw it was the link you sent me yesterday. Yeah. And I’d not heard of it before. And bear in mind, I went to the Baileys 50th-anniversary lunch recently, but that’s the only connection I’ve had with the brand since the 1970s.Andrew Mitrak: There’s an interesting thing where there’s meme culture of the internet. There are these people who like share things, and brands don’t always have control over that. That the internet—you bring a thing to life, and then some comedy sketch makes a silly joke and has your product being drunk out of a shoe. And no control over your product whatsoever, but sometimes the internet just will run with a thing. It just seems like an interesting little case study of what a lot of brands deal with, where there’s some meme that now comes across on the internet that a brand has to somehow choose to embrace, choose to ignore, or just choose to live with for a bit. And it just seems like an interesting element of today’s media culture of how a brand might have to interact with the online universe.David Gluckman: Well, again, that’s beyond my pay grade. You know, the brand has been handed over, and I either jump up in the air with delight or cringe when I see the way it progresses. But you know, that’s life.Why Great Ideas Start at the Top, Not in the MiddleAndrew Mitrak: You go on through your career and it turns out okay. You work on a number of great brands: Tanqueray No. Ten, Smirnoff Black...David Gluckman: Cîroc.Andrew Mitrak: Cîroc, yeah. And more, the list goes on. And rather than tell the story of each of those, I’d also, in your book, you also talk—there are these themes that come through your work as well and lessons that you’ve learned from all of them. And I thought we could talk about those lessons, and maybe some of your stories of those other brands you worked on could come through that.And one of the lessons that I totally identified with is that successful ideas don’t start in the middle of the organization. They start at the top. And that you need corporate cojones, you need leaders—usually the president or CEO or founder—to have conviction and make bold bets for a product to succeed, for a brand to succeed. Can you expand on this idea?David Gluckman: Yes. What happened was that roundabout the time... I think I started in brand development in ‘69. Around ‘72, I think, an American called Tom Peters and a colleague called Robert Waterman wrote a book called In Search of Excellence, which we read. And we got very excited by this book because it talked about how companies worked, how big—and these guys were McKinsey consultants, I think—and they were talking about what it was like being inside big companies. And we came to various conclusions. It took a long time for these conclusions to bed down, but I think they’re very appropriate now.One, that you could never develop a successful new brand if your path to development was through middle management because middle managers didn’t have the power to make things happen. So what IDV did, which was before it became Diageo, was instituted a thing called the “champion system,” which we got from Tom Peters, which said that anybody could commission a new brand provided he or she had the power to make it happen.So we were getting top members—we had the finance director come in with a brief—mainly top-level management because, A, top-level management weren’t interested in the mechanics of doing something. A middle manager has to go and spend hundreds of thousands of dollars researching an idea to prove to his people above that it’s going to work. We didn’t have that problem. You would simply be asked by your client, “Will this work?” to which the answer was, “Yes, I think so, but I’m not sure.” And you can never be sure whether something would work.So we had this top-down approach. The other thing is we didn’t engage marketing people. None of the brands we developed went down the marketing route or were developed through the marketing route. Marketing was very successful in making the brands work, but we didn’t use marketing. We didn’t use that constant desire to prove everything. If you look at Baileys and deconstructed it, nothing would have been as it was if we’d gone through the marketing route. Everything would have been questioned and debated and alternative before it happened, and might not have been quite such a successful brand. So we had a different way of working.“Don’t Go Through the Marketing Route”Andrew Mitrak: I want to follow up on this idea that you don’t go through the marketing route because something that I’ve thought a lot about on this podcast series is I want to cover the stories of a lot of the greatest marketers of all time. And within business, the greatest marketers of all time within companies, very rarely would you think that it’s the CMO, actually. If you look at a list, you’ll see it’s often founders or CEOs that have very strong marketing instincts. Steve Jobs, Walt Disney, Oprah Winfrey, Lee Iacocca.David Gluckman: A lot of people in the drinks business: Sidney Frank.Andrew Mitrak: Yeah. And it strikes me that a lot of the best... if you ask somebody, “Who is one of the best marketers in the world?” they usually won’t name somebody with “marketing” in their title. They’ll think of a CEO or founder who has really strong instincts. Do you have a reaction to this?David Gluckman: I think that’s true, and that’s certainly been my experience. The best people I worked with were board directors. O’Reilly was a fantastic guy to work with because he could take a decision. And he’d take a decision—I was a junior executive, aged 24—and if I came up with something that he thought was interesting, we’d do it.Whereas with marketing, you go through strategic analysis and you look at target audiences and you spend buckets of money doing market research. I remember I did a pitch to Unilever 30 years ago, and I said, “If I ran your business, I would cut your research budget, your market research budget, in half, and then I’d halve it again. And get people, A, to use their brains more, and B, to look at the data you already have.” I didn’t get the business, but that wasn’t a surprise.Andrew Mitrak: That is funny. It is interesting how often a company will always want to commission new research, even if the company’s been around for a very long time and probably has decades of existing research you could draw from and draw conclusions from faster and more cheaply.Why Buying an Idea is as Important as Creating OneAndrew Mitrak: Another idea of yours is that the person who purchases the decision deserves as much, if not more, credit than the person who comes up with the idea. Can you speak to that or can you articulate what this idea is?David Gluckman: This is something you learn over time. Ego plays such a big part in this whole business in which we work. But when you come to think of it, if somebody had said, “Look, I don’t think this chocolate milk stuff is our kind of thing,” that’s the end of the story. I think the people who buy ideas are not given nearly enough credit for that. I would say that every single idea of mine that got out of my office and into somebody else’s and worked was down to the person having the ability to buy the idea on an argument, because we never spent any money on research. We figured it was a complete waste of time.Because if you get nine out of 10 consumers thinking an idea is good, the chances are it’s mediocre because you’ve just reinvented your competition. Good ideas will get two passionate people out of 10 loving it and the other eight hating it, and you build from there. But you can’t use that as a tool to sell it to your marketing guy. Two out of 10 people think it’s a brilliant idea, you ought to go with it? No chance.Andrew Mitrak: So how does this change your behavior over time, knowing that you’re really dependent on the person buying the idea? For me, for instance, this totally resonated with me. And I know that I almost treat my ideas a little more cheaply in a way where there was a time, especially early in my career, when I feel like I had a good idea, I’m like, “Oh, this is so precious. I shouldn’t share it with anybody. I should really develop it for a long time.” And now I’m like, whenever I have an idea, I just share it. I try to get it out there. And I know whether it gets adopted or not, I’m not going to feel too bad over it. Of course, I’d like things to succeed and be adopted, but just get it out, share the ideas, be confident you’ll come up with more ideas. And if somebody buys it, great. And of course, do your best job to try to sell it, but if you don’t, try to not let it be out of your control. Is that your thinking about it, or are there other ways we should treat our ideas differently, knowing that really their success depends on somebody buying the idea?“There’s No Plan B”: Why it’s best to pitch only one ideaDavid Gluckman: When I worked in advertising in London in the ‘60s, there was one agency called Collett Dickenson Pearce, which I think was one of the best agencies in the world in its time. But they only ever produced one idea in response to a brief. When they went to a client, they said, “This is what we think you should do.” And there were two ways out of this: the client would give them good reason not to do it, in which case they’d do another one, or they’d fire the client and look for somebody else.And at the time, we were just amazed—working in more conservative agencies—how could they do that? How could they just go with one idea? But I think when you engage with the business of creativity and the business of solving problems, you realize that there can only be one solution within your capability. Now, I’m not saying it’s the perfect solution. There might have been a better idea than Baileys, and there may be better elements in brands. But I think if you’re really true to what you believe, you go with one idea.To the point, I had this long relationship with my client. I remember once going with two ideas, and my client said to me, “You haven’t solved it, have you, if you’ve got two ideas?” And I said, “No, I haven’t.” So they said, “Go away and come back with one.”Andrew Mitrak: Yeah, one of the quotes in your book is, “There’s no plan B.”David Gluckman: I think that’s what we had to do. After Baileys... when I started, the first pitch I ever did, there were 48 ideas. That was because we weren’t sure what the client wanted, and the client wasn’t sure what they wanted either. So there were 48 solutions. Whereas once things became more specific, you could look for one idea.Innovation vs. Renovation: The Case for Inside-the-Box ThinkingDavid Gluckman: The areas I... I think there’s a lot of glib nonsense talked about my particular field. The word “innovation” is used because somebody comes up with a turnip-flavored Smirnoff or something. But that’s not innovation. That’s something that you knock up on a Friday afternoon after lunch. That’s not innovation. Innovation is something new and doesn’t happen all that often.I have this... you know, people talk about breaking paradigms and disrupting markets. Most of that’s complete bullsh*t. My counter-theory to this is what I call “inside-the-box thinking.” I think most of the thoughts and ideas that have been any good that we’ve produced have been from inside the box, from looking at past research that people have done, just reading through documents and reports. From looking at... coming up with ridiculously obvious observations.Like, I remember when we did Tanqueray No. Ten, the observation upon which it was based was: Did you know that there’s 10 times as much vodka sold as gin? So why don’t we try and get vodka drinkers to drink our gin? And how do you do that? You take out all that juniper flavor and tame it down and make it fruitier and fresher-tasting. Now, that’s inside-the-box thinking because that’s based on data that’s already there.Andrew Mitrak: I love this idea of inside-the-box thinking. Do you have some practical guidance or a few tips for embracing this, for discovering ideas that are hiding in plain sight?David Gluckman: Well, I think you have to disregard consumer research because I think it’s a very blunt tool. And I say that from having done hundreds of focus groups all around the world, many, many in America. But you don’t have to go and ask consumers what to do. There’s a legend on the front of my book, which is the story of the man who sold the world what it didn’t know it wanted. And I think that’s what you’re doing. You’re trying to develop things that people didn’t know they wanted. I think that’s quite an important... you know, if you take the research route into innovation or development, you just end up with what people say. Can we produce a product to compete with Red Bull that doesn’t taste quite so ridiculous?The Rise of Non-Alcoholic Beverages (and Their Puzzling Price Tags)Andrew Mitrak: Back to alcohol brands, you’re mentioning the brand extensions that Baileys has done over the years. It seems like there’s this tension between alcohol beverages wanting to be part of cultural trends and to be innovative, but also that there’s this history and this tradition to it, right? Johnnie Walker has been around for 200 years, but I remember not too long ago when they were releasing all these special Game of Thrones editions to their brand. And similar with Guinness, you know, it’s a big piece of Irish pride, they’ve been around for hundreds of years. I hope they don’t mess with the recipe too often. But now I’m seeing the alcohol-free version of Guinness. And I actually think it’s pretty good, as far as non-alcoholic beers go. But it’s very different than traditional Guinness, and it almost seems like sacrilege to mess with Guinness, right? So, do you have thoughts on how brands both stay true to their values, their history, and not damage their brand with too many brand extensions, but still want to try new things and to innovate and be relevant?David Gluckman: I’m quite an outspoken critic of the non-alcoholic category, particularly wines and spirits. I bought a bottle of Gordon’s a while back, Gordon’s Zero. And it cost a pound less than a bottle of full-strength Gordon’s. And when you think about it, what you’re paying for that money for is gin-flavored water, which is crazy, really. I mean, gin-flavored water for £14.Andrew Mitrak: You’re totally right that, especially with a spirit or wine, the trend to go from like 14% to 0% just seems like almost too big a jump somehow. I think it works better with beer, but the pricing of it doesn’t make any sense to me at all. That if you look at the non-alcoholic beers at a supermarket, at least here in America, basically the same price, sometimes even higher than the alcoholic ones. There’s a thing called hop water, which is like the hops in an IPA beer that are infused in water. And sparkling water will be 30 cents a can here, but hop water will be like $2 a can or more. And it’s like, why is that? It’s just sparkling water with a different sparkling flavor.And then mocktails, if you go to a restaurant, there’s this thing called a mocktail instead of a cocktail, and it’s juice. It’s just juice! But it’s priced the same way a high-end cocktail is, and it just seems crazy.David Gluckman: Yeah, exactly. I find it strange. I had some non-alcoholic product, which I will not name, the other day, which cost, I think... on a 70cl bottle, which is our unit size here, cost about £42. And a bottle of Johnnie Walker Black Label, where your capital has been locked up for 12 years in a warehouse, costs £35. I think that’s just crazy, really, that you’re paying for a kind of flavored squash thing for £7 more than Johnnie Walker Black. It’s ridiculous. But that’s the way the world works.Marketing Alcohol and Navigating the EthicsAndrew Mitrak: I want to talk about this trend towards non-alcoholic beverages because I think it does coincide with more awareness about the negative health impacts and societal impacts of alcohol. People are almost willing to pay more because it’s perceived as healthier. Do you think that’s part of it?David Gluckman: It’s in part. I think we went there in 1984. The guy to whom I reported at IDV, who was a global director of the company, said to me one day, “Well, look, I think that alcohol is going to come under attack.” This was 40 years ago. He said, “Alcohol is going to come under attack.”We were amazed at how successful Perrier was, especially in the US. Because to me, Perrier is just soda water with history. And so we looked at developing a series of non-alcoholic products, which we did, and they were quite successful, except the company committed too much money. They set up a separate organization to manage it without having the critical mass of some big brand to make it successful. But we were there then. We had developed a brand called Aqua Libra, which was incredibly successful in the UK for a while, and another drink called Purdey’s, which is now owned by Britvic. So we went down that route. But the company, I think at that time, went into the merger and took the decision that their business was alcoholic beverages, not non-alc. So they were dismissed.Andrew Mitrak: I do want to ask you about this a little more as well because on the one hand, I’m mesmerized by the capabilities of developing an alcoholic beverage and the marketing around it, and iconic campaigns. Absolut Vodka, the Super Bowl is so full of great beer advertisements that people will talk about for weeks afterwards. So a lot of the best marketing and branding and advertising is around alcohol, but it is something that does have societal harm to it. My family has a history of alcoholism, and I’ve seen firsthand it’s had really, really bad impacts on people. And I’m kind of... it’s a tension because I can both admire the brilliance that goes into developing the products, but I can also see some of the harm that the products have had on people and in society.Does that ever come up? How often does that come up as you were working on these products, as you work in this industry? Do folks think very much about that and how they reconcile some of the negative impacts of the products they’re selling?David Gluckman: There was always that background feeling, as there would be with cigarettes. You know, should I be doing this? Is this the field in which I should be engaged? And because I smoked when I was younger, I would never have taken on a cigarette brief, I don’t think. But alcohol... well, it was there in the back of my mind, but it didn’t stop me from working in the category. It was just so interesting. And the laws protect us from selling booze to children and things like that. So that’s an adult decision.Andrew Mitrak: As companies introduce new brands of alcohol, they’re doing that because they want their company to grow, right? And they want to sell more. And in America at least, the top 10% of drinkers consume like 90% of the alcohol. And I’m wondering, where do they want to sell more to? Do they want to sell more to that top 10% of drinkers who are already drinking a lot? Are they trying to find new drinkers and bring new people into the market? Are they trying to upsell people so they’re paying more for alcohol than they otherwise would, so they’re not going at the bottom-shelf liquor, they’re going more for the premium one? Do companies have that strategy in mind of like, which market are we breaking into? How are we growing our product? And how does that reconcile with the ethics behind alcohol marketing?David Gluckman: I think most of the time people copy other people. So if somebody brings out a raspberry-flavored vodka, seven other people will come up with raspberry-flavored vodkas, which is copying. When Seedlip came out with their non-alcoholic spirit, about which I was quite scathing, other people have rushed in and copied Seedlip as well. So a lot of it is just copying what other people are doing. Not many people are looking to completely change things around.Could There Be Another David Gluckman?Andrew Mitrak: I’ve really enjoyed this conversation and reading your work. One of the questions that I have is that, could there be another David Gluckman? You seem to have been in the industry at this moment and had this career where you could come up with these ideas and work with relatively small teams and take bets and find the right decision-makers to champion that.But a whole industry and things have been bureaucratized around it, things have been so formalized with more stringent types of market research. It seems like there’s so much more consolidation within the beverage industry that they might be a little more risk-averse, and that having independent voices or having smaller teams create bolder ideas just doesn’t seem to happen as much anymore. So I guess the two parts of the question is, could there be another David Gluckman or a person like you who does what you do? And if so, how would they go about it?David Gluckman: I think the only way that would happen is the way it happened for me, is to find a client with whom to work who makes that possible. A client with corporate cojones, if you like. A client who says, “Yes, we can,” has a very positive attitude. And the client—I mean, I think if I didn’t have a client, I would have been... I might have done one or two brands if I’d been lucky. But the client that I had that could go to a member of the main international board and sell an idea off the back of a cigarette pack, and they empowered this kind of thing, they stimulated you.I think it’s the company. Otherwise, it’ll happen with entrepreneurs because the beer business is certainly full of people like that. Brilliant, brave people who went with their instinct.Andrew Mitrak: Again, for listeners, the book is That Sh*t Will Never Sell by David Gluckman. It’s full of great stories, some of the case studies you’ve heard here, but they go into more depth, and there are lessons and a lot of wit and fun throughout it. So, really enjoyed the book, David. Aside from purchasing your book, are there any places you’d point listeners to as far as where they can find more of your work online?David Gluckman: Well, I think they’ll be all over the place. So if you just Google me, you’ll probably find some stuff. If anybody buys a book and wants to have a chat, my Zoom door is always open.Andrew Mitrak: Oh, that’s a very nice offer. I hope you get flooded with meetings. So yeah, David Gluckman, thanks so much for your time. I really enjoyed the conversation.David Gluckman: It was a pleasure, Andrew. Enjoyed it too. Thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 37This week, I’m sharing a special conversation with Scott Reames. Scott spent three decades at Nike and for 16 years was Nike’s official corporate historian, a role he invented. He even helped Phil Knight with research and fact-checking for Shoe Dog, the only business memoir I’ve read more than once.Nike is the first brand I remember embracing as a kid. I suspect this might be true for a lot of marketers.Growing up in the 1990s, I played basketball, I watched Michael Jordan win six NBA championships, and my favorite movie was Space Jam (which, as we’ll discuss in this episode, originated as a Nike ad).Nike is the gold standard for branding. They set the bar for iconic advertising, bold messaging, and culture-defining sponsorships.But how did they build their marketing empire? Who were the marketers responsible?In our conversation, Scott shares the stories of Nike’s most important marketing milestones and the people behind the brand.Nike’s brand wasn’t built by seasoned marketing experts, but by a group of self-taught mavericks in Portland, Oregon with passion, ambition, and good instincts. Their professions: an accountant, a social worker, a lawyer, and a student.In this conversation, Scott shares:* How Blue Ribbon Sports (Nike’s original name) established its early reputation in the running community with the help of cofounder Bill Bowerman.* How marketing helped Nike win a legal battle against Onitsuka, allowing it to continue as a brand.* The story of Rob Strasser, Nike’s first head of marketing, who started as the lawyer on that Onitsuka lawsuit.* The real story of the movie Air, and how Hollywood gets so much wrong.* The surprisingly morbid inspiration behind “Just Do It”.Here’s my conversation with Scott Reames.Listen to the podcast: Spotify / Apple PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Nike’s Secret Sauce: ‘We never sold shoes. We sell dreams.’Andrew Mitrak: Scott Reames, welcome to A History of Marketing.Scott Reames: Thank you for having me. I’m excited to talk.Andrew Mitrak: I’m so excited to talk about the history of marketing at Nike. And as I was preparing for this interview, I was thinking, is the history of marketing at Nike just the same as the history of Nike?Scott Reames: It’s funny, I was thinking about a quote I have from Jeff Johnson, who was the first full-time employee hired in 1965, right? So, Phil Knight and Bill Bowerman, the co-founders, were working full-time at their own jobs, and they hired Jeff to essentially be boots on the ground and really do everything: start the marketing, start the advertising, start the product development, everything.And he told me years ago, he said, “The secret sauce for Nike, Scott, is we’ve never sold shoes. We sell dreams.” And to me, that is like the epitome of marketing. I mean, that literally is marketing. It’s marketing a product by going well beyond just, “Here’s what it does for you, here’s how it wears, here’s why it’s good for your foot,” that kind of stuff.So yeah, I would say if that was the mindset in 1965, then it certainly was a part of the fabric of what developed later into the company of Nike.The Bold Early Days of “Blue Ribbon Sports”Scott Reames: I mean, Phil Knight, there are some early letters that Phil Knight wrote to early retailers and coaches as well, but mostly retailers. And at the time, Nike started—or Blue Ribbon Sports started—as an Onitsuka Tiger distributor, not it didn’t have its own brand yet. And Tiger is now ASICS for those who aren’t as familiar. So we were the distributors of the Tiger brand running shoe in the United States.And Phil created a letter, I think it was also in 1965, might have been ‘66, where he didn’t name the runner, didn’t name the athlete, but said that there was a runner, a high-profile runner who had been running in Tiger shoes and felt that they were one of the greatest shoes ever. And he said something along the lines of, “The only people who won’t be running in the shoe are either uninformed or idiots.” And then Phil at the bottom wrote, “And now you are no longer uninformed.”I was like, wow. I mean, talk about a not-too-subtle dig at coaches and retailers. So from the beginning, there’s been that understanding that Nike, or Blue Ribbon Sports then Nike, maybe looks at things a little differently.Andrew Mitrak: That’s a bold line. There’s so much there. So, Jeff Johnson, who I’ll ask more about, he said Nike doesn’t sell shoes, they sell dreams. But in the early days, and you mentioned this, they weren’t Nike at all. They were Blue Ribbon Sports, and they were selling Tigers, Onitsuka Tigers. I actually, Onitsuka has re-released these, and I wear Tigers a lot.Scott Reames: Nice.Andrew Mitrak: Like they’re actually pretty good shoes. They’re kind of that old, I don’t know how much they actually match the original style of it, but I like Nikes of course, but I do also like my Tigers as well, those branded ones. And so, do you think that Nike in 1965, were they making marketing decisions? Or what was sort of the original Blue Ribbon Sports approach to marketing?Scott Reames: I think in the earliest days—‘64 was when the partnership started and the shoes started getting delivered from Tiger. ‘65 was when the first outreach really began. So the original, early marketing was really mostly done by Tiger because Nike was just… I keep calling it Nike, it’ll be interchangeable, but Blue Ribbon Sports, because Nike didn’t exist yet, was just the distributor of the Tiger brand shoes. They didn’t do a lot of their own marketing. They mostly sent out the flyers that that Tiger had sent to them.That started to change as the ‘60s progressed. Jeff Johnson started to be more involved in creating the flyers that would be used in the US. By the end of the ‘60s, Phil Knight is actually writing some copy. He actually coined the term “Swoosh fiber” that was used to describe basically nylon, the nylon uppers, in a 1969 print ad. So that was the first place that we can see the word Swoosh being used, and obviously becomes important later.How Marketing Won a Landmark Legal BattleScott Reames: But throughout the ‘60s, what Nike, Blue Ribbon Sports, did was increasingly taking over the marketing of Tiger, at least in the United States. To the point that when the two brands did part ways in the ‘70s, and they each sued each other for breach of contract, the judge ruled in Blue Ribbon Sports’ favor in terms of who owned the names like the Nike Cortez, the other shoe brand names, that we—they said Nike owned them because they had done the marketing of those products. And so it’s like Bill Bowerman designed the Cortez, and they ruled, the judge ruled that neither Tiger nor Blue Ribbon Sports owned the design of the Cortez, but that Blue Ribbon Sports owned the name of the Cortez because of the marketing they’d done of it.So those are anecdotal, but those are indications that the company was starting to realize the benefit and the power of marketing and advertising.Andrew Mitrak: Yeah, so marketing helped give them a legal win early on.Scott Reames: Which was critical because if you lose that, if we lost that case, I wouldn’t be talking to you today.Andrew Mitrak: Exactly. There are so many places where the Nike story seems like it could have just flipped a coin and could have gone either way. One of those, really early on, Phil Knight, I think he’s in Japan, and he comes up with the name Blue Ribbon Sports because he needs a company name. I’ve heard a few versions of the inspiration for that name. What do you think is the real story?Scott Reames: Well, one of the versions I bet you’ve heard is that it was his favorite beer, Pabst Blue Ribbon. That was lore and/or myth that was spread mostly by his contemporaries and others of that era who just liked to tease him. And he never really went out of his way to correct them. He just thought it was funny.But when we were working on Shoe Dog, he obviously wanted to really tell the story correctly. And he admitted there that no, he didn’t… while he did kind of BS his way into a meeting with the Onitsuka—well, with the president of Onitsuka—that when they said, “Who do you represent?” he was prepared that that question might be asked, and he answered “Blue Ribbon Sports,” because as a track athlete himself and just in general, a blue ribbon signifies first place or it’s a great thing to earn when you’re in Little League or sports in general. So he felt “Blue Ribbon Sports” telegraphed the message that this was a quality company, even though it didn’t exist.Andrew Mitrak: It’s so funny just to contrast the name Blue Ribbon Sports to Nike. Like one just kind of seems so generic, vanilla, it’s a distributor, right? And the other is so branded and is kind of abstract and all that. And you have to kind of create new meaning into it. It’s not obvious what Nike is until the brand exists. So it’s just funny to contrast the two.Scott Reames: That’s correct.Bill Bowerman’s Credibility and the Birth of an EmpireAndrew Mitrak: So, Phil Knight’s early partner was Bill Bowerman, the co-founder of Nike. And Bill Bowerman, he gives all of this credibility and reputation to Nike as a brand. So do you almost think of this partnership somewhat as a marketing decision to work with Bowerman, or how do you think Bowerman improved Blue Ribbon Sports’ marketing presence?Scott Reames: Well, certainly his name, the gravitas of his… I mean, literally the University of Oregon had won its first track and field title, NCAA title, in 1962. So he was certainly a rising star in track and field coaching. And the university also was starting to register some A-level runners. There was a man named Otis Davis that ran in the Olympics in 1960 who was a Duck. So it was basically a program on the rise.And obviously Phil Knight, having run for Bill Bowerman, also had a personal affinity for it. But I do think it was a little bit of mercenary, a little bit of certainly wanting to make a sale, obviously. I mean, Phil’s trying to get his fledgling company off the ground and making a sale to the University of Oregon would not be a negative thing in any way. And then also being able to say that the Tiger brand running shoes are the shoes worn by the NCAA title, you know, NCAA champion, University of Oregon, certainly had its own cachet.Whether that was done completely with forethought as to the marketing side of it, or it was just literally, where else would you start as a Duck alum? You know, Phil’s not going to go to the University of Washington, right? He’s not going to go contact USC. I mean, maybe eventually, but he’s going to start at home. So I don’t know if it was overtly a marketing thing like, “This will be amazing.” I think he didn’t have any idea that Bill Bowerman would ask to be cut in as a partner. He was just looking for a sale.And the main reason for that is the reason why he didn’t expect him to cut in as a partner was that he, Phil, did not have any knowledge of the fact that since at least 1954, Bill Bowerman had been contacting Adi Dassler, Horst Dassler, other members of the footwear cartel at the time, trying to get somebody to sell him shoes directly instead of through wholesale so he could get them less expensively. But more importantly, he also had design ideas that he wanted to impart and have put into a running shoe. And all he would get back from Adidas and others was, “Thank you for your interest. You can get our shoes at through such and such distributor.” And they made no mention at all about any interest in his design ideas.So Phil is just reaching out to Bill to get a product endorsement and a sale. Bill sees now an opportunity to have a connection, a direct connection to a footwear manufacturer who might take his ideas and actually turn them into something. So it was a very serendipitous exchange of letters that led to the partnership that led to Blue Ribbon Sports, which led to Nike, which led to you and me being here today.Andrew Mitrak: Right, yeah. And then so for listeners, Adi Dassler, obviously Adidas, and then the other brother, is it Rudolf Dassler?Scott Reames: Oh, sorry, Rudy, yeah. Horst was the son. I forgot about that, sorry.Andrew Mitrak: Rudy was Puma. Which is its own really fascinating history there that we won’t go into...Scott Reames: I mean, there’s a great book called Sneaker Wars. It’s absolutely fascinating about the two brothers and how much they didn’t like each other.Andrew Mitrak: Totally. Yeah.“If You Have a Body, You Are an Athlete.”Andrew Mitrak: So one of Bill Bowerman’s lines is, “If you have a body, then you are an athlete.” And I love this line, and it’s just like, what a great turn of phrase, and also really expands your addressable market as well.Scott Reames: Yes.Andrew Mitrak: Did Nike or Blue Ribbon Sports ever use this line publicly? Or how was this used?Scott Reames: No, not in the earliest days. It didn’t really… he may have used it to his own, in speaking to his own people or in his own communications with others, but Nike didn’t start using it until 2001. There was the Nike mission statement in the earliest days was essentially to be the world’s leading sports and fitness company. Right? Okay, well, it’s a good goal. We don’t want to be number four, you know? It’s like we want to be the world’s leading.So by 2001, check. They’d done that. So it was kind of like saying, well, we want to be what we already are. So Mark Parker, the co-brand president, or co-president at the time, decided that it was time to change the mission statement. And they went around and around, and basically they decided to be more aspirational instead of literally achieving a specific goal. And so it was like, to bring innovation, innovation, inspiration, and innovation to every athlete in the world. And the athlete had an asterisk. And then if you look at the asterisk, it said, “If you have a body, you’re an athlete.”Which is about the most inclusive way you could… I mean, there can’t be a more inclusive slogan, as you were saying earlier. I mean, literally, we all have a body. We can all be athletes. We can all, you know, we can’t all be Michael Jordan or Serena Williams, but we can certainly be more athletic or we can do something that is athletic in our own way. So that was when it really took a high profile within the company. Again, how it was used before that, I don’t know. That was the first time, and since then it is a key part of the mission statement.Phil Knight’s Skepticism and the Ad that Changed EverythingAndrew Mitrak: So back to Phil Knight and the early Blue Ribbon Sports story, I read that somewhat ironically, Phil Knight was skeptical of advertising. So when did they really start advertising beyond just sort of republishing Onitsuka’s brochures? What were their first early forays into advertising?Scott Reames: Really, beyond just the one-offs that were done like Carolyn Davidson, who designed the Swoosh, she also did some early advertising, but those were very one-offy. There wasn’t really a program put together, per se. That really came about in the mid-70s when we started to have a series of products coming out on a fairly regular basis. So there was, it was all print, there was no television, certainly by this point at this point. But roughly once a month, there would be a new shoe in the pipeline that we would advertise.The advertising was done first again by Carolyn, and then it became too much for her. She was just a freelancer, and we weren’t her only client. So she basically said she’d like to be replaced. So we brought in a couple of agencies. One only lasted for about a year, but the second one was John Brown and Partners. They were based in Seattle, and they started really doing the series of ads, a series of print ads.And usually it was a fairly technical: “Shoe X is coming out and it does this, and here’s why you would want to run in it,” and blah, blah, blah. So they were informative, but they certainly didn’t have the Nike oomph, whatever you want to call it, yet.And then that all changed in 1977. So one month in 1977, we didn’t have any new product in the pipeline. But we were particularly committed to running the ad. It was always in Runner’s World, I believe. And so we had a space there that we’d purchased. So Patsy Mest, who was the ad director at the time, or ad manager for Nike, told John Brown, “Just write something that makes a runner feel good about themselves.” That was I think the entire brief, at least that’s what John told me.So he’s kicking around like, okay, okay, what would you do? What would you do? So he came upon a very simple, five-word: “There is no finish line.”And then Denny Strickland, the art director for John Brown, and Bob Peterson, the photographer, had the brilliant idea to essentially create an atmosphere where you see a long way, a distance, in the distance there’s a runner running down a country road. So you can’t see the product. You wouldn’t know it’s Nike, literally, until you saw the bottom of the print ad. And that really became the first brand ad that Nike did. And it was mostly by the luck of the fact that we didn’t have product that month, and that John Brown had an inspiration, which is even more amazing because he told me he’s by far not a runner. Right? But he just felt like this was something that was like, to make them feel good, but it also meant like there is no finish line. So you ran a great race today, but tomorrow I bet you could do a little bit better because there is no finish line.And it just hit. Right? I mean, people really, it resonated with them. We got letters, Nike got a bunch of letters from people saying how much they appreciated the fact that we see them, that Nike gets them as runners. And so it actually spawned such a demand that people started wanting us to make a poster of the print ad, which was not part of our plan at all. We didn’t have a poster business. But within three or four years, we had a multi-million dollar poster business because of that print ad that spawned other posters like “Iceman” and some of the iconic, “Supreme Court,” that are now super, super iconic. All came about because of responding to the consumer saying, “We really like that ad. It hits for us. Can you reprint it for us?”Andrew Mitrak: So that ad, “There is no finish line,” great line, because there was no product that month. Most of the advertisements had been, “Here’s this shoe and technical specs,” and more advertising a product line versus advertising Nike as a brand and selling the dream. Did that, leading to things like the poster business, do you think that’s when it clicked for Phil Knight that advertising was really powerful? Or do you think that’s when he sort of went from being a skeptic to fully embracing advertising?Scott Reames: Well, it’s funny because when I interviewed John Brown, he told me that he had introduced, Phil Knight introduced himself to John by saying not necessarily what he told Dan Wieden, “I’m Phil Knight and I don’t like advertising, I hate advertising,” but he said something along those lines, that he was skeptical. He felt that word-of-mouth or, as we used to say, “word-of-foot” advertising was best. An athlete, a runner, say, “Hey Andrew, I think you’d like this shoe.” And then that’s why you would run in it, not because you picked up a print ad or saw something on TV and you’re like, “I’m going to wear that shoe.”So that was his mindset. And John believes that “There is no finish line” and the reaction to it was one of the first moments where Phil saw, literally firsthand, that there is a power to good advertising, to persuasive or not in-your-face advertising. But it was funny because that’s 1977, and then in 1980 or ‘81 is when Phil, I guess it was ‘82 when Phil first met Dan, and he said essentially the same thing, “I don’t like advertising.” So Phil was clearly reluctant or slow to embrace the power of advertising, which of course now is the ultimate irony, that it’s synonymous with Nike now.But he needed to see it because in his mind, he’s an accountant by trade, he’s a runner himself. So for him, it was Steve Prefontaine wearing Nike running shoes that he felt was the power, the endorsement of that kind, as opposed to just a clever turn of a phrase or a funny, you know, words on a paper.The Legend of Steve Prefontaine: Nike’s First IconAndrew Mitrak: Let’s talk about Steve Prefontaine, because it seems like he was one of the first Nike iconic sponsorships. Nike’s so well-known for partnering with athletes and having long-standing partnerships. Can you tell the story about their initial relationship with Pre and how this kind of became an early template for their sponsorships?Scott Reames: Steve Prefontaine followed in the footsteps, literally, of other Oregon runners like Phil Knight of course earlier, but Geoff Hollister and Kenny Moore and some of the early 1960s runners, all of whom played important roles both either in the launch of Blue Ribbon Sports then Nike or in the University of Oregon’s ascension into essentially the elite of track and field programs.So when Pre comes along in 1969, the Tiger Cortez had already been created, the Tiger Boston, I mean, we’re really starting to… we being both Tiger and Blue Ribbon Sports are really starting to get some, no pun intended, traction in the industry. Sorry, footwear jokes, what can you do?And then serendipitously, this kid from Coos Bay, Oregon, a little tiny little town on the Oregon coast, shows up at the University of Oregon and he just instantly captures everyone’s… he was so magnetizing. I mean, people were just drawn to him. And he performed so well at Hayward Field. Right? That he drew from the crowd, and the crowd fed off him. It was just an amazing symbiotic relationship.And he was also brash, but he backed it up. Right? He had swagger, but he was cocky, but he was also really good. So it’s not like he was just like, “God, that guy’s full of himself.” He was good and he knew it, but he then performed. And Phil seemed to really gravitate towards that personality. Maybe that’s Phil… Phil’s a very quiet, kind of introverted person. Maybe if he weren’t so introverted, maybe he would be more Prefontaine-esque, I don’t know. But Phil has referred to Steve Prefontaine as the soul of Nike on many occasions, which is all the more remarkable when you really look at that Steve had a very, had a very short life, unfortunately. He came to Oregon in ‘69 and he was killed in a car accident in 1975. So, and that was only two years after he graduated from U of O. And of course, back then, before NIL and all the other things we have today, Steve couldn’t accept any money from Blue Ribbon Sports. He was basically living on food stamps and surfing off couches for a while because he was training all the time. He couldn’t find a job.So by the time he graduated, then he was able to, Blue Ribbon Sports could hire him to be an employee, if you will, but mostly to let him train. But it was only a two-year window where he was essentially affiliated officially with Blue Ribbon Sports. And yet he is so impactful that more than 50 years after his death, he’s still considered one of the triangle legs. I mean, Phil Knight, Bill Bowerman, and Steve Prefontaine are essentially considered the initial trinity of the company.Andrew Mitrak: It’s a really remarkable story and a really sad ending to it. And I think when he died, he held like pretty much every record he could hold at the time. Is that right?Scott Reames: He held, I believe, eight American records. And this was back when they were doing both mile and multiple miles, like one mile, two mile, three mile, but also the metric races too. And he held pretty much all of them from within about a mile to three miles, and then the metric equivalents, at the time of his death, which is remarkable.Nike’s Pattern of Picking Rebels and UpsettersAndrew Mitrak: It seems like a pattern is Nike, either deliberately or with a lot of luck, just finding the right talent to identify and pick the right talent early on and get their brand associated with them. And Pre is just one example, and of course, they’d have a lot of other examples of doing that as well.Scott Reames: Well, theoretically, if a guy doesn’t or a woman doesn’t pan out, you kind of forget about them, right?Andrew Mitrak: I guess that’s right. Yes, it’s survivorship bias. Exactly.Scott Reames: Right. But so Steve Prefontaine passes in ‘75 and the mantle moves from—it doesn’t stay with running, it moves to tennis with a young John McEnroe, right? Well, look at McEnroe: rebel, brash, cocky, backs it up, you know, but not establishment, you know. And then the transfer is over to Andre Agassi: rebel, brash, you know, all the way up through Serena, Kobe. I mean, it’s just been the MO.And this isn’t always true. I mean, Pete Sampras was a very successful Nike athlete and he’s pretty buttoned down. You know, he’s not, I don’t think you’d call him brash by any stretch of the imagination, but so I think part of it is Phil seems to just have a gift for identifying, especially when they’re young, right? Because it’s really easy to sign somebody after they’ve, you know, been with another brand for five years and you kind of know who they are.Scott Reames: But to take a chance on a Tiger Woods, who, okay, yeah, obviously he was turned out to be great, but you don’t know that for sure when he’s 20 years old. I mean, there’s been a number of players that are can’t-miss who missed, right? And so, Phil does have—I don’t want to call it the Midas touch because he’s certainly not perfect. We’ve certainly had some people we picked that didn’t exactly pan out, but usually the ones that are, again, the status quo upsetters, the people that have a different point of view, the people that give zero F’s about, you know, how you feel about them. I mean, that kind of appeals I think to Phil, and it certainly has been some of the more successful Nike athletes over the years.Andrew Mitrak: So we jumped a little in history.Scott Reames: I tend to do that.Andrew Mitrak: No, no, it’s great because it’s all—all these ideas are related.The Serendipitous Origins of the Nike Name and SwooshAndrew Mitrak: And so, back to Blue Ribbon Sports becoming Nike. There are these stories that have been told a lot, and I don’t want to dwell on them too long. So there’s the story of Jeff Johnson coming up with the name Nike, and Carolyn Davidson designing the Swoosh logo for $35. And you can read about these in Shoe Dog, you can—they’re very well-documented online. I’ve also listened to several of your interviews to prep for this and I’ve heard you talk about it so much, so I don’t want to spend too much time on this part of the story.But the thing that strikes me about this period of time is that it’s like lightning strikes twice in the same place at the same time. That that name, Nike, and that Swoosh that Carolyn designed, it’s like peanut butter and chocolate or something like that. It’s just like, wow, those go together so perfectly. And what do you attribute it to? How did luck happen like just like that, right there? Was it luck? Was it some marketing instincts? Was there something in the water in Beaverton, Oregon? Like, what happened?Scott Reames: Well, Jeff has told the story multiple times, so I—and I don’t want to rehash what you said is already pretty much out there. But in terms of Nike was a chosen—it came to him for several reasons. Marketing was related to a big part of it. I mean, just the fact that it’s the Nike goddess of victory, the Greek goddess of victory. Well, certainly, again, like a blue ribbon, that’s kind of what you’d want to associate with, you know, victory. Duh.The Marketing Logic Behind the ‘Nike’ NameScott Reames: But Jeff had also read quite a bit about the successful brands and what they share often. And usually it’s a one or two-syllable name. It’s a hard or exotic letter like a K or a Q or an X, you know. And I mean a couple of other factors, and he just was like, Nike, when he thought of it, it was just like, it’s like check, check, check, check. All those things seem to work. So he was really adamant that that that was the name.And the funny thing was, just like with the Swoosh, all the people who were involved at the time with finally selecting the name Nike and the Swoosh logo agreed that they didn’t like either one of them that much. Both of them they considered to be the least gross, the least, you know, eh, you know. And that’s why that quote about Phil Knight saying, “It’s the one I, you know, I don’t love it, but maybe it’ll grow on me.”So it wasn’t like, again, they were like the clouds parting and the angels singing and they were all like, “Ah, that’s the mark.” You know, it was more of, “Okay, well this will do for now.” So part of it was blood, sweat, and tears of developing the brand and developing the fact that Nike—the Swoosh was now standing for and being associated with quality and successful athletes. You know, so if it had been a circle or a—I mean, there’s a bunch of other drawings out there that may or may not be legit that Carolyn came up with. She didn’t unfortunately save the rest of them, I wish she would have.So if it had been if it had been an X, let’s say, you know, then that today might be an X on a pair of shoes. You’d be like, “Oh, that’s the Nike Swoosh,” you know, or the Nike whatever, you know. And so we sort of again, retroactively look at now the Swoosh and say it was a genius move, or the name Nike was a genius move. But there were a lot of folks, when we first introduced the logo, especially the lowercase n-i-k-e, the italic lowercase Nike, a lot of people were like, “Who’s Mike?” Because the N looked like an M. And so there wasn’t that brand recognition.And even again, Jeff Johnson, when he was at the first trade show in 1972 where we’re actually debuting the new Nike line of shoes like the Nike Cortez now. They they actually brought the Tiger Cortez and the Nike Cortez to Chicago to the NSGA show to sell them to retail clients. And Jeff Johnson basically said, “You don’t need this shoe. You’ve already got the Tiger, but we think it’s a good one.” And retailers actually said, “Well, we’re not sure what’s going on,” because we couldn’t talk about it. “We’re not sure what’s going on between you and Tiger that you would have your own brand. But you’ve always been straight with us, so we’ll buy some of your shoes too.”You know, so it was literally, it was relationships, honestly, more than just explaining to them that, well, this Nike Cortez, it has, you know, Swoosh fiber, you know, or whatever. It was the relationships of it. And so if that’s—I don’t know if that’s marketing or if that’s just, that’s just building on your reputation and building on people trusting you.Andrew Mitrak: Yeah, that’s right. So I framed the question in such a way that it’s as if lightning all struck in 1973 and everything came out perfectly and that everybody embraced this as an iconic brand from day one. And the truth, of course, is no, it takes time. Right? You build—by the way, did I have the year right? Is it 1973?Scott Reames: ‘71.Andrew Mitrak: ‘71. Okay, thanks for correcting me. Yeah. So those happened in 1971, but people are mispronouncing the name, calling it Mike. And it takes years and years of building the brand and identifying with that Swoosh that it becomes sort of ingrained with all this meaning. So it wasn’t that it was like a home run right off the bat. It did take a lot of time to build.Scott Reames: It was unique enough, and it did look different, right? I mean, you got Adidas with three stripes, you’ve got Tiger with the sort of two-stripey, you know. And so stripes were kind of the look. And you could call the Swoosh—I mean the Swoosh originally was just called “the stripe,” right? It didn’t—nobody said, “This is the Swoosh.” In fact, we never have been able to fully find a paper trail or any sort of trail that went from “Swoosh fiber” for a shoe in ‘69 to “the Swoosh.” There was no memo saying, “Henceforth, this shall be called the Swoosh.” You know, it just sort of organically was referred to that over time, and then later trademarked.So it was a different enough logo. And there was also other efforts to—I mean, so the Nike boxes were orange, right? The shoeboxes were orange, very bright orange to contrast with the blue boxes of Adidas, right? So you again, very different—we’re trying to find different ways to differentiate that this brand is clearly not that brand, you know, or the other brands. And that was done with some forethought. Jeff Johnson has told me that that was specifically done, the orange boxes and some motions, some movements were made to make us look and be remembered as different from the establishment.Rob Strasser: From Lawyer to Nike’s Head of MarketingAndrew Mitrak: I want to ask about another major figure in Nike’s marketing history, and that’s Rob Strasser. And Strasser, he joins as a lawyer initially, then he became Nike’s head of marketing. And this just seems like an odd transition. I can’t think of many great marketers that started as lawyers. So can you tell me about this early part of Rob Strasser at Nike?Scott Reames: Yes, so he was one of—he was on the legal team. I mentioned earlier the lawsuit between Onitsuka and Blue Ribbon Sports. And he was on the working for the company, the law firm that Nike hired to represent them. And so he did such a great job and he just bonded. He bonded with Phil and some of the other Nike executives at the time. And so when the dust settled and the case had been won, at some point, I don’t know if he approached Phil or if Phil invited him, but he joined the company.And I think he did join originally to do some partly legal work, but you know, again, in the 1970s, it was pretty much all hands on deck. And I don’t know, I don’t know if I’ve ever really heard the story of how he specifically was asked to become the marketing director. I know that it was with—they had what was called the Buttface meetings. And again, if you’ve read Shoe Dog, you know the Buttface meetings. So it was fairly common every six or nine months for the senior leaders to get together at an offsite and walk in as the marketing director or the apparel VP and walk out as the footwear VP or the, you know, so they they would basically do almost a carousel. So it could be that Rob walked in as the legal rep and walked out as the marketing director. I don’t know.But whatever, however that came about, it was genius because he had an affinity for it. And that was what led to, you know, many, many—I mean, we talked about the poster program. I mean, that was essentially Rob’s realizing that this is a—that people want posters. Let’s make them posters. It’s not part of our business plan, but we can figure this out. Air Jordan. I mean, the whole signing of Jordan, that was Rob Strasser. And just the marketing in general, creating the Pro Club, you know, where people where NBA and ABA players got a percentage of some of the footwear that was sold that they wore. That was that was not done in the industry. And Rob created that. You know, so he was very much ahead of his time in a lot of things. Or maybe he just was a guy who could just analyze stuff. Maybe that was his legal brain that he could just say, “Well, this would make sense. Why don’t we do it this way?” And there’s a lot of more Wild Wild West back then.The Story Behind Rob Strasser’s Legendary ‘10 Principles’Andrew Mitrak: Rob Strasser, he penned these 10 principles. And we don’t need to read through all 10 of them or anything like that, but when did this happen? When did he write these principles? And what was sort of the context for that?Scott Reames: It was 1977. And from what I’ve been told, because Rob has passed many, many years ago, so I never got a chance to interview him. But what I’ve been told by his secretary is that she was called at the time, and by others who knew him, was he was just having a bad day. He—I’ve heard different versions of it, but essentially a couple of employees were pushing back on being assigned something that they didn’t really want to do. And Rob, that was like the last straw for him, that the people were no longer fully embracing that we, you know, you give all for the company and you just do whatever’s asked.So he went to his typewriter, sat down at his desk, just started quickly, quickly, quickly, you know, pounding out what became these 10 principles. Showed them to his secretary. She kind of looked at it like, “Oh, you sure you want to do this?” you know. And so they she made or they made a bunch of copies and he taped it or left it on people’s chairs or taped it on their doors if they weren’t there. Didn’t run it by Phil Knight, didn’t run it by anybody. It was just there the next morning when people showed up.And even though—I don’t know if we want to go down that whole Air rabbit hole, but in the movie Air, they they play those up as if they were like on every wall and they were like the guiding principles that everybody quoted all the time. And that doesn’t seem to be accurate at all. But I can tell you that almost everybody I interviewed had their original copy. They never got rid of it, right? So it had an impact. Not an overt daily, you know, it wasn’t like, “Well, as principle number four says...” You know, there was not that kind of quotation of it.But I think people appreciated that somebody, first off, clearly has a passion for it. And secondly, there’s the first effort to really try to figure out, well, what is it about our company that does make us different? And we’ve been, I mean, all the way through the maxims in 2001 and all the way to today with the five maxims now that there are, there’s been that desire to try to boil down to its essence what makes Nike Nike. And Rob’s was purely organic, purely hellfire and brimstone, you know, just and then they’ve done HR has tried to do a much more of a measured thing. And that’s to me, that was a little bit too shaved and polished, you know. So there’s but every time they do that, whoever does it, it comes down to performance, teamwork, authenticity, innovation. I mean, I’m pleased in a way that over 50, you know, 50-some-odd years almost later, the core values are roughly the same. However you want to articulate them, they’re really the same.Breaking Down the ‘Break the Rules, Fight the Law’ EthosAndrew Mitrak: I’ll read through a few of them just to give listeners context. And I’ll also post a link to them in the blog that accompanies this show. But it’s:* Our business is change.* We’re on offense all the time.* Perfect results count, not a perfect process. Break the rules, fight the law.And I’ll jump to number 10, which is: “If we do the right things, we’ll make money damn near automatic.”And I do think, like you were saying how like when HR writes it, HR wouldn’t say “damn near automatic” or things like “break the rules.” They can’t say that. Break the law, like, oh, we can’t do that. Yeah. So, but it’s funny though, like you need to have a little edge to be inspiring, otherwise you kind of like roll your eyes at it. So, it sounds like they weren’t completely formalized, but they definitely landed and there were things people would remember and keep as well. So is that kind of how they were how they were used?Scott Reames: I believe so. From the number of people I’ve talked to about it. And the hard thing or the thing that people need to be reminded of is the context of it. This is 1977. There was no guarantee that Nike was going to be Nike, right? I mean, we’d been only a company for five years as Nike. We didn’t have our own real basketball shoes at this point yet. We were mostly selling off-the-rack Blazers and Bruins that we got from, you know, different Japanese companies. So there wasn’t, other than the Waffle, the Waffle outsole, which was the one innovation that Bill Bowerman had brought in the mid-70s, when people, you know, people sometimes they laugh like, “Live off the land.” Like, yeah, like Nike has to live off the land or or, you know, “Break the rules,” you know, or it’s like they’re making it sound like we’re just, you know, we’re just kind of like completely just out there just to run roughshod on people. But we weren’t—we didn’t even know if we’re going to survive. There was some, ironically, since we’re dealing with tariffs today, there was some tariffs that were being imposed that were going to be costing the company like $25 million, which was like $24 million more than we had, right? And so it was going to potentially shut the entire company down.This is all in the late 70s. So yeah, we’re Nike now and Nike’s, you know, multi-kajillion dollar business, but not in 1977. So this was this was very heartfelt and there was a real concern that if people did start to put themselves first or start to push back on being asked to what they do, that the company may not survive. So with that context, these 10 principles, I think, resonate more.Andrew Mitrak: So you joined Nike in the early ‘90s, and this was after Strasser left, but shortly before he passed away.Scott Reames: Correct.Andrew Mitrak: Did you encounter these more like just in your role, or was it more later as a historian that you encountered them? What was when did you first come across these principles?Scott Reames: I don’t remember specifically, but I don’t recall them being—I definitely would say it was probably after I created the historian role in 2005. If I had come across them, it might have been like, “Oh, that’s interesting.” But I didn’t really know the story behind it. Again, partly because there hadn’t been a me before me, right? There wasn’t a historian who was capturing this stuff and publishing it. So maybe the people who were around from ‘77 on who did keep them in their drawer or kept them on their wall or whatever, they may have known the story, but it was not like you could just go to the website or go, you know, it’s like, it was just like, “Oh, wow, okay. What was the context of this?” “Oh, yeah, Rob Strasser.” “Who?” “Well, he died last year.” You know, it’s like it was definitely not a cohesively told story. It was more of if you knew, you knew.Setting the Record Straight on the Movie ‘Air’Andrew Mitrak: Okay, going down the Air rabbit hole a little bit.Scott Reames: Be careful.Andrew Mitrak: I know, I know. So you had mentioned Strasser being instrumental in signing Michael Jordan and the Air Jordan and the Jordan brand. And the story is well-documented. Unfortunately, like the best-known documentation of it is the movie Air. And when I first saw the movie, I did like it. I thought it was like a very entertaining movie and all that. But of course, like later on, you realize, oh, it’s it’s like almost entirely a work of fiction aside from like a few, you know, yes, Michael Jordan and Nike worked together kind of stuff. So, but as a historian, are you are you just sick of being asked about this movie, or what’s your relation to it now?Scott Reames: So I’ve had a little bit of a bell curve reaction to Air. Initially, I was like charged up. I’m like, I’m going to get the story straight. I’m going to tell the story the correct way. And I went on LinkedIn and, you know, posted a couple of links and stories. And then the next thing I know, I’m getting media inquiries. People are, you know, the Portland Monthly and Sports Business Journal want to talk to me about it. I was like, “Whoa, whoa, whoa, whoa, I wasn’t really planning to go that big.” But it was good because I was setting the record straight.And then it became like, okay, now I’m telling this for like the 40th time. So I was getting a little tired of it. But now, I still feel that it’s important that the actual story be told because there are people in the movie who played a much larger role—Rob Strasser, Peter Moore—in the signing of Michael Jordan than did Sonny Vaccaro, who was played by Matt Damon. Part of that’s storytelling, I get it. I get creative license. But I know Rob Strasser’s daughter, right? I’ve worked with her. She works at Nike. I’ve met Peter Moore’s kids, his sons, you know. So it’s like, I want them, I want their families to get their due.And you know, again, I just present what actually happened. If you—I thought the movie was actually pretty entertaining, too. Phil Knight actually told me he thought the movie was entertaining. When I asked him, because he had seen it before I had, and I said, “Well,” he said, “I thought they captured Nike in the 1984 time period perfectly.” And I said, “Oh, good.” I said, “How about accurately?” He goes, “Oh no, it wasn’t accurate at all.” I’m like... you know. So it’s just, that’s the hard part, is there are other people who were instrumental in signing Michael Jordan, and if you see the movie, you would have no idea.The ‘Cringey’ Portrayal of Phil Knight in ‘Air’Andrew Mitrak: Yeah, for sure. So I’m kind of surprised that Phil Knight was able to enjoy it because from, you know, reading his book, seeing some of his his speeches, and, you know, you were describing him as a pretty introverted person, the Ben Affleck portrayal of him, he kind of comes off as a—I don’t know, not a great look. Not that I know Phil Knight at all, and you only get so much from watching interviews or watching a speech of his, but it didn’t seem to be anything like him whatsoever.Scott Reames: The word that I was told and heard most often from people who know him and know the story was “cringey.”Andrew Mitrak: Yeah.Scott Reames: Right? That Ben played him kind of cringey or cringily because he’s not... I mean, again, in 1984, he was certainly younger, obviously, but yeah, there was just, it was a lot of license taken there. And again, I, my concern or my issue there is they could have reached out to Phil Knight, they could have reached out to me, they could have reached out to anybody, and they didn’t. You know, and again, as as people kept reminding me, it’s not a documentary, right? So it’s Hollywood.But the hard part though, Andrew, after the movie was how many people treated it like it was a documentary and said things like, “Oh my gosh, Deloris Jordan, Michael’s mom, I love her. She’s tough as nails. The way she negotiated Michael’s contract...” and I’m like, “That never happened.” So that’s to me is like, you’re you’re basically taking David Falk, the agent, and basically minimalizing him and saying that it was Jordan’s mom that did it all. I’m like, well, that would be interesting and it’d be a great story if it were true, but it isn’t. So why would you write it that way?Andrew Mitrak: Yeah, for sure. And also, reading a bit about Rob Strasser, he seems like such a larger-than-life character.Scott Reames: Literally.Andrew Mitrak: Blustery and… yeah, exactly. And couldn’t be any more different than the Jason Bateman character. And it’s like, I kind of would like to… it seems like the real person would actually be a pretty cinematic character. Like, just would have a big screen presence. So I just wonder if you were to rewrite it or do a story like this, would he and Peter be among the main characters for you?Scott Reames: Oh, absolutely. No, Rob Strasser—again, I didn’t meet him, but I’ve seen plenty of photos of him, I know plenty… I mean, his nickname was “Rolling Thunder.” He’s been described as a “walking HR violation,” right? I mean, the stuff that he would do in the ‘70s and ‘80s and the things he would say and the stuff he would throw at people, I mean, would get him written up by HR on almost a daily basis today. He was over three bills, right? So he was over 300 pounds, but I mean, it was a big man. It wasn’t like fat, he was just big. Very intimidating, very imposing.So yeah, when I heard Jason Bateman, and I love Jason Bateman, he’s one of my favorite actors, but I was like, for what role? And then when I saw him, it’s like he’s witty and urbane and Jason Bateman. And Rob, from everything I’ve heard, was just… let it all just loose. He just was like, didn’t give… he just would be Rob. And so it was like, there’s a disconnect here. That was a little strange. But the movie… again, it does capture some of the great stories, it just credits the wrong people.The Impact of ‘Air’ on Nike’s HistoryAndrew Mitrak: Do you think it’s… when it comes to interest in Nike history, do you think it’s a net positive or a net negative? Because on the one hand, you know, you’re… spent a lot of time as a corporate historian at Nike, and it’s near and dear to your heart, and you probably want more people interested in Nike history. So it’s probably good to get people to think about what happens behind the scenes and think more about the ads they see and the shoes they purchase and the brand they’re familiar with. But on the other hand, it’s obviously got so many things wrong that we just talked about. So it has to be super frustrating for you to hear these things repeated. But just on net, do you think it’s been a positive or a negative?Scott Reames: I don’t think it was a negative thing. I think it could have been more. And again, I think the story is fascinating enough that it didn’t need to have a lot of the manipulation of it. But in terms of, did it redraw and draw in a new generation of people? I think absolutely. So I’m not regretting that it was made. I’m just wishing that they had tried a little harder to stick more towards the actual happenings because they’re just as interesting in my opinion.But if it spurs other movies, if it spurs other people to become more interested in how Nike came about… I mean, Nike’s story is a fascinating story, right? I mean, to your point, you made a comment earlier about how there were many times that Nike has… you know, if you go left instead of right, you would have come to an end. It’s kind of like a video game, right? You pick the wrong door, game over. And when Phil and I were working, when Phil was writing Shoe Dog—I say Phil and I, but Phil wrote Shoe Dog and I helped to edit and helped with some materials—he was candid about how many times… I mean, we came up with more than 20 or 25 different times where, you know, if it’s left, it’s game over; if it’s right, we continue. And he just kept making the right calls, or the decisions just turned out to be the right ones. And that’s why we’re here today. There are so many other businesses that make that one wrong turn and they disappear, you never hear of them again.How Wieden+Kennedy Landed Nike as Client #1Andrew Mitrak: So around the time of signing Michael Jordan, it was in the early ‘80s that Nike formed its relationship with Wieden+Kennedy. Can you tell me about how they were founded and how Nike came to be their first client?Scott Reames: Sure, that’s a great story. So we had, as I said earlier, bounced around. We had John Brown and Partners, before that we had the Morton agency—I forgot them. So we had Morton for like a year, John Brown and Partners for like three or four years. And there was another agency called the William Cain agency here in Portland. And they had a young copywriter named Dan Wieden. Dan Wieden had worked with Peter Moore at Georgia-Pacific before that. And as Dan said, “Peter left Georgia-Pacific, I got fired.” So they kind of went their separate way. Dan ends up at the William Cain agency, and Peter ends up at Nike.So Peter is starting to need some more advertising help, and he contacts his old guy from the agency, Dan Wieden, or from Georgia-Pacific, and Dan starts writing some copy. And then Peter at some point decides he’s got too much on his own plate to do all the art direction, so he says, “Can we find somebody to do the art direction?” Well, David Kennedy was also an alum of Georgia-Pacific, and as Dave told me, he said, “I got tired of working on plywood advertising and decided it’d be more fun to work on footwear.”So Dan and Dave individually—Wieden and Kennedy, not Wieden+Kennedy—started working on the Nike account to the point where they realized that they wanted to do this full-time on their own and not be working for another agency. So they made a pitch on St. Patrick’s Day, 1982. They made a pitch to Tom Carmody and Patsy Mest, who were the advertising people at Nike, that they would start their own agency and they wanted Nike to come along as their first client.Again, this was one of those times where I just loved my job so much, because Dan, being a tremendous storyteller that he is, of course, can’t just say, “And so they signed us.” He’s giving me the whole thing about how he’d had a tooth pulled or he was about to have a tooth pulled, so he’s on painkillers. He’s already nervous about the meeting, so he’s having a drink or two. And he just said the whole thing is like this surreal circus going on in his head, and they’re pitching this idea of becoming the agency. And I said to him later, “What if they had said no?” And he goes, “Well, I probably would have quit and moved to Chicago or moved away.” But thankfully, Tom and Patsy decided that they would go with these two.And on April 1st, like two weeks later, they officially opened up their doors, if you will, although the door was like a hotel, and they were using… they borrowed a card table and a typewriter from Patsy at Nike. And that was essentially the launch of Wieden+Kennedy on April 1st, April Fool’s Day, which I adore, 1982, with Nike as its only client. They had never done a national TV ad, Nike had never done a national TV ad, and by October, they did their first couple of ads, and then, well, you know the rest. It worked out pretty well.Andrew Mitrak: Yeah, for sure. The rest is that, yeah, 40 years on, they’re still an agency partner for Nike. So it seems like amazing.Scott Reames: Winning Emmy awards and doing all these cutting-edge, amazing things.Andrew Mitrak: Yeah. It’s funny also that Georgia-Pacific was like the common thread of so much talent because I don’t know, I guess I don’t mean to be offensive to any Georgia-Pacific fans out there, but it’s kind of the most boring company possible. It’s like, what, it makes like cardboard boxes or something like that, or like tissue paper or something. It’s kind of a funny… just a funny place for all this talent to spring from that would do such creative, iconic ads out of that company.The Darkly Inspiring Origin of ‘Just Do It.’Andrew Mitrak: I have to ask about the inspiration for “Just Do It.” It famously is… Dan Wieden credits this to Gary Gilmore’s last words, which… it’s sort of a dark story. There had been this moratorium on the death penalty, and then that gets overturned, and Gary Gilmore was the first to be executed in 10 years, and his last words were “Let’s do it.” His last words are “Let’s do it” in front of a firing squad.And then 11 years later, Dan Wieden comes up with “Just do it” as a slogan for Nike, and he kind of recalls that it was Gary Gilmore’s “Let’s do it” that was the inspiration. And it just seems like a really odd connection. One that it’s not one-to-one, it’s “Let’s do it” versus “Just do it.” But also just that this odd little thing that’s a little footnote in history that’s kind of a morbid piece of history inspires, you know, probably among the best-known slogans in history, certainly in the top few. And it just seems like an odd connection. So what do you think about this story and what… is this truly how it happened or what’s your take on that?Scott Reames: Well, all I can tell you is that’s what Dan told me. And I remember my jaw opened up a little bit, like, “What?” And I said, “I’d heard rumors of different things, but this...” And he said… and then I finally said, “Are you putting me on?” And he goes, “No, no.” And he relayed the whole thing. He said, if I remember correctly, it wasn’t right yet before the firing squad, but essentially they were coming to get him from his cell, and they were like, you know, “Do you have any last words?” and so on. And he was just kind of like, “Let’s do it.” You know, I mean, “Just stop, let’s just get this over with. Let’s do it.” And he said that just stayed with him, that defiance, right? I mean, literally, it’s like, “Yes, let’s send me to my death.” You know, it just attached into one of his synapses in his brain and it parked there. From what he told me, that’s kind of the way his brain worked. Things just stayed with him.So why it was 11 years, I don’t know if his mind had been refreshed by an article that he’d read. He didn’t ever go into that level of explanation. But I know that he was frustrated that the campaign that they were working on was very disparate. It had about a half dozen different 30-second ads, and they were all interesting and kind of whimsical and funny, but there wasn’t really a thread that tied them together. And he even said to me, he goes, “I don’t… I’ve never been a tagline person. I’ve never been really one that considers that to be great moments in advertising.” But he said, “I felt like this needed it. It needed something to bring them together.” And that’s somehow that the “Let’s do it” bubbled up.Originally it was going to be “Do it.” And he told me that that felt too bossy. “Do it! Do it!” So he thought “Just do it” softened it a little bit. Like, “You know, okay, you’ve been talking about this forever, Andrew, just do it,” right? “You’ve been saying you’re going to start running after work, just do it.” It’s a little bit less, “Do it!” And it obviously worked.Andrew Mitrak: I mean, obviously it does. And it’s something where… well, one, back to the story, it just sounds like one of those things that’s like an internet urban legend or something like that. It kind of sounds like there’s just a ring of it that sounds like it’s a myth that’s debunked on Snopes somewhere. But in this case, it’s actually true, it actually happened.Scott Reames: The man credited with it told me he did it. So I don’t know how you refute that.Andrew Mitrak: No. And also, as you say, it’s like, okay, I have notes that have been tucked away for more than a decade, and I’m sure that him being the copywriter he is, he could do that too. So it makes sense, but it does, yeah, it turns into this amazing inspirational ad. It’s an inspirational slogan that you can remember. And like, sometimes I honestly say, like there are times in my life where I’ve probably been on the edge of something and just thought, “Oh, just do it.” And it probably got me over the edge to take some action. And who knows how many times that… probably a billion times in the world somebody’s made some decision kind of thinking, “Just do it.”Scott Reames: The reaction they got almost immediately was, I mean, women saying, “I left my husband or my boyfriend because I was inspired to just do it.” And it’s like, whoa, that was not part of the brief. But that was… people internalize that to be whatever it meant to them. And I think that’s why it’s still resonates so many years later because people still have an internal need for motivation. Some people are very easy to get themselves out there and other people just need, “Hey, just do it. I know you can do it, just do it.”Mars Blackmon and Michael Jordan: The Perfect FoilAndrew Mitrak: One of the ad spots I want to ask you about are the early Spike Lee ads with Michael Jordan. Do you know how those came to be? Because they’re among, you know… Nike’s made so many in history that are great, but those are just some of my favorites.Scott Reames: Well, the… Jim Riswold, right, a legend at Wieden+Kennedy, now passed away unfortunately not too long ago, somehow had the genius to realize that Michael Jordan needed a foil, right? Needed somebody to bounce off of and essentially to be the pitch person, whereas Michael then almost became the anti-pitch person. I mean, some of those original ads, I mean, literally Michael’s saying, “No, Mars, it’s not the shoes.” You know, I mean, it’s kind of weird or kind of bold for a company to say, “Our shoes actually will not make you Michael Jordan. But here’s Michael Jordan.”So, you know, and obviously, it was again very organic because Spike Lee had created the… I think it was Do the Right Thing, I think it was the first movie where Mars Blackmon appears, and he’s wearing his Air Jordans. So that was not because Nike placed them or gave him shoes, he just… Spike Lee, slash Mars Blackmon loved the Air Jordan.So that was that special sauce of Riswold and others just basically saying, “Hmm, these two could really play off each other.” And obviously, they did. And we recreated that to some extent with Little Penny and Penny Hardaway, right? So and Little Penny was from Chris Rock‘s voiceover. Same idea, right? An athlete who’s maybe not the most bold and outgoing person, so you pair them with a foil who is, right? And you get pretty much the same result. So I think a lot of times when we do ads, we do them once or twice and then we move on to something else. And Spike Lee, the Mars Blackmon-Michael pairing, just seemed to have that special “it,” right? It was like it hit over and over again. So they found different ways to bring the two of them together all the way up until, you know, essentially when Michael retires for the first time, and then we actually… Mars comes back, you know. So it’s or and then when he plays baseball, you know. It was like literally Spike Lee was almost attached to the hip to Michael through those ads.Andrew Mitrak: Well, then the other foil to Michael becomes Bugs Bunny with the “Hare Jordan” ads, and that becomes Space Jam, which is the other one I want to ask you about because that seems like such an innovative, kind of unlikely pairing as well.Scott Reames: Yeah, and I don’t, I don’t know the actual impetus for what caused them… you know, who was it that sat down and said, “You know, what if Michael played a bunch of the Looney Tunes?” I would suspect Riswold, but I don’t know for sure. But it was just a… you know, it was kind of whimsical. It was a Super Bowl ad, right? So they knew that they were going to have a bigger audience and a more diverse audience than just football or basketball players. It’d be essentially a lot of people who’d be watching it. So you want an ad that maybe is more… draws more people in. And obviously, Looney Tunes, you know, certainly who doesn’t… who didn’t grow up with them and who doesn’t love them?So the fact that it actually turned into a movie and then later a second movie and I think even a remake of the first movie just shows that whatever the thinking was, it was tapping into the right vein.The Origins of Nike’s Corporate Historian RoleAndrew Mitrak: In the early 2000s, is that when you made your transition to becoming a corporate historian for Nike?Scott Reames: 2004 into 2005, yeah.Andrew Mitrak: How did that happen? What did that look like?Scott Reames: Before that, I was in what was called Global Brand Communications. So my role specifically was to do the communications for senior-level leaders, including Phil Knight, Mark Parker, and others. And the more I facilitated those interviews, the more I listened to these guys talking about the early days of the company, the more I noticed that there were… let’s just call it variations. You know, “The Swoosh was $35,” “The Swoosh was $50,” “The Swoosh was $75.” Just little things, but I realized that because we were a very oral storytelling company, once a voice disappears, whether it’s Bill Bowerman dying in 1999 or Rob Strasser in 1993 or ‘94, those voices are gone, right? And if we aren’t capturing those stories better, we lose that amazing opportunity to really learn from them.And I was learning also a lot, Andrew, that a lot of what we accepted as lore wasn’t necessarily true. It’s like the game of telephone, right? It shifts and it drifts and it gets embellished and it gets just changed over time. And for the most part, except for a couple of the exceptions I just listed, most of the original people were still around back in the early 2000s. So I didn’t need to ask somebody else what Frank Rudy was thinking when he came up with the Nike Air idea; we could just interview Frank Rudy. And so we did. We could talk to Jeff Johnson about the name Nike and how he came up with it because he was around, and thankfully still is.So it was just more of kind of these ideas percolating together. In 2004, Phil Knight also announced, at least internally, that he was stepping down as the CEO. And again, as his PR person, I felt like, okay, well his legacy, his stories… we’ve got to make sure we capture these because who knows what… nobody knew at that time that he would still be pretty much be hanging around every day. But you didn’t know that for sure. And Jeff Johnson, right at that same time, had had a pretty bad stroke, which he’s recovered from, but it was a little bit of a shot across the bow. Geoff Hollister, employee number four, also a long-time contributor, was diagnosed with a cancer that eventually took his life a few years later. So mortality was essentially rearing its head right and left in the early 2000s, basically reinforcing my belief that we needed to capture these stories while we still could from the OGs.So that all came together. I pitched it to Phil over lunch. He said, “Let me think about it,” and a couple of months later, I got a call from the head of the department that ran the archives department saying they got a head count approved for the historian role. “Do I want it?” And I said, “Yes. Yes, yes, yes.”Andrew Mitrak: Yeah, it sounds like a dream.Scott Reames: It was a dream. I did it for 16 years until I retired.Nike’s Secret Sauce: Passion Over PedigreeAndrew Mitrak: I wanted to sort of wrap up with reflections on Nike and their marketing story, and one of the themes that comes to mind is people who aren’t trained marketers making some of the best marketing decisions of all time. That Phil Knight was really… he was an accountant, that was his background. And Rob Strasser was a lawyer, and Jeff Johnson, I am not sure what he was doing before marketing.Scott Reames: He was a social worker in Los Angeles.Andrew Mitrak: He was a social worker. And Carolyn was… Carolyn Davidson was really early in her career as a freelance graphic designer.Scott Reames: She was a student at Portland State, yeah.Andrew Mitrak: Still a student, yeah, still a student. And folks who just kind of have to learn and just have some instinct and do the right thing. And I’m guessing if you have any reflections on that, of just folks who aren’t necessarily trained in marketing, but still… I don’t know what it says about marketing, that you don’t have to be trained in it to make some of the best decisions ever in it. But what are your thoughts about that?Scott Reames: Well, I think Phil has a knack for finding people who are greater than their role, or that they’re flexible or they’re inquisitive and they… they can look at a problem that may not be something they’re classically trained in, but they’re intelligent and observant. And especially if they have a passion for and an understanding of what Nike is or who Nike is, they can articulate that maybe in different ways, but they can look at something and say, “Well, I don’t know, I’m not really trained in marketing, but doesn’t it seem to you that we should do this?”And I think the more, whether it’s the principles or the maxims, the different ways that Nike tries to get people to understand who we were/are, the more people are internalizing that and accepting it. And again, if they’re people who think beyond what’s laid out in front of them, they can somewhat extrapolate and essentially come up with an idea that maybe isn’t really something they were trained to do, but it just seems… “Well, that seems like a logical thing to do, doesn’t it? I mean, if this is Nike, shouldn’t we do this this way?” And I’m probably oversimplifying it, but it just can’t happen so often and be a happenstance, right?I mean, we’ve had this weird track record of bringing people in who were building architects and become Tinker Hatfield. He was not hired to design Nike shoes. He was hired to design Nike buildings because he was an architect. But somehow, he made that leap. And the people within the company who gave him that latitude… they could have easily said, “You’re an architect, get out of here.” Instead, it was like, “Well, that actually is not a bad idea, Tinker. What can you go with that?” That’s kind of cool.Andrew Mitrak: Super cool. No, I think it’s super inspiring. Scott, I’ve found this conversation super inspiring. For folks who want to learn more about Nike history and follow some of your work online, where would you point them?Where to Find More Nike HistoryScott Reames: To my LinkedIn page, I guess, would be the best place. I don’t do a lot of social media other than LinkedIn. I try not to just barf out stuff on a regular basis. I try to come up with something that’s topical or something that maybe is in the news, like Air. But I love hearing from people, and I love… I don’t really do an AMA kind of thing, ask me anything, but I love it when people do send a question, and I try to find the answer if I don’t know it. So if they want to find me on LinkedIn and follow me, I’d be happy to respond when I can. I will not tell you how to get a job at Nike because I haven’t applied there since 1992. But it is a great company and there are a lot of amazing stories about it.And of course, read Shoe Dog. Definitely if you have any interest in Nike, please read Shoe Dog because it’s an amazing look at the company.Andrew Mitrak: Yeah, Shoe Dog is just one of the best business books, business memoirs of all time. So thanks for your contribution to Shoe Dog as well, because it’s one of those few business books that I’ve reread and enjoyed a lot because it’s so good. So thanks for that. Well, yeah, Scott, thanks so much for this conversation. I really enjoyed it.Scott Reames: Thank you, Andrew. I appreciate it. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 36This week my guest is Ken Rufo, the owner and principal of Manchester Street, a marketing consultancy focused on B2B differentiation. Prior to this, he ran positioning and strategy at Emphatic Thinking, a consulting firm that’s now owned by Accenture. Ken earned his PhD in communication from the University of Georgia, and I met him back when he was my professor in my master’s program at the University of Washington.One of the things that I like about Ken Rufo is that he brings such a unique, original view on marketing, and he’s not afraid to be provocative and contrarian. For instance, when it comes to marketing messaging, he’s less interested in brand storytelling and more interested in making persuasive arguments. Listen to the podcast: Spotify / Apple PodcastsKen questions if marketing’s obsession with data was actually a mistake. He argues there’s too much attention on what’s easy to measure instead of what actually influences buying decisions.These are themes that I explored in my prior two episodes with Jon Miller and Kerry Cunningham, and I see this conversation with Ken as completing a trilogy of sorts on how B2B marketing has developed in the 21st century and how data and analytics and marketing tech have all changed how we go to market.Note to listeners: I hope you don’t mind the past month’s focus on recent marketing history. It’s been fun for me to dive into the inflection points that shape today’s digital marketing world (especially in B2B)as it’s relevant to the work I do every day. Don’t worry: we’ll travel back to earlier times of marketing history in episodes to come.Here’s my conversation with Ken Rufo.Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Bridging the Gap Between Marketing Theory and PracticeAndrew Mitrak: Ken Rufo, welcome to A History of Marketing.Ken Rufo: Thank you for having me.Andrew Mitrak: You were a professor that I had in grad school, but you’ve also been a successful principal at agencies and a consultant. And a thing that I’ve noticed over the course of the 40 or so interviews I’ve had for this podcast is that there is a really big gap between academia and practice. And you seem like one of the few individuals that I’ve encountered who successfully bridged that gap. I’m wondering if you have any observations on that.Ken Rufo: Yeah, it’s a good call out. And I think that academics, to their disservice, are significantly behind the times. And this is a very gross generalization, so there are going to be people who listen to this who get upset with me. But you look at a lot of the even the digital marketing curricula that are present in MBA programs, they’re five years on a good day behind where the industry is. They’re a decade behind, right? Like there are still classes in digital marketing that are not talking through the kind of granularities of a DMP DSP integration, for example. And I don’t know how you really understand what’s happening at a digital marketing level if you don’t understand that degree of technical granularity.On the other hand, I think that one of the things that happens on the non-academic side is because there is not rigorous academic theory and research behind a lot of things, there are a lot of things in the marketing world that are imaginary that we take as being true. A lot of things like that. You’ve probably heard things like the seven touchstones, right? Like you need seven touches before there’s a sale. That’s made up.Andrew Mitrak: The marketing rule of seven.Ken Rufo: Yeah, that’s a made-up rule. It was made up by a radio station like back in like the 30s or 40s to explain why it is you should buy multiple ad spots. It wasn’t based on research. There is research about threshold effects within persuasion within marketing, but it’s highly variable based on like the size of the market, the number of entrants, how recently you’ve been an entrant. Like the math is super complicated and it’s really only understandable right now post hoc. It’s not like this formula thing that you just plug in a formula and be like, I need nine buys, you know.Andrew Mitrak: It is funny how sometimes somebody will present a plan or some strategy and say, as we all know, you need seven touchpoints to get a customer. And you kind of want to start off with the meeting by saying, that’s BS. But it’s something we all kind of nod along with.The Evolution of Marketing’s Value Proposition in the Post-Dot-Com EraAndrew Mitrak: I know we could go a number of routes, but I want to kind of narrow in on the last 25 years or so to the post-dot-com era of marketing. Do you have thoughts on how the value proposition of marketing itself has changed over that era?Ken Rufo: Yeah, I have two, I have two really, I think, strong thoughts on this. And one of them will be a hot take and the other one will be, I think, really conventional. I think the first thing is we’ve gotten better and better and better at targeting. And we’ve realized that it’s not just enough to target a person, you have to target a time. Right? So like there has been a general switch from kind of like segment-based or audience-based marketing towards finding the moments in which the touchpoints actually matter, right? And the easy way to think about this is that in any act of marketing for it to be compelling, I need both my interest in the thing to be present and my attention to be available.So I can have the most amazingly catered, like audience of 10 people type message, you know, like really granular messaging, but if I’m not paying attention, and it’s not the right time for me to make a purchase, it doesn’t matter. Or at least it doesn’t matter in any kind of timeframe in which I could attribute conversion, right?So that has been really amazing. There is a downside to that. This is not the hot take, but the downside of that is that the more you target a smaller window, like you went from like broad message to a group of people to a person to a moment in that person’s life, the harder it is to fit a lot of information in. There’s a kind of compression paradox where if I’m just targeting you with the right display ad at the right time or the right search ad with the right time, it’s a smaller target and if I nail it, I just can’t fit that much information density into that package. And so that is a little bit of an issue. So I think that’s one of the things that’s really cool about what’s happened is that we’ve kind of understood this.“Hot Take”: Has Marketing Cannibalized Itself?Ken Rufo: The other thing, and this is more of the hot take, is that we have shot ourselves in the foot. I’ve never seen an industry self-cannibalize as successfully as marketing did when it went digital. Everyone was so excited to go digital. They were like, we’re going to we’re going to show you, like if we invest over here, we can AB test, look how B performs better than A and, you know, our CTR rate is like 100% higher, which often when people say like our CTR rate’s like 100% higher, what they mean is that there were five clicks before and now there’s 10 clicks out of a thousand. You know, now that that was in fact technically a 100% jump, but that’s not super compelling. I don’t know you can build a growth strategy off of like a five to 10 click-through rate, especially when that’s not even the conversion.But the biggest issue is it’s not how persuasion works. The stuff that we measure in a digital world, the original value proposition is we can provide you with demonstrable and measurable results. But the reality is that’s not how persuasion works and the kinds of things that we measure don’t measure persuasion, they measure interaction.Andrew Mitrak: Do you think it’s a result of marketing needing to justify its own existence? We want to prove the ROI of marketing and therefore we’ll kind of invent some metrics to prove ROI and therefore we’ll kind of obsess over those metrics and we need to get them better and better all the time. Is that kind of what’s behind it or if not, what would you attribute the cause to?Ken Rufo: Okay, that’s actually a really fascinating question. I’m going to say there’s three. The first one is marketing is often considered a soft skill. So unlike technical skills or financial skills or whatever else, marketing is a soft skill. I say some slightly compelling things and we wordsmith, right? Wordsmith is typically used in a negative, oh, you’re wordsmithing, right? Or sometimes a positive when you want to hire somebody in to make something sound prettier or whatever.But it’s considered a soft skill. So there’s a lot of folks in the especially in the tech world who like because they can solve computer challenges, kind of assume they can solve marketing challenges. Sometimes they’re right, sometimes that’s not accurate. I think same with CFOs, they tend to look at the CMO and they go, look, I can I can look at like we had X number of sellers, we hired X plus 10, you know, we got more revenue, see the sales team created revenue. How did you create revenue? Right? And the marketers are like, well, okay, I’m going to come up with an Excel document, it’s going to show you a bunch of stuff and we can attribute a lot of that to marketing.And I think the problem here is that because it’s a soft skill, it’s not as trusted, right? And there’s a bias against soft skills by folks who are more technical or objectively inclined. But I think the other problem here is that at the end of the day, marketing measures the interaction that a company has with a customer prior to sale and occasionally if we’re talking about retention marketing subsequent to a sale, right? But it does not measure the act of persuasion. Like what’s happening inside the brain is still black box, right? It’s still like unknowable. So I think part of the problem here is that what marketing is measuring is just it’s not measuring the right things. And not because they’re not measurable, I don’t know.The Challenge of Measuring Marketing’s True ImpactAndrew Mitrak: Yeah, that’s right. I guess every other department, most other departments at least, you know, sales, you have closed deals, you have revenue. Finance, you have profitability. If it’s a product or engineering thing, you could measure the rate at which things are delivered and customer service or other things you can measure tickets closed and things. And everybody needs OKRs or you know, some type of measuring and marketing needs to create them. Would you say that marketing, and I obviously we’re saying marketing like there’s a lot of companies out there, there’s different areas of marketing, but just by and large in broad strokes, do you think marketing has kind of come up with some of the wrong ones, and when do you think they started doing that?Ken Rufo: Look at it this way, right? Like CTR is a great example of this. When a CRO goes to present the effectiveness of their sales team, they don’t ever say we AB tested a 46-minute pitch meeting versus a 48-minute pitch meeting. We looked at a blue background on slide four versus a teal background on slide four, right? And what we noticed was a 67% more like larger focus of eyeballs, right, on the slides. Like so no one else offers that level of granularity as a means to justify their existence or process, right? See, I think we can separate the value proposition of the existence of marketing from the processes of marketing. And I think we’ve tried to substitute measures for the process for measures of the value. Does that make sense?Andrew Mitrak: Yeah, for sure. I think like kind of up-leveling the message back to your original hot take of marketing shooting itself in the foot. And to paraphrase it, hopefully not too poorly, is that marketing kind of got obsessed with data science and that may not have actually been a good idea for it in the long term.Ken Rufo: Yeah, I think some degree of data science is absolutely essential for contemporary marketing because you do want to know like, I think there’s a difference for example, between an ROAS measurement and an ROI measurement for marketing, right? And I think the latter of that is much trickier than the ROAS, right? Because within ROAS, I can look at like this ad versus that ad and I can say, well, this ad did perform better, right? But that doesn’t necessarily tell me that the idea to run ads period, was a good idea.Right? And that’s the part that I’m saying is tricky. There is still a lot of assumption and a lot of theory that is implicit within most marketing campaign structures, right? Or messaging structures or brand structures or brand architectures, right? But I think marketing did get a little bit too oriented on the data science thing where they were like, look, like we can pull numbers now. We can run some Python scripts, we can use R. And everyone was very excited. And I’m not necessarily sure that worked out. I look, every company I work with, I won’t mention specifics. Almost every company I work with, when they get bought by private equity, the very first thing that gets cut is marketing. Which is weird because at the moment you’re purchased by private equity, you have an automatic marketing opportunity boost, right? Why do they cut it? Because they can’t prove on a spreadsheet that it actually has value.Are we coming full circle back to Brand Equity?Andrew Mitrak: You know, the thing is, actually, I think a lot of that is why brand equity started. If I kind of think of David Aaker and his work and the original Marketing Science Institute conference, it was in the era, it was in the 1980s, in the era of, you know, the Wall Street movie with Michael Douglas and private equity, corporate raiders. And all of a sudden, marketing needed to justify itself and say, hey, brand equity, equity, that talks to the private equity folks, right?Ken Rufo: Yeah, exactly.Andrew Mitrak: So it’s kind of funny that you’re bringing it up. We’ve almost kind of come full circle as far as what you’re experiencing there.Ken Rufo: Yeah, and I do think that’s kind of like a weird moment that we’re in. I think we have reached a kind of weird full circle where we’ve gotten adept enough at targeting and measuring that now we’re looking for value in places that are not the metrics.Is “Marketing Science” a Real Thing?Andrew Mitrak: Do you think… this is going to be a loaded question here. I mentioned the Marketing Science Institute. I’ve spoken to folks from Ehrenberg-Bass, the Institute of Marketing Science. And I like a lot of their work. And also I mentioned how I worked with data scientists for marketing too.And there’s this Peter Thiel quote, I know he’s a controversial figure, but sometimes he has spicy quotes. And he a quote that’s something to the effect of, “If ‘science’ has to come after the word it’s describing, then it’s not science.” Right? Like biology and physics, those are science. Political science, social science, those aren’t actually sciences. So do you think marketing science is actually a real thing?Ken Rufo: Okay, so I mean, I should point out that etymologically, like biology, the logos that is “ology” in biology is the equivalent of science. Logos would have been like words, meaning, theory, structure, right? So like what we call science would have been that, right? Like scientia, the word that gave us science, right, is just the Latin version that we use. Okay, whatever.But I understand his point. His point is, the more you have to say it, right, the more you say like, I’m very handsome, the less it’s probably true, right? So I do understand the basic point. And I don’t think he’s wrong about that. I think it’s more like, what is the purpose of science?Andrew Mitrak: Maybe what’s also behind my question is that it seems like as far as marketing marketing itself and the value proposition of marketing itself, it wants authority and prestige and to be more tied to science. And it might even call itself “marketing science.” And that may lead you to kind of obsess over numbers like CTR. I’m wondering if that is a little bit of marketing, just putting a veneer of science on itself and is not as scientific as it might want you to think.Ken Rufo: Okay, here’s the charitable read on this. I think there is a general desire in most sectors of business to prove that you have value, right? Like to prove that you’re producing really good stuff, right? And the reality is that marketing has a variety of core functions and many of those core functions are very difficult to measure, but it does not mean they aren’t true, right? It doesn’t mean there aren’t scientific ways of assessing them. It just means it’s very difficult to measure some of those things, right?So, you know, for example, it’s very difficult because it’s functionally a counterfactual to say, would sales have sold as much if the landing hadn’t been softened by some really effective marketing stuff, right? If they hadn’t read some pre-materials or some good thought leadership or they didn’t have some ideas or vocabulary that was instilled in them by the marketing materials that they got or the account-based plan or whatever else, could sales have gone in and have, you know, a 40-minute conversation that resulted in a likely sale? Like could a seller pull that off?And the answer is sometimes a seller is just very talented and they can pull that off like out of a vacuum, right? Like I’ve seen some sellers who are so compelling, I’m probably sure I could if they had asked for one of my kids eventually, I probably would have given it. They’re just they’re just they’re very smooth. I appreciate that. Some folks are just like that. Not all sellers are like that, right? And the question is, when you talk about an average seller with average marketing, is that more powerful than a good seller with no marketing or really amazing marketing with a bad seller? That combination is very, very difficult to measure, right?We don’t have a lot of interoperability in the metrics that we use for marketing in a way that would make sense with the measures that we have for sales, right? We typically look at like we gave you a target, you hit your target, you had some tough accounts, you grew your accounts, etc, right? You had a certain number of calls, a certain number of meets, a certain number of deck deliveries, right, etc, right? There’s a variety of things that we can look at as sales metrics, but they don’t really work interoperably with our marketing metrics. So it’s a little bit harder to guess that that’s the case. And typically, although this isn’t always the case, revenue and marketing are split.So there’s no reason why we would want them to be interoperable. They report separately. I think marketing wants very much to say, hey, look, we contributed to that. Like you wouldn’t have done as good of a job if we hadn’t been around. But that’s just a very difficult case to make conclusively.Measuring Marketing’s Impact: B2C vs. B2BAndrew Mitrak: Is there better data for it on the consumer side or the e-commerce side? For instance, most e-commerce websites are pretty much the same functionality at this point. The variance between a good seller and a bad seller on the B2B side versus a good e-commerce site—the gap has mostly narrowed. Sure, there were early leaders who were way better, but other people usually catch on pretty quickly and implement whatever the best practices are. So, is marketing’s impact just a little easier to measure on the consumer side or the e-commerce side?Ken Rufo: Yeah, that’s a great call out. I tend to think about things from the business-to-business perspective.Andrew Mitrak: Yes, same here.Ken Rufo: In B2C, I think there are some differences because there is a more direct line between a marketing material and a conversion. So it’s a little bit easier to verify that some things resulted in a conversion. I still think there are a lot of attribution problems with this. I think there’s a lot of questions about whether or not incremental ads added to the conversion or if the conversion would have happened anyway. And that’s not a negative about marketing, I’m just saying that, let’s say I’m really interested in a product and I keep thinking about it. I see an ad and I go click on the ad because I’m already interested in the product.There’s an interesting question about whether the ad generated interest, added interest, sustained interest, or just filled a gap until I was ready to make a purchase. Those are four different scenarios for what an ad can do, and you would measure all of them slightly differently. For example, maybe there was something in that ad that broke a moment of tension within my deliberation process, and I was like, that is the phone I want to buy. That is the upgrade phone I want to buy. I want to go with a Pixel instead of a Samsung this time. And maybe there was something in that ad that did that, but I might have already been interested in the Pixel before that. Maybe the ad got me interested in the Pixel in the first place. We can look at the fact that an ad interacted with a consumer and we can say, hey, that ad was part of the journey that they made, and they ultimately decided to make a purchase, so the ad gets attribution, it led to a conversion. My point is just that we don’t always know what its actual rhetorical or persuasive function was—whether it was strictly awareness, deliberation, what other thing was contained within that.“Stories Bring Us Together, Arguments Set You Apart”Andrew Mitrak: If marketing’s obsession with data science helped shoot itself in the foot, what’s your take on storytelling?Ken Rufo: I don’t want to plug Manchester Street, which is my little entity, too much, but we do use a line that I like quite a bit, which is not mine originally. A very talented graphic designer named Nick Danielson used this line I think for the first time. Stories bring us together, but arguments set you apart. I think that when you’re thinking, especially in the B2B context where decision-making tends to be multiple people, it tends to be against very particular requirements, and sometimes sales can be more complicated, sometimes even elevated to complex in terms of the level of integrations. In those instances, storytelling is a great way to say, “I get you.” It’s not a great way to differentiate. The power of stories is precisely that it combines shared experience, but that does make it harder to stand out from the crowd.So I like storytelling, as long as it’s in the service of well-thought-through and very persuasive argumentation. I think storytelling for the sake of storytelling is a fun exercise, but there are novels for that. So I think it’s not necessarily what I think of as being a marketing function. That being said, I think that storytelling is a great corporate function at a strategic comms level, as a kind of organizing principle for the culture of an entity or an organization. I think storytelling is really useful for that. It helps people see themselves as part of a larger project or value, and I think that’s really powerful. I just don’t think that a lot of people see... look, you own a cell phone.Andrew Mitrak: I own a cell phone.Ken Rufo: Alright. How many times have you seen a Google Pixel ad or an iPhone ad where they’re out and they’re camping and they take a picture of the stars and you’re like, I need to go camping with my phone to take a picture of the stars. In fact, I can’t go camping without an iPhone or without a Pixel or without whatever. You know what I mean? You kind of like the emotion, but that’s not how you would decide on a phone.Andrew Mitrak: I think with the picture of the stars, I couldn’t say the specific ad you’re referring to, but I know the type of ad. Usually, the thing is you want to differentiate this year’s phone versus last year’s phone, right? And low light, that’s a difficult thing, and having a more powerful camera that’s better in low light, maybe telephoto, I don’t know, or the wide one. And it seems like a way of choosing a more extreme use case, which is a night photography use case, and which I think in a way is hopefully showing storytelling but also somehow weaving in some type of competitive differentiation, in that case, the camera.Ken Rufo: Those ads don’t do that. I just disagree with the premise that those ads do that. I think if we go back to Apple ads like the “Think Different” campaign, I think that’s a much better example of tying an emotional value or aspiration to an argument. “It just works,” or “I saved the day,” Apple “Think Different”—I think that was a really compelling way to separate the idea that if you wanted a machine that you could muck around with, then sure, maybe Windows. But if you would like to just be creative and not be encumbered by the machine, you can Think Different and do that. I think that’s a much more compelling campaign. In that situation, it’s a great example of where the story serves the argument, rather than just being the emotion for the brand or the product.Why It’s Time for CMOs to Embrace the ImmeasurableAndrew Mitrak: Coming back to data science and marketing, maybe having shot itself in the foot, and just to kind of tie the bow on that thought… What should be done about that? Or what should have been done differently about that?Ken Rufo: Those are two probably different questions. I think what should have been done differently is just that we over-promised what was possible. And I think we over-promised what was possible in part because of the question that you asked at the very beginning, which is the split between the academic and the practical that we see oftentimes. I think that in practice, people just thought, oh my gosh, if we can show these numbers, we’re going to be able to prove that marketing has really good ROI. We know it works. We all kind of intuitively know marketing is useful.And now we just thought, well if we have the metrics, we will be able to show this. But because the folks who were doing that were not folks who studied persuasion, rhetoric, psychology, other than as adjacent things that were useful to very specific acts, they weren’t really digging into the research and the theory that undergirded our understanding of those things. If they had at the time, they would have realized that the things we can measure don’t really assess whether or not the marketing was effective; they assess whether or not the marketing happened. And then we can do a post-hoc behavioral analysis, kind of like behavioral psychology, where we say, well, the result was more clicks, ergo, it must have been a more effective ad.But that doesn’t explain the act of persuasion. It doesn’t tell us that the messaging was better for a reason. It tells us that we are making an assumption after the fact that the behavior suggests that B is better than A, not explaining why B is better than A. And I think that’s a bit of the problem originally.In terms of what would fix it now, I think that marketers, CMOs, my preference would be that they just really stand up and say, look, a lot of what marketing does... marketing has some core functions: it makes you aware, it differentiates, and it educates on a point of view. I can measure awareness pretty easily, actually. I can measure whether or not my campaign made you more aware. Unaided brand recall, click-throughs, whatever, those are all actually pretty good measures of whether the ad effectively made you more aware. Search optimization, etc. In terms of, did it differentiate? That’s a little bit harder because we have to have a better understanding of whether or not the message actually resonated. And in terms of educating, what I mean by educating, I mean that I got you to think about things from my point of view.That is very difficult to measure. Unless I can somehow measure whether or not your sentiment, if I look at the sentiment that’s being used, matches the verbiage that I want you to use, that’s really the only good measure for that. I think that CMOs should stand up and say, a lot of what we do isn’t super clearly measurable, but I’m convinced that there’s a vision and a strategy and a thought leadership and a coherent way to do this. In the same way that when we think about sales methodologies, and we think about, say, Challenger Sale versus solution selling versus impact selling, we’re picking a framework that we think is just going to be the most effective based on our experience and intuition and a degree of measurement, but it’s not entirely decided by measurement. Marketers should do the same thing.A Collective Action Problem in Marketing LeadershipAndrew Mitrak: Do you think there’s a collective action problem among CMOs to do that and stand up and do that? If I’m the CMO—I’m not a CMO, but if I was at some big company and said, “I’m going to take this belief, things that are not measurable.” And then some executive, CFO, CEO, somebody who has influence over whether or not I have a job, says, “Yeah, but this guy over here from that company says they can measure it. I’m just going to go hire that person.” It’s like if one CMO does that, good for them, and maybe that works at a company, but there’s also a threat from others who might have bigger promises and then come in and do those promises, maybe not deliver on them, and then get another CMO job a few years later before people figure out it’s not working.Ken Rufo: That’s a real risk, and you’re not wrong. But the average tenure of a CMO is, I think, still somewhere around 18 or 19 months.Andrew Mitrak: Right.Ken Rufo: So it’s not like the current system is highly stable. I think this is one of those things where we all got seduced by the siren song of digitalization. Digital transformation was promised in a variety of venues, first in operations and workflow and cloud practices and whatever else. And then we were pretty convinced that we could assign data to a lot of different things to improve operational practices. And sometimes that data just doesn’t measure what we think it’s trying to measure or even sometimes what it purports to measure. I think a lot of companies sold CMOs and sold CEOs on the idea that if we could just attach more digital data, if we had the right platforms in place, we could do some stuff.By the way, there are some instances in which data is incredibly useful. I actually think that ABM programs are a great example. I think account-based marketing programs really benefit from data, although we should point out that most ABM programs look at completely different stats than our typical demand gen programs or even some of our brand programs. They look at completely different stats. I actually think those stats are often very, very useful in determining whether or not the ABM program is actually effective, along with conversion rates. And I also think that you should probably post-hoc interview sellers to talk about what the sales cycle was through.One thing that I would love to capture more data on—because I’m not an anti-data person, I like it—is I would love to know what questions sellers get asked in an aggregate subsequent to a campaign structure. So a seller goes into a meeting, how many times does the language accord with what we had in our thought leadership? How many times do they ask the questions that we’re suggesting are important questions in our marketing materials, so that we’re controlling more of the conversation? How often does that happen? But again, that requires a degree of integration in that training process, which is difficult.The Shifting Dynamics of Marketing ConsultancyAndrew Mitrak: So you’ve been in the marketing agency world and consultant world. Has it been close to 20 years for you doing that, or how long have you been doing marketing consulting?Ken Rufo: I don’t know. I’m really old now, so it’s been a while. I’ve been doing this for at least a decade and a half. I could probably figure out the exact timeline.Andrew Mitrak: How has that changed? How have the dynamics of running a consultancy changed over the time you’ve been in this profession?Ken Rufo: You might actually be better at answering this just because of the range of people you’ve talked to. So I can really give very limited anecdotal assessments. But I think it’s changed in a couple of core ways. The first one is the absence of business travel now, the relative absence of business travel, is really large because it’s much easier to develop larger, integrated relationships with an entity that you’re doing consultation for—whether it’s marketing strategy or strategy all up—when you are physically present in the day-in and day-out of an office where people are also physically present.There are all sorts of cross-pollinated... you know, people use “water cooler conversations,” but there are those things. You end up sitting down, you go out to drinks, whatever, and you end up getting some other tidbit that starts to factor into your analysis and assessment of what’s going on. And there is just a sort of magic to that as you learn more about the dynamics of an organization.One thing that I learned really early on as an academic who was moving into this world is that every business makes a decision for a reason. Sometimes it’s terrible decision-making, sometimes the reasons are not good, but they are absolutely intentional. There’s never a random policy; it’s there for some reason. It might be counterproductive, might be a bad policy or whatever else. But if you don’t understand what those reasons are—and sometimes those reasons are just people politics—so, one of the things I think does impact your ability to do marketing strategy from afar is that you just don’t have as complete of a puzzle in the post-COVID, less-business-travel era. I don’t think that’s a ding against consultants; it’s just that you have to change some of your own workflow processes to adjust for that. In some ways, you need to schedule meetings with people that you make sure are diversified across their level of the organization.We sometimes do these messaging workshops, and when we hold them, we want to make sure that the person who’s monitoring web traffic is in the same room as the person who’s setting the messaging strategy. Because I need to be able to say to that person, “Is that actually what the web traffic says?” and they go, “No.” And I go, “Okay, great.” Or sometimes we’ll do multiple workshops where we’ll do product in one group, marketing in one group, sales in one group, execs in one group, and then we’ll do a reconciliation group where we say, “Okay, so here’s a chart of how everyone disagreed. Who’s right? Like, why did product think X when marketing thought the opposite of X? Is it because marketing doesn’t understand product, or is it because product doesn’t understand the customer? Where’s the miscommunication there?” You have to adopt those sorts of processes now because you have such a partial window into an organization. So that’s one thing.The Value of Marketing Consulting in a World of AIKen Rufo: I think the other thing is just that there’s a lot more scrutiny right now on whether or not the consulting dollars pay off. And some of that is because of some, let’s say, high-profile examples of getting paid to change the name of a streaming service and then getting paid because that didn’t work out to change it again, and to eventually get paid to change it back to what it was before you got paid. And I’m not calling anyone out on this, particularly.Andrew Mitrak: Well, it’s got to be HBO to Max, HBO... all that. They themselves are pretty cheeky about it. I don’t know about the background stuff on that.Ken Rufo: The same entity was billed, let’s just say, billed for all of those.Andrew Mitrak: That’s funny.Ken Rufo: But I do think there’s a little bit more scrutiny because there have been some high-profile mess-ups for consultancies. But the other thing, by the way, is just AI. Like, I can hop on to some of the better AI programs and I can say, hey, give me the Forrester read on what this would be. Here’s a paper on how Forrester assigns its quadrants, what would we have to do to be considered in this quadrant? Here’s what Gartner says, what would we need to do to be part of this thing? And I think the pressure to have a person be smarter than the aggregate of the data of an organization that can now be parsed by AI is just really high. You just need some really innovative stuff. And I think, weirdly enough, this is actually where the academic part comes full circle, because now what we need is not aggregate levels of practice. Like, “I have so much experience, I can tell you what to do,” because so can all the things that cataloged evidence of your experience. What I really need is your way of seeing, and that’s theory.The Consultant as an “Insurance Policy”Andrew Mitrak: One question I have just about where marketing consultants fit in is that... I’m going to say something provocative and you can shoot it down, okay?Ken Rufo: Yeah.Andrew Mitrak: Do consultants partly exist so the decision-maker at the company doesn’t get fired? That if I’m a marketer and I have an intuition about a thing, let me hire a marketing consultant to do things, and you say to do this thing that I was kind of wanting to do, and then it doesn’t go well, I’m like, “Oh, that consultant.” At least I get to keep my job, but I’ll fire the consultant. Are they partly an insurance policy?Ken Rufo: Oh yeah. Yeah. There have definitely been... I think in two ways. Sometimes you’re just there to resolve an internal political dispute. Like one person says A, some other entity says B, and your job is to come in and be like, “I think A is probably the more reasonable thing.” And they go, “Aha!” But typically, it’s A that paid you. And I’m not saying that’s because you are biased in your thinking because A paid you; you’re biased because typically the reason why A decided to bring in a consultant is because they were pretty confident they were right anyway, and they just didn’t want to keep spending political capital to convince someone when they could just have a third party do it. But the other reason is, you’re absolutely right, we are fireable. And so when we mess something up or whatever else, it absolutely can just be because the consultant’s an idiot.Andrew Mitrak: Yeah, and this kind of comes back to the AI thing. If I’m the marketer and I’m having some political dispute or whatever, I can ask the AI and we can both ask it and then see if it supports our opinion and say we’re right. Or we can go to the consultant and do it. If I choose AI and I make a bad decision and I get fired for it, that’s my fault. They’re like, “Hey, you shouldn’t have trusted the AI, you should have done something different.”If I hire a consultant, you kind of get the insurance policy benefit, right? I can fire the consultant. So it’s like the AI in some ways for consulting isn’t as much of a threat.Ken Rufo: Yeah, there is that.The Value of Consultants: Breaking the “Inside-Out” PerspectiveKen Rufo: I think the other way to think about it, which is the more useful and charitable part, is that there are two things that consultants typically bring to the table. The first one is, because we work with a variety of companies, we have a variety of lateral experiences that we can draw from. A lot of times, the really good new twist in marketing is simply an idea from an adjacent industry that one industry wouldn’t have thought of, but the other industry needed to think of. And when you put them in juxtaposition, it suddenly makes a lot of sense. So someone who’s worked across a lot of industries is very useful.There’s an idea, both John Dewey and Thorstein Veblen talked about this in different ways. One called it “trained incapacity,” one called it “occupational psychosis.” But it’s the basic idea that the more you work in a particular space, the harder it is to see the outside point of view. This is the cop where every boyfriend that comes home with the daughter is probably a criminal. It’s that kind of idea. Or in marketing, we refer to it as the problem of the “inside-out perspective.”I’ll give you a great example of this. I was working with a company where we’re in a meeting and the head of product goes, “No other company does the following things.” And he lists this thing that their product did really well. And he’s like, “Nobody else does that.” And I said, “Well, that’s just not true,” because we always do a lot of really heavy compete analysis. And I said, “That’s not true. These entities all claim to do that exact thing.” And he goes, “Really?” And I go, “Yeah.” And he goes, “Well, we do it better than they do.” And I was like, “Okay, come on. You can’t say that’s true. You didn’t know they did it a second ago. You can’t now say that you have an assessment comparatively of your value relative to theirs. You were unaware they did it.” But that’s what I mean. Sometimes just having somebody who can come in and be like, “Dude...” is a way to break that inside-out glass and force them to think about things from outside. So I think that’s a real value that consultants can provide.Andrew Mitrak: I really enjoy this conversation, Ken. Something I like about you is that part of your offering is debating to get to the truth and also you kind of not that this is a debate per se. And it was a little more back and forth than usual on this podcast, and it’s something that I think brought a liveliness to the conversation.Ken Rufo: I will tell you, from an argument perspective, when I think about storytelling serving argument, there’s a concept called agonism. It’s where we get the idea of agony or struggle. Antagonism is typically when you are opposed to something, but sometimes you just struggle. And there’s this idea that when you put multiple ideas against each other for the purpose of letting them struggle, you emerge with a better idea. There’s actually good research on this.There was a great example, there was a study out of UC Davis, I think maybe about 12, 13 years ago. And what they did was they looked at... they basically assigned some students to do a thing. They said, “Come up with these ideas.” They assigned to one group no instructions. Another group they gave brainstorming instructions that are very similar to what you might see in an early design thinking workshop. And then they said, “And you guys argue about it.” What was interesting about it was not only did the argument group come up with more ideas that were more advanced in the sense that they were actually useful, they had been thought through a little bit, than the even the brainstorming design thinking group, but when they then called everybody back two weeks later, a lot of those same participants were still actively thinking of ideas in a way that the other groups were not.So I just tend to think that especially in marketing, you are talking about a battle of ideas. So preemptively have that battle. There’s lots of stuff that I’m probably wrong about. My kids tell me I’m wrong about a lot of things, but I’m always open to a better argument.Andrew Mitrak: There’s a great book on this. A previous podcast guest was Ian Leslie; he wrote this great book about John and Paul, but he also wrote this book that was called “How to Disagree.“Ken Rufo: I’ve not read it, but it sounds great.Andrew Mitrak: It was a good one. You might dig it. And I just plugged somebody else’s book, sorry about that. But if listeners have enjoyed this conversation, want to learn more about you and your work, are there places where you’d recommend they follow you online or any links you’d like to plug there?Ken Rufo: Look, I’m on LinkedIn. I have a LinkedIn profile, kind of. Manchesterstreet.com is the name of the agency, you can go check out the website.But the reality is, honestly, I think LinkedIn is such a diminishing return right now that I don’t really post on it anymore. We are looking at doing two things that I will, I guess, preemptively plug. Manchester Academy is probably going to start by the end of the year. This is going to be a kind of online course system that looks at some things like, what does the research say is the most effective way to run a meeting when you’re trying to get buy-in from execs who are a level higher than you? It’s going to be stuff like that. Or what’s the correct way to run a strength-weaknesses analysis that isn’t reductive to a SWOT analysis? Is there a way to do that at a marketing level that’s more important? So we’re going to be having those sorts of courses.And then we’re also looking at starting up a Substack that I think is going to be a more kind of heavy, just like, hey... because when we have conversations with clients and I say, “Well, one theory is this,” and I’ll cite something, they’ll be like, “Oh my gosh, I wish I had known about that.” And I don’t scale well. I can’t have that conversation an infinite number of times. But there’s been a request that we just start to put some of the theory discussions as well as some practical examples in some sort of a newsletter. So that’s probably something that we’re going to start up again by end of year. But if anyone wants to talk about stuff, just look me up. I’m super happy to have conversations about stuff. And if you think I’m wrong, absolutely tell me I’m wrong. Understand, I have no allegiance to any of the arguments that I’m saying. I think they’re right. But if you convince me they’re wrong, it doesn’t hurt my feelings. I want to be better. So if someone listens to this and is just very irate, breathe, and then reach out and send me an email.Andrew Mitrak: Ken, thanks so much for your time. I really enjoyed this conversation.Ken Rufo: Absolute pleasure. Thanks for having me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 35This week, I’m joined by Jon Miller, a Harvard-trained physicist turned marketing tech pioneer. Jon is best known as the cofounder of Marketo, and he helped define the playbook for B2B demand generation over the past 2 decades.A serial entrepreneur, Jon founded Engagio and was CMO of Demandbase. He’s busy building his next venture (which he not-so-subtly hints at during our chat).Jon pulls back the curtain on the rise of marketing automation. He shares the inside story of Marketo’s creation, the explosion of the “MQL-chasing playbook,” and how that playbook eventually led to the category’s stagnation.This is a great companion piece to my last podcast episode with Kerry Cunningham. Together, they tell the story of the symbiotic relationship between advisory firms like SiriusDecisions and tech companies like Marketo. They created a powerful cycle: They sold B2B firms on new marketing frameworks, the software to manage them, and the consulting to implement it all, spiraling into what Cunningham describes as the “MQL industrial complex.”Jon explains why he now believes the very system he helped build is flawed, leading to a focus on short-term metrics that “causes us to do wrong by the customer”. We discuss why he thinks innovation in the category “fell off a cliff” and what it will take to build a new playbook for the age of AI.Jon is super insightful and a great storyteller, and he’s candid about the ups and downs of working with startups, so this one is entertaining and informative throughout. Now here’s my conversation with Jon Miller.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsShoutout to Kerry Cunningham for introducing me to Jon Miller. Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Jon Miller, welcome to A History of Marketing.Jon Miller: Thank you for having me. Hello, hello.Andrew Mitrak: I’m so excited for this conversation. I want to start with one of your LinkedIn posts. Quote: “The metrics-obsessed, MQL-chasing playbook that I helped create at Marketo is steering us away from marketing’s fundamental truth. Do right by the customer.”And so, this quote encapsulates the story I’m hoping to unpack through this conversation with you: the creation of Marketo, how B2B marketing became obsessed with MQLs, and what sort of downstream impacts this had on marketing today. So, does that sound good to you?Jon Miller: That sounds great. This is a topic near and dear to my heart.Riding the Dot-Com Wave: MarTech in the Internet BubbleAndrew Mitrak: Well, let’s start at the beginning. I saw that you started by studying physics at Harvard. So I’m wondering, how did you go from there to a career in marketing and MarTech?Jon Miller: It’s one of those things that makes sense when you look at it retroactively, but you wouldn’t have necessarily thought it going in. I always thought I would be an academic when I studied physics, and I actually applied and got into MIT for a PhD program.But at the same time, being at a place like Harvard, there’s a lot of recruiting, and consulting firms and banking firms who come to campus. I couldn’t help thinking that that life seemed kind of glamorous, potentially, compared to the life of the academic researcher. And so I decided to apply and give it a shot. MIT was kind enough to let me defer my admission for a year, and so I ended up taking a job in a management consulting firm. And it turns out I really liked it.The quantitative background from physics actually applied to the consulting world, especially the kind of projects I was working on, which ended up being projects around topics like: there’s all this information about my customers, how can I use that information to make better decisions about how to interact with them and how to create the best value exchanges with them.So, I decided to go to business school. And so I found myself at Stanford, from 1997 to 1999, which if you recall is like the peak of the internet bubble.Andrew Mitrak: It’s an exciting place to be.Jon Miller: If you were at Stanford and not thinking about starting a company at the time, you were doing something wrong. Almost by just momentum, I ended up getting a job at a company called Epiphany, which was literally down the street from Stanford. I started working there in my second year of my MBA, and I could literally walk there. That’s how close this was.And I had no business getting a job in a high-tech company at that point. I had no high-tech experience or anything like that. But Epiphany was just entering the marketing technology space. Turns out, the consulting firm that I’d worked at before was a company called Exchange Partners, and we’d had a sister company called Exchange Applications. That company ended up building a marketing technology product that actually had an IPO and was probably the top marketing technology of the mid-90s.So, Epiphany was entering that space. They knew about Exchange Applications as the competitor, and the fact that I had even any connection at all through this sister company was enough for them to give me a job. So I find myself at Epiphany at the peak of the internet bubble, building marketing technology.The State of Marketing Technology in the Dot-Com EraAndrew Mitrak: What did marketing technology look like at this time?Jon Miller: It’s a great question. First off, it was on-premise. So, you know, half a million to a million-dollar software investment and another million-plus of implementation fees. And you were typically connecting this technology to a data warehouse. And it was mostly technology to build and extract lists. Right? So, The Gap would use Epiphany to query their data warehouse to pull this list for the direct mail catalog A versus this list for direct mail catalog B. And then email just started to come on board. So now they’re going to also use this to pull the list for email one and email two.Andrew Mitrak: Who’s buying the technology? Is this an IT buyer? Is this a CMO who’s buying it? What’s who’s on the buying committee for something like this?Jon Miller: Back then, with what I just described, it was like a million-dollar-plus investment. So it was complex capital investments that were very IT-driven. That was hard. The marketing department didn’t necessarily always have the political capital to drive their agenda into the IT department. And that was something that really, I think at the time, held marketing technology back.Andrew Mitrak: Yeah, and I imagine that it’s just a brand new thing. That marketing technology is sort of a new category and that there must have been some customer education on your part for them to just buy a product and use a product and implement it through their org like that.Jon Miller: To a degree. I think people had been doing—remember, especially before email, the main channel was direct mail, whether you’re sending postcards or coupon discounts or catalogs or things like that. And people had been doing direct mail and list pulls for a long time. It’s just they were doing it with handcrafted SQL code. And so, the innovation, the thing that was “new,” was the ability for a non-SQL database coder person to be able to go in and slice and dice the data to sort of start pulling some of their own lists. So it wasn’t a completely new thing, but it was a better, more efficient process.Andrew Mitrak: So you’re at Epiphany in the dot-com era. Were they impacted by the dot-com bubble?Jon Miller: Absolutely. I mean, I still remember the day that we announced that we had sold Amazon as one of our customers. And the stock went up literally, I’m not exaggerating, $70 per share that day. So I mean, that was literally hundreds of thousands of dollars of value on paper for me personally from that announcement. You can imagine that was a good day.And then the internet bubble... we peaked at a market capitalization of $8 billion, which is just insane to think about. And then the internet bubble popped and everything came crashing down. The stock went from $300 a share down to $60 a share. That was still worth a fair amount of money on paper, but you can imagine psychologically, when it was just at $300, it’s pretty hard to sell it at $60.And so, a lesson I learned is if you ever have the ability to take profit off the table, sell your stock when you can.Founding Marketo and the Shift from On-Prem to SaaSAndrew Mitrak: Can you tell me the story of founding Marketo? What was the problem you were hoping to solve with Marketo? This is sometime after the dot-com bubble bursting, I think it’s around the 2005 era. So what was going on then?Jon Miller: I stuck with Epiphany until 2005 when we finally sold Epiphany to an ERP firm called SSA Global. And I didn’t have interest in working there. And so when I was offered a package to leave, I took the package, came home, told my wife this. She thought I was insane because we had just bought our first house and we had a mortgage and she was pregnant with our first kid.So I was out kind of looking for a job, but I remember I had lunch one day with Phil Fernandez. Phil had been the president and chief operating officer of Epiphany. So I was like, “So what are you thinking of doing?” He’s like, “Oh, I want to be CEO of a company and I’m interviewing at a couple places, but I’m also thinking about starting something.” He asks me what am I thinking about doing. I was like, “Well, I want to be CMO or VP of Marketing and I’m interviewing a couple places, but it really does seem like there ought to be a company.” And we realized that the vision that we both sort of had for the company was pretty similar.So what was that vision? To your question, like, what was the idea and what was it for Marketo? And I’ve already alluded to this slightly. So before Marketo, there was on-premise software, which was a complicated capital investment to buy. The problem is that most executives looked at marketing as a cost center, and it’s very hard to justify a capital investment into a cost center. People want to make it cheaper; they don’t want to make it better.Andrew Mitrak: Right.Jon Miller: And that really had always held marketing technology backward. And at the same time, in 2005, you had Google AdWords really starting to take off. Google AdWords only got up and running in 2002. And here was a thing that a marketer could buy programmatically on their credit card. And what we realized is that marketers have lots of discretionary budget, whether it’s to spend money on Google ads or a trade show or printing brochures. But the key idea is it’s all Opex, not Capex.So the big idea from Marketo was that software as a service (SaaS), which was just becoming mainstream, could allow us to deliver complicated, serious marketing software as a subscription that a marketer could buy out of Opex and not Capex. So we had to make the software as easy to buy so they could make the decision of, “Do I do more Google ads, or do I buy Marketo?” And that’s what we really tried to build. Our mantra was “make it easy to buy, easy to own, and easy to use,” so that it would feel like that kind of Opex program investment. So that was the big idea.Marketo vs. Eloqua: The Battle for a New CategoryAndrew Mitrak: What were you kind of going up against with Marketo? You mentioned sort of on-prem technologies. If you were going to a big account that you were trying to land, what were you the alternative to?Jon Miller: So there was this other company at the time called Eloqua. Eloqua started in 1999 as a chat solution, and I think in the 2003-2004 time frame, they started delivering what now became known as marketing automation. And it was technically SaaS, but it was sort of like a weird semi-SaaS solution, if you will.Eloqua did a great job of convincing high-tech companies in Silicon Valley that they needed a solution like this. And we’ll talk about that more in just a second. But they also had a reputation of being complicated and expensive. And so it made for a really easy positioning for Marketo in the early days. Well, it’s like Eloqua, which you heard of, but that’s expensive and hard to use. We’re affordable and easy to use. That was the main thing we were positioning against.Andrew Mitrak: The other thing that strikes me about Marketo compared with Eloqua is “Marketo” is a much better name.Eloqua is kind of hard to spell, hard to pronounce, hard to know what it means, whereas if you’re selling to marketing and Marketo... it makes a lot of sense.Do you remember coming up with that name, Marketo? Because it’s a pretty great name.Jon Miller: Oh gosh, we tried all sorts of names and ideas. Even back then in 2005, 2006, getting a good domain was hard. So we would come up with ideas and I’d type it in, and nope, that one’s taken. Nope, that one’s taken.Specifically, the story is, one day I was playing with anagrams of marketing and what not. I tried Marketo, and it was like, no, that’s taken. And then I tried Ramketo, where I just played with the letters a little bit, and I was like, “Ramketo.com, it’s available!” And I remember emailing Phil and saying, “Hey, what do you think of Ramketo?”And he said, “Well, that’s terrible.”Andrew Mitrak: Yeah, it is. (laughs)Jon Miller: He said, “What about Marketo?” And I was like, “It’s not available.” So then he just went to the browser and typed Marketo.com. And there it was taken, but the website said, “If you want to buy this domain, email me here.”Andrew Mitrak: All right.Jon Miller: So Phil emailed the guy and said, “I want to buy Marketo,” and $4,000 later, he bought Marketo.Andrew Mitrak: Oh, man. Yeah, $4,000 in this day and age, that’s a steal. That’s great.Jon Miller: Yeah, exactly. So that was how we ended up being Marketo.com.Andrew Mitrak: I always love company naming stories and getting domain stories because there’s always some little hustle to getting the domain.Jon Miller: Yeah, exactly.How Marketing Tech + Marketing Consultants Sold “The Demand Waterfall”Andrew Mitrak: So, one of the things that is associated with Marketo is this idea of the marketing qualified lead, or the MQL. Do you remember the first time you ever heard the phrase “marketing qualified lead?”Jon Miller: I think so. So the term was coined and popularized by SiriusDecisions, which was an analyst firm. And they published what they called the Demand Waterfall. And so what they had was MQL, they also had the SQL (Sales Qualified Lead) and the SAL (Sales Accepted Lead). I believe they debuted that formally in 2006, which was the year that Marketo got up and running.I think in the early days, a couple of things kind of came together. One, Eloqua and SiriusDecisions kind of had a little bit of a symbiotic relationship, where SiriusDecisions was saying, “Hey, you should follow the Demand Waterfall.” Well, people would be like, “How do you do it?” They’re like, “Well, you need Eloqua to do it.” And Eloqua would be on the reverse side of that thing, like, “Hey, you should follow the SiriusDecisions model.” And so that synergy behind the MQL and the Demand Waterfall is part of what drove that Eloqua success, especially in those venture-backed tech companies.Andrew Mitrak: Right.Jon Miller: And that’s what we were able to glom onto with Marketo, as like, “Oh, you want to do this MQL thing that you’re hearing about from SiriusDecisions? Well, we’ll make it easier and more affordable for you to do that.”It was related to the core ideas of lead nurturing and lead scoring. Because the other thing you have to remember that was happening at this time is Google AdWords and other digital marketing channels were just beginning to take off. It was literally still early days where somebody might click on an ad and come to your website and fill out a form. And you needed a place to put that lead, if you will. But people realized that just because that person filled out the form, they weren’t necessarily ready to talk to a salesperson. It was a waste of time for both sides. So you needed technology to help you keep in touch with that lead and nurture it and develop it till it was ready. And you needed some ability to score them to know when they might be ready and it’s time to pass them.So by 2008, 2009, people were basically like, “I gotta get me some lead nurturing!” Like literally, that’s what people would say on their first call with us. They’re like, “Apparently, I have to do lead nurturing and you can sell me lead nurturing, so how fast can I get started?” And that’s kind of what drove a lot of the success in the early days.Andrew Mitrak: Yeah, it’s funny because I had spoken with Kerry Cunningham, who was at SiriusDecisions at one point in time. And when I was asking him about the origins of MQL, he was kind of blaming the marketing tech. He was saying the marketing tech came first, but it wasn’t totally clear to me. It seemed like a little bit of a chicken-or-the-egg-type thing.Jon Miller: I think it was very much a symbiotic thing going on.Andrew Mitrak: They’re working together in cahoots with each other.How Marketo Built the MQL-Chasing PlaybookAndrew Mitrak: You alluded to this right at the start: “the MQL-chasing playbook that steers us away from marketing’s fundamental truth: do right by the customer.” And you mentioned that Marketo is partially responsible for this MQL-chasing playbook, and people were coming to you saying, “I want to nurture some leads.” Why is that? What was Marketo’s share and responsibility in popularizing this sort of MQL-chasing playbook?Jon Miller: I literally wrote a book at Marketo called The Definitive Guide to Lead Nurturing. I wrote another one called The Definitive Guide to Lead Scoring. And so I went on teaching people, “This is how you do these things.”Over time, we became known as this successful, fast-growing company. And people would ask me to come give presentations about how you do it. Like, “Tell me, how do you do it? What is your secret sauce for your fast growth?” Right? And so I would give presentations on how I generated my leads and how I would nurture them and how I would score them and create the MQLs and pass them along. And it just almost created... it became this playbook that if you’re a tech company looking to grow, this is kind of how you did it. And again, it wasn’t just me. It was also SiriusDecisions preaching things, and it was also Eloqua preaching things and the rest of the category. But collectively, we created a movement where the MQL became the holy grail that everybody was trying to achieve. It became the standard of success for marketing.Andrew Mitrak: The MQL industrial complex is what Kerry had called it.Jon Miller: Yeah.Finding Traction and Product-Market FitAndrew Mitrak: So, you’re talking about Marketo gaining traction, and I want to dive into this story because it was founded, you said it launched in 2006, you co-founded it in 2005. Was it immediate overnight success, or when did you feel like, “Hey, this is a company here?”Jon Miller: I skipped a little part of the history of Marketo, which was the very first product we built was to help manage your Google AdWords. So it could set your bids and it could make your ads for you and A/B test the ads and also host landing pages to capture the leads. And it was easy to buy it. Come to the website, free trial, give me your credit card, start using it. And that product did not have great traction for a variety of reasons that we probably don’t have time to totally get into. It was too easy to buy, if I sort of oversimplify it.But we always knew that pay-per-click was just one step along the way, and we were going to add email and automation and these other things. So what’s interesting is we were building the thing that became marketing automation. And that didn’t actually come out till 2008. But as we were beta testing that and approaching it and getting ready to build it, it was clear that people thought there was something special there. Like people who knew Eloqua would look at what we had and they would say, “Wow, that is really cool and easier.”And Phil made a really interesting decision that was the right decision, but I always wonder if I would have made it myself, which is he decided to kill the pay-per-click product. He was like, it’s just not successful enough, it’s distracting - even though we worked on it for a while - it’s distracting from this other thing that seems like it’s a success. He also changed out our head of sales not long after the launch of the marketing automation product.These two things kind of made it come together. We had this product that seemed to have product-market fit and traction, and now I had a counterpart in sales who was executing well against the leads I was creating. So by mid-2008, it felt like we were starting to really hum along with traction.From PPC to a Full Platform: Finding Marketo’s True CallingAndrew Mitrak: Between these two products, the pay-per-click one and the marketing automation one, was there a different buyer for these products? And I’m also wondering, you were mentioning how with Epiphany, because it was a big upfront Capex versus Opex, that this was a different selling method as well. So were these marketers directly could buy it versus IT? Who was actually buying this at the company?Jon Miller: The pay-per-click (PPC) product would have been purchased by the digital ad manager. So literally the same person who would otherwise be logging into Google and setting keyword bids, they could just kind of buy our tool. The biggest problem there is, at the end of the day, we were a better UI on top of Google. But it’s really hard to compete against Google’s UI, right? They keep changing and evolving and adding things, and it was a challenging product.The marketing automation product, because it got wrapped up into this MQL, lead nurturing, lead scoring thing, it started to have more CMO-level visibility. And so the buyer was either the CMO or the head of demand gen or something like that. So it was a more senior, more strategic buyer. But in most cases, it was not IT.Andrew Mitrak: It was not IT. It was a marketer, and it was sort of higher in the org chart. It’s a little more lock-in as well.Jon Miller: Yeah.The Marketo IPO Experience: Marketing Automation Goes PublicAndrew Mitrak: So Marketo IPO’d in 2013, and there aren’t that many marketing technology companies that I can think of that are publicly traded.Jon Miller: There aren’t that many.Andrew Mitrak: There just aren’t. It seems like this is just an exciting experience to have co-founded a company and to IPO, and I’m just wondering if you have any sort of favorite stories from this IPO era.Jon Miller: We IPO’d on Nasdaq. Nasdaq doesn’t have an official trading floor like the New York Stock Exchange. So at the New York Stock Exchange, if you IPO, you get up on the big podium, you literally ring the bell, and that opens up the trading. But in Nasdaq, they have this fake studio where you press a button and confetti drops down, but it’s just a digital exchange. So, besides the confetti dropping, nothing actually happens.And the other thing about Nasdaq is they don’t immediately start trading the stock. Instead, there’s this whole process where they kind of clear the buy and the sell offers to figure out what the opening price is going to be, and then the stock starts to trade digitally. And that can take like an hour, an hour and a half.So we go to the IPO ceremony, we have our picture up on Times Square, there’s the big celebration, the button, the confetti. But you remember this is all like 9:30 AM, which is 6:30 AM my body time. And we’ve been going out the night before. And then we go to another room where they give you a glass of champagne. And then all of a sudden, all the adrenaline just leaves your system. Right? Because you’re exciting and champagne, and now you’re just sitting there for an hour and a half waiting for things to happen. And I literally fell asleep on the table from the adrenaline drop.Andrew Mitrak: Wouldn’t you be so... have a lot of adrenaline just to see what happens? In that hour and a half, wouldn’t you have a ton of anticipation? Like, is it going to go up? Is it going to go down? Like what’s going to happen? Did I leave money on the table? Is it going to pop?Jon Miller: I very much wanted to see it, but nothing’s happening. You’re just literally sitting there waiting in a room. And so the buzzkill and the energy drop of it is what I’m sharing, for what it’s worth. It’s a first-class problem, I understand.A Cautionary Tale: The Post-IPO “Why”Jon Miller: The other story I’ll share is more of a cautionary tale, which is, as we approached the IPO, that in some ways almost became the reason why we existed. Right? Like, “We’re successful, we’re going to IPO,” and “Why should you join Marketo? Because we’re going to IPO.” Culturally, that became our “why,” in the Simon Sinek viewpoint. And that’s a terrible why, because then once we IPO’d, everyone was like, “Okay, now what? Now, why do we exist?”And I don’t think Phil and I did a very good job defining the culture to be something more meaningful post that. So, you know, it’s a lesson that the IPO is just a financing event at the end of the day, and you need to have a “why” that’s deeper than just, “We’re successful.”Andrew Mitrak: You left Marketo a couple of years after the IPO.Jon Miller: Yeah, I left in 2015.Andrew Mitrak: In 2015. And then a couple of years, a few years later, Adobe acquired Marketo. Do you have any reflections on what this meant at a high level for marketing automation to be acquired by Adobe? Was it a significant milestone?Jon Miller: Yeah, I think the trend was very significant because there were really four major players that ended up making up the marketing automation space. You had Eloqua, which by this point had been acquired by Oracle. You had Pardot, which had been acquired by ExactTarget, which got acquired by Salesforce. Right? And now you had Marketo being acquired by Adobe.So three of the four major players were now acquired, with HubSpot being the only real standalone player. But even then, HubSpot, you know, pivoted away from just marketing automation to be CRM and kind of this full platform suite. So if you look at it across the board, I think starting in around 2018, you saw innovation in the category fall off a cliff. You can go look at Marketo today, and it looks like it did in 2018. Right? Yeah, there’s been a couple of bells and whistles added, but it’s still fundamentally pretty much the same product. And so I think that that has been a major disservice to the category, that there’s been so little innovation in the last six, seven years.And yet, buying has completely transformed in that time frame. And then AI comes along and it’s changing it even again. I personally think the current marketing automation category is incredibly stagnant, and there needs to be a new modern alternative, and somebody needs to build that. Hint, hint.Unpacking the Anti-MQL ManifestoAndrew Mitrak: Right, right. So let’s just also reflect on some of the things we sort of alluded to as well, is that you’d co-signed this Anti-MQL Manifesto with Kerry Cunningham, who I mentioned I’d also interviewed for this podcast. And you’re not a fan of MQLs today. And I’m wondering, when did you first get an inkling that something was off with this model? Was it while you were at Marketo? Was it some time after?Jon Miller: I mean, it started when I was at Engagio, which was the company I started after Marketo. And Engagio was what’s known as an account-based marketing platform. The whole idea of account-based anything is that in B2B, leads don’t buy things, companies buy things. And just because a person from a company comes to your website and fills out a form doesn’t necessarily show any indication that that company is looking to make a purchase. Similarly, you could have 10 people from a company show up on your website to do some research, but none of them fills out a form. That wouldn’t generate a single MQL, but it would certainly show that there’s something happening at that company that’s maybe worth identifying and following up on. So the problem with the lead-centric view started back in my Engagio days.But fast forward to say 2023 or so, this is when I really started writing about it more. As a marketer—I mean, at that time I was the CMO of Demandbase. Demandbase had acquired Engagio, I was running marketing for Demandbase. And I’m doing marketing, I’m doing the same secret sauce playbook that I did back at Marketo, the exact same stuff that worked so well at Marketo, and it’s just not working as well. It got me thinking, like, what’s going on here?And I started realizing that the buyer has gotten really frustrated with a lot of the tactics that we’re doing. I started thinking about the fact that the MQL model ends up being a very, I think, transactional way of thinking about marketing. It teaches us, or it makes us think, if I need more MQLs, I just need to run more campaigns. But as I like to say, marketing is not a gumball machine. That’s not how buying works, where you can just put more quarters in and get more stuff out.In fact, I think a better model for buying is a complex nonlinear system, which I studied back in physics. Like the weather is a complex nonlinear system, the stock market is a complex nonlinear system. And if you’ve ever heard of chaos theory, that’s all about studying complex nonlinear systems. Most people have heard of the butterfly effect, which is the sensitive dependence upon initial conditions that comes out of chaos theory on nonlinear systems, which is one small change here can have unpredictable effects there. That applies to buying. And if you embrace the fact that that’s how buying is working, trying to ever say, “Oh, well, I ran this one campaign which caused them to fill out that one form, which became a lead, which became a deal,” is just naive thinking.And then second, I think that the MQL way of thinking causes what I call the tragedy of the commons. Which is, anytime a tactic works, people will just keep doing more of that tactic until that tactic no longer works.Andrew Mitrak: Right.Jon Miller: And we see that in social, we see that in content, we see that in email marketing, and GenAI is only making that problem worse because it’s easier than ever to create more of all these things.But I think the worst thing about the MQL mindset is that it encourages short-term thinking. It’s like, I need this many MQLs to make this many deals, opportunities to make this much revenue for this quarter. It’s all about, what am I doing this quarter? And if I don’t have enough MQLs this quarter, what am I going to do? I’m going to do more stuff, causing more tragedy of the commons, causing people to tune out even more.If we need more MQLs, what do you do? You’re like, “Well, let’s gate our... let’s gate things and put stuff behind forms so that way they’ll have to fill it out to get our stuff so we get more MQLs.” But that actually hurts the buyer experience. Increasingly, we need to be thinking about things like brand and how people think about us before they ever fill out our form. But you don’t do those investments if you’re trying to drive MQLs. So all these things work together to sort of come back to that point that I said, which is it causes us to do wrong by the customer. And that’s why I signed the manifesto, because I think we need to change.Andrew Mitrak: Exactly. Yes. Well, preach. Amen to all of that. Everything rings true. This idea that it’s transactional, and I’m wondering if at some point the transaction kind of worked and then customers kind of caught on. Basically, I make The Ultimate Guide to X, it’s some PDF, it’s behind a form, you fill it out, and we kind of agree transactionally: you fill this out, you get your PDF, and I send you a bunch of emails you don’t really want that much.And maybe for the marketer, in the aggregate, that download plus their other behaviors indicates some signal that they might actually be interested in our product and might be a sales-accepted lead down the line. At some point though, the buyer catches on, “That ultimate guide to whatever is probably not worth all the emails I have to unsubscribe to, and it’s just not worth the hassle, and I’m not going to click anymore. I’m just not going to do that.”What I’m wondering is, did it ever work? Is it that it worked at one point and it was novel enough and it was low-cost enough that it wasn’t so saturated that it did work? Or was it doomed to fail from the start?Jon Miller: Yeah, I think it’s a little bit of both. You know, so, as I said, it did work at Marketo. You know, and people did download The Definitive Guides, and I think they did get value from them because they told me they got value from them. And then you fast forward to my time at Demandbase, and I wrote the best book I’ve ever written there, and it was hard to get people to download it because I think the world had sort of, for lack of a better word, gotten saturated and moved on.So yes, I do think there was that... there’s an arc to all these kinds of tactics at play. But I think what the MQL model never got right is that it always had this sort of short-term focus and a bias towards doing things that were measurable, even if they weren’t the things that would be the right long-term strategies. Most classically, over-investing in conversion performance marketing and under-investing in brand marketing.So I think that’s just fundamental to the problem.The Future Playbook: “True Revenue Marketing” and Shaping PerceptionsAndrew Mitrak: You kind of had hinted at this—you literally said “hint hint” - as far as what you’re working on now, what we can do to sort of find a better path to the future. Can you share more about the work you’re you’re doing now and what you think sort of the vision for the future of marketing is, kind of given this history?Jon Miller: Not much more than the “hint hint,” I think, because we are kind of still in stealth. But, you know, at the highest level, as I’ve alluded to, the current category is stagnating. It is not evolving for the age of AI, it’s not evolving to the new playbook. And there really ought to be an alternative that people can go to when they’re looking for something that’s easier and more intelligent.Andrew Mitrak: Well, we all look forward to some announcement or some product or some company in the future that solves all these problems. Also, just reflecting on this conversation, are there any other top-of-mind lessons for listeners that come to mind as far as this history of MQLs, the history of Marketo, and everything that we’ve talked about today? What are some of, like, if you were to sum up some of the top takeaways, what would those be?Jon Miller: I would start by saying, okay, it’s clear that we need to act differently, and that there is a new playbook that needs to focus on what I would call “true revenue marketing.” Right? Which is not “how many MQLs can I create,” but “am I shaping market perceptions so I’m the first one a buyer contacts when they actually are ready to buy?” That has positioning that’s so compelling that the competition reacts to us. And that has such strong brand preference that we don’t need to discount to win the deals. So these are some of the aspects of the new playbook.I really do believe that the pendulum in marketing needs to shift back a little bit more towards focusing on some of those fundamentals, if you will. So that’s one of the takeaways, but I don’t want anybody to walk away listening to this podcast thinking any of that’s going to be easy.Andrew Mitrak: MQL calculations: “I spend this much on this channel and get this many MQLs that convert at this rate,” is kind of easy. There is a formula that’s been figured out. The problem is often, it ends up being ROI negative if you calculate it all the way down, and so you can’t keep doing that.Jon Miller: Again, the problem with the sort of simple waterfall math is that it’s just... it doesn’t match reality.Andrew Mitrak: Yeah, that’s exactly right.Jon Miller: A model is great to the extent that it’s useful, but if it doesn’t actually reflect the way the world works, it’s going to cause you to make the wrong decisions. But the problem is, I and others spent 15 years teaching CFOs and investors and CEOs that the MQL model is the way that you’re supposed to do things. And so you have PE firms now and VCs who expect MQLs and “how many MQLs are you going to get?” and “what’s your cost per MQL?” and all that kind of stuff. And so as a marketer, if you come in and just say, “Oh, we’re not doing any of that anymore,” it’s not necessarily as easy as saying that.And so, you know, we could have a whole other podcast on how do we evolve this conversation? Like, how should a marketer evolve the internal organization? How should they position an investment in brand in a way that doesn’t sound squishy-squishy? How do they recruit the head of sales and the head of customer success and other members of the leadership team to tell the story? Because if it’s just the CMO complaining, then it’s marketing complaining. But if the whole revenue team is complaining, then it’s a business problem. That kind of thing. So it’s not easy, but it is also important.Andrew Mitrak: No, that’s totally right. And if you have any pointers on how to do that, I’m certainly all ears. Maybe we can bring you back for round two of a podcast to have that conversation. In the meantime, Jon Miller, I’ve really enjoyed this conversation. Just as a final question, where can listeners find you online and learn more about your work?Jon Miller: The best way is to follow me on LinkedIn. I share my thought leadership, my ideas, my best practices there. Also, cocktail recipes for anybody who is interested in trying to see what cocktails can teach us about B2B go-to-market. That’s by far the best way to find me. I also have my website, jonmiller.com.Andrew Mitrak: I’ll link to both of those on the blog that accompanies this post. So, Jon Miller, thanks so much for joining me. I really enjoyed it.Jon Miller: Thanks for having me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 34Today we’re talking about a phenomenon my guest, Kerry Cunningham, calls the “MQL Industrial Complex.”If you’re not in B2B marketing, that term might be new. It refers to the Demand Waterfall, a framework introduced has dominated business-to-business marketing for two decades. It’s shaped how companies organize their teams, spend their budgets, and ultimately, measure success. It introduced the phrase MQL (marketing qualified lead) and standardized SQL (Sales Qualified Lead). Kerry Cunningham is among the world’s foremost experts on this topic. He was a Senior Research Director at SiriusDecisions, the company that invented the Demand Waterfall in 2006. He was also a VP at Forrester, the company that owns it now.And here’s the twist: Kerry is now one of the Demand Waterfall’s staunchest critics, arguing it was misguided from the beginning. He’s now Head of Research and Thought Leadership at 6Sense and is exploring what comes after the MQL.As a B2B marketer who’s spent a lot of time working within this model, I tend to agree with Cunningham’s arguments. This conversation gets to the heart of some of the bad incentives and flawed assumptions I’ve seen firsthand, so you might hear me get more fired up than usual in this one. Even if you’re not in the world of B2B marketing, this episode is a great case study in how marketing theory, practice, and technology all intersect to shape the industry.Now, here’s my conversation with Kerry Cunningham.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Kerry Cunningham, welcome to A History of Marketing.Kerry Cunningham: Thanks, Andrew. I’m glad to be here.Andrew Mitrak: I’m excited to have you because I first encountered your work from The Anti-MQL Manifesto and your description of The MQL Industrial Complex. MQLs have existed as long as I’ve been in B2B marketing, and they’re something I kind of live with, for better or for worse—probably mostly for worse—throughout my day. And so, transparently, I think they’re the wrong metric and lead to a massive waste of time and effort. So your content around this resonated with me.But part of this podcast, since it’s a history podcast, I’m always curious about, “How did we come up with these ideas? Where did MQLs come from? How did we start living in this MQL industrial complex?” So, can you describe for listeners, where did this MQL industrial complex come from?The Genesis of “The MQL Industrial Complex”Kerry Cunningham: Totally, yeah, I’m happy to talk about that. And I think it’s important to understand the history because one of the things that I’ve been doing really constantly over the last seven or eight years is telling everybody we’ve been doing it wrong. And that message is not always well-received, curiously enough. But what I find is if there’s an understanding of how we got here, then it can help ease the pain of realizing that we got to move on.So how we got here, I think, is kind of just a fluke of technology in a way. My friend Jon Miller, who started Marketo, or one of the founders of Marketo, and a few other folks—the founder of Eloqua. I almost started working for one of the very first marketing automation platforms back in the late 90s also.Those systems were designed primarily with the idea of the buyer as a person in mind. And certainly, the simplest way to have a system that is going to try to engage people and then try to collect and do something with that information is one based on individual people.The buyer in B2B has never been an individual person, except on the very low end of the scale. But, you know, we find even now, if the deal is a $50,000 annual value or more, which is not a particularly big deal in B2B, there’s five or six people involved in that not just the decision-making process, but all the researching process.So anyway, the first technology that came around was built around the person because that was the easiest object to focus on. And what happens over time is you get these systems, it was widely adopted and very rapidly. And then once that happens, then things come along like—I worked at SiriusDecisions for a long time. SiriusDecisions developed the really canonical framework for measuring how you’re doing in this world where you’re producing leads.And so, SiriusDecisions developed the framework, it became a standard, and so you’ve got these practices: “Oh, let’s go out and get some leads, that seems like a thing that we do. Okay, great.” Now we’ve got a framework for saying, “Here’s how we should measure it.” Then you get standards, you get benchmarks are developed, and everybody wants to know, how am I doing? What are the best practices for improving that?And before long—and this is why I call it a complex, because it isn’t just the technology. It’s the technology plus you get these measurement frameworks, you get standards, you get benchmarks. And all of those things get an entire industry focused on how to improve their execution of the process, rather than asking the question, should we be doing this at all? Because if anybody had been asking the question, “Should we be doing this this way at all?” 20 years ago, the answer would have been, “No, this doesn’t make a lot of sense.”But instead, what happens is you get some technology, it’s the first thing everybody has. You want to use it. How does it work? Well, we send emails to people and they respond. They come to our website, they fill out a form, and we go after them. Okay, well, we can do that. Who’s doing that well? What’s the best process for doing that, right? So it all just goes down that path of, how do we do it well, or how do we execute best against this, instead of really thinking about whether we should be doing it.And the curious thing is, in those same organizations, and I was in some of them back in the day, you have people in product marketing, content marketing, even when it was new, thinking about buyer personas and understanding that each account that they might want to sell to has multiple buyer personas. But nobody ever connected the dots between, “Well, what happens if we get multiple buyer personas who happen to respond to this stuff we’re putting out there?” Is that a thing we should notice? Should we care about that? Does it matter? Is it good? Is it bad? That question, I mean, like literally never got asked. And when you look back, it’s like, well, that’s the simplest, dumbest thing in the world we should have been doing.So that’s really kind of how it goes. It’s kind of this first-through-the-gate with the technology, and then everybody went after it.How Marketing Automation Software Shaped the MQLAndrew Mitrak: That’s a great high-level overview and framework for how it developed. You know, just kind of diving deeper into that, when that technology developed—it sounds like the technology developing, the first marketing automation platforms that were adopted—that kind of helped set some of the groundwork for this industrial complex to be built upon. What were those technologies specifically, and around what years did they come out and start to get adopted?Kerry Cunningham: Yeah, so the marketing automation platforms. And so, Marketo wasn’t the first, but it was certainly the first really widely adopted, really well-marketed. And it functioned very well for what it did. Eloqua came along more or less at the same time. So this is the mid-2000s, 2005, 6, I think, in that time frame when these things come around.A lucky coincidence for me, in a sense, is that—and actually, I think I would take that back and say it’s probably more like 2007, 8, 9 when it really started taking hold. The technologies were around since 2004 or 5. I dropped out of B2B. So I was part of a company, and we had a liquidity event, and I just dropped out of B2B for about four years. The four years when marketing automation was really coming in and taking over. So I left B2B, I did other things, I came back, and I was able to look around because I wasn’t part of the implementations of all of this. I didn’t get caught up in the “how do we do it better?” I came around and I looked at it and I was like, “What the hell is this? This doesn’t make any sense.” The buyer is this big group of people, and all you’re doing is looking at individuals and not even noticing if we have buying committees, whatever, paying attention.So that’s really when it happened and also why I was just fortunate. Like, if I had been working in the space in that time, I’m sure I would have fallen into the same trap as everybody else. I’m not any smarter than anybody else in that respect.Andrew Mitrak: And so these technologies come out, and they look at leads as an individual person versus being structured to look at somebody as like a team—that teams or groups of people purchase products. Was that a technology limitation at the time as to how these were built? Or was it more of just the initial idea? Because if there were some flaws to them, I’m wondering why they got adopted. Was it a technical reason at the time? Was it just that, “This is better than before, and don’t let the perfect be the enemy of the good”? What do you think it was that led them to get so adopted at this point?Kerry Cunningham: A little bit of a mix of those things. So I think one, the technology is easier if you don’t have to connect disparate individuals from the same organization. That’s a complex problem to solve. And you’ve got examples from B2C where they already have systems like this where we’re tracking individual people in B2C contexts. So you can just port that idea over, which is really what happened, to B2B. So it was kind of a borrowing from B2C, where the buyer really is an individual most of the time, into the B2B context.And then, frankly, I think just what we do as humans, which is we fall in love with the technology, and we’ve got a new toy, and we’ve got a new thing, and we don’t think that deeply about whether it really is the right fit all the time. It’s just, it’s exciting to have it.And I was around at the time before this happened. And before this happened, you’ve got outbound prospecting, and you’ve really got no inbound marketing the way we came to think about it. You get very few leads of any kind. Mostly, it’s just you have to find companies and go out and prospect into them. So I wouldn’t want to underestimate how exciting it is as, one, as a marketer to finally be involved in revenue, because frankly, before that, you’re not. Right? If you’re a marketer prior to the time that there’s marketing automation, you’re pretty far removed from anything to do with producing revenue. You do branding. The closest you get is you put on events, you do field marketing things. Right? But you’re not producing, you’re not delivering leads in some old way most of the time.Andrew Mitrak: Most of the time. Yeah, maybe there’s some direct response type things, but those are usually consumer-oriented and not for big-ticket B2B products, right?Kerry Cunningham: Right. And they’re really small scale. So, you know, way back in the beginning of my career, I worked at some trade publications, and so you can get—you had direct response literally postcards from magazines and things. But it’s really small scale and not—it didn’t occupy an important space in anybody’s mind about how a B2B company was going to generate revenue. So it really was exciting, and I don’t think we should underplay that in thinking about the history of this because I think that’s a huge piece of it. It’s like, now marketing can be really close to sales. Marketing can participate in the production of revenue. For sellers now to be able to get these names of people who’ve come to your website that you have now, and they’ve filled out forms and looked at your content. I mean, this was very exciting, right? This is fun. This is a lot better than cold calling.Andrew Mitrak: And if I think of that mid-2000s timeframe, the dot-com bubble bursting was not that far in the rearview mirror. There was still some skepticism around the value of the internet in some ways. Mobile and the whole world being online in the way that it is now still hadn’t quite happened yet. So there’s probably some—and then there’s a continuous pressure for marketing to show its value. What is the ROI of marketing and beyond things like brand equity and such. So it seems like a very appealing thing to adopt.Standardizing the Demand Waterfall: How SiriusDecisions Solidified the MQL FrameworkAndrew Mitrak: So you were a research director at SiriusDecisions, and they developed this Demand Waterfall. It introduced these popular B2B terms like Marketing Qualified Lead (MQL), and Sales Qualified Lead (SQL). So you joined after these had already been developed? Do you know how these were developed and what it was like, what did SiriusDecisions do to develop this?Kerry Cunningham: Yeah, so I can talk about that. I got there right after the last lead-based version of it was developed. My job for a couple of years was mostly to help marketers improve their execution within that framework. And what we discovered—not discovered, but a realization my buddy Terry Flaherty and I came to after a couple of years of doing that is like, there is no better that’s any good. You can just keep getting better at this, really, but it doesn’t change the outcomes at all. And so we changed it.But the way that it came about was really smart people thinking really hard about what the process should be. And this is, I think, the thing that’s dangerous, and we always have to be on the lookout for. Right? So we’ve got this machine, marketing automation, that’s connected to our website, names come in. And so we think, “All right, what should we be doing to optimize the throughput of this system?”And really smart folks at SiriusDecisions sat down and thought through all of that, worked with hundreds and hundreds of B2B marketing organizations, and I think came up with what I think is the absolute best set of things you could be doing if that’s your paradigm, right? The right checkoffs, the right handoffs, the right nomenclature to distinguish, making sure that at every step in the process when marketing hands this thing off to a BDR (business development representative), say, that we have a date stamp attached to that. We know when it happened, that when they work their process, we know how long that process is, and then we know when the next stage was reached. So working through all of that, and did that for, you know, eight or nine years, I think, building that process out so that you could have industry-standard benchmarks, industry-standard terminology, industry standards for what those handoffs ought to look like.Along the way, they also introduced the scoring of leads because initially, these are just people who fill out a form, but now, maybe we don’t want them to just fill out a form. And I think, at some point, someone said, “You know, there’s a couple of ways we could go here. We could just look at the individual and say, well, how much content is that individual consuming? And what’s their title? Or we could look at whether we have multiple individuals from the same organization,” and the easiest answer was, “We’ll look at what the individual is doing.” And that’s the way all of the systems were built. And it was just the wrong way for it to be built.Unintended Consequences: The Tragedy of “Second Lead Syndrome”Andrew Mitrak: So, just to spell this out as an example, one company could have 10 people all fill out one form to get an asset, which is a signal. Or a company could have one person fill out that form and then click on an email and then do some other things. And that one person would get scored to be a lead, but that company that had 10 people all engaging would get ignored because they didn’t meet the scoring threshold. And so you’re kind of incentivized as a marketer to find more highly engaged individuals like that because then you get to beef up your MQL things, and you kind of ignore the harder challenge of reaching a bunch of different stakeholders in an organization.Kerry Cunningham: That’s exactly right. And to me, that’s the tragedy of B2B. What you just described is a massive tragedy. Now, it could be if you get 10 people from an account that come to your website and look at your content, they’re going to get themselves to be your buyer anyway. But you’re not doing anything to capture that or promote that.So the thing that happens with that 10-person buying committee who comes to your website and looks at one piece of content each is, one, none of them become MQLs. Sales ends up talking to that account because eventually they come and say, “Hey, look, I’d like a demo.” And sales ends up talking to them. Sales puts it in Salesforce CRM or whatever as something that they found or something that came over the wire or whatever it is. But in the meantime, marketing has done all of this work to get these people to come and engage with content. It worked, and there’s no record of it. Like, no record that gets attached to the sales opportunity that gets produced. Right? So what marketing has done that’s been effective is completely unknown, remains completely in the dark. And it never gets connected to the sales opportunities that get produced and moved. So you lose an opportunity to understand what’s working.It gets worse. We had this term we developed at SiriusDecisions when we were figuring all this stuff out called “second lead syndrome.” So most B2B organizations were structured such that if that first lead from an account comes across, goes to the business development rep who makes the calls, that’s great. If a second lead comes in the next day from that same organization, the BDR pay structures are typically that they can only produce one sales-qualified lead per account. So they look at the second one that comes in, and they say, “That’s no good,” and they mark it as a duplicate lead.Andrew Mitrak: Right (shaking head) and it still happens!Kerry Cunningham: Yeah, I know it does. Yeah, that’s another tragedy, right? And one that you think, if you just thought about that for a couple of minutes, you would never do that, right? I mean, I’ve said—I’ve talked about this to like, literally thousands of people, and everybody goes, “Oh, you know of course, you know?” And yet...And that’s why I think that this MQL industrial complex is a real thing. Because normal people under normal circumstances, it would occur to them that that’s dumb.Andrew Mitrak: Yeah, it’s like, it reminds me—it’s like if there’s an open house and you’re a realtor, and a wife comes in to look at it, and then you engage her, and then the husband comes in afterwards, and you just ignore that person. Or whatever order it is, or another family member. Oh, that’s a lot of high intent, but it’s as if they’re ignoring that second person like, “Oh, I already talked to that family once, I don’t need to talk to them again.”It would never happen in the real world, but somehow in these digitized systems and the incentives that get construed around it, it kind of makes everything sort of wacky, for whatever reason.Kerry Cunningham: Yeah, it completely distorts everything because everybody gets focused on this process that is in place and “How do I optimize that? How do I get my credit in that system, in that process?” And everybody was smart enough to think, “Well, that doesn’t make sense. Let’s do something else,” but nobody did because they’re just trying to optimize their particular outcomes in that process.The Ripple Effect: How MQLs Reshaped Org Charts and GTM StrategyAndrew Mitrak: We talked about the marketing automation platforms—the technology. There’s the SiriusDecisions of the world and the strategy and sort of the structures around it, it’s kind of a consulting complex on how to optimize this. And then also, it filters out into both marketing team org charts and how marketing teams go to market, or and even sales orgs also, and BDR orgs, go to market as well. Just like what tactics they prioritize, how they incentivize their teams. Do you want to speak to any of the other sort of marketing or GTM(Go-To-Market) org chart effects of adopting this complex in this time?Kerry Cunningham: Well, it’s hard to remember, but 25 years ago, there really wasn’t a demand generation function. And now it occupies most of the budget for B2B organizations. And so, one, it introduced this whole new function whose job was really just to produce leads, because demand was recognized really only as the leads that you produce, the MQLs that you produce. That’s the output from that function.And then you’ve got all of these functions that really do need to be there even without leads now, like RevOps (Revenue Operations) and those kinds of things. But all of those things are built on the back of, “Now we have to have this machine that really efficiently moves things from place to place.” And so you’ve got not just org charts, but industries built up around measuring these processes, attribution models, the measurement models.And frankly, that’s the stuff that—that’s the real industrial complex stuff for me. Because once those measurement practices are put in place, once a person has a job of measuring how this process goes—I’m in marketing ops now, and I have this job and I measure that—you get software built to help do that. You educate CFOs on why this is the right thing. And now you’ve got other parts of the organization holding you accountable for how well you do that.And so, in fact, today, I think one of the biggest reasons the MQL industrial complex hangs on is that people who built their careers in the last 20 years are now the leaders of organizations. And what they’ve known is an MQL industrial complex is, “How do we produce and optimize the production of MQLs?” And so they’re insisting that we have these objects, these MQLs, and all of the metrics associated with them when they’re no longer—I think most of the people close to the action already know that they’re not the right things, but they can’t get away with changing it.Andrew Mitrak: Yeah, there’s sort of both the leadership problem, kind of a collective action problem of, depending on how large your organization is, you got a lot of different people who are invested in this system aligned with that. And then also it could make certain marketing tactics just not look very good. Or it could make a lot of that leader’s decisions look like, “Oh, you’re telling me that all that stuff I was celebrating over the last five years is actually just wasted?” “I don’t actually want to say that to my boss.” So it’s kind of a tough thing to wind up changing.Kerry Cunningham: It is. Yeah.Gated Content and the Rise of the BDRAndrew Mitrak: You mentioned BDR, business development representatives, also sales development representatives—I think those are mostly interchangeable, SDR, BDR. Did that function also kind of emerge during this time of the MQL industrial complex? Because it seems like, did that org, did that exist more than 20 years ago, or is that kind of a new function as well?Kerry Cunningham: It did, but it was all outbound. So, in fact, for a big chunk of my career, I ran a third-party teleservices organization, and what we did was find prospects for tech companies. But it was almost entirely outbound, 99% outbound.Andrew Mitrak: And phone call at the time as well, probably was a more so than email, just because of the time frame. If it’s more than 20 years ago, not everybody had email in the same way or having cold emails wasn’t quite… There weren’t the ZoomInfos of the world or whatever other data providers there were.Kerry Cunningham: Yeah. That’s right.Andrew Mitrak: It seems to me like the thing that also sort of happens as a result of this is that there becomes this playbook of the marketing team creates content, and instead of just getting that content to as many people as possible, you put it behind a form because that form is how you measure something. And then what happens with that form is you start sending people a bunch of emails. And there kind of becomes this exchange where, “I’m going to give you something, but in exchange, you’re going to give me your email, and in exchange for that, I’m going to send you a bunch of emails you probably don’t want.” And that just becomes a whole mechanism that we all kind of have, there’s sort of like an invisible handshake that we all kind of agree to as a thing, which just sort of always struck me as kind of odd, is that that’s part of it.When Buyers Got Wise: The Decline of the Form FillKerry Cunningham: It is very odd. Yeah. It is. Yeah. So again, I mean, looking at it from the outside, you go, “Well, that’s kind of weird.” It’s kind of like the vendor is charging for the content about their solutions. And, you know, you could do well to ask the question, “Are they getting away with that?” I mean, you know. (Does that work?) And the answer is no, they’re not. Like, because we do this research now. We ask buyers, “Do you fill in forms?” And literally, we’re talking about one purchase you made in the recent past. “Did you fill in a form with the vendors you were looking at?” Two out of 10 people say yes. “Did you fill in a form to look at content with the vendor that you actually bought something from?” Three out of 10 people say yes.So, you know, I mean, that’s horrible, right?Andrew Mitrak: It’s a lot of folks that you’re like leaving off the table.Kerry Cunningham: It is. And it’s almost certainly the people that you really want to talk to, right? Nobody who understands what’s going to happen would choose to do that. You know, so nobody wants to be chased, you don’t like it, we don’t respond to it. And so, if I’m a senior leader in an organization and my company is looking at vendors, what we know from the research talking to buyers is that they absolutely will go to the vendor websites. And if you think about it, even the CFO for a reasonably sized company, if they have to sign off on a deal, if it’s like a big enough deal for them to have to sign off on it, they’re going to come to your website and look around, you know? And they probably already know you anyway, that’s a different story, but they’re going to come poke the tires. They’re certainly not going to fill out a form.So what message do you want to deliver to that person? What level of comfort do you want the CFO to have or the head of purchasing to have when they come to your website? What experience do you want that to be? If you were thinking about that, you would never put a form in front of it, right?Andrew Mitrak: Do you think that the consumer behavior changed over the years? Like, I wonder if there was the—so there’s, there’s the tech, there is the, um, you know, demand waterfalls kind of created and this concept of an MQL. There’s marketers changing their behavior and starting to put things behind forms instead of just making it available. And then do you think at some point a hypothesis I might have is, maybe early on, maybe for the first few years of this being a thing, CIOs (Chief Information Officer) and important decision-makers might fill out a form, but by now they’ve all caught on to the game. They know at this point, since this is so saturated and it’s become such an abundant practice, that, “Okay, I fill out the form, I get a bunch of emails I don’t want. I’m not going to do that anymore because I’ve been bait-and-switched too many times. I’ve had too many instances where the content wasn’t actually that great and those emails I got were kind of annoying.” Like, do you think that they changed their behavior over time, or do you feel like it was always kind of the case that CIOs and other important decision-makers just wouldn’t bother with a form?Kerry Cunningham: Yeah, I would, I think there probably were a few years back in the beginning of this, but I think you only need to go through a cycle of being hounded to decide you’re not going to do that again. I don’t think it took long. And when we look at the, I think the earliest research I could find on form-fill rates just looked at the number of form fills against the number of web visitors, and that was about 3% 12 years ago. It’s 3% today, overall. So, you know, that has a lot of junk and it has bots and all of that stuff. So the real relevant numbers are how many members of a buying group, our actual, you know, legitimate one will fill in a form. And that’s the more two out of 10, three out of 10. And I bet that hasn’t changed very much.And again, it’s a thing, you know, so think about content marketing is a huge part of this MQL industrial complex, right? Because it was built—content marketing exists, so that’s another, that’s part of the organization that really, that’s part of the org chart that is built to buttress this MQL industrial complex. And it’s a trick, right? It’s just a trick to get people to fill in the forms. That’s all it is. It’s a trick. But the better you get at that trick, the more likely it is that you are going to bring people to your website to look at your content who are actually not in-market. Like, if you have crappy content, the only people who are going to be coming to look at it are the people who want to buy your stuff, or they’re looking at you and your competitors. But the better you get at it, the more traffic that you get that isn’t going to be in-market right away. And that’s going to make everything that you’re doing look worse within the complex of the kinds of measurements and things that we have. So your conversion rates will go down. Your number of visitors, traffic, and all of that will go up, conversion rates go down.Now, that’s great if you actually are just worried about selling stuff. Right? If I just, if I just care about whether we’re going to build buyers who are engaged with us and like our content and all of that stuff, then I don’t care about conversion rates as form fills. I care about conversion rates of accounts to whether they become customers. So if I’ve got great content and people are loving our brand and learning about our solutions, does it matter that they filled in the forms? Well, it matters to you because you get measured on whether they fill in the forms. It does not matter to them, the buyer.And that’s the, that’s the disconnect that happened, and where it just, we became blind to the fact that we’re just focused on our own goals and trying to, you know, the process is really about us trying to get what we want. The buyer is kind of getting what they want. I mean, even if they do fill in a form or they get a junior person to go fill in the form, they get the content, they get it from somebody else, they get what they need. They’re going to get what they need. But you’re not going to get what you need, and it’s going to look worse all the time. And that doesn’t make any sense.And so if you’re a marketer and you’re trying to justify your existence, your ability to justify your existence is continually declining. The ROI numbers based on leads that end up on opportunities continue to go down because, as you said, people are wise to the trick, and they’re not going to engage in that trick. And you can chase them all you want, they’re still not going to respond. We’ve got a lot of stats on that from our buyer research. So buyers, if you ask them when do they talk to BDRs or sellers for the first time, it’s 70% of the way through their buying journey. And if you ask them, “Did you initiate contact, or did the vendor initiate contact?” buyers say that they initiated contact more than 80% of the time. And again, if you ask them, “But were you being called and emailed?” the answer is yes, almost all the time. But buyers choose the timing of when they’re going to engage, and that timing does not change simply because you’re calling and emailing them.And, you know, when I talk to marketers, I just think, “Well, just think about yourself. Does a BDR emailing and calling you ever change your behavior at all?” Right? Do you change, do you do anything differently because people are calling and emailing you? Of course not. You know? I mean, you’d never even would dream of it. You know, if you like the vendor, you put the email in the folder and you hang on to it for when you want it. You’re not going to respond. I mean, you know how that’s going to go if you do. All right? So, no, of course you don’t.Was the MQL flawed from the start? Or have we just outgrown it?Andrew Mitrak: Reflecting on this system as a whole is your overall take that it was misguided from day one and was like a mistake that was like fundamentally flawed? Or is your take more that it was appropriate for its time to some extent, but we can do better now because we have better technology and better insights now? Or what’s your overall kind of assessment of sort of the whole era?Kerry Cunningham: I would say it was fundamentally flawed from the beginning. There, it would have been complicated to fix from the beginning. It would not have been complicated to know that it needed to be fixed. That’s really what got lost in, and that’s why I focus on this complex idea, because it’s not just the technology, right? The technology got there, but the technology and the process and the measurement and all of that, it has an enormous weight to it that squelches the very simple thinking that would have said, “You know what? Okay, this is what we can do today, but by three years from now, we’ve got to notice when we have three members of the buying group that show up and fill out our forms.” Or, maybe since marketing has known that, say, the form-fill rate is about 3% to 5% for the last 20 years, marketing could have said to themselves, “Well, you know, all of those people that are coming to our website, we’re paying for all of that. And I wonder if there’s anything we can do to understand what’s in the rest of that web traffic.” And the answer has been yes for a really long time, right? Because it’s practically all, you know, I tell folks, look, if you’re paying to bring people to your website, the outcome from that is almost all anonymous traffic. That, I mean, almost every penny you spend results in anonymous traffic. So if you’re not doing everything that you can to legally understand what’s going on there and and which accounts are on your website, that seems like malpractice, you know? And but you’ve got a whole industry engaging in malpractice. It doesn’t really hurt you.Beyond the Waterfall: The Shift to Buying Groups and What Comes NextAndrew Mitrak: I think the natural next question is, “What comes next?” What takes its place? Also, do you have any examples of companies or individuals who sort of bypassed this complex entirely and sort of just operated outside of it? Do you have any ideas or successful stories of who’s marketed outside of the MQL industrial complex?Kerry Cunningham: We do. A little bit of this may seem self-serving, but I can talk about some of the, some of the things that we that have been done. So one, you know, back at SiriusDecisions, we ditched the old lead-based waterfalls and built a completely new one that was based around this concept of buying groups and noticing that there were buying groups. So that was back in 2017. And, you know, hundreds of companies have adopted that way of looking at the world. And some of the biggest companies in the world are still doing it. My friends back at Forrester, which bought SiriusDecisions, are still working with companies and getting them to adopt that. And and some of the really big companies are doing that.The reason I came to 6sense is because they’ve got a machine that’s built for identifying buying group-level signals. So, do you have multiple leads? We can show you that. Do you have anonymous traffic from those same accounts? We can show you that. Is there third-party signals outside of your website? Right? We can show you that and bring those things all together. So we’re not the only ones, there are others as well, but that’s the, that’s the answer. And the technology for doing that is actually really mature. It’s been around for quite a while, it’s been around for 10 years, but it’s mature now. It’s, it’s attainable by everybody. And so, I mean, there are, there are hundreds and hundreds and hundreds of companies that are doing this the right way, at least for part of their go-to-market practices. So, you know, we, part of this, the weight of the MQL industrial complex led people to do some really bad things like saying you should have both a lead-based and a buying group-based waterfall at the same time. No, that’s stupid. Unless you sell to individuals and you sell to big companies. As long as you sell to companies, you should be focused on buying groups, buying groups alone.PLG: Reconciling Individual Users with Buying Group IntentAndrew Mitrak: There are a lot of companies that do both. They have some freemium model, they have some land-and-expand model, they have some, but I guess that is a little more of like a product-led growth type thing where if you have a user signing up for a product or some trial or or some lighter weight account, it is a little bit different than them filling out a form for a PDF or something and becoming like an MQL. So I guess what, what is, how do those things kind of coexist?Kerry Cunningham: Yeah, so I think of the product-led growth lead, somebody who signs up and does an individual user of your license, as a slightly better MQL. If what your aim is to sell enterprise licenses, the fact that one person in a 10,000-person company is using your thing is better than if no people are using it. How much better is it? If you don’t see any other interest, it’s not any better. You know, it’s just like, you’re not going to go sell them anything just because one person downloaded and is using your thing, right?Andrew Mitrak: It kind of depends on the type of product someone. I think Figma, it’s like, oh, it’s, it’s kind of had virality sort of embedded in the product where one user uses it and they share it with somebody or, “Oh, and to see this design, you have to create an account.” And then, then all of a sudden you kind of have a buying group because you have a number of users who are using it, similar with Zoom, you know, because you have to have multiple people to communicate. It’s a better MQL in that, and it really becomes impactful when multiple people use it within an organization, which leads you right back to the buying group framework.Kerry Cunningham: Well, exactly right. So I think, you know, it’s a great signal to have if your product allows you to have that kind of delivery mechanism. That’s great. Now we want to look at all of the signals that would tell us whether the rest of that organization is in-market. And, you know, the key is just being able to to spend your resources in the place where it’s likely to do the most good. If you’ve got a potential 500-user account and there’s one user there and no other signals, it’s just not a good, it’s not a good bet right now. If it’s a great account for you, good fit, I wouldn’t, I’m not saying ignore it, but I’m, they’re not in market now. But if you have another account with no downloaded users because their policies don’t allow it, but they’ve got 50 people on your website, you should be paying attention to that one first.Beyond the MQL Industrial Complex: Are “Signals” the Future?Andrew Mitrak: On this topic of what comes next for marketers, what is your sort of vision for replacing the industrial complex? What are the big things that sort of need to fall into place to have sort of a new paradigm adopted?Kerry Cunningham: The concept of signals is a really important one. Back at Forrester in 2020, a colleague and I did a report called the Buyer Signal Framework. And that was our way of saying, here’s how we step above the level of the lead. We know that there’s the lead, there’s anonymous traffic signals on your website—far more valuable than whatever leads you have—and then there’s all that third-party intent signal, plus there are other kinds of signals as well.So, I think, first of all, we need to adopt a signal-based approach to understanding the market. And I don’t think that has an expiration date on it. You know, we have to have a pretty expansive view of what those signals can and should be and be continually updating that perspective.The thing that we struggle with still in B2B, in marketing, is we have had, through this lead-based process, a very top-down view of how we understand which buyer is good. Because, you know, we’ve said going to this web page is worth 10 points and going to this one is worth 20 points or whatever. We’ve controlled that. And I still see a lot of marketers want to look at big data the same way. So, we’ve got literally—we process, 6sense processes, a trillion signals a day at this point.So marketers need to leave behind this idea that they should start with and have a top-down control over how they understand which buyers are in-market. That’s not the way it works in the world today. It’s a signal-based view. We use AI to understand the patterns, and that’s what we should be looking at, is all the signal we can, use AI to understand the patterns that betray a buyer that is or is not in-market, and then where are they. And you don’t need to be an expert in AI or in big data for that. What you need to do is really understand a little bit of just what’s possible. And what’s possible is we can know a lot.Because buyers now have so many resources. There have been so many tricks set up across B2B, across the digital universe, and all of those tricks are selling their data. And so when people go anywhere, whether anonymously or known, to look at data and content or whatever, they turn into a signal. So it’s kind of, you know, the bad news about the industrial complex is we were looking at the wrong, we were looking at it through the wrong lens. But if we broaden the lens and step back and say, “All right, instead of looking at the individual, we’re going to look at the buying group or the broader organization to understand what they’re interested in,” we’re looking at much of the same data, but we’re looking at it in a different way that is much more diagnostic of the thing that we’re trying to find and to engage with. And so I think that’s the, that’s the perspective that everybody has to have. It’s like, you know, the data is out there, the technology is out there. What we have to do—and even if you’ve got your leads, okay, great—but we have to look at them differently.Avoiding the “Signal Industrial Complex”Andrew Mitrak: The thing that I’m completely on board with is getting rid of the forms and you know, don’t try to trick people behind a form and all that. I agree a lot of the MQL stuff is wrong.The thing that I would worry about with a signal-based approach is that you develop a signal industrial complex that eventually people learn how to game. And then also there’s not all, not all signals are created equal, not all people who collect signals or sell signal intent data are of equal value. That there’s, there’s sort of folks... I’m not going to name names, but folks who I’ve evaluated or purchased from where, “I think that signal stuff that I paid for was mostly snake oil, and I didn’t see any benefit to it,” right? And, and, um, and I wonder how do you set it up? But I, intuitively, I think it’s the right thing, though. Like, it’s like, okay, obviously this is much better and that there are people who visit websites, there are people who engage with content, there’s data everywhere. And if you can make use of that data, you’re going to have a much, you know, better success at understanding the effectiveness of and what marketing is working.It’s just like, how do you, how do you set it up in such a way that you’re not 20 years from now talking about, “Oh gosh, that signal, that signal-based marketing industrial complex was a bad idea.” How do you kind of set it up with the right guardrails in place so it sort of is indeed an improvement?Kerry Cunningham: Yeah, so I think the process has to be set up to collect or use as much signal as possible to make zero assumptions about what any of it means and to apply math on top of it to identify patterns and not try to outsmart the patterns. And so there’s two places, I think, where we get in trouble. One is we try to decide what signals we think should matter instead of just getting them, you know, bring them all in, put them in the bucket, and let the AI, which, you know, really, predictive modeling, which has been around for a long time, is a form of AI. And it’s really all we’re doing is we’re looking at the signal and trying to identify. So what we want to do is just avoid making any assumptions. That’s, and it’s difficult, right? It’s difficult to do that because we want to say, “Hey, I know, we’ve done this before,” but no, you have to just let the data and the math do its job, build that model. And then the model will tweak and adjust as you move. The times change, what happened last month may not predict what happens next year very well. So, you know, those things have to be—we have to adapt to those things. But what we can’t do is panic the first time it doesn’t seem to be working and say, “Okay, shut it off, let’s go do, let’s, you know, go do leads again or something like that.” It’s just, you know, and that’s a difficult thing for us.Andrew Mitrak: That’s right. There has to be some understanding that, hey, those dashboards that we used to have, we expected those to all drop down significantly. And you have to kind of go to a new paradigm and mindset shift, which could be a little scary, but it’s overall, it’s it could be a much better outcome.Kerry Cunningham: One of the big fears that happens that prevents organizations from really scaling this approach is if you take away the forms from in front of the content, you don’t have all of these names coming in. All of these names made you feel comfortable and like you had some control over what was going to happen next. The truth is you didn’t. You know, there was an illusion of control.Kerry Cunningham: But I use this analogy, probably makes some people angry, but, you know, in psychology when they do the experiments and they teach pigeons to press the button to get the pellet, other forms of that experiment are they drop a pellet at random times, right? And does a pigeon just say, “Hey, every now and then a pellet drops in, I’ll just wait for it to happen?” No, they do not. They develop behaviors that are highly personal to each pigeon that they believe are causing the pellet. So if they were just spinning around and pecking the ground before the pellet dropped in, the pigeon, in whatever ways pigeons think, think, “Huh, okay, spin around, peck the ground. If I need another pellet, that’s what I’m going to do.” And that’s what they do, right? And if it doesn’t work, which it won’t, then they’ll think, “Ah, okay, maybe I wasn’t doing it right.” They don’t think, “All right, never mind, I’ll just wait.” They think, “I’m not doing it right,” and they spin around twice, and maybe that works next time, right?So you get, you could have cages of pigeons on a bench in a lab, each with their own superstitious behavior about what causes that pellet to drop. And that’s exactly what we’ve been doing in B2B when we have these leads and we call out. We have all of these superstitious behaviors. “Oh, maybe if we call them 12 times, maybe if we call them 15 times.” But there’s like no canonical—you would think, you know, in B2B, across all of this time, with the billions of dollars that have been spent, the smartest people on the planet have been working in B2B, and nobody has come up with the right sequence to run to qualify a lead or to do something else or to do—there’s like nobody who can, you could point to and say, “That’s it.” In all this time, we figured it out, that’s how you do it. Why? Because there isn’t a figured-it-out. You know, it just doesn’t exist.Andrew Mitrak: That’s great. I love those analogies. The other one, I read this in a book somewhere, I don’t know which one, but it’s an analogy that I’ve used, and it’s a little bit of a joke, so here it goes: A man walks out of a bar, and there’s a drunk down the street under a street lamp, and he’s looking around. And the man walks up to the drunk person and says, “What’s what’s going on, sir?” He says, “I’m looking for my keys. I dropped them as I was leaving the bar.” He’s like, “Well, the bar’s down there. Why are you looking over here?”And the drunk man replies, “Well… this is where the light is.”And he’s looking in the spot where the light is, where the signal is. And I feel like that’s sometimes what we do as marketers, too. We are able to measure this one thing, and so that’s what we search for as well, where there’s this whole universe of other things to look for but we ignore because they’re harder to find and inconvenience us.So it’s like we’re attracted to this one little small area instead of seeing the bigger picture.Kerry Cunningham: Yeah, it’s a big part of it, right? Because there are lots of forces that keep us kind of doing the wrong things collectively over time, and that certainly is one of them, you know, the ease with which that has been looked at and tracked.Practical Takeaways for the Modern MarketerAndrew Mitrak: Just reflecting on this conversation and the MQL industrial complex, the anti-MQL manifesto, the benefits of signals, do you have any other takeaways for marketers? I don’t know if any one of us individually can change the whole system, but what can we do if we’re operating within a certain system or we’re, you know or we just want to be better marketers? What could we, how can we make use of this information to be better at our jobs?Kerry Cunningham: Yeah, so there are some things I think everybody can do without really a—well, a little, maybe a little bit of additional tech if you don’t have it right away. But first of all, look in your own—if you have, if you’re producing leads today, look in your own leads data and understand what that looks like. So we started doing this again a long time ago at SiriusDecisions, and this is what brought us to an understanding of buying groups. Because when you look at leads data, what you see is that there’s typically between one and a half and two and a half leads per account. And that’s if you just take all of the leads and you just sort it by domain and and that’s what it looks like. So immediately, if you’re being judged based on conversion rate to opportunity and you know that you’re only going to get one lead at the most on an opportunity, you’re being screwed already by, you know, by half, at least, right? Just looking at that.And that can be a revelation for people in the organization. Like, “Look, this is what it looks like.” And then at least, at the very least, start doing a report monthly, weekly, that shows how many leads are we getting per account and deliver that to sales leaders and have a conversation with the sales leaders to say, “Hey, look, you know, maybe right now we’re looking at these as duplicate leads, but here’s another way to think about it. You know, this is evidence of interest from this organization, multiple levels of interest.” So start introducing those concepts today, but do it with your own data. You know, take our reports, they’re all free to download and all that from 6sense, but take that, take that data and show, “Here’s what the industry looks like, here’s what B2B looks like in general,” but always look at your data and say, “And here’s what it looks like for us,” because everybody’s going to say, “Yeah, but for us.” So you’ve got to do that homework.Then, if you have a tool that does any sort of website de-anonymization today, use that. Get in the sales cycle for 6sense, we’ll do it for you, but you’ve got to see the anonymous traffic on your website because that’s the vast majority of all signal you’ll ever see. And what you want to see is, one, if we get multiple leads from an account, that very first thing, is that account likely to end up in a sales cycle, and are they likely to go deep? And you can even do something that says, “All right, so if we get one to two leads in an account, how likely are those guys to become pipeline? If we get three to five, how likely are those accounts? If we get six to 10, how likely are those guys?” Right? So you can start to look at the impact of having buying groups engaging with you and the likelihood of those, of sales getting a better outcome. Because now we can show that to sales and say, “Look, this is how our buyers are already buying, and what we want to do is make sure that our processes reflect what’s happening in the data so that we don’t miss.”Because what you can also do, and you will see frequently, is that, “Here’s an account where we got three form fills in this two-month period of time, but there was never any action on the account.” That’s probably a lost deal, right? That’s probably a deal that went to somebody else, and we just never did anything with it. Maybe those people all filled out a form, none of them scored up and became your MQL, so nothing happened. That’s the 10-person account. Go look for those. You’ll find them in your data. They’re there, right? Use the anonymous traffic the same way. All of those things can help build the case internally for why we just need to look at this differently. Even if you don’t want to take—like, and I don’t recommend taking all your forms off until you’ve had these conversations internally, until you can see this, and until you’ve built a mechanism where you can say, “Here’s a report that shows we’ve got multiple leads, let’s prioritize that account.” Right? So you’ve got to have a process for doing that.Same thing with the anonymous traffic. I mean, it’s a mistake to take a report that says, “Hey, we’ve got five people on our website anonymously, sales rep, go call on that account.” Your sales reps are going to hate that and are going to throw up all over that. They’re going to want the name. But if you’re the marketer, what you can and should do is say, “All right, well, here’s a set of accounts that have had an extraordinary number of people on our website this month, and we don’t have any of the names that we would like to have. Sales isn’t taking action on that account. What can we do to drive the kind of engagement that we need in this, what will be a very small set of accounts?” Right? So if you’ve got, you know, pick a threshold, but if we have five or more people from an account on our website anonymously this month, you know, for 6sense, “All right, do we know their CMO? We sponsor a community for CMOs. Is that CMO part of it? If not, that CMO should get an invitation to that right away,” right? And if we have any events coming up that are wine tasting events, dinner events, those kinds of things, you can’t do them for everybody. But if you’ve got five accounts a month that are on your website and deeply engaged, but you don’t have the right people to talk to and sales doesn’t want to go do anything with them yet, then that’s a perfect set of accounts to find another set of much higher-value experiences for those accounts to drive some engagement, to get, you know “You’re looking at us, right? So we’d like to buy you some wine. So let’s get together.” You know, that actually works. You know, it actually, those kinds of things actually do where you’re providing—or maybe it’s something that’s more work-related. “We have subject matter experts that you could talk to about given things. We have other kinds of events that you could go to.” So it’s building much more engaging kinds of experiences for your buyers. And then, you know, you’re not going to be able to deliver those on mass, but what you can do is identify the set of accounts where you should be delivering those, not just the good-fit ones, but the good-fit ones where you’re showing engagement where we’re not really there yet. It’s going to be a very small number of accounts relatively for anybody. But you can do some extraordinary things for those accounts and for the people inside them that you’ll be able to afford to do or more likely be able to afford to do because the number of them by then will be so small.Read Kerry’s Research OnlineAndrew Mitrak: Thanks for all of those insights, those tactics, those tips. Kerry Cunningham, I’ve really enjoyed this conversation. One last question is, where can listeners find you online and read more of your work?Kerry Cunningham: I’m on LinkedIn all the time. So, Kerry Cunningham on LinkedIn. I think there are a couple, but I’m pretty easy to find related to B2B stuff. And then on the 6sense website, there’s 6sense.com/research. We call it the Science of B2B. And all of our research is there. There’s videos, there’s, you know, dozens of reports, both about buying and about marketing processes.Andrew Mitrak: I’ve read through some of that research and really enjoyed it and appreciated the thoroughness of the work and the data that backs all of your insights and recommendations. So, Kerry Cunningham, thanks so much for being on A History of Marketing. I really enjoyed the conversation.Kerry Cunningham: Yeah, thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 33This week I'm sharing an excellent conversation with Russell W. Belk, Professor and Kraft Foods Chair in Marketing at York University.Professor Belk is recognized as a leading expert on consumption, materialism, collecting, and sharing. In 1988 he published “Possessions and The Extended Self,” one of the most widely cited papers in the field of consumer research. The Extended Self is a simple but compelling idea that, “You are what you own.” That possessions become extensions of our identities. Of course, this has massive implications for marketing.We spend most of our conversation exploring The Extended Self. We look at how luxury brands have leaned into the phenomenon. We discuss the relationship between marketing and materialism. We also explore how The Extended Self has adapted in the age of social media and streaming digital media that we subscribe to but don’t own.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsMore from Russell Belk:* Belk’s articles on Google Scholar* Belk’s Interview with the American Psychological Association* Find Russell Belk on LinkedInShoutouts:Laura Ries, whom I spoke with on podcast episode #19, released an excellent new book: The Strategic Enemy. Find it wherever books are sold.Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Russ Belk, welcome to A History of Marketing.Russell Belk: Thank you.Andrew Mitrak: Well, I'm looking forward to a conversation about your work and your career, but I thought I'd start right at the beginning. What initially drew you to marketing and researching consumption and consumer behavior?Russell Belk: My father went to art school and got into advertising. And I can remember these dinner table conversations: “Can advertising really do that to people?” The Hidden Persuaders by Vance Packard had come out, and I think that was a topic of one of our conversations, or probably more than one. And so that's stuck in the back of my mind. And I wandered over to business and started taking some classes and found that there was something congenial there and something challenging there, even though I regarded most of what I was hearing in the classroom as a load of rubbish. But which I think was a healthy take. But ultimately, I found some ways of getting through the program and finding things that interested me.Andrew Mitrak: Hidden Persuaders has come up a lot on this podcast. So it's a thing that I think inspired a lot of people.Bringing Anthropology, Psychology, and Sociology to Consumer ResearchAndrew Mitrak: Now, you eventually went on to earn your PhD in marketing. And when I think of your work on consumption, consumer behavior, materialism, and what would go on to be the extended self, it feels like a new jumping-off point that's not just marketing. You know, it mixes anthropology and psychology and sociology. So when did that line of research come up? Was that while you were getting your marketing PhD?Russell Belk: No, it took almost 10 years for me to get there. All of my training was in psychology, basically, and that was the name of the game: doing experimental psychological research at the time. I never had a course in sociology or anthropology, and so that was self-taught.And I was interested in things including gift-giving and collecting as initial topics, and they didn't lend themselves very well to experimentation, as you can well imagine. I had been researching gift-giving, in particular, by reading a lot of anthropology and sociology, and eventually, the methods began to at least accumulate as a possibility for me. And then I put together this thing along with Melanie Wallendorf called the Consumer Behavior Odyssey, and that was a jumping-off place for a number of us to get into more anthropological and sociological topics.The Origin Story of "Possessions and the Extended Self"Andrew Mitrak: After the Odyssey, you published one of your best-known works, and that's "Possessions and the Extended Self." And when I look this up on Google Scholar, it shows nearly 17,000 citations. It's a widely cited work and really influential. Can you share the story of writing this paper and the initial reaction to it when you published it?Russell Belk: Well, I think in retrospect, it goes back to my going off to university and finding that there were a lot of wealthier people than those that I'd gone to high school with. And so I became a little bit disaffected with the lifestyles of the rich and famous, if you will. And so, coming into it, trying to understand what possessions meant was the basic thing I wanted to do with my research.So this thing that the paper came out of was originally going to be a book. And one of the chapters of that was on materialism, and about the same time, I sent off an article on materialism that was from my old psychological days, and it developed a scale of materialism and some conceptual work. And another part of it was this notion of the extended self.Russell Belk: The way I used to do research in a pre-Google era was I would go to the library of the university once or twice a year, and I would go through all of the current journals, including law and medicine and all the fields. And if there was something interesting in the table of contents, I'd have a look at it. If it seemed to warrant it, I'd make a copy and bring it back.But one of the things that I found that was really fortuitous was William James's work. And he really talked about—well, he didn't use that term—the extended self. "A man is all that he can call his" is a quote that I'd taken from him. And I also happened to be reading some of his brother Henry James's work and found that the themes that Henry James talked about in fiction were similar to some of the things that William James was talking about in psychology. And so those were among the pieces. I tend to read quite broadly, and so I took advantage of a number of different types of evidence or research in trying to pull that thing together.Why “The Extended Self" ResonatedAndrew Mitrak: When I was reading about The Extended Self to prep for this, everything to me felt obviously true. And I'm wondering, is that just a bias in hindsight that, it's been around 40 years, it's been so influential, it's more commonly known? Or was it more that you were articulating something that everybody felt was true but hadn't quite been conceptualized and articulated in the way that you phrased it and the way that you kind of packaged up the paper?Russell Belk: Well, I think I pulled together a bunch of threads, but William James was writing in 1890, and so the ideas that are critical to it aren't new at all. It's been recognized for some time. I think I maybe systematized it a little bit. I played out the implications a bit and looked at things like burglaries and loss and harm to possessions and so forth. And so I think I did something with the concept rather than just reiterating common sense, hopefully. But yeah, in hindsight, hopefully, this has become a more pervasive and accepted concept today.Of course, as we become a more gadget-oriented, materialistic society, there's reason to go back and look at these things. And also, as we become less materialistic, as we dematerialize now.Is “the Extended Self” Innate or Culturally Learned?Andrew Mitrak: So you mentioned the history of these ideas, that they're not necessarily new ideas, but do you think that the core concept of the extended self—that we're not just our body and minds, that our possessions aren't just external objects, they're an extension of our own identity—do you feel like this is something that's biologically ingrained in what it means to be human? Or is it something that's more learned culturally? Are there cultures where this isn't the case, or is it true around the world?Russell Belk: No, it's not completely true around the world, and it's not biologically ingrained. It is cultural. And so if you look at Aboriginal Australians, until a generation or two ago, they were nomadic. And if you're nomadic, it is a burden to have possessions. And so, rather than having my spear and your spear, if I want to go out and hunt wallaby or kangaroo, I just pick up a spear that is in the community, take it out, use it, and bring it back. And rather than each person carrying spears and shields and other things, it makes sense to not be very materialistic.There are, from different vantage points, religious groups who are anti-materialistic. I had a student at one point who studied Catholic seminaries. And there was one where the priests—and it was all male—would switch cells (they were called cells) periodically so they wouldn't get accustomed to a particular point of view and see that as their possession. One of them had a letter from his sister that he put under his mattress and kept and felt terribly sinful for doing that. And this was a simplistic, a simplifying ethos, rather. And so, yes, there are cultures, and I would say that these are learned relationships. And now we're learning to get by with less in terms of physically owned possessions. And so that, too, is maybe pointing us in the direction of dematerializing and becoming less materialistic, in at least that physical object sense.Andrew Mitrak: Yeah, I'm sure. Well, let's put a pin in that because I'll come back to the idea of both dematerialization but also digitization and the extended self online, which is a really interesting area you've written about.The Role of Marketing in the Rise of MaterialismAndrew Mitrak: But coming back to the history of this idea, at least in America or Western culture, I've heard people that I disagree with kind of describe, "Oh, our materialism is all just marketing," that these marketers came around and Edward Bernays and others, they placed this idea that we have to have better stuff and we have to start replacing things. And I don't—well, I think marketing probably has some impact, I don't think it's quite that simple that, hey, we're materialistic because marketers tell us to be materialistic. But there are probably points where marketing has shaped it somewhat or has increased the idea of a brand perception, or I'm a Cadillac person versus a Ford person, or things like that. So what do you think of the inflection points of it becoming more pronounced and culture becoming more materialistic, and how did marketing and promotion play a role in that?Russell Belk: Well, yeah, I think marketing has had a role in exacerbating these tendencies, but it didn't create them. I wrote a book on collecting, and collecting is something that we find evidence of in prehistoric burial sites. For example, we'll find evidence of people's possessions being buried with them, that there's that degree of attachment that the attachment even lasts after death. Collections of interesting pebbles or iron pyrites or whatever it might be. So I don't think that notion of possessing things and, presumably—although it's prehistoric—extending ourself into them is anything new.But definitely marketing, you know, starting at least with the Industrial Revolution, has done things to encourage people to buy more things more frequently. There's a French Annales school. And one of the books is looking at prehistoric—well, not just prehistoric, but actually 17th, 18th century. This is Fernand Braudel. Possessions of peasants in the 17th, 18th century, and they would have a change of clothes, they would have maybe a pot and a pan, and that was about it. Not very likely to go to the store and buy trinkets or gadgets or doodads. And obviously, that became more feasible with the Industrial Revolution because we began to have jobs and income and things that we could do other than working in the household, for better or for worse. But that income and the cash economy and the rise of capitalism have had a lot to do with promoting and encouraging people to be more conscious of things like brands. And branding itself is not new, either. It goes back a couple of thousand years in China, for example. So it's not that there's nothing new under the sun, but marketing has had a role in exacerbating these tendencies rather than creating them.Marketing Case Studies of the Extended SelfAndrew Mitrak: So if marketing has played a role—it didn't create the spark, but it poured gas on the fire—are there any specific case studies that are early of when you feel like, oh, this is an example of a modern use of a brand or a company deliberately feeding into this idea of the extended self? A company that's specifically designing things with the intention of its consumers seeing this as part of their identity. Do you have any thoughts on when that first started deliberately happening?Russell Belk: Well, I think it probably started—it may not have started, but it was certainly alive with luxury goods companies. And initially having bespoke goods that were only available to the extremely wealthy, kings and queens, and people that were high in society one way or another. But eventually, it became, trickled down, if you will, or became available to the masses. And some of the things that were done were trying to emulate these lifestyles with much cheaper versions. Populuxe is one term for that. There are several. But also companies—I don't know if you ever remember any of the magazines that would have instant collectibles in them. And so you could either buy one at a time or get the whole collection, which isn't really collecting. You're just curating it at that point at best. But they were also catering to that notion that you, too, can have a fabulous collection like the art collectors that spend millions of dollars on these things. But it was a cheap imitation version of these lifestyles, if you will.I think that probably got exacerbated in the '50s when there were things you would go to the movies or you would go to the supermarket, and you could get a limited edition of a plate collection. And if you went every week, you could get the whole collection when you went to every new movie that came out. And these were serial collections—literally cereal, because some of them came with cereal, C-E-R-E-A-L—and laundry detergents and so forth. And so I think that was also catering to this urge that post-World War II, we have more disposable income, there are more things to buy, it's a wonderful consumer world. We have all of this pent-up demand after having sacrificed for the war effort, and now it's time to get back home for the women that were working at the time and start buying things for the household and for yourself.The Extended Self in the Digital Age: From Owning to AccessingAndrew Mitrak: I know you've probably revisited the extended self and the ideas of it several times since you published it originally in the late '80s, but it was originally written in this sort of pre-digital world. And now we are in this digital world. How did digitization and the internet and social media and maybe the metaverse and all those things—how do those things change the concept of the extended self?Russell Belk: Yeah, the extended self, in a sentence, is you are what you own; you are what you possess. And in a digital world, you are what you portray yourself as online on social media. In addition to that, we used to have physical copies of music. Well, eventually, originally, we didn't. We made music together. And then Thomas Edison began to have these wax cylinders and it became a commodity. And then we began to get into an era where we had consumer tape recorders, and we could do, with cassettes, mix tapes and send them to people. Now, maybe we can do a curated playlist for people, but we don't send them physical music any longer. We send them a clip of videotape of a group playing a particular song.Further to that, I guess I would argue that we now—you are now what you can access. And so that's the sharing economy coming in, the so-called sharing economy, because it's not really about sharing at all but short-term rental of things with Airbnb and Uber and so forth: access to rides, access to vacation homes, and so forth.Furthermore, besides dematerializing that once physical collection of music or movies because we now can rent them, we now can subscribe. You mentioned Spotify earlier. Spotify and Netflix give us access to things that we never own. We merely have access to them as long as we pay our subscription fees. So the sharing economy, the subscription economy, and the streaming economy have sort of all come together. At least those are our technologies so far that have allowed all this to happen.And some of those are truly anti-materialistic. Some of them are just finding a new way to capitalize on the latest technology. And we may be able to downsize in our rented inner-city apartment that we no longer have to buy furniture for because we can rent that, too. That we can live a less materialistic lifestyle in a smaller space. And Gen Z and millennials, for that matter, really started that trend of moving back into the city from the suburbs. That reversed a bit during COVID-19. And now that millennials are having larger families, they're moving out to the suburbs and sometimes the exurbs as well. So these are various trends that are affecting the degree to which we own things. It used to be the American dream to buy a house, fill it up with stuff, buy a bigger house, fill it up with more stuff, ad infinitum. Now, I think there are some alternative visions, the small house movement and so forth.And we've had, you know, since the ancient Greeks and Romans, various anti-materialistic ways of living a life, living a lifestyle. And now we just have some new possibilities, but the truly anti-materialistic practices have never gotten a foothold, even during COVID, where they've been more than a third of the population, and that's probably a high estimate. Most of us are still materialists at heart or possessing things, even though those things may be ephemeral and non-materialistic.You Are What You Access (And What You Choose to Access)Andrew Mitrak: There's so much to unpack with everything because there's a lot there. I feel like we just covered several decades of trends here in a very short period of time.I'm wondering—you mentioned one of the phrases you mentioned, "you are what you can access." And I wonder if it's also "you are what you choose to access."Myself and anybody else, we both have access to YouTube, but what we choose to watch on YouTube is completely different. I have no idea what somebody else watches and mine is mine, or same with Netflix. And that there is still some element of curation and really how we spend our time is more of a reflection—or how we have access to the thing, but how do we choose to spend our time with that thing defines us more.Russell Belk: That's true individually, and we could also make that known by featuring the music that we're listening to on our social media channel, whatever it might be. But at the same time, at the aggregate level, there are lists of, "This week, what are the popular Netflix shows?" And you know, how does that break down by demographic? And so it isn't entirely a secret what we consume, at least in the aggregate, although individually it may be as long as we choose to keep it secret.The Extended Self of Omission: Defining Ourselves by What We LackAndrew Mitrak: Does what we choose to not have also define us? Like a recent example is when Elon Musk bought Twitter. A lot of people deleted their accounts. And maybe that Twitter timeline that they had of all those posts was part of their identity. They'd spent maybe a decade or more investing in it, and then they said, "I don't want to be associated with this and I don't want to have it," or "I choose to not take part in TikTok or Instagram or whatever other social platform," and part of my identity is that I don't have something. Is that an element of the extended self, or is that something else?Russell Belk: No, I think it is. I happen to have a Tesla, and like others, have a bumper sticker that says, "Bought it before I knew what a jerk he was." And so you're sort of defining yourself by what you don't consume, or at least your apology for what you do consume.There was a time in the early '70s when the Arab oil embargo drove gasoline prices up. And in that case, having a small, modest, small gas-consuming automobile was a high-status thing to do. And having a big dinosaur of a car that obviously consumed a lot of gas was a stigma. And so it can be that consuming less can be a popular thing to do. It can also be that there's sort of holier than thou, that yes, you eat organic food, but I also do that and I'm a vegan, and I also belong to community-supported agriculture, so there, I'm more socially responsible than you are. And so that's a form of anti-materialistic bragging, if you will.Digital Curation vs. Physical Ownership: The iPod EraAndrew Mitrak: One of my personal experiences with the digital part—we mentioned Spotify—is that I was really late to adopt any streaming platform for music. In fact, I still haven't adopted Spotify because, strangely, one of my favorite artists, her name is Joanna Newsom, she's not on Spotify. She's on all the others, but she's not on that one, and she's chosen not to. And it's like, I won't even touch Spotify,,, I publish this podcast there, I hope people find it on there, but it's missing one of my favorite artists to this day.But even when the iPod first came out, though, you manually loaded music onto it. You could buy your album on iTunes, you could rip a CD onto the computer, you could use some peer-to-peer sharing illegal method–which of course, I never did… I would never do that–to get it on there.But there was effort into it. It was digital, but it was still curated. That it wasn't the whole universe of music, that I had my bootlegs and my live music, and sometimes when I ripped a CD on, and iTunes didn't recognize it, I manually put in the artist's name and the track titles myself. And because I had spent time on it and I had assembled it myself, and I had memories of when I discovered each of those, it was really something that I was very hesitant to part with because it was my iPod with my music and my iTunes that I had poured effort into. And even though streaming has all that stuff and more, it felt like I was losing something with that digital part.So there were these funny transitional periods within digital where there was still a physical element to it. And I'm wondering if your research ever came across that portion or if this little anecdote sparks any portion of your research.Russell Belk: Well, yeah, there's still, besides the curation that you mentioned, there are more things that you can do once you digitize your music. You can instantly alphabetize it, you can instantly get the covers of the albums, you can instantly rearrange it in whatever way you like, basically. And those are things that are made possible by digitizing it. So if we didn't see some advantage and some greater ease, we probably would be more reluctant to adopt the technology until it becomes almost force of nature. There are still people that don't have cell phones, but very few. I mean, even in India, that's true, and China, certainly.So, yeah, I think that we gain something and we lose something. But the whole phenomena of not needing to own things, being able to get by in what might become a post-ownership society—even our clothes. Rent the Runway and so forth, you can have a fabulous collection of clothes or handbags that look like, to an outsider at least, you're extremely wealthy. But in fact, you're subscribing to a service that allows you to have access to those things.So the notion of post-ownership is something that is not decided certainly. And I think we all like to have some things that we can hang on to. And we lose something as well. My parents, and maybe yours, had troves of old love letters that they bound together and kept for future reference. How do you archive the email messages that you've sent back and forth, or the tweets that you've posted? It's impossible. So I think we're learning to be less attached to things, but to have the access and to learn what further we can do with access rather than ownership.What to Do with the Knowledge of the Extended SelfAndrew Mitrak: It is a trade-off. And I'm wondering, just, how—not necessarily me as a marketer, just as a human—like, now that I'm aware of the extended self, how should I think about it in my day-to-day life? Is it more just being aware of it? And is it trying to be less materialistic proactively? Or embrace that I inherently, because of my culture, have some sense of materialistic tendencies and just be aware of that and not try to fight it because it's impossible to get rid of it now? What is the takeaway of what I should do with it?Russell Belk: Well, I mean, that's up to you. My mother died a few years ago, and I'm an only child, so I had to go through her possessions. And I found that there were many things that were deeply meaningful to her that meant absolutely nothing to me. Photographs are probably a good example. I threw away probably 60 or 70% because I didn't know who these people were, and they meant nothing to me, even though they meant, obviously, a great deal to her.But I learned, I guess, how much we accumulate and how privileged that is. Because at the same time, we have to worry about the next generation and what they're going to do with all this stuff and how they're going to get rid of it. And based on my experience, they're just going to come in with a bulldozer and get rid of most of the things. You know, I think we invest a lot in things that, in retrospect, is kind of foolish. But at the same time, assuming you're wearing one, I probably could not buy you a better wedding ring to exchange for the one that you have on your finger. That, you know, materially, you would gain, but there's an emotional sentimentality and so forth involved in that object.Andrew Mitrak: Well, yeah, it's funny, that's—I am wearing a wedding ring on my finger. That is probably not the right example for me, though, because I sadly, a few years ago, I was on a vacation and I had sunscreen on my hand, and I was at a beach, and it just slipped right off. And I thought it was so tight, but it somehow, and it's in the ocean. And actually, to your point about the extended self, it did feel like, "Oh, gosh, I really lost something here." And my wife was not happy about this. I wasn't happy about it. It definitely tainted a day on an otherwise great vacation. And now I have just this cheap little $5 one, and it's almost taught me like, "Oh, you know, don't lose a good one again." And I even rotate through them. I have a little silicon one that I use sometimes. So I almost had, with that particular one, even though it's a very small object and I probably should invest in a more important one, at least my wife has a very good wedding ring and engagement ring. Somehow they tricked us to buy two of those now. So we have both of them.Russell Belk: That's a nice story. You know, that reminds me, there's a film called Harold and Maude, sort of a cult classic from the '70s. And the octogenarian and a teenage boy that meet improbably, and he gives her a ring at one point, and it's meant to be like an engagement ring. And she thanks him very much, and she takes it and throws it out in the middle of the lake. And she says, "Now we'll always know where it is." And so, a different attitude toward the meaning of the thing than the object. It's truly the meaning behind it.Andrew Mitrak: I still know the beach it was at. By the way, that’s one of my all-time favorite movie soundtracks as well.Russell Belk: Oh, yes.Teaching the Next Generation of Marketers: Where the Extended Self FitsAndrew Mitrak: I'm sure you've, over the course of your career, taught a lot of marketing practitioners at some point. And when you think of, like, what message do you tend to impart to somebody who works in the field of marketing and promotion and in some ways maybe promotes things and pours gas on the fire of materialism to some extent? What is a message for that type of person? Is it, "Do this responsibly," or "ethically," or just "be aware of this?" Or what's your take? Because I am also a marketing practitioner. I sell—I work on, you know, B2B software, so I don't think it's maybe you wrap that up in your extended self as well, but maybe a little less so than certain objects. But what's your takeaway for the message of somebody who's working in marketing and what they soft of do with some of your work on the extended self?Russell Belk: Well, I'd like them, maybe starting with themselves and their possessions, to think about the relationship between people and things, and then to sort of back away from that. And if you're going into marketing, think about what the hell are you doing? Do you really believe that people are better off having more things?An exercise that I used to do with classes is: suppose you can start your own economy from scratch. What would you make legal? What would you make illegal? Or if you need to, what would you have age restrictions on, or some other restrictions? And so, okay, can you have guns in this society? Well, what about automatic rifles? What about knives? Knives can kill people, too. What's the difference there? And they'll come up with something lame, like, "Well, it's more personal," or "You have to give it more thought."At any rate, building your own economy and, you know, would you make marijuana legal? Would you make it illegal? What about heroin? What about junk food? Just what are you doing to try to get them to think more broadly? For my—I currently teach, I just teach two courses a year, shamefully, but I have a PhD seminar that I teach actually every other year and a master's introductory marketing class that I like to teach just because I have a lot of fun with it.Russell Belk: At any rate, I start out with people in Nunavut, which is a territory in northern Canada. And it's switched because of technology and because of the influx of government funding from subsistence hunting and gathering and fishing to buying things from the store and going out with a snowmobile to hunt and having a rifle and not just having implements that are basically handmade. And things in the supermarket—I can remember a package of dog food that cost $212, and, you know, a carton of milk is $20, and exorbitant prices for these things. And so it's a sort of a mixed economy that they still do hunting, and when they get a moose or some big game animal, they share it out in the community. And so that sharing ethos is still there. It's the same in aboriginal society in Australia where I've also done some work.So I try to get them to think outside the box or maybe to think inwardly in terms of what they're doing and what the impact is going to be before we get into the techniques of how you market a product and brand and so forth.Andrew Mitrak: Yeah, those are great questions to ask yourself, and also, it sounds like a really fun class to take. I wish I could take that one. So, one final question for you, Russ. If listeners want to learn more about your work, where would you recommend they start? Is there some link that you would send them to online?Russell Belk: Just do a Google search of videos that I've done, and I think you'll find some on YouTube rather than give you one that is the de facto go-to work. There are several talks, and it sounds like you did some homework before this and found at least a couple of them. So rather than my recommend something, just do like people do these days and Google it and see what you can find.Andrew Mitrak: Russ Belk, thanks so much for your time. I really enjoyed researching your work, and also, I just really enjoyed this conversation. So thanks for your time and your stories and your insights. It was a lot of fun.Russell Belk: Thank you, Andrew, for having me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 32This week we’re diving into early internet history and the digital transformation of Hollywood with the one and only, Shelley Zalis.Zalis is the founder and CEO of The Female Quotient, an organization dedicated to elevating women in the workplace and closing the gender gap for good. With millions of social media followers and tens of thousands of global event attendees, The FQ is the largest global community of women in business. But before she became a leading voice for workplace equality, Zalis was a tech pioneer who transformed the market research industry. In our interview, she tells the story of taking research from the analog world of mall intercepts and random-digit dialing into the digital age. She personally pioneered the modern, internet-based methods that are standard practice today.And she led this transformation by tackling one of the toughest industries to break into: Hollywood. You’ll hear how she used the early internet to reinvent movie trailer testing, breaking a decades-long monopoly in the process.I’m a huge fan of both early internet history and the inner workings of the entertainment industry, so this was an absolute blast. As you’ll hear, Zalis is a charismatic leader and a great storyteller. She shares amazing stories from her career, and the “heartbeat moments” she faced as an entrepreneur. After meeting her, it’s clear why Zalis is such an inspiration to so many millions of people worldwide. Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsMore from Shelley Zalis:* Follow The Female Quotient on Instagram * Read her column for Forbes* Find Shelley Zalis on LinkedInSpecial Thanks:Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Shelley Zalis.“How did a nice girl like me get stuck in market research?”Andrew Mitrak: Shelley Zalis, welcome to A History of Marketing.Shelley Zalis: Just calling it history and marketing is interesting in and of itself. So you had me at hello.Andrew Mitrak: Awesome. All right, well you've been a driving force in marketing and market research, so I'm looking forward to a conversation about your historic career and how you've seen the industry evolve. But I want to start right at the beginning. How did you get started in market research?Shelley Zalis: How did a nice girl like me get stuck in market research? That's a really good question. It actually started by—I didn't think I was going into market research. It was by accident. I was at Columbia, and I was a senior. Senior year, I went to the job bulletin board, and I saw this—I was studying psychology—and I saw this great ad up that I thought was a job at an ad agency. And I love commercials, and I watched them all the time. So creating them and working was like, wow! And I love examining people and their minds and messaging and comms.So I go to this interview, and I walk in, and there were four women sitting in the entry of the office, all eating ice cream and gossiping from People magazine about, you know, celebrities and trends. And I'm like, "Oh my God, I love this job." Only to find out it was a market research company. I got a D in statistics, so I would never be in a market research company or apply. If I thought it was market research, I would never have applied for the job. It was called Video Storyboards. So I thought you made these great boards and whatever.And then the owner comes out, and he's wearing Wallabees, red socks, and brown corduroy pants. And his shirt was kind of messy, and his name was Dave Vadehra. And lo and behold, I ended up accepting the job, and I worked there for probably six or seven years, and I loved it. But I did not apply for a market research company. I thought it was an ad agency.Pre-Internet Market Research: Mall Intercepts and Paper SurveysAndrew Mitrak: And so this was in the offline, pre-internet era. Can you just paint a picture of what market research actually was and what it looked like at the time?Shelley Zalis: Market research for me, at the time, was mall intercepts. So we did mall intercepts. And we stopped people and showed them an animatic. We produced these storyboard animatics on three-quarter-inch cassettes. You remember those thick things? And people would be in the malls, and they'd pop in the video. You'd sit in a little kind of place and watch it, and then it was a paper-pencil survey where they would answer the questions on a survey. And even on rainy weekends, somehow we managed to get these surveys done.It was an amazing experience for me. I did not know what qualitative was. I did not know what quantitative was. I only knew what Video Storyboards was. And I had a typewriter, and I did everything. I'd sit and type code, and I would tick, tick, tick, tick, tick to make the five-slash was across the board. That's how we coded and tabbed. We did coding and tabbing. And I knew nothing more than that's what I did. And we would sit around with the clients, and I'll never forget Bausch & Lomb was a really big client of ours, and we would show them the results and then I would just tell them what I thought. We'd watch the ads, we'd look at the results. And that's how we did market research.Andrew Mitrak: You said you did everything. Were you more client-facing, or were you the person at the malls kind of getting people in? What was your role at the company?Shelley Zalis: I did everything, which is probably why I'm a really good researcher because I understand the mindset of people. I understand what answers mean. I understand open-ended responses, close-ended responses. But more importantly, what I really understood was taking data and telling stories from it. And that was always really my sweet spot, especially with clients. I loved that meeting when the client would come and say, "So, which commercial is better than the other one, and why?" That "why" was so defining for me. Data is the "what," and that story, that heart of how people really feel, and that it is a love relationship with a brand and the authenticity of the story and the consistency, that to me was so remarkable.The Jump to Quantitative: Trading a Typewriter for a ComputerShelley Zalis: And then I got a phone call one day after six, seven years, whatever. Um, from a company called ASI that was later acquired by Ipsos, which is full circle because I was acquired by Ipsos too. And the job was coming to work at a quantitative market research company. Quantitative? What is that? And so I went into Dave's office, I said, "Dave,"—and I was like a daughter to him. 212-689-0207. I still remember the phone number, and this is 40 years ago. And I said to him, "What is quantitative research?" And he says, "It's basically what we do, but it's bigger sample sizes."And I said, "Well, I just got recruited by this company to come for an interview. I think it's time for me to fly. I think you need to let me go. It's time for me to go." And he says, "You're right. I don't want you to go, but go."And so I walk into this big office. I mean, we were in a little tiny brownstone, Video Storyboard tests. And now I go into this office with like 50 people or something, and they're not sitting around eating ice cream and talking about celebrities and people and gossip. It's like everyone is at their desk and punching away on their computers and all this kind of stuff. And the CEO comes out to greet me. And he is this tall, handsome man with a navy blue cashmere cape, an Armani cape. He says, "Shelley?" I said, "Yes." He says, "Come in." And he takes me into his office, and he has a big desk and a standing desk, and then sofas and chairs and tables. And he says, "Okay, here's your interview. I'm going to show you three commercials." I think it was for either Pizza Hut or Domino's. My gut tells me it was Domino's Pizza. He says, "And you tell me which one is going to do better and why."And I'm like, "Oh, this is easy. I am so well-trained for this."And he shows me the commercials, and I said, "This one did better. Here's why. Here's how they have to fix this..."He goes, "You're hired."I said, "Great."He says, "And I'm going to pay you this kind of money. And what do you need in your office?"I said, "Well, I need a typewriter and a TV."He said, "Well, why do you need a TV?"I said, "I watch TV commercials all day long. I love ads."And he says, "Okay." Then he says, "And a typewriter, that's not going to happen. You're going to learn how to use a computer."And I said, "Uh-uh. Not me. I think on a typewriter." And that was how I got my job at ASI.Andrew Mitrak: That's really funny that you were resistant to the computer because later on, you'd lead the transition to online and everything. So it seems like a pretty big difference there.Shelley Zalis: Well, the interesting thing about Video Storyboards to ASI: Video Storyboards was mall intercept, and ASI was telephone. And we would buy, to run the ads, we would buy time on unused cable channels. So those 105, 120, you know, this is before the world was as it is today. To the point where I was having my first child—you're a new parent—my first child, he's now 33, 34 years old. And at night, when I was feeding him, I would watch infomercials. And they were on all those underutilized channels because that's how they bought time to run programming on those channels. So it's just so full circle.In-Person vs. Over-the-Phone: The Early Days of Data CollectionAndrew Mitrak: So if ASI was doing things over the phone and previously you were doing mall intercepts, was there any trade-off in the quality of the data when you're doing something over the phone versus in person? What is—because obviously, you can do a lot more scale over the phone than at a mall, presumably. So what was the main difference?Shelley Zalis: Well, I think also random representative sample. I mean, if you think about going into the white pages, which is RDD, random digit dialing, back to those days of thinking of RDD, you would randomly pick that name out of a phone book. And so it's more representative. And also, you don't just recruit or stop people in the mall that look like you or sound like you or talk like you. I also never really understood how we would fill surveys in a mall on rainy weekends. Yet, we managed to fill them. And if you actually looked at the surveys back in those days, there were a lot of erase marks. Oh, was it really a man at this age, or was it a woman, but you made it a man because you had to fill your quota.Now, I had the same issues with telephone, by the way, but it's a much bigger, more random population, I think, than just geographically this is the mall in Beverly Hills and this is the mall in Chicago, you know, whatever.Andrew Mitrak: And when you're running this over the phone, what are your main clients? What problems are you trying to solve for them? Like what is the primary type of thing that you're doing for them at that point?Shelley Zalis: Well, we would recruit them. This is a really long time ago, so I might not remember this perfectly. But you would recruit them, and this is why we did the testing on unused channels, to watch—and this is how we added recall testing, 24-hour recall to see if you can remember not only the ad but who the brand sponsor was. Right? And so it was more pre-post recall testing and then asking them the questions about it. So that's how we did it at the time. When we were doing mall testing, you could do a 30-second, a 15, 30, 60-second ad, but you also, because you had that attention sitting down, they would also be able to see it in real-time and just give you their answers. Do you like it? Do you not? When we were doing recall testing, we embedded the advertisements into shows. And that's how we got recall measures. You're bringing me back to the nineties.The First Online Ad StandardsAndrew Mitrak: Yeah. So the reason I want to dwell on some of these offline things, over the phone, mall intercepts, is that you were also really early when it came to online market research.Shelley Zalis: First.Andrew Mitrak: Yeah, you were the first. Sorry, I didn't mean to say “very early.” The first, literally the first!And I'm wondering how you knew that the internet would be a big thing and not just a flash in the pan. And how you saw that this would be able to solve problems that in-person mall intercepts or kind of manual phone-type market research couldn't do. Why did you know that the internet would be a big thing?Shelley Zalis: I had no idea. So I did not know. But at the time, when I was at ASI, you know, we were doing telephone research. But I also was working on infomercials because it was a big aha moment for me, these infomercials: direct response, call to action. And so I created a dual-dial technique. No one did research with infomercials because your call to action was your numbers and your metrics for success. How many people bought from the show they watched? But I always thought to myself, an infomercial is a 30-minute show, and they would always put the call to action at the end. But what if I didn't wait until the end and I wanted to buy it? I didn't see the number. So I did a dual dial. One dial—and I did this in a central location—one dial that you could move to gauge your interest across the board. And the other dial, at what moment would you want to buy?And that is how we ended up creating a call to action in a 30-minute, every eight minutes. It was just mind-blowing for me, but using technology, and we did them in theater settings, and I had these dials and it was really quite remarkable.And the other thing that I was doing at the time, the internet online was starting to happen, but brands were creating 200-page websites for brands. Like for Tide laundry detergent, they would have 200 pages with the ingredients and how to do this and how to do that. And I thought to myself, gosh, no one wants to read 200 pages of a website about Tide laundry detergent. And by the way, Tide doesn't create a program to advertise in; they put their advertising in other people's programs.And there were also no standards online with banner ads and split screens and skyscrapers. I mean, do you remember—how old are you?Andrew Mitrak: I'm 35.Shelley Zalis: Okay. You won't remember this then because it was just beginning, but there were no standards. A banner ad could be this big or this big or this big, a square, that. And so how could Procter... if Tide wanted to buy ads across content sites, they would have to make them all different sizes. And so I built a consortium. It was called IIX, Interactive Idea Exchange, and CIA, Consortium for Interactive Advertisers, to bring 10 non-competitive advertisers together to create online advertising standards. The government called it collusionary, so we brought in the IAB, and then that's how the IAB started.But that's when I started understanding—oh, by the way, what we realized about the 200-page websites, most consumers would only go to a couple of the pages. And that's when I started creating microsites for brands, where instead of creating their own website to advertise in, we took the three pages and moved it to other people's content sites that had an audience. And so like for Tide, we called it Stain Detective. You could go to the page, and anything, any stain you had, it would teach you how to remove it. And it wasn't... Tide wasn't always the solution. And it was amazing.Pitching Online Research to an Offline WorldAndrew Mitrak: And so you're doing this—just place me in your career. Is this after you've left ASI and you started OTX that you're doing this, or are you still at ASI and doing this?Shelley Zalis: This is pre-OTX, where I had the idea. But by testing websites, I had the idea, "Well, why don't we migrate research from offline to online by creating a research website?"Andrew Mitrak: Right.Shelley Zalis: And that was how I got the idea to test shows, commercials, all of that inside a website by recruiting people to that website to test. And that was the whole epiphany around it, which is why I told you about infomercials and website testing, because it was how I ended up coming up with the idea of online research.Andrew Mitrak: So when you came up with this idea for online research and you pitched it to your bosses at ASI, I'm sure they were like, "Yes, let's do this! Let's all change!" Is that what happened?Shelley Zalis: No. Not at all. I went to my bosses and I said, "I have this really big idea. Let's migrate research from offline to online." ASI had just gotten acquired by Ipsos. And my bosses and bosses' bosses and bosses' bosses all said to me, "Well, it's not the right time." I said, "Not the right time? Why?" They said, "Well, first of all, Ipsos just acquired us and they want us to go global. So we have to invest all of our resources in global expansion because we were very US-centric. And second of all, no one is online except wealthy old men with broadband connections." And to test video, you needed high speed, but there was no high speed. The majority of people that were even online were on 14.4k modems. Clunky. And definitely not consistent if you're going to show video to show consistency, and you need that for research. And because no one's online, you can't get a representative population.So everything that they were telling me was "why not" versus "why yes." And so a week later, I'm on a panel with Larry Mock, who was the Chief Research Officer of Procter & Gamble, the largest consumer packaged goods company in the world. And my bosses were all in the front row, and I'm whispering to Larry. And Larry was very famous, very well-known as a market researcher. You should interview him. He'll tell you. And I said to him, "Larry, when is the right time to come and talk to you about migrating research from offline to online?" He said, "Next week." I said, "Great."So I come off the stage and my bosses said, "What'd he say? What'd he say?" I said, "I just asked him when is the right time because you told me there needs to be a right time. I want to know when that right time is to come and talk to Procter & Gamble." And they said, "Well, what'd he say?" I said, "He said, 'Come next week.'" They said, "Great. John will go, Paul will go, we're going to go, and Star will go." I'm like, "What about Shelley?" It's my idea, I got the yes, and if I'm not going, I'm going to cancel the meeting and wait for the right time.And that was my moment of truth. It was my heartbeat moment that I'd rather be in charge. Why am I always being told I'm not the right one, it's not the right time, it's not going to work, it's not possible, I'm going to fail? And that's when I left and started OTX. Had to.Hollywood Goes Online: Measuring Movie Trailers on the InternetAndrew Mitrak: So literally, that was the moment that you decided, "I've got to start my own company. These folks are going to miss out. They don't know what they're doing and I need to be in control of my own destiny." When you founded OTX, this type of company just didn't exist before, right? It was the first of its kind. So how did you know what you needed to do to build OTX? It's like, okay, I'm going to found it. What then? What are the first decisions you make to build this new type of market research company?Shelley Zalis: Well, what's crazy about that story is when I was doing website testing, I had hired this young guy, his name was Trevor Kaufman, to help. I didn't know anything about online or whatever. So he helped a lot. And I said to him, "Will you help me build a website for online research? And if anyone buys it, I will give you a million dollars." He was 20, 21 years old. And so we built it in my basement. And I brought the idea to Nielsen. And I said to Nielsen, "I have this crazy idea to migrate research to online." And they said, "We love it. What do you need?" I said, "I need a million dollars to give to this young kid."And we ended up giving Trevor the money. But it was over a year helping do the research and test and whatever. But I say we made him a millionaire at a very young age. And I pioneered at Nielsen, and I called it Reel Research, R-E-E-L Research. And I decided I was going to start in movie research, movie testing. Why? I knew nothing about the movie business. Zippo, zero, nada. But I knew that if I could test movies and trailers—which were two and a half minutes long versus 30 seconds for CPG clients where nothing changes—I could do anything. So if I go for the hardest category and build around that, then the rest is easy.And there was only one person in the entire world doing movie research, and his name was Joe Farrell. And this story is so crazy, you can't make this up. Joe Farrell had a monopoly. Nobody could break the monopoly of NRG (National Research Group), Joe Farrell. He was the godfather; they called him the godfather of movies and movie research. And crazy enough, let's go back to Video Storyboard days. He tested trailers in the malls. So now I'm back to my Video Storyboard days. And successfully, and he was the CEO whisperer. He was the whisperer to everyone. He would tell someone, "This movie's going to be big, move the date." And no one could break his monopoly. So I thought, you know what? I'm going to try. And I'm going to go in with online research.Breaking through Hollywood's Research MonopolyShelley Zalis: And I realized there's always a yes, you just have to find it. But no one was able to find it until I came along. And so I went to Warner Brothers. And there was a guy named Dan Rosen and Richard Del Belso. I am so grateful for them. And I said to them, "Are you perfectly satisfied with how you do research in the movie business today?" And they said, "Well, of course not. Who's ever perfectly satisfied?" That was my crack.I said, "Great. I have this crazy idea to pioneer online research, migrating it from the mall to this. I don't know how to do it, I don't know what I'm doing, and I don't know anything about the movie business. But will you take a chance on me?" And Dan will tell you it's because I actually told him the truth. "I know nothing about this, but we're going to hold hands and go together." And I said, "And all I want from you is to give me every ad you've tested in the mall and let me test it online so I can calibrate the norms. And it won't cost you a nickel." He said, "Great, I'm in." He said, "The only problem is we have exclusive contracts with Joe Farrell, and we'll get sued." I said, "Let me see the contract." I look at the contract, and it was exclusive, but it was exclusive for mall testing. There was no online. I said, "Dan, loophole. I'm online. He's mall intercept. So you're not breaking the exclusivity with another mall intercept testing company, I'm online."And so that was that. Partners, hand in hand. And we held hands and I tested everything in parallel. Now, the interesting part was they called me Jane Doe because if Joe Farrell would have found out, it wouldn't have been a good thing. Not that they were breaking a contract, but he might have withheld information from them. Joe Farrell used to call me "her." "If you're going to work with her..." He called me her, and I like that. That was really good.But we also had the producers and the directors that were all comfortable with offline data. So I said to Dan and to Richard, "Don't go in with online data because a) it's not reliable yet, b) I don't know what it means, c) we haven't calibrated the norms. I'm not comfortable. But what I do want you to go in with is the verbatim testimony." Because in the malls, they would scribble the answers of what you liked about it. There were two things. What did you like or what didn't you like about the commercial, the trailer or whatever? But online?​​ But online, the verbatim testimonies were wow! They were the wow factor because people gave robust answers in bold type, in capitals, when they want to say, "I love Brad Pitt!"I said, "So you go in with the quantitative results from Joe Farrell and then just supplement. And don't say it's another company, just go in with these verbatims. Add the verbatims."And they go in with the verbatims and the producers are all, "What the... where did you get these amazing verbatims all of a sudden?"And he said, "Oh, online. We're doing it online."And everyone starts saying, "I want the online. I want the online version."And lo and behold, we started calibrating the norms. And not only did I do Warner Brothers, but I went to Sony.And I said to Sony, "Warner Brothers is using it."And as soon as you say that, Sony is like, "Oh, me too." And then Disney, "Oh, me too. Me too, me too."Power of the pack. And next thing you knew, we were in. Am I telling you too many pieces of the story?Andrew Mitrak: No, this is great! Shelley Zalis: Then all these CEOs, the studio chiefs... by the way, Joe Farrell was the godfather to their children. So this was not an easy thing to break. And all of them had these decks—paper stacks, paper stacks, paper stacks. And I said, "I'm not going to deliver paper. We're going to deliver the reports online." And they're like, "No one's going to read them. No one is online." And I said, "Okay. I am going to deliver a teaser in paper with chocolate chip cookies and milk. And it'll have a code to go online." And sooner than later, everyone was doing online. And then Joe Farrell, who would always say, "Everyone lies online. It's terrible methodology,"... but we also did movie research online, predicting... and we were nailing it. And he kept saying, "No, it's not this, it's not that. And telephone and mall is the way to go." And I said, "How do you know that people in the mall and people on the telephone don't lie? Why are you just attributing this to a new methodology and look at what it's not versus what it is? What percentage of people lie online, too? What percentage have you looked at those paper trails?" I only knew this because I've been there, done that. I did telephone and I did mall. So you can't mess with me. I've been there, done that, right? Anyways, those were all the little loopholes of how we actually created online. And then next thing you knew, Joe Farrell started going online trying to build an online business, but we were already in online.Andrew Mitrak: Right. Yeah. So National Research Group, NRG, was founded in like the 70s or something like that, right? So it'd been around for a long time. Wrote all his contracts for malls, which is the only way to do it back then. Along comes a new paradigm, online, and you find this wedge because the new paradigm, new market opportunity. And also your position, it's OTX... online is the "O." So you're branded as the online expert. So I imagine if a 1970s-founded, Joe Farrell, old-school way of doing things, repositions to be online, it just doesn't quite have the credibility that you have. And it seems like you also found product-market fit because a movie trailer is, one, it's probably one of the few types of ads that people actually want to go out and see. Usually, people have ad blockers, but some of the most popular videos online are new movie trailers. So you can actually watch this. And they're probably short enough where the buffering and the bandwidth probably somewhat works if it was much longer than that.“Wrap, wrap, wrap!” Securing Movie Trailers with DRMShelley Zalis: It works because it was two and a half minutes, and so we had it download in the background as it was loading. So it was not easy, especially on 14.4 modems and maybe the fast ones were 28.8. And people with T1 lines were not representative; they were mainstream. And I had to ensure that everyone saw the same quality. And so what we did was we built this buffering mechanism that allowed the video to download as you were answering questions in the survey so that by the time it opened, it would be already downloaded and you would have smooth sailing. I used an analogy: it was sort of like if you're on a freeway that is jammed, you go really slow. If there's no one on the freeway, you go really fast. But you have to be able to build it so that everyone has the same experience.And then protecting the video, because in the movie business, a movie could close before it opens. It was all about opening weekend. And the reason I built it for the hardest common denominator was because the studio would send you 20 ads on a Friday night that had to be encrypted and encoded. If you're just sending it to a mall, boom. If you need to encode, encrypt, and then get big enough sample sizes—I think we were doing 300 because I had to match what Joe Farrell was doing, it was 200 or 300 per trailer or commercial—that had to be given back to the studio by Monday morning. And I remember in those days when I built the system, we had a refresh button. Refresh, refresh, refresh, refresh, because I had to make sure that there were 300 people filling out the survey by the four quads, too. A movie is stereotyped by male, female, under, over 25—four quads. It's a four-quad methodology. And if I could build a system that could encrypt, encode, get the surveys up, get the samples in, and deliver results online by Monday morning, I could do anything.And we had to build a DRM solution, which didn't exist. You know DRM?Andrew Mitrak: Digital Rights Management, right?Shelley Zalis: That didn't exist. I had to build an encryption system because I'll never forget this moment on a Friday night. I'm having dinner with my family. And online, you're always on. There is no off button. You're always on. And I get a phone call from a lawyer at one of our studios that said—and it was for one of the biggest films of all time—someone lifted the trailer. Now these trailers are not aired, and they lifted the trailer and broadcasted it out.Now, thank God the trailer did really well, and the movie was going to be a blockbuster. But that was scary as hell. And I remember saying to the lawyers, "First of all, trailers have been lifted in the mall. So let's not... Second of all, you know that is the risk with online. It ended up doing well, and I said maybe this is a new way of going viral, you know, the talk." And I said, "And third of all, it took... I can't remember the number, but a group of hackers. It wasn't just a single individual. It was a group of sophisticated hackers—because it was a superhero thing—it took a group of them over 24 hours of nonstop working to break my code. 24 hours with over 25 people." I said, "So my system is pretty secure." Like, I said, "You go see how easy it is to lift one of those tapes that you have lying around between intercepting UPS and FedEx packages to somebody not paying attention to someone pulling that. You tell me that's never happened to you before." But that was a moment. And so we built a DRM solution to wrap, wrap, wrap, wrap, wrap around the videos.Andrew Mitrak: What was your relationship like with filmmakers themselves? I imagine a superhero movie, they want to test, test, test and get all four quadrants and that. But there's probably certain auteur-type filmmakers who see their film as their baby. Did you ever have relationships with them where they saw, "Oh, testing, that's... they're the bad guys who just want to change my artwork"? What was the relationship like? And do you have any examples of changes that were made to movies or movie trailers as a result of the tests?Shelley Zalis: So, we tested so many trailers. And for them, there was no... they created them, and all we were doing was showing them which one was going to do the best. And of course, it wasn't just four quads. They would say, "This is our target," and we had to reach the target. And after a while, I had an enormous community. I called it the blender. Now people call it a router or whatever. And the way I built the sample, because that didn't exist either, I had to build a sample ecosystem. I had to build an RDD online. So think about RDD offline is the telephone book concept. I was actually teaching a class as a guest lecturer at Wharton in the business school, and I remember telling the students how I came up with the sample methodology for online. I said, "I closed my eyes one day and tried to imagine RDD on steroids, but online." And so I mixed all of these samples from Greenfield to Harris Interactive to AOL... and I put them all into this blender. So it was a blend. And I said, "It's sort of like One Fish, Two Fish, Red Fish, Blue Fish."And I took the entire class downstairs to the library to read One Fish, Two Fish, Red Fish, Blue Fish. And I said, "You need all kinds of fish in the ocean. Different fish in the lake. Different... if you want an ecosystem of representation." And that was the idea of... and then eventually, I ended up having 20 sample companies, 50 sample companies, whatever, all... and it would go like this, and the router was the hardest thing to build, that the first male 25 would go into that survey. I was doing a hundred surveys at a time. Go to that one, the next one into that one, that one. So it was representation on steroids. And it was magical.The movies we tested in real life, that was not online because they were two and a half minutes, and so we did that the old-school way. But we didn't start with movie testing; we started with trailer testing online. And then the movies just came our way. And what was amazing about the realness of it, because you... testing a movie, you want to smell people, you want to see people, you want to hear people. A movie director or producer would hear when someone would laugh or when someone would cry or... so that we did offline.The Three Sales of OTX: A Journey from Nielsen to IpsosAndrew Mitrak: Yeah, that makes sense, yeah. So I could spend hours just talking about movies and this early internet era because I'm fascinated. I love movies, and I'm always fascinated by early internet history as well. But I know we have limited time, and I want to just jump ahead in your career to The Female Quotient. You wind up selling OTX to Ipsos.Shelley Zalis: I sold it three times.Andrew Mitrak: You sold it three times? What were the stories of selling it?Shelley Zalis: Well, I first went and pioneered at Nielsen, and I had to build from scratch. And then I left Nielsen because they wanted to walk, and I had to run. And then it's now called Nielsen Online, but it started from REEL Research, R-E-E-L Reel Research.Andrew Mitrak: Okay, I misunderstood. I thought you had sold the product, like they were buying your license to the product, but you sold the company itself to Nielsen?Shelley Zalis: No, I did not get anything from Nielsen. I was an employee. I brought the idea to Nielsen and pioneered at Nielsen.Andrew Mitrak: Oh, okay.Shelley Zalis: And I got this young kid money, but I was a salaried employee with a big idea that needed to see it come to life. I then left Nielsen because people were starting to compete with who would run my business that was incredibly successful. So I left it behind and I joined iFilm.At iFilm, I was an owner. And iFilm, do you remember iFilm?Andrew Mitrak: I know I've seen the logo "iFilm" a number of times.Shelley Zalis: But you would have seen it because iFilm was the first YouTube. It was so ahead of itself, but it was YouTube. Let's just... and so I went to iFilm.It was run by Kevin Wendle, who was the founder of CNET, and Skip Paul. And they were a dot-com company so ahead of itself. But the reason I joined them was they understood video on the internet, and they understood the internet. And they wanted to run. And they were obsessed with REEL Research that then became Nielsen Online. And that's when I called it OTX. And I built, in a warehouse—it was like really a dot-com, and I was surrounded by young, techy, entrepreneurial people. I was like in heaven, as a traditional researcher, to now be in this spirited place. And my business ended up growing exponentially. And I used off-the-shelf technology that I modified using iFilm's help. It was called iFilm OTX. It was booming. I loved it.And I sold from iFilm... well, iFilm was doing video. And one day, I heard that they wanted to go into porn. By the way, don't forget, this is online, and they should. Like, they had all the channels. That should be a channel.Andrew Mitrak: Yeah, it makes sense... It's just, do you want to work there? Do you want to work at a company doing that?Shelley Zalis: Well, iFilm OTX because they wanted the iFilm brand on top. I came with the name OTX; they said we're going to call it iFilm OTX. Anyways, I walked into a board meeting one day and I said, "Here's the deal. You should go all in in porn, but go triple X because that's where the money's going to be, and I'm out." And so I sold from iFilm to Tom Freston and Bob Pittman. And Bob had just started a company called Pilot. He had left AOL Time Warner. Tom Freston was a VC. And I sold to them. So that was the second because I'll call going to iFilm then going to... and at iFilm, my ownership was in terms of revenue because zero on zero is zero. No one thought I would be successful. And I ended up selling... I was doing 30 million in revenue at the time. And I sold to Bob Pittman and Tom Freston and stayed with them for a few years, and then we sold to Ipsos.Andrew Mitrak: I wish I could spend more time going on this because I need to ask about The Female Quotient...Shelley Zalis: I like you. I've never told it this way.Andrew Mitrak: No, I love hearing it this way. I love all these details, and I want to spend proper time on all of that. But also, I can't talk to you without also, of course, talking about The Female Quotient. And so you transition from innovating in research to innovating in culture with The Female Quotient, where you're founder, CEO, and chief troublemaker. When did this start? It sounds like the values of equality have been with you for forever, but was there a moment when you knew this needed to be its own company?Founding The Female QuotientShelley Zalis: Yeah. So I'm at Ipsos now. When I went to Ipsos, I had 250 employees. When they acquired me, I was doing 60 million in revenue, and I was operating in six cities. I now sell to a company doing 2.6 billion in revenue, 16,000 employees, operating in 83 countries. Now, my dream was I wanted to sell to a VC, not to a traditional research company because I was going back to the Nielsen days then. And I had 10 out of 10 offers from different VCs. I accepted one, and they were going to buy us for $100 million. And my only wish and my only ask wasn't about salary. It was that you can buy me for $100 million, but I want a $100 million shopping budget. I want to go buy all these small, new, up-and-coming technology companies that's going to make the online research business go to a whole other level. And I got a yes, and the deal was done, signed, sealed, and delivered. And then the market fell, the dot-com market boom fell.The head partner of the deal calls me up. I'm in Hawaii celebrating with my family. She calls me up. And she, Vivian, and she says, "I have good news and bad news. What do you want to hear first?" I said, "The good news." She says, "We're still going to go through with the deal. $100 million, no problem." I said, "Bad news?" She goes, "I can't guarantee you the $100 million shopping budget." And I said to her, "I am so grateful, but I can't do it." I said, "Because especially with the world collapsing, the traditional market research companies are going to win, and my little cute company will disappear because it's the alternative, it's the 'and,' it's not the 'either/or' yet." And I had to walk away. And Bob and Tom were really pissed at me, but I quashed the deal; they would have cashed out. I cared about my employees and my team and growth and innovation and all of that, and I needed that innovation budget, of which I didn't have with Tom and Bob.And so I waited longer, and then Ipsos came and acquired us. And so while I was at Ipsos, I was the only female CEO, top 25 in market research, you know, when I had OTX. Didn't stop me, but I knew I thought differently, I acted differently, I led differently. I knew all those things, but it didn't matter. It was my company. I gave myself permission, and I was doing just fine. And now I'm at Ipsos. I'm sitting at a board, a publicly traded company, two women on a board of 26. And they were moving my employees around like chess pieces. And tears came down my eyes. And I was pulled aside after, and I was told by the HR person, "There's no room for emotion in the boardroom." My head said, "Just agree because they just bought my company for a lot of money." And my heart said, "No way."And so I went and gave a speech to thousands—I was a global speaker at this point. And my speech was called "Bring Emotion to the Boardroom," exclamation point, heart, heart, heart. And that was that. And it was clear to me that with the power that I had, with the position that I had, with the purpose that I had, with the passion that I had, that I needed to give back with generosity what I wished I had my entire career, which was girlfriends in business. And so while I was at Ipsos, I started the Ipsos Girls' Lounge because I wanted to go to CES, 150,000 people, less than 3% were women. I did just fine in the predominantly male-dominated conferences, but it was boring and it wasn't fun, and I wasn't surrounded by people just like me. So I invited five girlfriends, and I said, "Walk the floor with me at CES. And if you have other girlfriends, invite them." 24 hours later, 50 women showed up. And two remarkable things happened at the time. One, every single guy's head turned. "Where the hell did all you women come from?" And that's when I coined the phrase "power of the pack." A woman alone has power; collectively, we have an impact. And the second was I was surrounded by women just like me: imposter syndrome, work-life balance, how do you do it all? How do you stand out as a woman in business thinking differently, acting differently, behaving differently, and not wearing those ugly suits and the ugly shoes and trying to fit in? How do we stand out the way we want to? And that was when the Girls' Lounge was born. And we were all doing deals in my bedroom. It was a king-sized bedroom. And by day two, 100 women; by day three, 350 women. We took over the penthouse suite. Boom. Girls' Lounge was born.And I called it the Ipsos Girls' Lounge. Then my five-year contract ended, and I had no earn-out, but I'm very loyal. And they wanted to renew my contract. And I said to them, "I will, as long as you commit in writing to keep funding the Ipsos Girls' Lounge because it's really important to me." My contract came back, and my package was in there, but there was no Girls' Lounge. And I said, "Well, where's the Girls' Lounge?" They said, "We want to do it, but we can't guarantee it." I said, "No guarantee means it's not going to happen." And I said, "I'm not resigning, I'm just not renewing, and I'm going to take the Girls' Lounge with me because it's not important to you. So I'm going to take it, and you could become the first partner in the Girls' Lounge."That was over 10 years ago. And today, the Girls' Lounge has evolved to the FQ Lounge. It's brought to you by, you know, collectively by amazing Fortune 500 companies, men and women. We have over 7 million-plus women in business across 30 industries, 100 countries that are part of the pack. So from the OG of five to now over 7 million. We host pop-ups all over the world at industry conferences, but we also do pop-ups and summits across different categories. We also are now in the media business, waking up one day to a very unique community of over 7 million B2B women in business is one of a kind. And then, you know, we have an advisory practice advising Fortune 500 CEOs on how to close the gender gap across the board, but more importantly, how to make everyone feel seen, heard, and belong.Andrew Mitrak: Seeing your content online, the community you've built, people's reaction to this, the amazing storytelling your team does across all social channels, it's just so inspiring and it's so amazing to see what you've built. I wish we had more time together so I could just ask you more and more about this. But I really appreciate your time, your stories from your career, from market research, from all those really cool inside Hollywood stories of film trailer testing online. Shelley Zalis, just thanks so much for your time. I really appreciate it.Shelley Zalis: Well, first of all, I want to thank you, Andrew, because you've asked the questions that haven't been asked, and putting it in a timeline, but the linearity of where we were to where we are, but also to where we're going is so incredibly important. And I call people like you conscious leaders because you're just conscious, and it's not whether you're a man or a woman, it's about the intentionality. And so thank you for your intentionality and your passion for all of this, and for being a new dad!Andrew Mitrak: Thanks so much. Well, I know your career inspires so many people, including myself, and just hearing from where you've come from and all of the gritty details along the way and everything you did, it's just so inspiring to hear. So Shelley Zalis, thanks so much for joining me. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 31Last time on A History of Marketing, Paul Feldwick celebrated advertising’s roots in entertainment and spectacle. This week, we hear almost the opposite perspective.My guest, Robert J. Herbold, spent decades leading marketing at Procter & Gamble and then served as Chief Operating Officer at Microsoft. From the client side, Bob values discipline and persuasiveness above all else. He even calls advertising creative that strays from strategy “gobbledygook.”The contrast highlights why marketing is such a rich topic to explore, and I think there’s something to be learned from both. As Rory Sutherland writes in Alchemy, “The opposite of a good idea can also be a good idea.”Bob’s career illustrates that tension on a global scale. He spent 26 years at Procter & Gamble, he worked inside the legendary brand manager system that became the blueprint for modern consumer marketing.P&G is among the most talked about companies on this podcast, second only to Coca-Cola. Bob shares an inside perspective on what brand management means at the company, and shares lessons from leading P&G’s global marketing and market research functions.As COO of Microsoft from 1994 to 2001, Bob reported directly to Bill Gates during a period of unbelievable transformation. During his tenure, he helped navigate:* The “Start Me Up” launch of Windows 95, which was the first consumer marketing campaign of its kind for a software product* The $150 million investment that saved Apple from bankruptcy.* The "browser wars" with Netscape and the U.S. government antitrust case that followed* The CEO transition from Bill Gates to Steve Ballmer.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThis also felt like a special conversation to me. While I’ve never worked directly for Microsoft, I live in Seattle, and several of the best bosses I’ve had are Microsoft veterans. In speaking with Bob, his perspective on marketing reminded me of things I learned from them.So this is a great conversation about leadership, discipline, persuasion, and the inside story of marketing at two of the world’s most influential companies.Bob Herbold's books discussed in this episode:* What's Holding You Back?: 10 Bold Steps that Define Gutsy Leaders* Seduced by Success: How the Best Companies Survive the 9 Traps of Winning* The Fiefdom Syndrome: The Turf Battles That Undermine Careers and CompaniesSpecial Thanks: Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity. And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Bob Herbold.From Computer Science PhD to Marketing CPGAndrew Mitrak: Robert J. Herbold, welcome to A History of Marketing.Bob Herbold: Thank you.Andrew Mitrak: I'm looking forward to a conversation about the lessons and insights from your career. I thought I would start at the beginning by asking you this: How does a guy with a PhD in computer science find himself in charge of worldwide marketing and brand management for Procter & Gamble?Bob Herbold: I chose Procter & Gamble because it was a very strong company. They have a lot of technical expertise, much deeper than people would imagine, given the businesses that they're in. What people don't understand is marketing at Procter & Gamble is extremely quantitative. They have a world-class market research organization that collects data reliably on how consumers react to your product and the competitor's product. Consequently, it's a lot of statistical analysis, and it's great fun. Basically, you're learning the ropes in terms of brand management, what it takes for a brand to be profitable at Procter & Gamble, and what the components of profitability are, et cetera—and of marketing.Things moved quickly. After about five years, I was put in charge of the brand management organization—the advertising group. Then I became the VP of Market Research. They needed somebody with a lot of computing skills as well as statistical skills because it was time to move the market research organization into the current technology that was being used in that industry. And so, I became the Senior Vice President of all of those areas that we've just talked about: marketing, market research, and information technology.The Call from Bill Gates: Leaving P&G for MicrosoftBob Herbold: I was on year four when I got a visitor that represented Bill Gates. They explained the job at Microsoft, which was the Chief Operating Officer. I said, “Well, it sounds like a fine job, except I'm not leaving Procter & Gamble because this is a great company. I'm doing well, things are rosy, and why should I leave?”So, they said, “Well, just go visit with Bill for a day, and then let's see what you think.” So I went to visit with Bill for a day. We hit it off. He wanted me to come back the next week, and that's when it was time to make a decision: Either I was going to get serious about this, or I'm not. I made the nervy move of deciding to leave Procter & Gamble, which is a rare thing for somebody at the level I was situated at. So I went to Microsoft in late '94 and was the COO until 2001, when I retired.So that's really a strange set of steps. On the other hand, the thing that is common as you go from one to the other is that in each case, the company was basically taking advantage of an opportunity for somebody that seemed to be able to deal with a variety of situations, which I was able to do. And I enjoyed every one of it. So that's the long answer to your short question.Andrew Mitrak: I'm sure we'll jump around a little bit in this interview, but I want to ask you about Bill Gates and Microsoft because one of the things that's astonishing to me is that in 1994, I think Bill Gates would have been in his late 30s, like 38 or 39 years old. Not a lot of people left Procter & Gamble; you'd spent 26 years there at that point. So what was it about Bill Gates, Microsoft, or the opportunity that drove you to leave?Bob Herbold: It was the technology. Simply put, I was a nerd at heart in terms of really enjoying the technology. The decision to go there was really twofold. One was the lure of working with the technology again. Secondly, it was the quality of the people I met at Microsoft that Bill exposed me to during those two days.I was very skeptical of Microsoft in terms of talent. You need to understand, Procter & Gamble does a superb job at personnel management. They're very careful with recruiting. They know who they want; they know the skills they want. I was so surprised to find out that basically, it looked like Microsoft had the same kind of principles. Those two things were the lure, but when you boil it all down, basically my family—my wife, one of our kids—said to me, “I don't know why you're worrying about making this decision. It's pretty obvious. When you get to be 65 years old, you can say, ‘Well, I worked for Procter & Gamble for a jillion years, and it was total fun.’ Or you can say, ‘I worked for Procter & Gamble for 26 years, and you just went and did this fun thing.’ So you take your choice.” And so I decided to take the leap and to go over to Redmond, Washington, and enjoy the industry and the people at Microsoft.What Bill Gates Saw in a P&G ExecutiveAndrew Mitrak: What do you think Bill Gates saw in you? I'm sure they could have seen a lot of different COOs and hired a lot of different people. Why did they single you out, and why do you think they hired you?Bob Herbold: Well, first of all, my responsibilities at Microsoft were basically the business components. I had finance, information technology, human resources, manufacturing, marketing, and market research. Basically, Bill ran the product groups, and Steve Ballmer ran sales. So I had the rest of it.What Bill saw in me was somebody who's got a heck of a lot of battle scars from many directions. So this seems to be a guy that he's not bothered by throwing all kinds of different problems at him and just working to fix them. At Microsoft at that time, we were a fairly fat organization. We had hired too many people. The systems aspect was a mess. There was a lot of opportunity to improve the profit margins by getting the costs under control. That was one of my big jobs, and several major transitions needed to be made.Learning Marketing by Doing: The P&G Brand Management ModelAndrew Mitrak: I want to ask you about some of your battle scars at Procter & Gamble. You had to learn marketing once you were there because you became in charge of a marketing group with a technical background. For listeners who might not be aware, Procter & Gamble's marketing and brand management function is legendary. On one of the first episodes of this podcast, we talked about the history of Procter & Gamble and Neil McElroy, who started their brand management model in the 1930s. I'm wondering if McElroy's legacy came up during your time at Procter & Gamble or if they had a marketing training function or a brand man training function for people encountering marketing from a technical background like yourself.Bob Herbold: Marketing at Procter & Gamble is taught by doing it. You listen to your brand manager and your assistant brand managers on the brand group, and as a group of five or six people, make your product great. I don't want to pooh-pooh marketing, but it's a very easy discipline to pick up. By that, I mean if you care about the consumer—if you care about who's buying your product and why—that's marketing, okay? Brand management at Procter & Gamble teaches you a very good lesson about marketing. Marketing isn't worth a hoot unless you're making some money, okay?Brand management is all about you having responsibility for coordinating a product development group assigned to your brand. That product development group doesn't report to you, but they are focused only on—that small group is focused only on your brand. You have to manage that relationship so you can go to them and say, “We need to improve this aspect of our product,” and consequently, let’s work on that. You have a couple of finance people assigned to your brand. Once again, they don't work for you, but you have this relationship where you go to them in terms of how much money we are making, how we are allocating our costs, etc. Same with manufacturing. There are a few people you work with to get your product made. You're putting together volume estimates for the months to come to figure out how much to make. You're working on the advertising itself, be it print or TV. You're working on the finances to make sure this thing is going to make sense. You're working on product development to improve your products in the future. That's the core of Procter & Gamble brand management.P&G’s Three-Sentence Brand StrategyBob Herbold: When people say, “I worked in advertising or marketing at Procter & Gamble,” they're really not serious, okay? What they worked in was brand management. You learn a lot about bad marketing by understanding your product and your profitability. Your tendency to buy stupid advertising from the advertising agency is much lower than the average company because you probably don't have any respect for the gobbledygook they're going to put in front of you if that's what they're doing. You're very willing to call a spade a spade when they've gone overboard on creativity and have underwhelmed you in terms of persuading the consumer to take an interest in your product.Advertising at Procter & Gamble for a brand group is getting persuasive advertising from the agency that's going to actually sell your product. There's a lot of discipline in that task. One is the strategy statement. You hear people working on strategy, and they hire fancy consulting companies. They build binders of gook that they think represents their strategy. Strategy at Procter & Gamble: three sentences, okay?* The first sentence for your brand is the benefit you provide the consumer. For example, in the case of Tide, you're the superior detergent. That means you're going to beat on product development to always have products that outperform your competitor in a blind test, and that's where the product should be. In the case of Tide, that's where it lives; that's where it's lived for many years. The same way with Crest in terms of cavity protection, et cetera.* That second sentence is the reason why someone could believe the benefit statement. You get the reasons why the product can deliver. Sometimes that's an on-air demonstration, I should say, and sometimes it's something else.* The third aspect, that third sentence that's important, is the character statement, which is: If this brand were a person and they walked in the door, tell me about them. In the case of Tide, it's a trusted member of your family that you rely on to make sure you never have a doubt that you're getting the best cleaning possible, that all the stains are out that can, in fact, be taken out.Consequently, simplicity was key. One of the things you learn at Procter & Gamble is that business is not that complicated. People make it complicated. They mess things up because they overthink the whole deal. Consequently, you get a lot of bad marketing, products that don't deliver, etc. The consumer finds out very quickly. At Procter & Gamble, you're driven by the consumer, and you have a lot of good measures on your product in terms of whether it's performing. So that's the long and short of it.Andrew Mitrak: If you think of the AIDA model of advertising—attention, interest, desire, action. An example I've used for sharing the AIDA model or explaining it to somebody who's learning marketing is a Swiffer ad, which is a Procter & Gamble product.It might have been after your time there, but if you look at their ads for it, you can see beat-by-beat in a 30-second ad: Attention—they'll grab your attention. I think the ad was that a traditional broom just moves dirt around; it doesn't actually get rid of it. Interest—the dirt needs to be removed, not just moved. Desire—the Swiffer cloths are differentiated; they can collect dirt and be thrown away. And then their ads would end with, “And here is where you can buy it at the store, at the household cleaning aisle at your local store.” It has it all really tightly packed in there, and it's not some celebrity endorsement or doesn't have all the fluff—I think you called it gobbledygook. It's just really tight. I'm sure I could find any Procter & Gamble ad and see that it's all really tight fundamentals and really lean to get the message across.Note from Andrew - Thanks for Ben Thompson at Stratechery who introduced me to this example of the AIDA model in action in this article: https://stratechery.com/2020/the-anti-amazon-alliance/Bob Herbold: Yep.Launching Liquid Tide: How P&G Innovated by Competing with Itself Andrew Mitrak: While researching and prepping for this interview, I watched some of your lectures that are available on YouTube, and you spoke a lot about inflection points. This is probably more speaking to business leadership in general and the inflection points that companies have faced. I'm wondering, when it comes to brand management and marketing at Procter & Gamble, were there any specific inflection points that come to mind in your 26-year career there?Bob Herbold: There were several. Probably one of the largest was when I was running the advertising, marketing, and brand management group of package soap and detergent. One of our brands was Tide. Someone had come up with a liquid version; it was all powder at that point. In R&D, they had been working for years and years on a liquid detergent that would clean as well as powder Tide.When I was there, the product development people claimed they had finally achieved this. Naturally, we exposed those formulas to extensive product tests where basically it was liquid Tide versus powder Tide in blind tests, usage tests, and the like, as well as against the competition. Liquid competition at that point was really weak in the context of cleaning. The blind test showed that this thing cleaned as well as powder Tide. Launching that product generated a huge boost for the Tide franchise. We offered both powder and liquid for many years, just in case there were people that absolutely loved powder detergents. That was a really important inflection point in the industry—that someone could come up with a formula that would clean as well as that. That was a ton of fun to market that baby.Andrew Mitrak: I wonder if there was a risk of perceiving this as, “Hey, we might cannibalize ourselves if we're converting people over to liquid; we might lose some of our…” But also, if you don't cannibalize yourself, somebody else might do it for you, and that would be a bigger risk, right? Is that the dilemma you were facing?Bob Herbold: Absolutely. We knew it would cannibalize; it was the subject of how much. But also, we knew it would kill—I should say that it would beat the liquid competition, which was very weak at that point.I don't want us to get sued by the government.Andrew Mitrak: Exactly. I’m sure this is probably the scars of the antitrust investigation into Microsoft. You can't use "kill." Can't use those words about your competition.Bob Herbold: You can’t use those words…Anyway, we knew we could get business from both parties. The powder would be injured, so to speak, and we'd get a lot of new business. We ran a test market on this very issue. One of the things that's great about the consumer products industry is you can isolate an area and do a very clean test to understand the nature of the change you want to take place.How Measuring Persuasion Changed P&G AdvertisingBob Herbold: Another inflection point that I think was very important was when I was running Market Research and we came up with a measure that was what we called a “persuasion measure.” We tested this thing nine ways from Sunday to make sure that brands that used what we measured as persuasive advertising, in fact, had a marketplace impact when they ran that advertising. We ran a lot of split-cable tests on this issue to find out that our tool for measuring persuasive advertising was really working very well. Consequently, from that point on, any new advertising had to be tested with the persuasion tool from the MRD group to understand whether this was really going to make the mark relative to the consumer. A huge inflection in terms of having some confidence that the advertising was going to work.Now, I'll tell you the people who hated this were the ad agencies, okay? Because somebody has a report card on this advertising done at the time of the early testing of an ad. It was a great tool, and I'm assuming it's still used—the evolution of that tool. It was powerful.Creative Ad Agencies vs. Strategic ClientsAndrew Mitrak: I'm picking up on a little bit of disdain for certain types of ad agencies or certain types of creatives. I'm wondering, did you ever butt heads with them, or did you ever have direct interactions that are memorable with your ad agencies?Bob Herbold: Oh yeah, no doubt about it. In fact, I'll never forget when I first had responsibility for package soap and detergent. The guy who was running Compton Advertising (which became Saatch & Saatchi), which was one of our large advertisers at that point—a company that has subsequently been acquired, then acquired, and then acquired...Andrew Mitrak: Like most ad agencies, it seems like.Bob Herbold: This guy looked at me and said, “Oh no, I worked with Herbold three years ago, and he's dreadful to work with. Oh no, not Herbold again.” He said that to my face. I laughed and said, “Yeah, I'm here again.” That was a funny reaction. But the fact is, yeah, we gave the advertising agencies a fit at times because they would love a piece of very creative advertising, and it would fail in terms of all of our measures. Sometimes they would say, “We have to go to the wall on this one.” We'd put it in a test market, and it wouldn't work.That's what you have to do with an ad agency. The problem with many marketing organizations in many companies is they don't have the nerve or develop the expertise to say to an ad agency, “No, we don't like that stuff. Go make some more. Go generate another creative idea.” It can be a stressful process, but if you want to win in the marketplace, you've got to go through it.Andrew Mitrak: I know we're jumping around here, but let's jump ahead back to Microsoft, now that we've heard some of those P&G battle scars. Marketing is among the portfolio of disciplines or functions of the company that you're overseeing, but I'm curious, were there any marketing principles you were able to bring from P&G into Microsoft? This discipline of brand management and this rigor in ad testing—were you able to bring any of that over to Microsoft?Bob Herbold: Yes, to some extent. I was compelled not to divulge, for example, the persuasion work simply because that wouldn't be appropriate. That's Procter & Gamble's entity that is very valuable and very unique to them. But on the other hand, what Microsoft needed was basics. They had no basics in terms of marketing to speak of. They were just starting to put their toe in the water on advertising.One of the first things we did when I got there was to measure, through market research, “name a software company.” In 1994-95, if you asked that question, the name that popped up was IBM, okay? Anything dealing with a computer, the name that popped up would be IBM. Microsoft awareness was very, very low, and what Microsoft does was even more mysterious.Building the Microsoft Brand: A Lesson in BasicsBob Herbold: So we put about a campaign of television advertising to try and get at the fact that Microsoft is a software company. Software helps you become creative and do things that are going to be valuable to you. In fact, I brought forward the old strategy statement from Procter & Gamble in terms of what's the benefit, is there a reason why, and what's the character statement. The benefit statement was, “Microsoft software leads the way in providing access to a new world of thinking and communicating.” That's an important statement. That's what we had the ad agencies write advertising for. “Microsoft software leads the way in providing access to a new world of thinking and communicating.” All of a sudden, it gets real simple as to what the advertising should communicate. The character statement was, “We're here to help. We're a friend that can assist you and make a whole bunch of tasks a whole lot easier,”—that kind of ilk.We developed advertising along the lines of that strategy. Wieden+Kennedy was the advertising agency. We tested the advertising extensively, and after a couple of years of running it, when you go to consumers and say, “Okay, name a software company,” Microsoft was right at the top of the list by a big, big margin, and IBM had fallen way down, which is exactly what we wanted to have happen.Behind the Scenes of the Windows 95 LaunchAndrew Mitrak: If you joined Microsoft in late '94, I imagine the Windows 95 launch, which I think happened around midway through '95, must have been one of the first... To me, it might be the most iconic Microsoft campaign that I can think of, even though I was very young when it happened. Was it one of your initiate? I'd also read that this cost like $300 million, which was a lot of money at the time. Driving efficiency and driving profitability was another mandate you had, so I imagine it didn't come easy to spend a lot of money on a big launch like that. I'm just curious, what was your approach to this Windows 95 launch? Do you have any stories from it?Bob Herbold: Yes, it was very significant. Bill Gates led the charge and said, “Listen, we're betting the company in moving from a 16-bit word to a 32-bit operating system. This is a huge rewrite of the operating system. We're taking a big risk with the whole company, so every aspect of the company must do their very best work,” okay?In regard to manufacturing, we had to have the product all ready to go globally on August 24, 1995. From an advertising standpoint, we had to have great advertising. We ended up spending a lot of money on The Rolling Stones, utilizing the Start button of Microsoft, running their famous song.Andrew Mitrak: "Start Me Up."Bob Herbold: The budget on the whole thing was huge. On the other hand, this was a once-in-a-lifetime opportunity. But what's really interesting is toward May, June, July of 1995, there was a lot of pressure on the company and a lot of articles being written basically saying, “Microsoft missed the internet,” okay? You may not remember that, but it was brutal in terms of positioning us as completely flat-footed when it comes to these new tools that the internet can provide.We constantly said to Bill, “What are we doing here in terms of, you know, what product group is aligned against this thing?” He said, “Listen, until the 24th of August, this company is totally focused on Windows 95. Once that occurs, we'll go from there.” People ignored the internet while we polished all the stuff related to the launch of Windows 95, which we pulled off successfully. It was televised throughout the world with a big event we had on campus with Jay Leno—a major kickoff.Right after the kickoff, basically, Bill organized the troops and focused on the internet. Within a very short period of time, we had the initial versions of Internet Explorer out there, battling with Netscape. For the next year or two, it was all about Windows 95 penetration and getting Internet Explorer's market share up and putting it on the map. So Windows 95 was very, very important, but I really learned a major lesson on focus. Bill did the right thing by totally focusing the company on that very important project.High-Interest vs. Low-Interest Categories: Tech vs. CPGAndrew Mitrak: It just strikes me that the "Start Me Up" licensing from the Rolling Stones, the big splash with Jay Leno, who was just the new host of The Tonight Show—those types of things don't feel like Procter & Gamble. They don't seem like things that Procter & Gamble would do for marketing. What was your perspective as somebody who spent your whole career at Procter & Gamble and is now doing the types of marketing launches and tactics that you wouldn't have necessarily done at your prior company? What was that like for you? What was your assessment of it?Bob Herbold: It wasn't as different from Procter & Gamble as you would think. For example, if you looked at what we did behind liquid Tide, the amount of money that was spent and the overall effort through our sales organization to get the retail trade excited about pushing this new product was huge. Now, one of the differences between the two, with the Tide experience versus the Windows 95 experience, is that detergents are a low-interest category, okay? Technology is a high-interest category.What you're going to have is media getting all interested in technology because it's very G-Whiz, and it affects people very, very directly if it gets to the point where people think it will get. Detergents are a completely different issue, okay? You're going to affect people who shop for groceries, you're going to affect people who do the laundry, and so the target audience is much narrower, much quieter, and the whole thing is very different. But in terms of the importance that you treat the project and how it is executed, you wouldn't see as much difference as you think.People often say to me, “Man, that was a massive change between Procter & Gamble and then going to Microsoft. What in the world?” I said it was very interesting because there are some aspects that didn't change at all. Both companies hire really, really good people, and they take the time to make sure that they're really smart and that they're really qualified to do the job. Consequently, with both companies, you're working with really good people. The second thing that was so similar is the focus is on the product. You really get that at Procter & Gamble, and I was so surprised to feel the same thing at Microsoft.Then it changes dramatically. The speed of the industry—it took years of chemists and chemical engineers working on those liquids to figure out how in the world they were going to match the performance of the powder detergents where they can basically deliver the key ingredients to a garment in such an efficient manner. At Microsoft, or in the tech industry, things move so fast. The speed of the underlying industry is gigantic. I often tell people it takes much, much longer to develop a formula that will take a Merlot wine stain out of a white shirt compared to doubling the capacity of a microprocessor. The difference in industry was key, but you quickly learn the necessity of not being quite as careful as you would be at Procter & Gamble, but you've got to get on with things, and you do them as carefully as you can. But speed's important in that technology world.Andrew Mitrak: Yeah, the world of atoms versus the world of bits.House of Brands vs. Branded House: Comparing P&G and MicrosoftAndrew Mitrak: The first thing you mentioned when you were coming to Microsoft was unaided awareness of software companies and how people would come up with IBM, and Microsoft was pretty low ranking. But you had to market a lot of brands, right? You had to market Microsoft, but then Windows, and then Excel versus Lotus 1-2-3, and Word versus WordPerfect, and you mentioned Internet Explorer versus Netscape. So you're marketing a lot of stuff at Microsoft. How did you think about that? When it comes to, you mentioned the importance of focus and landing Windows 95, but within Windows 95, there are all these subcategories of brands that are also being marketed together. As the COO who was in charge of marketing among other things, how did you balance all of those brands?Bob Herbold: Well, to be clear, each of the products—like Microsoft Exchange or Microsoft Office—have a very significant marketing group within them, okay? They're the ones that are actually responsible for developing the ad. On the other hand, the corporate advertising and things that are going to go broad, we had a hand in. So consequently, a piece of advertising like "Start Me Up," we provided a lot of the funds, they provided a lot of the people to do the selection of the approach and the like. We sat in on all those meetings and the like.We had an oversight role and were very involved on those big projects, but on an ongoing basis, in terms of materials for sales and standard kinds of marketing things that are very important, the product groups handled a lot of that as well. So the relationship between marketing efforts centrally and in the divisions was very active and important so that they knew how to represent Microsoft with the same kind of face across all those divisions. That's another thing that's important when you have many products like that—and this is quite different than Procter & Gamble—is that you actually have one brand, and that's Microsoft, and then you have a lot of sub-brands, et cetera.That's not the case at all at Procter & Gamble. At the time I was there, and until very recently, you never mentioned Procter & Gamble in a brand's advertising. So at Crest or Sure deodorant or some of the other products, you'd never hear the Procter & Gamble name. You would only hear Crest, or you would hear Tide or Sure or Cheer detergent, et cetera. So, a very different approach globally.Andrew Mitrak: Is one approach better than the other, or is it just more like a cultural marketing thing?Bob Herbold: I think in the technology industry, it's much more focused on big brands that basically can leverage the names. I mean, IBM had many, many different products, but basically, you were buying IBM. So, a similar analogy. Hewlett-Packard, the same case. The name Hewlett-Packard, be it a server or a PC or whatever, represents a quality level that you come to understand.The Story Behind Microsoft's Investment in AppleAndrew Mitrak: One moment that I wanted to ask about is that you were at Microsoft at the time that Microsoft invested $150 million in Apple, which was right on the verge of bankruptcy. There's also this very famous video of Bill Gates appearing on video at the Macworld conference, and Steve Jobs seems small—he's standing there physically behind a podium, and Bill Gates's giant face is behind him. It's just one of these—the perception is so funny because they're such two iconic individuals within tech and within marketing. I'm wondering if you remember this period and any stories you're able to share of this Microsoft investment in Apple.Bob Herbold: There were some meetings between Bill and Steve Jobs where Jobs would get off target. Jobs was always hung up on the fact that he would complain to Gates that Bill should feel guilty selling Windows because it was an expletive deleted, okay? It was a piece of blank, big time. So consequently, him having to come to Microsoft while he served up Bill... Bill was a good friend of Steve, but on the other hand, they were fierce competitors. That was a humbling situation where he had to come. We wanted Apple to succeed because it's always good to have a competitor.We ended up giving them the money, but subsequently, they asked him to appear in front of their analyst meeting a couple of days later, once we agreed. That led to the incident that you're talking about, where people remember the "1984" ad, or whatever it was, with the woman running down the aisle, swinging the hammer, and crushing the big dude that was on the screen. That guy represented the status quo and the bureaucracy, et cetera. So when Bill did appear, suddenly Steve knew the mistake he made. Right after that event, we understand—can't verify this, but we understand—that most of their PR department was fired simply because they put him in such a funny position. Because the audience was laughing because of what he had created, which was, you know, the bureaucracy won. The status quo is in charge, and there he is on the screen giving us money in order to survive. So it was hilarious.Product vs. Sales: Assessing Gates and Ballmer as MarketersAndrew Mitrak: So you came in, there was Bill Gates at the time, CEO, in charge of product, and there's Steve Ballmer, who's in charge of sales, and then you're in charge of everything else. And those wind up being the, you know, Bill Gates was CEO from Microsoft's founding through around 2000-2001, and then Ballmer was the CEO after for the next 10 years or so. I'm just wondering if you have an evaluation of the two of them as marketers.Bob Herbold: Steve Ballmer was very involved with marketing and consequently worked very closely with the people in marketing because he cared a lot about it, and appropriately so. Bill was not as interested, okay? He's a product guy, primarily, extremely good at working with product development and the like. So, those two individuals were quite different.When Steve took over, you wouldn't want to say he's not a product guy, but we got somewhat seduced into trying to put Windows everywhere as an operating system. When Steve tried to do that with a smartphone, it simply made a very clunky device, so it failed in the marketplace. But Bill was very good at marketing, but Steve was very good as well. Steve didn't have the product instincts that Bill did. I'm not saying that negatively. So there you have it.How to Learn Marketing? By Doing It.Andrew Mitrak: I want to also ask about education because you've spent a lot of your career focused on education. We talked about you earning a PhD, but you were on the President's Council of Advisors on Science and Technology, and you were also focused on K-through-12 education. You've donated very charitably to education, to colleges, and endowed professors. And then you also mentioned, though, that the only way to learn marketing is to do it. So, do you have any thoughts on how we educate marketers or what people can do to become better marketers? A lot of academics listen to this podcast, marketing academics do, as well as practitioners. I'm just wondering if you have any thoughts on how to get a marketing education.Bob Herbold: Actually, I think that the most important thing is the variety of experiences and capabilities that the individual has, not so much deep marketing skills. I remember one time, I was basically the head of marketing at Procter & Gamble, and we had a person that we really wanted to hire. They asked me to talk with him, and I did. I got the strangest question. He said, “You know, one thing I worry about, I went to such-and-such a highfalutin school here, and I only had three different marketing courses, and I think coming to Procter & Gamble, I'm going to get killed because I don't have the marketing depth.”I said, “Well, take a guess at how many marketing courses I've ever had in my life.” He said, “Oh, probably very deep.” I said, “I've never had one.” I said marketing is all about human instincts and caring about the consumer and getting the product right and common sense as to what's going to persuade people to buy this product. I said, I don't want to pooh-pooh marketing, but it's far simpler than you think. A lot of times, marketing people get too involved in trying to apply this, that, or the other thing from a textbook.What's going to make a product successful is it's meaningful to the consumer, you have the capability to explain why it's meaningful to the consumer, and thirdly, you get them to try it. That's a marketing task as well. There are ways to do each of those things, and it's not that hard. So I think the individual—and I often get asked that question, to tell you the truth—I think the more variety of experiences people have in life is probably a very important marketing lesson as well. So, a strange answer to your question.Andrew Mitrak: No, I think that's right, to be honest. I've learned more just from doing it...Bob Herbold: Absolutely.Andrew Mitrak: ...than from reading books. That said, when I read books, it is useful to take instincts and apply frameworks to them or to somehow articulate what you're feeling and thinking, so it seems intuitive to others. But again, having a variety of experiences is so valuable. And actually, a lot of what you're saying are things that I've also heard from my managers who used to work at Microsoft, so I wonder how much of it came on through you somehow.Bob Herbold: [Laughs]Final Thoughts and Gutsy DecisionsAndrew Mitrak: If listeners want to learn more about your work, or if there are any... I know you've written some books, and I can publish the links to those in the show notes that accompany this. Are there any links you would point people to online or references you would choose to send people to?Bob Herbold: The third book that I did, I think is probably a good summary of how to be successful in terms of launching a product and managing a product and marketing a product. The name of the book is What's Holding You Back?, and it's all about gutsy decisions where, in fact, you have to face reality. In some cases, you can't get all the data that you need to make the decision, but you've got to make the decision based on your gut. Gut decisions are usually based on the success of them, on the experiences that you've had in life. So I think that is an important summary of some very basic principles that people can use day in and day out. So I would point them to that book.Andrew Mitrak: Bob Herbold, thanks so much. I really enjoyed the conversation.Bob Herbold: Great. Thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Bonus EpisodeThis week’s conversation with Paul Feldwick was so packed with histories and insights that I simply couldn't fit everything into one episode. So, I cut out one of my favorite parts to share with you as a separate “Bonus Episode.” (Even if you’ve heard the main episode, this will be new to you.)Paul shares the behind-the-scenes story of the iconic 1990s Barclaycard ads, starring the comedian Rowan Atkinson. Atkinson used these ads to develop the spy character that would become Johnny English.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsFeldwick worked on these ads when he was Executive Planning Director at BMP DDB Needham Worldwide, the lengthy-named agency behind Barclaycard’s classic campaign. The execution took so many unlikely twists and turns, Paul wrote the story as a case study for WARC (World Advertising Research Center) and in his book "Why Does The Pedlar Sing?"To give you a sense of how legendary this story is, the late Jeremy Bullmore once wrote: “It's possible that the only honest case-study in the history of marketing is the Barclaycard case written by Paul Feldwick... it describes in hilarious detail just how luck, agency obduracy and a collision of events entirely fortuitously led to an award-winning campaign of great commercial effectiveness.”I love this case study because it articulates so much about the messy relationship between clients and agencies, strategy and creativity, and how seemingly obvious insights like, “Rowan Atkinson is funny” can lead to successful marketing campaigns.I hope you enjoy it. And be sure to listen to my full interview with Paul Feldwick if you haven’t already. Paul is entertaining and persuasive throughout.More from Paul Feldwick: * Paul just published Creative Awards: A Very Short History, which argues that ad industry awards judge “aesthetics” at the expense of “effectiveness” and attempts at assessing loftier values like “purpose” are misguided.* Paul’s excellent TEDx Talk Aesthetics And Jugs And Rock'n'Roll, discussed towards the end of the main episode.Note: A special thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.The Disconnect Between Strategy and ExecutionPaul Feldwick: There's a lengthy story at the start of Why Does the Pedlar Sing? about a campaign for a credit card called Barclaycard, which is still a very big brand in the UK, a campaign using Rowan Atkinson, which we did in the early 1990s.Andrew Mitrak: These ads, I was not familiar with them, I'm from the US, but they're so good and they're so funny. And I watched them on YouTube. I encourage listeners to go to YouTube, if you just search "Barclaycard ads," it'll probably autofill and find these Rowan Atkinson ones. And they're so funny, so clever, and they usually are about a minute long or so, they're almost little short films.Paul Feldwick: They're 60-second ads. I mean, the great thing nowadays is that so many ads are instantly available on YouTube, or other platforms, but mainly YouTube is usually the best place to start. And you have to remember that even 30 years ago, that simply wasn't the case. I mean, 30 years ago, if you wanted to say to somebody, "you should see this great ad for Barclaycard with Rowan Atkinson," it would involve getting hold of a copy of a video cassette that had this ad on it, you know, in a format that you could access. So we take that so much for granted now, but it does make it much easier to have these conversations.But I brought it up, as I say, I write extensively about it in the first couple of chapters of Why Does the Pedlar Sing? because it's such a great example of the disconnect between what we actually ended up doing, which was producing something that was first and foremost, whatever else it did, it was entertaining. It works because it's entertaining, it works because it's funny, it works because it's got high production values, it works because it's a very enjoyable piece of 60-second cinema that people watch. And yet, at the time we were doing it, although part of us knew that was what we were doing, we also still were having to pretend that this was all about just communicating a product benefit in a sort of slightly clever way. So there was this doublethink always going on. And I suspect where it works, it does still go on. Although perhaps partly as a result of what I've written, and maybe some other things that are going on, I do sense that in the last 5 or 10 years, it's become more acceptable to talk about advertising as entertainment. There was a time when that was something you almost couldn't say, because it would immediately invite a lot of people going, "advertising is not meant to be entertaining, it's meant to be selling," you know. You can still find plenty of people who will bang that particular drum.“The Only Honest Case Study in the History of Marketing"Andrew Mitrak: Let's come back to this Barclaycard example because there's a quote that I pulled that's from Jeremy Bullmore. The quote is, "It's possible the only honest case study in the history of marketing is the Barclaycard case written by Paul Feldwick."Paul Feldwick: I actually did write the account of how we got to this campaign, quite a long time before I wrote Why Does the Pedlar Sing? I wrote it as a sort of standalone article, probably about 20 years ago now, I would think. And I just felt the story needed to be told before it all got completely forgotten. And I just told it to the best of my ability. Because what happened, and I think anyone who's worked in an advertising agency will recognize that this is not that unusual, although this may be a fairly extreme example. But what happened was we were pitching for the Barclaycard account, and we won the pitch with a particular campaign, which was nothing like the campaign that eventually ran. And this is very typical, actually. As I'm sure you know, a lot of pitch-winning campaigns for one reason or another, they never win. It was a totally, totally different kind of campaign. It was based on a sort of a very abstract idea, if you like, which was, Barclaycard, we think it's all the credit cards you'll ever need. And this was illustrated with some very dramatic, very expensive film, which was going to involve people like running up the stairs of skyscrapers and standing on the roof of skyscrapers and cutting up all their other credit cards and throwing them to the four winds so that they'd flutter down into the streets. I mean, you can sort of picture how this could have been done in a very dramatic way with music building to a great climax. This was about the time that, you know, Saatchi's had just done those sort of big ads for British Airways which were done on an epic scale. It was, you know, it was sort of about 1990, it was that that sort of mood. Note - For more on this era of advertising and Saatchi’s British Airways adverts, see my conversation with Mark TungateWhen the Pitch-winning Idea Won’t Actually WorkPaul Feldwick: This was what won the, won the campaign. And so everyone was sort of very enthusiastic about it, of course. I mean, the client had bought it, we'd won the campaign with it, everybody loved it. And then things started going wrong. We started doing some research, and the researchers came back and said, "Actually, the public don't seem to really like this campaign very much. They don't really get it, they're not very excited by it." But because everyone was so invested in it, they didn't dare say, "We think you should can it and start again." They said, "I'm sure we can just make it work with a little bit of tweaking." So they were doing that. And then meanwhile, we were also finding the campaign was going to be incredibly expensive. And we were also finding that, you know, every ad that ran on British television then as now had to go through some sort of copy clearance committee. So there were various hoops that they'd have to pass and they were saying things like, "Well, look, you can't show other people's credit cards or be seen to be cutting them up. And you certainly can't be seen to be throwing them off buildings because that'll be like littering," and stuff. So there were all sorts of problems with this campaign. But nevertheless, nobody, there was a kind of groupthink thing going on. Nobody could get their head at all around saying, "Perhaps we should stop and do something different," because this was the great pitch-winning campaign, you know, and nobody could dare say a word against it.So, to cut a long story short, the agony was prolonged for about six months, during which we tried to make this campaign work. And every time we tried to make it work, it got worse and worse and worse. So, you know, it ended up, it ended up with like literally one man standing on a fire escape cutting up a credit card and putting it in a brown paper bag. And people were kind of going, "What the hell is all that about?" So we were finally bumped into a sort of, and it was a really important relaunch for the client as well. This wasn't just a new campaign, there was a huge amount riding on this. They were relaunching the whole brand, they were introducing for the first time a fee for the cardholders. You know, and everything was built around a particular date when this relaunch was going to take place. So, you know, there was a deadline, there was a huge amount riding on it. And, you know, this is the point at which I'm sure they must have been tempted at some point to say, "Let's fire the agency and start again," except they didn't really have the time to do that either. So we were kind of stuck with each other.The Birth of a Classic Campaign: “You should use Rowan Atkinson because he’s funny”Paul Feldwick: I'll cut to the chase. With a bit of to-ing and fro-ing, at the very last minute, somebody came up with like the third or fourth idea, which was, "We'll use, we'll write some scripts around Rowan Atkinson." And we took those out to research and they weren't very good, even so, and people didn't get it. And I had to come back from this research, which I, at this point I was conducting the research myself. And I came back and I said, "The only thing I can salvage from this research is that people really like Rowan Atkinson and they say you should use Rowan Atkinson because he's funny whatever he does."And at the same time, we were in touch with Rowan Atkinson, and he was quite keen to do advertising, but he was also, he had a whole character that he wanted to develop, which he'd come up with entirely, which was the character that eventually turned into Johnny English many years later on. So he said, "Well, I've got this idea for a character." So anyway, one thing led to another, and we got to a point where we all just had to kind of trust the process, trust Rowan Atkinson, trust each other to develop, and our creative department became involved in writing the scripts. And we shot the first few films, and there wasn't even time to research them before we went on air. We just had to kind of believe in it. We researched them as soon as they went on air, because worst-case scenario, there was a point there where we could do something about it if it was terribly bad. But fortunately, it wasn't terribly bad, it was actually brilliant.Allowing for improv while sticking to product messagingPaul Feldwick: And it took me a long time to make sense of that story. There's, as Jeremy says, you know, this is a very funny story in some ways, and it's the kind of story that people in advertising agencies actually like to tell to each other in the pub along the lines of, "Oh, you know, well, we farted around for six months and we got it all horribly wrong, and then just at the last minute, we got lucky and we were able to sort of save the day." And that's one way of telling the story, that's close enough to the truth to be plausible, but it doesn't really tell you quite enough. It doesn't really tell you anything useful to learn from, because, you know, if you're a client hearing that story, you think, "Well, that's all very well, but that's not really how I want my advertising development process to go." So I wanted to sort of think, "How else can we tell that story so that we can learn something from it?"And what it seemed to me had happened was that throughout the sort of initial development process of the pitch and then working with the campaign after the pitch, we were still very wedded to a very traditional model of how we thought that advertising was meant to work, which was, you know, you have a proposition and you find a way of dramatizing the proposition, and that's what's going to somehow persuade people that Barclaycard is the better brand. And then because we were so up against it and we had to change our minds very much at the last minute, and because we then suddenly lighted upon this brilliant comedian, Rowan Atkinson, and his equally brilliant producer-director, John Lloyd, who was working with him, we were suddenly, we moved into a different realm altogether where suddenly in the realms of show business.And the shoots were very interesting because they were all location shoots. And Atkinson and Lloyd and all those team were there, and the agency creative teams were there. And some of the clients were there as well, but they were kind of, they were out of the office. They were in places like Marrakesh and, you know, Moscow. And to some extent, they had a script, but they were also, they were shooting it as if it was a comedy show, so that it was like, if you said the line and it wasn't funny enough, Rowan Atkinson would say, "Well, look, let's rewrite the script." And they did. So there was a lot of room for improvisation in it as well. And the reason that those ads are so successful and so funny, and that they still stand the test of time in most cases 30 years on, is because that was the approach that went into making them. It was not the traditional advertising agency, client breathing down your shoulder, "We have agreed every word of this script and we have got to do it exactly the way that we agreed it with the client, and we have got to get in three mentions of the product," and so on and so on. It was much more done in a way of, above all, this has got to work as a piece of film.And so it did. That was how they made it work. Which is not to say it's self-indulgent or it doesn't do the job. It does the job brilliantly. And I think we always felt that actually, because, you know, people like Rowan Atkinson and John Lloyd didn't have anything to prove, they didn't have any axes to grind. They didn't have any problem with thinking, realizing this is an advert, you know, we're here to sell the product. So that you'll notice when you look at some of these scripts how Rowan Atkinson gets the brand name into just about every line in a totally seamless way. He's always sort of, you know, he's the guy who refuses to use the Barclaycard, and he's arguing with his assistant who's the guy who does have the Barclaycard. He's thinking like, "Barclaycard, Boff. What do I need a Barclaycard for? I managed perfectly well without a Barclaycard." So it all happens quite seamlessly, but it's just done in a way that works. And I think looking back on it now, I think that we made this huge leap without quite realizing it from thinking like a sort of old-style ad agency and thinking, you know, plonk, plonk, plonk, to thinking like entertainers. And that's why those ads are so, and I mean, it needs to be said, because we haven't said this so far, but what's crucial to this story is that campaign was incredibly successful. I mean, it wasn't just, "These are great ads that the ad industry thinks are wonderful." These were ads that were hugely popular, hugely famous, and as a result, did an incredibly strong job for Barclaycard. And they are still probably in the UK, just about the only ads for Barclaycard that most people will remember as long as they're old enough to remember them.So that for me became the start point for Why Does the Pedlar Sing? because that was building on the idea that so much successful brand advertising has its roots in the whole world of entertainment and show business rather than in that sort of world of propositions and reasons why, which is another kind of advertising history, but increasingly, I think, not the most important or relevant one to what advertising in that kind of sense achieves.Path dependency: The process and end result would not have won the pitchAndrew Mitrak: What's funny is that despite all the success and even your case study of these ads, that it is show business. It's Rowan Atkinson is funny and whatever he's in, and you just got to trust him and let him improvise and all that. The agency could never sell that to the client. They want all the analysis, the positioning, the branding, the data, the research, the focus groups. They want all of that, and that's just the process through which they buy that, even though there's evidence to the contrary.Paul Feldwick: That is a fundamental cultural issue. And, you know, it's still very, very rare that people kind of get that right. I've seen examples, you know, continually, one sees examples of campaigns. I mean, there was a campaign a few years ago in the UK for Tesco, a big supermarket.And it should have been great because they hired some really brilliant, famous entertainers to do it. They hirednRuth Jones and James Corden, I think, and you know, the people who did Gavin & Stacey or whatever. And you see the ads and they're just kind of, they're leaden, they're sort of flat. And you can just sort of get this feeling that everything has been overcontrolled, so that it loses that magic that it needs to become a piece of entertainment. And it's that aesthetic quality which is so important in making the difference between an advertising campaign that sort of flies and one that doesn't. And it's quite an intangible quality. So, you know, it's a cultural thing that people think they're playing safe by trying to control everything. And in fact, they are not playing safe because they are jeopardizing the very thing that they're trying to achieve. And I think that's still happening, if it's still happening, because people are still not clear enough in their mind that they need to make this leap. And to some extent, the advertising industry has itself to blame for all this. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 30What if core concepts like the USP, ad recall, and the sales funnel aren't timeless truths, but just ideas that happened to catch on? What if even the people who invented and promoted these ideas didn’t always follow their own advice?This week, I’m joined by Paul Feldwick, a career ad man who has spent the last two decades analyzing his industry through a historical lens. Feldwick traces where the “eternal truths” of advertising came from to see if they hold up to scrutiny. He also argues that in its quest for respectability, advertising has forgotten its roots in showmanship and entertainment, often to its own detriment.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsIn this episode, you will learn:* Why many of advertising’s foundational “truths” are built on shaky ground.* How P.T. Barnum and the concept of "humbug" are central to understanding brands.* The difference between “mental availability” and true “fame.”* Why brands are built less like cathedrals and more like a bird’s nests.Listen to the full episode to hear Paul’s fascinating take on the history of advertising, the problem with “purpose” in branding, and why Pixar may teach us more about marketing than most textbooks.Paul Feldwick's books discussed in this episode:* The Anatomy of Humbug: How to Think Differently About Advertising* Why Does the Pedlar Sing?: What Creativity Really Means in AdvertisingNote: A special thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.How Advertising History Informed an Ad Man’s CareerAndrew Mitrak: Paul Feldwick, welcome to A History of Marketing.Paul Feldwick: Thank you.Andrew Mitrak: You've spent most of your career in advertising and then the last decade or two writing about advertising through a historical lens. Were you always interested in this history angle of advertising, or did that come later for you?Paul Feldwick: I don't think I always was. I think when I came into the advertising business—and that was back in 1974, just to put it into some kind of context—I think for the first 10 or 15 years or so, I just kind of absorbed everything that was going on as if it was like eternal truths because that's what I think you tend to do at that age. All the things that were taken for granted, I just assumed, "This is how it is, and it couldn't be any other way."Paul Feldwick: I can probably point to one particular book that was a sort of real eye-opener for me that started me questioning all of that. And that was when I picked up a copy of Martin Mayer's book, Madison Avenue, U.S.A., which was a journalistic study of advertising in America written and published in, I think, 1955. When I got it, this was probably about 1985 or something like that. So this book was now 30 years old, which still seemed like sort of ancient history, given that most people in advertising weren't very interested in history or thought even five years ago was a long time ago.And as I read it, I just found all these light bulbs really going off in my head because I suddenly realized that all these concepts that I've kind of taken for granted as being, as I say, some kind of eternal truths, were in fact just ideas that particular people had had at particular points in time, and that had just happened to catch on because they were simple, or because they became popular, or because somebody had advocated them in a particularly effective way.Deconstructing Advertising's Foundational MythsPaul Feldwick: So, I began to realize that the whole thing about the Unique Selling Proposition was completely invented by a guy called Rosser Reeves. Or that advertising recall had been invented by a guy called George Gallup. And what's more, the more I kind of… that was when I started to put these things, I think, into a different perspective. And then the more I looked at them and the more I reflected on it and read a bit more about it, it became clear to me that not only were these things sort of contingent and specific in time, but that almost without exception, they had no real solid foundation in terms of science or empirical testing, or even any kind of coherent theory. They were just kind of ideas that people had come up with and gone, "Hey, how if we did it like this?" And then they'd just caught on as fashion does.So suddenly, advertising recall was easy to measure, and suddenly everybody wanted to measure it because everybody wanted a number that was bigger than the other guy's number. And nobody was stopping to say, "Does this number… what does this number really mean? Does it actually mean anything?" Or, "Why do we believe that every ad has to have a proposition?" And then that sort of led me back into, "Where did that come from originally?" And I realized that both Reeves and David Ogilvy were huge fans of this guy called Claude Hopkins, who again, none of my contemporaries claimed to have even heard of, who wrote his book back in the 1920s. So I kind of dug back into that and thought, "Well, what did Hopkins have to say?" And I found this is fascinating that Hopkins has a view of advertising and how it should be done, which is completely different from what I'm doing right here, right now in the 1980s. And yet, he seems to have been a huge influence on some very important people. So how do I reconcile these things together?So that kind of led me into just understanding that you cannot really understand where you are now, let alone where you might be going in the future, unless you understand something about where all this stuff came from and how you got there. And then you are in a position to be critical of it. You don't have to be critical in the sense of saying, "Well, it's all rubbish"—although occasionally it's quite close to being rubbish. But you get to a point where you can say, "Well, this is a useful concept for this kind of situation, and I can see why it became popular, but actually it doesn't explain this kind of situation, and yet we're kind of acting as if it did." So that was how I got started, I guess. That was where the historical perspective came in. And it was by no means a case of, "Oh, isn't the history sort of quite interesting?" although it was interesting. The real fascination for it was it began to explain something about why we're doing what we're doing right now and put me in a position where I felt that we could take a more intelligent, critical attitude towards that. And that, I think, has sort of drove me ever since in terms of why I continued to find advertising fascinating over the following decades.Andrew Mitrak: So much of that also rings true for my own interest in marketing history. This idea of the way that I do my job and live my life and my whole organization, team, and industry is structured around things like a funnel. And who invented this funnel? Where did this come from? There is no funnel, it's just somebody's idea that caught on at some point. It's a useful way of thinking about things sometimes, and yet you can also get completely obsessed by it.Applying Historical Lessons to Modern AdvertisingAndrew Mitrak: As you were discovering Madison Avenue, U.S.A. and historical elements to advertising and looking towards the past, you were five to 10 years or so into your career. Did you discover things that made you think, "I wish I had found this sooner," or did it change the way that you yourself advertised or worked with clients or worked with others within your agency? How did it sort of inform your own practice?Paul Feldwick: It's a more complicated question to answer. I think it took a long time for me to fully process it, let me put it that way. Because of course, I was working in the world as it existed. So while I was beginning to become more questioning… there were always things that we questioned. I was working in an advertising agency, Boase Massimi Pollitt (BMP), back in the '70s and '80s. We were known as a very creative agency, and that, as you know, is a highly charged word which we might come back to later. But what we meant by creative was we did advertising that was, for the most part, very entertaining and therefore very popular, and therefore very successful.And we kind of quite profoundly believed that that was the best thing to do. And yet, there was a big disconnect between that approach and almost everything that you read in the sort of accepted texts about how you did advertising, which was all Rosser Reeves, Unique Selling Proposition, and Ogilvy saying, "Don't sing your sales message, selling is a serious business," and going back to Claude Hopkins saying, "Nobody ever bought from a clown." So there was always this real tension between what we were doing, what we knew to be effective or believed to be effective, and having to continually sort of push that against a sort of tide that came very often via our clients that somehow that was not what advertising was about. That advertising was about selling and giving people facts and giving people information and persuading them why this product was better than another in a very rational way. And this was the ongoing context in which I was trying to make sense of these things.And I guess it took me a long time to really put all that together in a coherent sort of way. And I guess the reason that I wrote the books was ultimately to sort of satisfy myself about how to make sense of that. And so I fully made sense of it, I think, only after I'd left the agency and maybe had a bit more not just time to reflect, but also a bit more perspective where I could look back on what I'd done.Advertising as science vs. salesmanship vs. show businessAndrew Mitrak: Two books that I read to prep for this interview that you're mentioning, there was The Anatomy of Humbug and then there's Why Does the Pedlar Sing? And for listeners of this podcast, they're both excellent. They're enjoyable reads; they're actually relatively short, but they're very dense in that they pack a lot, but also it doesn't feel like homework. It's a really fun, enjoyable, but also full of strategy. And so we're going to talk about both of them. There's the science element and the advertising as salesmanship element, but then there's more of like advertising as show biz.Paul Feldwick: Right from about 1900 onwards, advertising agencies were so keen to show that advertising was a respectable profession. And they wanted to distance themselves totally from the sort of the very earliest generation of brands and advertising, which was very much, you know, the traveling medicine show, the P. T. Barnum-type presentation. And they literally wanted to disown all that. In 1910, you've got the trade magazine Printers' Ink refusing to celebrate the centenary of Barnum's birth because they said he stood for everything that was sort of vulgar and disreputable and appealed to the lowest instincts of the public and all this sort of stuff. They absolutely hate Barnum.And no, instead, from that point on, the advertising industry wants to present itself as professional. They literally want to be taken seriously like doctors or lawyers. So, the last thing they want to do—and this is the Catch-22 in it all—is that if you do start from a point of view of saying, "Actually, advertising has a great deal in common with entertainment," then some clients are going to put two and two together and start saying, "Well, why the hell don't we just hire some entertainers then?" Which in many cases would be a very clever thing to do, and in some cases has indeed been done and has been a very clever thing to do.You look at the history of advertising—and this isn't in the book, by the way, it might be in the next book if there ever is another book, which I'm not sure there will be—but if you look at the history of advertising in the 20th century, you'll find people like George Lois, very famous names, and you look at what ads they actually did, and you find, well actually, they didn't do very many actual ads at all. They did some other clever stuff, and they were great at selling themselves, but they didn't do great ads.Then you can look at another character who's not mentioned in any of the advertising histories: Stan Freberg, who is a very famous, very funny entertainer and comedian in the mid-20th century, in the '50s and '60s. Stan Freberg wrote loads of ads. He was a great friend of Howard Gossage, who got him some of the gigs. And Freberg would be brought in by agencies like BBDO when they were absolutely stuck. But it was always a really difficult relationship because Freberg wanted to do this wild and crazy stuff which was usually incredibly successful and very entertaining. And a lot of it still stands up today. A lot of it's actually, by modern standards, rather politically incorrect today, but that just shows how times have changed. But also how sort of irreverent Freberg was. He was taking the mickey out of things. But nobody talks about Freberg in the history of advertising. It's like there's this sort of unspoken turf battle that I think has always been going on, which is advertising can only be done by these people who are advertising creatives, advertising experts. And if we allow any of these entertainers in, it's got to be entirely on our own terms so that we can control them.And that's not the only way of doing it. A lot of great advertising has been done by people who work in agencies who just happen to think like entertainers, like the great Tom Webster, who I used to work with. But I think the advertising industry, to some extent, has dug itself into that hole by insisting that what we do in advertising is different from entertainment. And actually, it's a lot more like entertainment than they are prepared to admit.Did Claude Hopkins Follow the Advice of “Scientific Advertising”?Andrew Mitrak: That's a really interesting idea. I hope you do write that book; I'd read it. The idea that a lot of the most well-known advertising people of the 20th century didn't even write that many ads, or also that they didn't always follow their own advice. The ads that Claude Hopkins' agency ran, sure, they did a lot of direct response ads like what he wrote, but they also did other types of ads that probably broke a lot of his rules. And I'm sure the same goes for Ogilvy and so on.Paul Feldwick: That's true. I mean, I make the point in The Anatomy of Humbug. Hopkins is a fascinating character because he wrote his book Scientific Advertising, and it's partly written because he knows what his clients want to hear. And he's saying, "It's all about, don't be frivolous, nobody ever bought from a clown, the more you tell, the more you sell, give lots of facts about the product." And in a lot of contexts, this works really well, and he knew how to make it work really well.But then if you read his own autobiography about other things that he did, he could work in a completely different mode. He was hired to promote a brand of suet for making cakes. And instead of doing adverts at all, he got a baker to make the biggest cake in the world and put it in the shop window of the biggest department store in Chicago. And the police had to be called to control the crowds, and it got on the front page of the newspaper. I mean, it was pure Barnum. Pure Barnum stunt. So, Hopkins had more than one string to his bow. He understood the show business aspect just as well as he understood... and it's not that one's right and one's wrong. They're both things that can be done well or can be done badly, and they're both things that can achieve results.But probably, particularly as the 20th century moved on, and as media moved more and more beyond simple text to photography and color printing, and then into radio, and then into television, and then into color television, and now, of course, into the internet and TikTok and whatever else, I think it's progressively moved further and further away from the dominance of text-based, rational facts. There's still plenty of place for those, but it's progressively moved more and more into what advertising does.And this is where the work of Byron Sharp and The Ehrenberg-Bass Institute I think is hugely important and relevant. It is ultimately probably about creating mental availability as much as anything else. And that is very powerfully done through using entertainment.What is “The Anatomy of Humbug”?Andrew Mitrak: Let's talk about The Anatomy of Humbug. I suppose for listeners, we should probably define what "humbug" is, because it may not be obvious. It's a book where you almost get to the 10th chapter before you're like, "Oh, I actually get the title now." It comes from P. T. Barnum, this figure that the ad industry has sort of distanced itself from. Can you share why you think it starts with P. T. Barnum, and "humbug" is the word that you sort of anchored to?Paul Feldwick: You were interested in how I chose the titles of my books, I think. When I had the idea of calling this, after I'd finished writing the book, "humbug" sort of emerged towards the end of the process, actually. That's why it doesn't really come in until the end. I decided to call it The Anatomy of Humbug because I just thought it had a ring to it, and also there was something subversive about it. The idea that advertising should be considered as "humbug"... there's something sort of disrespectful about that, that's really going to annoy an awful lot of people who work in advertising who just take it all too bloody seriously. You know, "Oh, we're not humbug, we're..." this whole thing about advertising.And in fact, a number of people who I respected a great deal sort of gently, or not so gently, tried to persuade me not to use that title. Jeremy Bullmore said, "Oh, I'm not sure I would use that title." Paddy Barwise, professor at the London Business School who was very kind about the book, said, "One thing I think you really shouldn't do is use that title." So this made me actually more and more inclined to use it, because I thought, "Well, I quite like to be controversial.""Humbug," essentially, is a rude word. You remember probably the most famous example of its use, which goes back to the early 19th century, is in Dickens's A Christmas Carol.Andrew Mitrak: That's the only use that I was familiar with. Prior to reading this book, I had only heard it from Scrooge.Paul Feldwick: You need to put that into context to understand what it means. Scrooge is being asked for a charitable donation because it's Christmas time. And Scrooge says, "Christmas! Bah! Humbug!" I think at that time, it means "nonsense," it means it's some kind of a cheat or a fraud. I think you have to understand that at that time, the word "humbug" probably had the same sort of power that a word like "bulls**t" would have today. It's a rude word. Scrooge is being memorably dismissive of the whole thing about Christmas. He's saying, "Christmas? Bulls**t!"And the same word was... now if you've seen The Greatest Showman, which is a very unhistorical movie about Barnum, but it does get this sort of quite close to right, Barnum had a lot of critics, and one of his sort of arch-enemies described him as a "humbug." And that was meant to be damningly rude in the same way that Scrooge was being damningly rude. But Barnum, of course, being Barnum, saw how he could take this, turn this to his advantage straight away. So Barnum said, "I am not just a humbug." He said, "I am the Prince of Humbugs." And he gloried in this word "humbug."He then went on at some length and wrote a lot about what he believed "humbug" really was. And he quite cleverly defined it in a way that sort of meant, "Yes, of course, it's nonsense. Of course, it's not literally true. Of course, there's an element of make-believe about it all, but it's not actually deceit because I'm not trying to fool people, I'm not trying to trick people." And he says, "Humbug is about putting on a show. It's about attracting the crowds. It's about giving people, promising people whatever they want, but then make sure they get value for money."So it was in that spirit that he tried to reclaim the word "humbug." And he used it and sort of gloried in it all his career. And it was when I read more about Barnum and I started to think about how Barnum, who had been so disowned by the advertising industry, was in fact, in many ways, where so much of what not just advertising, but the whole phenomenon of brands as we know them, derives from the activities of Barnum, that I started thinking, "Actually, in the same way that Barnum did, I can be a bit provocative here by using this word 'humbug.'"And saying, "We argue about, is advertising science? Well, up to a point. Is advertising art? Well, that doesn't quite sound right either because 'art' sounds far too grand. But maybe advertising is best thought of as humbug, in the sense that Barnum used it." There's a wonderful book called Fables of Abundance. By Jackson Lears, who's a sociologist, historical sociologist, who's written a wonderful book about advertising called Fables of Abundance. And his whole story here is about how this sort of original carnival world of Barnum became disowned by the advertising business. And he totally backs up everything I've been saying from that point of view. He's not the only one.So that was how I got it. And I have no regrets about choosing that because I think it's passed into the language a bit and probably, I think, shaken things up a bit, which is what my intention was.Six Models of How Advertising WorksAndrew Mitrak: So Humbug, the book, is not just about “humbug.” It does actually cover a lot of the historical thinking around strategy in advertising as well, and sort of different modes of thinking about how advertising works. I think you map out six of them. There's Salesmanship, Seduction, Salience, Social Connection, Spin, and Showbiz. So they all start with "S," and Showbiz is the one that's probably the most reflective of humbug.Paul Feldwick: That's right. And I mean, I wouldn't sort of... I don't really disagree with anything I wrote in that book now, but I think my thinking sort of continued to build on that. Some of those strands now seem to me perhaps more important than others, although I think they are all important in their way. But I had to tell this story because it really seemed to me this story had never been told before. And I think at the time I produced the book, that was true. Paddy Barwise, who wrote a nice review of it, and he, as professor of advertising at the London Business School, so he knew a bit about it, said he'd never heard this story told before in quite such a clear way.And I think it was the whole area of things that people would not dare to talk about somehow, these contradictions that were not acknowledged, so just surfaced all the time as continual arguments within agencies or between agencies and clients. So often in an agency, you'll be sitting around a table and the client is saying, "Well, we've got to have these three product points in the ad." And the creatives are saying, "No, you don't want any of that. You just want this picture of a purple elephant on a bicycle." And they're kind of talking about completely different things, and they're never going to resolve that or make any sense of that unless they realize that they're both talking about just completely different theories about how the advertising is supposed to work. And it's not necessarily that one is right and one is wrong, but you know, they're both techniques that you can use to try and achieve your goals. And it's a question of which is more appropriate in the circumstances.Andrew Mitrak: The thing that you... the analogy you use is that it's a six-sided die, or you even use this analogy of a Rubik's Cube, that they're sort of interlinked with each other and they can have sort of different makeups. But on the one hand, it seems like if you kind of go purely trust the creatives, that's a pretty high-risk scenario, right? Like they might get it totally wrong or choose the wrong celebrity endorsement or entertainer that just is a miss. And then on the other hand, if it's over-engineered and overthinking, it's too sterile and it's just too bland. And then if it's a mix of both, there's also risk with that too if it kind of strikes the wrong tone or it feels like, you know, sort of the... a camel is a horse designed by a committee kind of thing. And it's funny, like how do you... how do you sort of think of these as fitting together? Okay, there's all these things exist. Now what do I do about that?Paul Feldwick: It's a subtle one because I think to some extent, I mean, I came up with these six things. And as I said at the time, there could probably be more than six if you thought hard enough about it, but six gives you a nice sort of visual image that you can hold on to, which is always slightly dangerous because it makes you think there's some sort of objective reality here which is more solid than it ought to be considered to be. But a number of these things, they do overlap quite a lot. So in The Anatomy of Humbug, I talk a lot about the idea of seduction because at the time, the debates at the time were largely around the notion of subconscious seduction versus rational persuasion. And that's still, I think, a valid and interesting way of thinking about it. But then there's also, you can make it simpler than that and simply say it's about salience and top-of-mindness and mental availability, which has now become a more dominant theory. And perhaps we're sort of tending to forget about the seduction theory as well.Why Creative Advertising Must Please the PublicPaul Feldwick: What do you do about it in practice? That's complicated too, because you say, "Should you just trust the creatives?" Well, again, that depends, because it depends what the creatives are trying to do. And the other big issue, which I explore at much greater depth in Why Does the Pedlar Sing?, is that within the last few decades, I fear it's becoming increasingly the case that creative people in advertising agencies are no longer focused on producing stuff that pleases the public, but are producing stuff that pleases each other and which wins them, therefore, creative awards or appeals to some sort of higher-order concept like "purpose," which is controversial, to say the least. And whenever it loses sight of, "We are trying to be popular and famous and please the public," there is danger that we are producing something that is irrelevant.So, I came from an advertising agency background where what pleased the public was central to what we did. And that was true in a very practical sense because we continually did qualitative research amongst our target audiences. And every TV campaign that we did, we would research amongst focus groups of target audience in animatic format, which was as close to the finished film as we could get. And we learned a tremendous amount from that. And what you learned from that continually was it doesn't matter who likes it, whether the client loves it or the creative director loves it or what anybody in the agency or anywhere else thinks about it. The only thing that matters is if you show it to a bunch of ordinary people and if they all look blank and say, "I don't understand what that's all about," then it's failed. And sometimes you can solve that by just changing things around a bit, and sometimes, frankly, it's best to just kind of say, "Okay, we're barking up the wrong tree, we'll do something else."But unless what you're doing is anchored in trying to produce work that is genuinely popular. This is why, again, the world of show business, the world of entertainment is such a good sort of parallel for advertising because on the whole, nobody pretends that it's a successful piece of entertainment if nobody likes it. I mean, it may only appeal to a small group of people. Some things are more popular than others. Some things appeal to a small group of, you know, an elite middle-class group, others are more popular. But on the whole, if you want to be Taylor Swift or you want to produce Friends or The Simpsons or a Pixar movie, there's not much messing about. Its success is measured by the number of people who enjoy it and want to be part of it. And that is part of what constitutes its fame, although the fame also is part of what constitutes the enjoyment. So those two things go together.And that's exactly the same thing with brands and with advertising and the marketing of brands, I think. So, the more any agency loses touch with that and sort of privileges, "Oh, this is a great ad," even though none of the public are clever enough to appreciate it, that's pretty much of a nonsense in my book. And that's where I feel a lot of the problems have crept in.Fame and Popularity: The True North Star of Marketing?Andrew Mitrak: Following up, you're talking about this idea of fame and popularity, and this is a big theme throughout Why Does the Pedlar Sing? You talk about some of the sort of behavioral science and scientific background to it. You talked about Byron Sharp and the Ehrenberg-Bass Institute, and they call this "mental availability." Daniel Kahneman calls it the "availability heuristic." Robert Cialdini, who I interviewed on this podcast, he calls it "social proof." And then Jeremy Bullmore, he says, "We value the famous far more highly than the little known."It almost seems sort of obvious in a way, but also something that... like at a marketing department, I never say like, "Let's just make our product famous." We always try to say, "Oh, we'll generate this many leads and impressions and measurements and conversions," and we talk about other things and don't just simplify it to fame. And it strikes me, is that something that folks in marketing and advertising should be doing more often? Is just saying, "Hey, let's simplify these complex theories and just have fame and popularity be our North Star?"Paul Feldwick: Well, fame is hugely important. I mean, I think it is, as Jeremy said... I mean, Jeremy was one of my great role models in the advertising world, sadly no longer with us, but whatever I've said, I've usually found that Jeremy said it 20 years earlier than I did and in far fewer words. But he did say that thing about, "All that brands have in common is a kind of fame." And I use that in the book because I think he's absolutely right.But apart from that, it's actually quite rare to find people in advertising talking about fame. I mean, I've looked through all my advertising textbooks and looked up "fame" in the index. You don't see the word "fame." And I think it's, again, a bit like Barnum, it's a slightly suspect word. It's a bit cheap, it's a bit vulgar. What is interesting to me, one point I'd like to just stress while we're on this, is I think mental availability and fame are concepts that go very closely together, but there's a crucial difference between them. Because mental availability, as Byron Sharp defines it, I think is a useful concept, but essentially, it's talking about something that goes on in an individual's head. It's a psychological concept. You measure it by saying, "My mental availability..." it's what is top of mind in my mind.Whereas fame, I think, is primarily actually a social concept. It's what's happening in society at large. Now, part of that is everybody will have a lot more mental availability because this thing is famous, but what keeps it there is the fact that we are sharing it. It's a socially constructed thing. We all have common knowledge. Not just that I know about this and you know about this, but I know that you know about this. That's common knowledge. That's really important. And also that we are in all sorts of ways jointly involved in engaging with this. So we'll talk about this, we'll argue about this. Controversy is good, Barnum knew that. We might be wearing this, we'll have the logo on our t-shirt, we'll have the Apple logo on the back of our MacBook so that when we're sitting in the coffee shop, everyone can see that it's that. We've got the white earphones, which everybody still knows who makes them. All these things are really important. They're the social aspect of what creates fame. And that for me is what makes fame as a concept sort of substantively different.And again, if you look back at the whole history of the sort of practitioner theories of advertising, I think overwhelmingly from about 1900 onward, they have tended to be based around an assumption that it is a one-to-one communication. That here is the advertiser who is communicating with the prospect who is reading the ad or listening to the ad and then is being asked, "Do you remember the ad?" And it's all one-to-one. And actually, successful advertising campaigns do so much more than that. They don't just work on a one-to-one basis, even if they're working on one-to-one with millions of people. They are producing things like catchphrases which pass into the language. You know, "Got Milk?"... catchphrases like that pass into the language and they become shared, and then they take on a life of their own. And that is so much what I think advertising should be focusing on. It's not just, "How do we influence one person?" but "How do we influence people en masse?"The Perils of Personal Fame vs. the Power of Brand FameAndrew Mitrak: Something I'm thinking about also on, “how do we influence people en masse?”. If I were to apply this to myself and this podcast, I don't want to be famous. I don't want to be Taylor Swift. A marketing history podcast would never be the top number one on Spotify. And also, it seems kind of miserable. The people who try to be at the top of those things sort of game it. It's very… you mentioned how it can be crass to be famous. You have these very silly YouTube thumbnails, and you have short things, you're saying provocative things that don't always make sense. I'd much rather just have respect among my peer group and think, "Oh, that person speaks to intelligent people, he asks smart questions, I've learned something from that." And it seems like there are a lot of brands that might feel the same way about their products.Paul Feldwick: I guess so, but personally, I'm very sympathetic to what you've just said. I only want a very limited amount of fame myself. It seems to me that to be a genuinely famous person and carry it off sustainably over a long period of time requires either some fairly heroic qualities of endurance and courage or possibly some sort of borderline psychopathic tendencies. You can think of examples for yourself.But I think there is a difference between a brand and a person. As a person, that's your life. If you want to be a globally famous person, that has probably huge rewards and excitement if you're that way inclined, and it has huge drawbacks as well, potentially, and not everyone can handle it. A lot of people burn out and have terrible experiences as a result of it. But a brand is not a person. I mean, brands in many ways are like people; they are in many ways like celebrities. But the crucial difference is Coca-Cola is not a person. Even Tesla is not Elon Musk, although that's getting a bit too close for comfort. But the two are technically different, and it's only bad management that would enable one to drag down the other.A brand is something that exists independently of that. So if you are managing a brand for commercial gain, then on the whole, the more demand, the more fame you can create, the better. Yes, you might not want to be a worldwide brand; you might be happy running a coffee shop with one branch that happens to be the most successful coffee shop in Frome, and you might not be ambitious to do anything more than that. But even so, within that limited scope, probably fame is of some benefit.But it's brands at that level—the coffee shop with three branches—it's not on the whole what our conversations about advertising and marketing are about because that's not where the numbers are. We are talking on the whole about brands where bigness is better. It is a numbers game; it is about scale. Coca-Cola is a better brand than Pepsi because it's bigger than Pepsi. These are sort of truths that tend to get forgotten. The late Andrew Ehrenberg used to have a wonderful way of saying, "If your brand is so strong, why isn't it bigger?" which people never could come up with a very good argument.Andrew Mitrak: Hard to argue with that one.Paul Feldwick: So it's about numbers, fame, and on the whole, a £3 billion brand is better than a £300,000 brand.“What Is Brand Equity, Anyway?”Andrew Mitrak: Speaking about brand popularity and, "If your brand is so strong, why isn't it bigger?" You write a bit about the 1990s when brand equity became a buzzword, and I've actually interviewed David Aaker. In fact, I've now recorded two interviews with David Aaker, who's probably the individual who's most responsible for popularizing the idea of brand equity. I don't think he actually invented it, but he definitely wrote several popular books about it and has continued to champion brand equity. And then you wrote a book on brand equity called What is Brand Equity Anyway? I haven't read this one yet.Paul Feldwick: I would say it's not nearly as entertaining as the other two. It's a much more serious work, but it's also a critical work because that book is a collection of essays or papers that were published separately, and I just kind of assembled them. The paper that it's named after, "What is Brand Equity Anyway?," I wrote in about 1996. So that was kind of in the wake of... and it's very precisely around 1991-92. Aaker wrote Managing Brand Equity in '91, so he was very much... he must have bashed it out pretty quickly to hit that trend.Andrew Mitrak: I think he saw it at a conference in ‘89 or so, wrote academic papers on it, and then published Managing Brand Equity shortly after.Paul Feldwick: Very precisely, there was a Marketing Science Institute conference in 1988, which I think put brand equity on the map. It hadn't really been in existence until the mid-80s, I would say at the earliest. This was all in the wake of various controversies about mergers and acquisitions and how accountants dealt with this concept of goodwill and so forth, and it kind of grew out of that.My take on it was critical to the extent that although everybody talked about brand equity, it seemed to me that it meant a number of different things, and I was never quite sure which one it was meant to mean. Was it actually the value of a brand, the financial value of a brand? And if so, how do you arrive at that? That's a whole area of controversy in itself. Or is it about some concept of brand strength, coming back to our Ehrenberg quote? How do you measure that? And if your brand is so strong, why isn't it bigger? There are ways you can measure it, but they're all different. Or is brand equity actually about something more descriptive? Is your brand equity to do with what you stand for? Or is it to do with your distinctive assets?All these different concepts are sort of vaguely thrown in together, and a lot of people were trying to make sense of them by rolling them into a ball, sticking them all into a PowerPoint chart, and adding some arrows or something and saying, "Look, that's brand equity." But actually, it didn't really solve those intellectual problems; it was just totally fudging the issues. And I think we hear a lot less about brand equity now. It was the buzzword of the 90s, and it's rather faded from view, and a lot of those issues, I think, are of less interest to people now, but they have some interest.Building Brands Like a Bird Builds a NestAndrew Mitrak: What's interesting though is that when brand equity emerged, it did seem to shift the conversation about brand and branding in general. From what I can tell—I was born in 1990, so I wasn't alive for many things before this—but it seems like "brand" was not as much of a strategic term as it was after brand equity. And now, a lot of the ideas of brand equity are just kind of rolled into "brand," and it's brand image, brand positioning, and so on.Paul Feldwick: I think you're right. I think you're absolutely right. The positive thing about that whole brand equity mania is that it did refocus people on the fact that there really is a value in brand names, and there's a way of thinking about brands which is greater than just the short-term sales issue. And that was not totally original, because that quote... it was so well put, it's never been better put than by that quote from the chairman of Quaker Oats, which I actually managed to trace back was probably said over a lunch back in the 1930s: "If this business were to be broken up and I was to take the trademarks and goodwill and you were to take the factory and all the stock, I would do better than you." That puts it so clearly that that's what brands are all about.“If this business were split up, I would give you the land and bricks and mortar, and I would take the brand, and I would fare better than you.”-John Stuart, Former CEO of Quaker Oats (Early 1930s)Andrew Mitrak: This was John Stuart of Quaker Oats.Paul Feldwick: John Stuart was his name, that's right.Andrew Mitrak: It's such a great quote. It sounds a lot like brand equity, and here it is in the 30s that you traced it to.Paul Feldwick: Somebody just waited another 50 years for somebody to come up with the expression "brand equity." But what I find less positive about it in terms of its legacy is that it left everyone with this idea that a brand was something somehow mystical, and every brand has an "essence," and every brand is based around a big single idea. Or, more recently and even more contentiously, every brand is built around its "purpose" and all this stuff about Jim Stengel and the power of "why," which I don't really want to get into now because we haven't got time.Other people have taken that apart much more eloquently than I probably could, but I do think that is, on the whole, completely missing the point. And again, in Why Does the Pedlar Sing?, I try to spell out what I think brands really are all about. They do not grow out of some mysterious essence or single idea. They grow over time out of their gestures and their responses to what happens to those gestures, by building on… again, Jeremy Bullmore probably said it better than I did many years previously; he said something about, "Brands are built the way birds build their nests, out of bringing lots of twigs together." And if you want a metaphor, it's more like that. They are accumulated over time, but what is essential for them is really just the energy and a certain degree of consistency, but mainly consistency around the very tangible things, like distinctive assets and logos and characters or whatever and names. It's much less mystical and it's much more concrete than the general discourse usually allows for.The Pixar Model: “It’s Art, But It’s Popular”Andrew Mitrak: As we move towards wrapping up, I want to come back to an idea you were bringing up earlier. The crux is this idea of humbug or showmanship, and then there's all the marketing and advertising literature of building strategies, doing measurement, salesmanship, seduction, salience, social connection. An idea that I have is that if you want to follow any formula of how to win a client and come up with a campaign or market a product, if you follow all of that, you can probably be relatively mediocre or maybe even slightly above average if you just follow the stuff to a T in a formulaic way. But if you want to have a truly great campaign, a Barclaycard-style campaign, a campaign that's really memorable, there's just some certain quality to it that might be showmanship or some level of creativity that's just not something that fits neatly into any formula. There's some element of the unexpected to it, some element of luck, some element of the cultural zeitgeist that is probably not going to ever be captured into one model. To have a great campaign, there's just some level of happenstance to it that's really hard to quantify or put into some framework in advance.Paul Feldwick: Yes, up to a point, but I'd just qualify it slightly. There always is an element of luck or happenstance. But that doesn't really get you very far, and it's not really what anybody wants to hear. It's just the truth. The more practical question is, what can you do to maximize your chances of getting lucky, if you like?And again, there is no simple formula because we are in the whole realm of aesthetics, which is another word that nobody wants to use or confront, if you like. But again, I just come to say, if you think of making a great ad campaign as the same kind of challenge as making a successful Pixar movie... I mean, one of the best books about creativity from that point of view is Ed Catmull's book about how they do it at Pixar.Andrew Mitrak: Creativity, Inc., it's one of my favorites.Paul Feldwick: And you realize when you read that, it is not like they all sit around and go, "Hey, let's do a film about toys! That's the big idea!" and suddenly it's all there. That's not important at all. What actually makes the difference is a fantastic amount of grunt work that puts together how every detail of this product fits together into a whole that is aesthetically successful. In their case, that means the characters, the dialogue, the drawing, the visualization, the songs, everything. And an army of people are involved. On that level, this is a much more complicated thing than even the most complicated 60-second advert, let's face it.But what it requires to produce quality is an ability to focus on how that's going to work and work together to achieve that. Another thing you notice in Catmull's account of how they work at Pixar is they do not, on the whole, say, "It has to be like this because," or, "Well, if it's not going to be like that, I'm not working on it, so I'm going to go." People don't engage in fight or flight. They are going to have to engage potentially in conflict. It may be a lot of discomfort, but their protocols that they try to stick to are: you stay in the room, you try to be honest with each other, and you try to advocate what you believe is right but also continue to listen to what the other people are saying and stay in the room until you come to some resolution that you all feel happy with.If ad agencies and their clients were better at doing that collectively, they would have a better quality of output. And that's really all it comes down to. That's, I think, the crucial factor. So again, there are huge lessons to be learned from the parallel processes that are going on in the entertainment field. And that's as close to a formula for it as you're going to get.Andrew Mitrak: That's right. I love that book, Creativity, Inc. by Ed Catmull. I actually, prior to being a marketer, did filmmaking, and I think that was published around 2010, 2011 [Note: I am incorrect here. It was published in 2014], and Pixar was, for me, at its peak right then. If you think of their movies that they just released: they'd released Ratatouille about a rat in Paris; WALL-E, where the first 20 minutes is almost a silent film of a robot that's alone; and then they released Up about an 80-something-year-old man.If you thought of focus-group testing those, you wouldn't think that a rat in Paris, a silent film starring a robot, and a movie about a grumpy octogenarian would test well and be big box office hits. And yet, some creative something, their process, they were able to create both art, but it is also very popular.Paul Feldwick: And that's the key thing. It's art, but it's popular. The agency that I used to work for, at its best, that's exactly what we did. And we weren't the only ones. There were other agencies who worked in different ways who also achieved that: Collett Dickenson Pearce, and DDB at their best, and so forth. It can be done.Where to Find More from Paul FeldwickAndrew Mitrak: As I'm wrapping up here, I didn't mean to plug somebody else's book, Creativity, Inc.Paul Feldwick: Oh, I'm very happy to plug that one.Andrew Mitrak: But I also wanted to plug Anatomy of Humbug and Why Does the Pedlar Sing?Paul Feldwick: [Holding Why Does the Pedlar Sing to the camera] This is the one I guess I'm still more excited about.Andrew Mitrak: It's great. I liked them both. It was actually grea... I read them almost as one book. As soon as I closed the cover of Humbug, I went right on to Pedlar, and they flowed together really well.So listeners, if you like this podcast, definitely check those out. They're fun reads, highly recommended. Paul, I really enjoyed this conversation. Aside from those two books, are there any other places you'd point listeners to if they wanted to read your work or find you online?Paul Feldwick: Those two books are probably the best of me as far as all this is concerned. If you're real nerds, you can find other bits of video online, but stick to those books and you'll get most of it.Andrew Mitrak: I will also plug... I'll drop a link to your TEDx talk that you gave.Paul Feldwick: Actually, that is a good one. And although that's 15 years old, I still think that is a good TEDx talk.Andrew Mitrak: And you bring up the idea of aesthetics, which you very briefly mentioned on here, but that's another interesting topic.Paul Feldwick: That's the one area I would explore further if I were to write another book.Andrew Mitrak: Well, I hope you do. Paul Feldwick, thanks so much for joining me. I've had a lot of fun.Paul Feldwick: Thank you for having me. This is a public episode. 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A History of Marketing / Episode 29I’ve made an oversight that needs correcting. For a podcast about marketing history, we've almost exclusively focused on consumer brands. We’ve barely touched on business-to-business marketing, even though B2B makes up a larger sector of the global economy.In marketing textbooks and industry coverage, B2C campaigns tend to grab the headlines while B2B marketers work behind the scenes. It's ironic this podcast would have the same bias, considering I've spent most of my own career in the B2B world.So today, we’re diving into the side of the industry I know best. It’s the engine that markets everything from jet engines to the datacenter chips powering the AI revolution, all the way down to the glass on your smartphone. How did B2B marketing evolve from a sales support function to a sophisticated field in its own right?To explore this history, I'm joined by one of its pioneers, Waldemar Pfoertsch. In the 1980s, Pfoertsch helped establish the first marketing department at the German industrial giant Siemens. Pfoertsch explains this was when the term "marketing" was new to the B2B world. He co-authored B2B Brand Management with Philip Kotler and is now at the forefront of what he calls “H2H” (Human-to-Human) marketing.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsHistory shaped Pfoertsch's career. He studied economics in a divided Cold War Berlin, worked in a socialist margarine factory in Poland, and consulted for companies in the former Eastern Bloc as they navigated a turbulent transition to capitalism.In this episode, you’ll learn:* Case Studies in Industrial Marketing: How companies like Saint-Gobain (founded 1665), Siemens (founded 1847), and IBM (founded 1911) marketed their industrial products* Ingredient Branding: The story behind "Intel Inside" and the sophisticated B2B2C strategy that can make a component more famous than the final product.* A Cold War Perspective: What working in a socialist factory revealed about the flaws of a planned economy and the power of market systems.* From “Industrial” to “B2B”: How the term B2B became, in Pfoertsch’s words, "a sexy one" compared to the older "industrial marketing."Note: A special thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Waldemar Pfoertsch, welcome to a History of Marketing.Waldemar Pfoertsch: Hi Andrew, I'm very happy to be here.Andrew Mitrak: Me too. So we have a lot to cover: B2B brand management, ingredient branding, and H2H marketing. But before we get into all of that, I want to hear about your background. When did you first become interested in marketing?Waldemar Pfoertsch: The first time I really did marketing was in 1984 when I worked at Siemens. At that time, they didn't have a marketing department; they didn't have the term "marketing." And one professor, Professor Backhaus, a B2B professor, came to Siemens and said, "Hey, you have to think of marketing."That was actually the time when marketing spilled over from the U.S. to Germany. For B2C (business-to-consumer), it came a little bit earlier, and in the early '80s, B2B marketing came to Germany. So, we established in that project the first marketing department at Siemens.Siemens is a large electrical conglomerate, and I was in strategic planning at that time. We were responsible for that project, so that was the first time marketing came to a German B2B company.Andrew Mitrak: I have to ask, just how did you set that up? How did you set up a marketing department at Siemens?Waldemar Pfoertsch: Well, Siemens is a conglomerate, similar to General Electric (GE). Actually, today it's larger than General Electric, and we always looked up to General Electric. Now we are looking down, which is not good. But nevertheless, at that time, the selling was done through sales. Marketing didn't exist. There was technology and the salespeople, and nothing in between. The knowledge was with the salespeople.And the major insight at that time was, "Hey, the knowledge is not with the company. The core knowledge is outside. We can't do the right things." Only if the salesperson tells the R&D guys can they do the better things. And then we started thinking about marketing intelligence, gathering the information from the salespeople, setting up on each of the divisions one person who was the interface between the salespeople and the R&D and the manufacturing.It's not... I mean, R&D is very important, but you also have to know how to supply. If you don't have the products ready when they are needed... So that was the magic, and it really propelled Siemens to a different layer.Shaped by Cold War Berlin and the Eastern BlocAndrew Mitrak: Stepping back, before you joined Siemens, you studied marketing and economics at what in English is called the Free University of Berlin in the 1970s. And Berlin, by the way, is one of my favorite cities in the world to visit today, but you were there when it was a divided city, of course. And in some ways, Berlin was the epicenter, it symbolized this ideological conflict between communism and capitalism. Being there at that time in history, studying things like marketing and economics, just seems like quite the place to be. Did Berlin and the Cold War influence your perspective on marketing and economics?Waldemar Pfoertsch: Absolutely. I mean, that was mind-bubbling. This was really great, this situation. But I have to tell you, I did not study marketing. There was no marketing book, there was nothing there. I mean, there was business, and I actually studied economics and business; I have two master's degrees. And out of that, things developed.But let me give you a personal experience. I did a couple of internships during my study, and one of the internships was in Poland. So I worked in a socialist margarine factory, and I did all the things that were necessary to get the product out of the door and get it to the stores and the retail. But that was a pure disaster. I mean, there was no funding, there were no capabilities, there was no understanding. And the main problem of the planned economy was supplies. Do we have enough material to let the machine run? And if we don't have it, what do we do? How do we subsidize? It was a total disaster. And it was pretty clear that this kind of system has to go down. And it went down.When you look at East Germany, it was very good in the '60s and the '70s, but then when the digitalization or the electronic stuff started, they fell behind. They had some stuff in Romania, so the East Bloc did something, but in the '80s, they really fell behind. And that, of course, showed the superiority of other systems. But on the other hand, we also know that the new free market system has its flaws, too.From Corporate to Consulting: A Pivot to Post-Cold War EuropeAndrew Mitrak: Then you spent eight years at Siemens after your education, and then later you became a professor of marketing. I'm wondering how your experience in the private sector shaped your approach to being an academic.Waldemar Pfoertsch: Well, the work at Siemens was an extraordinary work, so that really shaped my knowledge. And that's why I'm still a B2B guy. I come from the B2B world. But also, Siemens was an international company. They are in 190 countries of this world, so the interaction—the power plants, the automation equipment, everything went globally. And that is something which is very different from a consumer market perspective. So the industrial part really shaped myself.After Siemens, I actually started a consulting company in Chicago for bringing German or European companies to America. But unfortunately, that was 1990-1991, when the Eastern Bloc opened up. So nobody from Europe was going west; they were all going east.So I did a first study trip with Kellogg students to East Germany, and when I came there, I saw the opportunities and the need for bringing knowledge to the new territories. So East Germany, the Czech Republic, Hungary, Poland, all these kinds of countries needed help. And I did a roughly 10-year consulting period where I helped many companies in East Germany and in Eastern Europe to restructure and become international.But you probably remember at that time, there was the collapse of Russia, the Soviet Republic. And then all the markets for the East European companies disappeared. So they had to do a turnaround and look to other markets—the U.S., the Asian markets. So that was also an exciting period of time.Andrew Mitrak: That’s astonishing that you were educating companies in the Eastern Bloc that had grown up under communism, then suddenly needed to adapt. Do you have any favorite stories of people you met or companies you worked with at this time?Waldemar Pfoertsch: I mean, there are good stories and not-so-good stories. I worked for Adtranz, which was a train manufacturer. They took over the East European train manufacturing, and that became Bombardier today. So that is a super success story, where they used the technology and all the people, the knowledge, and created a new company out of that.But unfortunately, most of the East European companies fell apart. And I actually had one very sad project where I had to close down a manufacturing plant of precious metal production with 15,000 people. And that was not fun. Number one, they didn't see why we have to close it down. Number two, I could not sell it because everybody wants them to go down. So all the Western companies were saying, "Okay, we're going to destroy that. We want to have our own dominance." And it was so difficult at that time. And there were more of them. I mean, lots of knowledge was destroyed in that period of time, because the approach chosen in the various countries was did not suit too well. Hungary did a good process, where they said, okay, we don't close any companies, we just give the access to capital, and when you have capital access, you can actually make management decisions. Czech Republic was in between, Poland had a special solution, and then we had the East European, which were the East German one, which was the most the biggest market, and most of the East German companies got destroyed. On various reasons, of course, some of them became manufacturing places for other companies. I mean Mercedes-Benz now, the old Dam had various places there. But it is more a sad story than a good story.Andrew Mitrak: Well, thanks for sharing that with us. It is a moment in recent history. That is just astonishing that all of that took place, that transformation took place.Waldemar Pfoertsch: Yeah, but you also need to remember the downturn of the Soviet Union. I mean the Chicago Boys didn't do a good job. They had an idea, but the country was not ready. In 1994 and 1995, we had a huge, huge, failure in that area, and of course, they came back, and that is also an explanation why they are looking for leaders who are not putting money first. They are putting national things first, and we have to see. Stuff that develops out of certain activities, and now we have to deal with it.Andrew Mitrak: Yeah, that history is still unfolding and rippling.From “Industrial” to “Business to Business” to "B2B"Andrew Mitrak: Moving to B2B, you mentioned this, you said that you're a B2B guy. I've also spent my career in B2B marketing, and it's a topic that we haven't actually really focused on yet on this podcast. So I'm really excited to speak about B2B with you. You co-authored B2B Brand Management with Philip Kotler in 2006. And it sounds like this word, "B2B," was a new term at the time. It was previously more used as "business to business," all spelled out. Can you share more about the emergence of B2B marketing and what inspired you to write this book specifically on B2B brand management?Waldemar Pfoertsch: Let's go first to the term. "B2B" was used around 1998-2000 as B2B e-commerce. We had the first initial B2C e-commerce, the start of Amazon and all of that, and then the B2B companies started. And this term was clearly used only for e-commerce. People bought components, particularly C-parts, not the main stuff—not trucks, not other things, but small things. And that was the start. But the term was a sexy one. It really characterized stuff.So when we wrote the book, we said, how should we call it? The term which was used before was "industrial marketing." And the term "industrial marketing" does not have an appealing connotation. It is industrial, it's machinery, it's stuff like that. So when we decided on the title, and I still remember Philip Kotler was so strong on, "We need to use B2B!" So we did.But the reason why we wrote B2B... I was at Kellogg in 1990-91 in the strategy department as a visiting professor, and Phil was on the fourth floor, and we met various times on the fourth floor because there was always more life than in the strategy department. So I came to the fourth floor, and we talked and had joined activities and exchanged preparation for class and this kind of stuff. When I came to Germany and tried to understand what's going on in the market, of course, I had the knowledge from Siemens before, but I was teaching in southern Germany, which is actually the industrial heart. And what I saw was, these guys had no idea about marketing, and branding was not there. Of course, there was Bosch, the big guys. In Stuttgart, there was an IBM department and an HP and some other American companies. But the small and medium-sized companies, they were left alone. They had no approach on how to fight the big guys.All my students were going to try to go to Daimler and Bosch, but for the small companies hired them at the end, because there was a limited pool at the big companies. They came back to me and said, "Hey, what you told us, I can't apply it." So I said, "What's the problem?" So I had lots of theses and student papers, and all were about, “hey, we have no idea what to do."So then came the analysis: what is the issue? What is different between B2C marketing and B2B marketing? And it's pretty obvious.The Core Differences Between B2B and B2C MarketingWaldemar Pfoertsch: What is different between B2C marketing and B2B marketing? In B2B marketing, we talk about large products, expensive stuff, complicated technology, and international sales. We are not talking about individual personal purchases; we talk about group buying. We talk about long-term relationships. We actually don't talk about products; we talk about solutions. And you have to promote that differently.A TV commercial doesn't help. You need to bring the knowledge. You need to involve the guys. You need to actually develop the product together with your customers, and you need to understand the customers of the customers. So that kind of marketing was not there. And then, of course, the major deficit was branding. They used their name, they had a corporate logo, but it was just sitting there, and there was no brand ambassador. All this kind of stuff needed to be created.That was actually the reason why we wrote the book. There's another reason, Phillp, when he wrote his marketing management or the Principal of Marketing, he had some parts of B2B in there. But B2B and branding were not there. Finally, from that year, he had a chapter on B2B, and also a subchapter on branding. And that really changed the learning of the students; everybody who goes through marketing today at least knows that B2B marketing is different.Today, B2B management, B2B marketing, and B2B brand management are on the same level as B2C. So I'm pretty happy about what we have achieved.Andrew Mitrak: Yeah, absolutely. It's an area that has grown a lot in the last 19 years or so since this book was published. I'm frankly happy that you adopted B2B marketing as a tool. As a B2B marketer myself. I wouldn't feel as good if my LinkedIn profile said industrial marketing instead of B2B.Building on Aaker's Foundational Branding ModelsAndrew Mitrak: I did speak with David Aaker on a previous episode of this podcast, and of course, he's cited very frequently in your book, or his work is referenced. His work on building strong brands is a little more focused on B2C. I'm curious how your work, B2B Brand Management, built on Aaker's earlier models or how it differed.Waldemar Pfoertsch: I mean, David, number one, is a good friend. Number two, his concept is the basis of everything, so no doubt about it. But the situation in B2B is different. Let's talk about the decision-making process, the buying center. So we have somebody who says, "Hey, we need a new truck," or, "We need new equipment." That's most of the time, the user. Sometimes it's the finance guy, and he sees the economics getting out of control, so we have to do something. Sometimes it's the technology fellow who says, "Hey, we need to update."So there are various reasons why somebody wants to buy some new things in B2B. In B2C, it's different, right? You're driven by impulse, you're driven by innovation, you're driven by your neighbors, whatever makes you buy something new. In B2B, the main emphasis is you want to create value. And you want to create value for yourself, but also you want to create value for your customer. And therefore, you need to consider various aspects. In the buying center, there is not only the user, the decider, and the gatekeeper. They are also the people who see what it means for the overall thing, like the financial guys. And of course, the CEO, who has the overview, who sees, "Hey, I buy this, or I buy that, and I can have this?" So this kind of decision-making process is very different from B2C. It has the elements, and it needs a psychological consideration, because all the people, all the participants are people.So what Aaker has done is the groundwork for B2B, but the application is different. And of course, it's also continuously changing. So I always refer to Aaker when it comes to the basics of the principles, but there are also areas we need to adapt and areas we need to develop.He had a book on brand portfolio, which is the only book in the market, but there's much more to do for this area. So that's another project. which has to come up because in B2B brand portfolios is becoming so important. There are various examples where companies are adding various brands because now, without a brand, you're not something. In the old approaches, in the Siemens, the IBM, you try to integrate. General Electric took the brand away, took the assets, brought it out, was super successful. 10 years ago, GE started to keep the brands. Siemens is doing a different way. They're spinning off the brands and concentrates. That kind of portfolio management needs new consideration. So there is more to do in B2B brand management.Can Brands Transition from B2C to B2B?Andrew Mitrak: Do you have any favorite examples of B2C brands that successfully expanded to B2B or vice versa? I'm always curious about how brands exist in both or use maybe their awareness in B2C to build their B2B marketing. What are some examples of companies that have crossed over?Waldemar Pfoertsch: The classic example is GE. I mean, from the light bulb to the fridge to the power plant. But today, GE doesn't have appliances anymore. They sold it off. The brand is still there, but you know, some other companies are running it. The same with Siemens. They had the refrigerators and the other appliances. They sold it off. But they went through this development and concentrated.We have actually a very interesting new development, which came with the digitalization. Most of the big digital companies started as B2C Company. When you look at Amazon, it was a B2C company, and today, it's a cloud company, and by the way, Amazon Business is now at 200 billion. It's already a big one. It's the same with Microsoft. They started as a computer company or a software company for PCs. Now their company will cater to the corporate. So the digital companies expanded from the B2C approach to the B2B approach, and it's clear because B2B is actually more than B2C. We have the government markets, as part of B2B, we have education, we have health. So there is consumer market. The example, what I normally take is when you sell an Airbus, you probably have to sell 100 million T-shirts to consumers just to show the importance of B2B.Ingredient Branding: Differentiating Products with B2B2C MarketingAndrew Mitrak: This is one of my favorite sections of the book, is on ingredient branding. I've always been fascinated by this topic because it involves multiple companies navigating joint positioning of their brands alongside each other. I haven’t talked about this on this show. Could you just define what ingredient branding is for listeners?Waldemar Pfoertsch: Well, I actually use another acronym; I use B2B2C (business-to-business-to-consumer). And by using this acronym, the situation gets relatively clear. You have a component supplier, and the component is so important for the final customer that the performance of the component is a decision factor for the final buying decision.It started in the '80s. People discovered that sugar is not the right thing to drink. And then came NutraSweet. And NutraSweet managed to go into Coke and the other soft drink suppliers, and that really changed. But they had to do something. So the B company, the NutraSweet, had to tell the Coke drinkers, "Hey, you have something better."Andrew Mitrak: Because before, it would be saccharin, and saccharin would be on the label, and that's like a chemical, it's not a brand, and it sounds gross. But if you call it NutraSweet, it's like, "Oh, what's that?" That sounds a little better.Waldemar Pfoertsch: So, NutraSweet is actually the first company who really did it professionally. And when you look at the other ingredient branding companies which came up—one of them is Intel, Gore-Tex—they all hired people from NutraSweet. So NutraSweet is actually the core of that. And the most famous one is the "Intel Inside." And of course, the Gore-Tex, the Dolbys, and many more. It's roughly 150 very dominant companies. Phillp and myself, we actually wrote a book on ingredient branding, a whole book. And in the end, they are all the ingredient branding in there, so we analyze them all.The most important part is you have to get the customer pull going. So if the customer understands that what you're offering is really superior, the customer goes to the store and says, "I want it." And of course, they don't have it. So there are 10, 20, hundreds of people saying, "Hey, I want a jacket where I don't get wet, and my sweat inside goes out." The answer is Gore-Tex.I mean, that's magic. If you go hiking, if you go bicycling, if you go mountain climbing, whatever you do outside, you are sweating. So the sweat has to go out. If you have cotton, you're wet. I still go walking, I still go hiking, and I see people wearing a cotton t-shirt, and I know, "Hey guys, you are 50 years behind."There is better technology, right? So the invention of Gore-Tex really changed. And that invention is worth for you more than a hundred bucks. So having a regular jacket and a Gore-Tex jacket makes a difference, and you are willing to pay for it. So when you get that pull, then you won. And that was actually the magic of what Intel did.Remember, we had 50 million processes at that time, and Intel had 40 [million].. I was at Siemens, and we had our own processor. We had a Siemens processor which was, by the way, much better than the Intel. Much better. We had multitasking, we had multiple boards, we had multiple... Intel did that 20 years later. We had that, but we didn't have the marketing power, and we didn't understand what Andy Grove was doing. By the way, Andy Grove did it against his financial people. I talked to the CFO from that time, and he said, "I didn't agree, but he pushed us." He said, "We have to spend it." So that was really one person who understood the ingredient branding.Andrew Mitrak: Totally. So I was born in 1990, and I grew up. So if I think of the ads and purchasing a PC, when my family bought their their first computer, that I remember, at least, for the home, and I just remember in the 90s, in the early 2000s, going into a Best Buy and seeing all the Microsoft PCs, or the Windows PCs that were created by Compaq, and Dell, and Gateway, and they all had the light blue sticker on them. The sticker that said, “Intel Inside.”Waldemar Pfoertsch: Except one, remember?Andrew Mitrak: Apple?Waldemar Pfoertsch: No, Compaq. Well, Apple, too, but Compaq didn't. And it didn't survive.Andrew Mitrak: Oh, okay.Waldemar Pfoertsch: It's gone. The only company who didn't was Apple. And by the way, Apple switched to Intel before they designed their own switch.Andrew Mitrak: But when they switched, though, Apple never put a blue sticker on, though, when they switched. And they seem like the only company that was able to get Intel, but they didn't want to do the ingredient brand in the same way that others did.Waldemar Pfoertsch: Actually, this is the situation today with Apple. And this is one of the most important things to understand. If you have a strong brand—Mercedes-Benz, Apple—and you put another logo on, you actually dilute your brand. So ingredient branding works particularly good for underdogs.Is Ingredient Branding A Smart Long-Term Strategy?Andrew Mitrak: This is actually the question I want to follow up with is that because of the competition between the two brands, there are a lot of those PC makers, like Gateway I mentioned earlier, that I don't think exist anymore. And the Dell and HP they exist today, and they're doing fine, but if you look at counterparts, like Apple, a multi-trillion dollar company versus, I haven't looked up their market caps for HP and Dell lately, but it's a lot lower. That wasn't the case. Apple was much smaller than them at the time, but it seems like the value accrued to companies that weren't as reliant on ingredient branding in the long-term. It may have helped some of these companies in the short term and break through, but maybe there were long-term brand issues.Waldemar Pfoertsch: Ingredient branding is a temporary concept for consumer brands. If you have various brands facing the customer, the customer is confused. You expect from a high-end brand that they have the best processor, that they have the best camera, that they have the best class, that they have the best protection. You expect that from Mercedes. You want that.Of course, when you are not so a high-end car, you want some components which make the car better. For example, Brembo brakes. So when Chrysler put the Brembo brakes on, suddenly the people who really want to drive a faster car understood this is the car. This is the brakes, what you need for having a powerful engine. A good example I use is Huawei, a Chinese brand. They came from B2B. This is a B2B company, and then they added the Handheld. They do telephone systems, and then they added the handheld. And of course, the handheld was Chinese. I mean, what do you expect? Cheap, breaks, whatever, but then they use a Zeiss camera. And that ingredient really propelled them up. So with an ingredient brand, you can bring your product to the level of a high-end brand. And today, Huawei is on the same level. I mean, they have people say, I would never buy an Apple after I had a Huaweii. And now they have their own operating system. Now the situation is even different.Ingredient brand is a temporary strategy for certain products, and it's actually a very difficult one, because when we wrote the book in 2006, Intel changed, from Intel inside to I3, I4, I5, I7 inside. So they changed from a corporate ingredient brand to a feature ingredient brand. That is an important part. I can give you another example. It's Gore-Tex. If you cover all the areas of your market, you have the so-called “fiasco effect.” Fiasco effect means everybody has your product. You can't differentiate anymore. So, you have to come up with an something for differentiation. And that is crucial, because if you don't differentiate, it doesn't mean anything. So how does Gore-Tex do it? They actually do it very differently. They do it very selectively. They go by industry application. Gore-Tex, we have in bicycles. Gore-Tex, we have in motorcycles. Gortex, we have in workforce. Gore-Tex, we have in medical, all that kind of stuff, where we really needed it. I mean, it's super important technology, but what they do is they give exclusive rights to suppliers. And with that, they don't run into the fiasco effect. And that is very important. Ingredient running is the most sophisticated marketing or branding concept, and it needs constant attention.The Evolution to Human-to-Human (H2H) MarketingAndrew Mitrak: I want to shift this conversation to H2H marketing. You published H2H Marketing: The Genesis of Human-to-Human Marketing in 2021, and the preface of this book describes H2H marketing as an evolution and expansion of B2B marketing. So what is H2H marketing, and what inspired you to write this book?Waldemar Pfoertsch: Thank you for asking that because what we have today is really something different. In the last 20 years, marketing and branding really changed because technology changed, interaction to customer changed, lots of things really made the world different.We went through the description of B2B marketing and B2C marketing. By understanding the digital transformation, we just need to acknowledge that today, we have the opportunity to actually reach each and every individual. Which also means on the other side, on the B side, the company side, there are also individuals. And these individuals can connect with the final individuals. So coming from B2B, going to B2B2C, and seeing that in all these various transactions are humans, and we can reach these humans, we can have a new concept.And that concept, what we call now human-to-human marketing, is a concept which builds on the existing current knowledge of marketing, but it adds the dimension of digital transformation. It adds innovation by using design thinking, and it makes a major shift by looking at a new way of understanding marketing per se. We use the so-called service-dominant logic as the theory for the new marketing.What we see here is that the new concept of H2H marketing is a concept where digital is first. It's a prerequisite. Twenty years ago, we couldn't have done it because we wouldn't have interacted with these guys. But today, we have the possibilities. And also, you are looking for producing something; you are looking for creating value for your customer, and that customer creates together something new, and also you learn from it. So that kind of new concept, and you will see not too much is in the current textbooks. So there will it will take some time, and there's also a big struggle about the term H2H. It's not yet completely accepted, but I'm pretty sure we'll find a term, and I'm pretty sure that the principles we have laid out here will be understood and applied. It's actually very important that not only the [magnificant] seven applying it, but the other ones. And that is actually my mission to get the knowledge out to all the people in the world who would like to do better marketing and what we need today for a better future. By the way, now AI is coming, and AI is a digital agent. It's part of that process, and will change the marketing approach for the future.Andrew Mitrak: I love this concept of H2H marketing. We can and should record another follow-up interview just on this topic because I think it's so fascinating. Professor Waldemar Pfoertsch, Thanks so much for your time. I really enjoyed the conversation.Waldemar Pfoertsch: Thank you, Andrew. It was a pleasure for me.Footnote: This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 28There are nearly two billion Muslims in the world, members of a faith with more than a thousand years of history, commerce, and culture. Global brands are increasingly vying for their attention and disposable income. So what exactly is Islamic marketing, and how does it differ from simply putting a "Halal" label on a product?To answer that question, there’s no better guide than my guest this week, Professor Jonathan A.J. Wilson. As the Editor-in-Chief of the Journal of Islamic Marketing and author of the book Halal Branding, he is one of the world's leading voices on this topic.Wilson’s journey is anything but conventional. Before becoming an Islamic Marketing expert, he cut his teeth in a high-pressure advertising sales environment that Wilson likens to Glengarry Glen Ross. He also side-hustled as a musician and appeared in the video game Grand Theft Auto under the rap pseudonym “Robert De Negro.”Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsIn this episode, you’ll learn:* What Islamic Marketing Really Is: A deep dive into the ethics, history, and modern practice of faith-based marketing.* Global Case Studies: How brands like KFC and Nike succeed (and fail) at connecting with Muslim consumers.* A Lesson in Trust: What a story about buying a rug in Iran with no money reveals about a different way of doing business.* The Musician as Marketer: Why designing band flyers and getting people to a show can teach us about branding.This conversation explores how culture, faith, and personal history intersect to create a modern understanding of marketing. Now here’s my conversation with Professor Jonathan A.J. Wilson. Transcript Note: A special thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.Andrew Mitrak: Professor Jonathan AJ Wilson, welcome to a history of marketing.Professor Jonathan AJ Wilson: Thank you very much for having me.Andrew Mitrak: So excited to have you here. I want to start off with your background. You've had an unconventional journey. You studied chemistry, you've been a musician, you were an athlete, and your personal history is pretty diverse as well. So after all this, what eventually set you on the path of marketing and branding?Professor Jonathan AJ Wilson: It's interesting because I think when you talk to people, at least back in the days who came into marketing, we all just fell into marketing.The first time that I studied marketing was at a postgraduate level when I was doing an MBA. But prior to that, I didn't know what marketing was. We had the traditional subjects like chemistry and history and stuff like that. And so, as a graduate, when I finished my MBA, I knew that there were two areas that I was interested in, which were human resource management and marketing, and they're both people-centered. And then I got a job in marketing, right? My first job was advertising sales. And I think it's that situation where someone shows an interest in you and offers to pay you money, and then suddenly you're like, "Wow, marketing's great, isn't it?" Wow, I can talk about adverts and magazines and stuff. So the first job set me off. If I didn't get a job in that, then I probably could have ended up in pharmaceuticals or something else.The Nuances of Marketing, Branding, and PRProfessor Jonathan AJ Wilson: It's one of those things where we as marketers, we know what we do, but it's still one of those things where when you're with your friends in the pub or you're having a coffee and they go, "What do you do?" And you go, "I work in marketing." And they go, "Oh, okay then." And they hear sales, right? So you sell people stuff that they don't want. And you go, "Well, it's not quite like that." Or they go, "Oh, so you're just about manipulation and mind control, making people want things that they don't want." And you go, "Well, it's not quite like that."And then, I guess, and some people might call me out on this, but then some marketing people will think marketing becomes a dirty word like sales is a bit. So they think of a sexier term and go, "Actually, I work in branding." And you go, "Oh, okay. Wow, branding sounds cool."And I'm joking about these things, but the thing that I've been interested in is whether that's in academia or in industry, there's a massive overlap between these terms. What is marketing? What is branding? What is PR? And I've enjoyed putting people on the spot and saying, "Okay, well, what is the difference between marketing as opposed to branding? Or how do you define these things?"And also, we know, for example, that if you look in a business school, branding sits within a marketing faculty, or a lot of branding academic papers are published in marketing journals. But if you look in industry, actually marketing departments and branding departments can be quite distant. And the career pathways, there are a lot of people that come into branding that perhaps don't have a business background, are creatives, or even are accountants because they're used to valuing things. And so, it's kept me busy, I would say that, over the years, just asking these playful and simple questions and then just seeing how people respond, and also seeing how businesses are structured.Andrew Mitrak: Yeah. It's interesting because the ambiguity can create some confusion, but I think it also creates a lot of opportunity, even selfishly for a podcast like this, it means I get to explore a whole wide range of topics.A Glimpse into 1990s Advertising SalesAndrew Mitrak: I want to go back to your first role in advertising sales. I'm just wondering, could you paint a picture of what that was like? What exactly were you selling? What was that atmosphere?Professor Jonathan AJ Wilson: Okay. If you haven't watched the movie, anyone who's listening, I'd recommend you do. It was a bit like Glengarry Glen Ross with Al Pacino, Jack Lemmon, Kevin Spacey, and a bunch of other people.When I started in advertising, I didn't have a computer on my desk. I had a telephone and that thing that you call the Rolodex, right? We still use that term, but I don't think people know what a Rolodex looks like. Actually, I had a card box. And so you had, you'd inherit a client base from someone who moved on or left the company, and you just prayed that they had legible handwriting. And so you had in handwriting someone's name, a contact number, not even an email address, right? You had a fax number and an address, and then you would phone this person up, and then you'd make notes as to whether you got through and what they said.It's crazy, right? That's about 1998 that you've got no computer in your desk. People can smoke in the office, and you're phoning up, and you pretty much know that by 5:30, no one else is going to pick up your phone because people will just leave their desk. And it was all about the power of communication over the phone and convincing people to consider placing their advertising campaigns with you in your chosen media, stuff like that. And if you were lucky, having one of those client meetings or client lunches, but a lot of people were too busy, but just filling up your diary and making maybe a hundred calls a day or something like that and trying to convert those into advertising campaigns and grow your client base.And then I remember leaving in 1999 to join another company, and one of the reasons were that they were more technologically advanced and they paid me more money, right? It's a bit of a grind as a graduate starting in London. So for a few thousand pounds more, you jump. And this company said, "You can have your own computer." So, in the previous company, if I wanted to write a letter and fax it out, I'd have to handwrite something, give it to a secretary who served about 30 of us at the end of the office, and then she would type up a draft, you'd say okay, and then you could fax it. But in this new company, I could write my own letters. I had an email address. I did not have internet access though. That was not allowed on our computers. You had to ask permission and go to the end of the office.And I stayed there for about a year, and then in 2000, I was like full-fat advertising where I had full internet access and all of the trimmings and farts. And I worked through a number of roles, working up to being a key account manager, and then I got head-hunted and I went client-side, so I ended up doing planning and buying. And yeah, it was interesting doing the full suite of things and a bit of PR and events as well.But there was a lot of investment in training. So I remember also in my first job, we spent two weeks training how to behave on the telephone, as in they would record our phone calls, we'd have dummy phone calls. Do you say, "um"? Do you use words like, "obviously," because it may not be obvious. But we had those things drilled into us and all of those things like AIDA—attention, interest, desire, action. I had to go through those step-by-step. Sell me a cup of water. We even went on NLP courses, transactional analysis, anything that could give you an edge on the phone to be able to communicate with somebody. So all of the psychology or the psychological techniques, we used all of those things.And it served me really well in terms of, I think in the workplace today, I do wonder whether we spend enough time learning how to communicate and how to negotiate in real time over the phone or face-to-face. And that's why I like the movie Glengarry Glen Ross because it gives you that insight into just the stress and the pressure of dialing somebody, and people could hang up on you. And often what happened was, if you've been chasing someone and they're like, "Oh, it's you again," boof, and then they've hung up. And my boss would be looking at me going, "Get back on the phone." And you'd have to call them back and go, "Hey, I think we got cut off. So what I was saying is," boof, hang up again. And I'd be doing that. So you developed a thick skin and your boss is shouting at you and dropping F-bombs, and you've got these targets. So anyone that was still around after 6, 12 months in various roles, it was known that you had what it takes to work in advertising. A lot of people did move on and it's London and they went out of the profession. and I stuck around.Branding Lessons from Life as a MusicianAndrew Mitrak: So while you're doing all this, you are also a musician. Were you traveling? Were you in bands doing shows? Did that teach you at all about marketing as well?Professor Jonathan AJ Wilson: Yeah, it taught me a lot. Yeah, I was in various bands when I was at uni and then when I left and I moved to London, I got spotted in one band, which led to me writing music for Grand Theft Auto, the first three games. I did some of the voices, the characters.Andrew Mitrak: I definitely played Grand Theft Auto 3 as a young teenager when that one came out. I've definitely heard your music. That was the breakthrough game, so that's awesome that you're in that.Professor Jonathan AJ Wilson: If you check the credits, you have to look. I went under a pseudonym because I was also on the hip-hop rap station. So the game's credits that you'll find me listed as are under the name Robert De Negro.Andrew Mitrak: Oh, that's so good.Professor Jonathan AJ Wilson: I thought, "What's the most gangster name that I can come up with?" Robert De Negro. That's a rap name for you.Andrew Mitrak: That is great. Did you trademark that? I wonder if that existed.Professor Jonathan AJ Wilson: I didn't, but I've noticed on like Twitter and X that there are quite a few. If you search, there are loads of Robert De Negros, but I was the Robert De Negro.Andrew Mitrak: Oh my God.Professor Jonathan AJ Wilson: I wasn't sure. I wasn't even sure back in the days how to do that. I just thought that through using it, through familiarity, that would be it. No one would dare call themselves Robert De Negro other than me.Andrew Mitrak: That's a good first foray into personal branding, which became a topic that you've covered.Professor Jonathan AJ Wilson: Yeah, and I got it tattooed on my arm as well.Andrew Mitrak: Oh my God. That's awesome. So I think I interrupted you. So you were telling me about how being a musician sort of taught you a little bit about marketing as well.Professor Jonathan AJ Wilson: Yeah, because you have to get people to go to your show. You have to get record labels to pay attention. There's no one else that can do those things for you. We have to do it in a 360 holistic approach where it's like, you write the songs, and then you have to get people to be interested in them. I had to design the flyers. You design t-shirts. You're doing posters at the venue. You're actually, I didn't realize at the time, but you're doing a ton of marketing.And in fact, one of the examples that I give when I'm lecturing branding at uni is Metallica. And so one of the things that I said, I was like, "How much money do you think it cost Metallica to design their logo?" And like, how many rebrands have they had, and what agency did they use? And you realize that when you're musicians, you design your own logos. I mean, even, I remember Wu-Tang Clan, I saw The RZA talk about his album launch, went to see him, he came to London, and he was talking about how, I mean, I think the Wu-Tang Clan's logo is amazing. And he's like, "Oh, we got DJ Mathematics to design it for $400."He did it in an evening. That's the reality. And I think that's the reality check where sometimes we problematize and we overcomplicate things which can actually be quite simple. And that's not saying that the things that we do in branding are unimportant, but it is a reminder that we have to be able to justify what it is that we're doing. And so as a musician, things are a lot more fluid and you just roll up your sleeves and do it. And I've taken that into academia, and I've also taken that into my writing and my consulting.So, I think the older that I get, the more that I actually draw from music. I think I underestimated what a powerful effect. I mean, even if you think about someone like Louis Vuitton, I think the creative director now is Pharrell Williams. So here's another example of somebody who is a tastemaker who over the years has made hit records and demonstrated that he can connect with people and they respond in a positive way. So logically, it makes perfect sense to have this person handling your brand. So I actually think, and I remember Nile Rodgers talking about branding a couple of years ago, Nile Rodgers from Chic and everything. And yeah, I realized that as musicians, we're actually pretty good at branding.Andrew Mitrak: There's a lot to that. I mean, from the flyers, coming up with a band name or a personal name itself, is actually a marketing activity, communicating across multiple forms of media. It's not just about the music, which is a big challenge to do well in itself, but also appearing on video, performing, engaging a crowd live, getting people to show up to that crowd, getting your song on the radio. There are so many, to be a successful musician, you have to really just play on such a wide surface area, which does tie into a lot of what marketing, what professional marketers have to do as well. So how did you go from, you talked about your career in advertising sales or your first jobs in advertising sales, being a musician, and then you pursue academia? What was the jump into the academic side of marketing?The Leap from Industry to AcademiaProfessor Jonathan AJ Wilson: Well, I had a lot going on in my life. So I decided to pause doing music, and I wanted a fresh challenge from advertising because I felt like a lot of my job involved being persuasive in terms of being a great communicator and a great negotiator and just connecting with people. But I didn't find that intellectually stimulating enough, I think if I'm to be honest. I didn't think that it felt strategic, and I was up for a new challenge. And so, one role came to an end, and I thought, "Okay, the easiest thing in the world would be to go back and work for another advertising company." But I thought, "Let me try something different."I was lucky enough to pick up my first marketing consulting contract, which was a steep learning curve, not for the work that I was doing, but all of the back-end stuff, like when people talk about a consultant. Actually in this scenario, I went for an interview for a marketing role, and the person interviewing me said, "I don't think that you're right for this role. You've got great skills." And I was like, "Here we go. Here's another rejection." And you're going, "Okay, okay." He goes, "But I'd like you to do something else for us." And I was like, "What?" He goes, "Yeah, I'd like you to come on as a consultant." And I was like, "What is one of, how does that work? What do you do?" And he said, "Come back to me with your hourly rate and your day rate." And I was like, "How much do I charge?" I'm calling my mates and going, "How much do you charge?" And, "How do you do that? How do you invoice? And what do you have to do?" And so I had to learn all of those things whilst giving the impression that I knew all about those things. But that was a great learning curve because now there's no one else. When you work for a big company, they have invoicing templates, they have documents. But back then, it was a bit like being in a band and I had to do those things.And when I'd done my consulting or when I'd done audits and things, I had to prepare my own reports. And then I would think, "Okay, I need a template." And I was very sensitive to the fact that I was like, "Okay, I'm charging this money, which is great, which is more money that I'm used to being paid because an hourly rate consultant gets much more than pro rata your full-time job." But when I was sending in documents, I wanted them to feel like that document was heavy enough that it was worth the several thousand pounds that they were paying me. And so I was thinking about the design, the template, the end notes, the references. So I was designing these templates as well that I felt communicated value for money. So I had that contract for, I think it was about half a year.But at the same time, I was applying for anything that moved. I wanted a new challenge. I got an academic role, and it was for a visiting lecturer post. It was like five hours a week. I'd never done that stuff before. I had a love-hate relationship with university, if I'm to be frank as well. And because I remember one of my friends saying, "Okay, you're good at talking. Have you ever thought about being a lecturer?" And me quite flippant and rudely replied, "Well, isn't that for like failed practitioners? Isn't that for people that can't actually do marketing? How could you talk about it and not do it?" I was being a little bit cheeky, but anyway, I got the interview, and I did the lecturing, and it was so much fun.Within a few months, they offered me a full-time role, and I took it up. And then you do that teaching, and you get better at teaching. And then someone said, "If you want to stick around, you better do a PhD, and you better think about writing journal papers." So there were aspects where I taught myself academia because I came in a less conventional route. I wasn't like PhD, postdoc, and you're under somebody's mentorship. I was doing a PhD part-time on the side whilst being a lecturer, and I remember the first, my first lecturing, it was quite daunting because this was before social media as well. It must have been 2005. I remember getting a hard-bound A4 book because when it sinks in that you're going to lecture this module for five hours a week. I was like, "What am I going to talk about for five hours a week for the next 12 weeks?" And I started writing things in the book that I was going to say.When I asked them, I said, "Okay, what's the textbook? Do you have any materials?" They said, "No, Jonathan, it's over to you. Whatever you feel is appropriate. We wouldn't dream of stepping on your toes. You are the expert." So I basically got a blank piece of paper. And straight after that meeting, I went to a bookshop and I looked for what I thought was the best textbook. And I was like, "Okay, so this is going to be the textbook for my course." And I was like, "I guess I better read it then." So then it was like, I thought, "This is probably the first time that I'm reading a textbook from cover to cover." I'm highlighting and going through stuff and making notes. And the night before my first lecture, I didn't go to sleep. I was up all night preparing. I wasn't nervous, but I was preparing.And then, of course, you do your first lecture, and people come in late, not everyone's paying attention. And then I realized it isn't just about, maybe I mistakenly thought at the time that I was going to have to machine gun knowledge into these people for five hours a week. But actually, you realize, "No, you've got to take people on a journey. You've got to hear about what they have to say." So actually, I'd overprepared. I had so much material. And I had to let some of it go. And then what happens is it spills over into the other modules that you get given. And before you know it, you're in that circuit.Andrew Mitrak: Everything you're saying resonates with me so much because having a varied background of a lot of experiences, I think just helps prepare you for what you end up landing on in such a great way. I did cold calls for my dad, who's a real estate agent as a kid. And when I was at a startup, I managed an SDR team and did a lot of cold calling then and it prepares you, right? It prepares you to speak later. And I did consulting and getting to figure out how a business works and how do you charge clients and just doing those details. I'm now at a big company, but I feel like I have superpowers compared to folks who have just been purely at a big company their whole life and have had a lot of things done for them. And that when you do these things, even though they may not seem obvious, you wouldn't have necessarily planned it out that way to start, you connect the dots backwards, and they help prepare you to connect with folks. I'm sure that cold calling and facing rejections helps you prepare for when students aren't paying attention to you or whatever. It's like that kind of stuff helps build body armor and it helps build experiences that you can just help relate to and connect to and actually speak with some, to something with some first-hand knowledge of how things work.Professor Jonathan AJ Wilson: 100%. I agree, and the thing that you have to be careful of, or I have to be careful of, is that it's funny when you get a role like this because you go down memory lane. So some of the things that I warn colleagues about, don't just replicate the sins of your forefathers or the people that taught you because sometimes when you're trying to develop, you end up becoming like the lecturers that you had that maybe you didn't like because you had that inflicted on you, so then you end up inflicting it on somebody else. Or you're just following somebody else's rules. And I think that the unorthodox route at least opened my mind to something else. And being a musician, you're right, definitely did that.I was having a chat the other day where I said, "It's funny because when you look at lecturers, sometimes they can be quite thin-skinned." You imagine the scenario where you're in the classroom, people aren't paying attention, they're on their phones, people are coming in late, they're leaving. You've seen what happens, and people get irate and they say, "I prepared this material, and you'll never get a proper job, and you need to pay attention." And if there's 10 people in the class when there should be 50, then their energy levels go down, and they almost feel like, "Do I even share this stuff with you? Because there were going to be 40 people that didn't hear this. Maybe I hold this back for the next lecture and bark at people and tell them to turn up, otherwise they'll be in trouble."But if I then cross-reference that with me as a musician, and this is what I was saying to one of my colleagues, I was like, "Look, I'm on stage, and I've rehearsed these 10 songs, whatever it is, and I'm going to play them whether there's 10 people or 10,000 people. And when I'm playing them, some people are going to come in late, some people are going to go to the toilet, someone is looking at a girl and chatting her up, other people are drinking, they're going to the bar, they're not paying attention. Some people even throw bottles of drink." The last show I did, I remember there was a pint pot of beer just bounced off the neck of my guitar. It's what happens. I don't think it was that they didn't like what was happening. I think there was a mosh circle and a drink flew.But I guess the point that I was trying to make to them was, "Look, I don't stop the show and go, 'Listen, I've rehearsed for hours, or please pay attention. This is the best bit of our set. This is the solo.'" You just are a slave to your craft, and you've come there and you do what you're going to do and you perform because that's what you were built to do. And so I do draw from music again to remind myself that that's how I have to be in the classroom, that there shouldn't be any, I do feel like every lecture should be like a concert in some way, shape, or form. Maybe it's an unplugged, intimate 10-student classroom, but my mindset, I do get hyped up before every lecture. I do have that hype song on my headphones and think, "Okay, right, I'm going to do this now." I might not know what's going to happen, but I try and get pumped in the same way for the lectures as the same way as you do in that cold call, because otherwise you're not going to have the energy levels to get yourself through or that business pitch, but I try to do that for everything, for all of those human interactions.Andrew Mitrak: Yeah, the kind of entitled feeling of, "You have to listen to me," it doesn't work, right? You could never run an ad campaign that says, "You know how hard our agency worked on this ad? You got to pay attention to us. Don't skip it. Don't use an ad blocker." It just would never work.Diving Deep into Islamic Marketing and Halal BrandingAndrew Mitrak: So, getting to your research and academic career, I want to talk about Islamic marketing and Halal branding, which is a topic I haven't covered yet on this podcast at all. And so, I'm really excited to speak with you about this as well. So you're the editor-in-chief of the Journal of Islamic Marketing, and you've published several papers related to Islamic marketing and Halal branding. Can you just describe at a high level what Islamic marketing is and how you first encountered this field?Professor Jonathan AJ Wilson: Yeah. So, I've been editor for the journal for nearly 14 years, and the founding editor stayed for about one or two years and then moved on. So I inherited a new fledgling journal. And it was publishing about 3 issues a year, 18 articles a year, and now it's, I think it's 12 issues a year and about 160 papers. So it's been a slog. It shows you that there is demand.And what I would say is Islamic marketing, because I didn't come up with the term, the term is almost created and I've had to accept and accommodate and then breathe my own personality into it with regards to the journal. So what I have done is I've tried to make it more inclusive. I think in the beginning, there was a sense of, like with a lot of niche areas, or other communities, right? Where you feel like the world doesn't understand you and you're different and distinctive, therefore you need your own platform or your own journal.And so with Islamic marketing, the argument was that Muslims and Islam and all of these things warrant a separate discipline and understanding. And that's why the journal exists and that's why people are writing these papers and there's been lots of research. Halal is a little bit easier in the sense that it's to do with more lifestyle practices. Predominantly, it's to do with food and eating, but it could also be about how you live, the clothes that you wear, things like that. And it shares in that respect a similarity with perhaps what people are more familiar with, which is kosher with the Jewish community. So it's this thing that it's suitable, think of it as a label suitable for Muslims, right? You're getting something verified and certified.And so within that discipline, people have been researching all sorts of areas and it's blossomed from starting off with the basics, which are, "Can I eat in this restaurant?" to, "What does a holiday experience look like which is inclusive and recognizes who I am?" And I think what I've tried to encourage is to get people to think from different perspectives what that means because if I go back, why Islamic marketing when the theme started, probably 15 to 20 years ago, right?I think we have to go further back and think about 9/11. Or September the 11th, but probably even I have to go into more detail because now I realize that we have a generation of adults who were born after September the 11th, and that event doesn't mean as much to them as it does to people who were alive and witnessed what happened.And so I think what happened after those global events was a feeling from the Muslim community that they were misunderstood, they were misrepresented, and something had to change. And you could look at that from different angles, had to change in the sense that whether that's we need to have more say-so in the boardroom or more seats at the dinner table, or we need better representation, or we need to be thinking about how we create our own business models. But also, how we counter the argument that what we are or what we do or what we say or what we believe is not compatible because there was also this rhetoric which is like Islam versus the West.And this idea that Islam is not compatible. And so I think we could also see that there were a wave of people, I think very intelligently who thought that we can actually counter some of these negative sentiments by showing people that we have a rich, enjoyable lifestyle without, for want of a better term, selling out. We are catering for ourselves, we are pleasing ourselves, we are doing good things, and you are also welcome too.“Propaganda” and Its OriginsAn interesting word that springs to mind is propaganda. It's an interesting word because I remember Edward Bernays in 1928 had his book called Propaganda. And if you trace back the linguistic roots, it was the Roman Catholic Church—it was an Italian word that was used, and in that context, it was about spreading good news because there were concerns that people were leaving Catholicism. So they needed propaganda in order to invite people back and to keep them within Catholicism.And of course, we fast forward past Bernays's book and Noam Chomsky being very critical, and quite rightly so, of propaganda and you think about Manufacturing Consent and The Engineering of Consent and these other books where this is what happens if you're too good at spreading good news and persuading people—it goes bad, and you're controlling people.And so, I'm fascinated by the term propaganda as well because I think that in equal doses from both sides of the fence, there have been people that have also been navigating, "Is this a good thing?" And is the end result... I think there are different camps. There are people that think it's going to make them more money. There are people that think it's the right thing to do. There are people that think that it's going to counter negative perceptions which aren't necessarily linked directly to the products or services that they're marketing, but there's a wider societal value. There are some geopolitical imperatives because there have been initiatives from governments that have encouraged conferences and events.And perhaps the most visible sense of that is if you think about Islamic finance. Islamic finance came out with these financial products which were considered to be more compatible with the tenets of Islam because of the ways of understanding usury and interest and how you can develop these financial products. So logically, if you have Islamic finance, then someone says, "Well, you have to know how to market these products." So that's where Islamic marketing comes in, and then you've got food.I guess the thing for me is, and this has been particular to my work, there's a thread which goes back to the same way that I ask questions of marketing and branding. I ask very simple questions, and it's fascinating how difficult it is at times for people to answer those questions. I've written a lot of conceptual papers where I've playfully asked, "What is the difference between Islamic marketing and Muslim marketing? And is it different than, for example, ethnocentric marketing or ethnic marketing or international marketing?" And in asking those questions, I've also come up with hierarchies of trying to understand and define because I think to put everything into one bucket does some things a disservice.So, for example, if you were to think about something which was loud and proud Islamic marketing, 100% to Muslims, by Muslims, for Muslims, it would be Hajj or pilgrimage. If you were offering pilgrimage packages to go to Mecca, then that to me is a classic example of Islamic marketing. But then if you were to put in the same category fast food burgers... I don't know. Or to infuse Islamic religious, spiritual values into a burger—that seems a stretch and you could argue becomes a little bit political as well.Case Studies: From Fast Food to FashionAndrew Mitrak: Do you have any favorite case studies of Western consumer brands that are attempting to appeal to or using some form of Islamic marketing, whether it's trying to target Muslim consumers who are in a predominantly Western market or trying to break into a market that's predominantly Muslim? Are there any examples of that happening that come to mind?Professor Jonathan AJ Wilson: I would say the fast-food brands are probably the best at doing it, and it's easy for them to do because they can get the dietary requirements correct, and then they can package it, they can change the spices. You can wish people Eid Mubarak or whatever it is, whatever festivals, it becomes really simple.For example, you pick a brand like KFC. It's chicken. Chicken they can scale across the world, but then if you look at a KFC restaurant in Jakarta, the staff, as part of their uniform, have, if they want them, headscarves. The chicken is extra spicy and you're talking in a different language. So, I think it's easy for them to demonstrate those things.I have actually done some work with KFC in the UK. What's interesting is that there are Halal-certified restaurants where the chicken is suitable for Muslims, and there are a number of them in the UK. At the time that I was working, I think the profits were something at least 20% greater than the non-Muslim friendly or Sharia-compliant or Halal restaurants. So logically, that might make you think that you should just make them all Halal, especially because KFC does that—they're all Halal in, say, Indonesia or Malaysia, places like that. But also you've got to think about the implications, and I think that there are lots of companies that are very sensitive.It's easy to show Islamic marketing and being friendly to Muslims and liking them in Muslim-majority countries. The challenge that some brands face is when or how they're able to do that in Muslim-minority countries. How does that work? Because they're sensitive to what the implications are, that there's a vocal minority of people from the far right or whoever that are going to say, "Oh, this is terrible. We're losing our country." So it's challenging.But then also if I think about other brands, some of the sports companies, Adidas and Nike, have been really good. You see now that there are more visibly Muslim females using athletic wear, so they've got headscarves and they've got different cuts of clothing. So they've found what I'd say is a clever way to address certain issues to show people that they belong and that they're welcome in a frictionless way. So whether that's that you just go to, for example, an Adidas store in Central London, and for those of you that haven't been to London in the summer, we have a lot of tourism from the Gulf region as well. The simplest thing you can do is dress a mannequin and make them look like a Muslim. And then people go, "Oh, okay, then you like Muslims and you're Muslim-friendly."There are good and there are bad things about that. Bad is probably the wrong word, but I don't want to gloss over the other things that employers have to do in terms of representation within your organization, the people that you employ, and whether there are global events happening that you wish to comment on or remain silent upon. I think those things have to be considered as well.Common Pitfalls in Cross-Cultural MarketingAndrew Mitrak: Are there ones where things that might work in traditional marketing promotion might not translate to a Muslim audience? I imagine some forms of humor or sensuality that might be in consumer marketing ads might not translate to a Muslim target audience. Are there pitfalls that you've seen companies run into where they get it wrong by just either not being attuned to some of the cultural practices properly or just kind of missing some of the bigger picture zeitgeist and macro events that are happening?Professor Jonathan AJ Wilson: In that regard, it's a bit like international business case examples, that if you get it wrong... probably the things that are catastrophic: contamination. You market it, and then you find out that the food is contaminated with whatever, pork or something. Then that just undoes all of your hard work because people think that you've just been trying to exploit a lucrative market. Which is why, for example, when I worked with KFC, they were very strict about not sharing supplies between the various restaurants, and they had certain protocols. So one of the things I was involved in was creating signage for workers, so even the workers were not allowed, even in their own private lunches, to bring pork into the restaurant, things like that. So, not taking those things seriously, the risk of contamination.I think saying that you care about people and then just withdrawing or you-turning—so if you get a backlash, if you get complaints from the far right and then you just pull up the drawbridge, that's also very damaging. So we know that there are lots of things going on in the world, and if you don't comment on those things, even silence is a bad thing.Other things that are, I think the obvious, you can't say the words correctly. You don't get the right voiceover artist, you just get someone that struggles through those certain words, so you make obvious mistakes like that. I think proximity is also maybe another way to understand it. If there are things that you know could be considered to be inconsiderate, insensitive, insulting, unattractive, whatever it is, keep them as far away as possible from that community.So, on a really simple level, if you're a supermarket and you have this Halal food, don't put it in the same aisle, in the same chill cabinet as the pork. Even if it's wrapped. When I've done studies, psychologically it's not a good look.But the advice that I give to people is, think of it like this: Forget that we're doing marketing and think about if you wanted to make friends with somebody on a human-to-human level, how sensitive should you be and how do you communicate that? And you will find that there are some general rules, but there are also some nuances. People aren't monolithic and stupid.So there are some brands that get away with stuff because people like them because they know where their heart is at and stuff like that. And I think that sometimes companies forget that. They want a very prescriptive list of, "Okay, this is how to talk to Muslims, and then I can tick that box and then we'll be safe."And if you think about how bizarre that is, if you think about other, like in UK employment legislation, we talk about protected characteristics. If you were to say, "Okay, how do I talk to disabled people and make them happy? How do I talk to women? Is there a book on how I can talk to women and they will feel included and welcome?" We're kind of at that stage of development, to be honest.I also want to say that it's reciprocal because then if you go to the other side, if you go to the East or the Muslim world or even the Far East, then I mean, I've grown up, you said about my varied experience, but as a mixed person who's often the outsider or the minority, it's easy for me to spot these kinds of double standards. And so sometimes, the East is equally equipped at being able to stereotype what the West is like. "They don't understand us because, oh, they make these mistakes." And I think one of the things I like to do is to try and bring people together and think, "Okay, well, let's be a bit more honest about what it is that we're good and not so good at."So yeah, there are some mistakes and sometimes they're amplified, but then also if you look a little bit closer, sometimes it's just news headlines because people are still buying those products. We sometimes get into that LinkedIn loop where someone will say, "Here's a disastrous move," but that company is still around and they're still making money. They could do better, but there is that other side.Historical Marketing Context and Modern ApplicationsAndrew Mitrak: Most of the examples we've talked about related to Islamic marketing have been within this century or the last, post-9/11 or so. Islam has existed for more than a thousand years, and presumably Muslims have been purchasing things for more than a thousand years. Do you have any favorite examples, this being a history podcast, of early Muslim brands or early forms of commerce practices or companies, or just things that precede this more recent era that you either discuss in your courses or that you've written about in your research?Professor Jonathan AJ Wilson: I think one of the things that springs to mind is even currency. The idea of, and if you think about a brand, the brand... Islam is very much centered around, in comparison to say Christianity, in some Orthodox Christianity where you had icons and iconography, the Arabic text is central to that. So in writing in Arabic, which is Bismillah hir-Rahman nir-Rahim, which is basically, "In the name of God, the beneficent and the merciful," you are declaring a statement of intent that you are aligning yourself with the values of this belief system.You have within the Silk Road trading where there are some merchants who realized that carrying gold across different waters and countries was a task and a half. So they developed checks, as in written checks where you could cash this in somewhere else. And in the name of God, this check signifies that I owe you this money and it's of this value. So I think that there are great examples that when you go into history, you see things like that where people understood how to do business. Or even in a marketplace about how you compare like-for-like comparisons.One of the ones, actually, in terms of trying to get deeper in understanding Islam and business, one interesting one for me was about who is responsible when things go wrong when it comes to business. So, I had a situation, when we started to get into online, think of the classic example: somebody comes to your website, they buy something, you post it to them, and they say that they don't receive it. Whose responsibility is it?That was one of the things that I was interested in. And, especially because online didn't exist at the time when Islam was going around the world. But my feeling was that it was the responsibility of the business owner until the person receives the item, they are responsible for putting that item into that person's hand. Other people would have different interpretations or different opinions, but I think that for me, that's how... so you can imagine in online, that's a bit more complicated because you're having to package something, courier it, it may or may not arrive, and as a business person, you're thinking, "Yeah, but this person could be lying to me. This person might have received it, or it got lost and I don't have any more stock. How do I do things?" But I think that for me, that sentiment had to remain in there because that comes from a market culture of there is an offer and there is an exchange. Until you have handed over that commodity to that person and they are in ownership of it, it's not theirs. And it's yours and it's your responsibility.Understanding “a faith-based approach to business”Andrew Mitrak: And Muslims would have a different perspective on that exchange versus a non-Muslim usually? Because as a consumer, I feel like I'd be owed it, or there'd be, today, of course, you can see, is it the carrier's fault? Was it landed on your porch and was there a photo of it on your porch and it's some theft issue and take it up with your police. Whatever it is. Would a Muslim usually react to this situation in a way differently than a non-Muslim?Professor Jonathan AJ Wilson: I guess it depends on what they believe, right? Because people are people. But I think it does raise those things because we've all been in this scenario of, "Did you check your letterbox? Did you..." because you're trying to see who's to blame here rather than, and I think that the thing about a faith-based approach to business is that you believe that there is a more powerful entity overseeing everything and everybody will get what they deserve. Yeah. Right? And I like to keep that sentiment, and that keeps me a bit more chill. There are terrible things that happen, but everyone gets what they deserve eventually. I don't know when that'll be. It might be a few centuries in the future or... But I think that that's an important one. Just the responsibilities of a business owner. And as we know that consumers have far more right now, but it's kind of more recent.And we think about those scenarios. I remember there was one, years ago online where a website made a mistake, there was an error in their online cart and so the televisions were super cheap and everyone noticed that and they just ordered them. And then the situation is, "Okay, are they legally obliged to honor the price that they put on the website and they've taken that person's money? Or is it reasonable for them to deny that purchase and to refund the money?" And I think that it's interesting how we explore those things, not just from a legal perspective, but also, yeah, within different cultural traditions or faith traditions and historically how that's happened.Good haggling and bad haggling in Islamic marketingAndrew Mitrak: On this topic of exchange, one thing that came to my mind right now is this concept of negotiating or haggling. When I've visited predominantly Muslim countries, there tends to be more of a, you know, the price is negotiable. Whether it's a bottle of water I'm purchasing at a market, a sandwich, an outfit, or a rug or a piece of furniture, everything is negotiable. And that's not always as much the case today in a Western country. Usually, the price you see is the price you pay. How does that influence Islamic marketing, the sort of approach to negotiation and price?Professor Jonathan AJ Wilson: That's a good question. Because I think we've all been hurt by haggling, right? Yeah. I guess, let's call it good haggling and bad haggling. And I don't mean it as who's the better negotiator, but in the truest sense, if a business person, whether it's a Monday or whatever it is, thinks, "Okay, today I would be happy with this amount of money for this product," and then you agree, that's great. And then another week they might not be so happy because they're like, "I've got more overheads or business has been slow, so I'm going to have to dig in here and say this is how much I want." To me, that's good haggling because there's an understanding.Bad is when people are basically lying. "This is one of a kind, I guarantee to you," or even there are gray areas where, should a local pay the same price as a tourist who's got far more buying power? And I wrestle with that one because we've all gone to countries on the basis that we know that there are things that are super cheap, and that's why we go on holiday. And if someone was to say, "Nah, but you're in this cafe in Kuala Lumpur," and they're like, "Nah, because you're a foreigner, you're going to have to pay more money because you got more money." I would hate that. But at the same time, there is a logic behind it because I'm going to a cafe where we can all eat for a couple of pounds.So I think that there should be more conversations about those things, realistically to see how we understand them. And that isn't just a conversation where often when people can't afford to pay things, they think about, "Okay, let's put you on a payment plan. Three payments and here's the interest rate." I don't know, are there alternative ways that we can accommodate people's different demands and lifestyle choices and opportunities? Probably.Where to start in Islamic marketing?Andrew Mitrak: So if there are marketing practitioners or students who have enjoyed this conversation and want to learn more about Islamic marketing and Halal branding or just want to think about how this might apply to their business or their company, where would you recommend they start? What questions should they be asking themselves?Professor Jonathan AJ Wilson: Contact me. Find me on LinkedIn, contact me. I'll put you in the right direction, give you some links. I would say just step one, ask the questions and find people, surround yourself with people who you think can answer those questions or would have some experiences.And often what I found is, we've spent a lot of time talking about this area about Islamic marketing and Halal, which is an area that I've developed a reputation globally for because it's I suppose, people have thought it's so niche, but at the same time it's so massive because you've got so many people in the world and so many huge countries that it's a bit of a weird one. So I have that under my belt.But also, I would say whether that's marketing to minorities, ethnic minorities, music, sport, there are other areas that I've written on. I tend to apply the same approach. It's that same Socratic approach of, "Okay, when don't things work? And how do they work? And do they work the same?" And so part of it is just searching for your blind spots and thinking what are your, and what are your competencies in these areas? And that's been part of my personal journey. I've been to about 40 countries over the years.What purchasing an Iranian rug can tell us about Islamic Marketing.I'll give you an example that's probably quite topical, but I've been to Iran a couple of times. Iran was not like how most people expect Iran to be, whatever that is. That's probably a whole podcast. But I think the story I'll leave you with is, I was in a hotel and they sell a lot of amazing Iranian carpets and rugs. And I was just waiting to be picked up because it was a work trip.The owner said, "Would you like to look at my carpets?"I was like, "No, I'm okay."He goes, "Why? You're waiting, you've got a few minutes."And I said, "There's no point."And he said, "Why?"I said, "Because I have no money," because I had underestimated the fact that my bank cards do not work in Iran. I didn't have any cash with me, couldn't draw any cash, nothing. Thankfully, I was on a work trip.I said, "Look, mate, I am not the guy for you because I can't purchase."And he goes, "Why should that stop you?"I was like, "Because I have no money."And so we had this conversation.And I said, "What, you're telling me that if I like something, you'll let me just take it home?"He goes, "Yeah. And you can transfer the money when you get home."I was like, "Really?! Okay. What about that rug there?" It was some silk rug. It was really expensive.And he goes, "If you like it..."And then I was looking at it, I was like, "Well..."So I did. I picked up a rug. He took a photocopy of my passport and my contact details.And he says, "Okay, I look forward to when you transfer the money. Here are my bank details."And I thought, "Okay, maybe this is just a one-off."And I ended up going into another carpet place and I bought another rug to see if he'd do the same. And he did. Wow. And then I came back to London, and I was so overwhelmed by how this is how they have to do business, and the gratitude. It kind of blew my mind. So literally the next day, I went to the bank and I transferred that money to him and the other guy. And thought, "Wow."And then I got a phone call from the bank: "Why are you sending money to Iran?"I had to explain, "Oh, no, no, no, no. I was buying some rugs."And they're like, "Okay, yeah."After I'd said that, they were like, "Yeah, yeah, yeah. A lot of people do that."But that was quite an interesting moment and just changing the way that I look at how you can do business and what that means.Andrew Mitrak: Thanks for sharing that story. I imagine also just the personal connection that's involved there, the level of trust, that I'm sure if you went back to Iran, it's probably pretty likely that you would visit those merchants. Or if you were to purchase another rug, it's like you've established this rapport and kind of by having almost more friction in the process and writing that note back to them and having some mutual trust with each other, that's a powerful thing. It's a beautiful thing.Learn More About Professor Jonathan AJ Wilson’s WorkAndrew Mitrak: Well, thanks so much for this conversation. You mentioned your LinkedIn. Where else would you recommend listeners find you online?Professor Jonathan AJ Wilson: I'm on LinkedIn as Dr. Jon Wilson, Instagram, Facebook, X, @DrJonWilson, and I have a website, drjonwilson.com.Andrew Mitrak: That's great. We haven't even talked about your work on personal branding because we've covered so much on this podcast already. But I really enjoyed the conversation. I hope we can talk again sometime. Thanks so much.Professor Jonathan AJ Wilson: No, thanks. That was fun. This is a public episode. 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A History of Marketing / Episode 27This week, I’m excited to share a timely conversation with author, filmmaker, and activist Jean Kilbourne. Kilbourne is recognized as the pioneer of feminist advertising criticism, and is best known for her influential documentary series, Killing Us Softly. Since its release in 1979, Killing Us Softly has been essential viewing in classrooms across the United States, draws attention to the objectification of women’s bodies, the promotion of harmful stereotypes, and the effects of advertising on the self-image of women. In past episodes of this podcast, I’ve mostly focused on the positive side of advertising. We’ve covered the history of advertising and the Creative Revolution, explored the science of persuasion, celebrated iconic spots like Apple’s "1984" Ad and classic Coca-Cola campaigns, and analyzed milestones in measuring advertising’s effectiveness. But advertising is not without its critics, and a history must cover the good alongside the bad. As a marketer myself, I think it's important to listen and learn from critics so we can avoid making the mistakes of others. There is no better guest for this conversation than Jean Kilbourne. Kilbourne has been a trailblazing force for more than 50 years, and in our interview she brings an analysis that is thought provoking, witty, and entertaining.Now, here is my conversation with Jean Kilbourne.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsTranscript note: I use AI to transcribe conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.Content note: I’ve included images of advertisements from “Killing Us Softly” in the transcript to illustrate the conversation. There are some ads you will likely find distasteful and potentially upsetting. If you prefer to avoid these, you can listen to the audio or watch the YouTube video instead of scrolling further.Andrew Mitrak: Jean Kilbourne, welcome to A History of Marketing.Jean Kilbourne: Thank you so much. It's a pleasure to be here with you.How It Started: An Awful Ad In A Medical JournalAndrew Mitrak: I want to start back in the late 1960s or so when you began cutting out and saving those first advertisements. Can you take us back to that moment? Was there a specific ad that stood out to you or what motivated you to first find an advertisement and say, "I need to preserve this"?Jean Kilbourne: I sometimes say, in 1968, I saw an ad that changed my life. And I did. But I have to go back a little bit as to why I would have been interested in this ad. I was involved in the anti-war movement, like a lot of people in my generation, and then went from that to the second wave of the women's movement. So I was already interested in feminism and all of that. I went to Wellesley College, and then I had to go to secretarial school to get a job. So my options were very limited. I was a waitress, I was a secretary, etc.So, I had a job putting ads into The Lancet, the British medical journal. Simply placing the ads into the magazine. And one of these ads was for birth control pills called Ovulen 21. It featured a smiling woman's head, and it said, "Ovulen 21 helps you remember by weekdays rather than cycle days." The gist of the ad was that women were too stupid to remember our cycle days, but we could remember the days of the week.I remember looking at this, and it wasn't the first ad I've ever seen that trivialized or stereotyped women, but there was something so atrocious about this particular ad. And I remember thinking, this is really awful, and it's not trivial. This is going into a medical journal. It's not trivial. So that was the first ad I took home, and I put it on my refrigerator with a magnet. And then I started noticing and collecting other ads.Andrew Mitrak: So you put it on your refrigerator to collect it. You didn't have a vision at the start of turning these into a slide presentation. It was just to preserve the evidence of this crime.Jean Kilbourne: That's exactly right. And of course, there wasn't even a model for doing a slide presentation on this. Sometimes people say, "Did you set out to do this?" I mean, there wasn't anybody who was sort of traveling around with slide presentations, or at least not on this topic, certainly.But I did become interested enough, and I began to see patterns in the ads. I had maybe 10 or 15 ads on the refrigerator by then, and I began to think these are related in some way, and they really are saying something about what it means to be a woman in this culture in terms of advertising and the mass media. So then I bought a… I got a camera, but I got a macro lens, I got a copy stand. This was over 50 years ago, so it was really a time when that's what you had to do. I had to teach myself how to do all that, and I turned the ads into slides. But even then, I didn't think this was something I was going to make a career out of. I was just very interested. And then I became a teacher. I was a high school teacher for about three years, and I began to use the slides in my classes.Seeing Patterns in Harmful Advertising TropesAndrew Mitrak: What were the other ads? What was the range of ads that you were collecting?Jean Kilbourne: Well, some of them were just the ideal image of beauty that was everywhere and was so much the same. Some of them, I noticed that women's bodies were dismembered in advertising. So that many, many ads featured, obviously, women's breasts—a huge way to sell products—but also a woman's torso or a woman's legs. And this was not happening to men. So I noticed that. And that seemed to be saying something about the dehumanization of women and the objectification of women.There were also quite a few ads that were violent in one way or another, that seemed to portray battering or rape in a kind of jokey sort of way, usually. But I noticed those too, and those of course stood out for me. So there were many different patterns that I saw.Andrew Mitrak: When you use the word "dismembered," it's a really violent word. Sometimes, though, it's also sort of tightly cropped where the camera frames on a piece or a portion of someone's body versus the entire human. Is that sort of the idea behind that?Jean Kilbourne: Well, sometimes, but sometimes it literally, the ad would simply feature a woman's legs, or a woman's legs sort of in the air. Or sometimes, often, it would feature just a woman's breasts. So it wasn't just the way it was framed, it's just the way it was shot. And that seemed to me particularly dehumanizing. I mean, I used the word dismemberment on purpose because the body really was dismembered. And again, this wasn't something that was done to men.Also, there were many ads that featured women without heads, basically. I mean, the ad would start from the neck down. And that seemed sort of something that was not happening to men either, and that seemed to be very dehumanizing and objectifying. The other thing I noticed was the body language of women, that it was often so trivializing. And often, one of the things that I talked about in the original version of Killing Us Softly, and still do, was the sexualization of little girls. And that was happening even then. So little girls were presented in sexualized ways, and adult women were infantilized. Adult women would be portrayed dressed like a little girl or with a lollipop or a headband or something like that. So that was something that stood out too when I started collecting the ads.View the original 1979 version of “Killing Us Softly” at Archive.orgAndrew Mitrak: So the initial collection, you first presented these in a high school class. What was sort of the context for the initial presentation?Jean Kilbourne: Well, I taught high school in the late 1960s, so I got away with a whole lot. I was able to teach whatever I wanted to teach. I was an English teacher, but I created a film study class. And then I created a women's study—I mean, I did things that would be impossible to do today. We were not teaching to the test, to put it mildly. So I just, I think I used this in a unit I was doing on probably on women's issues, but also maybe on media. And so I did use it, in the beginning, I used the slides in my high school class. They were incredibly effective in terms of teaching the students not only about issues about women, but also about advertising and about marketing.Selling “A Perpetual State of Dissatisfaction”Andrew Mitrak: One of the themes of your work is that the advertising industry's goal isn't just to sell an individual product, but to sell a perpetual state of dissatisfaction. That they're not just selling lipstick, but they're selling the need for lipstick. Was there a moment or a specific ad that shifted your understanding about the overall goals of advertising or when did this bigger picture come into play?Jean Kilbourne: There wasn't a particular ad, but I did notice that most of the products that were being sold were really the same. That was one thing. The kind of lipstick or the moisturizer or whatever. In fact, I would go sometimes to a CVS or a drugstore and look at the brand-name items versus what was being sold cheaply. And the ingredients were almost always the same.And so that made me realize that what they had to be selling was an image. They had to be selling something beyond the lipstick and the moisturizer. So that was one thing. Another thing that became clear quite quickly is that many of the products that were being sold to women didn't really work. The so-called anti-aging products, for example, which almost always featured a very young woman smearing on this cream. And also the diet products. They, of course, did not work because if they did, then that would get out. Of course, the world has changed since then, and now there are diet products that do work. And not so much that there are anti-aging products that work, but people have surgery and all kinds of other ways to do that. But 50, 60 years ago, that wasn't the case. So these products seemed to be not only the same, but they actually weren't working. So all the more reason that they had to be sold by selling something other than the product.And I'd also been influenced by… there wasn't much out there about advertising in those days, but I had read Vance Packard's book, The Hidden Persuaders, in high school, and I remember being fascinated by that. And I also had read Erving Goffman's book on Gender Advertisements, which was also… that was mostly about the body language and the way in which women are posed and everything. And that was very important to me as well. So those things informed my consciousness about all this.Andrew Mitrak: Erving Goffman, did he also write about the masks that we wear and that there are different personas? Am I remembering the right author?Jean Kilbourne: Yeah, he's a sociologist who wrote about a lot of things, but I think only that one book was about gender, and it was very specifically about, again, not just body language, but things that still are true—the way in which women often cover their mouths in ads or do the little girl thing, become sort of ridiculous or trivialized. He pointed that out early on.Bringing Advertising Criticism to the Feminist MovementAndrew Mitrak: So you're drawing from some of these sociologists like Goffman, others who have written about advertising, and then you were doing a lot of your own research, literally through magazines and just what you were finding and piecing this together through your independent research.Jean Kilbourne: And I had a feminist point of view, of course, which Vance Packard did not, and so that made it different as well.Andrew Mitrak: From your feminist point of view, what were your key inspirations there? Who was inspiring you and what literature were you reading?Jean Kilbourne: Well, that's kind of interesting because nobody was talking about advertising or the image of women in advertising at all. And in fact, most feminists in those days felt that it was a trivial issue. Everybody thought it was a trivial issue. What I heard most of all people would say is, "I don't pay attention to ads, I just tune them out." Everyone believes that they're somehow not susceptible to advertising, which of course makes the advertiser's job so much easier because it's beneath our radar.But what feminists would say to me was, "We don't have time to deal with trivial issues like the image of women in advertising. We're dealing with serious issues like violence against women." And I would say it's related. When you objectify women, you set them up for violence. In fact, it's a necessary step for violence, is to dehumanize the person you're being violent to. I don't think it's really possible to be violent to someone you consider an equal human being, but it's very easy to abuse a thing. So that was my argument, but it took years before even feminists took the issue seriously. So when I started, I don't think there was anybody else who was really looking at this in any kind of serious way.In terms of the other influence, I was influenced by the consciousness-raising groups because that was the second wave of feminism. We got together in small groups and told the truth about our lives. The poet Muriel Rukeyser has a wonderful line, "What would happen if one woman told the truth about her life? The world would split open." And that is what happened in these consciousness-raising groups, that we realized we were not alone. Those of us who've been raped, those of us who've been sexually harassed, those of us who've been in abusive relationships, we were not alone. And up until that time, I've been sexually harassed all the time, and I thought it was something I was doing wrong, or that I was the only one. So just to learn that this was happening and it was happening in a very systemic way was incredibly important.When Did Harmful Tropes Emerge in Advertising?Andrew Mitrak: You recognize that this is happening in a systemic way. Part of this podcast is taking a historical view on marketing and advertising. Do you have a sense of when this emerged—when unrealistic beauty standards or harmful stereotypes of women started to appear in advertising? Was it there from the beginning or were there moments that punctuated it becoming a more prominent part?Jean Kilbourne: You'll probably know more about this than I do, but in the beginning, I think, of advertising, advertising was designed to give information, right? It was sort of something in the newspaper telling people where to go for a sale or something, or in the very beginning, signs on buildings: "Here's a tailor, here's a…" that sort of thing. Then it became something that was very, very different. It became something that again was selling products that people often did not need, or selling them using images that were harmful and destructive in some way.I used to say to my audiences sometimes that if an ad is giving honest information about a product that we need, I have absolutely no problem with that, but can you name an ad that does that? A national or international ad. And really, hardly ever could somebody say, "This is honest information about a product that we really need." So I think that was part of what happened. As the whole media changed with television and all of that, it became much more advertising-based and commercially-based so that the point of the programs and the magazines and everything was to sell audiences to advertisers. That was when things really flipped and became very, very different than they'd been in the past.De Beers and “A Diamond Is Forever”Andrew Mitrak: One that you've spoken about that is a historical one is De Beers and the idea that "A diamond is forever," and that we didn't feel the need to purchase things like engagement rings, but this company, through creating this need or creating this dissatisfaction of somehow your love of somebody is measured by the size of a ring… that's one that strikes me as a historical example. I think it was in the '40s or so that that one appeared.Jean Kilbourne: Absolutely. And I don't think diamonds were even particularly precious or desirable really before then. That's such a good example of how a company created a need. One of the earliest examples too that I use a lot comes from Edward Bernays, of course, who was the father of public relations. He had the brilliant idea in, I think it was 1929, to march with the suffragists—he hired women to march with the suffragists in the Easter Parade, I think. And then to light cigarettes. And that was an amazing thing to do then, for women to smoke in public. And when they were asked about it, they would say, "These are torches of freedom."So what he did was he linked smoking with liberation for women. And then of course, that went on. We saw that with Virginia Slims, "You've come a long way, baby" was a direct line from that. But what an amazing thing to link an addictive product with liberation for women, with freedom. He was one of the starters of that sort of thing.Andrew Mitrak: I recorded an episode with Bernays’ biographer [Larry Tye]. We talked about this and it’s sort of co-opting a movement for good with commercialization. In this case, the commercialization of a lethal product that’s killing its customers.Jean Kilbourne: Well, actually I did my doctoral thesis on the co-optation of women, the liberation by the media, by the advertising. I’ve always felt that capitalism always co-opts any kind of radical movement for change. Whether it is women’s liberation or the green movement, basically anything that’s going to bring about radical change in society that might harm shareholders’ profit is going to be co-opted. We are seeing that more and more of that now.Kilbourne’s Experience as a Professional ModelAndrew Mitrak: A piece of your own history that we haven't talked about yet is that you were once a model in London in the 1960s, and you've spoken about how this was a formative experience for you. Do you have any reflections of this time, and did your later study and analysis of advertising change your own memories and reflections of it as well?Jean Kilbourne: I didn't really set out to be a model, but again, as I said, I went to Wellesley College, and then I went to secretarial school. The options for women were so limited. I was a waitress, and I was a secretary. But modeling was one of the few jobs available to women that was lucrative. And so, when I was young, I was often encouraged to enter beauty contests and to model. I was always ambivalent about it, always, because for one thing, it seemed sort of awful to rely so much on something like one's looks, one's image. But again, it was lucrative, and also in those days, there was a lot of encouragement to do it. Nobody saw anything wrong with it. It was like, "Wow, you have this opportunity, you should do it."But I found it incredibly depressing, actually, and dehumanizing. I also found it interesting that the other models, the ones who were really doing this, were among the most insecure group of women I've ever known because if your value depends on your looks, you're always going to be comparing yourself to somebody else, or dreading growing older. And of course, in those days, growing older meant turning 30. So I didn't, I would do it, and then I would back away from it. The other thing about it is there was an incredible amount of sexual harassment, and that just sort of came with the territory. And the number of times that I was told I could really make it big if only… So that was very depressing as well. So it was not a career, by a long shot.Andrew Mitrak: I'm sorry that you went through that. It's disgusting and makes me angry and sad. And also just that it's a profession that so many young people aspire to. It's glamorized in a way, and really it's a career that even the very small number who are successful within it seem, as you're mentioning, to have deep insecurities or face other challenges.Jean Kilbourne: Thank you. It's also changed tremendously because when I was young, models were not famous. You did not know the names of them. Maybe you knew Jean Shrimpton, but you really didn't know the names of the models. They weren't celebrities. And then, of course, that changed, and the models became supermodels, and then they became very famous. Also, when I was young, we didn't really expect to look like the models. We didn't measure ourselves against them all the time the way that is happening now. So it was a very different world.The Viral Spread of "Killing Us Softly"Andrew Mitrak: Jumping around a little bit, you had been putting these slides together for your high school courses. Do you remember the first time you gave what became the "Killing Us Softly" lecture? What was the audience and what was the initial response to it?Jean Kilbourne: Well, I remember the first time I gave it to a large audience. I did it in classrooms, then I got invited to do it for smaller groups here and there. But the first large audience was at Concord Academy in Massachusetts, a very progressive, wonderful school. I was invited to speak to the entire student body, which I think would have been about 400 or 500 people. I was so terrified that when I was driving there, I seriously considered driving off the road. Not to kill myself, but just to be incapacitated. The other thing I thought about was phoning in a bomb scare, which in those days did not land you in federal prison, but it would have… I was terrified because I was very afraid of public speaking. Most Americans are. In fact, studies say that we fear speaking more than death, which I've always found kind of funny. But that didn't mean I wasn't good at it. I was actually always pretty good at it, and I actually enjoyed it, but I was very afraid of it.So that first big audience was hugely important because had it not gone well, I'm not sure what would have happened. But it went very, very well. I got a standing ovation, and they had wonderful questions, and they stayed around to talk for a long time. So it was very, very heartening. So I do remember that lecture very, very well.And another thing, in terms of the very first lectures I gave, what surprised me the most when I first started doing this was that people laughed. I hadn't set out to be funny. And I also never wrote out a script; everything I did was sort of ad-lib. I remember the first time that I said, talking about the ideal image, that, "She is completely flawless, she has no scars or blemishes, indeed, she has no pores." And everybody laughed, and I thought, "Wow, that's fun." So I keep using that line. And I then started encouraging people to laugh at the ads because I thought it was good to ridicule the ads. So then the presentation became actually very funny because the ads are so ridiculous. And I think that had a lot to do with the success of "Killing Us Softly"—that it was funny, and it was not what people were expecting. They were expecting, I don't know, a polemic or something, but it was not what they were expecting.Andrew Mitrak: It is actually funny. It's also entertaining to watch. It doesn't feel like homework. It's sort of like eating your vegetables but also having some sugar with it so it goes down a little easier.Jean Kilbourne: Some of my best lines, by the way, came from my audiences. One of my favorites was an ad, this was a long time ago, for a diet product, and it said, "I'd probably never be married now if I hadn't lost 49 pounds." And one woman shouted out that that was the best advertisement for fat she'd ever seen. The audience broke up, and I started using that line all the time, too. And the other thing is, in those days, when I was starting out, people were saying feminists had no sense of humor. That was a big thing—that we were ugly, and we were depressing, and we were man-haters and all of that, but we had no sense of humor. So I certainly wanted to dispel that.Bringing “Killing Us Softly” to College CampusesAndrew Mitrak: Now, these were popular lectures as soon as you started getting these big audiences, and you traveled the country, right? You traveled to different colleges. I read online—I can't believe everything I read on the internet—but it looks like you were one of the most popular lecturers of the 1970s visiting colleges.Jean Kilbourne: Well, there was one point somewhere in the early '80s that The New York Times Magazine said that I was one of the three most popular lecturers on college campuses. One of whom was Maya Angelou, so I was very pleased by that. We actually had the same agent.But I was, in the very beginning, doing maybe 110 lectures a year. I was going out on Monday and coming back on Friday, a different place every single night. I think I've lectured at close to half of all the colleges in the US and most of the ones in Canada. I also traveled a lot in Canada. So I've been on at least 1500 campuses. I was out just on the road all the time. I was young, so it was exciting, and it was exciting to see audiences' reactions all across the country. I've lectured in every state, every province. Then I had a child fairly late in life and cut back, but I still was doing like 70 a year, but I didn't want to be away from home more than about two nights a week. So that's how I managed that.Andrew Mitrak: Is this partly what inspired you to turn your lecture into a film? Just that this travel schedule was so intense and there's clearly such demand to see your lecture? Is this what inspired the film version of "Killing Us Softly"?Jean Kilbourne: That would make sense, but that's not what happened. In those days, I still didn't have very high self-esteem, and it never would have occurred to me that people would have wanted to turn my lecture into a film. That just wouldn't have crossed my mind. So two filmmakers approached me and said that they wanted to turn it into a film. My reaction was, "Oh my, these nice filmmakers think that my work is important." Looking back, this is kind of crazy, but that's the way it was, not just for me, for a lot of women. So the film was made. It was a one-take, one-camera film, cost $6,000 to make, and it, in today's terms, went viral and made a lot of money and also was seen by a whole lot of people. Unfortunately, I had made a very bad deal with those filmmakers, so eventually, I switched over to the Media Education Foundation and have made my films with them ever since, and that's been much better for me and for everybody.The Viral Spread of “Killing Us Softly”Andrew Mitrak: Do you have a sense of how it went viral? Where were people actually watching it? Where was it being played?Jean Kilbourne: I have no idea except word of mouth. It was shown in classrooms. I think in particular, feminists who were teaching found this an incredibly effective way to teach their students about sexism in an entertaining way, in a way that would capture their attention. I think it just had to be word of mouth, people at conferences, people at different places. Of course, the fact that I was on the road and I was spreading the word that way. But when I think about it, I could be on the road for 100 years and I wouldn’t reach nearly the audience that “Killing Us Softly” has been able to reach. It just happened due to word of mouth because in those days there was no social media. There really wasn’t any advertising to the film.Andrew Mitrak: Did it going viral change your career at all?Jean Kilbourne: It changed my career a lot in two ways. One is, not so much about my career, but in terms of what I was trying to do because I’ve always been an advocate, an activist. That’s really what this is about. I was able to get the messages out to so many people than no matter how many lectures I did. But the other thing is that more people saw the film, the more they wanted to see me in person. So I became more popular as a lecturer.Andrew Mitrak: Did you come up with new materials because people had already seen the film? Did you feel some pressure, almost like a stand-up comedian, once their specials out they usually come up with new material. Did you think, “They’ve already seen the film so I need to have new ads or new materials?”Jean Kilbourne: The trouble is the ads turn over so fast and there was no way I was going to be able to keep up. Some of the ads were so perfect and making my point that I didn;t want to stop using them. What I did was I found new ads, and I would sprinkle them in, but I didn’t totally change the presentation. Eventually, by the time I got to “Killing Us Softly 3” and “Killing Us Softly 4”, I began to present them more as a historical perspective. Here’s what it was like and here’s what it’s like now. So that way, I was able to use a lot of the same material but have it updated enough to keep people’s interest. There are teachers who have probably seen “Killing Us Softly” hundreds of times and they could sing along with me at any presentation. They seem not to mind, which was very often touching.The Advertising Industry’s ResponseAndrew Mitrak: We haven’t talked about the advertising industry’s response to your work yet. What was their initial reaction to it?Jean Kilbourne: The initial reaction was just to ignore it. Sometimes they attacked it, but not so much when I was talking about the image of women. It was when I started talking and making films about alcohol advertising and tobacco advertising. That’s when they became upset, and that’s when they started labeling me as a prohibitionist. They called me Carry Nation. They tried to turn my message into something that it wasn’t at all. Because the image of women, by that time, everybody knew it was a problem, it was going to be hard for them to fight back against that. But they could fight back against what I was saying about alcohol and tobacco. I think what I was saying about alcohol and tobacco was because I started doing research and talking about those issues in the 70s. I was presenting something very different than had been presented before. For example, with smoking, the typical approach for kids was to show them diseased lungs and things like that. I started smoking when I was 13. I wouldn’t have cared about a diseased lung at all. I didn’t expect to live beyond 50. But what would have gotten my attention was being told that I was being manipulated by a very powerful industry that wanted my money. And that is what I did. I started talking about the ways in which these industries were targeting kids and the messages that they were using, not at all about the health consequences. Because most kids feel they’re immortal, and they really don’t care about the health consequences, but they really don’t want to be manipulated. That was my great insight on those and since then, that became the primary prevention tool working with alcohol and tobacco, but it really wasn;t then until 70s.Is it Possible to Establish a Causal Relationship Between Ads and Harm?Andrew Mitrak: In one of your articles, you wrote, “It is virtually impossible to measure the influence of advertising on a culture.” I’m wondering if there have been attempts to establish a direct causal relationship between advertising and some negative effects we’ve been talking about, because it does strike me that there are a lot of correlations. Is there any research that you found compelling that tries to show the exact like direct cause between these two or to quantify the negative impact, because it is clearly very tough to do. I’m just wondering if you see any kind of direct causal effect?Jean Kilbourne: People have done studies of the influence of “Killing Us Softly” on audiences. Sometimes they found that there’s a slightly positive influence but again who knows really? I think the fact that there isn’t a control group makes it almost impossible to do the gold standard research. Some of it has been ridiculous, like I remember doing an interview with a TV person about alcohol advertising and about the effect that alcohol advertising has on us and young people in particular. Then the rebuttal was that a reporter went into a bar and asked people if they were drinking because of the alcohol advertising. How many people said yes, do you think? None. Obviously, I mean it was so stupid but that was sort of the approach because it actually is very difficult to find out. I think advertisers would love to know.Andrew Mitrak: What is kind of ironic about the setup of the question is that advertisers want to know the impact of their ads to be able to show ROI. Whether you’re an in-house marketing team and you’re showing impact to your boss and your finance team that advertising is positive ROI. Advertising agencies, they want to show that their work causes impact. But in the same way that you would like to show “I would also like to directly measure the harm.” It’s tough to show the causality even though both of you want in some way.Jean Kilbourne: I mean, it’s very tough, right? As you said, when advertisers try to see if this particular ad is effective, that’s hard. It’s hard for them to really measure that. At least it always has been. So maybe there’s some new technology now, but I am not aware of it.Advice for Practicing Ethics MarketingAndrew Mitrak: I'm a marketing professional. I primarily work in B2B software marketing, so I don't think you show so much B2B software in your slides. But I think just as somebody who is also a student, professor, or educator, just reflecting on folks who are marketing practitioners, what are some of the top lessons they can take away to help pursue their work in a responsible way?Jean Kilbourne: One of the things that's really impressed me is how many advertisers and marketers have asked me that question. And students who are studying advertising, although I do remember one young woman who approached me and said, "I saw your film last year and I switched my major from advertising to social work." And I said, "I'm really sorry about the pay cut, but good for you." I'm obviously not trying to have people do that. But what I do ask them to do is to think about some of the ethical issues that will come up—to think about those issues before they have mortgages, before they are in a situation where they feel like they have to do it. If somebody comes along and says, "We're marketing a cigarette to women by playing on their fear of gaining weight," be in a position where you can say, "I won't do that," as opposed to feeling like you have to.And that's one reason I think that there should be much more discussion about ethics in business schools and in classes that are talking about this, because it certainly is possible to do ethical marketing. But sometimes people have to learn more about how to do that and what to avoid. So that's one thing that I suggest. I also suggest to people that they form alliances. If they're in an agency or something, form alliances with other people who care about these issues and want to market in a more responsible way. One organization I love, and I think it may have started 10 years ago, even longer, is called The 3% Movement. Kat Gordon, the woman who started that, it started because at that time, 3% of creative directors in agencies were female. 3%. Now I think it's soared to like 11%, but in any event, most of the power was in the hands of men. And so what Kat did was she started this organization—and I remember I spoke at the first conference, and it was quite a while ago—and it's really taken off, of trying to get women and men who care about these issues to get together because there's strength in numbers. You might not want to be alone in opposing a marketing idea, but if you have people behind you, that can make a very big difference. So those are some of the things that I've suggested. I also, of course, suggest that people work for nonprofits, but again, sorry about the pay cut. I do suggest that people use their skills—because there are some incredible skills that are involved in this—use them in so far as possible in a way that helps and does not harm.Andrew Mitrak: I think it's useful for folks who do work in this industry. Somebody's probably going to do this, and I think you want folks who are educated and mindful about this to be there because otherwise, if they all leave and all go to nonprofits, it's just the people who don't care at all who are continuing to work in the for-profit sector.Jean Kilbourne: But people who could do it in the for-profit sector and maybe do pro bono work, which a lot of people do, for the nonprofit sector. Because God knows the nonprofit sector needs those skills. It needs good marketing and good advertising. It's really important.Where Do Harmful Advertising Practices Come From?Andrew Mitrak: Everything that's being discussed, I never learned as a marketer. I've read a lot of advertising books and marketing books, and nobody ever told me, "Here's how you Photoshop somebody to look unnaturally skinny and perfect. And here's how you manipulate people and here's how you lean into their desire and unfulfilled needs." You don't learn that.You learn things like how your product is positioned and what your segment and target audience are. Where do you think these underlying things come from? Is it just an unspoken pressure that the industry has to Photoshop people in strange ways? Where are these ideas coming from if they're not in marketing textbooks or advertising books, and they don't speak about it publicly in conferences? But it does happen and it does come out in the open. Where do you think it originates?Jean Kilbourne: That's an excellent question. I really don't know because you're absolutely right. It's not in textbooks, it's not in conferences. And I'm not a conspiracy theorist. I don't think that it's taking place in dark rooms somewhere—well, it is taking place in dark rooms, never mind. But it must be in photography studios and advertising agencies. There must be, because obviously people are doing this, they're doing it all the time. So somebody's teaching them; they're learning somewhere. Where do you think?Andrew Mitrak: A hypothesis I have is that if I just look at artwork in general, I remember seeing Michelangelo's David in Florence. Perfect body. I don't have that body. This sculpture is more than 500 years old now, and there is a lot of artwork that shows ideal forms of people. Also, when I was doing filmmaking and learned to color-correct people, you know, the lighting's off, let me adjust that. You kind of give people a tan a little bit with your color grading. I don't think I was intentionally trying to say, "Oh, tan skin is beautiful," but we're primed this way through artwork, through advertising, through all sorts of media we consume of what looks good. And we do that. And people, maybe not even consciously, just have an intuition around what are good aesthetics. In some ads, it might be an unconscious bias somebody has to just create beauty or fix what they see as some blemish or flaw. It might not even be that conscious. The work you're doing is actually showing unconscious biases that have compounded to create these distorted aesthetics that we see in advertising. That's just a hypothesis or a musing that I had.Jean Kilbourne: I think that's part of it. When you mentioned the statue of David, an ideal image of beauty has existed forever, probably. But the difference between seeing a statue of David and being hit with an ideal image thousands of times a day everywhere is a very, very different thing from appreciating the beauty of a figure in an artwork versus not only seeing it everywhere but seeing no other options. Almost always, for women and for men, the models are very, very specific.The other thing is, what a difference… every time I go to the museum and I see, you know, Rubens for example, and I see the women, I think, how would this change women's lives if this were the ideal? I think it would change women's lives dramatically. So that says something about the power of the image. And in terms of people doing this unconsciously, I think you're right. I think that sometimes does happen. But I also think if they're selling a diet product, they're going to do whatever they can to make the person look as thin as possible, including ridiculous things where the thinness becomes so incredible and so extreme that it's absolutely impossible. The person is a skeleton.Andrew Mitrak: I recall some of the images in your lecture series, and I think you even used an example of a model, I think from South America, where she died at like 88 pounds from anorexia and probably felt tremendous pressure. So really, some very awful, "killing us softly," negative consequences from that.Jean Kilbourne: Right. Yeah, a lot of anorexia, a lot of eating disorders. And not all the models, obviously, but the models, most of them have a certain type of body. It's very tall, very thin, usually not very full-breasted, so that's either done through Photoshop or implants. But it is a very specific body type, and I always say, there's nothing wrong with this body type at all, but it's a body type that basically 5% of American women have. So if that's all you see, then you begin to feel… and you can't diet yourself into this body type. You just can't. Most women are more apple-shaped than V-shaped.Learn More About Jean Kilbourne’s WorkAndrew Mitrak: Jean Kilbourne, thanks so much for this conversation and for your work and for sharing your insights and wisdom and reflections with us. This has been great. For folks who have enjoyed this conversation and want to learn more about your work, where would you direct them?Jean Kilbourne: I think probably to my website, if that isn't too old-fashioned. Because that's where people can find out about my films and my books. I have a couple of books and many articles, and I also have a resource list where people can get further information. It's a resource list where I talk about parenting resources and media literacy and all kinds of different resources. So I am on LinkedIn and stuff, but probably going to the website is the best way.Andrew Mitrak: Well, yeah, I'll paste a link to that in the show notes and the blog that accompanies this post. Jean Kilbourne, thanks so much. I really enjoyed this conversation.Jean Kilbourne: Thank you, I enjoyed it too, and thanks for such great questions. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 26 Today marks the first day of San Diego Comic-Con 2025, which feels like a fitting time to explore the incredible intersection of comics and marketing. Comics were once a niche, nerdy subculture but for the past two decades they’ve grown to dominate the global box office and are at the center of pop culture. So how did comics market themselves to the masses? To help us understand this journey, we have the perfect guide: Rob Salkowitz. Rob writes for Forbes and is the author of the book, Comic-Con and the Business of Pop Culture. He's also a professor at the University of Washington, where I was lucky enough to take his class 12 years ago. Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsRob takes us on a tour that reveals the intertwined history of comics and marketing, a connection that runs deeper and further back than you might imagine, rooted in the very DNA of mass media.Here’s a glimpse of what cover:* The relationship between early comic strips and print advertising* How comics evolved from selling newspapers to serving as WWII propaganda* Stan Lee’s brand-building genius and how Marvel marketed itself baby boomers* How George Lucas launched Star Wars at Comic-Con in 1976, creating a blue-print for Hollywood blockbuster launches at SDCC* Timeless marketing lessons on activating superfans, creating scarcity, and how in-person events can create meaningful marketing momentsNow here’s my conversation with Rob Salkowitz.Note - I use AI to transcribe the audio of my conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.Comic-Con: From Niche Gathering to Global LaunchpadAndrew Mitrak: Rob Salkowitz, welcome to A History of Marketing.Rob Salkowitz: Happy to be here.Andrew Mitrak: Before we go back into the history of comics and marketing, I want to start with where we are today. I'll be publishing this on day one of San Diego Comic-Con, which is the biggest event of its kind in the world, and you are one of the world's leading experts on Comic-Con.This event started more than 50 years ago as a gathering of geeks, and now it's where the world's largest media franchises launch new movies and TV shows and video games. Can you just paint a picture for us—for somebody who's never attended or hasn't been to a Comic-Con before—what is the modern San Diego Comic-Con? What does it look like and sound like and feel like to be on the ground floor of one of the world's biggest pop culture trade shows?Rob Salkowitz: Sure. We're talking about 150-200,000 people that are able to get to the convention itself, and probably another 200,000 people that are in the streets of San Diego just there for the vibe for the week. It's one of these big events that combines a lot of different stuff. So there's entertainment, there is technology, there are comics and games and all of the things that go into that.It's a combination of a lot of different fandoms. It's a big opportunity for studios to showcase their upcoming stuff to the adoring public. And as we got into the social media age, it's become a premier place for influencers and everybody with a selfie stick and a platform to get up because the backgrounds are great. It's incredibly lively, it's visually appealing. There's a little bit of Mardi Gras, there's a little bit of the Super Bowl, there's a little bit of the Oscars. I mean, it's glamour and weirdness and exuberance all packaged into one thing.Andrew Mitrak: Do you think that's a reflection of comics themselves as a cultural touching point, permeating through other things? Or do you think it's partly just the convention itself expanding to encompass more, or just a little bit of both? How would you think about that?Rob Salkowitz: If we roll the tape back a little bit, Comic-Con began, as you say, in the early 1970s, and the people who were fans and collectors of comics were very much a subculture. Especially adults who took comics seriously enough to study them, to collect them, to want to get together and talk about them in large numbers, to meet the creators of them—that was a minority even when comics were still kind of mainstream. And then as you get into the 70s and 80s and comics vanish from the newsstands and are sold almost exclusively through comic stores, you really had to be the kind of person that was really into it to seek them out, to find them.But at the same time, that audience became much more devoted because they were being fed a product that was being optimized just for them. So, comics through this period of being at the margins really got compressed into this very potent, well-connected subculture. And among the people that were part of the subculture were a lot of creative-minded people. So even starting in the ‘50s and ‘60s, the people that were reading the comics, they came in, became writers, became television people, became people like George Lucas who were highly inspired by the stuff that they read in comics and went out and started making movies.And in fact, the first place that Star Wars appeared before the public was at Comic-Con in 1976 when they brought it around as a roadshow to say, "Take a look at this thing that we're cooking up."The Power of the SuperfanRob Salkowitz: The advantage of this as Comic-Con developed is that if you're doing a project, a commercial project, whether it's an entertainment book, a game, or anything, you want that critical mass of fans engaged first. So if you can get those people activated to come to your opening day weekend, to buy your game or your book on the first week in enough numbers that it puts it up into the bestseller list, that it puts it up at the top of the charts, there's a lot of people that will go and then go after something just because it's popular.You really need to activate those fans. Once we started seeing social media platforms coming around at the end of the ‘00s, the value of having all of these hardcore fans that were very vocal, that were very credible, and all of these people out there on their channels saying, "I was just at Comic-Con and I saw the preview to the coolest movie, and we all need to go and see that"—the marketing power of that and the brand-building power of that was way in excess of anything that these brands could buy through ordinary channels.So, it was around that time—I wrote my book in 2012, and I was observing how all of these things were kind of converging together—and the power of this for marketers in the first place was, you want to get that core audience of superfans activated and engaged. You want to pull out all the stops and have your Hall H presentation, unveil all the stars and the exclusive clips, and have everybody holding their cell phones up and, you know, having the signs that say, "Absolutely no video recording," knowing that within five seconds, the entire world is going to see all of this stuff. That's the dynamic that was at work as Comic-Con grew from being a niche activity into being the gigantic extravaganza that it is.The Shared DNA of Comics and AdvertisingAndrew Mitrak: You gave a preview of how Comic-Con grew to become the extravaganza it is. I want to dive into that deeper, but before we do, I thought I'd take a step back into history and sort of look at how marketing and advertising and promotion and comics more broadly have been intertwined over the years. Then we'll get to how that planted the seeds for something like Comic-Con.When I look at the origins of advertising, I think it has a lot of similar DNA to early comics. If you look at early newspaper comic strips and early print ads, they both use visual storytelling and memorable characters. There's this idea of marrying art and copy together to help convey a lot of information to somebody. But also, the art part of it, the comics part of it, being accessible to a large number of folks who aren't necessarily reading every word. And also, of course, using humor, of course, in a comic strip or often in advertisements. You're an expert in both marketing and comics. How deep do you think this connection is, or am I grasping at straws trying to make this connection?Rob Salkowitz: They both come from the same source, which is that on one hand, human beings love stories. We are attracted to storytelling media in general. And the combination of words and pictures, or sometimes just pictures and visual storytelling—there's a whole prehistory of comics that says, "Oh, cave paintings and tapestries and all of these things." And it's true. When you see stories represented in this way, where it's a sequence of images or something that our mind can picture visually, it activates your brain in different and more primal and instinctual ways than going through a medium like text, for example.As soon as newspapers were able, as soon as printing technology was good enough to be able to reproduce decent-looking artwork, you started seeing, first of all, editorial illustrations, you started seeing illustrations that would accompany stories. Before you could reproduce photos very well, it was drawings and it was artwork. And one of the things that newspaper editors realized is sometimes simpler images work better than highly detailed, realistic images. So having that simplified visual medium at your disposal was really important.If you look at when comics started appearing in newspapers around the turn of the 20th century, it was the comic strips that sold the newspapers. There was a very popular early comic strip called The Yellow Kid that appeared in New York newspapers, and one of the publishers—Hearst and Pulitzer were the two publishers of the competing newspapers—and I forget who stole from whom on this one, but somebody stole The Yellow Kid from the other one as a way to sell newspapers. And that's where we get the term "yellow journalism," meaning unscrupulous, shady journalism. The fight wasn't over the stories, it wasn't over the facts; it was over the comics.Andrew Mitrak: And in some ways, comics sell the newspapers, and advertisements help fund and subsidize the newspapers, so they're all kind of working together.Rob Salkowitz: Exactly. And the advertisers also saw that comics were a potent medium. And then also, the comics were such a popular thing around the 1910s and 20s. The people that were doing the early comic strips—Mutt and Jeff, and Gasoline Alley, some of these really old original comic strips—were celebrities. They were in every newspaper, and they themselves were endorsing products. There's some very funny advertising of, "Bud Fisher, the guy who does Mutt and Jeff, uses this kind of razor," as if the endorsement of a cartoonist was somehow important or influential, but maybe it was.So, those things grew up together. The comics and advertising as mass media grew up together. There were a couple of ad agencies in the 40s and 50s that specialized in doing comic-style ads, and some of the really good comic artists of the 60s and 70s actually came through that studio and learned how to do this sort of realistic illustration style preliminary to that. So there's a lot of crossover in the media itself. That's an untold story, I think, that's not widely known.Andrew Mitrak: I think that The Yellow Kid was actually used to endorse products or would be put in things. So the comic character is selling the newspaper, but it's also not limited to that strip. The character would wind up promoting adjacent products somehow, just as a way to advertise to kids or advertise to folks who are familiar with the comic.Rob Salkowitz: And you had these pop culture characters that came out of that period, like Tarzan, who didn't originate in the comics; he was a prose character. But as soon as original characters started coming out of the comics, within six months of Superman in the comics being a bestseller, there was a Superman radio show, there was a Superman book, there was a Superman animated movie serial, and product tie-ins and all of these things because advertisers always want to get on board with what the public likes. So the connection between comic characters and commercial communication was established at the earliest possible opportunity.Understanding Comics and CommunicationAndrew Mitrak: A lot of what you were speaking to earlier as well with comics as a sequential art medium to convey information, it reminds me of a book that you introduced me to when I took your course, Scott McCloud's Understanding Comics, which is one of those books that you think it's about comics when you read the cover, then you realize, "Oh no, it's just actually about communication in general and how humans interpret information." And like you were saying, how a simpler character that's abstracted is actually easier for us to digest than a hyper-realistic image. And I just think that's one of the great books that you turned me on to, just as I think there's a lot of marketing communication lessons in that book as well.Rob Salkowitz: When I teach it in my class, a lot of the students that come through my class aren't interested in comics per se, but a lot of them are UX designers. And there is no better UX that's ever been invented than comics. For all of the reasons—McCloud is very technical in the way that he breaks down this experience of reading a comic panel to panel as a series of still images engages your mind in a particular way that's different from watching video or different from reading a book or something like that. And the ways that the characters are represented on the page and the artistic choices made by the artist and the visual storytellers involved with it are all very deliberate, and they're meant to guide your eye around the page or to make an emotional impression on you. So it looks very simple, and you look at something like Peanuts or Calvin and Hobbes or something like that, and it's so simple, but under the hood is a 12-cylinder engine. I mean, there's a lot of very powerful storytelling levers that are being and dials that are being manipulated and turned to make it look easy. And that's the unique power of it.From Comic Strips to Comic BooksAndrew Mitrak: Mostly we've been talking about comic strips so far—Peanuts and The Yellow Kid and that—but at some point, they emerge into books. And when did that happen? When did comics sort of go from the strip to the full book?Rob Salkowitz: In the United States, it was in the early 1930s that a couple of entrepreneurs got the idea to package together a bunch of Sunday newspaper comics into a folded-over book that was distributed on newsstands. Within a couple of years, they were exhausting the ready-made material that had already been printed, so they started doing original stuff.The other thing sociologically that was going on is that there was a huge influx of Jewish immigrants from Eastern Europe at that time. And the kids and the zero and first-generation people that were coming to this country were often denied opportunities to get into commercial illustration, advertising, comic strips as opposed to comic books. A lot of the doors to the more lucrative avenues for those kind of people were closed. And so, with the entrepreneurship that we associate with a lot of immigrant communities, they were looking around and saying, "All right, let's do this as comic books." So you had a lot of very scrappy and, in some cases, not terribly scrupulous entrepreneurs, a bunch of hungry, young, idealistic artists, kids that had no particular place to put their stuff. So that, those things all came together, and we saw original ideas. If you unpack what Superman is about, it's kind of an immigrant fable about a guy who comes from somewhere else and he's trying to fit in and he's trying to do the right thing with the rules of his culture and all of this sort of thing. And it's kind of a power fantasy of people that are not allowed to rise naturally in the society that they're in. And those are very potent stories, and it captured the imagination of a lot of people.From Comic Books to Propaganda ToolsAndrew Mitrak: You mentioned how Superman had a subtle telling of an immigrant's tale. But then as World War II breaks out, it becomes a lot less subtle, and comics become more of like propaganda to support the war effort. And folks like Superman and Captain America, they're icons of America and icons of good. How would you characterize the use of comics as a tool to support the US war effort in World War II?Rob Salkowitz: From a marketing perspective, the kinds of messages that you need to get people riled up about wars are not terribly subtle, and they depend a lot on stereotype and simplification and things like that. And again, you have a medium like comics that is tailor-made for that. It went hand-in-hand with radio, which was another mass medium that was happening at the time, where you got this one-dimensional view of what was going on. There was the person that was talking and there was not anything else to distract you from that.So those two things together, and the fact that a lot of comic characters were on the radio at the time and things like that. So, it was very effective. And in some of the later, immediately after World War II, there was a big critique of comics, attempts to censor comics and drive them off the newsstands. And interestingly, the main critic of that was coming from the left, not from the right. And his perspective was that comics were a tool of indoctrination and propaganda and that it was the crude simplification of these images that was making people into docile cannon fodder for the imperialist war efforts and things like that. Not that he was pro-Nazi—I mean, he was a German refugee—but his view of the world was that the lower down the discourse was, the worse off humanity was for it. And so he was pointing at comics as making all of our minds cruder because of that. He didn't appreciate or get all the other stuff that was going on. What he saw is, during World War II, there was a lot of racist and jingoistic and very crude stuff going on as a part and parcel of the war effort.Early Comic Book AdsAndrew Mitrak: So, on this thread of indoctrinating children, it's funny also to me is when I look at the ads inside of comics at this era, it feels like a lot of what you think of like the X-ray specs and the sea monkeys and whoopee cushions. Were those the kind of ads that were inside of comic books at the time? Or was that sort of what funded them, or how did that work?Rob Salkowitz: You have to realize, from today's perspective, when we look at the Fantastic Four movie is going to make a billion dollars and all this stuff, comics were a very low-born business. The kind of people that were involved in the production of comics were not terribly far removed from gangsters, and some of them actually were gangsters. The newspaper distribution of comics was tightly controlled by organized crime and some very corrupt stuff going on. And so a lot of the ads were packaged by these advertising companies that specialized in very low-rent kinds of stuff. And they would divide the page up into sixteenths or something like that. So you would get all of these weird, tiny little ads to separate kids from their dimes for plastic toy soldiers or X-ray specs or hovercraft, whatever.The Rise of the Comic Book MascotAndrew Mitrak: It's funny though, also, it's around this time that you can see marketers in major companies taking inspiration from comics. Like the Kool-Aid Man emerges in the 1950s, and Bazooka Joe, and Tony the Tiger. Mostly things that are creating mascots. While they weren't comic book characters themselves, they look like they could be comic book characters, and they have a lot of the markings of a comic book character. It seems like they've drawn some inspiration from comics. I mean, Bazooka Joe quite literally using the comic as a way to sell the gum. Is that something that you've come across in your research at all, of marketers in this era being inspired by comic books?Rob Salkowitz: I haven't made a careful study of it, but you could see a couple of things. One is, comics were very popular with kids. If you had a product that you were selling to kids, then it's like, "Oh, it's comics, like Captain Crunch or something like that, he looks like a comic character." There was a lot of overlap between the audiences and the language that you were using to speak to the audiences. There was also the ad illustration and art industry was starting to open up. So a lot of the, frankly, many of the people that were driven out of comics by the censorship and the witch hunts and panics of the early 50s ended up in advertising, where they were doing illustrations, they were doing storyboards, they were doing character designs and things like that. And again, there were people that were working in advertising who would eventually end up in comics. There are not that many job opportunities for commercial artists and illustrators out there, so there's going to be a lot of overlap, I think.The Marvel Age and the Rise of Youth CultureAndrew Mitrak: In the 1960s—in '61, the Marvel era of comics begins. You start to see comics for the first time represent youth culture. Spider-Man is a character that's a young person; I think a high school student. Before that, while comics were popular among kids, they usually featured Superman or Batman or guys who were older adults as characters. How did Marvel market themselves compared to what came before them? How did Marvel stand out or counter-position them as a new type of comic brand?Rob Salkowitz: Some of this is demographic, right? So you have the Baby Boom starting in 1946. So these boomers, the oldest ones are 11 or 12 in the late 50s, and they're reading these kind of not terribly challenging Superman and Archie and stuff like that. And they get to be about 13 or 14 in that era, and they're looking around for something that's maybe a little more satisfying intellectually. And so they'll glom on to anything that's not as insulting to the intelligence as some of the stuff that was being done elsewhere in that time. And Stan Lee was a very shrewd and ambitious guy.The extent to which he was responsible for the creation of these characters is very much in dispute right now. But one thing that Stan Lee was is a master marketer. This guy really understood not only that the content is going to sell, but that the brand sells. And so what Stan Lee brought to Marvel Comics—more than Spider-Man, more than Silver Surfer and Fantastic Four and the Avengers and all of this stuff—was this feeling that if you were reading a Marvel comic, you were part of something that was cool and fun and buzzy and bigger than the one issue that you were reading.Because Stan Lee invented this concept of continuity, where you would pick up an issue of Spider-Man and Doctor Strange would be a guest character in the Spider-Man, and he would refer to something that was happening in Doctor Strange comics, or Daredevil would be fighting with a character from the Fantastic Four. And if you were reading any of these comics, you felt like if you weren't reading all of them, maybe you were missing something important. So he would promote the comics with his internal ad pages, and he would communicate with the readers in a voice that was very authentic. And he did this in a conscious way. He wanted to differentiate himself from DC, which was very official and standoffish and stuff like that. And he wanted to be the big brother, the best friend voice. He wanted to make the readers feel like they were part of something.And yes, it helped that he had geniuses like Jack Kirby and Steve Ditko and people like that that were doing the stories, that were creating the characters, whatever his role in that was. But all of those guys worked at other companies over the years, and none of their stuff made people care, made people open their wallets and open their hearts as much as the stuff that they did with Marvel. And a lot of that was due to the brand-building genius of Stan Lee.Andrew Mitrak: He also wrote letters or he had readers write letters in, and then he responded, and he had his catchphrase, "Excelsior!" and all that stuff. And really humanized and built true fandom to have the creator and the mastermind behind this Marvel Comics universe write you a letter and respond to you and have a human connection. It feels way ahead of its time.Rob Salkowitz: Way ahead of its time. It's like you could build a brand-building textbook from studying how Stan Lee built the Marvel brand. We say the Marvel Age of Comics started in 1961. Well, yes, that's when the comics started coming out, but it was 1964-65 when people started caring about them and honestly, when the quality became consistent enough that it was worth caring about, because it took a while for that to sink in.And what he also managed to do was, instead of the readers that would read—they were 9, 10, 11 years old, be reading the comics, become 12, 13, get interested in other stuff, throw the comics away—those folks would stick with it because they wanted to find out what happened next. They didn't want to leave this community behind. So they get into high school, they get into college, they have more stuff on their minds, and they start writing letters that reflect, "Why aren't you talking about the civil rights? Why aren't you talking about Vietnam War?" These are the things that are important to us. And that encouraged Stan and some of the younger creators that were coming into the business, many of whom were fans themselves, to say, "There might be an opportunity to make these stories a little more complicated, make them a little more sophisticated." Then it starts to be these comics aren't just good to be adapted into Saturday morning cartoons; maybe some of these stories have longer legs, maybe some of them have more commercial potential. And that's when you have a company like Warner Brothers taking an interest in DC and stuff like that. So larger entertainment companies start saying, "Hmm, there's something to be had."The Origins and Evolution of Comic ConventionsAndrew Mitrak: So in the last 10-15 minutes we’ve covered an expansive history of comics, though I think it was pretty good for a concise interview. Coming back to Comic-Con, when did comic conventions in general start?Rob Salkowitz: Yeah, I mean, they come out of an earlier tradition of science fiction conventions. The science fiction fan community was pretty well established, and a bunch of the early comic creators were originally sci-fi fans in the 30s and 40s. Some of the sci-fi writers, like Ted Sturgeon and stuff like that, wrote for comics. So there was a lot of overlap, and the sci-fi community already had a fan culture that we would recognize as such.So in the late 50s, early 60s, some comics stuff started to infiltrate because there were some very good science fiction comics done in the 50s. So even the very snobby science fiction fan community had to admit that, "Well, these adaptations of Ray Bradbury are pretty good."That started to cross over from there. And then, as we were talking about with Stan Lee running the letters, not only did he run the letters—and DC did this too—they would print the addresses of the people that wrote the letters so that other people reading the comics would know who the other fans were. They would start writing letters to each other and started creating this informal network.Around the same time, collectors were starting to recognize that older comics were valuable artifacts. They weren't treated especially well. Finding a first Superman comic in good condition might be worth a hundred bucks. And when the first comic sold for a hundred dollars, it was front-page news. Newspapers covered it as, "Wow, there's gold in your attic." And so those kinds of stories are guaranteed to pull that stuff out of the woodwork.So the cons arrived in that period to gather the fans together in one place, create a flea market where you could buy and sell comics and collectibles, and it was a place where the fans could meet the artists. Because the poor artists were sitting in their basements doing this stuff. They had no idea people were reading them or taking them seriously. They were afraid to admit to their friends that they did comics. They would tell people, "Oh, I write children's books." They would say anything but comics. And so getting them out into the light and realizing, "Oh my gosh, all of these people know my work and appreciate it," it was good for the business, it was good for the fans.It became this kind of thing. And if you were one of those weird people that liked comics into your teens and 20s, this was a place where you could go and meet those other people and hold your head high. You wouldn't have to pretend that you're too cool for all that stuff. You would get in with your people, and you would be saying, "Who's stronger, the Thing or the Hulk?" And these arguments could go on all night. And that created a lot of community.How San Diego Comic-Con Emerged as a LeaderAndrew Mitrak: So, these comic conventions emerge out of sci-fi conventions. San Diego wasn't the first one, but eventually, it became among the premier ones, or at least the premier one in the US. So how did it establish itself as the leader?Rob Salkowitz: Well, at first, it absolutely wasn't because the center of the comics publishing industry was New York. But in the late 1960s, Jack Kirby, the great artist for Marvel and later DC, moved from New York to the LA area. So he was on the West Coast, and a community of fans and people and other artists and professionals started to form in the West Coast. So several groups of fans in the San Diego area organized this show. Originally, it was nothing special; it was a couple of hundred people. They had trouble getting it off the ground. It was very informally organized.There was a guy who was a veteran of other shows in Detroit and places like that that knew how to run a convention, and he kind of took these folks under their wing and turned it into a more regular, professional show. And in the mid-70s, the New York show started to peter out a little bit. The organizers of them, they couldn't get the East Coast shows quite off the ground. And so, here's San Diego out here. Let's go out there.Also, the fact that Star Wars used San Diego in the mid-70s as a test market, and then Star Wars became the biggest thing in the universe when it came out. And every fan in the world was interested in that. All of these other, the proximity to Hollywood made it very easy for anybody that had a genre or fan-oriented or comic-oriented—there weren't that many of them, but shows that would appeal to this fan base—just get in the car and drive down to San Diego. It's a lot easier than flying all the way to New York.The Rise of Comic-Con and HollywoodAndrew Mitrak: So, Star Wars... San Diego Comic-Con starts in 1970, right? And Star Wars is '77, is the first one?Rob Salkowitz: So '76 is when they appeared at Comic-Con, and then the movie came out in May of '77, I believe.Andrew Mitrak: Okay. And so, do you know what inspired George Lucas or the producers or marketing team behind Star Wars to do that? Because it's not exactly obvious, right? It's not an existing IP that comic fans know. Was it just some intuition that, "Hey, this is kind of a nerdy movie"?Rob Salkowitz: There's a whole story with this, which I don't know all the details of, but you can find it. I mean, this story has been told accurately somewhere. But what I understand to be the general outlines of it is, number one, Lucas was a comics fan as well as a sci-fi fan. There are parts of Star Wars that are very directly influenced by Jack Kirby with Doctor Doom and the New Gods and, "Luke, I am your father." That whole stuff comes out of comics that people would have been reading in the early 70s. So how that connects up to the fan base is pretty simple.Also, it was modeled on Flash Gordon and these old serials. Well, one of the things that people did at the Comic-Cons was they would screen these movies because we didn't have videotapes, we didn't have those kind of things. So people would get out their old 16mm films, and they would show them at Comic-Con. It's one of the rooms—if you couldn't afford a hotel, you could just sit in the movie room all night and watch King Kong and bootleg Japanese anime from the 60s, all this crazy stuff they would screen there. So fans were used to seeing movies and movie-oriented stuff, and if you were interested in that kind of science fiction and that kind of thing, it was totally in place at a comic convention.Andrew Mitrak: So after Lucas did this with Star Wars in '76, '77 era, did Hollywood start showing up to every Comic-Con, or did it take a little while for Hollywood to have a bigger presence?Rob Salkowitz: It took a while because the people that were running Hollywood at that time were from the era that looked back on comics as trash for kids. Even if there were people that took it seriously at one level, the other formative experience for a lot of these guys was the Batman TV show of the 60s, which was played for laughs. It was basically making fun of how stupid these characters and these comics are, how ridiculous it's the same story every time, and all that stuff. So what was burned into their minds is that comics are low-grade stuff for idiots and juvenile delinquents, and the best we can do is make fun of them.And so, you get a movie like Superman: The Movie, which is a great movie and didn't take that view at all, and a lot of comic fans, to this day, it's one of their favorite movies, even though the visuals weren't quite good enough. So there would be some stuff there, but the people that were running Hollywood, the TV executives, and the people making those decisions took no notice of that.Milestones in Comic-Con's GrowthAndrew Mitrak: So, when you look at the last 50 years or so almost since Star Wars to today at Comic-Con, what have been the major milestones or inflection points of its growth? Specifically with the marketing angle and media blitz of the growth, because I'm sure it probably had some organic growth of comic book fandom and all that, but as far as it being seen as a way to exploit this space and market our product to them in a big way, how did that change over the years?Rob Salkowitz: I think there were three, let's say, intermediate steps between here and the big explosion. The first one was when comics started getting distributed in comic shops instead of on newsstands. So on one hand, comics became less of a mass medium. On the other hand, the material and the fans and the culture of the comic book shops was creating a subculture that was much easier to zero in on and say, "Hey, you're at the comic shop every week, come to our convention. We're having a convention in your town, we're having a convention in San Diego," whatever. So it captured the hardcore fans. Instead of having to look everywhere for them, you had one place that you could look for them.At the same time, a new generation of creators that was more ambitious was doing stuff that wouldn't be commercially viable unless they could take it directly to the fans first and say, "Hey, take a look at this cool graphic novel I'm doing." Nobody knew what this term meant. "We're doing a comic that's a whole book." You couldn't—it'd be very hard to just take that out to the market at large. You had to sell it to the people that you knew would buy it in order to make it commercially viable.So, as comics became more serious, you get to 1986, which is the year that you had Watchmen, you had The Dark Knight Returns, which was a very serious Batman story, and then you had Maus, the Holocaust memoir by Art Spiegelman. These things all came out at the same time, and the mass media all suddenly was like, "Oh, comics aren't just for kids anymore." You would see these dumb headlines that were talking about that.So, Alan Moore, who was the creator of Watchmen, came to San Diego, and it was this huge thing. I mean, it was like the Beatles coming to America. He is British, it was a long trip, and it didn't go well. He got mobbed. He was totally freaked out, and he has never come back to—he very rarely appears at conventions or anything like that anymore because of that.So, Comic-Con kind of pivoted from being a place just for where fans meet to a place where some really interesting, cutting-edge content and creators and also independent publishers were looking for people to do comics. All the fans that wanted to see the creators would go to Comic-Con because all the creators were there to see the publishers. And so it created this snowball effect that was moving on.And then the last thing that happened in terms of San Diego that was important is that the convention center expanded in capacity. The first year that I went was 1997, which was the last year when it was just the original building. And you could fit 40,000 people in there, which was large. Like, 40,000 comic fans in one place, oh my god, that's crazy. Then the next year, they opened Hall D, and then the next year they opened Hall E. And then by some time in like 2003, 2004, they had the entire convention center open end-to-end, and you walked in there and it just took your breath away. You could not see from one end to the other. And so the scale of it just became like, "Oh my god, this puts everything else in the rearview mirror."And then people were like, "Oh, I see." And news crews would start showing up. So news crews would be covering it because it was this big, crazy event. And then when news crews show up, ah, earned media. Let's get back to marketing here. These are impressions that you don't have to buy. You can, if your banner is there, if your stuff is there, and people talk about it on your behalf, they're going to take that message out to the audience. And so entertainment media—as a speaking as an entertainment writer, we are a lazy bunch. If there is one place that we can go to get all the stories, we're going to go there. So San Diego became that place. And so all the media is there. When all the media is there, that means, "Oh, Hollywood, we should show up there because we'll get all this free exposure." Hollywood starts coming, and then all of these fans who don't even know about comics or anything like that, it's like, "Oh my god, like Tom Cruise is on stage at Comic-Con, or Arnold Schwarzenegger," or the top of the A-list people would show up in person, unannounced at this event, and it would just blow people's minds. They would be like, "How could you not want to be in the room for that?" And so that's how it unfolded into this gigantic extravaganza.The Dawn of the Modern Superhero BlockbusterAndrew Mitrak: That last phase—I didn't realize that the logistics of the event and the space and the location itself expanding really did seem to coincide with right as superhero movies came to dominate the box office. And it seems like it's the past 20, 25 years or so that they've really been not just dominating the box office, but also being such a big part of pop culture more broadly. And of course, a lot of this, I'm sure has to do with some rights and also some of the tech and CGI capabilities happening to coincide, and now you can do a Spider-Man movie that looks as good as that one does.Rob Salkowitz: That's exactly right. So it was two things. It was number one, that the tech finally got good enough that what you saw on the screen was as good as what you saw in your mind when you were reading the comic. As hard as they tried to make comic book movies look convincing—the Batman movie from the 80s, great-looking movie, well-directed, Jack Nicholson's in it, but it falls a little short. God help you if you try—they tried to do a Fantastic Four movie in 1993, and it's not quite... So getting it to look not ridiculous and the effects to get good enough, and also the video games to get good enough, so that when you had the platform game tie-in to the movie, that became another source of big money.But the second thing that happened is that a lot of the leadership in the studios started to transition generationally. And so out were the old guys that were like, "Eh, comics for kids." In were the people that read Marvel Comics in the 1960s, that read comics in the 70s and the 80s, and knew what they were capable of, knew that these stories, properly told, could be way better and not condescending and not campy and stupid, but actually be the basis for really good storytelling. And so, the quality of the product improved at the same time that the means of promoting the product arrived. And that was two things that happened together that made it happen.Evaluating Comic-Con’s Role in Box Office SuccessAndrew Mitrak: When you think of superhero movies, they've just been the dominant money-maker at the box office over the last 25 years or so. What do you see as Comic-Con's role in this? Is it Comic-Con, is it the movie itself, is it a little bit of both? Because not everything that's activated at Comic-Con—and even if it's warmly received... I was there, I was at Comic-Con when Scott Pilgrim was promoted, and everybody loves Scott Pilgrim at the Comic-Con. And it was a good movie, it was Edgar Wright, who's a great director and really well-made, but it didn't quite break through to the mainstream necessarily as much as you might have hoped, given the Comic-Con reception. But then other things, like the whole cast of The Avengers is at Comic-Con to announce the first one, and that becomes the biggest franchise pretty much ever. So what's your model on what breaks through and what is Comic-Con's role in helping it break through versus what sort of is just popular among the die-hard fans who are attending Comic-Con?Rob Salkowitz: It's wonderfully unpredictable. If there was a science to it, then practically there is at this point, and that's partly, I think, why the performance and the inspiration and a lot of these things has fallen off a little bit, because it's like, "We've picked the lock, we know what makes it work." But I remember being at a panel in, I don't know, 2005, 2006. So there were these adult-oriented comics, mature subject matter stuff that DC was doing on a line called Vertigo. And they had a character called John Constantine, who was this cynical, British, supernatural detective modeled on Sting. But the British-ness of this character was fundamental to what the appeal was.So they're at the Vertigo panel, they're announcing the John Constantine movie. And Karen Berger, who's the editor and mastermind of Vertigo Comics, is up there and she says, "Yeah, we're going to do a John Constantine movie!" And the whole place blows up. And she says, "And guess who we've got to play John Constantine?" And it's like, "Keanu Reeves." Silence. And you could feel the blood drain out of the faces of everybody on that stage. It's like, "Wait a minute, don't you guys like Keanu Reeves? Like The Matrix?" It's like, "Yeah, but not for that! What are you thinking?"He cannot do a British accent at all. He's become a meme and more beloved now, also, but at the time, he wasn't quite who he is. And it's like, if you swing and a miss, it's too much. If it's the Watchmen movie that Zack Snyder did in 2008 that was literally a page-by-page adaptation of the comic, because he had so much reverence for the source material, he didn't want to do anything different from what was in the comic. Well, as great as Watchmen is, by that time, it was a little bit dated, and there were some things that they probably should have done to make it more interesting or to realize that you're not in comics, you're in a different medium.And so there's a bunch of creative missteps that you can do, and comic fans will sniff that out. The people at Comic-Con who are sophisticated, used to watching a lot of media, they won't let you get away with those kind of things. And sometimes it goes wrong. But the other thing that Comic-Con did is it exposed a lot of properties that you wouldn't have thought of to make movies out of by these producers that were coming there. And they thought that they were looking for Marvel and stuff like that, and they end up with Hellboy, or they end up with The Walking Dead, other properties that may not have been top of anybody's list and suddenly they become very, very popular.Andrew Mitrak: I think it was Sony who retained Spider-Man and X-Men and sold away Iron Man and all the rest for pennies on the dollar as far as the rights go because they didn't...Rob Salkowitz: Marvel was in bankruptcy in the late 90s, and they sold Spider-Man to Sony, and they sold X-Men and Fantastic Four to Fox, I believe. That's right. And then the ones that they were left with was Iron Man and Thor and Captain America, and nobody thought, "Those are the third-tier characters." And Marvel really bet the house on being able to do that right. They actually raised money and started their own studio. The origins of Marvel Studios is actually pretty interesting, how they did that, because it was not obvious at all that they were going to be successful. But at the end of the day, they knew their own properties better than anybody else did, and they just knew they had some very good casting that helped also.Key Marketing Takeaways from Comics HistoryAndrew Mitrak: Most of us are not marketing comic book superhero movies. I'm wondering what lessons there are and what takeaways there are for marketers. What can we learn from the history of marketing of comic books or Comic-Con itself as far as drawing lessons and how to sort of apply them to other forms of marketing?Rob Salkowitz: There's all kinds of things that comics as a medium and as a culture were ahead of the curve on. We talked about the role of people like Stan Lee in creating a brand around a unique and memorable and personal voice. It took marketers a while to realize that that was a good way to do it. And it didn't even matter what it is that you were trying to market. If you could get people to identify with your brand in that way, they would do anything for you. They would become your ambassadors. So comics figured that part of it out.Comics figured out the—because of the way the medium and the business worked, they had to sell you an issue every month, and they needed to keep you interested month to month. So you needed things to be interesting enough to change a little bit, but not change so much over time that you would get so far away from the premise of your character that you wouldn't even recognize it. So this idea of continuity and stasis together as a storytelling vehicle to keep people engaged, and then also this idea of continuity where you were telling big stories and not just creating a story, but you're creating a whole universe that gave you opportunities to explore backstory and characters and history. And then to take it not just from one medium, but to all kinds of different media...If you look at the way the television worked in the up until, say, the early to mid-90s, every time you turned on the TV and watched an episode of something, it was as if none of the other episodes of that show had ever existed. Then, as it became possible, "Oh, we can rewatch the season on VHS or something like that," you started to get these season-long story arcs, like in Buffy the Vampire Slayer or Star Trek: Deep Space Nine or things like that. And it became—you'd be able to build these franchises starting with one thing and then moving over to another thing. Comics had been doing that, had been doing that for 40 or 50 years, and a lot of the same storytellers that were doing it successfully in comics moved over into other media to do that. And I think marketers can learn from, when you're trying to build a brand, when you're trying to build a line of connected products or create affiliated brands or tell big stories, there's a lot of lessons that you could learn from how to weave these things together.As you know, I teach a class in transmedia storytelling, and that's one of the principles of it, is how do you keep people engaged across these different media? How do you make your story accessible to different audiences in different ways, but all have them funnel into the same place? Marketers are trying to do that every day. So it's a little bit of a bank shot. It's not like, "Oh, study this comic, and you'll know how to sell IT services or something." But the fundamental building blocks are there, and the advantages that comics have been doing it to a very critical audience. So it's been wind-tunneled and tested in an optimal way before it hit the streets. And they've created this culture, just like this great petri dish for trying out all of these different things. So I think a lot of brands and even just the idea of a convention itself has been adopted across a lot of industries that are using the Comic-Con model in ways that I don't think the original founders would have intended or recognized.Andrew Mitrak: Some of my top takeaways might be the power of in-person events and in-person gathering. There's some itch that we have. I'm sure a lot of comic book fans are introverts and don't necessarily gather, but there's something about magic of people wanting to connect in person. And as a marketer, in-person events are super hard. There are all these logistics and moving stuff around, but it can be worth the effort if your target audience is there. That's one. Obviously, appealing to your superfans and creating magical experiences and treating your fans and showing respect for that core group that will spread the word. I think there's also some power to physical materials. A comic book is a physical thing, and so much of advertising and marketing is all digital, and that just having something that's tactile and there in front of you—I'm sure you can read comics on your iPad or on your book, but there is still something that's nice about a printed material.Rob Salkowitz: The scarcity angle and the fact that the best way to get people to buy your product is to tell them, "I'm sorry, there's not enough, we don't have any, wait in line, maybe you'll get one." Creating that sense of scarcity—we live in an age of digital abundance. Every digital thing is identical to every other digital thing. So having something that is unique, that's physical, that's collectible, that's hard to replicate, and that's exclusive—yeah, brands could totally learn from that.Andrew Mitrak: I think one other takeaway I'd have also is that no matter how big something is, it can always seemingly get bigger. Even if you think 40,000, "Who could ever need more than 40,000 people at a comics convention?" And I remember when I was taking your class 11 years ago, I thought, "Oh gosh, superheroes are at their peak. They're already going to Guardians of the Galaxy. Nobody's heard of that. They're already like..." But they've been so much bigger. It can get than where you think it is, even if you're thinking it's at the top. Things can always get bigger. There's room for more, just because there's so much creativity within storytelling, and the world is such a large, addressable market that things can always get bigger than you expect.Rob Salkowitz: Absolutely.Andrew Mitrak: Well, Rob, it's been so much fun taking this tour of comics history, marketing history, Comic-Con marketing history. Where are the best places for listeners to find you online and read your work?Rob Salkowitz: Yeah, so I write for Forbes, and you can find my stuff there, probably five pieces a month, something like that. So you can search for me through the usual ways. If you follow me on BlueSky @robsalk or on LinkedIn, is a good place for connections. You can find my books sold in Amazon. So the main book that's the focus of this conversation is called Comic-Con and the Business of Pop Culture. It came out in 2012, and unfortunately, it got enough stuff right that it now reads like, "Oh, that's totally obvious." But at the time that I wrote it, a lot of this stuff was not totally obvious. So that's where that's the genesis of a lot of the stuff that we were talking about. I've also written some other books on other business subjects that people might be interested in.Andrew Mitrak: Well, yes, thanks Rob. I'll post links to all those in the show notes and in the blog that accompanies this post. So thanks so much for your time. I really enjoyed this conversation.Rob Salkowitz: Thanks for having me. I thought as my student that you'd gotten your fill of it 12, 15 years ago, but apparently not.Andrew Mitrak: There's always more to learn about this, and I think checking in every 12 to 15 years sounds okay to me. (Laughs) I hope you have a great Comic-Con this year. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 25I wanted to do something special for the 25th episode of "A History of Marketing." While I love the conversational format of the podcast, I stumbled upon a story so incredible, so important, that it demanded a different approach. This story is told in a documentary format that took 10X the usual effort to produce.That story belongs to Wroe Alderson.Ever heard of him? I hadn't either until I started this podcast. Yet, his short Wikipedia page calls him "the most important marketing theorist of the twentieth century and the 'father of modern marketing.'" (A title usually bestowed upon Philip Kotler.)How could such a pivotal figure be almost completely unknown today?Answering that question took me on a six-month journey. What I discovered was a life that reads like a great American novel. Before he was a marketing theorist academic, Wroe Alderson was a hobo riding the rails, a prizefighter, a lumberjack, a poet, and an FBI suspect who traveled to the Soviet Union at the height of the Cold War.To do Wroe’s story justice, I decided to break from the usual format. In this episode, I weave together multiple interviews—with Ben Wooliscroft, a professor who has spent his career studying Alderson and chronicled his life; Stan Shapiro, a 91-year-old colleague who co-authored a book with him; and with his only son, Evan Alderson, who shares powerful stories about the defining moments of Wroe Alderson’s life.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThis episode pieces together stories from the astonishing life, the groundbreaking work, and the mysterious disappearance of the most important marketing figure you've never heard of. You can listen to the audio, and I’ve included images and footage in the video version and the transcript below.I hope you find Wroe Alderson as inspiring as I do, and that this episode can play a small part in bringing renewed interest to Alderson’s life and work. If you like this podcast, please consider sharing it with a friend or posting about it on your preferred social network. As always, you can email me at [email protected]. Episode transcript:Andrew Mitrak: My guess is you haven't heard the name “Wroe Alderson” before. I hadn't heard of him either before I started this podcast series. The Wikipedia entry on Wroe Alderson is less than 500 words long. Here’s the first sentence of it:Wroe Alderson, 1898 to 1965, an active Quaker, is widely recognized as the most important marketing theorist of the 20th century and "the father of modern marketing."That's quite an introduction. So, how is it that I know nothing about him?Ben Wooliscroft: If you're a physicist and you'd never heard of Newton or Einstein, that's where we are in marketing.Andrew Mitrak: This is Ben Wooliscroft. He's a professor at Auckland University of Technology and co-editor-in-chief of the Journal of Macromarketing.Ben Wooliscroft: How did this discipline join together around the central character who was president of the American Marketing Association, who created the Marketing Science Institute, who was heavily involved in starting the Management Science Institute, incredibly influential, and yet he died and very quickly his theories almost evaporated.Andrew Mitrak: Could this really be true? How could one of the most important figures in marketing theory be wiped from the pages of history? To my knowledge, there are no videos of Wroe Alderson, there's no audio of him speaking. I couldn't find a single podcast episode about him. The only YouTube video about him is from some spam account that scrapes Wikipedia pages and reads them in a robotic voice.Robotic Voice: “He founded Alderson & Associates and served as a professor at Wharton University of Pennsylvania after joining it in 1959.”Andrew Mitrak: It has more than 93,000 uploads to date…. But after scouring the internet, I found a massive 572 page volume called, A 21st Century Guide to Aldersonian Marketing Thought, published in 2006. Within this tome, there's a 30 page biography written by Ben Wooliscroft.Ben Wooliscroft: Thank you for inviting me to come and talk about Wroe Alderson who's been the basis of much of my career. To work out why we lost the theories, I wanted to talk to as many people who were alive who had been there and seen that transition. I sat down and tried to put the narrative around his life, because he was a fascinating character.Andrew Mitrak: Wroe Alderson's life is an incredible story. Here's a teaser. At various times, Wroe Alderson was a hobo, a lumberjack, a teacher, a prizefighter, a soldier, a football player, an academic, a government policy maker, an entrepreneur, a poet, a Quaker, an FBI suspect, and more. Reading it feels like a character that was part Twain, part Hemingway, part something else.1898 - 1915: Born into poverty in rural MissouriAndrew Mitrak: I believe the clues to understanding Wroe Alderson's approach to marketing are in his life story. It starts with his birth back in 1898 in rural Missouri.Ben Wooliscroft: They were a poor family, a lot of children, mother, father.Evan Alderson: He had lots of brothers and sisters. Family of seven kids, I think.Andrew Mitrak: This is Wroe Alderson's only son, Evan Alderson. He's a retired professor from Simon Fraser University.Evan Alderson: His mother got a degree at a teacher's college, which was unusual at that time for a woman to receive an actual degree at the teacher's college. She was a very sweet woman. I think she was probably part of his intellectual development in some ways or his curiosity about the world and so forth.Andrew Mitrak: If it's okay, I'm just going to read a little excerpt.Evan Alderson: Absolutely.Andrew Mitrak: “Wroe Alderson graduated eighth grade and left school at the age of 15. As a young man, he left home in Missouri and took to the rails, living as a hobo and traveling as far as Washington State. Pre-World War I, he held many manual and menial jobs including at a tannery. While he traveled around the country working, he would send money to support the family each month... Alderson was an able fighter and was involved in a number of prize fights.”I'm going to stop. I could go on, but when I hear that, I'm like, “What?!” Evan Alderson: (Laughs)Andrew Mitrak: This is the person who became a renowned academic and scholar and father of marketing thought? Each paragraph - each sentence really - felt like that could be an entire chapter of a book.Evan Alderson: Let me just say something about the record that you have from Ben Wooliscroft. I think that a lot of the facts even in that story that you just read me are maybe not quite accurate. There are a lot of memories at play. For example, about his education. Actually, Wroe graduated high school at the age of 16.I'm not entirely sure that that's different from completing grade eight because I don't know what the educational system was at that time.The other thing that I remember from a story that I think is very important that really hasn't come out in much of the writing, he talked a lot about his father being a very strong guy. There's this fable that he actually lifted huge weights and so on at fairs and even like train assemblies and stuff and which again may be fictional or maybe not, but he was a spectacularly strong guy. And I think that was a big influence on my dad.He left home at 16, my dad. And I suspect that before he left home, there were various sessions behind the woodshed or in the barn or either whipping or by hand, he got beaten. And I think that made an impression on him. And I think he left home for a reason.I think in some ways, I think he lit out for the territories to paraphrase Mark Twain, right? That he wanted to get away from home.The one story he told me that I can remember that I think is very informative, and he told me he was quite sentimental about it. He was on a train somewhere. I don't know quite where. I know he tried to sign up for the army early.He told me this story of being on a train with some other young men, and looking out the window, and unexpectedly seeing his dad outside the train, waving. Waving at the car in front of him, and then he went by, waving at the car that he was in, and then continuing to wave. And he realized that his dad wanted to know that he cared for him, and that he was wishing him well, and that he was going to stand there for a long time, continuing waving in hope that his son would see him.That was his interpretation, and I think it was a very moving moment for my dad about his dad. After years, it's still a moving moment for me.1910S: WWI, Spanish Flu, and family tragedyBen Wooliscroft: He spent some time in the army, but it was interesting talking to people. They talked about him as being severely left-handed. And there are a lot of left-handed people out there who can still use a rifle in a right-handed way. And the First World War was not an inclusive war. Here's your piece of equipment. You will use a bolt action rifle. If you cannot manage that with your right arm in the standard model, you're not much use to us. And he really struggled. So, he ended up working as a typist in the army during the First World War.Andrew Mitrak (Speaking to Evan): When Wroe was enlisted in the army, what was called the Spanish flu broke out and this had a terrible impact and a terrible tragedy that struck Wroe's family and your family. This is your grandfather who passed away and your aunt and uncle, Wroe's brother and sister, passed away during this 1918 flu pandemic. A really horrible tragedy that leaves some lasting trauma. Did he ever speak to that experience?Evan Alderson: I do think he was probably very supportive of the family after his father died. He did, I think, support them financially in various ways and helped them out. So, I think he continued to be attached to that side of his family.Andrew Mitrak: Do you think coming back to this train moment, as he's departing the station, do you think that was the last time he saw his father?Evan Alderson: It's possible. It's possible that it was. Yes.Ben Wooliscroft: Now, of course, after the First World War, there were really tough times. So, we've got this man who has been brought up in what we would consider now abject poverty, desperately seeking work, looking for income to send home to keep the family.Early 1920s in Washington State: From lumberjack to Renaissance manEvan Alderson: As we know, he was stationed at Fort Lewis in Washington State. I think that's where he was a lumberjack actually. He was in the West Coast forest. He sought out an education, and while he was in Washington, he ran across this very interesting economics professor.Andrew Mitrak: Yeah, Selden Smyser.Evan Alderson: Selden Smyser, which I don't know anything about, except that my dad admired him and got very interested in economics as a result of that, and was encouraged to go off to study.Ben Wooliscroft: And really encouraged him to come to university where Wroe started his first degree, and you've dug up some amazing stuff from Central Washington University.Andrew Mitrak: Let me jump in and explain this. So, Wroe Alderson was enrolled in what was called Washington State Normal School. I had never heard about normal school before, but this was the historical term for a teacher training institution.Washington State Normal School is now known as Central Washington University, which is about two hours east of where I live in Seattle. I looked up Central Washington University's archives for 1922 and 1923, the years that Wroe Alderson attended. I found digitized copies of their yearbook and newspaper clippings. And Wroe Alderson was all over them. He was president of the student body, an editor on the student newspaper, a property manager and actor in the drama department, a fraternity member, and a tackle for the football team, which won a regional championship.This was new information to Wooliscroft. It wasn't in his biography, likely because Wooliscroft wrote it 20 years ago before these documents were digitized and made available online.Ben Wooliscroft: That's really amazing to see the photos you've sent through of him in his football garb. It's a shame there isn't a tape measure beside him because by all accounts, he was around 5'2", 5'3".Evan Alderson: He was pleased with himself about his football because he, shorter and smaller but equally strong as the big guys on the team.Ben Wooliscroft: And also how broad his contributions were being involved in theater, looking after the magazine for the year, and really a renaissance man, one might say.Mid 1920s: Washington D.C. and the US Department of CommerceEvan Alderson: That's what he really wanted to do, was to get a real good education in economics and go that direction.Ben Wooliscroft: Interesting to go from Washington State to Washington D.C., finishes his degree at George Washington University. There's a real theme running through here.Andrew Mitrak: For listeners who are outside of the United States, I'm sure all the Washingtons are somewhat confusing. But he's moved from Washington State to Washington D.C., which is about as far within the continental US that you can go. It's a very big trip. He's in Washington D.C. He earned his degree in economics and statistics.Ben Wooliscroft: And then to employment for the US government looking at supply chains. That was foundational to I think everything that followed was his really rich understanding of how goods were distributed through the American economy. And that was a major topic for marketing at that time because it was a real challenge and efficiency was not primary.Andrew Mitrak: This is the first moment within the story where I start to see the trend line into being a marketing theorist. And as you mentioned, it's supply chains, it's analyzing efficiency of drugstore purchasing policies, and what were the major contributions of Wroe Alderson's early work at the Department of Commerce?Ben Wooliscroft: This was not a prosperous time for America. We've got the Great Depression, and he's going around and there are a whole lot of people who are running drugstores and they've got reps coming to see them and saying, can I sell you some drugs? Can I sell you some goods? Now the drugstore owner knows the people who are coming to see me are on commission. If I don't buy something, that's someone who doesn't eat tonight or whose family suffers.The phenomenon that occurred was a whole lot of drugstores would have five or six different brands of aspirin on their shelves. They'd buy a small bit from everybody because they felt this social responsibility to their fellow man, usually a man on the road as a sales rep. Lots of small purchases, very inefficient supply chains, lots of little deliveries coming through, but a very human world view.The first marketing question: “How do we get goods to market?”Andrew Mitrak: Later, we hear about things like the 4 Ps, product price place and promotion, and so much of marketing today, we think of the promotion part of it, but that place part was more the distribution part, the logistics part, the supply chain and where somebody chooses to expand. And it sounds like this is more sort of the area that he's studying.Ben Wooliscroft: Yes, and the first marketing question was really, how do we get goods to market? Some of the early definitions of marketing explicitly excluded sales. They weren't interested in promotion. They were only interested in how do we get goods to the retailer? After that, it's nothing to do with us. That's a different discipline.Marriage to Elsie Star WrightAndrew Mitrak: He was an incredibly hard worker at the Department of Commerce and one illustration of this is that he meets Elsie Star Wright, who becomes his wife, and this is so funny. He gets married on Christmas day, not because he wants to get married on Christmas day, but it's the only day he was sure he could take off work.Ben Wooliscroft: Certainly she was an intelligent person, a very caring and moral person. They clearly cared for each other, they had a good relationship. Elsie was doing her PhD. A number of times when she was getting close to finishing her PhD, something would come up and disrupt it.Evan Alderson: She graduated in Sciences and she went into embryology and was working on her dissertation for a long time to get that done and kept having kids instead of completing it. She would call me her little PhD because after she had me, she gave up on trying to… having three young kids to take care of, she gave up on trying to complete it. She lived a very domestic life after she was married, but she was a very intelligent and skilled person, and had her own serious intellectual capacities.1940: Conversion to QuakerismAndrew Mitrak: Yet another curveball in his life story is he became a Quaker. I looked this up in the 1930s and 1940s, they accounted for less than one in 1,000 Americans.Evan Alderson: I don't know how much you know about Quakerism, but it's had its own very sectarian moments when William Penn was off getting his colony and George Fox was refusing to take off his hat to the king and that kind of stuff because every person, every human soul was equal. And as the Quaker saying was there is that of God in every man and that whole notion of a kind of fundamental human equality. They had particular manners that they preserved over time, like we had a somebody in our community who never wore buttons because they were frivolous, so he had to have shirts that were pinned together in some ways and all that kind of stuff of not false showing of yourself and so on. Both had some religious backgrounds, but I think they found a home there.How the Quakers helped standardize fixed retail pricingEvan Alderson: The other thing that was, I think, influential for him is that Quakers were very adamant about single pricing. That is to say, you didn't barter.Ben Wooliscroft: If you go to a Quaker shop and ask them what the price is, they tell you what the price is. In the English language world, Quakers and other sects that are extreme truth-telling, created the fixed price. Otherwise, at that time, if you went to a shop to buy something, it was a skilled activity. You had to be ready to negotiate the price of something. As soon as we get a Quaker shop, the price is the price. This is a major breakthrough in commerce and in the retail environment.Andrew Mitrak: I'm by no means an expert on Quakerism, but I understand they value equality, they value simplicity and community, reverence for nature, and if you look at his writings about things being interconnected, that marketing isn't purely about squashing your competitor, but there's a lot of opportunity for coexistence between companies that it seems like there is a thread between how Quakerism influenced some of Wroe's philosophy when it came to marketing.Ben Wooliscroft: Yes, and one of my favorite after dinner stories is Wroe Alderson sitting in a Quaker meeting. And the legend which I have heard from multiple sources is that it came to him as he was sitting there waiting for inspiration from God, that God was looking for humans and humans were looking for God. In the same way that consumers are looking for suppliers and suppliers are looking for consumers. And this idea of “double search” came to him.Inspired by his religious devotion and meditations, a different view of the world from what was predominantly a supplier sends goods into the world to a more negotiated market where there's a recognition of search on both sides, a much richer and systems oriented marketing view.1943: World War II and the Office of Price Administration (OPA)Andrew Mitrak: Wroe Alderson converted to Quakerism in 1940, and then World War II breaks out. His family takes in refugees from Austria and Germany and this just speaks to their ethics and maybe their Quaker philosophy, that's that in action. It's a really admirable thing for them to do. And then he also joins the Office of Price Administration and he works for the government again. Do we have any record of what his work was at the Office of Price Administration or what did the Office of Price Administration actually do?Ben Wooliscroft: The Office of Price Administration was responsible for stopping rampant inflation which is typical of war, followed by a great depression.If we look at the history of modern warfare, we see almost without exception, some depression cycle follows a major war and that we have rampant inflation with the reduced supply during the war. So, the Office of Price Administration was charged with avoiding that situation and they did that through a number of ways: rationing, which visited the US for a short time, clearly kept going a lot longer in other countries. But then they added the marketing side and a lot of social messaging around not paying above the ceiling price.[Archival Government Video] OPA Narrator: Here is the OPA meat regulation. OPA requires tray posting of every display with grade, points, and price. 85 cents is illegally high for any cut. In addition to tray posting, OPA requires the butcher to post a list of ceiling prices and the points required. You can help to hold the home front line against ruinous inflation if… You know your meat!John Kenneth Galbraith and “Countervailing Power”Ben Wooliscroft: They had a really strong campaign against black marketeers and that the selling price, you would be supplied. This is why I visited J.K. Galbraith, the smartest individual I've ever seen, because he was the head of the Office of Price Administration.Andrew Mitrak: It's worth a slight detour to talk about John Kenneth Galbraith. Galbraith was a Canadian-American economist who served in the presidential administrations of Roosevelt, Truman, Kennedy, and Johnson. He received both the World War II Medal of Freedom and the Presidential Medal of Freedom, and he was appointed to the Order of Canada. He published four dozen books and several of them were best sellers.(An amazing side note: Galbraith also popularized the term “conventional wisdom”)In 1952, Galbraith published his book, American Capitalism, The Concept of Countervailing Power. Countervailing power is a concept kind of like checks and balances, where the power of large corporations is held in check by the strength of other groups like labor unions and organized retail buyers.Evan Alderson: Countervailing power. That's a term that Kenneth Galbraith used. My dad said on several occasions, he thought Kenneth Galbraith had stolen that term from him. Maybe not the term, but the concept from him.Ben Wooliscroft: Wroe was definitely involved in that sort of supply, messaging around it. J. K. Galbraith didn't recognize [Wroe Alderson’s] name. I'm not sure how big the office was, but I understand that Alderson was reasonably senior in that office.Evan Alderson: I don't think Kenneth Galbraith stole it, stole the idea from him. But I think it might have emerged out of their conversations at the Office of Price Administration, OPA. I think it was probably a very creative time for both of them. They were doing a really interesting thing. They were messing with the markets. So, they had to think a lot about how systems worked and how they interacted.1944: Alderson forms his consulting practiceAndrew Mitrak: After the war, he sets up a consulting business called Alderson & Sessions. He met Robert E. Sessions, who was his co-founder, at the Office of Price Administration during the war. This later became Alderson Associates.Ben Wooliscroft: He was a full-service guy from start to finish. Alderson Associates was product development, commercialization, logistics, selling, advertising around it.Andrew Mitrak: And he had big clients, clients we still recognize these names today, DuPont, Standard Oil, the Rockefeller Foundation, J. Walter Thompson.Ben Wooliscroft: He also worked with Jeep. So, his research led to Jeep stepping out of being a military vehicle into being a marketable consumer vehicle as well. He needed to know how people would use a Jeep, what attributes of the Jeep would fit into their lifestyles. The Jeep idea of being on the beach with your Jeep and your girlfriend became quite emblematic of an American experience, far removed from the thought of it being a military vehicle designed to get you into or out of trouble.Andrew Mitrak: Here's Professor Stan Shapiro, who at 91 years old, is among the few living academics who worked for Wroe Alderson.Stan Shapiro: Where do you buy baby food? You buy baby food in a supermarket. Sounds like a stupid question. It was Alderson & Sessions that moved it from drugstores to supermarkets. They did a consulting practice for Johnson & Johnson, which wanted to know how its marketing could be improved and what was improved… you're selling it through the wrong outlets! And it also interfered with the impulse purchase.Usually you go to the drugstore for a purpose. And you go to the supermarket to do the week's shopping, and things are strategically positioned to encourage you to go by all sorts of interesting displays that you had no intention to originally buy. And you're much more likely to get the stuff bought if you repositioned it in the supermarket.How theory informs practice, and practice informs theoryAndrew Mitrak: Over the course of this podcast series, I've interviewed several professors about the development of marketing theory. I've also interviewed CMOs and executives about how marketing practice has changed. It's exceedingly rare for any individual to excel at advancing either theory or practice. But Wroe Alderson did both. His consulting practice informed his theory and he applied his theory to his practice. Here's how Stan Shapiro summarizes him.Stan Shapiro: I'd say a genius in blending theory and practice. Nobody before or after in the marketing area has done it as well.Ben Wooliscroft: Instead of just this very discreet bespoke consulting job, we are going to find out something more that makes this a contribution to knowledge of marketing in general. We will understand more about the world. Of course, the brand died when he died. But we talk about the big four today in terms of consulting companies, he was one of the big two on the east coast of America.1948: President of the AMA and publishing “Towards a Theory of Marketing”Andrew Mitrak: He's nominated and he becomes president of the American Marketing Association in 1948. That same year he publishes Towards a Theory of Marketing. What was this theory of marketing in broad strokes and why would he spend the rest of his life working on this general theory of marketing?Ben Wooliscroft: His 1948 paper in the Journal of Marketing with Cox is towards a theory of marketing. We spend a lot of time on theory in marketing. We've got theories of branding, we've got theories of consumer behavior, a whole lot of different ones, often that don't talk to each other. The idea of theory of is that they are then joined together around some central hub. And the rest of his life before he died in 1965 was really spent trying to make that a reality.It's hard to put it all into a short bit but I’ve got sessions I give to my students which take a couple of hours. The real nub of it is this idea of heterogeneous supply and demand, markets as places for matching information to work out which the best exchanges would be, and then all the institutions that go around that to do that better.He produces a theory of exchange, theories of retailing, theories of consumption, theories of distribution, the idea of cooperation and competition being balanced appropriately, the idea of branding is clearly in there, but in its infancy, looking at a lot of the costs involved in information flows, and how that can be improved.The organized behavior systemStan Shapiro: The concept of the organized behavior system was one that Alderson had formulated. It was the idea that you're best looking at an activity in terms of the whole range. There's a lot of attention in marketing on micro activity. But let's pay a little more attention on marketing as society's provision. We're not focusing on a micro exchange, we're not focusing even on a marketing channel, but how from beginning to end, people get the mix of goods and services they want, they like, or in some cases, they can only afford.Ben Wooliscroft: Alderson looked at the world and saw groups working together and recognized that individuals are members of multiple groups. And this is a real departure from what we expect, partly because of our current individualistic world view.The primary organized behavior systems are the family, the firm. We go and work for a firm because in the medium to long term, we're better off. There are days we don't like it, but we stick with it. And the government is also an organized behavior system. So, these institutions were his building blocks.Alderson and FunctionalismAndrew Mitrak: Here's a clip from my conversation with Jagdish Sheth on episode seven of this podcast. It's the first time that the name “Wroe Alderson” was brought up on A History of Marketing.Jagdish Sheth: And there was a whole writing by one single author called Wroe Alderson. He was a brilliant theorist. And he came out with a theory which he called it functionalist. I still don't understand him because he was very complex language even for academics. It's like reading Greek or Sanskrit or something like that.Ben Wooliscroft: One of the biggest criticisms of him as an author was that he used complicated and new words, which is really rather unfair. I've done reading level analysis of his work. It's not more difficult than Kotler. It's a very lazy excuse to say Wroe Alderson's too hard to read.Andrew Mitrak: One of the words that comes up a lot when looking at Alderson is functionalism. Could you share what functionalism means?Ben Wooliscroft: Yes, and functionalism, it's a shame he used that word because functionalism which is a school of philosophy of science where we're looking at the components of a system and how they work together.So, yes, it's a systems perspective. It's a particular type of system, and in the mid-60s, it received criticism. With the great upheaval in America, the rise of the critical school, functionalism was criticized for excusing things because if there was an institution like the monarchy, functionalism would say, this is the purpose of the monarchy in the system. It sought to explain all the pieces.Critical scholars would say, no, the monarchy is the appendix. You don't actually need it and you're excusing them because they happen to be there at the moment doesn't mean that they should be there.If you look at the history of mentions of functionalism in literature, if you do a Google Ngram or something, you see it being really quite popular, and then dropping off a cliff as the word fell out of favor. Had he just said a systems theory, it might have been more palatable and kept going a bit longer.Were Alderson’s theories too complex to be memorable?Andrew Mitrak: We were talking about why Alderson isn't as well known today. One idea might be that when I ask, can you define his general theory of marketing? Well, it takes a two-hour lecture. It takes more than that. It takes a lot to do that and it's, in some ways, the people who are remembered, they're kind of the ones that are a little easier to explain.They have a nice, pithy, memorable phrase like the 4Ps or STP or brand equity, which are all great. They're all important and I don't mean to diminish them in the slightest. But there is a certain memorability to that where you can kind of say that, oh, that's product price place motion, that's the marketing mix. And Alderson doesn't quite have that equivalent.There wasn't any short quip, acronym, or easy to remember thought. I'm wondering if that idea rings true for you or if you have any sort of idea about that.Ben Wooliscroft: Very much so. It's all very well to say, “Einstein is E=mc².” But to get to the point where you can actually understand what that means, you've gone through typically an undergraduate education and really thought quite hard. And if we get into things like quantum physics, leading quantum physicists like Feynman and others say, well, there are three people in the world who understand this theory and I'm not sure that I'm one of them.So, should a theory be hard? That's one of the philosophy of science questions.1955: Alderson travels to the Soviet Union, becomes an FBI suspectAndrew Mitrak: Back to Wroe's biography, right when you think things are starting to, okay, I see the line. He's writing a general theory of marketing, he's the president of the American Marketing Association, he's the founder of one of the top marketing consulting firms in America. Yet another just amazing left turn that's like you wouldn't expect is he visits the Soviet Union in 1959 at the very height of McCarthyism.And this would be like… you wouldn't imagine the president of KPMG visiting North Korea right now. Just imagine the flack that he must have gotten and the FBI list he must have been on, and he's already sort of on the outside being a Quaker, a pacifist, and here he is going into enemy territory, visiting the Soviet Union.Ben Wooliscroft: So he published a booklet on it. So not only doing it, but then making it public that he had been there. Their travel papers were from the Quakers because you couldn't travel there on an American passport.Evan Alderson: He was invited along with some other very senior members of the Quaker church. He was very interested, of course, because he was interested in how they deal with scarcity.Ben Wooliscroft: And he was looking at their systems of distribution. He was looking at where it was efficient or inefficient.Evan Alderson: It was a kind of a mission, it was fact-finding.. and it was the kind of stuff that wasn't terribly well regarded at the time.Stan Shapiro: They were kind of curious, what were these people doing, wandering through Russia at a time of Cold War concerns. It wasn't until Mark Tadajewski published that article about him being followed by the FBI.Andrew Mitrak: Mark Tadajewski is a professor with a passion for marketing history. He performed a Freedom of Information Act request, also known as a FOIA, for the FBI files on Wroe Alderson.Andrew Mitrak (to Mark Tadajewski): Do you know if a FOIA has ever been done on Wroe Alderson?Mark Tadajewski: I did it. (Laughs)Andrew Mitrak: You did? You did it? Oh, wow. That's amazing.Mark Tadajewski: The paper that I wrote was called "Quaker Travels, Fellow Traveler? Wroe Alderson's Visit to Russia During the Cold War."The FBI didn't have a clue that he'd gone there. They only found out, the image I had in my head was it seemed to be some guy in an FBI field office who's sitting there reading a local newspaper and Alderson and the Quakers, which is the group he went with. Now, the Quakers are always going to attract attention because they're pacifists. So they need to be watched.So Alderson goes there. He's really interested in the Russian distribution system, but seeing where it works and where it doesn't. And he comes back and so somebody from the FBI realizes he's been there because he's been lecturing on it at different places. And then, I don't know how this kind of happened. Presumably he's being followed at this point. But Alderson's in a cafe where somebody's asking him about the trip or something along those lines.It's a long time since I've looked at it. I think he prods him, and he's basically trying to encourage him to say something about the Soviet Union being better. And Alderson wasn't having any of it. He was quite vociferous at the table. He was very, very firm about his views and he's not clearly aligned in any way, shape or form. And that's reported back to J. Edgar Hoover.1963: Marketing and the ComputerBen Wooliscroft: Stan Shapiro, he was deeply involved in some of the work that Alderson did.Andrew Mitrak: One of Stan Shapiro's collaborations with Wroe Alderson was the 1963 book, Marketing and the Computer. It's among the first books to analyze the implications of the computer on modern marketing.Stan Shapiro: And remember, let's make it clear. I didn't work with Wroe Alderson. I worked for Wroe Alderson. And there is a difference in that. Remember, this was the early days of computer. You cannot imagine. And there was this enormous room, which had one of the early computers. It was the size of a conference room. And it was felt and well anticipated, this was going to revolutionize things. And so he decided to put together this book.Andrew Mitrak: Here's a quote. "Advancing skill in handling numerical data is a major facet of intellectual and material progress. Man, the marketer, is first of all man, the counter, whether he keeps his score on clay tablets or magnetic tapes. The perennial questions of the marketplace are how many and how much."They also anticipated the use of computers for better forecasting. Another quote. "The constant pressure for better forecasts may occasion a deep regret for past business records thrown away. It is impossible to foresee all the possible uses of information which appear relatively useless today."Stan Shapiro: I think there were some important insights, but we were there and we were there early. And that was all Alderson wanted to do. He wanted to be there intellectually early in a number of areas.Marketing Theory Seminars and Alderson the educatorBen Wooliscroft: Associated with the consultancy, but driven through the universities, was the marketing theory seminars. They had meetings by invitation only. And so, if you're the deputy vice president marketing for Firestone or Bell Telephone or Coca-Cola, and you got an invitation from Alderson to come to this, you would come. As well as senior executives, Wroe Alderson chose the young scholars he saw across the country, and they were invited. And of course, if you got invited, you wanted to go because this was the president of AMA, the leader of Alderson & Sessions, the Wharton professor.Stan Shapiro: And he was a character. He was an event. Now, we're talking about a heavy set man, didn't dress too well, kind of a little awkward in his manners. Very bad classroom lecturer, brilliant across the beer at the faculty club. That's where Wroe Alderson was at his greatest.1965: Wroe Alderson’s deathAndrew Mitrak: Although he was athletic as a young man, Alderson enjoyed food and drink and by the mid-1950s, he was seriously overweight. Wroe suffered his first heart attack in 1955. And despite attempts to moderate his diet, he had health issues for the remainder of his life.Evan Alderson: This is a story of a major event in my dad's life that I never witnessed. But I heard about it from my mother when she called to tell me about my dad's death in 1965.They had a place near Royal Oak in Maryland, which was near an arm of the Chesapeake Bay that came up and they loved it there. And you hear from what you've read that that was his retirement place and he was pretty much by that time retired from his work at Wharton school and he was spending more and more time in Maryland and that was his place. And he loved it.He had boats that he didn't drive anymore, but he loved to go out on his paddle boat just off the shore. There was a little beach on the property and he went off just a little way out and then came took his paddle board back.And that morning, he'd gone out on his paddle boat. And he had, I imagine, that when he, the way I construed the events is that when he was coming back on his paddle board, he had his third heart attack.He knew what was happening. And he was out there, maybe not all that far, but maybe 50 yards to shore or something. And he was having his heart attack. And he faced this ultimate dilemma of what to do next.He tried to make it back to shore.And I can imagine this guy, I think I think of a lot… using all his strength… everybody he was, everything he knew… trying to get back on his paddle board and making it to shore and taking one or two steps onto the beach… and falling dead.Obviously, that story is very moving for me. And it's full of love and compassion when I think about it. But I also think it was very much about his character and who he was and his determination against many odds and how he could manage best in an absolutely horrible situation.Andrew Mitrak: Thanks for sharing that. That's deeply moving to hear that. I obviously didn't know the circumstances of his passing… and in a way, it's beautiful that it happened in a place that he clearly loved, that he loved the water and the Chesapeake and this meant a lot to his family…But going to shore while you're facing that, it's really a feat of strength and shows that you don't want to be lost at sea either. You don't want somebody else to discover you, you don't want to become somebody else's problem.Evan Alderson: Exactly.Andrew Mitrak (to Evan Alderson): Thanks for being so open and sharing about your family, your father. This has really been just a moving conversation to hear about.Andrew Mitrak (Narrating): Wroe Alderson wrote poetry for his wife, Elsie, and was known for his eloquence when he spoke at friends meetings among Quakers. He wrote about the fleeting beauty of the Chesapeake Bay, the location where he died, in what became known as The Autumn Prayer. I'm going to read a few of my favorite lines that seem appropriate."We've just had a week of golden October days beside the Chesapeake with heaven waiting in every sunset... What we see now shall never be seen again…. What we love most, even now, is slipping away…. Time is our sovereign currency, but let us not grasp it with a miser's hand…. The notes are transient, the symphony, eternal."Wroe Alderson’s legacy and place in marketing historyStan Shapiro: When Alderson left, the driving force was gone.Ben Wooliscroft: It seems that wherever he was, he was one of these very charismatic and active leaders. So he would step in and drive things and be engaged, be it church, be it university, creating whole institutions like the Marketing Science Institute, leading the AMA. And yet he spent so much time involved with the market at the bottom, where the customer hits the road, that I think that really added a lot of value to his theories.Stan Shapiro: Now, as to why people haven't heard about him, you take a PhD course in marketing, what you do is you learn more and more each year about less and less until you become a leading authority on next to nothing at all. That has been the focus. Alderson is wide-ranging.Ben Wooliscroft: I was going back to second year, did my honors degree and in the honors year, they said, and now we're going to talk about Wroe Alderson for one class. And I was upset!Here is the person who gave us the most complete theory of marketing, who was the most connecting person in the discipline, and I had to get to fourth year to hear about him.To be honest, I was very lucky because most universities in the world won't mention Wroe Alderson at all. And this had stuck with me, the sense of injustice that our leading scholar had forgotten.Andrew Mitrak: So now you know more about the life and influence of Wroe Alderson than almost every other marketer in the world.So, was Wikipedia right? Is he really the most important marketing theorist of the 20th century and “the father of modern marketing”? I'm still not equipped to answer that, and I've come to think of labeling any individual person as the father of an entire discipline is kind of a frivolous exercise.I'm also not sure that honor would sit well with a Quaker like Alderson, who saw all men as equals and who rejected offers of honorary PhDs because he hadn't felt like he earned the title. But I hope you agree that Wroe Alderson lived an inspiring life. I'll give Stan Shapiro the final word.Stan Shapiro: Wroe Alderson was not a person, he was a personage. He was the most important figure in the mid 20th century in the marketing. Now, there were people who chided me for not giving him the whole century, you might say, but there were one or two other people like Philip Kotler for whom I could make the case, but there's no question in my mind, he dominated that middle period in intellectual thought. I'll sign off with that.Here is the complete version of Alderson’s “Autumn Prayer” which I read excerpts of:I’d like to give a special thanks to professors Ben Wooliscroft, Stan Shapiro, and Evan Alderson for their participation in this podcast about Wroe Alderson.I’d also like to thank my friend Scott Morris of Waka Seattle for providing creative feedback during the editing process of this episode.This episode required ~10X the effort of my usual conversational episodes. I had a lot of fun creating it. If you liked this episode please consider sharing it with a friend or posting about it on your preferred social network. If you’d like to send me a note about it, email me at [email protected]. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 24What does it take to build a brand that endures? Few people on earth can answer that question better than David Aaker.David Aaker, AKA the "Father of Modern Branding," is back to mark the launch of the 2nd edition Aaker on Branding. This book distills decades of Aaker’s work, covering brand strategy, portfolio management and execution. Our conversation is a great entry point.My last interview with David Aaker is the most popular podcast episode of “A History of Marketing” in terms of downloads and streams. I’ll be honest: I think this one is even better.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsWe cover a lot of ground in this episode, including: * New “5B’s of Branding” framework for brand-led growth* How Aaker’s pioneering work on brand equity elevated the role of marketing * A case study of Dove’s Real Beauty campaign* And moreNow here’s my conversation with David Aaker.Note: I use AI to transcribe the audio of my conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.Andrew Mitrak: David Aaker, welcome back to A History of Marketing.David Aaker: Yes, as we were discussing offline, that this podcast was one of the most popular that we shared in the last four or five years.Andrew Mitrak: Right back at you. This first episode that I published with you was the most popular episode that I've shared to date on this podcast as far as measuring downloads and streams. There's some magic, some little spark. And so I'm hoping we can go even bigger with the sequel. I'm just grateful to speak with you again and also speak to the new edition of Aaker on Branding, which I read, and I'm really excited to dive into.David Aaker: Good, good. Thanks for having me.The Enduring Influence of Philip KotlerAndrew Mitrak: Congratulations on the second edition of your book, Aaker on Branding. I actually wanted to start right at the end of the book and jump to the acknowledgments section. And you write in the acknowledgments section, "A special thanks to my role model, Philip Kotler."And I'm sure a lot of marketers, your readers, former students see you as a role model. And when I was reading this, I was like, "Oh wow, even David Aaker has, has a role model." So, could you share what makes Philip Kotler a role model for you?David Aaker: What I'm so impressed with Phil is that he has really introduced whole new concepts and perceptions of marketing. I mean, he came up with social marketing. He's done so much. He came up with the idea of a customer journey. And then he has turned to larger issues of the economy and our society and so on. And he's got a dozen or more books on that subject. And in those areas, as in all his areas, he's very good at conceptualizing, providing frameworks, overall frameworks, and helped people. And of course, that his pivotal work was the marketing management textbook that he did something like 20 editions ago.Jeez, he's just such a driving force. And then he's been such a personal friend. When I was a young professor at Berkeley, just a couple of years out of my PhD program at Stanford, Isat down with Phil, and he was a giant at that time. And he would listen to my discussion. I was a statistician. I was doing the most incredibly boring stuff. And he would sit and ask me about my material, and he was taking notes. He took notes. I was two years out. I wrote six articles on the stochastic model of consumer behavior. It was awful. No impact, no interest. And Philip Kotler was taking notes about it. He was always so curious about that.Then 11 years ago, in my first Aaker on Branding version, he labeled me as "The Father of Modern Branding." Then it stuck, and it's all Phil.He's just such a generous guy and he's such a creative, curious guy.Andrew Mitrak: Wow, that's great. I wanted to start with Phil Kotler because he was the person who actually introduced us. And as you mentioned, I had a similar interaction. I'm a very small little peon compared to a person of his stature. But when I spoke with him, he really did seemingly kind of just treat me as an equal and didn't talk down to me, didn't condescend. And he was nice enough to introduce me to colleagues like yourself to also interview. So he's, he's been such an early supporter of this, this podcast that I thought I would start there.As you mentioned, it was kind of tying back to Aaker on Branding. It was in your first edition that was published in 2014 that Kotler called you the "Father of Modern Branding." And it stuck. And can you just share more about your reaction to how that happened and what it meant to you to have this title bestowed upon you?David Aaker: I've written 18 books now, and I think most of them have Phil as, done an endorsement for me.If you look at the back cover of almost all my books, there'll be a comment by Phil Kotler. And he's just so generous with that. And that was his comment on this book.Andrew Mitrak: So one of the things that also reminds me, coming back to ideas around branding, is that a big part of brands is that they don't just reflect what you say about yourself, but brands are what other people say about you. And your brand being "The Father of Modern Branding," it's something that you don't bestow upon yourself or wouldn't, if you just called yourself that, it wouldn't have the same weight as when somebody else calls you that.David Aaker: Yeah, it would be really tacky to call yourself that. (Laughs)Andrew Mitrak: Yeah. So 2014 was the first edition of Aaker on Branding. And your new edition is just coming out now in 2024. I guess the obvious question is, what's changed between now and then? Why revisit this book and what are the kind of the major updates to the new edition?What's New in the Second Edition of "Aaker on Branding"?David Aaker: Well, there's several motivations, but the main one was that a lot of my work and thinking since then has been engaged in applying branding to different areas of strategy and marketing. And I've written three books since then: the Creating Signature Stories, the Owning Game-Changing Subcategories, which is about branding and disruptive innovation, and The Pursuit of Purpose-Driven Branding, which is about signature social programs.And I've written about 150 blog posts. I've written about six or eight articles. And so, that needed to be incorporated because the whole point of the book is to kind of summarize my writing so you don't have to read nine books. But, the second reason is that really the world has changed. And there are at least three major challenges, three or four major challenges. And for each challenge represents a real opportunity for branders.And finally, I introduced what I call the Five Bs. And I did that as a way to make people understand the real breadth and depth of branding and not to slip back into this it's an image and awareness problem.The Five Branding Bs ExplainedAndrew Mitrak: I want to ask you about these five branding Bs. So the B does stand for brand in all of them, but I think what it speaks to, something you said in our last conversation is that you don't really talk about brands because "brand" alone is, is not descriptive enough, or it doesn't have, have enough. So you kind of have to have “brand” attached. So there's brand equity, brand relevance, brand image, brand loyalty, and brand portfolio. Those are sort of the five branding Bs that are discussed in this book. And what was the sort of the idea behind having, introducing this concept in, in Aaker on Branding?David Aaker: I don't want people to sort of short-circuit branding and think again, back in the old days when it was awareness and image, that they're kind of done. It's something that can be delegated. And I want to remind them of the scope of it. And so I thought that that sort of cute device might be a way to get people to, to make sure that they're thinking more broadly.It starts with the three pillars of brand equity, which are brand relevance. I said brand awareness is not enough. You need to have brand awareness in the context you're interested in. So if you make electric cars, it doesn't help if you have high awareness about your ability to make hybrid cars. It's not enough to know about the brand; it has to be credible. And that means there has to be no reason not to buy the brand. You have to think it's capable of doing what it promises. So relevance for me has become a really important topic. I talk about winning the relevance battle instead of the brand preference battle.And then brand image. What I want to make sure of is that people don't focus in on functional benefits, but they realize that any association that can contribute to the instincts about a brand, it can contribute to the relationship with a brand, is important.And the third is brand loyalty. Now, brand loyalty is what I used to attempt to change people's view of branding way back 30 years ago when people were indeed thinking of brand awareness and image, you could delegate it to middle management, you could delegate it to an agency. But when you introduce brand loyalty, it's so pivotal because it means that branding is involved in all aspects of the brand touching the customer. It's involved in product development, it's involved in the consumer journey, and it's involved in consumer insights, involved in segmentation. It's a strategic variable. And it's an asset.Brand as an asset is really huge. And that's what got marketing a seat at the executive table, CMOs, VPs of marketing, where they had heretofore been relegated to middle management. And so, so brand loyalty is, is just so important in conceiving of a brand and of implementing a brand.The Power of Synthesizing Brand ConceptsAndrew Mitrak: What I love about this book is, as, as you're saying, you just packed in so much there. And we're going to come back and dive more into a lot of the points you just raised and the examples you talked about. But what I love about this book at a high level is that, like you were saying, it takes a lot of the concepts you've written about in other books, packs them all into one. And so all of these pillars you've discussed, they've been books in themselves, and we could spend full podcast episodes, multiple of them, just diving into any one of these examples. But this kind of gives a great introductory view to so many of your ideas.At the heart of a lot of these ideas is, is really brand equity and what they, and brand as an asset, which is sort of a, a pillar of your career and contribution to the field of marketing. And when, when you spoke about brand equity and the introduction of it, and how it changed everything on the last podcast, this was like a new idea to me. I hadn't quite done my research on this. And I was almost skeptical, like, "Oh, that was when CMOs became a thing? and that's when branding really got elevated? Is it when brand equity became an idea?"And I'm going to share in the video version of this podcast in the blog that goes with it, this Ngram view where it looks at the frequency of word usage. And right around the time you publish, you start writing about brand equity, the mentions of brands (and branding) just shoot up, like it skyrockets.David Aaker: Really? That's interesting. I didn't know that.Andrew Mitrak: It's really interesting. Right around this time that you see the frequency of the word "brand" and "branding" is just jumps. It's like it's, it exists, but it's, it's not nearly, like right around the early 90s through the, through the 2000s, it jumps up. And then also, I spoke with Sergio Zyman, who was the first CMO of Coca-Cola, and he's, according to him, the first CMO in history. And it times out with what you were saying. He became CMO in the early 90s at Coca-Cola and got a seat at the table all around branding. It was one of those things where when you said it, I hadn't fully digested the implications of it. And since we've had a chance to talk and I've been able to reflect and kind of learn more about marketing history, it's like, wow, this really was a big, impactful event.David Aaker: Yeah, Sergio Zyman, wow, a name from the past. He was a very visible and energetic and kind of controversial CMO, but he had left his impact.Andrew Mitrak: He did. The Historical Context of Brand Equity's RiseAndrew Mitrak: So, do you have any other reflections on the historical importance of brand equity and kind of this, this time in history?David Aaker: In writing this book, I was reflecting on that, and I sort of connected the evolution of brand equity to what had been going on in the 1980s. The 1980s was characterized by the, the strategic model of the day was driven by the Boston Consulting Group's market share growth matrix. It was developed actually in 1971 in a famous article. But that was so influential. And what it said was market share is a driver, driver of success. And so, if you have high market share, that means you have scale economies, it means you have experience economies. And that means that you're going to have lower costs. That means you are, are going to can, can wipe the floor with competitors. And they had all this analytical data to prove that large market share companies were more profitable than small market share companies if you control for things.People would do anything to increase market share. They would buy market share with promotions, they would put out products that were cheaper, just to gain market share and to get a lower price. And, they destroyed brands doing that. And, but at the same time, in the mid-80s, scanner data came out. So you had the thing on every package, you could scan it. Gosh, you think that's what, 40 years old or something. But when that came out, people were so excited because now marketing could be done scientifically. No longer was it sort of rely on judgment and instinct and creativity. It was science. So now you could do experiments where you could change the appeal of the advertising, you can change the advertising weight, and you could see exactly what happened the next day. You could see what people were buying the next week, accurately, totally, absolutely accurately. It was the scientific world.Well, what they learned was that the only thing that moved the needle was price-off promotions. So everybody rushed into price-off promotions, which destroyed brands. Kraft took two years to recover from this debacle. And what they learned was they did not achieve growth, and the profits went down.The growth-share matrix and the scanner data with experience made people really receptive to another route. And that other route came in the form of brand equity.I was at the right place at the right time. At that point, I was very ill-defined as a brand myself. I was all over the map. I came out as a statistician, I wrote a market research book, I did all kinds of analytical statistical studies. Then I wrote an advertising book. I was really interested in advertising. And then I got into business strategy, wrote a business strategy book, market strategic management that was a textbook for that course. And so I was extremely ill-defined.Then came this brand equity thing, and people were really intrigued by it. The Marketing Science Institute, the support of academics, made that, elevated to the number one research priority. But nobody could agree what it was. Most people thought it was awareness and image.I wrote the book, Managing Brand Equity, in which I defined it to include brand loyalty. And then I also in that book put out the 15 ways that brand equity helps a business. That's when it took off. And the next book, Building Strong Brands, was how to do it. It just was a lot of luck. I stumbled into branding, and from then on, that's been my purpose in life.The Role of Marketing Science Institute and Academic CollaborationAndrew Mitrak: You mentioned the Marketing Science Institute, and I actually just interviewed a former president of MSI. But what was so interesting to learn about it, so the MSI is this institute that kind of gathers academics and then marketing practitioners. And there was this conference, and I think it was the 1988 one, where the topic of brand equity was elevated.And this is also an interesting commonality between you and Philip Kotler, by the way, is that brand equity was not something you invented, but you caught on to the idea and you brought it out of this niche, kind of siloed academic conference and brought it to the masses and made it so that the entire business community could make use of this and take action based on this idea and change things.Similarly, Philip Kotler, a lot of people might even think he invented the four Ps, which, which he didn't, but he took this, again, this, this niche, this idea that was sort of in academia, and he made it applicable to marketing managers and actionable. Recognizing that there's an interesting idea and spreading it in a way where the masses can more broadly use it and digest it and understand it and that it's a model that they can apply, I think is a really useful tool that, like identifying a good idea and spreading it. Like, do you see that as, as something in common, this, this idea of identifying the idea and evangelizing it to a broader community of marketers?David Aaker: I was told just the other day that by somebody that's a big contributor to branding, that I was able to form frameworks and structures that are broad and to position the totality of it and not just make a contribution within one part. That was Bernd Schmitt of Columbia, who's done a lot of work in experiential marketing and in the big think, he calls it. He noted that my work was the work that really provides the broader frameworks. And I think that's true for Phil too. You can take a concept and put a framework on it and position it within marketing.Case Study: Dove’s Real Beauty CampaignAndrew Mitrak: I want to come back to Aaker on Branding and the Five Bs in the book and also try to weave in a little bit of a historical lens and a case study. And one of the examples that you mentioned earlier is Dove. And Dove features really prominently in the book. Unilever owns Dove and introduced Dove in the 1950s. The Dove of the 1950s and the Dove today, there's been a big evolution to that brand. So I'm wondering if maybe we could talk about them in the context of the Five Bs, and if you could tell the story of Dove's evolution as a brand and how Unilever has managed that brand.David Aaker: The Dove product came out of some research that was done in the Second World War on how to dress wounds. You, you need to keep them moisturized. And so they took that moisturizer idea, and its patent, in 1952, developed a soap around it. And they didn't call it a soap, they called it a beauty bar. And it was a bar with a moisturizer. Talk about disruptive innovation, talk about really being differentiated. They were. And it was a very successful product. And they built on that, always with this moisturizer idea. And they would have ads where they would pour cream into a bar of soap, and that was the moisturizer entered in, the moisturizer cream. So they had a very unique soap, very differentiated soap.And flash forward to 50 years, in 2004, they had extended that brand to other products, like shampoo and deodorant and body wash. And so it's hard to talk about moisturizer if you make a shampoo. It's not very relevant. To boot, they lost the patent, the patent ran out, the moisturizer. So they had competitors that were coming out with moisturizers too. And so they really needed a new start.And so they were doing some research on their market, the women that bought their soap. And they, I don't know how they did this, but they stumbled onto the idea that women really resent this beauty standard. You have to be thin and young to be beautiful. And they did some research and they found that only 3% of the world's women thought they were beautiful themselves. Only 3%. And this artificial standard was out there and it was so resented. So they took on the task of changing that. Almost every year they would do a, a some sort of visual demonstration that this was a phony standard.So one time, for example, they had a person that drew faces from descriptions. And they did it from the description of a woman, and then a second-hand description of a woman being described by somebody else. And it turned out the sketch based on the woman's own self-description was very unattractive next to the other one. So their tagline was, "You're more beautiful than you think."Incidentally, taglines are really underused, that's another topic. But anyway, they're really good at it. And, that ad, which came out in 2013, was the most viral ad ever up to that date. Can you imagine? The most viral ad ever. I mean, this stuff really struck a chord.They had campaigns like that that were every other year they had one time they had people go to a store and there were two doors. One is the beautiful door and the other is the plain door. and a lot of people would go through the plain door because they didn't think they were beautiful. They did such clever stuff. and of course the subject is ripe for creativity.And then they developed, two years after they developed Real Beauty, they developed self-esteem programs for girls. And they, that tended to involve a lot of people and in teaching or mentoring girls, and they had a lot of support for that. They developed workshops, they developed agendas, they developed plays and so on. And the whole thing actually changed the lives of hundreds of millions of women, hundreds of millions. And it drove energy and visibility and liking into a brand that was still making just horribly mundane products.And by the way, one of the things people worry about, and justifiably so, is that these are regarded cynically as, "Oh, you're just out to sell me something, and you only, you don't really care about this, you just want to get some leg up for your brand," which is absolutely true. But nobody says that about Dove. Nobody. It never comes up. And it's because they've made a long-term commitment, it's because they're passionate, it's because they're knowledgeable, they're thought leaders, it's because they're so successful.Analyzing Dove through Aaker’s 5 Bs of BrandingAndrew Mitrak: Yeah, there's so much in this example. The videos, first off, I watched some prior to this interview. They hold up so well. It's hard to not have your eyes well with tears as you're watching this. And they touch on, there's this emotional element to them. There's also this almost scientific element to it. It seems like a psychology case study. It seems almost like a scientific A/B test of one person describing.David Aaker: Oh, it is. It is. Most of their things are real experiments.Andrew Mitrak: Yeah, it really is. And it kind of gives it this another level of credibility where it's not just tearing at your heartstrings on an emotional level, but there's, there seems to be science and research and a surprising idea behind it, and it's all executed to perfection.If you tie these sort of back to your, your Five Branding Bs, there's so much to this as well. Dove was part of a brand portfolio. And you said how they had extended themselves into product lines that were a little less relevant. So there's the brand relevance idea that shampoo wise is, is not as relevant when it comes to moisturizing skin. There's the image, brand image, aligning themselves to this idea of real beauty. And that kind of pays off into loyalty by, by the longevity of them running this campaign for decades. You mentioned how they introduced this in 2004, but that video went viral nine years later in 2013.David Aaker: The video was made nine years later. It was just one of a, of a, of a dozen and a half things, such things.Andrew Mitrak: That the video was made nine years later, but that tells you they were working on this campaign and this idea and committed to this over the long term.David Aaker: Yes.Andrew Mitrak: All of that ladders up into Dove and Unilever accruing “brand equity.” So it has all the Five Bs, it seems like, working together with Dove.David Aaker: Now, in the case of Dove, moisturizer is a terrific example of a branded differentiator. It was really a brand in its own right. And real beauty as is the self-esteem program, are brands that are attached to them, and they're terrific branded energizers and branded differentiators.Brand Decisions: Objective Data vs. Subjective TasteAndrew Mitrak: When a brand like this is thinking of making this bet, say like Dove making this, this Real Beauty campaign bet, I don't know if there's any quantitative data that I would have in advance as a marketer or as an executive kind of buying into this campaign that would give me high confidence this would work. It seems like at some extent, like there's, there's creativity and there's instinct and there's taste, and it's the way that the campaign is executed. And I'm wondering how much of brand building can sort of be planned based on empirical data versus being a matter of gut instinct and taste?David Aaker: Well, I've always said that, that you need to test things and so forth. But the really, really great ideas, you don't even have to test. Some ideas just click and they're so powerful, so logical, so appealing that you could test them, but you know what's going to happen, it's going to work. So that's a nice place to be. But it is good science to test in the laboratory or in the field of a program.One of the classic experimental designs is before-after design. So you look at the situation before, and then you do a treatment and then you look at it after. So you could look at what Dove was, what its sales level was, what its attitude toward it, the loyalty level and so on. And then you introduce the Real Beauty program, and then the next year you can look at Dove again. And that's a nice experiment because you've controlled for a lot of things. It's the same product, it's the same company, it's the same kind of customers. All that's the same. And so you do the treatment and, so you can be pretty sure you're looking at the impact of the treatment. And then you can do the same thing from 2005 to 2008 to 2010 and get more information. Then if you do it on a pilot basis or in the laboratory, then usually you can run a similar experiment but a more controlled one.The Central Tension: Short-Term Results vs. Long-Term Brand BuildingAndrew Mitrak: When I think of your body of work and brand equity and a lot of the ideas in Aaker on Branding, I think there's a tension around you advocating for long-term thinking against all of these short-term tactics. And a couple of quotes here:"At the center is a drive to build strategic brand assets that will provide the platforms for future success as a counterweight to the dominance of short-term financials."And another quote in this book is that,"A brand is an asset with long-term value as an enabler of strategies, and the effort directed at short-term results should support or at least avoid damaging the brand."And this, this short-term versus long-term thing is something I encounter every day as a marketer. Every company I've ever joined, there's some like "close the gap" initiative and "hit this quarter's sales target" or "meet some growth milestone by a certain date." And in your role as an author, as a consultant, as, as a marketer, how do you advise people to manage this tension between short-term results and long-term thinking?David Aaker: Well, when I was writing the book, it came to me that this illusion that the brand is an asset thing has been growing for 30 years and we've got CMOs and Vice President of Marketing in place, that the battle is over. Turns out the battle is not over. Short-termism is just always there because it's driven by the fact that that's the way people are evaluated in business and that's the way executives are evaluated.And it's very easy to do that but it's very difficult to measure long-term results because a lot of it is conceptual, it's not data-driven. So that it raises its head. And it's now come up with its own label. They call it demand marketing or performance marketing instead of short-term results. So it's got a more respectable label.And my take is that, it's fine to have short-term programs, demand marketing programs, but if you're in a B2B, you have to create leads and so on. But it's important to do it in such a way that it doesn't damage the brand. Hopefully, you do it in a way that enhances the brand by leveraging some of the brand assets. But at least you should do it so it's neutral to the brand, so that people are comfortable. It's not so off-brand that they say, "They're doing that?"You know, you have Toyota dealers talking about the sale of the month or something, and you just cringe, and they don't have any control over that. If you do have control over it, you want to make sure it doesn't damage and at least it's neutral. That's one thing. The second thing is, what you want is brand programs that are so powerful that they create short-term results as well as long-term results. So there shouldn't be any controversy then.You look at the Dove program, that created enormous immediate sales every time they ran these programs.Andrew Mitrak: Funny enough, you mentioned demand, that's actually my full-time job title. I'm not a podcaster full-time, this is a hobby. But that's a funny thing because it's something I identify with. I'd like to do the campaigns that accrue long-term value, but sometimes you're pressured to get the short term results. But if I'm purely being selfish and I want to get promoted this year, there's a lot of incentive to focus on those quick wins. And even if there's zero or even negative impact on the brand, because if I'm purely being selfish and just want to climb the corporate ladder, there's this incentives problem where the thing that I'm measured on is in the near term. The long-term thing, I'll be promoted by the time they figure out that was bad for the brand, right? And do you think that this is some of the tension and how can companies need to fight against this?David Aaker: Oh, it's very much part of the tension. And it's, it's healthy to be decentralized. It's healthy to have these kind of objectives, but it can be really damaging. So what, what you need is somebody that is at a senior level that has the authority to take a big picture and say that, to make sure the brand isn't damaged. And you have to achieve your objectives in another way. And Prophet has done a study that indicates that the most successful companies have these two arms work together. And if that's done, then the problem is reduced.Andrew Mitrak: It strikes me that for most general life advice, long-term thinking is a good thing. If I could eat that donut today, I'll be really happy at this moment, but if I eat the salad, I'll be better in the long term. And we all know that's the right thing to do with most things. It's just something that maybe doesn't click or people have to be reminded of it when it comes to branding, that investing in, in the things that accrue long-term value, brand equity, is better than this short-term thinking.David Aaker: Yes.Brand's Role in Disruptive InnovationAndrew Mitrak: I want to transition and ask you about the role between brand and brand equity and disruptive innovation, because I think this is a really interesting idea of how those two things interact with each other.David Aaker: Yeah, I mentioned that one of the challenges that I see that's that it has always existed, but it's magnified manyfold. Disruptive innovation has always been the route to growth. "My brand is better than your brand" marketing almost never creates growth. But what's happened is that these disruptions are more frequent, they scale faster, and they have more impact on the marketplace than ever before.And what is also true is that branding has, has often been underused or even forgotten in the process because the focus is so much on creating the disruption and putting it in the marketplace, that branding is considered a tactical thing we'll worry about later on. So they want to get the disruption right and they want to get the resources, financial or otherwise, to make it happen. That's their priorities. And they usually don't even have access to marketing talent, or if they do, they don't use it properly.So the opportunity is for marketing to become a player in disruptive innovation, to help them develop what I call the "must-haves" that define the disruption and through their consumer insight and their being close to the market. And secondly, to position the disruption, to position what I call the new subcategory that emerges. And that's a marketing task. It's different than they've done before, but it's a marketing task they're good at. But you have to position the subcategory because the subcategory has to win. And that's the underbase of the strategy.And third, they have to build barriers. And you do that by scaling fast. You do that by creating a loyal group of customers, that's a branding problem in part. And you do it by branding the innovations. And because that will prevent people from copying you because they won't have access to the brand.Andrew Mitrak: Do you see it as brand plays a role on both sides?With disruptive innovation, there's the incumbent, and then there's the emerging startup that is going to disrupt the incumbent. And it seems like you're speaking to how the disruptor should also embrace investments in branding as a vector for disrupting the incumbent. But also the incumbent could invest in brands as a preventive measure to disruption.David Aaker: Yes. I outline the alternatives for the incumbents in the book. One alternative is to leapfrog and to create an even more superior must-have that will trump the existing one. So you fight the relevance battle by creating a super subcategory. The second thing is to do what Kevin Keller has talked about, develop a parity brand. So you develop some, some capability in that must-have dimension, and you don't need to claim it's better. You don't even have to claim it's as good. You just claim it's good enough. It's good enough so you shouldn't use this criteria to not buy our brand.So that's the parity option. The third option is to ignore it. And so this guy has got a thing. I think it's going to make my whole thing I'm competing in irrelevant in the future. I'll eventually close down. But in the meantime, I'm going to make a ton of money because I'm not going to invest in this thing. I'm going to milk my customer base, I'm going to milk their momentum. And I'm not going to have to invest in it. I'm going to make a ton of money and I'm going to use that money to create some disruptive innovation elsewhere. And maybe they're wrong that this is going to happen overnight.The fourth strategy is to say, "It's been a good run, I'm leaving." There's a time that comes that you're strategically better off putting money into growth areas than you are trying to keep alive something that's dormant.Andrew Mitrak: There are so many disruptive innovation examples we could cover. I think one that's struck me is Netflix. You, you do write about Netflix in the book and who they're disrupting is Blockbuster. And Blockbuster at one point had a pretty good brand, right? Like it was a place where people would go, it was pretty iconic colors and image, you would see, you'd see them. But they kind of got greedy with late fees. And Netflix disrupted them on a different vector, which is, is the DVD, which was small enough that could be shipped by mail and at a relatively low cost. And their differentiator was "no late fees ever." And then also they had this really long, long tail of their back catalog of more obscure titles that wouldn't make sense for Blockbuster to stock, but Netflix in a warehouse could. And so they found different vectors to, to compete with Blockbuster. And of course, that's even before they got into streaming, which is a whole other angle. That was them leapfrogging as well.David Aaker: Well, that's what I was going to say. Netflix is one of the rare, rare companies that are able to do a disruptive innovation against themselves.I mean, most companies just cannot bring themselves to do that because they're making a lot of money doing what they're doing, and they're very good at what they're doing, what they're, and they're not, they're not going to be good at anything else. And so they resist it. But Netflix is a rare company that was able to do that.The Underrated Power of Taglines and JinglesAndrew Mitrak: Last time we talked, we talked about the disappearance of taglines and how they're less and less common nowadays. And I wanted to ask you this time about a fun one: jingles.Jingles are virtually non-existent now, and you haven't heard a jingle in a long time, in a long time. You know, they were a huge part of advertising and of a brand in the, in the 50s and 60s. They lingered around to some extent in the 80s and 90s, and now they're virtually non-existent.To come back to Netflix, all you get is a little audio "dung dung."They, they do a little sound, not a jingle at all.So it's like they've gotten more and more compressed and maybe there's some branded audio element to them, but not very much. So I'm just wondering, do you have any, any thoughts on jingles and why they're virtually non-existent today?David Aaker: There used to be a saying in advertising, "If you have nothing to say, sing it."Yeah, it's a really interesting question because jingles are really important. They catch in your mind. They're, it's a way to make a tagline come alive. Very interesting question. I suspect that as things evolve, there'll be people here and there that will figure out a way to make a jingle relevant and work again. But I'll just say a thing about taglines. I got involved in the political campaign of the year. I was involved by giving advice that nobody listened to, but nevertheless, I was into it. And I was so frustrated by the fact that these people are really good at owning the news of the day. Something would happen in the morning, they could use AI or something, come out with an ad in the afternoon, put it in the marketplace, and it would be really topical and they would win the day. But the net result was a barrage of ad hoc, ill-focused ads with no message that you could remember. What cried out to me as you needed a tagline and you need a visual symbol and hopefully both.It's not easy to create a great tagline, but you always ought to try. And you should have a set of three or four campaigns around three or four issues with taglines for each. And it just seems so obvious to me. They wasted so much money. And so I wrote a chapter in the new book called "Taglines and Symbols" to let people know why those things are so important and what they can do.Final Thoughts and Future LearningsAndrew Mitrak: You inspired me. It strikes me that this podcast– I don't have a tagline, I don't have any symbols, I don't have a jingle, so I got to get to work on some of those things.David Aaker: Well, yeah, but you have a good title.Andrew Mitrak: Thanks. (laughs)David Aaker: And the name is kind of like a tagline and a symbol. If you get the name right, and that's not so easy to do because a name can lock you in and so on. I mean, if they called it Amazonbooks.com, which people thought was the intelligent thing to do back then, they would not be where they are now.Andrew Mitrak: Yeah, it's funny. On the title, I had the title before I had the podcast. I kind of thought of it. I'm like, "Does that exist?" It doesn't. I better do it.David Aaker: Yeah, it's, it's really unique. There's nobody else that looks at things from an historical point of view, and it's so useful.Andrew Mitrak: Thanks. And to get guests like yourself, like Philip Kotler, who doesn't want to be part of history? Right? If it was, if it was about me like it was “the Andrew Mitrak Show”, which nobody cares about, right?You wouldn't want to bother with that. But if it's, "Oh, I'm worthy of history." This is clearly about elevating marketing to hopefully a higher stature, and who wouldn't want to be a part of that?David Aaker: And there's so much to be learned from experiences that could be 30, 40, 50, 100 years old. A lot of learnings there. And also it's really interesting to know the process by which something evolved because that's a, that's a great teaching for what's going on today.Andrew Mitrak: Yeah, for sure. There's this Charlie Munger quote that I like that goes, “There's no better teacher than history in determining the future,” and that… “There are answers worth billions of dollars in a $30 history book.” I've always enjoyed his writings.Why do we do the things we do? How did marketing get to where it is? That I'm really grateful to be exploring with experts like you on this show. So I've really enjoyed your time and your expertise, and thanks for coming back for a second episode. I've really enjoyed this conversation.David Aaker: Yeah, I want to mention, Andrew, about my new book. I'm going to have 10 learnings, one a week, every Wednesday in my blog on LinkedIn. And one of them, the third one will be the history of brand equity that we discussed.Andrew Mitrak: That's amazing. If listeners aren't already following on LinkedIn, they absolutely should be. It's such a great resource to find continuous inspiration and insights and lessons as well. Also, listeners should definitely purchase the new, second edition of Aaker on Branding. It's a great read and follow David Aaker on your blog at Prophet and also on LinkedIn as well. All really great resources. So, thanks again, David.David Aaker: Thank you, Andrew, for having me. It's always fun. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 23This week, I'm joined by Bill Moult, an entrepreneur and executive who spent his career at the center of the marketing data revolution. Bill has served as CEO and President of companies central to advertising research, new product forecasting, brand metrics, and media measurement.Bill also served as President of the Marketing Science Institute, an influential non-profit that bridges the gap between marketing academics and practitioners to drive business performance.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsIn this conversation, we explore Bill’s historic career and learn timeless lessons in leadership and marketing insights. We discuss:* The evolution of new product forecasting, from expensive regional test markets to the sophisticated "simulated test markets" pioneered by his company, BASES.* How scanner panel data and advanced modeling allowed companies to accurately forecast sales for new products before they even hit the shelves.* A high-stakes case study of a major CPG company that ignored a data-driven forecast and lost $100 million on a failed product launch.* The shift in advertising research from measuring single metrics like "recall" to integrated models that incorporate persuasion and predict in-market sales.* The role of the Marketing Science Institute (MSI) in connecting academic and business worlds, and how it served as an early platform for ideas like Clayton Christensen's "disruptive innovation" and David Aaker’s “brand equity”* An inside look at how Nielsen actually worksNote - I use AI to transcribe the audio of my conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.Andrew Mitrak: Bill Moult, welcome to A History of Marketing.Bill Moult: Well, thank you. I appreciate it, Andrew. I am delighted to be part of it. I think what you've done already is really ambitious, and if I can help in any way, that'd be great.Andrew Mitrak: I'm sure you can. I'm so excited to speak with you. You've had this amazing career as a marketing research executive and an entrepreneur, and you've intersected with foundational organizations: Ipsos, which is one of the world's leading market research firms; Nielsen, which is a name everybody's familiar with, the top analytics firm; and the Marketing Science Institute, a non-profit that's been brought up on the show in previous episodes, that brings together leading marketing practitioners and academics into one forum. I'm hoping to use this conversation to cover your career, the life and times of Bill Moult, and use your career in marketing to explore these institutions and the evolution of marketing research and the industry more broadly. Does that sound good?Bill Moult: Fair enough.The Influence of Philip Kotler and Early Marketing ScienceBill Moult: You and I were talking before this video started, but I'm going to come back to your first interview, which was with Philip Kotler. Which, I would say, Andrew, was a great choice. I'm fortunate to know Phil from my Marketing Science Institute days. The reason it was a great choice was, he had gone through a much more intense educational experience than I did and studied under Milton Friedman at the University of Chicago in economics. Then he went for his doctorate at MIT where he studied under Samuelson. I mean, both giants, obviously. Phil could have worked anywhere because he has smarts, he had drive, he has charisma, and he certainly learned a heck of a lot about economics. But he chose to work in marketing. The reason he did that, in part, was because he recognized that there was some science in marketing.Over time, there's been a lot more science developed in marketing and marketing science, in particular, as a part of the field. I worked in marketing science for almost my entire career, in different kinds of marketing science. It was during periods of time when those different parts of the industry were starting to develop. I never had an interest in a mature business. I was too much of a risk-taker, so I liked stuff that was either a startup or a turnaround. Fortunately for me, there were plenty of those opportunities that happened in the marketing science field.I felt that my, starting with my work at Wharton, it prepared me for taking a scientific view of marketing, marketing research, and marketing analytics. That's pretty much lasted through much of my career.Andrew Mitrak: I was very fortunate to speak to Phil first. Had he not responded so quickly and wanted to do an interview with me, who knows if this podcast would even be happening. Both for his contributions to the field— his textbook was the first major textbook that I had in marketing—and his impact on this podcast.Bill Moult: Yeah, I am very, very grateful for Phil Kotler. Do you know what edition you had?Andrew Mitrak: Fourteen.Bill Moult: I had two. The second edition. Now, when he wrote his first edition, I was in the Marine Corps, I was in '67, so it wasn't too long after he did the second edition. I am really humiliated that yours is much more recent.BASES: From Booz Allen to a Leading Forecasting FirmAndrew Mitrak: (Laughs) Back to your career and your journey. You went into the private sector, and the company that you joined and became president of was called BASES. You built this organization, you led this research organization, and I think this was right around 1980 that you joined and you grew it throughout the 1980s. Can you just share what BASES was and what drew you to this organization?Bill Moult: I wouldn't say I built it. I joined it very early. It's very important to say where it came from. There were three or four key executives at Booz Allen. BASES actually stands for Booz Allen Sales Estimation System. One of them was Jack Brown. One of them was Lynn Lin, who is a very, very talented statistician, mathematician, econometrician. One of them was Regg Rhodes. They started BASES as a business. Then they asked me to join. I was there three months and they asked me to become the president. It was maybe my favorite organization in my career. I was there about 10 years. We took it from, I wasn't there to take it from zero to one or zero to two, but I was there to manage it from 2 million to 20 in the first six years I was there. Then it grew again by a factor of 10 and more after that and became the leading new product testing and forecasting company in the world. It was a real success story.Bill Moult: We weren't the first one in the business. We had some very good competitors, but we managed to do a lot of things pretty well, and we relied very heavily on the data that was available, not just to our company, but to our sister company, AdTel, a split cable testing company, and others that had this amazing new scanner data and scanner panel data that was coming on the market. We figured out how, Lynn Lin really figured out how to make some magic out of the depth of that data. Working with things like what was called a repeat decay curve, trial repeat, purchase cycle, and all that kind of stuff. Ended up being able to forecast new product sales really well.Navigating the New Product Landscape in Consumer Packaged GoodsBill Moult: The new product business, particularly in consumer packaged goods (CPG), which is where some of our sophisticated clients were, went through a state, went through moving from very big regional test markets, which were hugely expensive, to smaller regionals, then to large individual markets like Charleston, West Virginia, and Orlando, Florida, which AdTel did and so forth. Then BehaviorScan (associated with IRI) came along and said, "Let's make them really small market." This is Information Resources in Chicago. They went to very, very small markets, about eight or 10 around the country, and figured out how to make it effective even on a much smaller scale. Meanwhile, the stuff that BASES worked on and competitors of ours were called simulated test markets. They figured out how to do this without even a test market, but with getting very deep survey research, very extensive analysis, and were able to forecast sales before the product was even ready to be in the marketplace.That took off because it was economically so viable and such tremendous leverage. But the other reason it took off was, when people went to test market, there was something important that happened. They were so committed to this thing as a company – these are the clients like Procter & Gamble and Kraft Foods and so forth – that no matter what happened, they were going to go national. That was a really bad idea and it lost them a lot of money. The earlier you could make these things provide answers and predictions, the more likely they're actually able to drive the prediction as opposed to not really end up driving a good decision.Product Demand Forecasting ExamplesAndrew Mitrak: Let's dive into a product example that BASES would work on for a Procter & Gamble or General Mills or one of those large CPG companies. What if you could talk like, okay, you've met the client, they're introducing a new product, they want to understand the market viability and product forecasting for it. Then what? Is there a specific example that you think could illustrate the journey for this?Bill Moult: I probably won't, even with this 40 years in between, I probably, I don't think the statute of limitations is even that short for brand specific stuff. I will tell you my favorite client was Procter & Gamble. I can probably talk about some things that happened there without disclosing the brand. You would develop a concept or product, and they'd have to have enough supply of the product that they could actually put it into the hands of two or 300, four or 500 people and have them use it in their homes for two weeks and then come back and respond. You have a chance to see, how do they respond, how do they react to the individual advertising position? Could be a board, or it could be a video ad or whatever.Andrew Mitrak: Just to ground this. Let's say this, for the sake of argument, it's a laundry detergent. Like say Procter & Gamble or whatever large company, they're introducing new laundry detergent and they want to see, do the consumers buy this? Like it? Use it? And then they come to BASES to help figure that out. Is that the right way to think about it?Bill Moult: Yeah. They would have, let's say in that if that were the product, they would have a product that they developed or a concept that they developed. Usually you'd have both a concept and a product and you say, okay, this is the way we're going to advertise it. This is a board that shows how we're going to advertise it. This is positioning. It may have to do with cleaning, may have to do with scent, may have to do with sustainability, it could be anything. Is that an attractive enough idea that somebody's going to actually buy it? You go through the process of determining that, whether somebody's likely to buy it. Then among those, a subset of those people that are most likely to buy the product, you actually give them the product. In many cases, it's just a white box with black printing on it. It doesn't have the final stuff. You give them a chance to use it in their home for two weeks, typically. They would go home in that case and they would try it on their laundry. Then we would call them back, as agreed, they knew we were going to be calling them back and ask them, "Well, okay, what do you think of this? Would you buy it if it were available?" and so forth. The first part is about trying to figure out whether they would try it the very first time. The second part is about whether they would rebuy. The third part goes on and on for this thing called the repeat decay curve, and the purchase and purchase variability and the package sizes, all that kind of stuff. You put it all in a model, you crunch, crank it out, and you give them an answer. Both of those things, they're based on empirical research that says when people say they're going to definitely buy something, actually, a lot of them don't. After use, there's also you ask questions like, "definitely, probably would buy," and so forth. The same thing is true, but the percentages are totally different. You need to learn how to do that by looking at literally hundreds of new product introductions and you link these databases.How Ignoring Forecasting Data Cost a Client $100MBill Moult: One that I'll give you, I won't say specifically what the company or the product was. We did this product and we knew that this was a very, very high-profile product and an initiative within the company. I was presenting it myself. We go into this presentation of the outcome, and usually there might be five or eight people in the room or whatever. There were 40. We had heard, we had already read, you could read in the press that the world knew that this company was going to be introducing into this new sector for them, and it was a big deal. Once I saw 40 people in the audience, it kind of filled out the story. One of the most, so one of the things that happens, you have to have the concept, how you're going to present it. You have to have the product so they can take it in their home and use it and so forth. You actually have to have a very, very good understanding of what they're, how they're going to introduce this product. How much money they're going to spend, how they're going to advertise, how they're going to promote, and so forth. It's like, I don't know, 25 pages long as a detailed plan. It's really hard for them to do it. It was an unpopular part of the process, but an essential part of the project process. They did that, and they laid the entire thing out. The single most important thing in that marketing plan was one question we asked: "What is your minimum business requirement? What will it take for you to get in your first year of retail availability, how much sales will it take for you to say, 'Okay, this is worth doing'?" We focus on that number a lot. We did this product, and the concept wasn't bad, pretty good. The product wasn't bad, it was pretty good. But it couldn't deliver the minimum business requirement. I'm giving this presentation, and I'm reading the tea leaves in this room. They sort of appreciated the learning, but they didn't appreciate my conclusion at all. I said, "It's not a bad." I said, "You got to understand, this is not a bad concept. It's not a bad product. You have no chance of achieving your objective." Then I said, "In fact, I'm begging you not to introduce this product in the way you're doing it." About two weeks later, there's an announcement in the press that this company, well-known, respected company, has decided that they're going to go into a test market with this product. I was elated because I knew they go into a test market and they might lose 2 million bucks, but they wouldn't go national and lose $100 million. I was thrilled. Then a month later, they introduced nationally. They even admitted at the time that the test market was a head fake. They were trying to throw off their competition. They did go into the market and they did lose $100 million.Andrew Mitrak: Wow. Gosh, it's a shame you can't tell me which company this is because it's an interesting story.When Forecast Data Doesn’t Favor Your ProductAndrew Mitrak: As a forecaster, you have to tell clients what they don't want to hear sometimes, and it's up to them whether they listen to your advice. That was a company that didn't listen to your advice. Are there any examples of companies that, taking the laundry detergent example, say, "Hey, we did the study, this doesn't clean the clothes well enough, go back to the drawing board."Or do they change the product? Do they change the advertising? Do they change something else? Do they decide to just kill that one and do something different? What are the outcomes that a large company might do?Bill Moult: You must have read stuff. All of the above, Andrew. All those different things happened.The thing that was nice about BASES was it was early enough and it was inexpensive enough that they could iterate and they could go through the stage more than once. Yeah, there's some huge, a lot of the products introduced during the 80s, 90s, whatever, a lot of the most successful products had been BASES tested. We couldn't tell anyone they were BASES tested, but sometimes the clients did. They would even go into the retailers and say, "You should give us some credit for the fact that we've tested this thing carefully. Here are our BASES results, so we know this is going to be a successful product. Therefore, you want to put it on the shelves here of your retail outlets."The rise of the Product Forecasting IndustryAndrew Mitrak: Was BASES a new category of forecasting company because of new methodology or new technology? Or did companies like BASES exist before? What did companies like Procter & Gamble use before BASES and what did BASES do differently? Can you frame BASES in a historical sense of where it fit in the evolution of forecasting?Bill Moult: I love that question. I love it because we were not the first. BASES was not the first. The first one was Yankelovich LTM. The second one, but what became the most successful before we entered the business, was Assessor. MDS Assessor was, MDS was a company in Cambridge, Mass. associated with MIT, and they, really smart people. Then ESP was the model that came out of NPD. NPD was one of the leading, one of the first and for many years, one of the leading companies in the panel data business. What panel data is, is to look at not purchases by store, but by household. How does that happen over time? That's how you can get this idea. We were actually the fourth one to enter the business, but we were committed to using the best available data, and the data that was coming along with scanner data, scanner panel data was amazing. There weren't that many people that knew how to, that had it or knew how to use it effectively. There was no one else that had Lynn Lin, who really built these very sophisticated simulations. We were the, maybe the fourth one to enter the business, but we probably had or used the best available data. We were also in the AdTel business, which was a split cable business. The person in your house and the person next to your house might actually receive different advertising messages by the split cable, and you could see the responses that they would have over time, or receive more advertising or less advertising and so forth. That was the test market, the electronic test marketing business and AdTel and BehaviorScan did that. But they had just fantastic data.Understanding Scanner Panel DataAndrew Mitrak: You mentioned the source for some of this data was scanner panel data. Scanner panels are something I've heard brought up on this show a couple of times, and I've visited the Wikipedia page a bit for it. But for listeners who might be hearing of a scanner panel for the first time, at a very nuts and bolts level, what exactly was a scanner panel? How did that data get collected?Bill Moult: Okay, first of all, the scanner refers to UPC scanners at the supermarket. Prior to that, at the supermarket, you had a sales clerk checking things out and it was very, very labor intensive and so forth. Somebody figured out how to develop a little UPC code, and so it could be scanned in a second rather than half a minute to get the complete identification. The industry really got into that because it worked really well for retailers. If it works well for retailers, you got to figure out a way to make it work for the people that sell to retailers. That was the UPC. It used to be audit data or warehouse withdrawal data, but scanner data allowed you to get very, very detailed data, not only for a market, but for a store. Taking it beyond the store, you could recruit people to participate in panels and they might present a card when they check out and get a little bit of discount for checking out. The real purpose of the card is to have an identification so you know regardless of where that person shops at many different stores and chains in their market, you know what they buy. You know if they bought it once, twice, or three times, and you know how often, you know what quantities they do. That's what a scanner panel is, is a group of thousands or tens of thousands of families who purchase information that is directly linked to the stores and to the individual products. You start with a scanner, it becomes a panel when people are recruited to participate. They might participate just by presenting a card or the initiative they actually write stuff down. Then there's another level too that I should mention beyond that, which is it's great if you get that data that has all their purchase information. But what about their exposure to advertising? Well, that's an entirely different set of data. If you can get that and incorporate it, it's called single source data. That's unbelievably powerful because then you have a chance to see, Andrew bought this, was exposed to this advertising, his neighbor didn't get exposed to it. This is the behavior that came down and how can I quantify it over time? Therefore I can predict the sales as well as understand what's really working and what's not working. Those are the different kinds of data and that's what, those are the reasons that models were changing so fast because the data was getting so good, and it was getting really, really complete. Then it went further later in the career that I wasn't as involved in single source data. A woman by the name of Leslie Wood did the best analysis on that. There was a project that was done, I'm jumping way ahead because that was what happened later in my own experience. Single source data ended up and continues to be a really powerful tool that's used particularly by consumer packaged goods.The Convergence of Data and the Rise of ASIAndrew Mitrak: This intersection of scanner data, panels, single source data, it was all coming together around the 1980s and creating innovation in the accuracy of forecasting with models like those that BASES was pioneering at the time. From BASES in the 80s, you went to ASI, which was an advertising research company where you became their president, their CEO. Can you tell me about this move and ASI and what advertising research looked like at the time?Bill Moult: Every job I did, Andrew, was either a startup or a turnaround. This one was a turnaround. When I joined, the people at ASI didn't know we needed a turnaround, but you could see it from the outside. The history of the advertising testing business, it had actually started a company called Burke, and it was really sponsored by, very visibly sponsored by Procter & Gamble. It measured what they called related recall. I show you an ad and ask you, ideally within the program, a television program, ask you to watch a program, agreed that you will talk to us a day later. What Burke did was call you a day later, ask you about the program, and they really weren't interested in your answers to that. Then they ask you about the advertising you remember from that program. In particular, what they really wanted to do is get what was called related recall. Does somebody remember an ad and are you able to correctly associate it with the brand that was actually being advertised? It's a very simple measure, very important measure. Procter & Gamble was pretty visible in supporting that and that was I think the most important reason why that became pretty much standard requirement for many advertisers. They really used one measure, which is that related recall measure. Then another company came along, and the company was called either ARS or RSW, they actually had several different names. They also had one measure, but it was a different measure. It measure was called persuasion. They said what's really important is, am I going to change what you buy based on you seeing that ad? They would try to relate the exposure to the ad to the brand choice, not whether you remembered it, but whether you changed your brand choice. It's a good measure, but it was one measure. It was obvious to me shortly after I joined ASI, if not before, that ASI had very good people, but they were really losing their momentum. The reason was, this other guy came along and came up with a better measure. When I joined ASI, shortly after I joined, it became clear to me that we had to change. We had one company with one measure, another company with another measure. They are both good measures, but they're incomplete. I said, we need to have an integrated measurement of more than one dimension. We need some measure of recall and some measure of persuasion, and we need to put them together, ideally with some analytics. In order to do that, I have to walk away from the single measure system, which was very profitable and had a long history to it. It was probably the biggest risk that I took in my career for the company. We did take that risk. This one I will tell, I'll tell you a Procter & Gamble story on this one because they're so important. We not only changed the system to have multiple measures, I made the decision that we would wait until we had an unbeatable combination in the business proposition, the analytics, and everything else before we go back to Procter & Gamble. Because ASI had some of their early Burke people as a part of the team at that point. They were familiar, but we waited five years. We went back after five years, we said, "We think we're ready to show you something that we think is better than anything that we've done before, but anything that anyone else has done before." It incorporates these multiple measures and it links them to actual sales response based on market mix modeling and a few other things like that. The same thing happened there that happened in all cases when the real thought leader client in the industry changes, people tend to follow. ASI managed to grow very dramatically after having gone through this difficult period. Then I went to the owners of ASI. These guys were great. Terry Elkes and Ken Gorman. Terry had been the CEO of Viacom before Sumner Redstone bought Viacom and ran it himself. I love these guys and they were really good to me and they were pleased to see what was happening with ASI and so forth. I said, "I need a meeting with you guys sometime soon." I met with the two of them and I said, "Terry, Ken," I said, "I've loved working with you guys. But I've got to tell you, I've come to the conclusion that to fill myself out as a business person, I really need some international experience. I know ASI can't provide that. We don't have the resources, the wherewithal to go international." For that reason, I'm giving you 18 months notice. Ken or Terry said to me, "Bill, thank you, we hear you, give us 24 hours to respond." I went, we met back 24 hours later, I had no idea whether they were just going to kick me out or what. Terry said, "Bill, we have decided that we would rather sell the company than replace our chief executive. You can decide who to sell the company to." I was blown away that they would say that. Fortunately, there were four companies in the industry who, once they knew we were available, who were very interested, and three of them were very willing to have this crazy president or CEO at that point have a tour in some international company. The one that ended up buying ASI was Ipsos, which is based in Paris. Not a bad choice. That's what we did. We sold it to Ipsos and I got a chance to spend some time in Paris.Measuring Recall, Persuasion, and ResponseAndrew Mitrak: There's a lot that you covered in this and I want to go back to what you were saying at the beginning of ASI, that they had been measuring one vector, which was recall. So how well could an ad be remembered at all? Important, but insufficient potentially. Then a separate competitor was emerging and they're measuring persuasion. Which is more about the ad's effectiveness in a way. You have to remember it and it has to persuade you for you to make a purchase. This is sort of building a more multi-dimensional model for ASI's product offering. Is that the right way to think about it? That you kind of took both those two and brought them together? Were there any other dimensions involved?Bill Moult: Those two, but more importantly to linking it directly to response. I knew the people with the data, I knew the people that had the modeling. We brought in some fantastic modelers and we were able to not only use these two measures, but to combine them in a way that was empirically derived and related to actual sales effect. No one had done it before. That was a pretty good combination.Andrew Mitrak: At ASI and advertising research companies more broadly, who were your main customers at this point? Were you primarily working for a CPG company like you were with BASES? Were you working with advertising agencies? Within customers, who was your key stakeholder? Was it a marketing department? Was it somebody who's overseeing advertising? Was it finance? What did that relationship look like or who was the primary connection point?Bill Moult: It varied a little bit, but primarily the clients of those sorts of things, the lead clients of those sorts of things are the consumer packaged goods companies. The reason is, that's the industry that has the best data. They know how to get the most out of the data, and it requires these models and these capabilities and these talented people. Yeah, so the companies involved at ASI were primarily, and I would say this is also true for our biggest competitors, primarily consumer packaged goods companies. The part of the company, to answer that question, was either the research company, in some cases they changed the name to insights, or sometimes the marketing company, marketing part of the company. The agencies would usually be involved, the ad agencies, which were independent, would usually be involved, but they were kicking and screaming about it. No one likes to have their papers graded. So many of them were resistant at first until they realized that it actually helped the entire system, and some of them became really good users of research and in fact, good innovators of research. Both ASI and BASES were overwhelmingly consumer packaged goods.Consolidation in the Market Research IndustryAndrew Mitrak: BASES was acquired by Nielsen, ASI was acquired by Ipsos. Some of the other companies you've mentioned that are in this industry have also been rolled up or merged or acquired. It seems like there's this gravitational pull towards consolidation in this type of industry. I'm wondering why is that? Why is it not more distributed across a lot of small companies? It seems like there's a trend towards rolling up and consolidation.Bill Moult: I think both for data reasons and for financial reasons. I'll talk about Nielsen a little later because I think it makes more sense then because I think there's a couple of companies I worked for before I worked for Nielsen myself and I can comment in that context. Yes, there's been tremendous consolidation of the research industry, no question about it. I think it's generally been good, but it can go too far. In some cases, you have seen them consolidate and then they split up again. Nielsen's done that about three times.The Marketing Science Institute: Bridging Academia and PracticeAndrew Mitrak: This leads us to the Marketing Science Institute, which you joined after ASI. Can you share about what the Marketing Science Institute is? It seems like a different type of organization than you've previously worked in. What attracted you to it and what was the organization doing?Bill Moult: Oh, it's definitely different. Different than any others I've seen. I was first exposed when I was a doctoral student at Harvard Business School, I was exposed to MSI because MSI, the Marketing Science Institute, actually started at Wharton. Then it moved to Harvard. Then while I was at Harvard, they made the most important decision, I think, to make it independent so that it wasn't associated with any one school, but could work with any school. I was there to see parts of that evolution. A guy by the name of Stephen Greyser, who was the longest-serving executive director. It was an organization that deals with both business people and academics in the field of marketing. It turns out that if you think about those two groups of people, they're generally not all that interested in each other. Most people in business don't really care that much about academia except their own alma mater. Most people in academia, even in marketing, have relatively little interest in real life business. But if you get the few people that really are interested, you get that subset of the people together, you do amazing stuff. Let me use this as a chance to jump into PIMS, because PIMS was, stands for Profit Impact of Market Strategy. It was a very, very ambitious project that started at General Electric (GE). Now, there was a point when General Electric had dozens, maybe hundreds of different businesses. They called them strategic business units, but they were a great consolidator to use that term. They were in all these businesses and they said, "Well, we're in all these businesses, we got to figure out what really makes a business successful, what makes it profitable? What is the profit impact of things that we do, including the marketing strategy?" That's what PIMS stands for, Profit Impact from Market Strategy, but it went way beyond marketing. They said they did this analysis and they got all the different business units to fill out ridiculously long questionnaires about every detail in the business so they could do this big, sorry, they could do a large, sophisticated analysis. It was a really cool idea, but then somebody finally realized, "Well, wait a second, we're only looking at General Electric's business. How are we going to know what really matters if we're not looking at any other businesses? We're not even looking at our competitors." They said, "We need to we believe in this project, we think we can learn from it and benefit from it and change our business as a result of it, but we have to include a lot of different strategic business units." We need to do it independent. They chose MSI as the company that could be an independent middleman for this process. Bob Buzzell did that process. That was the first time that, for example, a sophisticated analysis said, "Yeah, there's really a good reason for you to generate a high share rather than a low market share because there's a very strong financial link." You only know that if you build these sort of extensive, sophisticated, and broad-based analyses. That's what PIMS did. But Marketing Science Institute did more generally was to get those marketing people and the marketing companies and the academics together doing research that made sense. For example, the business people set the agenda. They said, "You guys are doing all kinds of research that we think is wasted." At the same time, we really need this done. For example, we need to figure out what the World Wide Web is going to be all about. Can you guys focus on that and change the, set the agenda for the marketing people? Then the marketing or the academic people. The academic people would spend a lot of time, a lot of resources, a lot of smarts, and they would answer these questions. Usually it would take them years to answer them, but they'd answer them to the Marketing Science Institute. There was some really good stuff done. The interesting thing was that people that were involved in the Marketing Science Institute, there was about 70 member companies and they were all the blue chip companies. At least as many leading academics involved. They would kind of do this stuff first. One of the best examples was disruptive innovation. You know Clay Christensen. There was a book that Clay Christensen wrote that said, "This is the way you need to think about innovation and disruptive innovation in particular." It was very successful, it was a bestseller. Two years before he wrote that book, he wrote a Harvard Business Review article, basically said the same thing. Two years before he wrote the article, he presented it at the Marketing Science Institute. What was happening was people were getting involved very early on in the developing areas, and it didn't always happen quite that beautifully, but that was a good example of when it did. The Marketing Science Institute was a wonderful experience and it was unique because it brought the academic world and the business world together. It was hard to do. It's currently part of the ARF (Advertising Research Foundation), but it's still independent, largely.Andrew Mitrak: That Clay Christensen example of disruptive innovation originating or having early beginnings at MSI is a great example. There are other ones that have come up on this podcast. I interviewed David Aaker who's really popularized the concept of brand equity and brought it to the masses and it defined a big part of Aaker's career. But he originally heard about it, on this episode he was talking, or on this podcast with him, he was talking about how he learned about brand equity at the 1988 MSI conference. You have these conferences that set a theme and bring major thinkers in marketing together and there would be presentations and papers published and an exchange of ideas and somebody could latch onto that and bring it out of this, out of MSI to marketing and business more broadly and actually have an impact.Bill Moult: That's a great example. One other thing that happened at MSI I got to mention to you though. Dave, there was, the way it's organized is it's led by two people as peers. One who's a president, who's hopefully around there for years, and the other is an executive director who was an academic, and we tried to serve both groups. I was the president for a number of years and there were two different executive directors while I was there. But one of them said, after we'd been working together for a while, he said, "Bill," he says, "I, we got really smart people from the advertisers or the member companies. But they're all from market research or sometimes from market strategy and so forth, but they're really not the people that are doing the marketing for the company." He said, "Whereas on the academic side, we have all the right academics, the science-oriented ones, the quantitative and so forth. How do we fill the gap?" We identified an opportunity to make a connection with chief marketing officers. Now it was a relatively new concept. I learned on your podcast that Sergio was the first CMO. Now I can say Sergio because he only needs a first name, he's like Madonna, the Madonna of the marketing world. He was the first one, I think you said in '93. A little bit less than 10 years later, we were able to make invitations to between 40 and 45 of the best CMOs, mostly in the United States, but a few international ones, and they almost all, once invited, came. We got them together with some academics. It didn't last forever, it went a few years and it was really good because it got the marketing people, not just the marketing research and the marketing analytics people, connected with the academics.The Evergreen Challenge: Connecting Marketing Academia and BusinessAndrew Mitrak: I think this idea of the intersection between academia – I've interviewed a lot of academics on this podcast – and business leaders, I've interviewed some of them too, is an interesting idea where I feel like it's an evergreen challenge to get them to speak and connect and communicate. Connecting academia to the real world is just an ongoing thing where it doesn't seem to happen as much within the field of marketing. If I think of other areas of the sciences, in biology, a breakthrough that's a published paper can all of a sudden spin up a new biomedical or pharma company that can really be productized. Similar in computer science, a white paper on AI can spark a whole revolution in a field. That just doesn't happen quite as often in marketing. Why do you think that is? Why do you think it seems to be an evergreen challenge that we needed institutes like MSI to bring these people together proactively because it's not happening naturally? Why do you think that is?Bill Moult: I don't know. I share your frustration that it doesn't happen more often than it does. I think some of the things that happened in Silicon Valley, where, especially Stanford academics were very closely involved. I don't know that it just hasn't happened in that way in marketing or marketing research. One example is a guy by the name of Michael Ray, do you know him? Or do you know him by reputation? Okay, so he was a marketing professor that focused on advertising, but he went to Stanford or spent much of his career in Stanford, and he ended up being a guru in the area of innovation. For whatever reason, he was interacting with a lot of the right companies in Silicon Valley and they were a heck of a lot more interested in innovation than they were in advertising. He basically changed his focus as an academic guy. I think there was a different environment there. No, it's frustrating, but I also think it represents an opportunity. Some people make it work really well.Nielsen: What do they actually do?Andrew Mitrak: I'm going to jump ahead a little bit and talk about Nielsen because you were the president of Nielsen Media Analytics and Knowledge Collaborations. You were also the CEO of a company called Interscope Research, which you later sold to Nielsen, and you've had advisory roles within Nielsen. Nielsen is one of those companies that even before I got into marketing, you'd hear about Nielsen, you'd hear about Nielsen ratings. I think a lot of people have heard about Nielsen, but it has always been a little bit of a mystery to me what they actually do at the end of the day, how they actually work. Can you help demystify Nielsen or speak to your time there? What do they actually do? What was your role within Nielsen as well?Bill Moult: That's a tall order, Andrew. I was hoping you'd demystify it for me. Nielsen's an amazing company or companies. It started really by two guys that were phenomenal in terms of their impact, AC Nielsen and then AC Nielsen Jr. What they did, among other things, they created the concept of market share. They said, "All these companies are doing their own thing, they're selling their product, whatever, they think they're doing well, they don't know if they're doing well." They really needed to understand whatever else is selling, not just what their company is selling, but everyone that competes with them. We're better off if we can gather data that measures the sales not just of your company, but every company that's in that category, and then compares them and tells you not just what are you doing in terms of sales, what are you doing in terms of market share? Market share turns out to be a very strong concept. They did that starting with, this is way before scanner data, they started with audits, and they did those audits, and then they succeeded in that business to the point that everybody felt that that was required really to run their business, they would have to get that data. Then they found that the same opportunity existed in media. It wasn't enough to just know something about your viewership, you needed to understand competitive viewership or listenership or whatever it is in order to do the other. They started Nielsen Market Research, Nielsen Media Research. Those companies have been together or separate, together or separate multiple times in the history of those companies. They come up with good reasons why they should be together and then for a while it doesn't work and they split it up or whatever. It's separate now. When I was there, it was together. They're interesting because, partly because of the capabilities they have. I'll tell you one of the things that's underestimated is how good the people were. I'm going to use two or three examples here. One guy is, you will recognize his name but for the wrong reason. His name is Dave Calhoun. Dave Calhoun has been well, very visible for the last three or four years because he was on the board at Boeing after he left Nielsen and after he left Blackstone, he was on the board of Boeing when Boeing crashed two 737s. They asked him to get off the board and run the company, become the CEO. With the idea that all the problems that Boeing had would go away. Well, they didn't go away. Boeing's had a very, very difficult time and in my view, Dave's got too much of the share of the blame for what was really could be explained by a lot of things and a lot of people. He was the best CEO I've ever encountered in my career. Dave was CEO when I was at Nielsen, and when I was at Nielsen, that was one of the periods of time when they were all together and they were making, creating real value from being together. I'll give you another example. The quality of some of the people that were there both what they did before, during, and after their Nielsen thing. One of the best examples is Steve Hasker. Steve had been a very successful consultant at McKinsey. Dave Calhoun knew Steve, I think they worked together on some stuff. Dave said to Steve, "You know, I was very fortunate. I, Dave, was very fortunate that I learned a lot from Jack Welch when I was at General Electric. When I was running two different, two or three different businesses that Dave ran while I was there. I learned from him a lot." He says, "Steve, you've been a consultant at McKinsey helping people understand what it takes to run a company well. Would you actually like to do it? Because he says, I think I could teach you as much as Jack Welch taught me." That was, you have to jump at that opportunity. Steve did and he did really well there. Now, he's the CEO of Thomson Reuters. There was a lot of quality in people, but they also had a lot of opportunities and challenges, partly because they were in these different businesses, both businesses were changing, they had different cultures, very, very different cultures. The media business and the advertising business and the marketing business, these are different animals and some of the people involved. The quality of the people and the resources that they had that they could be linking these databases made it a really interesting but also challenging business to be involved in. I was fortunate, I think, to be involved. I came in to start a start a business. In these two businesses that they call watch and buy. Watch is the TV or internet or whatever, and buy is the UPC scanner data. There's two different businesses, separate sometimes, together sometimes, whatever. One of those businesses, the buy business, with UPC scanner data, had built over time a lot of good analytical services. The other had built none. The media business was saying, "These are how many people are watching your show and that's pretty much it." I mean, I'm obviously exaggerating, but there was a very a total disconnect between the level of analysis and support of that sort on the buy business versus on the watch business. They asked me if I'd come in and build a business on the watch side. I said, "Yeah, I'll try." I found that there were three relatively small businesses that were going on just in a very custom basis. We pulled those together, we built some other capabilities, and built some standardized services. Some of them did pretty well. I was only there about three years. They have gone through one or more of these combinations versus separations since. I can't tell you exactly what the status of it is now. But as one more example of the quality of the people, I had the pleasure and the honor of starting the media analytics business for Nielsen. My successor in that role as president of Nielsen Media Analytics was Karthik Rao. He's the CEO of Nielsen Media today. I was fortunate in the quality of the people that I got to interact with and the stuff that we did there and I have very good feelings about a company that's been complicated and as you said, a bit of a mystery to people off and on for many decades.The Importance of People Above All ElseAndrew Mitrak: Something that's true that you've called back to a lot is that even as the technology changes at these various companies and latest and greatest in marketing research changes, having great people be leadership, be leaders at a company, that stays true as a constant of what makes a great marketing company. I'm wondering about if you think of the last several decades of your career and the time that we've covered on this, on our time together, there's been all this change in, we haven't even talked about the internet that much and all sorts of changes in the marketing and advertising and research landscape. I'm curious about what hasn't changed though. What's still true today that was true when you started your career?Bill Moult: Well, the most important thing in my career is the people that I dealt with. I was very fortunate there. What hasn't changed is this is a business that's going to succeed or fail based on the quality of the people, the level of their commitment, their ability to work as a team. I think that remains true. The data's changed. A mathematician might say things haven't changed at all, that is you're all really crunching numbers in a different way, but they're all the same underlying things. But if you're looking for a constant, I would say, I'd choose the team every time.Andrew Mitrak: I think that's a great message to wrap up on. Bill, it's been such a pleasure speaking with you. I really enjoyed it. Thanks so, thanks so much.Bill Moult: As did I. Thank you so much. You take care. Good luck with this entire initiative. This is a public episode. 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A History of Marketing / Episode 22Today marks Sir Paul McCartney’s 83rd birthday. To celebrate, I’m publishing my excellent interview with Ian Leslie. Ian’s the author of the New York Times bestseller: John & Paul: A Love Story in Songs, published in April.It’s my favorite book I’ve read this year. It tells the story of the creative partnership at the heart of the most influential band in history. I’m pretty familiar with Beatles’ story, but this book tells the story in an intimate way. I laughed, I cried, and I didn’t want to put it down — except to stop and listen to the songs. Now you might be wondering, “That’s nice, but what do the Beatles have to do with marketing history?” Great question! For one, as the best-selling musical act of all time, the Beatles knew a lot about marketing. They deliberately crafted their image, they mastered media relations, and they engaged their fans with tactics that were way ahead of their time. In marketing speak, the Beatles created a new category and they dominated that category as the brand leader.This episode analyzes the marketing masterclass that was The Beatles, and Ian Leslie is the perfect guide. Not only is he a great biographer who's immersed himself in the world of The Beatles to write John & Paul, but he's also a marketing veteran who spent the first part of his career in advertising and brand strategy.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsIan Leslie is behind the popular Substack The Ruffian. (I am a paying subscriber and highly recommend it!) Prior to John & Paul, Ian also published a viral essay “64 Reasons To Celebrate Paul McCartney.”Now here’s my conversation with Ian Leslie. Note - I use AI to transcribe the audio of my conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.John & Paul: A fresh look at the best-selling musical partnership in historyAndrew Mitrak: Ian Leslie, welcome to A History of Marketing.Ian Leslie: Hello, Andrew. Good to be here.Andrew Mitrak: Great to have you. I loved reading your book, John & Paul. You told the story of The Beatles, and of John Lennon and Paul McCartney, in such a fresh and intimate way. I just devoured this book. I made my wife read it, and she loved it, and we've had the joy of just talking about this book, revisiting The Beatles' music together, and listening to some of Paul's solo work. So it's been such a joy, and I just wanted to start by saying thanks for writing this book.Ian Leslie: Well, I'm delighted to hear that. Thank you very much.The Beatles as business innovatorsAndrew Mitrak: So, given your background in marketing and in business, when you were researching and writing this book, did you ever find yourself, either consciously or unconsciously, analyzing The Beatles through the lens of marketing, promotion, and business strategy?Ian Leslie: Yeah, there were several points where you reflect on how certain decisions impacted their success or slowed it down in some way. And apart from anything else—apart from the creative and the artistic story, which is obviously where I focus in the book—it's an incredible story of innovation and creating a whole new market. You know, we talk about inventing the future a lot. I mean, these guys really did invent their own future because they weren't satisfied by what was around them.First, a big brand in their home market, and then they become a huge global brand, and they're absolutely dominant. And it turns out to be an enduring brand, too. It's not just for a couple of years. And they're creating a new category, or new categories, as they go, both in terms of the overall category of being a pop group that isn't just a flash in the pan. And also products like the album, which hadn't really been a best-selling product type until they came along. So yeah, it's an astonishing story just from a commercial point of view.‘The Beatles’: The best or worst band name ever?Andrew Mitrak: I think for me, one of the first parts of the story of establishing the brand was actually just the selection of their name. The name "The Beatles," I think, is just the perfect band name.And it sounds so perfect, it almost seems like it just came from the heavens organically, but it was a really consequential and deliberate decision they made. And they tested a number of names. Prior to The Beatles, of course, they were The Quarrymen to start. But do you have any thoughts on or reactions to their approach to naming and the name "The Beatles" itself?Ian Leslie: That's interesting because it's interesting that you see it as the perfect name. And I'll invite you to expand on that in a minute. Because I could see it both ways. I mean, obviously it worked out pretty well. But you might say it's like the worst name ever, as well. And it's almost like these two things are inextricable. It's either going to be the worst or the best. It turned out to be the best.But let me just put the case for the worst name before we get onto the case for the best. It was not a recognizable type of name, if you see what I mean. Basically, the stars of the time in the late '50s and early '60s were solo stars or a solo star plus a backing group. So you had your Elvis Presleys, and you had your Cliff Richard and the Shadows. Right? So you had your X and the Ys. And the idea that you could just have "The Somethings"... you know, or Buddy Holly and the Crickets. But the idea of just "The Crickets" or "The Somethings," it wasn't really a thing. It wasn't really a precedent for that.And it got The Beatles into a lot of… it slowed down their progress in a way because they were so determined not to have a frontman for various reasons, that promoters and so on found it hard to say, "Well, who are these? I don't understand. What is this group?"And then the other thing is, it's just this really cheap pun. I mean, the stories differ on the origin of it, but something to do with maybe they took inspiration from The Crickets and they chose another insect, but made a pun on it because they were playing what was called beat music at the time. And they end up with this pretty cheesy pun. And the name had to be explained over and over again. And you see this all the way through, right up until they start becoming famous, all the promoters, all the record label guys, and audiences are like, "The Beat… The what? The Beetle? What?" And they have to spell it out. "Yeah, it's spelled B-E-A-T."So it's this laborious thing where you have to explain it. And then once you get it, you're like, "Oh yeah, that's The Beatles. I'm in on it." So, this I think is where we flip into your "best name ever" case.A big improvement over “The Quarrymen”Andrew Mitrak: The case for it being the best name is – I've had the chance as a marketer to name a couple of companies and products– And I think what you look for is you want something to be short, right? Aside from "the," it's a couple of syllables. It's easy to pronounce. It's unique and it's clever, but it's not like some weird misspelling. Beat, B-E-A-T, right? It's easy to spell. Also, I know it existed 40 years before Google and SEO, but if I was to name a thing today, it seems very SEO-optimized, which is kind of funny.And also, it enables them to grow... you know, they were The Quarrymen, which sounds like a very local, schoolboy kind of name, right? I think it alludes to the school they attended, right? And I couldn't see The Quarrymen having Quarrymen-mania, right? And Quarrymen merchandise being a global phenomenon. It's a very… a hard name to spell.So "Beatles" just seems to have a certain universality to it. They also feel like they're a group, which is really enabling their success. And it was really prescient of them to not be "Long John and the Silver Beetles."And also it's more distinct. Something like The Animals... it sounds a little vague though, right? It doesn't sound as unique and ownable in a way. So that's my bull case on the name The Beatles.A high risk branding bet that paid offIan Leslie: So, the way I see it is, names like this that are not descriptive of the product in some way, that are just sort of odd or weird and need explaining, they're like high-risk bets. You know, they can easily go wrong, which is why a lot of, or maybe most, brands when they're naming their product—brand managers—they choose a name which explains a little bit what the product is. So, say this is like Microsoft versus Apple. I mean, Microsoft… it's actually a bit of a weird name because they were weird guys, but at least it was something to do with microcomputers and software. I don't exactly know what the derivation is, but you get the general area. Whereas Apple is just like, what? It's got nothing to do with computers. I don't even get it. They're both successful, obviously, but Apple's probably the cooler, better brand name. And it paid off in spades, right?So yeah, The Beatles chose a name which isn't descriptive. It's not "Something and the Somethings." It doesn't tell you anything about them, really. It's an odd name. But once you're in on the secret, then you feel like you're in a club. And so it helps to generate this early community of fans and community, which a lot of startups really look for when they're in the first year of existing. So I guess there's something in that.Creating and managing the Beatles’ imageAndrew Mitrak: So, they had this really distinct image in their early days: the mop-top hair, the matching suits, the Beatle boots. Literally iconic from head to toe, from their hair to their boots. So, would their manager, Brian Epstein, deserve a lot of credit for this? Or do you think this was leaning into some of The Beatles' organic tastes of fashion? What are your thoughts on the initial image they created?Ian Leslie: Yeah, it's an interesting question. Before they met Brian Epstein, they had a… they always had a strong look. They always looked… and they looked very different from the other groups that were around. The other groups tended to wear flashier gold lamé suits and look very much like they were in show business. And The Beatles went for a scruffy leather jacket… It looked like they were just thrown together, but actually they all wore the same thing. And it was all definitely part of their image as scruffy upstarts.Now, Epstein comes along and he's like, "Well, you're not going to get on TV if you look like this, right? You have to find some compromise here." And looking back on it, Lennon was like, "Oh, he made us sell out," and so on. But I don't think that's quite right. They already looked a bit sort of try-hard with their leather jacket rockabilly look. It looked a bit like they were trying to be throwbacks to the 1950s. There was something a bit, "Ah, we've done that now, guys." So I think they were already ready to move on.And the other thing is, they took his cue to smarten up, but then they chose really cool suits. Like Yves Saint Laurent-influenced, collarless jackets and narrow trousers in cool materials. So they found this… it was a bit like a Motown group, really. So they find this way of saying, "Okay, I understand the goal now. The goal is to break into mainstream media in effect, and you can't do that if you're dressed for small clubs in Liverpool and Hamburg. But also, I don't want to just be like all the other groups." They've always hated being like all the other groups, right? We're never going to do that. "So why don't we find our own way to smarten up?" So that's the interesting lesson there, is like, you're going to compromise with the audience or the market in some way, but that doesn't mean becoming less individual. You just find a new way to be individual.Andrew Mitrak: It also strikes me that their look and their image— I think of The Beatles as the black-and-white era Beatles and then the color era Beatles. And that there's, you know, sort of A Hard Day's Night and there's Help!, right? And Help! and beyond. And that this black-and-white image, it was the 60s, but a lot of things felt like the 50s still. And that it somehow just seemed to look good on black-and-white television, just their silhouettes and their image. And it feels like they were really attuned to the actual media that was presenting them.Ian Leslie: Yeah, and you can see that in the album covers as well from pretty early on with With The Beatles and Beatles for Sale. And they are opting for a kind of moodier look. They don't want to be just these grinning guys or these glamorous pop star image. They're doing something new, and it's a bit more European. It's influenced by Germany and, you know, by Astrid Kirchherr and by French culture. And more to the point, what they're doing now is taking control of their brand.The Beatles as a vertically integrated brandIan Leslie: You think about the fact that Lennon and McCartney were writing their own songs and singing and performing and then recording them. That was pretty much a new model, certainly for a group. And they were effectively… because before that, you had groups, and then you had songwriters, like Tin Pan Alley songwriters. And the labels would distribute the… they would match the songs to the group or to the solo act. They'd say, "Okay, try this song, try this song, try this song." And very quickly, The Beatles were like, "We don't really want to do other people's songs. We'll cover rock and roll songs or soul songs that we love, but we're not going to accept other writers' songs because we've got pretty good songwriters."So they vertically integrate the creation of the content and the distribution of the content, if you like. And also the front end of the content, not just in the recordings, but in the actual packaging of the product as well. So they take control of that creative process from beginning to end. They do that pretty quickly, really within the first year of getting famous. So it's an extraordinary amount of very audacious act of confidence and a land grab which opens the way for this whole new category, in effect.Andrew Mitrak: It's just astonishing the intuition they have, the boldness of it, and that they were able to get this control. And they were just little kids, like they were 20, 21 in this era. And they have such great intuition about so many things. Of course the writing of the music and the performing of the music, which is at its core, but then also their image, and as you said the vertically integrated end-to-end ownership of the process. Not only really good musicians, but also really good at a lot of other things.Ian Leslie: Yeah, I mean, I still don't really understand where they got that confidence or that audacity from. But I think it is partly to do with just having been together and experienced so many amazing experiences, both traumatic and joyful and hard and fun together in those years as teenagers in Liverpool and then in Hamburg, that they felt, you know, John and Paul in particular, but the whole group, really felt kind of indestructible and had a sense of, "Well, you know, you take us or you leave us." You know, they weren't absolutely against compromises, as we've seen in the sense of, you know, in terms of how we dress and so on. But they did have this sense of themselves as artists. They might not have used the word, but they did think of themselves as artists rather than just entertainment stars who were going to do music for a year and then become game show hosts, which was the conventional career route for most pop stars.‘Beatlemania’ and the merchandising machineAndrew Mitrak: I was watching the Beatles 64 documentary, this is the one that was produced by Scorsese and I think it's streaming on Disney. And it struck me that when they came to America in February of '64, their fans already had all the Beatles merchandise, seemingly. They have this clip in the documentary of people having the mop-top wigs and buttons and knockoff Beatle boots and all this merch that they had. And it's like, these people, they just came onto the scene. I think their music had probably been on the radio in the months preceding their visit, but still, it just seems like, just operationally, how did they get all this merchandise produced so quickly? I'm sure it was some mix of knockoffs and maybe some legit merchandise. But do you have any sense of the merchandising machine that surrounded The Beatles in this era?Ian Leslie: I don't know, it's a good question. I'm not an expert on that side of things. But I think a lot of it was not official merchandise. I think their record label, Capitol in America, very quickly did a big merchandise effort when "I Want to Hold Your Hand" becomes their first smash hit in America. And then they did the wigs and they marketed them as these four mop-tops and so on. But then I think, America being America, lots of small entrepreneurs just sort of pitched in and did their own thing. And the thing is that they hadn't tied down the legal rights to that and the commercial rights to that merchandise.And it's one of the things that Brian Epstein gets criticized for most harshly in retrospect, is that he didn't tie down merchandising deals and therefore left an awful lot of money on the table. How far he was expected to have foreseen that boom in merchandise, I'm not totally sure, but it's true that they weren't making a lot of money from this stuff.‘A Hard Day’s Night’: Expanding to the big screenAndrew Mitrak: There's A Hard Day's Night. I don't know how it was also released in 1964 or how they had the time to film such a good movie. But they make this film, A Hard Day's Night, which stands up really well. And did they see films as sort of a way to promote their album sales and their concert tours? Or did they see this film as an art form in itself that they wanted to really break into? What was their approach to where film fit in?Ian Leslie: Well, I think it was very conventional at the time for pop stars, you know, Elvis Presley most famously, to make movies as an extension of the brand. And yeah, as another way to distribute your content and another way to meet your teenage fans.So that wasn't innovative, saying, you know, "Oh, you know, we're pop stars, now we need to do a movie." The innovative or the thing that was different about them was that they decided it would be good.You know, we can put it more like, you know, they wanted it to be innovative or artistic or creative. But basically, they were just like, "We don't want to do a crap movie because we think all these teen pop movies are crap."I don't know exactly how they chose Richard Lester, the director, or the writer, [Alun Owen], but the writer had spent time in Liverpool and was part of the beat scene, he got them. And so they helped choose him. But they end up with this team, including a cinematographer, a brilliant cinematographer [Gilbert Taylor]… he went on to shoot Star Wars. You know, so he's probably responsible for the two most powerful visual properties of the 20th century. So they had an amazing team and so, you know, some of that is talent that was around in Britain at the time. Some of it is luck, but a lot of it is The Beatles' driving force, which is, if we're going to do this, we want it to be good. We don't want it to be mediocre and embarrassing. And you can get a long way with that attitude.John, Paul, George, and Ringo: A whole product rangeAndrew Mitrak: There's a quote that you wrote in your book on A Hard Day's Night or this era, and I'm going to read it back to you because I like it a lot."After A Hard Day's Night, The Beatles had distinct personas in the minds of the public, vividly drawn but crude cartoons. Ringo Starr as the doleful clown, George Harrison quiet but deep. John was the Beatle with the sharp tongue and scathing wit. Paul, the cute and charming one. The Beatles conspired to create these masks, but by 1966, they were wary of them."And I just think this is an important passage because it sets up a lot, but what stood out to me is "they conspired to create these masks." Why did they conspire to create masks? Could you unpack that line?Ian Leslie: Well, they realized, together with Brian Epstein, that being this unusual type of group which didn't have a lead singer could actually be… on the one hand, it made them difficult to comprehend within the music industry, but once you get over that barrier, it actually presents this huge marketing opportunity. Because then you can have all four characters, and all the fans could choose their favorites. And you have this whole product range, if you like.They wouldn't have put it like that, right? But certainly, Epstein was central in, before they were famous, at the Cavern saying, "You know, make sure we give George a turn at the microphone. I want you swapping between John, Paul, and George."And when they're on stage, you see Ringo raised up, so Ringo's not this anonymous drummer, he's very much part of the visual presentation of the group. So in that sense, it was a conscious presentation. And then when it comes to the film, obviously the film is this heightened version of Beatlemania, a comedy, ironizing version of what's going on with them in that first year of fame. And it creates these caricatures which are rooted in some truth about what they're like, but are not the whole deal. So yeah, they're very much part of creating that story. But obviously, it's somewhat in tension with their mission as artists and their desire to be individual human beings and not just fodder for the entertainment industry.Andrew Mitrak: It’s useful to have this shorthand or a “crude cartoon” but down the line it does put them into a box and plant the seeds for music criticism of their solo careers, and the legacy of John vs. Paul as that becomes a central point to your narrative.Ian Leslie: Yeah, true.Engaging super-fans with Christmas recordsAndrew Mitrak: One of the other things they do in this era that I wanted to highlight is that they'd have an official fan club and they'd do these Christmas records.And they'd record these, they'd mail them to their fans, and they'd be sort of lower quality recordings, but they'd have improvised jokes. And it felt like a really… if you can listen to them, I think they've been packaged on the Anthology and are on YouTube and such, but it feels very modern as far as a marketing tactic to have this this special, raw, authentic, hear directly from them, hear their improvised jokes on the recording. It feels like it was almost recorded in a living room where they're having drinks or something like that as they're recording these. And then they just send sort of their authentic selves to their fans, almost like an early newsletter. Can you talk about this? Was this a common thing in the time or is this something that The Beatles sort of helped pioneer or perfect?Ian Leslie: Yeah, that's a great point and a great sort of analogy for how fans communicate. Yeah, they were communicating very directly with fans, weren't they? I don't know the answer. I don't think it was that conventional. I don't think they did it in a conventional way. And they were always very assiduous about looking after their core fans, I suppose. All the way through, they were replying to a hell of a lot of letters, for instance. So many stories about people coming in and seeing them after gigs or before gigs, just going through piles of fan mail and writing replies.Making Christmas recordings and sending it to their fans they were doing that all the way through the 60s, even after they're growing their hair and being cool and doing drugs and being weird, right? They were still doing Christmas messages. There's a very amusing conversation in 1969 when they're all splitting up and they're grown-ups now and it's all so different and changed. And John is saying, "Yeah, but what are we going to do about the Christmas message? We need to get that out to our fans." They're still thinking about that. So they did have this intense focus on the bond that they had with their core audience.And comedy was a big part of it, being funny was a big part of it, right? It's not not just about music. It's about this personal connection. And they always had that, as well as the music and as well as the image, they always had this strong personal bond with their fans that they were very keen to cultivate.Expanding their fanbase from teenagers to everyoneAndrew Mitrak: On their fans, what's really funny to think about also is just how their fans evolved over time. That in the Hard Day's Night era, in the Ed Sullivan era, what you see mostly on the screens are overwhelmingly teenage girls, right? And I imagine that a lot of their fan mail was from teenage girls. But then pretty soon, they'd have universal appeal. Abbey Road is only six years or so later, and the fans for that don't seem like an album for teenage girls at that point. Same with Sgt. Pepper's. And they expanded their appeal with that core teenage girl audience, but they didn't limit themselves to that. Can you speak to how they thought about expanding their appeal and keeping their teenage girl fan base, but also expanding it so they weren't limited to that little box?Ian Leslie: I don't know. I mean, I actually think that for all that we're talking about them being intuitively great marketers, which I think they were, they didn't really strategize about their audience in that way, right? So they weren't ever thinking, "Oh, we need to move on to a different audience now. And how do we manage that transition?" They really were just thinking, "How can we delight everybody now?" and "What's going to delight ourselves?" And it turned out to be the same thing to a remarkable extent.Now, with the teenage girls, I think what's interesting about that is that the teenage girls who caught on to how amazing this music was before the rest of the country… before all the older blokes who later on took ownership of this story and said, "You know, you don't understand the music, it's all about…" Like, okay, well, you completely passed you by. And that the screaming was basically the most appropriate response to a change in music and culture that was this seismic. So I applaud all those teenage girls.The other thing to say about this is that The Beatles never took those teenage girls for granted. They never talked down to them. They were never scornful about them. So they might have complained about the noise at the concerts now and again, but you will search high and low for interviews in which they make any mean-spirited comment about their fans. Do you see what I mean? And I think, particularly from John and Paul and George, I don't think they would ever… they ever thought in terms of, "Oh, now we need to get rid of this shallow, silly teenage girl audience and move on to the mature male…" I just think they thought, "We want everybody in." You know, this is a big tent, we want as many people in it as possible.Andrew Mitrak: There was a quote that I had highlighted from the book as well."As well as female fans in Liverpool, McCartney's ballads later helped win over older generations. But the ballads were more than a marketing tactic."And I think that songs like "Yesterday," which is just this astounding piece that stops you in your tracks, and it's not the whole band, it's Paul solo with some orchestration on the record, that doesn't necessarily feel like it's pandering to the teenage heartthrob audience, although he's the cute one. But it also has this appeal to a broader crowd than just the teens who are watching Ed Sullivan.Ian Leslie: Yeah, absolutely. They always had this incredibly broad appeal. And so, in a way, they were the voice of a young generation, they were subversive, they were anti-establishment, rebellious in some ways, but they were always charming with it. It was impossible to resist the charm about, you know, "you just rattle your jewelry," you know. That remark from Lennon at the London Palladium was just the perfect Beatles-Lennon style remark where it's satirizing the rich, but it's kind of in a quite a warm-spirited way, you know, it's not that mean. So, they did have this remarkable appeal. And then they become really the brand leader for pop and rock music.The Beatles as brand leaders in their categoryIan Leslie: You think about brand leaders in any category, what I learned in my marketing theory days—it's not always true—is that the brand leader can win on all the attributes in a category. It can lead on all the kind of key attributes that people care about when it comes to this product type, right? And then the challenger brands have to come in and take one of them, compete on one of those dimensions, because it's only the brand leader that can compete on all of them.So in Andrex, we have a very famous brand of toilet paper in Britain called Andrex, and it was the brand leader for many years, and I'm not sure if it still is. And its slogan for many years was "soft, strong, and very long."So there you have all the three things that people care about in toilet paper, right? It's soft, it's strong, and there's lots of it. And you can have those "and" kind of brands when you're a brand leader. But then if you're a challenger brand, you just want to come in and say, "No, we're the softest," right? It might not be the strongest or the longest, but we're the softest.And that's what you start to see in the 60s because you see The Rolling Stones come in and consciously position themselves against The Beatles and say, "Well, we're not going to try and be for everyone. We are going to be the voice of the teenager versus the parent, right? The rebel versus the establishment." And we'll position ourselves against the brand leader and kind of, you know. So they opened up this space for different brands to kind of come in and take different parts of the market.“Let’s write a swimming pool…”Andrew Mitrak: There's a quote from Paul, I have it here:"John would be getting an extension on his house or something, and the joke used to be, 'Okay, let's write a swimming pool.' It was great motivation. And then in the next three hours, 'Help!' appears from nowhere. And suddenly you get this idea, this is a hit, this is a good one. And you become aware that what we're doing is making money, making good money."Not that all their songs were probably written just purely for money, but it was something that was in their mind and that they were thinking about the appeal of their music and the marketability of their music as they put it together. So it does seem like it was a conscious driver of their work.Ian Leslie: Definitely, definitely. I mean, they always wanted to be rich, and they always wanted to be famous, right?But I think what that comment is so revealing of is how our ideas of how to make money were flipping around this time and how kind of almost shocking it was that you could do this, right?Because you're growing up in an era where, roughly speaking, the amount you earned was somewhat equivalent to the amount of work you put in, the number of hours you put in. And certainly, you know, their alternative careers, which were working in a factory or or maybe becoming a teacher if you're lucky, you know, you worked really hard and then you got a salary for it.The idea that you could just spend half an hour writing a song and earn a hundred times a teacher's salary in that half an hour, because there was something so extraordinary and desirable and contagious about what you created in that half an hour, that was just breathtaking and and sort of hard to get their heads around. So I think that's what Paul's joke is about.They realized that this thing that they liked doing anyway, which was writing songs together, yeah, they could earn huge amounts of money from half an hour's work, and then they could... I mean, that was crazy. And we're a bit more used to that idea now because we live in this kind of world of mass creativity, mass entertainment, and passive income and all these other concepts. But then it was pretty new.Release strategy: albums, singles, and non-album singlesAndrew Mitrak: On this songwriting and song release strategy, one thing that strikes me about The Beatles is both their albums and their non-album singles, which seems like a unique thing. Well, one, most albums would usually have a few good songs and then a bunch of filler, a few good songs if you're lucky, right? There's some filler. But The Beatles' albums, especially from Rubber Soul onward, didn't really have filler. There was no room for filler. There weren't covers the same way there were on the early albums.And on top of multiple albums a year of just great music, they'd also release these non-album singles. And some of their best-known songs, like "Paperback Writer," "Rain," "Lady Madonna," "Hey Jude," "Revolution," were never on an album, or they weren't packaged on an album. You'd buy them as a single.What was their strategy behind this? Is it just that they wrote so much good music they couldn't even fit it all on the albums, that they were just overflowing with great hits? Or was there more of a deliberate approach to doing this both album and non-album single approach?Ian Leslie: Yeah, you know, it goes back... I can't remember if "Please Please Me" is on Please Please Me. It's the kind of thing I should know, but I forget. But certainly "She Loves You" and "I Want to Hold Your Hand," I don't think are on albums. And yeah, you see that all the way through. "Penny Lane," "Strawberry Fields," is probably the most famous example, you know, recorded for Sgt. Pepper and then kind of, "No, we'll release these as a single." And obviously it's a single...Andrew Mitrak: By the way, you're in England and you know the UK albums. I know the American albums, and so some of these, I think, would be on albums for the ones that I purchased as well, but they weren't on the UK albums.Ian Leslie: …You don’t look old enough to have purchased the American version...Andrew Mitrak: Well, I didn't purchase them back then, but I'd go to my local Best Buy and buy the CD of it, right?Ian Leslie: Oh right…Andrew Mitrak: Even on streaming, when I look at the US albums, which is what I probably default to on my Spotify or YouTube Music or whatever, it just always has those singles on an album. I think "Penny Lane" is on Magical Mystery Tour…Ian Leslie: They did put them on Magical Mystery Tour. That's fine. But they were recorded for Sgt. Pepper. So they were meant to be part of that. There's a famous thing which is like, "Oh my god, what if they had been on Sgt. Pepper? It would have been even more amazing."But yeah, but generally a lot of singles, a lot of their most famous songs are not on any albums. And their albums are really pretty good. So, I don't think this was a normal thing. I think this was them from the beginning deciding that they didn't want to rip fans off, and they wanted to kind of give fans more than fans expected.You know, these days the cliché is, you know, "surprise and delight your audience." But it was that kind of thing. It was like, "How can we actually go further than we need to in terms of, you know, generosity and giving our audience more?" And in a way, it became a bit of a rod for their own backs, I think, because once they'd established that habit, they didn't feel like they could get rid of it.So I think they maybe regretted not putting "Strawberry Fields" on Sgt. Pepper, etc., etc. But by that stage, they'd established the precedent. But yeah, I mean, I just think it's another beautiful example of The Beatles just always doing more than they needed to and being better than they needed to at every stage, in every aspect of their creative production.The Beatles as PR pioneersAndrew Mitrak: One of the other things that strikes me about them is their public relations. So much of the footage we see from them in the 60s is them in front of the press with a bunch of microphones in their face, especially in their touring years where they'd sit and everybody from the city that they were touring in would have the local media asking them questions.They were just so witty and have this kind of meta-commentary about being interviewed in a way, or kind of there's a self-awareness to how strange it all was. And they just strike me as the folks who would do really well on social media today as well.So do you have any thoughts on their approach to public relations and media relations and how it differed from other artists at the time?Ian Leslie: You know, it's funny, as you're talking, it does remind me of these current debates in politics about how to present your... how to get yourself across, you know. And the contrast between the way the Democrats handle communications in the election campaign and the way the Republicans do, or at least the way the kind of Trump wing of the Republicans do it, which is much more free-wheeling and kind of, "Here I am," and unscripted and rambling on, versus the Democrats who are more conventional politicians, like, "Here's the script." And I don't want a free-wheeling conversation because I might say something wrong, right?And The Beatles did have that kind of, like, "We're unafraid. We'll just come on and talk to you, and we'll answer any of your questions. It's fine. We might kind of take the piss out of you if you ask a stupid question, but we're not going to just do the scripted kind of delivery." And they hated that kind of artificial, synthetic kind of being a good boy in front of the press and saying the right things, just as a lot of people today hate the kind of conventional politician, you know, just being on message all the time. The Beatles never wanted to be on message. They always wanted to be themselves. And you see that in the press, in the PR as well as the music.Where does it come from? I mean, I think this again goes back to the fact that they spent a long time together struggling to become famous for several years. I mean, obviously John and Paul and George had been together for like five, six years by the time they got famous. And they've been performing in all these terrible places. And they've just been kind of pushed together, and they've got this very strong sense of who they are. They have a very strong internal culture, organizational culture, if you like, which... and so by the time they get famous and are in front of the world's cameras, they just know exactly who they are, and they're not prepared to compromise on that. They're just like, "Well, this is who we are. We like making ourselves laugh, and we hope you're going to laugh along." And by and large, the world did.Facing a PR crisis of biblical proportionsAndrew Mitrak: On this topic, one of the things that seems appropriate to bring up is the "more popular than Jesus" quote. And this is also an area where a band is probably dealing with something that no other band has really dealt with before, like a PR crisis about the importance of religion and comparing themselves to that. And it seems relatively like a kind of a blip.Obviously, it's an important point if you see a documentary or in your book, it's covered, but it is something they also recovered from pretty well. How do you think they handled it or what was sort of their approach to handling that?Ian Leslie: Well, yes and no. It was a blip, but I think it was quite a scary blip at the time, both because when they were on tour in the States and there was this whole kind of hoo-ha about being bigger than Jesus, they felt under assault. They felt sort of unpopular for the first time, or they felt hostility, real hostility towards them for the first time, which was very unsettling. And they felt a physical threat as well. There had been rumors of snipers getting into concerts, maybe someone's going to shoot us. So that was all quite scary.And some of their concerts didn't sell out. That tour, you know, there were empty seats in those stadiums, right? Which had kind of never happened before. So I think it felt a little bit like this might be it, you know. There was some sort of sense of real jeopardy there in terms of their career.But the way they get through it is by returning to this sense of inner conviction and determination to tell the truth, as they saw it, without being kind of overly combative or rude. They say, "Look, you know, it wasn't intended as a criticism of Christianity, and we weren't saying we're like Jesus or better than Jesus. We were just making an observation about the way society is going, right?"What terrified them actually was not so much... I'm certainly sure this is true of John... not so much the prospect of a career ending, although that was pretty bad. It was, in a way, something even worse, which was this sense that he would be forced to lie and to sort of not be himself and that they would all kind of have to say, "Oh, yes, you know, we're terribly sorry. We do believe that Christianity is just as, you know, will always survive and be bigger and..." I don't know what whatever the lie would have been that would have satisfied these people, if there was anyone. I think that sense of, like, "We might have to compromise ourselves." And then they pretty quickly work out, "No, we're not going to do that. If we stick together and we talk our way through this and we're just confident, we can get through this." And even if it means hurting our commercial popularity, what's the big deal?In negotiation terms, they had a BATNA, they had a kind of walk away thing, which was like, you know, "Well, fine, you know, we're just going to carry on making music and enjoying ourselves. And if this is it, we've already done way better than we thought we would do." And so that gave them a kind of fearlessness.Rock critics and the Beatles’ breakupAndrew Mitrak: In the late 60s, there's the rise of rock music criticism for the first time. It doesn't seem like rock music criticism was really much of a thing. And Rolling Stone magazine comes out, and John Lennon is the first person on the cover. Do you have any sense of how they approached rock criticism? Or did it actually have any impact on sort of their commercial sales or anything? Or what are your reactions or thoughts on sort of rock criticism at this time?Ian Leslie: It didn't really have any impact. And as you say, it wasn't really… they sort of created, like so much else, they sort of created the whole category of grown-ups thinking and talking and writing about rock music, right? Their music was way ahead of the… the category of, or the sector of entertainment, music, and wasn't really ready for music of sophistication and depth and complexity. So they were way out ahead of everyone for a long time with a few peers like Bob Dylan and the Beach Boys and The Who. But the charts were mostly full of kind of quite bad sort of pop acts really up until the mid-60s.So there suddenly starts to become this whole kind of rock critic, rock journalism. And then it does become quite important. It's never really important to them in terms of sales, I don't think. But particularly, it starts to bite around the time that they're splitting up in the wake of The Beatles' breakup, when they're doing solo albums.The extent to which they really cared about what critics said about their albums is really striking to me looking back on it now. It seems almost unbelievable because, like, McCartney's first solo albums sold really well, pretty well, but he was devastated by the bad reviews. And it really, really hurt him, really got to him. So there was a sense that there was this kind of, like, how am I seen by critics, by my peers? That's really important to me, as well as whether or not people are buying my records. But I think that happens towards the end of the 60s, early 70s, and really the early 70s, maybe through the 70s for a few years, is the heyday of the really, really powerful rock critic establishment.Andrew Mitrak: I was reading some of the contemporary reviews of Paul's solo work. And I think like I'd brought up Venus and Mars on the in the Rolling Stone review at the time of Venus and Mars. And the opening lines are something to the effect of like, "Gosh, you're really seeing how important John Lennon was." And that it's really missing the presence of Lennon. And it's a Paul review, but the first person mentioned in the review is John Lennon.It seems like there was this image of John as the tortured artist and the brilliant mind behind the group. And Venus and Mars is an album that I think has aged pretty well overall, and I think a contemporary, like a review today would be different about its assessment of it. I also think Lester Bangs was like a popular critic at the time who'd, you know, called Paul "Muzak" and very, very dismissive of it. And like, they could be really mean about it. So it seems like it's something that, you know, if you're an artist, like, how could you not be impacted by that in some way if something's going to be so vicious about your music?Ian Leslie: Yeah, and they were very much of their time in that they were mostly male. They responded to Lennon's kind of strong kind of, you know, what we might call kind of like high-agency vibe and his kind of counter-cultural vibe. And, you know, who's making big kind of political gestures around this time in the early 70s. He's part of the kind of anti-Vietnam, anti-Nixon movement. He was on the right side of history, in inverted commas, right? And he was very much part of the kind of counter-cultural movement, which was really where all the kind of hip people were, right?And McCartney was not really there. I mean, in a sense, he was political. There were certain things that he cared about and campaigned on, like marijuana legalization and vegetarianism. And you arguably had a much greater impact on those causes over time than Lennon did in sort of dabbling with counter-culture for a couple of years. So it wasn't that he was apolitical, and he did make a song about Northern Ireland as well. But it's that he didn't see himself as an essentially political figure in the same way. And he was also just somebody who was unashamedly into being a dad and a loving husband. And that was totally uncool.It didn't really fit with the kind of prevailing ideas of being a rock star and being a man, you know, being an artistic man and being a genius, you know. You were meant to be conflicted and difficult and weird and messed up and do unconventional things and throw TVs out of windows and and take drugs and maybe be really horrible to women, that's kind of part of it as well. And McCartney was just sort of refusing to do any of that stuff. His reputation took a battering in the 70s, and it got much worse after John's death because John then becomes kind of deified and it takes many years for his [Paul’s] reputation to recover from that.Apple Corps: A strong brand, but a disastrous businessAndrew Mitrak: One other thing I think that's worth highlighting for the marketing element of The Beatles is Apple Corps. And they name their company Apple Corps. We were talking about naming earlier, and you cited Apple as the great computer brand. And it just strikes me that what do they name their company? Apple Corps. And that even though the company wasn't especially successful, that name actually became pretty valuable because of the trademark and licensing and legal settlements with Apple Computer, which they could have never known at the start. But they picked this really great name, and it seems like that seemed to be among the more valuable parts of that company itself. And it seems like it was reflective of some smart branding intuition. Do you have any thoughts on Apple Corps?Ian Leslie: Well, it was Paul McCartney's name, and he took it from, I think, from a René Magritte painting. You know, McCartney is a huge fan of René Magritte. He just got into him at the time, and you know, there's that famous picture of the man with the apple in front of his face. And I think he took it from that.He liked the sense of artistic subversion that it was associated with. And they were very much running on instinct through the whole Apple thing. In business terms, that proved to be disastrous because it turns out your artistic instincts aren't that good when it comes to running a business. But in anything to do with the creative side of it, it was they were still pretty good, and yeah, Apple is a great name.How George Martin is like Eric SchmidtAndrew Mitrak: Thanks for this conversation, this tour of Beatles history. I know that we've taken a marketing and business approach to this book, but it's... you know, this book is so much more than that. In fact, this business element is just a footnote in the book, and at the core is just this amazing, heartfelt, intimate story of these two geniuses and we were lucky enough that they crossed paths as young men and made all the contributions they made.But as you reflect on this conversation, are there any reflections on lessons that marketers can draw from The Beatles or other things we didn't talk about when it comes to The Beatles and some of the innovation they did around marketing and branding and promoting their music and their work?Ian Leslie: I mean, I think there are more. The thing is, like, the more you think about it, the more stuff comes up. One of the things I was thinking about the other day was the analogy between George Martin and Eric Schmidt at Google. You know, when you have a startup and you have these brilliant young guys, and then it's like, "Well, you might need a gray hair, experienced guy." And Eric Schmidt was the perfect guy for the Google co-founders, and he kind of helped. But in other cases, it hasn't worked out because the gray hair thinks he knows better than these kids and tries to impose his experience on them, and it doesn't work.George Martin was in that Eric Schmidt mode. He used his experience, but he recognized very early on that they were the talent and that they really knew what they were doing, even if they weren't musically educated like he was. They had great musical sophistication and great musical intuition.So his ability to put his ego to one side and say, "Well, how can I help these guys?" rather than trying to impose my ideas on them, I think is a great lesson there for for startups and and growth.But yeah, I'm sure we could talk for a lot longer. There's so many lessons.Subscribe to Ian’s Excellent Newsletter: The RuffianAndrew Mitrak: Absolutely. Well, thanks so much for the conversation. As one final question, where can listeners find you online?Ian Leslie: Well, I think the easiest place to get me is my newsletter, my Substack newsletter, which is called The Ruffian. So if you just Google my name and Substack or The Ruffian, you'll find your way to it.Andrew Mitrak: Yes, I'm a subscriber to The Ruffian. I love it. It's a really great newsletter that covers a lot on John and Paul and also a lot of other great topics. Ian Leslie, thanks so much for joining me. I really enjoyed the conversation.Ian Leslie: Thank you, that was brilliant. Thanks a lot, Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 21This week, I'm delighted to be joined by Professor Rachel Kennedy, Associate Director (Product Development) of the renowned Ehrenberg-Bass Institute.The Ehrenberg-Bass Institute for Marketing Science is a leading organization in research on how to grow brands. Professor Kennedy herself ranks globally in the top 1% of advertising researchers and is highly regarded for her work in bringing evidence-based research into tangible marketing practice.In our conversation, Professor Kennedy shares fascinating insights into the work of marketing science pioneers like Andrew Ehrenberg and Frank Bass, and the founding principles of the Ehrenberg-Bass Institute in Adelaide, Australia. We explore their core concepts on how brands actually grow and discuss the global impact of the Institute's groundbreaking work.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThis conversation is packed with important concepts when it comes to measuring marketing’s effectiveness, including:* The concept of Empirical Generalization and why the Eherenberg-Bass Institute believes it’s a revolutionary approach to understanding marketing* Key concepts like Double Jeopardy and Negative Binomial Distribution (NBD), explained in an accessible way.* What happens when brands "go dark" and stop advertising, and the real impact on sales and market share.* The importance of ad likability and how it connects (or doesn't) to advertising effectiveness.* How the Ehrenberg-Bass Institute translates research into strategies for brand growth.* And much more.Now, here's my conversation with Professor Rachel Kennedy.Note - I use an AI tool to transcribe the audio of my conversations to text. I check the output but it’s possible there are mistakes I missed. Parts of this transcript have been edited for clarity.Andrew Mitrak: Professor Rachel Kennedy, welcome to A History of Marketing.Professor Rachel Kennedy: Thank you, Andrew. Absolute pleasure to be here. Thank you for the opportunity.Viva La Revolution: The Ehrenberg-Bass Approach to Marketing ScienceAndrew Mitrak: I'm looking forward to a conversation about the Ehrenberg-Bass Institute, your expertise on advertising and media effectiveness. To start, I thought I'd ask you about a research paper that you sent me in advance of this interview. It's called "Viva La Revolution! For Evidence-Based Marketing We Strive." When I saw this, I thought, “What?! This is an unusual title for an academic paper.” You're positioning yourselves as revolutionaries. Can you tell me about this, what was this revolution, and what were you reacting to?Rachel Kennedy: Well, the revolution still continues. We are just so different from most of the marketing academics around the world in many ways, particularly how we study marketing. Because we study it in a very different way, we see different things. It's as different as people seeing the world being flat versus other people who see it round. It is that different.The revolution we're encouraging people to join, and have been for decades, is to stop and look at the evidence that we see because it changes what you see, and we think it changes things for the better. We'll definitely come to some of that, but that's the big picture of the call to action. It's not the first time we've been seen as being different. We're different in many ways. That's why I reached out to you; because you were talking about the history of marketing, I thought it was really important that we share that there is this very different way of looking at it, but importantly, that is discovering new knowledge and changing the way marketing is done around the world.Empirical Generalization and the Pursuit of Evidence-Based MarketingAndrew Mitrak: When you say "we," are you referring collectively to the Ehrenberg-Bass Institute, or does this paper also talk a lot about this group called the Empirical Generalizationists and this research tradition? Are those one and the same? Empirical Generalizationists, I'll just call it EG from now on, by the way, it's a mouthful. How do we think of EG and the Ehrenberg-Bass Institute? Are those the groups collectively?Rachel Kennedy: Empirical generalization is a thing that's far bigger than the Institute. In marketing, we are key proponents of it, but not the only ones who see its value. We're intimately linked with it, and as a team, we're large, the largest in the world studying marketing. We're incredibly cohesive in our belief that this is the way to make discoveries and to advance our discipline. We are disciples trying to spread the word, and we live and breathe it, but others do as well.The idea of coming up with empirical generalizations is broader than marketing. In fact, what we do is take the approaches that are done in the physical sciences, the ways of studying the world, and apply them to studying the things marketers are interested in: How do brands compete with each other? How do brands grow? How do marketing levers work? We study them in the same way that physical scientists do, which begins with pattern spotting: describing the world that we're interested in, ideally with as much data as possible, importantly across diverse conditions or data collected in different ways (survey, behavioral data, the more diverse the better).We pattern spot and, across known conditions, document how things are related. We're very focused on sameness, where things are the same, and documenting the conditions where they're not. This is such a different approach to most marketing study, where it's about single data sets, where people are doing complex models looking for statistical differences. We're looking across conditions, across data sets, looking for sameness, looking for what robust knowledge is likely to hold. When you've done enough pattern spotting that you see these robust patterns, the idea is to quantify it. The end point we're looking for is maths and laws that describe those big patterns.We're very associated and known for laws like double jeopardy. Small brands will always be hit twice; they have fewer buyers who buy less often. Duplication of purchase, sharing across brands is predictable based on the size of those brands. Negative binomial distribution, buying skews light, natural monopoly, it goes on, but that's what empirical generalizationists are looking for: simple laws that describe the big picture of how the world works. As researchers, we're always interested in the nitty-gritty and the deviations, but as a discipline, understanding that big picture helps us understand what matters. It helps us know what constructs we should be studying. It helps us predict the future and understand the world in ways that we don't think traditional studies achieve quite so well.Andrew Ehrenberg and Frank BassAndrew Mitrak: Can you tell me, where did this idea of empirical generalization come from? Who were the originators of this thought? Also, if you can share how you came across it for the first time?Rachel Kennedy: Personally, and as the Institute (because as you'll see in our name, we're the Ehrenberg-Bass Institute for Marketing Science), we're inspired by both of those individuals. I'll talk about Frank (Bass) first. I never got to meet him, but I'm definitely inspired by his work. Both of them were marketing professors, born in the same year, both very quantitative in their background.Frank Bass studied maths at Harvard, but the thing that inspired us, in terms of studying the real world and implementing marketing science, was that he came up with the diffusion model. So understanding how new technologies and new products come to market and their life cycle. Studying the real world, underpinned by data, and quantifying it in models—that's core to what we believe matters.Andrew Ehrenberg, I was lucky enough to work with him in '99 and 2000 in the UK, had a very strong relationship with the Institute, and very much inspired us down this journey of empirical generalization. I can talk more about him just because I spent so much time with him. In terms of your history channel, I can probably share a few more snippets which are really important to me and important to our journey as an institute, as well as my own journey. He was originally born in Germany. His father was a staunch critic of the Nazis, so his family had to move to the UK. He studied statistics, a highly trained statistician. He understood data and numbers incredibly well and drew on that through his life. In hindsight, he was probably also inspired by a father who was a staunch critic to stand up and talk about what he believed and saw in data, which has been an important part, perhaps going back to your first question of why we see it as a revolution and that it's important to share these beliefs. Again, inspired by him.Anyway, he was a statistician. He was employed by, I think was the name of a large panel provider, to analyze their data across different categories. Marketers kept asking him to do things like the report on the loyalty of brands. He was looking at the data—he wasn't a marketer, he was a statistician—and he'd go, "Why do they keep talking about loyalty when I look at what people buy and they're not loyal?" And they're buying skews light, things that were in total contrast to the language and what the marketers were wanting him to see in the data.That led him to this journey of documenting the patterns in buyer behavior data—patterns about how people buy and how brands compete with each other—that led him to make some incredibly important discoveries in marketing, like the negative binomial distribution, that brands have these predictable patterns in terms of how people buy them, how they compete. He definitely was my inspiration.Not only did he talk about how there were these patterns in marketing that we should document—he was published in Nature, a top scientific journal, showing these patterns, along with many other places—so he shared that message. He also was heavily focused on how it is that you share information. He wrote a book about data reduction so that you can see these patterns. Many things about him inspired us in our journey.The NBD-Dirichlet ModelAndrew Mitrak: You mentioned negative binomial distribution, and that's one I've seen come up in the work of the Ehrenberg-Bass Institute, and it's mentioned in the paper you sent over. I'm not a mathematician. Those words, negative binomial distribution Dirichlet—I hope I'm pronouncing that correctly. Could you explain this concept to somebody who's not an expert in math? What is the overall “dummy” version of how to think about this idea?Rachel Kennedy: Okay, there are two different things there, which do come together. The NBD-Dirichlet is a model that Andrew Ehrenberg with colleagues, Gerald Goodhardt and Mark Uncles and others, brought together. It is the maths that describes a lot of those laws I mentioned earlier. Embedded in that total model is the maths for double jeopardy, duplication of purchase, natural monopoly. It is maths that describes how brands compete with each other. The negative binomial distribution part is a pattern we see that all brands hold: big brands, small brands, brands in different markets across categories. When you fit that maths, it gives you the number of how many people will buy a brand once in a year, twice, 50 times if that's relevant to the category. It's relatively simple maths—beyond me to create, but relatively simple—but it describes the big patterns that we see time and time again.Andrew Mitrak: If I was to come back to your idea of you being revolutionaries and what you're reacting against, I think one concept that might be a myth or something not backed up by the data is something like an 80/20 Pareto principle or things like that that are sort of myths you hear bandied about.Rachel Kennedy: Even though that one's called a law, that is not what we see in the data. It's not what we see in the real world.Andrew Mitrak: And the NBD would be a better reflection of what you see in the data and what you see in the real world, something that would contradict more of an 80/20?Rachel Kennedy: Absolutely. Maths is a simplification of the world. E=mc², it describes it really well. It gives you the big picture. It helps you understand what matters. It's the same with the NBD-Dirichlet. Within the Institute, we've had decades of testing it. Does it fit really well for durables in the same way that it does package goods? How do services look? It gives us the big picture, and it has proven itself to be remarkably accurate—not saying perfect, but remarkably accurate. It focuses marketers on the things that matter most.So that's the maths part of it. But as an institute and as scientists, that's absolutely critical and part of the journey. But we're also interested in, “What does that tell us about theory? What does that tell us about the constructs that really matter to marketers?” So by understanding those patterns, there are very clear lessons. So, big picture: if a brand wants to grow, penetration is king. You don't get there without nudging more buyers towards your brand. So that has to become a metric that marketers matter.So Andrew was incredibly important: we named our institute out of him. We continue to talk about him all of the time and inspired by him and Gerald Goodhart, Frank Bass, others, but we've continued that journey of pattern spotting and translating what those patterns mean for practice. And that's where, in terms of you ask the question of what is this revolution, as an institute, we're very focused on taking that maths and translating it into practice. Our mission is to create discoveries about marketing and the things that matter and to disseminate that knowledge so we have a real-world impact. So we work closely with industry. And I mean, every day we're working from C-suite across the diversity of different marketing roles. In fact, we work with anyone who's interested in evidence-based growth.Two Dominant Pillars: Mental and Physical AvailabilityWe're working closely with them to translate what we see in the data and work with them to implement what makes sense and then getting feedback on what works that creates this virtuous cycle. And as part of that, we've advanced, and we truly think it is an advancement, and this is where it comes back to that initial question, we are just so different from others, the new theory about how marketing works. So we think growth is underpinned by, you know, two dominant pillars: mental and physical availability.When we see brands grow, it's because they're able to step change their mental and or physical availability, so they come to mind for more people in the range of situations where they might buy, they remove barriers so they're easier to buy, and through doing those things, they nudge penetration. They're bought by more people, more often. So that's the journey we're on.‘Double Jeopardy’ and What it Means for GrowthAndrew Mitrak: I'm going to ask you more about that journey, but I want to define one other thing that's been brought up a couple times, that's double jeopardy. So the double jeopardy law, can you explain that one to me?Rachel Kennedy: It's quite simple algebra if I had a screen, I would share it with you. But you don't even need the algebra once you understand it. The law just says, it's a law of loyalty, and how much loyalty a brand should have is predictable based on the size of that brand.The law, when you put it in words, is: “Small brands will always be hit twice.”They have fewer buyers than bigger brands, and those buyers buy them slightly less on average, or they're slightly less loyal on average. Flip side of that is bigger brands win, they have more people who buy them, and those buyers buy them more often. So any brand can apply that algebra or get its benchmark or norm to check that it has the loyalty that it should. And being laws, they nearly always do.But the real world's messy, and you do see sometimes where a brand might have more loyalty than it should, or less. And through this journey of decades of just checking and checking and looking, well, does doctor's prescribing show the same patterns that we see of households buying, or do people who buy airplanes have the same loyalty to brands that we see in services? We keep seeing that double jeopardy does hold, that these patterns are incredibly robust, but there are some known deviations.So private label predictably looks a bit different, and now that we know it, it makes sense because private label have limited physical availability. So they look like big brands where they're available, but across the total market, unless you look at them in aggregate, they look different because even people who would buy them can't, you can't buy a Tesco brand if you're in Sainsbury's or you can't buy an Aldi brand if you're in Woolworths.Andrew Mitrak: I'm going to ask you about how the institute works with real brands in the world. And I want to use this double jeopardy law as an example because it seems very useful for a big brand to be aware of this. How would you advise a big brand to think about that? And then on the flip side, a newly forming company or a newly formed spin out brand, it seems like it's a cold start problem with starting a new brand that's a new entrant because it is dinged twice as the law suggests. So how have you advised a large company dealing with the double jeopardy law versus a small or newly formed company?Rachel Kennedy: It's equally important to both. Doesn't matter if you're a big or a small brand, it's important that you understand how the real world works. And so, vitally important, probably almost more important for a small brand because a small brand's got limited resources. So they possibly have to be a little bit more strategic in where they invest those resources. So the law just gives us the benchmarks and it gives us the understanding of how the world works and also it shows us what success will look like. So if you're a small brand starting out and you're putting your mortgage on the line to make this a success, don't you want to know what success looks like? I would if it was my money. It shows them what success looks like if they want to be bigger.It shows them the thing to focus on more if you want to be bigger is getting more buyers, removing barriers that stop some people buying you. So as a launch brand, why are some people not buying you? Is it that they've just never heard of you? So maybe you need to advertise. Is it that they can't find you even if they've heard of you because they've seen you on Tik Tok or whatever, but your link to buy doesn't work. Fix that problem. So it helps you know where to focus your efforts. It gives you a benchmark that even if you are a small brand that says, yes, you'll have lower loyalty, but are you getting the loyalty that you should for a brand of your size?Andrew Mitrak: Is one implication – and this might be me oversimplifying– is that if you're newly starting, there might be an argument for going for breadth versus depth. For going for many customers versus just going for one single high paying customer. Are those kinds of the ideas that I would think about as a company that was interpreting this law or am I oversimplifying?Rachel Kennedy: No, not at all. And simplification is really important. That's vital to understand the world. I mean, when you are very, very tiny, you might be, you know, putting all of your effort in to have just that one customers. And we do see time and time again that small brands can be a bit different to bigger brands in likes of loyalty. If you've only got one brand, then that is different to a brand with millions. But, yeah, it is useful to know what the world looks like, so we know what to focus on and to have those benchmarks to go, well, for your size, are you looking like you should or not? And if you want to be bigger, knowing what that will take and what are the levers that you should be moving and what success will look like so you know if you're actually getting there or not.The Ehrenberg-Bass Institute: Structure and MissionAndrew Mitrak: That leads to my next question. We've talked about Andrew Ehrenberg and Frank Bass, and some of the core ideas. Can you tell me more about the Ehrenberg-Bass Institute itself? What is the institute? Who are the people there? What is the makeup of the institute itself?Rachel Kennedy: We're a not-for-profit research institute, based in a university—currently the University of South Australia, but we're about to become Adelaide University as we merge with the University of Adelaide. Exciting times for us on that front.But we're researchers. We have research professors, marketing academics, research assistants, people involved in teaching, but at our core, we're researchers. As I said, our mission is discovery and dissemination. We're incredibly cohesive. We are a big team, and different people have different interests. Some people do more pricing, some people look at portfolios. I spend a lot more time looking at media and advertising, but as a team, all of us are interested in buyer behavior, brand growth, competition, and those things. We don't just work differently in that we're such a big team focused on similar things; we engage with industry through our corporate sponsor program.We're 100% industry funded, and it does skew towards big brands who fund our research. That's partly good for us in that we love engagement and it's so core to what we do, but they're also willing to fund the research that we do. They pay a subscription fee that creates a research budget that no individual business alone could ever have, and no other marketing department in the world has. That research budget then enables us to undertake gold standard studies that again creates this virtuous cycle. In return for businesses subscribing to our research, we share that research.Sponsors get early engagement with the research findings, they get a lot more depth of knowledge. We share regular reports with them. We're frequently in their offices or involved in their planning days, sharing research and giving them feedback on what they're doing, they're giving us feedback on our research, telling us what their challenges are. Because we work across so many different industries all around the world and we're constantly getting that feedback, and we also have industry boards (a North American board, an Australasian board, and a European board), we have people from C-suite giving us feedback on what we do. We know what challenges brands face, what they don't understand about our research, what keeps them awake at night. That then feeds into what research studies we conduct, and it creates this virtuous cycle where industry wins.The fact that, decades on, they keep engaging suggests that they do, otherwise why would they part with their hard-earned money? We win because we get that challenge, that feedback, access to data—all those things that help us do better research. It's a virtuous cycle that we think is win-win for everyone.Measuring Advertising EffectivenessAndrew Mitrak: Today, you're among the top 1% of advertising researchers, and advertising and media effectiveness really seems to be one of your areas of expertise and focus. I'm wondering, how did you first become more interested in advertising and media effectiveness? You mentioned this scientific approach to advertising and media research—what does that look like at a tactical level?Rachel Kennedy: My journey into advertising research related to trying to replicate a study from the Journal of Advertising Research because, I probably haven't mentioned that word replication much, but we are absolutely huge fans of it. That's part of that pattern spotting of just seeing, do you find the same results that other people find? Do you find it in a different country, different categories, different measures? In hindsight, it was probably the worst area to go in if you want to be an empirical generalisationist because no two bits of advertising are the same.When you're trying to pattern spot and see how ads work, it's just a nightmare because you can't control things because things are changing all the time. That's one of those fundamental things important to the Institute: trying to tackle the big questions of what matters, trying to work out what do we know and what can we trust. A lot of my personal research has been around how do we measure advertising. There's been enormous change from when I started; it was all surveys, all intermediate measures of effectiveness: What do people like? What do they recall? What are their intentions to buy in the future?We've had biometrics, neuro, so many different things that have come along since then, online digital experiments. There's been enormous evolution. I've spent a huge amount of time trying to test different measures to go, what are they actually capturing and what measures can we trust, and for what information.Measuring Advertising: What’s Changed and What Hasn’t ChangedAndrew Mitrak: Certainly the ways you would measure or the tools available to measure advertising effectiveness over the course of your career, I'm sure they've changed a lot, and ad inventory themselves have changed. The ad formats, and even within internet advertising. The the types of ads within internet advertising when it started it was little almost mimicking the style that you'd see in a newspaper where where ads were off to the side, and then they become newsfeed ads, then they become these story ads that take over your full screen, and there's so many different types of advertisements within digital.Then meanwhile, television and broadcast, print…Rachel Kennedy: Cinema hasn't gone away.Andrew Mitrak: Exactly. It still hasn't gone away.So what has stayed the same over your career as far as analyzing advertising? And then what are the top things that have changed?Rachel Kennedy: The thing that hasn't changed much is people's brains, and the job that advertising has to do.So with Andrew Ehrenberg, we wrote a paper about the role of advertising and its key thing is being creative publicity. I would say that still holds.So without question, the way marketers can put advertising to market, so much more diversity. You know, there's so much more fragmentation. There's so much more data, but I feel a lot of marketers are probably drowning in data because they're measuring, I was going to say everything. Lots of people are drowning in dashboards with so much data, but they're not necessarily able to isolate what are the measures that matter most.In terms of what I've tried to focus on is real-world ads, whereas a lot of advertising academics historically created artificial ads. Now with AI, there are more opportunities to do that in some realistic ways. Not always, but definitely.And going back over the last decades, we've been very focused on real-world ads, trying to get large samples of ads – never as big as we would like or as much, but at a scale above what is normal for many advertising researchers. So going back to trying to describe the real world with large samples of real-world respondents as opposed to student samples which is often the norm for many academics around the world. Testing advertising from different measures, trying to find out what are the big picture things that we're learning and how you best measure those.Ad Likability: Does It Still Matter?Andrew Mitrak: Some of your early articles were on this topic of ad likability. And I'm wondering if you found any link there between ad likability and an ad's effectiveness. It seems like as far as formats changing a lot… well an ad could be likable around any type of format. So I'm wondering about that too.Rachel Kennedy: You're going back a very long time there, Andrew, but that's okay. That was one of those first studies that I talked about. And we learned then, and we still know, people can like ads for a range of reasons because it makes them laugh, it's funny, but it tells them something interesting about a shoe brand that they love or whatever it might be. So ads can work in different ways, and that still holds today. But from a marketer's perspective, likability matters, probably now more than even in the past, because if they don't, they will zone out, they'll change to other content that does capture their attention or their interest enough.We learned then, and it holds, likability alone is not enough. So in my PhD, I documented these things called dysfunctional ads where the people who knew who the brand was for didn't like them, but there were also people who liked them but got the brand wrong. So they're doubly dangerous in that they're not working for the brand, but potentially working for a competitor. So today, as much as then, people need to know the brand that the ad is for if that ad is going to have any chance of doing what it needs to do. And ads have to work through memory. So we talk a lot about their role is mainly to refresh, but occasionally to build new memories that make it more likely that that brand will come to mind for more people in the range of situations where they might make a purchase.Ideally, brands want to create ads that are so well branded that people who don't know much or don't care much about them still have that spark of a memory that they're starting to build or refresh the memories that help them win into the future. And the effects of advertising do play out over long periods of time, not just weeks, but months, years, and even longer where they're successful at building the right memories.When Brands Go Dark: The Impact of Stopping AdvertisingAndrew Mitrak: Some of your other articles were around this idea of “when brands go dark.” And by the way, I love your use of language because that is an article title that you just want to click on and read. So, can you share more about this research and what you found?Rachel Kennedy: Yeah, so for a long time, we've had kind of big questions that we're trying to tackle. And one of them is, what is the spot worth? We talked earlier about how much choice marketers have, really hard to know where do you put your budget? Which platforms, which format? So they're trying to work out, well, it's incredibly useful to marketers if they know what a spot is worth. So we've been trying to tackle this problem over years with different data sources, in different markets, different measures. The "going dark" was just another piece of the jigsaw puzzle to try and give us some more evidence because if you take away something that exists, you can see what happens when it's removed. So that's one way to determine what value was that advertising delivering.I was lucky enough to have a research student, Adam Gelzinis, who was happy to take on this particular project. One of our corporate supporters had a lovely dataset. There were about 40 brands over 20 years, and we knew exactly when the brands in their categories were on air, how much was spent, when they were taken off. It was all alcohol-related categories, so ciders and other things. But the nature of the category was that brands would be advertised for a period and then not. So there was lots of switching the advertising on and off.So we started that fundamental pattern spotting of describing what happens to sales when brands stop advertising. And there were very clear patterns that hold, and we isolated some of the conditions that matter. So when you stop, sales do go down, and we quantified that, like that process we were talking about before, and isolated conditions where you see more of an impact. So small brands are hit more than bigger brands. Brands that were already declining in sales, if they took advertising off, that sped it up. So that was our first paper.And then, as good scientists do, we knew that it was important to replicate. That one got lots of traction, so we kind of went, yes, people understand what we're trying to do here. We had a PhD student, because the engine of a research institute is research students. They can devote three years of their life to studying one thing. In this instance, Peilin took the challenge to replicate what we'd seen in a far, far bigger dataset. 365 brands across 22 different categories, US, so different markets. So lots of the boxes that we like as scientists in terms of differentiated replications, trying to see if the pattern holds in slightly more diverse circumstances. And she used a different measure, market share rather than sales, which had a number of benefits in that it helped us, enabled us to compare across the categories and things far more easily. And again, quantified. A year without advertising on average led to a 10% drop in market share, two years without advertising, 20% drop in market share, three years was 28%, racking my brain there a little bit. But again, highlighted the conditions that Adam had seen and a few others. But that work continues. So the nature of marketing science is slow. So we're now looking at different measures, looking at quantifying quarterly stops, and continuing to refine and, yeah, look at this in different conditions to continue that journey.Productizing Research: Translating Findings into ServicesAndrew Mitrak: Another part of your role, in addition to being an expert in advertising and media effectiveness, is related to product development. So the idea is taking the Institute's research and development and translating into products and services for industry supporters. Do you have any favorite examples of how you've been able to productize the Institute's research in this role?Professor Rachel Kennedy: I would say everyone, so many researchers in the Institute are involved in this as well. So taking the robust findings that we've got and looking at ways that we can encourage people to use that evidence. So for a long time in terms of the way we set up, we were just about sharing the research, you know, giving seminars to share what we found and what we thought it meant.A while back, we set up the Mars Marketing Lab, and they funded a lab within the Institute and kind of challenged us to scale up in a way that we hadn't before and work with them to disseminate that knowledge globally into their business. So through that process, we learned a lot about change management and using knowledge. So that kind of led to this idea of, well, how do we package what we know into tools or ways that marketing practitioners who are often so busy, they can't be as close to the research. They're often in an environment where they have to use that template to brief for advertising, or they're looking at a particular dashboard, so their plans for the next year have to refer to the data that they've got.But often there's a clash between the traditional tools and measures that are measured around the world and still to this day. So we have worked with our sponsors to work out, well, how do we embed the right construct, the right measures, the right ways of doing marketing that are going to deliver the best results.We've developed tools where we measure distinctive assets, category entry points, do reviews of media plans, reviews of dashboards, or whatever it might be. I think you asked what was my favorite. I love doing all of that, but one of the things that we offer and the ways that we've worked out is How Brands Grow Live. There's also a version of that, How Brands Grow for Executives. The live one is where we go into a supporter's business and we work very closely, typically with 30 to 40 senior people.As researchers, before we do that, we have done a lot of fundamental research on that particular company's brands, their categories, and we develop exercises. Some of the exercises are standard across, but we then work with those senior executives on their data and challenge them to see what we see, and together produce, well, at the end, it's the team trying to apply the knowledge that we see with feedback and evidence-based growth plan. The reason I love those most is we just see the traction that it has. And the number of times those senior leaders go, we just need to roll this out globally with all of our teams because it is, like I said at the beginning, that transformation from seeing the world as flat to round.When they get up close with the researchers, they look at their data with us, not had it that they've just not gone, yeah, the world is not as I thought it was, and they get hungry and so passionate about ensuring that their businesses can now see what they see because it's so incredibly obvious that they need to be doing different things. And then watching those journeys play out where they do different things and see the results, it's so heartwarming. So that's why that's my favorite.Andrew Mitrak: Something I've really appreciated about this conversation and about the Ehrenberg-Bass Institute is that there's really a relationship between your supporters and industry and research and academia. And over the course of this podcast, I've gotten really lucky to speak with CMOs and entrepreneurs and business leaders. And in those conversations, I can't recall them bringing up academic research. On the flip side, I've spoken to a lot of really great academics, and the research is very fascinating, but admittedly, sometimes at the end of the conversation, I'll kind of be scratching my head where I'm like, “How could I as a marketer actually apply that?”Do you have any guidance or tips or any suggestions on what academia can do more broadly to, to better integrate with and collaborate with industry, and I guess vice versa for industry practitioners who are marketers full-time and don't necessarily seek out academic materials. What would you suggest? How could somebody make better use of this to become better marketers?Professor Rachel Kennedy: Yes, so we see that industry are hungry to engage. As you said, we're on the other side of the planet from many of them. Why would they come to us rather than, you know, big name universities who are in their backyard? It's because we add value. And to me, you talked about people who are doing kind of interesting research, but as a practitioner, you go, how would I use it? To me, that is just an enormous waste of resources. It's just not good for the academics' career. Well, they might get promoted, but they're not going to have real-world impact. So academics have to do research that matters, solve the problems that industry have. And it's not that all research is about solving problems, but understanding the world and the things that matter and being able to translate that knowledge so that people can see its value.We see that industry are very happy to engage. They're happy to jump on a plane and come and see us and fund us year after year, share their data, share their challenges. You know, lots of NDAs need to be signed and those things, which are completely fair. But yeah, it's not a lack of interest from many people in industry. Contentious knowledge, and we're often associated with that because what we've found clashes with what people have been told previously. So for marketers who have, you know, had a traditional training, their core DNA is around segmentation, positioning, targeting, that's the world that they see, to try and engage with the likes of the knowledge that we share does require people to commit some time to understanding what is this new marketing, what are the constructs that are now important, what language is more useful to describe the world, why might you want to measure things in different ways? So that's not an easy journey.Committing the time to learn, to look at data, so that the natural thing is often to go, that can't be right. So take up the challenge and look at data, run experiments, test competing ideas, and see, see what works. So yeah, it can take time, it can take a commitment of budget so that you can actually test things and or, you know, get your research team to look at data in different ways. So yeah, learning can take a commitment and can be hard, but what we see is that those people who do, do different things and get different results.Connecting with the Ehrenberg-Bass InstituteAndrew Mitrak: Where would you suggest listeners find you online and follow your work and follow the work of the Ehrenberg-Bass Institute more broadly?Professor Rachel Kennedy: Yes, so we're not shy. Our mission is to disseminate. So, follow me on LinkedIn, Byron Sharp, Jenni Romaniuk, John Dawes, anyone from the Institute, search on Ehrenberg-Bass Institute, we're not hard to find. We do try and be active in the likes of LinkedIn. We regularly give keynotes at conferences around the world. We do try and do regular podcasts because we passionately believe that this process of bringing science to marketing is helping us discover better knowledge that does help marketers deliver on the outcomes that they're looking for.Having said that, while our mission is to disseminate, for those people who are really serious, there is real value by supporting the research, because then you get a lot more, you get early access and so much more detailed understanding of the research that we don't share in podcasts or keynotes, and in formats that enables whole teams around the world to engage with the content. So for anyone who can, absolutely encourage them to join our program and knowing that that's then going to fund a mental research that, you know, raises the whole industry up. And we're easy to find at marketingscience.info.Andrew Mitrak: Well, Professor Rachel Kennedy, I really enjoyed this conversation. Thanks so much for your time.Professor Rachel Kennedy: Absolute pleasure, Andrew. Thank you for having me. A pleasure on my side as well. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 20This week, I'm thrilled to be joined by Richard S. Tedlow, the MBA Class of 1949 Professor of Business Administration Emeritus at the Harvard Business School. Professor Tedlow is a renowned specialist in the history of business, an acclaimed author, and a truly engaging storyteller. Tedlow also the author behind the popular Substack, Dystopias and Demagogues.After dedicating over three decades to teaching and research at Harvard, he was recruited by Apple to become a member of Apple University, the company's prestigious executive education arm, further cementing his expertise at the intersection of historical trends and modern business practice.Professor Tedlow is the author of several excellent business history books and biographies. Much of our conversation centers around his seminal 1990 work, New and Improved: The Story of Mass Marketing in America.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsNew and Improved offers an expansive survey of how commerce and marketing evolved, tracing their journey from the mid-19th century through the transformative changes leading up to the internet age.We explore the core concepts from New and Improved, exploring the eras of fragmentation, unification, and segmentation in American marketing. We also discuss how these historical trends continued after the book’s publication with the rise of the internet, mobile technology, and social media.This conversation is packed with insights, history, and case studies, including:* The profound influence of Alfred D. Chandler Jr. on the study of business history and Professor Tedlow's own work.* The "Cola Wars" between Coke and Pepsi as an example of competitive marketing strategy and the shift from unification to segmentation* The rise and fall of retail giant A&P and the lessons it holds for businesses today.* Professor Tedlow's current work on his Substack, Dystopias and Demagogues, where he applies historical lessons to contemporary societal challenges. (I’m a subscriber and recommend you check it out!)* And much moreProfessor Tedlow is a great storyteller, and this discussion offers a rich understanding of how the past continues to inform the present and future of marketing. Now, here's my conversation with Richard S. Tedlow.Note - I use an AI tool to transcribe the audio of my conversations to text. I check the output but it’s possible there are mistakes I missed. I have lightly edited parts of this transcript for clarity.Andrew Mitrak: Richard Tedlow, welcome to A History of Marketing.Richard Tedlow: Well, thank you very much. It's nice to be here.Alfred D. Chandler Jr: The Founder of Modern Business HistoryAndrew Mitrak: I had a lot of fun researching your work, your career, and reading your book New and Improved. I'm going to ask you about all of that. But one person I want to ask you about is someone I heard you mention in an interview. His name was Alfred D. Chandler Jr. Can you tell me, who was Alfred Chandler and what did you learn from him?Richard Tedlow: Alfred Chandler is basically the man who founded modern business history. I learned a great deal from him. He's most well-known for two critical books. One is called Strategy and Structure, published in 1962. Another is called The Visible Hand, published in 1977.Strategy and Structure was a study showing the relationship between a strategy that a company wants to investigate or pursue and the structure that the company has, the organizational structure. For example, if you think about chapter two in Strategy and Structure, that's about the DuPont company. Al's middle name was DuPont, and although he was not a member of the family, he was very close to it, Alfred “DuPont” Chandler Jr. Strategy and Structure is the story of a company, DuPont, which grows very big between 1914 and 1919, decides it wants to pursue a new strategy, which is product diversification, and discovers that the old structure prevents it from doing that. So, Strategy and Structure is the story of a crisis that the company experiences in 1919, 1920, 1921, and how that crisis internally leads it to develop a structure which makes the strategy possible.The structure that makes the strategy possible is a change from what is called the U-form—the unitary form of a corporation, where you've got a manufacturing department, a marketing department, and that's pretty much it—to a multi-divisional form, called the M-form, which locates the direction of the company around product divisions. So now you have a paint division, which has manufacturing, marketing, and management. That divisionalization became the structure which permitted the strategy of product diversification to take place.Up until that book, nobody had really intellectualized what it means to try to pursue a strategy with a structure that's holding you back. Nobody made it so clear that structure must serve strategy, not the other way around. That's one thing I learned from Chandler.When he came to the Harvard Business School in 1970-71, the business history course there was called Business in its Historical Environment, BHE. Basically, it was a nice course, but it was the basic problem with history: it was a bunch of examples, and you didn't know what they exemplified. He changed that course, labeling it "The Coming of Managerial Capitalism." So now the course was about the coming of management to business, and as business grew big, what that meant for the laboring person and the development of unionization, especially during the 1930s, and what it meant for government—the development of government regulation. It was about business, government, and labor. That was the course I taught for many years. He gave it a fuselage, a raison d'être, which really hadn't existed before. You could take that and build anything off of it. The tree trunk was so hard, so strong, so vital, that all kinds of branches could grow off of it. That was what I did during the 32 years I spent at the Harvard Business School.The Role of History in Deriving Business StrategyAndrew Mitrak: It sounds like business history had just been businesses in some historical sense, but was less about how to derive strategies and frameworks from studying business history. Chandler helped make it more relevant, more useful to people by showing how a company through its history changes its strategy and what the lessons are for other companies and contemporary business leaders. Is that part of the right way to think about it?Richard Tedlow: I think so. That's very well put. History doesn't repeat itself, but it does give you a set of questions. If you attack those questions properly, you're going to come up with the true and righteous way of moving forward. After reading Strategy and Structure (which, by the way, McKinsey & Company, the well-known consulting firm, gave to its managers and partners), you know that the first question you ask when dealing with a company that's got a problem is: is our structure holding back our strategy? What's the relationship between these? The structure should facilitate it, not screw it up. He gave as vivid an example of that in real life, using manuscript resources, much more so than anybody ever had before. Then, with The Visible Hand, he came up with a master narrative of business history.The classic problem for an historian (which I've been all my life) is: history is one damn thing after another. The question is, so what? Therefore, what? Chandler gave you the "therefore what," and that was wonderful. It was liberating and very exciting to be around him.Tedlow’s Career in Business HistoryAndrew Mitrak: Was Chandler a primary influence that inspired you to become a business historian and spend so much of your career on it, or what were some of the formative influences that led you to pursue this as part of your career?Richard Tedlow: My father was a business executive. When I was getting my master's in graduate school, I thought it would be interesting to write about a company, which not many people were doing back in 1970-71. He said, "You ought to take a look at Revlon," which was a big cosmetics company in the 1970s. The entrepreneur of Revlon, Charles Revson, was still very much alive. I did. That was what my MA was about. My first refereed journal article publication was in 1976, about Revlon and the quiz show scandals, because Revlon sponsored the 64,000 Question. After that, moving to public relations and how a company presents itself to the public was a more or less natural progression. I decided pretty early on that I wanted to be a business historian. I first met Al in 1973 at a seminar I was part of and he presided over. Then, when I got to the Harvard Business School, he was already the Straus Professor of Business History, and I got to work with him very closely.Another lesson, by the way, from working with him: He was working on a gigantic book called Scale and Scope. He gave me a bunch of chapters to read, and I found a mistake in one. I'm thinking to myself, I was very young, not well-known in the profession; he was world-famous. How do I go about explaining to Professor Chandler that this didn't quite work? I told him I thought there was an error. He was very quiet. We met weekly in those days. He said, "I looked into what you found. You're right." He changed his text. Then he gave me a gigantic manuscript and said, "Go over the whole thing. Anything you find, I want to know about." That was really the beginning of our working together. Then we wrote a casebook together, published in 1985, on business history. It was a wonderful relationship for me. I learned an immense amount from that man.Andrew Mitrak: Studying business history and researching it at that time must have been so different from how it is today. First, business history in general was even more of a niche area than it is now, and also pre-internet or pre-computer-assisted research in the same way. It seems if I were Chandler, I'd be very grateful to have a smart student willing to look over, pour over, and fact-check my work. That must have been a fun time to be working in business history.Richard Tedlow: It was joyful. We wound up with a very close-knit group of people. At the Harvard Business School—that's an institution—no one goes there to learn history. They don't generate historians. But nevertheless, at one point we were teaching 1300 students business history at HBS. It was our team. There were just terrific people. It was one for all and all for one. It was a wonderful professional experience for me.Marketing History's Place in Marketing EducationAndrew Mitrak: I'm going to ask you about marketing history within business history because I went to grad school and studied marketing. Most disciplines have some emphasis on history. If I took a geology class, a psychology class, or an economics class—any number of classes—I learned some history of the discipline. But that never really happened with marketing classes. At most, they'd reference Kotler and the 4Ps in the 1960s. It's like there's no marketing history before that. Why, when it comes to marketing, do you think there's such less emphasis on marketing history? Why is it that other disciplines will probably have the first lesson be some survey of the history of it before getting into modern theories, but that doesn't happen so much with marketing? Why do you think that is?Richard Tedlow: History has to market itself to marketing. You need as an historian to explain why this is important for you to know. I think the problem lies more with historians than marketers. We have not been sufficiently accessible to the world of marketing. There is a Conference on Historical Analysis and Research in Marketing (CHARM). It does exist. You'll also find marketing articles in the Business History Review, edited at Harvard, which I edited in the 1980s. But you're right. Even if you look at strategy, for example, there's a well-known textbook called The Economics of Strategy. They start with history. I'd like to see more of that in marketing. Maybe it'll happen, who knows.New and Improved: An Approachable History of Mass MarketingAndrew Mitrak: When I started this podcast, I was initially looking for a book on marketing history and didn't find one. It was only after starting this podcast and recording a few episodes that I came across New and Improved. It's probably the closest book I found with the expansive history I was looking for. I'm almost grateful I didn't find it at first because I might not have started this podcast had I just found it and read it. What I love about it is it's written in this approachable style that's not just for academics. Some other marketing history texts or conferences are very academic-focused. This one seems like something I could just pick up and read at the beach, enjoy the story, but also take the lessons. Was that part of your goal when writing this book—to write a more popular book? What were your initial inspirations?Richard Tedlow: I like to write the way I speak. I like it to be almost as if it's spoken. One of my books is on Audible; I spoke it. Amazon asked me to do that. I want it to be acceptable. Another thing I learned from Chandler is that your research has to be solid because your interpretations may be revised or reinterpreted, but the research, if good, will last forever. If you look at this book and don't think about the propositions or generalizations, but look at the history, you won't find, I don't think, in this compact a form, the history of Coke and Pepsi or of Ford and GM. My goal is to make it, and in all my writing, I try to write as if I'm speaking. I try to be accessible. Certainly, my teaching was the same way.Andrew Mitrak: It's primarily focused on America and the 20th century, really the late 1800s up to around 1990 when it was published. Why were you focused on this time and America specifically? Was it that a global history would have been too much to fit into one book, or did you think this was a particularly special time and place to share the narrative of marketing's story?Richard Tedlow: Both are true. Some of it, frankly, is my own intellectual limitation. I'm an historian of the United States. I was a history major at Yale, got my PhD at Columbia in history, but it was American history. There's a hell of a lot to know just in American history. Those are the archives I've worked in; that's what I know best. So if I'm going to make an academic statement, it has to be based in America. That's where the intellectual capital exists for me. Which isn't to say there isn't plenty to learn from any number of other countries; I just leave that to somebody else who's more global in their perspective.The Three Phases of American Marketing: Fragmentation, Unification, SegmentationAndrew Mitrak: So, I'm going to ask more about the book specifically. It categorizes the story of marketing in America into three phases: fragmentation, unification, and segmentation. Can you broadly share with listeners what these are and what these phases mean?Richard Tedlow: Fragmentation is early marketing. It's before the railroads, before the telegraph. It was a world of high margins, very low volume, and restricted market size because you couldn't get anything anywhere. There were no railroads; it was a canal-based world.Unification was made possible by the railroad network and the telegraph network. The full force of it really wasn't felt until the 1880s. The railroad network was still in its infancy in the 1850s. In the 1860s, there was a Civil War; you're not going to have national marketing then. In the 1870s, there was a depression. So it was in the 1880s that the great growth of branded merchandise marketed nationally takes place. Coca-Cola was founded in 1886. Procter & Gamble was founded in 1837, but Ivory soap floated in 1879. Kodak was founded in the 1880s. A wide range of other branded products that lasted for a century were founded once it was possible to reach a national market and you also had information through the telegraph.That's the era of unification. This is an era of high volume, low margin (because you're looking for volume), and incorporation of a whole national market. In the automobile industry, this comes a little later because it took longer from a technological standpoint to have automobiles. But if you look at, for example, the first decade of the 20th century, there were hundreds of automobile companies in 1905, 1910, what have you. The Model T organized the market. That unified the market and incorporated the whole country in it. After that, the market became segmented. After it was saturated with the Model T (which was basic transportation—it takes you there and it brings you back, was Henry Ford's favorite slogan), Alfred P. Sloan Jr. attacked Ford by coming up with the classic product line, which was divisionalized. DuPont owned a controlling stake in General Motors; they brought the divisionalized structure to General Motors in the 1920s. Sloan came up with "the car for every purse and purpose": Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. You'd sort of work your way up that ladder, so they'd have a lifetime value of a customer. It was very modern in many ways. That's the world of market segmentation. You see this in lots of different industries. When a new industry is developed, everybody flows into it. Then a couple of leaders sort of organize the market, and then new entrants attack by segmentation. So that's fragmentation, unification, segmentation.Corporate Combat: Case Studies in Marketing HistoryAndrew Mitrak: You've alluded to how you illustrate these phases with case studies: the Cola Wars (Coke versus Pepsi), which has come up a lot on this podcast—it's a fascinating way to look at that battle and draw marketing history lessons. Ford versus General Motors, which you just spoke about. Then there's also the story of A&P, once one of America's most popular retailers, though probably not a household name today. And the story of Sears Roebuck. I'll start with the first two: Coke versus Pepsi, and Ford versus GM. There's this corporate combat narrative approach. Why did you settle on that narrative, or what makes it so appealing for drawing lessons from history, seeing these companies duking it out?Richard Tedlow: Because there's built-in drama, first of all. Secondly, you actually can, by seeing the conflict between the companies, see how marketing progresses. For example, Coke and Pepsi. Coca-Cola was the brand beyond competition. I have quotes in the book; one American soldier in Burma during World War II said, "I think I'm in this damn mess to help keep the custom of drinking Cokes." That's brand loyalty. If you're willing to take a bullet for a brand, that's brand loyalty. Coca-Cola was the brand beyond competition. How do you compete with that?Pepsi came up with a way. It had been bankrupt in the mid-1920s, but in the 1930s, they came up with "twice as much for a nickel, too, Pepsi-Cola is the drink for you." The idea of twice as much for a nickel during the Depression, when Coca-Cola was selling a 6.5-ounce bottle for a nickel, you could sell a 12-ounce cola for a nickel—that had enormous price appeal. That's how they entered the market; Coca-Cola provided a price umbrella.Seeing this conflict, to me, made more sense than reading articles in the Harvard Business Review or the Journal of Marketing. I wanted it to be not a history of what academics had said about marketing, but a history of what business people did to market. That conflict provided drama, and also a sense of progress.The Strategy of Finding an Enemy: Duopolies and CompetitionAndrew Mitrak: For marketers and business leaders, is proactively finding an enemy or archnemesis a good part of strategy? It seems like some categories become almost duopolies with iconic two companies. Then there are markets like Coke and Pepsi (though more fragmented now) or Ford vs. GM (also more fragmented now) that were once dominated by two major brands. Is drawing lessons from history about these duopoly dynamics something marketers should proactively think about and strategize around?Richard Tedlow: When it's a duopoly, in one sense it's good because you're measuring yourself against a competitor you understand. In another sense, it's bad because you need to think out of the box. You need radar spotting the next competitor. Companies that don't do that... Intel was a great company in the 1990s. What the hell happened? By 1999, Intel had basically a monopoly on the microprocessor, a device vital for life in the 21st century, and they lost it. Nvidia, now the headline company, was founded in 1993. How did they miss that, especially with Andy Grove, who always said, "Only the paranoid survive" (a bestseller)? It's important to have competitors, but it's important to focus on the smartest competitors you can find. That's what companies sometimes don't do.The Cautionary Tale of A&PAndrew Mitrak: I also want to ask about A&P, a company many listeners might not know, but it was once as well-known as McDonald's. Why focus on them? What's the cautionary tale of A&P?Richard Tedlow: The first part of the book is from the manufacturer's view. The second, Sears and A&P, is from the retailer's view. Sears marketed everything except food. A&P marketed food—and you need food, clothing, and shelter to make it through the day. A&P stocked America's pantries; it was the power retailer of its time. It also managed a remarkable transition during the 1930s from thousands of small stores to fewer, larger stores because the automobile revolution made it possible to drive to a market rather than go to one on a streetcar and stock up. They managed that transition very well.The question was, having managed this enormous change so well, what went wrong that made it difficult for them to manage change in the future? That's what that chapter is about. A&P was always looking for the next depression, which led them to sign one-year leases, meaning they couldn't get the best store locations. They were also deeply devoted to private label because they were vertically integrated. When I was a kid, they'd sell Ann Page sugar frosted flakes. Kellogg's was selling Tony the Tiger, which you're probably much too young to remember...Andrew Mitrak: I remember, “They're great!”Richard Tedlow: "They're Gr-r-reat!" That's right, exactly.Imagine you're shopping with a young kid shouting for Tony the Tiger. Are you going to say, "You know what? You can get Ann Page, they're just as good and five cents cheaper"? The kid has a psychotic episode. You don't need to be screamed at much to say, "I'm going to another supermarket and get Tony the Tiger because that's what's coming to me over my TV," which was widely distributed by the 1950s. That was a revolution A&P did not manage well.A&P in Mad Men: A Metaphor for Decline?Andrew Mitrak: One way I'd heard of A&P before this book is from the show Mad Men. Have you seen the show Mad Men?Richard Tedlow: YesSpoiler Alert - Please skip this paragraph if you have not watched the show Mad Men and plan to watch it in the future.Andrew Mitrak: I'm a big fan of the show. It probably like also got me somewhat interested in this historical part of marketing. A&P appears a few times, and it always seems to coincide with a character dying or something bad happening. A grandpa character dies in line at A&P—his generation would have shopped there. A copywriter, down on his luck, starts working at A&P, almost symbolizing his character's death. That’s the last time they refer to him on the show. Then Betty, the main character's wife, is seen shopping at A&P in the last season, and her end is… not good. It's like A&P is used as a metaphor for dying.Richard Tedlow: It didn't end well.The story doesn’t end well for A&P. The company was incapable of reinventing itself. Its owners, John and George Hartford, were elderly men. They turned the company over to a man who might have revived it, but he died of a heart attack early. Then it was in the hands of Ralph Burger—you'd think perfect for a food store, but it didn't work out. The book quotes an A&P executive: "Cleanliness and courtesy standards, freshness and quality control standards, shelf stocking and checkout standards, and store morale all deteriorated at the same grinding, steady pace." It happened step-by-step. It's the frog in the boiling water story. Before you knew it, you had a boiled frog, and they couldn't compete, while competitors like Safeway and Kroger are still in business.Andrew Mitrak: It's interesting to see the counter-cycle. A&P with its private labels, then supermarkets with big brands. A&P dies, and then places like Trader Joe's or Whole Foods emerge, almost as a counter-reaction, filling that gap.Richard Tedlow: Here's a question for you: What did Jeff Bezos do first when he bought Whole Foods?Andrew Mitrak: I remember seeing Amazon Echos next to the bananas.Richard Tedlow: The very first thing: he cut prices on a lot of items. If you want to enter a market, price is key. There are two ways to compete: on price or on something else. He came in with price. Whole Foods has its private label, but overwhelmingly, if you go to Stop & Shop or Safeway, they're private label. You can do it that way.The Fourth Phase: Hyper-Segmentation in the Internet AgeAndrew Mitrak: You published this book at the dawn of the internet age. In later writings, you talked about a fourth phase of hyper-segmentation. Can you share about this or other phases that might have happened after the book's publication?Richard Tedlow: The internet and social media mean companies now know so much about their customers they can have "markets of one." The dream in the 1990s was to turn marketing into a conversation, not just "buy this, buy this." The amount of data big companies have about buyers and potential buyers is unprecedented. Any book on marketing history now would have to fully grasp what this fourth phase means. That's not easy, but it can be done. There's room for somebody.Andrew Mitrak: Do you think those four phases have held up since you introduced them?Richard Tedlow: Historically, they've held up pretty well as a description of what happened in the 1910s, 20s, 30s. It's a good pattern. It's an idea, not just one story after another. The important thing about introducing a pattern is that people can attack it, like Coke and Pepsi did to one another. In the clash of ideas, you grow. Intellectually, life isn't a seesaw. If you come up with an idea and someone else comes up with another, we're both better off. If it stimulates thought... there have been books written incorporating this, not just in marketing. The Economics of Strategy by David Besanko (not my field) uses Coke and Pepsi as an example of attacking an entrenched incumbent. That's not easily answered. But incumbents also have dilemmas: how do you change when you're winning? These are questions the study of history surfaces. This gets back to something I said earlier: history may not give you answers and doesn't repeat itself, but it will give you questions. Then you, with the corner office and big salary, come up with the answers.The Historian's Challenge: Models vs. Messy RealityAndrew Mitrak: I'm trying to figure this out through the podcast. I'm collecting interviews, hearing diverse perspectives on marketing history. I was surprised how contentious little parts of history are, how it's not settled, and there's more debate than I expected. Your frameworks (company strategy, transportation, communications, consumer behavior) make perfect sense and fit these phases. But then you see "whataboutism"—what about this edge case that doesn't fit? How do you, as an historian, respond? You can have an elegant model, but it's a model, not the whole world, which is messy.Richard Tedlow: That's one of the great things about case method teaching at Harvard Business School. You can have a "what about" corner case as a case and ask students, "Is this the future or not?" Let them say. It's the difference between successful people and not. You have to keep a very open mind, but not so open your brains fall out. Within your company, you need principles that guide. For example, "Focus and simplify"—a wonderful instruction guiding Apple. The importance of making decisions that guide the customer.Steve Jobs believed the customer, especially with a path-breaking product, didn't know what they wanted. It was up to you, not necessarily to ask, but to tell. He always said if Henry Ford had done market research, they'd have said, "Get a faster horse," not "I want a Model T Ford." The market wouldn't have come up with that. Ken Kocienda's book, Creative Selection, about his time as a software engineer at Apple with Steve Jobs, is, though not a marketing book, perhaps the best marketing book I've read. It shows how Jobs made decisions, like the keyboard on the MacBook. It's an education. A classic example of "focus and simplify." Why is that so important? Variety is expensive, complexity is hard to manage. If you focus and simplify, you're ahead. There are principles like that at Apple, but they don't necessarily tell you the next step, but they tell you how to take it. That's wonderful.Systems vs. Individuals: The Entrepreneurial SparkAndrew Mitrak: I'm adding Creative Selection to my reading list. This idea of Jobs, Apple, and Ford brings up a tension in your work: systems and frameworks versus individual entrepreneurs who break the mold. How do you reconcile these when telling these stories?Richard Tedlow: I'm very intrigued. We started with Al Chandler. Strategy and Structure lists companies from the high tide of American business in 1962. Most are dead. What happened? Bureaucratization makes it very, very hard to think about step-function change. Why didn't Sears become Amazon? Sears was the most trusted company, had a national warehouse network, stores everywhere. Why not Sears Web Services? Because Jeff Bezos never would have worked for that bureaucratized company. He had an entrepreneur's soul. Amazon lost money for a long time before becoming a powerhouse. He joked he should have called it amazon.org. But he had an idea, understood how technology would revolutionize retail, and he's smart. That's Amazon. Sears and Kmart don't exist anymore. It's intriguing how difficult it is for an established company to reinvent itself with a step-function change in the environment in which you are doing business. For Bezos, that environment was technology. Sears couldn't reconceptualize its business for the new tools. You needed someone young, hungry, and smart. It's very, very hard for these companies to reinvent themselves.From Surveys to Biographies: Tedlow's Shifting FocusAndrew Mitrak: Pulling on this thread of individual case studies: New and Improved is a survey of business history. You wrote another survey of PR, Keeping the Corporate Image. Then your work shifted more towards biographies of specific companies like IBM and Andy Grove at Intel. You also wrote about broader ideas like denial and charismatic business leadership. It seems there's this historical survey of trends, then you get more specific with individuals, and then you take another specific angle on phenomena like denial. Why the shift from surveys to biographies, and what's the role of each for a business historian and educator?Richard Tedlow: They have to coexist. A lasting biography takes both “the life” and “the times.” You've got to put those together. That's an exciting adventure. The wonderful thing about biography is that, in a certain sense, the biography organizes itself. One thing comes after another as whoever the subject is grows. Somehow it's more, literally, more human. You get a sense of who the individual is making decisions, how this individual pursued his or her career, what decisions they had to make.Andy Grove, for example, talks about the strategic inflection point. That's the point at which your company either takes off or declines. It is intriguing that you get to these nodes, these places where, if you go right instead of left, there are turning points. You've got to make the right decision at those moments.Lessons from Apple’s HistoryIt's very interesting, if you look at Apple's history, to see why these people opened stores in the early 2000s. Gateway Computer, which you've heard of...Andrew Mitrak: I have. I remember visiting a Gateway store out in the boonies, maybe near a Best Buy, but its own place.Richard Tedlow: Why do you suppose that is?Andrew Mitrak: I'm sure you have a better answer, but I'd guess it's not enough of a destination for foot traffic. Apple opened stores in malls or iconic places, beautiful buildings that welcome you in high-traffic, often affluent areas. Maybe it's a choice of place. Driving out to a Gateway seems antiquated.Richard Tedlow: What Apple did was reconceptualize the retail experience. First of all, I think to this day, I don't know how many stores they have, call it 500, maybe more. But when they opened those first stores, it was a place you went to get educated about the product. You're right, you didn't go to the boondocks to shop at Apple. You went to a mall, and it would be right across from Victoria's Secret or a Nike store. Very high traffic. That broke the mold. These are consumer durables, expensive products. Apple has been a premium-priced company selling premium-priced products. Steve Jobs thought it needed explanation and love.He reconceptualized the retail experience for computers. He did this after Gateway, my recollection is, closed its stores. They tried being their own retailer, closed their stores. He opened his when the company was very small. What a wild thing to do.Steve Jobs and the iPhone LaunchBy the way, the introduction of the iPhone, maybe the most important consumer product of the 21st century, was in 2007. If you look at Steve Jobs's keynote that day, which I think is still online...Andrew Mitrak: It's on YouTube. I've watched it more times than I can count.Richard Tedlow: It was about 82 minutes long. There are fascinating things about it. First, he understands it's an internet connectivity device, a phone, an iPod. The iPod arguably is the product that made Apple. There's a beautiful book, The Perfect Thing. The iPod was the perfect thing. Jobs understood if you could incorporate this into a phone, someone else would. Either we do it or someone else does. So he decided to do it: an iPod, a phone, and an internet connectivity device, three in one. But if you look at that keynote, he mentions the camera in like one minute: "By the way, it has a 2-megapixel rear-facing camera." I don't know if this is true, but my guess is that camera is one of the top five apps on the phone. How many photographs are uploaded to the cloud every day? Steve Jobs himself, and also the App Store, he didn't fully appreciate what he had there. But somehow it was open enough so it could grow into this unbelievable product.Andrew Mitrak: My guess is also the level of focus. Storytelling is an editing process; it's what you leave out. As a great pitchman, he knew if you included all ideas—four things in one, or it's also a calculator—it's too much for the brain. Three is an elegant, magic number. Even if he included the camera (probably my favorite app on the phone, I use it a lot), I wouldn't remember it the same way if it was four in one versus three.Richard Tedlow: I think there's truth to that. That keynote was a remarkable display of what he had and the team he had. People yelling and screaming in the audience, all Apple engineers. It was a joyous moment, and it gave you a sense of how exciting it is to play on a winning team in business. He was able to construct that. That's part of the company's strength that Tim Cook, one of the great business executives in American history, took that ball and ran with it. Boy, did he. It's fantastic.Teaching at Harvard vs. Apple UniversityAndrew Mitrak: We're talking about Apple. You were a teacher at Apple University and spent a big chunk of your career as a professor of business history at Harvard. How do those two experiences compare? Did people immediately understand the benefits of learning business history, or did you have to paint the picture of why it matters today?Richard Tedlow: There was no need to sell it at Apple. One of the biggest differences is that at Apple, you didn't have to grade papers. I'd have 200 students a year; that was three weeks of grading for the final, and early in my career, midterms too. That was hard. Also, at Harvard Business School, there was a forced curve. Very smart students, but 10-15% you had to give the lowest grade to. That was hard. You didn't have to deal with that at Apple.You didn't have to sell history because at Apple, you weren't so much teaching history as teaching decision points. Since you knew how things turned out, you could dissect something and say, "Okay, I can tell you this decision resulted badly. I want you to tell me why." So here's the story. You tell me what went wrong and where. You learn that at Harvard Business School. One of the first cases I taught in marketing was a salesman's diary. It was, you know, on September 12th this happened, on October 5th this happened. I'll never forget this case. The guy lost a sale. All you had to do was say to the students, "All right, here are dates. The guy kept a diary. Where did he lose the sale?" That happened. It's the past. But this is a dilemma any salesperson faces. What went wrong and where? Cases like that you could teach anywhere; it's a pleasure.Dystopias and Demagogues: History as a WarningAndrew Mitrak: I also want to ask about Substack and Dystopias and Demagogues. It's a Substack I read, and the stakes feel higher compared to your other work. I read it, I recommend it. I wouldn't say I enjoy it, but "enjoy" might not be the right word because it gives me anxiety. I think that's partly the point: using historical examples to ring alarm bells. Can you tell me about Dystopias and Demagogues and your process?Richard Tedlow: I'd be delighted to. I started writing this in August to explain to myself what was going on in the United States. I publish on Tuesdays at noon Eastern Time. I don't try to write daily like some, but that's not me. I want to use what's going on today as a hook, but I'm an historian, so I want to go back and say, "What can we learn from the past?" For example, this country, and I never would have said this 15 years ago, seems to be turning its back on democracy. That's very dangerous.History can tell you what has happened to countries that made that choice, what the symptoms are, and perhaps suggest solutions. I'm 77 now, so the clock is ticking for me. When I look at the country, I'm more concerned about its future than ever. Being an historian, I think the country is in more trouble now than ever, including the Great Secession Winter of 1860-61. We're getting warnings that many people are discontent. As a result, we have the president we have now. It's unclear to me if he's a cause or a symptom. That's something I try to work out.I also believe Dystopias and Demagogues has encouraged me to realize even more vividly the importance of history. George Orwell said, "He who controls the present controls the past. He who controls the past controls the future." I believe that's true. History has never been as important as now. It's distressing that so many universities are losing focus on history due to expense and the need for practical knowledge, which I understand. Nevertheless, studying history helps tease out fact from fiction. A classic example: what happened in Germany from 1919 to 1933, the Weimar Republic. Life was difficult for statesmen there because of the "stab in the back" belief: that Germany hadn't lost WWI but was betrayed by leftists, Social Democrats, communists, and Jews. The result of that myth was, in part, Adolf Hitler becoming Chancellor in 1933, leading to 12 years of hell.A lot of that was because of a mistaken belief in history. Germany lost WWI on the battlefield. There were revolts, a revolution, the Kaiser was kicked out. Germany's allies had given up. The war was going to end. But because of misunderstanding what happened, horrible things took place. An acute, honest understanding of the past is very important in moving forward. That's what Dystopias and Demagogues is about.I agree, it's not like New and Improved, which has laughs. The Cola Wars are fun. The current situation isn't as enjoyable. But it's important to face facts. That's what I try to do. It's also a way to keep in touch with thousands of former students. I love hearing from them, taking their advice, learning from lead users—very important. Anyway, that's the story.Andrew Mitrak: The current situation can evoke many feelings, and sometimes people don't know what to do. I'm glad you've found this productive outlet, writing these thoughtful historical essays. It's an example of doing something productive instead of just venting. I publish this podcast on Substack weekly too, and having a weekly practice is something I've personally enjoyed.Richard Tedlow: It organizes your life positively.Andrew Mitrak: Aside from subscribing to Dystopias and Demagogues, where else can listeners find your work?Richard Tedlow: I don't think so. I have books through Amazon. Giants of Enterprise I enjoyed writing very much. It was a number of years ago. But it's fun to re-engage with business executives like Sam Walton or women like Oprah Winfrey or Mary Kay Ash. These are remarkable, often "think different" stories. It was fun to research and write about them. That's online if anyone's interested—Apple Books or Kindle.Andrew Mitrak: Great. Richard Tedlow, thanks so much for your time. I've really enjoyed this conversation and appreciate your work. I look forward to reading more of your books.Richard Tedlow: Thank you very much. It's been a pleasure to chat with you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 19This week I’m excited to be joined by Laura Ries, a leading marketing strategist, speaker, and bestselling author. Laura is also the daughter of Al Ries (1926-2022), the legendary marketer who's best known for popularizing the concept of positioning, along with his partner and co-author, Jack Trout (1935-2017). Laura and Al Ries co-founded RIES, the global positioning strategy & consulting firm and co-authored several books together including The 22 Immutable Laws of Branding, The Fall of Advertising and the Rise of PR, and The Origin of Brands.We talk about all of this in our conversation, and we cover Laura Ries’s upcoming work “The Strategic Enemy,” which will hit bookshelves this fall.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsLaura is a world-class speaker and strategist, and this conversation is full of useful marketing advice and case studies including: * Coors Beer and their missed opportunity to own the “Light Beer” category* The .Com Bubble (Pets.com & Webvan) and how massive advertising budgets couldn’t overcome weak credibility and a lack of positioning fundamentals* How The Gap successfully launched Old Navy to expand their market share without extending their brand* And much moreNow, here's my conversation with Laura Ries.Note - I use an AI tool to transcribe the audio of my conversations to text. I check the output but it’s possible there are mistakes I missed. I have lightly edited parts of this transcript for clarity.Laura Ries: Born into MarketingAndrew Mitrak: Laura Ries, welcome to A History of Marketing.Laura Ries: Well, thank you so much. It's a pleasure to be here.Andrew Mitrak: I'm excited to have a conversation about positioning, branding, your amazing career as an author and marketing consultant. But to start, I want to ask about your background. How did you first become a marketer?Laura Ries: Well, I was born into it, shall we say. I was the only child of my father's (Al Ries) second and forever marriage to my mom, Mary Lou. And at an early age, just sitting at the dinner table, what did we talk about? Marketing. My dad was a great teacher. He loved to tell stories, and I always loved the story. We'd always have this little TV with the bunny ears. We'd always watch MASH at dinner. My dad had served in Korea with the army, and so he loved the show, I loved the show, but the commercials were where he shined. He would talk about the ads and what the companies were doing right and wrong. And he talked to me and my mom as if we were adults, as if we were the CEOs of these companies, and we could actually change something.But it was a great introduction and really got me excited about the whole industry and the business. And of course, when I was little, he took me to the office in Manhattan where he had an advertising agency for many, many years. And I just, I just soaked it all up, and it just seemed so interesting and cool.And then later on, it wasn't until my teens, the “Positioning” book came out in 1981. And a few years later, I don't know why, but I picked it up, and I was like, "Let me just see this thing my dad apparently wrote." And that changed everything. The book, as many people know, is amazing, but it really tuned me in. It was written in such a clear and funny and interesting way. And from that day on, I just knew that's what I wanted to do with my life.Andrew Mitrak: That's amazing. You grew up with it, and in middle school, you read "Positioning." I bet that's younger than the usual reader for "Positioning." So, this is your father, Al Ries. And you shared a portion of your upcoming book with me, "Strategic Enemy," and you have this beautiful afterword that's dedicated to your dad, Al Ries. And you describe watching MASH and seeing these commercials. Do you remember any specific commercials or critiques that he had that come to mind from that era?How Coors Could have Owned the Light Beer CategoryLaura Ries: Well, really, one of his most famous stories and the critique was about Coors. And during that time, my dad actually had some meetings with Coors where he flew out to Colorado. And he got to Colorado, and he went to a bar, and he was like, "Give me a local beer." And the bartender was like, "You mean a Colorado Kool-Aid?" My dad was like, "A what?"Denver is the Mile High City. Coors was naturally a lighter beer. And that wasn't something most people knew. And so he would go on and on about this story. And he told them on multiple occasions, "Don't line extend." Miller Lite was making headway, Bud Light hadn't launched yet. "Be the original light beer without the 'light,' you know, in the name." And he was so passionate. He was like, "It would have been such a great success." And they didn't do it, and it crushed him. And he would tell the story over and over.And I always like to say, when I was a teenager, I mean, you'd just like, "Oh, roll your eyes," like, "He's going to tell it again." And it's funny because he didn't repeat it because he forgot he told us. He did it to make a point that the more you repeat something, the more powerful, the more memorable, and even the more believable it is. So, he was a great storyteller in that regard. And so, I do remember many of those stories that he would tell over and over again.Andrew Mitrak: It's so funny. When I picture Coors, I picture Coors Light in a way. That is what comes to mind. Why is that? They are a diluted brand because you're split across multiple things. They're most associated with light. They also try to capture this idea of cold, which is a funny idea too.Laura Ries: Well, originally it was such a cult following. It was only in the, it was Rocky Mountain water, it was in the Rocky Mountains. I mean, there was a tremendous PR effort around it. Even Smokey and the Bandit, the whole movie was about bootlegging Coors across the country because you couldn't get it on the East Coast.But they missed out on an important opportunity to not, while they were successful with Coors Light, what if it had just been Coors? What if Coors alone could dominate that new category of light beer? And again, it goes back to my new book, "Strategic Enemy," but the enemy would have been regular beer, right? Coors could have owned it. When you have your one name on two things, who's the enemy? Right? You can't say that your regular beer sucks or that your light beer is watered down. It puts you in a very precarious situation. So, when you do have a brand that stands for one thing, has a very specific enemy, your message can be so much more powerful.Laura Ries’s Early Marketing CareerAndrew Mitrak: So, I'm going to go behind the scenes a little bit. In advance of recording this podcast, I sent my questions in advance. And I wanted to ask you if there were any other influences you had when it came to marketing. And it was beautiful that you said, "Nope, it was pretty much just my dad, Al Ries." And I'm wondering, did you ever take marketing courses, or were there ever other marketers who tried to teach you? Because I imagine if you grew up in a household with one of the best marketing teachers in the world, it would be, you'd be a tough student. So, did you have any encounters like that when it came to learning marketing from others?Laura Ries: Well, there are so many stories. My first job out of college, I had an internship at TBWA Advertising, right there on Madison Avenue. And I was on the account team for Evian and later Woolite. And then later got a job there. I worked for a whole year there before going to work with my father. But it was very interesting during that time, and I had a lot of opinions and insights. And I did work with great people. Louise was my superior, and she was just, how she worked with clients, and many people at the agency. I met Bill Tragos and many of the bigwigs. The agency launched the Absolut campaign and so had a great history.And it really was fun to be in the agency and to know what it was like to just be a low-level executive in that experience. But I had such aspirations. And what my dad was able to tell clients, I really liked that. I mean, when you're an agency, you have to be very careful, and you can't tell them exactly what you think. I mean, you're trying, you're trying to sell advertising, right? You're not necessarily selling the strategy. So, that's what I really learned. I didn't want to be in the position of selling advertising; I wanted to help companies figure out what to do.Now, listen, at 22, I had no idea what I was doing. But I was spunky, and my dad was just so generous with his time. And so, I look back at my career with my father. We were, he passed at almost 96 years old, so tremendous longevity of his life. And he was working until the absolute very end. But in those decades, that first decade, I was just learning from him, right? Soaking it up. I was a young kid. I would go with him on every session, every speech, and it was just amazing.And then, into that second decade, well, I have my own experience, and particularly I had a lot of insight into female-type of categories and new technologies that he was very willing to listen to me on. And then, in the last decade, really leading the company, and also really honoring him and his induction to the Marketing Hall of Fame, and allowing him to really work as much as he could. And he really enjoyed it. And so, it was so special. I mean, maybe he couldn't travel to every speech, but we would work on the slides together.And one of the last memories. He had fallen and broken his hip, and things were going down. And he wanted me to give a presentation. And so I went over, he had worked on some of my Visual Hammer slides. And so, the family and I gathered around while my dad was in the hospital bed with a big TV, and I would do the slides, and he hammered me. He's like, "Slow down. You've got to wait, pause. Don't stumble through this." And it was, it was really magical because my whole life, he was always teaching me, guiding me. And I hold that, you carry that with you. I carry those, those feelings and those memories, but also now able to really, after so many years, have my own ideas. And that's really exciting too.Andrew Mitrak: That's beautiful. That long collaboration between a father and daughter is really a special thing. And you mentioned that your father passed away a few years ago at almost 96 years old, so remarkable longevity.How Ries & Trout Popularized PositioningAndrew Mitrak: On your website, on ries.com, you pay tribute to the history of positioning and the history of Ries and your collaborations. And you tell the story of many of the major milestones that your father contributed to. So it's, it's great as somebody who's interested in marketing history, it's great that you're preserving and carrying on that history. And can you tell the story for listeners of how Al Ries and his collaborator Jack Trout first became interested in this idea of positioning? Because it wasn't, it wasn't really a household word within marketing at the time that they got started with it.Laura Ries: No, not off the bat. And it is a great story. I mean, my dad was kind of one of the madmen of Madison Avenue, as was Jack Trout, in the 60s. And he worked in PR and at advertising agencies, and very early on, he struck out to start his own agency, Ries Cappiello Colwell, in 1963. And very exciting, but he was a young advertising company. They had mostly business-to-business clients. Jack later joined the agency. He was on Uniroyal, one of their clients, and then came over to the agency.But the problem that they faced was, how do they build their agency, right? Unless you have big clients. And so they were trying to make a mark. And that's where the, the, the first idea of positioning came about, was how do we differentiate our agency? And it was at that time, the big word around Madison Avenue was David Ogilvy and creativity. And it was said creativity could do the job of 10 ads if you had one creative one. And the entire focus on the industry was over creativity. And while early on, they might be effective, and if you had a lot of money, but it wasn't for every company.And so, what they thought about was, initially, the rational approach. And then my dad had the idea to call it "the rock." So, every ad had to have a rock. And what that rock was, was an indisputable idea, something that the mind wouldn't challenge. So, he was starting to get into the notion that it wasn't just what you're communicating, but the most important thing was getting in the mind. And so, to make it as easy as possible, again, most advertising today is puffery and claims, "We're the best this and the best that." Is that believable? No. When you say it, it's not believable at all.But for one client, Uniroyal had the most patents ever, right? I mean, that was not disputable. People actually believed that. Or when you say, you don't do something, that's also very believable. So, this idea of the rock they kind of threw around, and it was actually Jack who said, "Why don't we call it positioning or a position?" And Al thought that was a great idea. So, they renamed it positioning and started writing articles and doing speeches.And really, the big break was when my father was giving a speech where Rance Crain, the owner and editor of Advertising Age, the bible of the industry, especially back then, loved the speech. And he said, "Al, like, how about you write an article?" And my father was like, "Great." I mean, and in fact, it was a series of three articles. And that really blew everything up. And what did it do? It created a lot of controversy. All the creative people said, "What are these crazy positioning guys talking about?"But that's what drives interest, that drives attention, and that drives the positioning idea into the mind. And it was this battle between positioning-focused approaches to marketing versus creative-only approaches. And I think positioning did a very good job along in that battle. And most companies today, that word "positioning" is used around the world. The book was successful not just here, but globally. And that's why my father and I have been to over 60 countries, because of the acceptance of the idea of positioning. And today, over 50 years later, the interest and importance of the idea that successful brands need to take into account positioning. It's not just innovation, but Peter Drucker said innovation and marketing, but I think it's positioning that is most important.Positioning vs. Creativity: The Madison Avenue DebateAndrew Mitrak: And there is a funny sort of meta story to that of them kind of drinking their own Kool-Aid and using positioning to position themselves against other advertising agencies to stand apart. So, just a lesson right there, to marketing yourself as a marketer. And so, you mentioned how when they published these articles, which by the way, are republished on your website ries.com, and it was great to read through them in the original format. But you mentioned how there was this industry response that was controversial. And do you recall any of the examples of the controversy around it?Laura Ries: Yeah, I mean, it was tremendously controversial. To think back and luckily, my dad was very good at preserving things. So, we have many of the old articles that talked about the craziness. The creative community was really trying to defend that, but also, companies saw the opportunity of using positioning type approaches. And then many successful examples, right? Avis is number two because they try harder. And many companies started to get in on this notion of, again, thinking about in the mind of the consumer, what's the open hole? What position can we occupy? And of course, the most important position to own is leadership of the category itself. And that led to many successful later books expanding on the notions of positioning.How “Positioning” Shaped Marketing in the 1980s onwardAndrew Mitrak: So, they published these articles in the early 70s, and then in 1981, they published "Positioning," which is the book you mentioned earlier, is the book that you read in middle school. And it's called "Positioning: The Battle for Your Mind." And it became one of the...Laura Ries: Right here!Andrew Mitrak: You have it, you have it handy. Do you just have all the books handy right in front of you? That's amazing.Laura Ries: Of course, I got all the books, I'm a marketing person! It still sells well. And I mean, obviously, many of the examples are old, but they still hold true of the principle of positioning. And very interesting to read.Andrew Mitrak: Yeah, absolutely. The examples totally hold true, and there's, I certainly believe there's a lot of lessons in them. And if you were to describe the impact that it had on marketing as a practice, are there any examples that you'd cite of how marketing in the 80s and 90s, following the publication of this book, how it became really a different practice than it was prior to positioning being a key idea?Laura Ries: It's funny. I did study marketing in some ways in college. I took a couple of classes. I was a communications major. And I did take an advertising class. And of course, I was very excited to get the book, the textbook, which my dad actually knew the guy that wrote the textbook. But there was a whole chapter on my father and Jack and positioning and everything. And I was so excited. I will say the professor was not too excited with me. But, he couldn't show favoritism or anything like that. But it was kind of very fun for me to see my father's name in that textbook.And it changed everything, right? It made the textbook. I mean, how could you get more important than that? But really, it changed how people thought about marketing. I mean, it was really that, it was the communication going out was the focus of what do we want to say? Who are we? What do we want to tell people? And it flipped the script. And instead of thinking about it from just the, from us to them, is first to think of the mind. And what's in the mind today? And what will the mind accept? And is there a new category opportunity? And then thinking about things like line extension and how that impacts how the brand is thought of and stored and even talked about within the mind itself. I think there's been a lot more emphasis on the mind because of positioning when it comes to branding and companies. And so that's been so exciting.But the other thing is that some people still violate them. We've written books on the immutable laws, right? And there, there are still many violations out there. So, it does keep the work exciting and important and shows that it's a challenge. Many of the things about marketing are not logical. We say that marketing isn't like math. In math, 1 + 1 always equals 2. In marketing, it's sometimes the opposite. 1 + 1 might equal a half, meaning the more things you expand, the weaker your brand becomes. And why 3 - 1 might equal 4. Because once you narrow the focus, you might have some, a much stronger message that you can promote, get attention for, create controversy. All of these things generate.The 22 Immutable Laws of MarketingAndrew Mitrak: You mentioned those immutable laws, and one of the books that your father, Al Ries, published was "The 22 Immutable Laws of Marketing." Can you share any background on the creation of this book?Laura Ries: Well, yeah, I mean, again, I have the props here. Excellent book. Yeah, that was in the, what, was like 91, I think. But it was, it was simple. And part of their message in terms of what positioning was, is the more you can oversimplify an idea to make it short, simple, memorable, the better it will be received. And so, really, the goal of that book was to put these principles into little snippets, little short, 22 chapters of ideas that people could really remember, understand. It was a quick read. It definitely is again, one of their, their best books and best-selling books because it really does really pack a punch of, of really making those ideas super simple and super clear.Andrew Mitrak: Do you happen to know, this is probably the only place where I've ever come across the word "immutable." I don't see it very often. It's just, but, do you remember how they came up with immutable and how they settled on 22?Laura Ries: Well, I, I don't. I mean, they started working with HarperCollins. So, the original books were with McGraw Hill, and then Harper was a great partner. Al, and our, the books that I wrote with him were with Harper. We had a long relationship with them. And Adrian Zackheim was the editor, and he was just amazing. And they had a great collaboration. So, I imagine it was a back and forth. They wanted a shocking word. Again, the title and the cover are super important in books. And so, having some sort of word that wasn't usual, was really a big part of it.Andrew Mitrak: Yeah, that's right. It's funny to see how you market marketing ideas as well and how they come up with a striking word like that that is just so ownable. And as you mentioned, there are other books you published that continue on this idea of 22 or 11 or, so those numbers...Laura Ries: Yeah, well, and being different, right? I mean, when you use a word that is known but isn't used that frequently, it gets your attention. And so, books and ideas also have to be positioned. And names and visuals are incredibly important. So, we try to, and all, believe me, we've had many fights with publishers over the covers. And not all of them are our favorites, but we certainly have a few.Building Ries & Ries: Father-Daughter DynastyAndrew Mitrak: Around the time that this book comes out in the early 90s is, is the same time that you founded Ries & Ries together with your, with your dad. And what was it like going into marketing consulting as a young professional and going into business with your dad?Laura Ries: Well, I mean, it was, it was magical, honestly. It's funny, my dad always said, the most, after we started working together, the question he was asked most often after a meeting or presentation was, "How did you get your daughter to work with you?" You know, many successful entrepreneurs and business leaders are like, they wish their kids, especially their daughters, would come work for them. And the answer was, I never, I never pushed it. My dad never asked. It was, it was almost, it was unspoken. It was just a feeling between us. And I think the fact of when you tell a kid to do something, the last thing they do will be what you tell them to do. So, he definitely took that advice and didn't try to push it. But what he did was just so remarkable. And also his just willingness to teach me and not try to pretend like he was a big superstar, and just sit down with me.I mean, I have so many memories of working together, especially on projects. So, as young as the fifth grade, I was bringing my own slide projector to the class presentation, which I always joke, I mean, the other kids did think I was weird, but I always like to say I was practicing for my future. And he took an enormous amount of time to help me. And with those projects, I really learned how to break down ideas, how to visualize them, how to simplify them. So, whatever the topic was, it wasn't really about the topic, it was about learning how to present. And I mean, honestly, I just, I mean, I had a, I like to present, as you can maybe see. I don't mind being on camera. I love talking about ideas. And so it turned out to be a great fit.Andrew Mitrak: I think the first book that you published together was "The 11 Immutable Laws of Branding on the Net."Laura Ries: No, 22. Yeah, we did the 22 first.Andrew Mitrak: You did 22. Okay, so was this "Branding on the Net" or was this...? (*Note to readers: My research was wrong here, and this is why you can’t trust everything you read on the internet!)The 22 Immutable Laws of BrandingLaura Ries: This was, yeah, this was the book, "The 22 Immutable Laws of Branding." And so, I started working with my dad in '93. Actually, the marketing one was in the late 80s, and then they had "Horse Sense." And then, I started working with him in '93. So, I helped him with the research on the book "Focus," which is another one of his really big, important books. It really breaks down the importance and as well as the impact on a company's financials of when you, when you focus a corporation. So, I was there and saw the whole process with him, and it was super exciting. And then we pitched the idea for the, the "22 Immutable Laws of Branding," which also the publisher was interested in exploring into, branding was becoming a big, a big and bigger buzzword.So, yes, so we worked together on that. And again, he was so generous to make me a co-author and allow me to participate in that. But it was super fun, just you have to work out all the chapters and the order and the examples and the research, which was much harder to do back then. I mean, we subscribed to probably 30, 40 magazines and newspapers, constantly, we had to rip them out and save them in folders. It's so much easier today with being able to use the internet to find this stuff. But he was very diligent about saving and reading. And that's really an incredibly important part of our process, is studying the case histories. So of course, we've worked on a couple hundred brands, but we've studied thousands and thousands more by reading their case histories of what made them successful. I think that's the most important thing for marketing, of how they get that brand in the mind? That's the big challenge. And it's very difficult, but once it's done, it's very powerful.Early Internet Marketing: Branding on the NetAndrew Mitrak: I didn't think about that. Researching these books and coming up with these case studies prior to the internet would have been so difficult. And you were coming up in your marketing career, building, building the consultancy, Ries & Ries, at this time as the internet was developing. And it sounds like you kind of extended that idea of the Immutable Laws of Branding to the idea of 11 Immutable Laws of Branding on the Net. And were you on...Laura Ries: The net came up and the publisher was like, "You've got to write something." So, I mean, we wrote that book really early on. I mean, it was right at the we probably were writing it in '99. You know, honestly, we did a pretty good job. I mean, not everything is accurate. I think we underestimated the power of search because we thought people would go right to websites. But the opportunity to find information once everything was on the internet became a truly big deal. But I think it's really important and our biggest message with that internet book, and it's the same with any brand, but there was the, the .com bubble was all about people wanting to use generic brand names. So, it was books.com or pets.com or business.com, which were going for millions and millions of dollars. And what we said was, "No, it's going to be brands. It's going to be Amazon, and it's going to be brands that are built for the internet."And also, then subsequently, in combination with that, was the importance of PR and not starting with advertising. Because while Webvan wasn't a generic name, they started with massive amounts of advertising and quickly went belly up. And of course, as you know, the cover of the "Fall of Advertising" book is the demolishing of the pets.com sock puppet, which really was the poster child of that era of using $50,000 in $50 million of advertising to launch a brand that had essentially no sales. Not good math. And instead, you have to have a obviously the right name, the right brand, and business strategy, but then using PR to gain credibility and allow it to go along with the rise of the company itself.Andrew Mitrak: Yeah, it's funny how these things come in cycles because then over the last few years, we saw a big rush to the .ai domain name and a lot of generic brands using just “something.ai” as their thing. And you just got to, got to learn the lessons of the previous era before you make the same mistakes all over again.Laura Ries: I know, and it's funny. I mean, history repeats itself. If you don't study history, you may be condemned to repeat it. I mean, it went back to Miller Lite. The original brand name was L-I-T-E. They tried to make it a new brand for a new category. But L-I-T-E is, it looks cute on a piece of paper, but how do things process in the brain? It's sound. And the sound is the same whether it's L-I-T-E or L-I-G-H-T. And that was a critical difference. And many companies today continue to even make that difference. I mean, Freshpet dog food, if you ask people, "Do you buy Freshpet?" I say, "Yep, I do. I ordered Farmer's Dog." Because that's a real brand name. You need both. You need a category name, and then you also will benefit from having a real brand name, one that has a capital letter.The Fall of Advertising and the Rise of PRAndrew Mitrak: Over this course, there was, there was "Positioning," there was "The 22 Immutable Laws of Marketing." You co-authored "The 22 Immutable Laws of Branding," so you kind of extended your marketing consultancy beyond just positioning to also doing branding. And then you write "The Fall of Advertising and the Rise of PR," which you were just alluding to, and it has this hilarious pets.com sock puppet deflated on the road.Laura Ries: I mean, if you haven't seen it, people have to see it. It's the best. Yes.Andrew Mitrak: It's great. What was it like kind of expanding the scope of your purview when it came to marketing consulting to, to be in branding, in PR as well? What did that look like for you as a professional?Laura Ries: First of all, we made a lot of friends in PR. I will say that.It is an interesting trajectory in terms of, my father ran an advertising agency, which is Ries Cappiello Colwell, then that was later in the late 70s named to Trout & Ries. But for 30 years, they were an advertising agency. And with the rise of positioning, however, they got attention from many big companies, as a matter of fact, even like Burger King hired them for strategy. And Burger King didn't want this little agency to do advertising for them. But positioning brought in clients for consulting. And so, by the 80s, the business was really half and half. So, they had half traditional advertising agency. They had 200 people in the Manhattan office. And then half of it was these kind of consulting projects. And they were, people are busy, they just do what they do, right? They were running around.But my dad was giving a speech in the 80s on positioning and on focus and all these important things, and the danger of line extension. And some fella in the audience raised his hand, his question was, "Why don't you follow your own advice? You're advertising and consulting." And my dad was like, "Hmm, you're right. You're absolutely right." But it was scary to lose what, half their revenue? I mean, that's incredibly scary, but they did it. So, the decision was, we're going to get out of advertising. We're only going to do what really made us world famous, which was positioning strategy. So, they took two years to shut down, wind down the agency, and he and Jack came in, I think '88, just strategy consultants. They had an office in Greenwich, Connecticut, out outside of the city to kind of make that distinction, and were just consultants. And that was one of the best things he ever did.The second best was, of course, working with me. Which was really fun. But it really was very, very important. So, it was then a decade of being in consulting and not in the ad agency business that we did write the book on PR. And all of the books essentially come from the experience working with clients where noticing what does work, what is happening, the downfall of companies that used massive advertising, most associated with a line extension, right? Companies choosing that route instead of new brands and seeing how things even as Botox was one of our great examples because it was not allowed to be advertised because it was an off-label usage of the drug. They had to use PR. And guess what? It became a multi, hundreds of million dollar product because of the massive amounts of PR and why nobody in America can frown anymore, or anywhere around the world because of Botox. So, it was examples like those. And of course, many others. I mean, Starbucks didn't advertise for 20 years, yet has built one of the best, most known global brands around the world.The funny story about "The Fall of Advertising," the initial name, because remember, a book title should be shocking. Listen, the immutable laws, I mean, sometimes companies can break them and be successful, but the name is shocking. You have to be shocking. So, the original name was "The Death of Advertising" or "The End of Advertising" or "The Death." I think it was “the death.” Yeah, we had a, our Rest in Peace. And we sent it, of course, Rance Crain became a very good friend of my father's. And he sent Rance a cover and a summary. And Rance said, "Al, you can't call it 'The Death of Advertising.' We can't write about it. Our magazine's called 'Advertising Age.' Can you tone it down a little?" And that's where we changed it to be "The Fall of Advertising." And it was literally one of the best moves we made because it, listen, the book didn't say that advertising was going to be over. It says that advertising is best used when a brand is established in the mind. It's necessary to reinforce a position. What should Starbucks do today? Massive advertising is what they should do. And they are making steps in that direction and have turned up the, you got to defend your leadership. Advertising is a defensive mechanism to keep, keep Dunkin' Donuts from getting too much attention, right? You got to hammer in what it is that Starbucks stands for. And that's coffee, and that's baristas, and that's the back to Starbucks strategy is trying to do that, go right back to what they focus on: coffee.Are Marketing “Laws” Breakable?Andrew Mitrak: Something you mentioned there is that you have these 22 immutable laws, but people can break them and still be successful. When you author a book that has these laws, do you get sick of people asking "but what about" type questions?Because of course, they're general principles, general guidance, right in most scenarios. But do you, do you kind of find that coming up a lot whenever you make a statement like this is a law?Laura Ries: Yes! But first of all, marketing is not like physics. Right? In physics, if there's one situation, and the whole law of gravity is gone, right? It doesn't work. In marketing, that's not true. I mean, yes, you can always find some company that violates the rules and still has some success.But what we have found, and where positioning had that very much in the 80s where people would say, "What about the Japanese, Al? What about GE, Al? GE puts their name on everything. Sony puts their name on everything." And at the time, his answer was, "Let's wait and see. I don't think it's long-term, the right strategy." Short-term, line extension can be successful. It's the long-term that it catches up with you.And look at GE, and IBM, and Sears, and Sony that have been undermined by their line extension strategy and the one name on everything strategy, as opposed to, say, Apple. Apple is the company, but they have a different brand name for each category, right? It was the Macintosh, it was the iPad, it was the iPhone. And so, that strategy long-term has been very successful.But also, the key in presentations, where you've got a Q&A at the end, we always try to loop in those ones we know we're going to get asked about. And so, we will talk about the GE strategy and why it may have worked initially, but long-term, and not successful. Again, when a company is 100 years old, it's a little different than you as a startup. You know, you can't be GE. You can't be Amazon. You have to be who you are.The other example we used to get asked about was Virgin and Richard Branson. And we got a great answer for that one. I mean, Richard Branson is a master of PR. He will dress in drag, he will show up in his underwear. He will do anything. Now, if your CEO will do this, well, then go ahead. But also, the numbers don't prove the success. They have not been successful in Virgin Cola, Virgin Vodka, Virgin wedding dresses, many of the crazy line extensions that they've gotten into. That short-term PR bump, long-term has not led to any sales.Andrew Mitrak: Bless them for trying. It's a really entertaining company and enjoyable to watch. But he's...Laura Ries: There's only a few of those kinds of people in the world. And listen, that's the, that's the key of positioning. Do you want to use the strategy that works 95% of the time? Or pin your hopes on being the exception? Pin your hopes on all of your competitors line extending, or your CEO is Richard Branson and able to get in the news every day. I mean, those are few and far between. Much better to have the right positioning, the right name, the right visual, will help you out much better.The Origin of BrandsAndrew Mitrak: You mentioned marketing is not physics, but you did write a book that ties branding to evolution a bit. It's "The Origin of Brands," kind of tying to "The Origin of Species." And can you share about that idea of how brands evolve and what your approach to telling the story and evolution of brands was?Laura Ries: That is a great book. We wanted more of the tree effect on the cover to represent the idea of what Darwin talked about. And that was really the divergence of species, of what he noticed was one species over time became multiple, and those were very different from one another. I mean, and so what we see is, it's not really the divergence of, of brands, but it's the divergence of the categories themselves, leaving opportunity for new brands to establish themselves. So, for example, in computers, what was a computer? Well, initially, that one tree was a mainframe computer, and IBM was the brand that got in the mind and owned the mainframe computer. And IBM said, "Terrific, that's our tree." But the thing happens is that that one category, computers, diverged over time and became mini computers, and then you had the software for computers, and you had personal computers, right? And palm computers. And what did IBM do?Well, they said, "That's our tree. We're going to put our IBM name on everything." Instead, they faced focused competitors that looked at every new branch on that tree and said, "I'm going to be Microsoft and focus on software," right? "I'm going to be Sun and focus on workstations. I'm going to be Dell and focus on personal computers." And those were the big winners. And that's exciting because it means there's always opportunity to beat even a company as big and as powerful as IBM, but not by copying them, but by looking for a new category opportunity.The big thing is that, and you know, funny to say it from someone who's lived their life in branding, people don't care about brands. They don't care. They care about categories.Now, the tricky thing is, they speak in brands. They think Red Bull is a great brand because it represents the energy drink category in the mind. And the energy drink is where the power is, and they were the pioneer of that new category and being the leader, being the pioneer is the most powerful position you can own. Now, there's also the opportunity, again, in that category, to be a number two brand. And sometimes the number two can even overtake the leader. But Monster did just that by being different, right? The 16-ounce can with the, with the name that communicated that, with the visual and the green and the monster truck things and everything else that goes along with it. In many markets, Monster sells more than Red Bull, which is a tremendous feat.Why “Positioning” EnduresAndrew Mitrak: I'm thinking about positioning that your father helped popularize more than 50 years ago. And if I think of all the buzzwords that have kind of come and gone, I could do a whole podcast about a lot of just those because there's so many, so many things that have come and gone. But positioning has this, this staying power. And I'm wondering, what's, what's your take on why that is? It seems like positioning's only gotten more important over the years. Why is that?Laura Ries: Well, I mean, it works. I mean, I think that's part of it. But it's also strategy versus tactics. So, many types of these buzzwords are tactical oriented, and tactics change all the time. I mean, we've seen the introduction in our lifetimes about the internet and social media, and now we have AI. And those are tactically where this is strategic. And it goes down to really just the fundamentals of the mind. And the mind doesn't change. I mean, we are all human. We continue to be human. And while our experiences may have changed, building your brand in the mind is the end goal. And positioning explains how that happens. It explains how to deal with competition, how to position whether you're first in a new category or you're competing against a competitor where you're trying, or you need to start a new category. And it deals with the importance of the brand name and the category name. It takes into effect so many different things. And again, it was first, right? So, it went up at a time where people weren't thinking in that direction. They were thinking about communication as the main emphasis of marketing and primarily using advertising.Positioning took the tactical side out of it and said, "Let's take it back to the fundamentals." And when you're the pioneer, that's a very strong position to have. And so, I think that that's also helped. But it's a great joy and it certainly brought my dad great joy to see that it was impactful. And his greatest hope was to help people. It really wasn't driven by money or fame; it was to work with companies, work with people. He loved to mentor people. People are brands. And that was tremendously important. I mean, listen, it was a very, my mother-in-law hates to hear it, but I did not take my husband's name, which back in my day was very unusual. But Ries was my brand, and I wasn't going to change my name to Brown. Most people don't think of themselves as a brand in that way, and they, they actually try to, "I'm going to just try harder. You know, I'm, I'm Laura Brown, and I should be just as successful." But you know what? I wouldn't have been. What my brand name was incredibly important, and it hasn't impacted psychologically in the mind to introduce someone, to get you through doors. And you should never overlook that. And don't throw away an opportunity to work with my father was, was one of those great opportunities. And so glad I took advantage of it.Advice for Building a Father-Daugher Marketing BusinessAndrew Mitrak: On that topic, on the Ries brand name and your collaboration with your father, I just think it's such a beautiful thing that you went into business with your dad. And we spend so much of our life at work, but really, obviously, the time that matters most is the time we spend with our family. And you just got to spend more of it with your dad, and he got to spend more with you. I have, I have two daughters. I'm expecting my third. Do you have any advice on how to successfully work with a family member or with a, I'd love for them to, I guess the Mitrak marketing family down the line someday, maybe. But, how can I make this happen? Or what's your, what's your advice on that?Laura Ries: Well, obviously, I mean, if you are a parent like, telling your kids to eat their vegetables every day is unlikely to be successful. So, but being a role model, eating your vegetables and showing them the way, making it fun, making it entertaining. And spending time with them. As a busy as a young parent, it's so hard. But that time is so well spent. They will remember it. And I think that's what led me to, to want to work with him, to seeing the time he spent with me helping me on papers or projects, and and finding what it really is. I mean, listen, not every kid is going to be interested in what their parent does. But they, they, so you may find what they're interested in and learn more about it and participate in that way, or it could be that they have a genuine interest in what you do. And bringing them along. I don't know how much they're, my kids didn't really have like, "Take Your Kid to Work Day." I don't, that's, that was most one of my favorite things to do. And I think my parent, my dad would like pull me out of school, or there would be a holiday. And getting to watch your kid or getting to watch your parent. And most kids are they have to be entertained. Well, maybe not.I learned a lot just sitting there bored sometimes at his office and wandering around the halls. And but all of those experiences are, I think, really make a difference. And so, trying to, trying to make that time and just enjoy your kids. I think it, they're such a gift. They are such a gift. And they're each individual and they're each different. But having the time to, to be with them. And for me, what was so interesting, obviously, I spent my whole life with my father, but those first 20 years, I only saw him at night, right? So, he was the dad, and he was traveling, and I saw him in dad mode. But getting to see him every day at work mode was really cool. And that is, was whatever you do, like if you can invite your kids to watch what you do, I think that's really so interesting. It gives them an insight into the world of what it's really like. It's not what the Netflix show tells you it's like. And that's, that's really the opportunity to see and travel is, is incredible.The Strategic Enemy: Coming This FallAndrew Mitrak: "The Strategic Enemy" is your new book. It's slated for release this fall. I've seen a little preview of it. I'm so excited to read the full thing. What are you able to share about it with listeners?Laura Ries: Oh, well, I am super excited. And the story of why I really wanted to write it is that's how "Positioning" was born, right? We talked about it already. I mean, they, they, it's not that they hated creativity, but they said, "We've got to pick an enemy to go up against." And to get your idea in the mind, you have to kind of reposition another idea. So, "Strategic Enemy," I think every brand should think about what that is. It might be a company, it might be a category, it might be another idea. But finding that enemy and positioning against it. And some tips like, "Just say no."Many companies are built on this idea of just saying no. I mean, Salesforce and "no software." Chick-fil-A, right? "Eat mor chikin."I mean, think about the power of saying no and how few companies really do. And don't be your own worst enemy. I mean, Coca-Cola launching Coca-Cola Life? I mean, what does that say about Coke? That it's death? I mean, that's the instant idea most people think of. I mean, don't do that. The line extension truly is the enemy of positioning today. That is what undermines the ability to own a position first and foremost. And listen, it doesn't limit you either, because you can launch your own enemy.I mean, what's the best thing the Gap did? It was launching Old Navy. And ultimately, it competed against them. But Old Navy became bigger and powerful and the major force of the company itself.So, launching new brands, like, for example, Mike's Hard Lemonade. What did they do? They launched White Claw. I mean, just one of the biggest beverage brands billions and billions of dollars. I mean, there are great opportunities, but if you take a moment to say, "Not how, what more can we get into, but is there a new brand that can even potentially become our own enemy?"So, there's lots of great case studies, great ideas and inspiration to think about how you can utilize this, even when it comes to something like a nonprofit, the idea of narrowing the focus is extremely important. And you see the success of, for example, Tunnel to Towers. They're not just trying to help veterans. What do they do? Mortgage-free homes for heroes. You know, why don't, being burdened with the mortgage, not having the home be adaptable and smart. I mean, that's a powerful idea that evokes a visual, it evokes emotion, and it evokes the enemy of, "We can't let our heroes being straddled with mortgages, not being in smart homes." I mean, that lends yourself to having a great conversation.Andrew Mitrak: That's right. So, "The Strategic Enemy," look for it on bookshelves this fall. I'm so excited to read it. Laura, I really enjoyed this conversation so much. As one last question, where can listeners find you online to follow your work?Laura Ries: Well, that is simple. It is ries.com because I bought the URL in 1996 at the dawn of the internet. Working on, I've been updating the website, so looking at all the iterations over the years, it's crazy. And yes, the book, you can pre-order now on Amazon. Super, super excited to just share my passion about positioning and helping companies build better brands for the future.Andrew Mitrak: Great. Laura, thank you so much. I've really enjoyed the conversation.Laura Ries: Absolutely, my pleasure. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 18This week, I'm thrilled to welcome Nino Carvalho, a professor, author, and marketing consultant based in Portugal.I actually discovered Carvalho and his work thanks to a podcast listener who brought him to my attention via a YouTube comment. After connecting with Nino and reading translations of his publications (he primarily writes in Portuguese), he has become an inspiration for me and my exploration into marketing history.Nino stands out as one of the few marketing educators I've encountered who passionately emphasizes the importance of marketing history in his teaching.Our conversation is packed with so much material, it’s like three episodes rolled into one. I'm especially grateful for this conversation; since Nino primarily creates content in his native Portuguese, there aren't many long-form English-language discussions like this one available.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsWe kick things off with Nino's book, Mais Marketing, Menos Guru, which translates to “More Marketing, Less Guru.” We chat about the history of so-called "marketing gurus" and how we should critically consider their role in shaping how people think about and practice marketing.From there, journey through marketing history in the Lusosphere, the Portuguese-speaking world. We start by examining how Portugal's early commercial and trade history laid the groundwork for early forms of business schools. Then, we fast-forward to the 20th century to uncover how marketing education emerged in Brazil during the Cold War and in Portugal following the end of the Estado Novo dictatorship.Throughout our conversation, Nino shares his valuable perspective on how learning marketing history can enhance a marketer's skills and strategic abilities. He even offers me a few tips on how to make marketing history more engaging for marketing students. (Fingers crossed that I can put these to work!)This episode is a bit longer than usual, but I'm sure you'll find it interesting throughout. I certainly did.So, without further ado, here's my conversation with Nino Carvalho.Note - I use an AI tool to transcribe the audio of my conversations to text. I check the output but it’s possible there are mistakes I missed. I have lightly edited parts of this transcript for clarity.The Spark: What Inspired Nino to Teach Marketing Through a Historical LensAndrew Mitrak: Nino Carvalho, welcome to A History of Marketing.Nino Carvalho: Thank you very much, Andrew. It's a pleasure to be here.Andrew Mitrak: I'm so excited for this conversation. We have a lot to cover. I want to start with your book, which is in Portuguese, Mais Marketing, Menos Guru, or More Marketing, Less Guru. I love the title of this book. This is one of the few popular marketing books I've come across that talks about the importance of marketing history. What first ignited your passion for marketing history?Nino Carvalho: Well, I think it was like a spark that suddenly started. It sounds like a very emotional thing. I believe I was always curious about the history of things in general. When I started working with marketing and studying marketing, especially in the digital field where many new professionals and their digital gurus took things from the past and kind of reinvented the wheel themselves to have a new package and try to sell that to newbies and people who are just starting to study digital. So that, I think, took me on a journey to go deeper into what those concepts, those theories, or the practices they were talking about were all about, because it didn't sound quite reliable. So this was like a very instrumental motivation.However, during the search for those things and looking for the truth or the beginning, the origins of some concepts, I think we start discovering a lot of new things about marketing. Because marketing is so connected to society, you also start learning about society in general, other countries' histories, other cultures' histories. So, I think it's something that will either strike you straight away or not because it's very strong. And I think this motivates us to keep learning more about the past of our discipline. Of course, I also noticed that the more I learned about the past, the better my classes and my professional work as a consultant were as well. So, it was like finding my own personal Holy Grail, in a way.Defining the Guru: Marketer vs. Self-PromoterAndrew Mitrak: So we're going to talk a lot more about marketing history and everything you found, including your Holy Grail. But first, going back to the title of the book. The title is More Marketing, Less Guru. I think we've all seen marketing gurus on the internet and whatnot, but I'm wondering how you would distinguish a marketer from a guru.Nino Carvalho: Yeah, this is interesting because by studying our discipline, I found out that there will be different interpretations. For instance, what we in Portugal or in Brazil would understand about a guru is different from how North Americans normally would. So you say that Kotler is a very important marketing guru, and this is a positive thing. It's a positive adjective. When you use that in our markets, probably even in Europe, I think, but surely in Brazil and in Portugal, this has a more negative connotation.So, there will be important, positively speaking, marketing gurus such as Kotler, Peter Drucker, and so on. But I would say that the negative side of the word refers to those professionals who have a lot of fireworks, and everything seems so easy and magical. They try to give very simple solutions to very complex things. This is very captivating because, of course, people love to have simple solutions to complex issues in their lives. So, when I mention gurus, it's that negative aspect of people who have their own dogmas. They are mostly very superficial, and they are quite ignorant, to be honest, about things related to marketing and management, and so on. So that's the kind of professional I want to put on one side, and other gurus such as Kotler or very studious and hardworking professionals on the other side.Andrew Mitrak: That's right. Yeah, I understood, even though I'm an English speaker, what was meant by the translation. I think this idea of somebody who is almost self-aggrandizing or promoting themselves more than they are promoting the substance of marketing. And then it's almost more about this very high-level view where they appear to be smart, and their posts on LinkedIn and Twitter and all these things make them appear to be very concise and actionable. But then you look into the details, and you're like, that doesn't really make sense. That doesn't really pass muster.The Dangers of Oversimplifying Marketing AdviceNino Carvalho: One of the main things is that those gurus try to sell one-size-fits-all solutions. That's pretty much against marketing because we talk about how important it is for us to prioritize, segment, and make very data-driven decisions, and to differentiate ourselves and our companies from competitors. So differentiation is key. On the other side, those people think that a one-size-fits-all solution will fit everyone.There are other issues as well. For instance, perhaps a problem that you, Andrew, solved in your own professional environment in the US with the companies you're used to working with, might serve well for similar contingencies. However, once you export it to Europe or to small companies even in the US, I'm not so sure. So, we need to take that into consideration, especially now when you see a very turbulent, very unstable, and unpredictable environment out there.Early Marketing Gurus: From Claude Hopkins to TodayAndrew Mitrak: I want to ask about the history of marketing gurus. When did they first emerge? Have they always existed as long as marketing, advertising, and sales have existed? Has this type of person always been around, or did they emerge later? Do you have any favorite examples of early marketing gurus?Nino Carvalho: So, looking at those negative examples, I honestly believe that they were always there, throughout history. I was never able to actually find out the primary source. But you have, in advertisement and sales, very old gurus in our history. For instance, especially in the beginnings of the last century, because of the connection with advertisement, sales, and those manuals that people were writing at almost industrial speed, just producing things, and everyone had their own manual, and so on. So, you do have quite a lot of examples back then.For instance, one of the guys that, up until today, is used as a reference by newer gurus is Claude Hopkins. Claude Hopkins, one of the things that we should be thanking him very honestly for, is because of so many bad things he did with marketing and with a company he had with an associate, a partner. They sold medicine. So, they sold miraculous medicines that cured everything. Because of that, there was a journalist in the US who started to dig into that story of a miraculous medicine and, of course, found out that it was a hoax; people were dying. This investigative, journalistic work was the starting point for a number of discussions in the US government that turned out to be the first regulatory aspects of communicating and selling to the health and medicine industry. So, this is a very strong example.Note: View my conversation with Mark Tungate for more context on this.Andrew Mitrak: I want to share more for listeners about who Claude Hopkins is because he's a great first example. He wrote this book called Scientific Advertising, and it's still somewhat widely regarded. The medicines, the 'miraculous'—I love that word you're using—often we might call them snake oil salesmen, or these patent medicines that are really of no value to anybody. These magical elixirs. We can almost laugh about them today, but that was really dark. It's selling people hope and cures, and it's doing nothing for them, for their illnesses. Medicine, in general, has come a long way, but this certainly wasn't helping. So, it's interesting to me that Claude Hopkins is somebody you cite, and he dresses himself up as a scientist. He calls it Scientific Advertising, which is almost kind of a red flag when you look at who might be a guru.Nino Carvalho: Yeah, and honestly, Andrew, they are still using this "science" sort of cover up until today. A couple of days ago, this weekend, I was browsing and talking to my students, and there was a new guru selling a "social media scientist" role, which was for someone to be prepared to post and edit copy, like those very basic operational things, calling them a scientist.Hopkins and Ogilvy: Gurus with Important ContributionsNino Carvalho: However, most of those gurus, such as Claude Hopkins, and I would also mention David Ogilvy—this could be a surprise to most people—but those guys had some important contributions. Claude Hopkins wrote about advertisement techniques that we still use today, such as A/B testing, using coupons to spread the word, writing different regular mail (today we use email or WhatsApp messages, whatever). So, they had nice initiatives. However, there are a lot of things that we should be questioning as well. David Ogilvy, for instance, again, had a number of positive examples. However, he, and I think advertisement agencies in general, tend to have this movement of taking an important yet complex concept and trying to package it in a way that is very easy for their own customers to consume, which sometimes are big companies. So things spread very fast. David Ogilvy, for instance, took a very important academic paper from the 50s, 1955, where two guys were proposing their view of what would be, years after that, the branding area. So they started to discuss branding. David Ogilvy read that in the Harvard Business Review paper, kind of gave it his own packaging, and then sold this to companies, professional markets. Up until today, we have this kind of war between branding and marketing.So, I think that we should learn more about those, let's say, "dark side of the force" gurus, because, yes, they may have some good contributions for us to think about and to study. But we cannot forget some of the damage that they will kind of leave, those scars, in our area. So it's important for us to know and to know how to balance.Andrew Mitrak: That's a really good point. I personally have been inspired by David Ogilvy. His were like some of the first books I read that were kind of historical, in that they were written more than 40 years ago; they covered a time well before digital marketing. And there was a lot of good advice, or there's a lot of—he's very witty, very memorable. But there are these sort of oversimplifications. Like he says, "Always print on a white background with dark text and never invert the two." And, well, is that really true all the time? I've had a client in the past when I was consulting who had read a David Ogilvy book, and he always insisted on his logo being really large on everything on his website and every little thing. It's like, "Oh, David Ogilvy says my logo has to be large." I don't even know if Ogilvy actually said that, but he's listened to this guru and he accepts it as a truism with no context and no nuance, which is kind of a dangerous thing to do. You want to take the good, but also make sure that, hey, it doesn't necessarily apply to every single scenario.Napoleon Hill & the "Think and Grow Rich" ParadoxNino Carvalho: No, and I think that's the big issue because those gurus, some of them, like Claude Hopkins and Ogilvy, still have millions of followers and readers and believers. So, they are very influential. People will continue, such as Napoleon Hill. Napoleon Hill is one of the biggest hoaxes in the whole history of management or whatever you can think about. Even Peter Drucker. Peter Drucker has very important, several important contributions to marketing. I think Peter Drucker is one of the guys responsible for popularizing marketing, making it more popular amongst smaller companies. So, this is very important to marketing. However, he also took those important and perhaps sometimes complex theories in marketing and management, and even his own consultants worked with other companies. The solutions they proposed to huge companies, he said, "Okay, so now you just follow those three steps that I did with GM or IBM, and you can do the same in your laundry like in the corner here in your neighborhood." So, we need to take this very carefully.Andrew Mitrak: That's right. I think what's interesting also is you mentioned Napoleon Hill, and he wrote this book called Think and Grow Rich. And of course, that's also another red flag. Think and Grow Rich sounds like you're promising me a lot for very little effort. But I was listening to this interview with—are you familiar with Banana Republic? You'll see it in malls and stuff. I was listening to an interview with Max Ziegler, who founded Banana Republic, and I was shocked to hear he founded it because he was directly inspired by Napoleon Hill. That was his Bible that he followed. And I'm like, "Oh, Napoleon Hill, he always kind of seems like a guru," and I didn't ever really think to take him that seriously. But here's this person who founded this really large company who was inspired by him. So, it's this weird tension that gurus could be a little dangerous, they could be simplistic, they can lack nuance, they can have all these flaws, but they can also still have good to them. They can inspire people to do things. I guess you kind of have to take a balanced view of them and take them in context, that they're not either all good or all bad. They can have good things, and they can also have things that are overly simplistic as well.Nino Carvalho: I think there are two things. I fully agree with you. One thing is, sometimes it could be more difficult for, let's say, newbies in marketing to kind of separate what is what. So, this is something we should be paying attention to. The other thing is, more recently, those gurus, because of digital marketing, have access to educate, so they give their courses and hypnotic content to millions and millions of people. This is also an issue because when you have this power, such as the internet, to talk to and to influence so many people, you should be thinking very carefully about your own responsibility as an educator. So, if I just say, "Listen, I have this launch formula, and you just follow these steps, it doesn't matter even if you have a product or even an idea, just jump in, and I'll teach you and I'll guide you, and you will have good results." This is dangerous. So, I think we should be very careful, especially with this educational aspect of it. This is, at least in Brazil, I can say that because of the deficit, the difference in educational level, you cannot expect that the majority of the population, by hearing those gurus, will have the means to make this contrast between what makes sense and what is completely nonsense.Connecting Past to Present: Making Marketing History TangibleAndrew Mitrak: This is a good transition because you're talking about the responsibility of marketing educators, and you are a marketing educator. You are a professor, an author, a speaker. And also, as you're teaching people, you're also teaching about marketing history. When you teach marketing history and introduce—you're teaching a marketing class and you're including historical examples—how far back in history do you go? What are the earliest dates? What are the earliest milestones and historical artifacts that you reference when you teach?Nino Carvalho: This will depend. It will depend because I like, even if it's briefly, to go back to the first exchanges, like seven or eight thousand years ago. Just to talk about how, if you put marketing under a microscope, probably the smallest particle of our discipline will be "exchange." Then, with this, I try to bring in how marketing is connected to commerce. Therefore, the more cities and cultures develop and evolve, commerce also evolved with them, and then marketing was there as well.But I try to put that in a very brief space, bringing in some curiosities, such as talking about how you can see the same theories behind customer behavior that you see in major sports events today. You can also see those references in gladiators' games in ancient Greece, like organized groups cheering for different opponents in that fight or in that battle. You could have merchandising just like today, and you also had it in the gladiators' games several thousand years ago. So, I also make those bridges to kind of engage them via those curiosities. However, I think it becomes more tangible to them when you bring examples from the past and show them how those things are so important nowadays.“Marketing” in Ancient MarketplacesFor instance, in very old markets, such as in Greece or in old Rome, in ancient Rome, there was a group of merchants who got together in an organized way to complain to the local government. They said, "Listen, we have a huge market here, people from all over the known world come here to exchange, to sell, to buy. But we are selling our stuff, and we have people here dealing with meat. So they are killing pigs, they are chopping the heads off chickens, everything very close to where I sell my clothes or my jewelry." So, they made a movement for these people to go away to a different part of the city, to have their markets, the meat markets, separated because of the aspect of the smell, of the whole atmosphere. So, we work today with sensory marketing, for instance, concerning sounds, smell. Those bridges also make a difference. And I also think it's interesting to students when, of course, they connect their own history to our marketing history. So in our case, Brazil and Portugal's history, and also always making this kind of link with North American marketing history because it's the hegemonic view. It's important for us to have that in context so we can understand better how marketing works.Andrew Mitrak: I love this example of the merchants who organized in ancient Greece, ancient Rome, a very long time ago, to change where they sell. I think of how you could tie that to a current example; it sounds a lot like if there's a social media platform that has hate speech or violent images or things, you don't want to advertise your product right next to that. That could be—you don't want your product associated with that. It kind of strikes me as somewhat similar, where you don't want to be selling jewelry or textiles where it smells like meat or people are seeing animal blood, and it's upsetting. So it seems like there's just a connection between those two.The Etymology and Evolution of the Word "Marketing" ItselfAndrew Mitrak: In our email exchange prior to this, you shared a marketing manual that dates from 1767, and it uses "marketing" in the context of a shopper visiting a market to purchase things. Your book also highlights that the first use of, quote, "marketing" dates all the way back to 1561. So, when you teach, do you teach about the evolution of the word "marketing" itself, and how do you tend to describe the evolution of the word "marketing"?Nino Carvalho: This is something that I think is very important because, even today, I believe one of the main things that prevents us from developing, from evolving in our own discipline—either in the academic way or in the practical environment, the market—is that there's no consensus about what marketing is. So, you will see, you hear people in the streets say that marketing is advertisement, sales—those are very common. But sometimes even marketing is kind of a lie. So, "Nino, do you believe in Andrew, or are the things he's saying actually true, or is it just marketing?" "I know he's just very good at marketing." So, he's a guy who knows how to influence. This is an issue. So, I think it's important for us to understand that there's a history behind it.However, if you go to people who write about marketing online, several of them do say that marketing is a verb because you have the "ing" part, the suffix "ing," behind it. So it's a verb, it's continuous, so it represents movement, and so on. Interestingly enough, those people are repeating something that I see where they are coming from, but it's not a verb. It was a verb in the past. So, yes, "marketing" in 1561—this is a reference from the Oxford Dictionary, so that's the one I use—they say that a lawyer in the UK, when translating a piece (and I never found whatever piece this was) from French, he chose to write "marketing" translating something, and I never found out what this "something" was.However, marketing for centuries was indeed—it has the meaning of buying and selling in a market. That was why it was a verb. And you can see, I sent you a couple, you can see some very old books from the 1800s, perhaps even a bit older, using the word "marketing" just trying to make it sound like "buying the marketing," "selling on the marketing," or "preparing your product to be purchased" or "to sell your product," and so on. This continued until the beginning of the last century, so the 1900s, when this guy, one of our grandfathers in marketing—so Kotler is our father, or one of the fathers, we had, we have grandfathers.So, Ralph Starr Butler, probably in 1911—and this is probably because I don't think anyone, and there are people looking for this Holy Grail again, so like the very first use of the word "marketing" as a noun. So, Ralph Starr Butler, he mentioned in a letter to another historian, a marketing historian, that he needed to conceive a course for the University of Wisconsin, a course that mixed promotion, sales, distribution, and he was trying to figure out a title for this course. Then "marketing" came to his mind, and then he started using "marketing" since then. In 1914, he eventually published a book, it was like a textbook used in correspondence courses in the US, and probably he is the father who baptized our word as a substantive.However, the concept continued to change. We had some very important changes in the word "marketing," such as after we have "marketing" as a noun in the beginning of the last century, in the 60s, especially in 1960, we were presented with the Four Ps, the marketing mix. So, you had since then a different understanding of marketing. A few years later, 1969, with "broadening the concept of marketing," again, you broadened the concept of marketing. Then, services marketing, relationship marketing, branding, so, digital marketing nowadays. We keep changing the concept, it keeps evolving, which is great. But it's important for us to be very—I would say that as a professor, not with my clients in terms of as a consultant, but as a professor, I am very orthodox about those concepts because we, at least we who are marketing professionals or marketing students or professors, we need to be very demanding about what those words really mean. Because this, if in our own midst, in our own métier, we do not have our own agreement about those concepts, this prevents us from developing. So I think this is an issue.Andrew Mitrak: I think this is so important because as marketing professionals, we need to be very specific about our language. Any campaign we're doing, any strategy we're writing, you need to be very precise with your language. And if you're not even precise about the word "marketing" itself, it just seems like we kind of need to follow our own instructions there. So, thanks for that history.Marketing in the Lusosphere: Portugal's Commercial FoundationsAndrew Mitrak: I want to shift to something you mentioned earlier, which is the history of Brazilian and Portuguese marketing. You are Brazilian, and you primarily educate in the Portuguese language. This is a topic that I just haven't discussed on this podcast very much yet, and I'm grateful that you're here so we can discuss how marketing evolved in the Lusosphere. When you were educating marketers, either in Brazil or in Portugal, where do you typically begin as far as connections to their own marketing history?Nino Carvalho: This is very interesting, Andrew, because marketing, as you know, how it was kind of "born" in different countries or markets will differ. So, we use North American marketing because of the importance it has throughout not only the marketing world but the business world in general, in the whole world, of course. But it's interesting for us to see those particularities in different countries. So, if I want to really go to the origins of marketing in the Lusosphere, of course, I would start with Portugal, as Brazil was a colony, a former colony of Portugal.This actually, Andrew, was the reason I decided to dedicate and kind of invest myself in studying the history of marketing. It was the following premise: I thought, okay, so I'm learning by reading about the history of marketing in the US, in the UK, for instance, that marketing is kind of one developed stage in the commercial history of that country. So commerce will start to evolve, evolve, evolve. At some point, marketing will be able to appear as a science, and so on. So, if that was right, there should be some history in Portugal because of the commercial history that Portugal had several centuries ago—Portugal, the UK, the Netherlands, Spain, France, and so on. So, that was my motivation. And I was right. I was right, but I never would have been able to guess the whole history.The thing is, it's very interesting because in the mid-1700s, so in the 18th century, Portugal was kind of feeling they were losing their global power. You had, in the UK, several discussions about the future of the economy, and Adam Smith in 1776 would publish the milestone of our current liberal economy. Portugal was kind of feeling aside, left behind. And they were, a few years before that, a huge global potency in terms of commerce and discoveries, and so on. Because of that, the king, King José, what he did back then was to start exchanging some ideas with a, let's say, a sort of ambassador, a Portuguese ambassador in the UK. This guy was looking at, probably in the pubs, people drinking their whiskeys and talking about Adam Smith, the future of the economy, and so on. You had the commercial class with more money, so buying political power, getting closer to the noble people, to the church as well.So, this guy, his name was Sebastião. Sebastião wrote to the king here in Portugal saying, "Listen, King," like a WhatsApp message, "Listen, King, that concerned me. Something like that is scary. Things here, they are not looking great. We need to think about having our own managers and commercial cast as well because this will change. Mercantilism is going down the drain. We need to move on to the future of times," and so on. So, King José invited Sebastião to come back to Portugal and titled him. He gave him the title of Marquês, Marquis probably in English, isn't it? So, he was a very important figure in Portuguese history. Marquês de Pombal is his name. He was a dictator, to be honest, Marquês de Pombal, but he invested a lot in kind of revolutionizing the educational system in Portugal. With that, they created, Marquês de Pombal and King José, they created the first commercial school, the first public commercial school in the world. So, this was very important in marketing. They, like, students learned what was important for marketers back then, such as the difference of laws in different countries, weights, different measures, the ways of measuring and weighting things, exchange, how to write commercial letters, and so on. So, that's the very origin of marketing in the Lusosphere.Andrew Mitrak: Was this called the Aula do Comércio?Nino Carvalho: Aula do Comércio, yeah. It's like, in the sense, if I were to translate it, it's like "Commerce School." That was the main thing. It was a technical school. It's not a university, but it taught some profession, some trade. People learned some trade.Andrew Mitrak: Your book also, I think, cited that they taught things like bookkeeping, accounting, and double entry, which are foundational to having businesses today. And here it was, being taught to the commercial class back in the 1750s.Nino Carvalho: Yeah, especially Andrew, because up until then, this commercial knowledge was pretty much masters and apprentices, like the medieval guilds several years before. So, they kind of made this in a more formal, more structured way. So you start to have more commercial managers. And the students, they would become managers of the Portuguese companies. That was the main goal: to prepare them to manage Portuguese and, of course, private commerces and companies back then.Andrew Mitrak: Aula do Comércio, seemingly a lot of things like a business school. Business schools teach things like accounting as well. And all the things to make you a business manager were established in Lisbon as the first state-sponsored school. So it just really seems like a very important milestone that came out of Portugal.Nino Carvalho: You are very right. And actually, if you look at the genealogy of Aula do Comércio, they kept alive, they changed their names, then they merged with other schools. But they are still alive today. The name of the school nowadays is ISEG, which is an acronym for Institute, like Superior Institute of Economy and Management, something like that. And they teach marketing and management. Aula do Comércio also exported this educational system to the colony in Brazil. So, Aula do Comércio was present in three different states and cities in Brazil, and of course, was also very important to fast-track the whole background for commercial managers and business people in Brazil as well. So, this was, of course, 300 years ago, almost.So, jumping a bit more into the future, more recently, so I think like in the 30s, Portugal had a dictatorship here, a military dictatorship. One of the things they did was to isolate Portugal from other countries, especially the US. There were some countries that they liked less, so the US, UK. So they were very isolated. It was forbidden in the country for several years, from the 30s to the 70s, it was forbidden, for instance, even to use foreign words. So, you couldn't even write or say "marketing" anywhere. This was, of course, very damaging to the development of marketing and the whole market scenario, the ecosystem here in Portugal. So, only once the dictatorship came to an end in 1974, so a few dozen years ago, what they did was they started to gradually, very slowly, be more open to business in general, the country. So in '86, Portugal joined the European community, and this helped a lot. So, more international companies, and with more international companies, you need to have better professionals in the market, and so on. So, only in 1984, so pretty much 40 years ago, there was the first actual marketing course here in Portugal. The name of the school is IPAM, which is the Marketing Management Portuguese Institute. I give classes there. I'm a professor there, and of course, I'm very happy to teach and to tell students that history. I think they would be proud. So, they were the first course here in Portugal. And this was 30 years after marketing started in Brazil. And of course, if you like, I also can talk a bit about the Brazilian side of the history.Fernando Pessoa: Poet, Writer, and …Marketer?Andrew Mitrak: Yes, we will. Let's jump to Brazil in just a moment. But one other individual I wanted to highlight is that your book has a chapter on Fernando Pessoa. I read a translation of this book, and it translated to Poet, Writer, and …Marketer?. Could you share who Fernando Pessoa was for listeners who aren't familiar with him and what his relationship was to marketing in Portugal?Nino Carvalho: Fernando Pessoa, probably—of course, I'm not an expert in this—but probably is the most important and well-known Portuguese, specifically from Portugal in this case, but probably in the Portuguese language, writer and poet. So, he's actually extremely important, and he wrote using a number of different names. So, you see Fernando Pessoa in several different personalities writing poems and texts, and so on. Fernando Pessoa was educated in a technical school as well, a technical commerce school in South Africa, in the late 19th century and the beginning of the last century. So, when he was a young person, his high school was pretty much a commerce school in South Africa. South Africa was a colony of the UK. So, he knew, of course, English probably as well as his Portuguese, I would say so. And probably he had contact with English commercial literature, which probably also came from the US.So, I believe in this link, and this is something that I'm trying to kind of dig into much further with a colleague who is a history of arts professor, because I believe that Fernando Pessoa had contact with the sales and advertisement literature in the US in the beginning of the last century, such as Claude Hopkins. Because when he got back to Portugal, he had to work in an accounting office to earn his bread every month. Just to kind of add up to his salary, he did some kind of freelancer jobs, such as producing advertisements and slogans for companies here in Portugal. So, he did the first ever slogan for Coca-Cola in Portugal. I wouldn't be able to translate it, but it was pretty much, "At first, it's strange, but then you get in love with that." Something, just to say that the taste was a bit different—soft drink in the late 20s, 1920s—but then you get kind of crazy about it. So, this was the first slogan for Coca-Cola. He wrote a lot about commerce, management, and the practice of marketing in the 20s and the 30s as well. This was very common both in Portugal and in Brazil. Several well-renowned writers and poets today, they had to do those freelancer jobs as advertising or salespersons just to pay their bills. So, you see a number of cases of very famous writers who also produced several slogans and advertising pieces back then.Andrew Mitrak: That's an amazing story. I'm always interested to see where marketing and advertisements can also support the arts. You see a lot of film directors and such who got their start doing commercials. Here you have a renowned, beloved poet and author who also was supported by commercial activities like marketing and Coca-Cola advertisements.The Birth of Marketing Education in Brazil and PortugalSo, moving to Brazil, marketing came to Portugal in 1984. I was looking at your YouTube channel, and you had a commemoration of 70 years of marketing in Brazil, starting in 1954. Your video was published last year, so 70 years, now 71 years of marketing education in Brazil. My understanding is this involved a cultural exchange between professors in Brazil who visited Michigan State in the US, and then American professors from Michigan going and visiting São Paulo. Can you tell the story of this exchange, why this happened, and how it brought marketing to Brazil?Nino Carvalho: This is very interesting because marketing started formally in Brazil because of, let's say, one of the consequences of World War II. After the World War, as you know, we had the Cold War. Both of those two main groups of influence, the US and the Soviet Union, were trying to influence more countries to spread their ideological views after the war. This was known as the Cold War, as you know.Brazil kind of benefited after President Truman in the US wrote a document where they would transfer technology, investments, knowledge, know-how, and so on, to countries in Latin America, just to spread this influence. One of the countries was Brazil. In the 50s, Brazil started to join forces with the US on a number of different fronts. One of them was in the Brazilian University, the name is Fundação Getúlio Vargas. This was, they just created that foundation, that also they were looking at developing management, bringing companies to Brazil, kind of trying to stimulate industrialization, and so on, with the help of US investments.So, as a part of a number of initiatives during this period, some professors in this Fundação Getúlio Vargas went to the US, to Michigan State University, to learn more about management, about marketing, sales, and of course, then to bring this knowledge here to Brazil and to spread it throughout Brazilian students and professionals, and so on. So, they did that. They went to Michigan State University. They also brought back a number of American professors who would give classes and courses in Brazil. Actually, the library at this foundation in Brazil, the library up until today has the name of one of the professors who came from Michigan State University and then was kind of, carries the name of the library now. So, they made that exchange. So, in 1954, there was the first formal marketing course in Brazil. And so the story goes.What I'm trying to, it's interesting because more recently, I saw there is a very kind of timid dispute between another school here in Brazil with a potential history that they were the first, several years before. So I'm trying to dig into that. However, what we do know so far, in terms of clear documents, and this is the hegemonic view here in Brazil, is 1954 with Getúlio Vargas and Michigan State University. Since then, Andrew, since the 50s, I would say that our way in Brazil, especially, of doing marketing, doing digital marketing as well, is very much influenced by North American professionals, professors, culture, and so on. This is, of course, we have all the pros and cons of that, but the influence clearly is there.Andrew Mitrak: It's interesting. You mentioned how there's another school that says, "Hey, we were first." This is something that's so funny about history: you have to be cautious saying anything's the first because then there's always something that comes before it. Also, with something like marketing that can, as we were talking about, the definition of marketing and what's included and what's not, it's cool like, okay, you can see arguments for it being even earlier. So that's interesting.One person, one name that comes up in your book is Raimar Richers. Could you share a bit about who Raimar Richers was and what his contributions were to marketing in Brazil?Nino Carvalho: Raimar Richers is actually someone, he's a guy from Switzerland. He's a Swiss citizen, Swiss/Brazilian. He's important because he was the Brazilian professor kind of in charge of this pioneer group from the Fundação, the foundation that I was mentioning to you, Getúlio Vargas, that went to the US and brought back marketing and management techniques. So, he was the leader of that movement. He also was the first professor who mentored, let's say, the first masters and doctors in marketing in Brazil. He was one of the supervisors, let's say. So, he was also important in sharing and just rolling out his knowledge in this sense.He made a book trying to propose, and this was quite interesting, it never went anywhere, but it was very interesting. He tried to propose a kind of Brazilian version of the Four Ps. He called it the Four As. That was interesting because this local flavor is important in marketing. Of course, however, it's very difficult to compete with and replace "marketing mix." So, and it's interesting, Andrew, because this won't make sense to your audience because it's a very local Brazilian thing. But there's another curious thing about Raimar Richers: probably his brother is much more famous in Brazil. Because his brother is the owner, or was the owner (they both are deceased), was the owner of the main translators company for American movies in Brazil. So, of course, we have here thousands and tons of American movies and TV shows, and so on. And they translated. So, when you said like "Brazilian translation," then they say the name of Herbert Richers, which was his brother. So, everyone in Brazil knows Herbert Richers, but doesn't know Raimar Richers.Bridging Marketing Practices in the Lusosphere and AnglosphereAndrew Mitrak: So, thanks for this tour of the history of Portugal and Brazil. We only spent 20 minutes or so on it, but I'm sure we could spend hours just looking more, looking just into this topic. If you were to look at the Lusosphere, marketing in the Lusosphere, and its relation to the rest of the world, how do you see the work of Portuguese and Brazilian marketers influencing marketing beyond the Lusosphere? Or do you feel like it's more the other way, of marketers in North America or in the English-speaking world sort of influencing Portuguese-speaking marketers? How do you see the relationship between the two and the impact on marketing more broadly?Nino Carvalho: This is a great question for a number of reasons. On one hand, I believe that it's very recent, in a number of areas, this movement of trying to look at local histories via a different lens than the hegemonic view. So, we are starting really, very, very recently in Brazil and Portugal to try to see what is the Brazilian management marketing history, the actual Brazilian or the actual Portuguese, the Portuguese people, the Brazilian people. We do practice marketing here. It's not only via the US, or we do have influence from the US, but also from Europe because of our past, our colony past. So, this is a movement that's very recent. I think in several countries.So, this is one aspect. The other aspect is, I think that Brazilian and Portuguese markets, they are, they were, and they still are very different. In Portugal, Andrew, just for you to know, there are 10 million, perhaps 11 million inhabitants. In Brazil, we have 222 million. So, that difference is huge, not only in the numbers, but when you have 200 million people in your country, then you have more companies because they have a huge market to sell. You have more money circulating in the economy. Brazil is a hub for the entire Latin America and also a hub for other countries as well. And because you have so much money circulating in the economy, you have great universities, multinational companies, great advertisement agencies. So, it's like a very positive cycle that you have over there.In Portugal, you have only 10 million people. You have a very recent democracy, even more recent than in Brazil. You have a huge influence from Europe because they are one of the smallest countries in the European Union. So, you have different influences, and I think that those have pros and cons, as in anything else. However, when you look at the Lusosphere in Africa, such as Angola, Mozambique, Cape Verde, you'll be able to see that they have much more educational influence, even in marketing, with Portugal than from the US or Brazil. So, when they started their universities, even because they were colonies as well, Portugal went there with universities and courses. So, the first marketing course, for instance, in Cape Verde, and I have students from there, they graduated only in 1997. So it's very recent. And it was a local university in partnership with a Portuguese university.So, I think that this influence is starting to change a bit. But the reality is, in our universities, both in Brazil and in Portugal, students will learn marketing, 90% or more, is still North American marketing. This is difficult to kind of challenge. And I don't think that we should kind of just deny it. This is completely nonsense. But we should kind of incorporate a UK view because they also have a lot to contribute, even in the beginnings of marketing. The Nordic view, services marketing, relationship marketing, and so on. The local flavor. So, a broader view would be richer for all of us. But currently, I think that if we do have a Brazilian or Portuguese professor that influences the market outside the Lusosphere, in my mind, I can only remember the Portuguese Luís Moutinho. He wrote the forewords in my newest book. He was the first doctor in marketing in Portugal. Of course, he's retired at this point, but he has a lot of books with Philip Kotler, a lot of books, very new things such as neuromarketing. However, he was a professor in the Suffolk University in Scotland for 40 years. So it's a Portuguese outside our environment.But things are changing. And I think also, to be honest, that American intellectuals, such as Philip Kotler, they are, I believe, or some of them, they are incentivizing or stimulating more people from other countries and other backgrounds to contribute with marketing kind of discussion in general. So, they are also helping this movement of looking outside the US to have a more diverse view and enrich our discipline. Kotler is doing that brilliantly the last few years. And he's not the only one. So I think that new things are coming, and this is very important to everyone, I believe.Making Marketing History Engaging for Today's MarketersAndrew Mitrak: I want to come back to the idea of the value of marketing history. You and I both clearly see the value of it. And kind of coming back to this idea of students who may not see the value, or may want to just learn about marketing today, or be a little more myopic, or "what's in it for me?" If you were to say, what is the selfish reason for marketers to learn marketing history? How can learning marketing history make someone a better marketer or more effective at their jobs? What would you say to that? Does anything come to mind?Nino Carvalho: I would say, I believe, that in a short answer, to learn the history of marketing protects you as a professional and gives you a competitive advantage. Of course, there will be explanations for that. But I think the bottom line is, the more you learn about the history of our discipline in this broader way, as we are discussing here—just look at the local context, a bit of history in general—this will protect you from so much nonsense, lies, fakes that are happening nowadays. We need to be more critical. This historical view helps us to be, to question things and to be a bit more annoying in a way that, "No, listen, Andrew, I'm not buying that. I'll look for it." So, I think this is very positive.And also, as a competitive differential, Andrew, because I believe that as soon as artificial intelligence surpasses our human intelligence—and I think this is right around the corner, it has already replaced very operational functions such as producing content, editing videos, and so on—the more we move that way, the more important it will be for professionals to develop a more critical, analytical, and holistic view. This will only be possible with a multidisciplinary background. I think that history is important to kind of give some pillars to help us build stronger, more reliable knowledge and expertise from there. So I think that's pretty much it: protect us and give us a competitive differential, an advantage.Making Marketing History Engaging for Today's MarketersAndrew Mitrak: Those are both great examples. If you were to share some tips with me on how to make marketing history more appealing to marketers—I guess this is a very selfish question. I'm trying to share this podcast and help others be more interested in marketing history. What tips would you have?Nino Carvalho: I think that one of the things that will capture, in my view, first of all, people's attention—and this is, of course, important if you look at the AIDA model, isn't it? Attention, interest, desire—is to capture them via the curiosity aspects. Such as the history of Spam, that food from the UK, which is quite interesting. In my own reality here, looking at the commercial aspect of Portugal being a huge potency worldwide, and so on. These things about old advertisement gurus such as Claude Hopkins, David Ogilvy. So I think those curiosities usually capture the users', the students' attention.The other thing is for us to show them, and this is also very effective, that, okay, so you are talking about how important it is for us today to have a funnel here in our marketing team. Right. So, let's have a look at how and where those funnels started appearing in our discipline. So taking those things and bringing them back to the past. I think this is very important as well.I believe that because, Andrew, we can see that out there, in the whole world, those discussions about truth, lie, what actually happened in history, because this has become more blurred, more and more, isn't it, with different narratives, and so on. And also discussions about DEI—I think it's the same, DEI, diversity, equity, and inclusion in the US is the same. So, DEI, these discussions, diversity, for us to be a more plural society. Those discussions, some people are very averse to those ideas. However, I think that to learn in a broader way about history will help us to make those connections. Marketing, I also think this is important to show students, marketing is a very active and important agent in society in making those changes—bad changes, good changes. Marketing helps tell what is, how your look is accepted or not, what is a beautiful woman, what is the role of a man, what's. So those things, marketing influences that a lot.So, I believe that because of that, we as marketers have kind of a superpower. And as Uncle Ben told Spider-Man, with superpowers also come great responsibilities. So, I think that when students discover that, well, this is actually true because if I work in a huge company, I will affect perhaps thousands, millions of people. So, this perception, I think, changes how people think and how they will operate in their day-to-day lives. Those are things that, in my own experience, I can see when I start having this conversation: a group with a shine in their eyes, and a group just waiting for the bell to ring so they can leave the class. We need to be very resilient, very patient, to focus on changing those fewer people's lives, I believe.Finding Nino Carvalho OnlineAndrew Mitrak: Wonderful advice. Thanks for all of those ideas. And thanks for all of your time today. Where can listeners find you online?Nino Carvalho: I will have some content in English often on my LinkedIn, so just type Nino Carvalho over there. There will be a few lectures, presentations, and classes in English on the YouTube channel, again, Nino Carvalho. But in addition to those two, for my Portuguese students and listeners, I'm also on Instagram, of course, where my username—and I lost this battle—is Nino Carvalho Consultoria, which is "consultant" or "consultancy." And of course, my website, ninocarvalho.com. And my courses at marketingelevation.org. They are in Portuguese at this point only. And my books, again, only in Portuguese. Perhaps at some point, Andrew and I will be motivated to get together to write some History of Marketing for Beginners in English and in Portuguese as well. Andrew Mitrak: Well, I'll post links to all of those on the blog and in the show notes to make sure listeners can find them. But Nino, thanks so much. This has been such a pleasure to meet with you. Also, prior to this episode, you shared so many great resources with me and have just been such a huge help and source of inspiration. So, thanks for all of that, and thanks for your time today. I've really enjoyed talking to you.Nino Carvalho: Andrew, thank you very much. And not only for inviting me, of course, it was extremely pleasant, especially because I have a very good reason now to just send to my father. I never told you this, but he was an academic scholar here in marketing in the past. He's retired, of course, and he's quite old. But I will forward to him, "Listen, you know those guys, Aaker and Sheth and Kumar and Kotler? And there's your son over there!" So this, I have to thank you for it.But much more than that, because this would be a bit selfish, but so much more than that, I think, Andrew, that the work you are doing—and this is very honestly, I'm saying this very honestly—is extremely important to marketing professionals, to marketing students, and to the future of our discipline. Because we are being bombarded by those fakes, those gurus, and it's difficult to fight against it because it's not a fair fight. So, you took the initiative, and you put this huge constellation of legends in one place. When I mentioned to you that I want to translate those to Portuguese, I'm being very honest because this, I think, will help to spread your work. And this will kind of elevate, I believe, the level of our market. So, I have to thank you as a professor and as a professional as well. Because if you never did that, other people didn't either. So, you took your time, you took the initiative, and you are investing yourself in that. So, I do have to thank you. And I'll make my best to spread your channel and your podcast to as many people as I can. Thank you very much.Andrew Mitrak: Oh, thank you so much, Nino. That's so nice of you to say, and I really appreciate that.Nino Carvalho: Thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 17This week we're mixing up the usual format. I've been publishing this podcast for a few months now, so I thought this would be a good time to reflect on the conversations I've had so far, talk about what I've learned, and share a behind-the-scenes look at how the podcast is going. Spoiler alert: I think it's going great.I recruited my friend Scott Morris, Creative Director at Waka Seattle to interview me about the podcast.Scott is an incredibly talented documentary filmmaker who always asks thoughtful questions. He provided me with incredibly helpful advice and feedback as I put “A History of Marketing” together.I gave Scott some of the top questions I've heard from listeners, but otherwise let him drive the conversation. Now, here’s Scott Morris interviewing me.The Origins of “A History of Marketing”Scott Morris: I see this as serving as a proxy for your audience. So I'm going to ask you some questions about the podcast: how it started, how it's going, and then where it's going to go from here. So diving right in, let's go back to the beginning. A History of Marketing. Where did you get this idea? What's the origin story?Andrew Mitrak: The podcast idea came all at once, but a lot of things were percolating in the background. I released a trailer, about a three-minute intro to the podcast, and it's a pretty honest trailer. It really tells my journey from the start, and of course, it's three minutes, so it's an abbreviated journey, but it tells most of the important parts of the story.At some point, it hit me that I'm a marketer, and I've spent a dozen or more years doing this professionally, and I know very little about how it started. Meanwhile, I'm very interested in history. I read—most of the books I read are non-fiction or history books—and I feel like I have a grasp of a lot of other disciplines, the history of those disciplines. I know a little bit about psychology and economics and computer history and art history and music history, but I didn't know anything about marketing history. And that suddenly hit me as odd. And I'm like, I better go look for books on marketing history.And I really didn't find any. There are some books, and I don't mean to diminish the work that's out there, but they tend to be very academic-oriented journal articles. There's a book called The History of Marketing Thought. Or they're siloed. They're histories of advertising, of certain elements of public relations, and biographies of individual marketers or advertisers or entrepreneurs. But there wasn't anything that was like a history of marketing. And similarly, there was no podcast dedicated to it either, or even a blog really dedicated to it. There were blog posts or podcast episodes that touched on marketing history, but nothing that really dived into this particular topic.And being somebody who's interested in storytelling, interested in marketing, I thought this was a gap. And it was one of those moments where I thought, “This doesn't exist in the world, why don't I try to fill it?” And that's the start of the show.Scott Morris: In the process of building up the interviews and starting the editing process and really building what you felt like was going to be this podcast, what's been the toughest part?Andrew Mitrak: It's been surprisingly easy, all things considered. You are aware of this, most listeners probably are not, is that I have a video background. I had produced podcasts at a prior company that I was at. And so I know all the tools. I was a student in college, I was a journalist, I was a documentary filmmaker, and a lot of those skills translate pretty well to podcasting. I also am pretty good at cold emailing, and sending emails to guests was a fun little challenge. So a lot of that came easily. I'm not the best at any one of these things, but I think that I have a lot of the skills, when combined together, that make me pretty good at this so far.I'd say the thing that I disliked the most about it—that to me it's hard because it's hard to do things when you're not having as much fun—is sometimes it's things that I've signed myself up for, like doing a YouTube short. I have a lot of joy in editing the full episode. I'm in the zone when I'm in Premiere and editing everything together, and I feel good about releasing the long-form stuff. But there are things that I'm like, well, every episode, every platform seems to want these short little snippets and these bite-sized things, and let me go ahead and do those as well. And I don't find as much joy in them. I see them as a little more of a chore.So there are things like that that I'm like, it's my own doing. I could choose not to do it, but the things that don't get me excited about it, they feel the hardest to me. And also, I always edit the short last, so I've gotten the whole episode done, I've gotten it all transcribed, I've got everything published, and then I do this little short, and it seems like one extra thing to do. So maybe I'll stop doing that because it's really by my own choosing that I do it.Surprising responses to the podcastScott Morris: Nice. Well, I have some ideas for that for you. So, let's talk about that afterward. You got to do those shorts, man. Once the episode started airing and you were starting to get feedback and listeners and subscribers, what was the thing that was most surprising to you? Was there anything that generally in terms of the folks who had been listening or specifically anyone that had reached out, left a comment or a post about one of the episodes?Andrew Mitrak: The most surprising and delightful thing is the response from international marketers. And it helps you realize how big the world is, how interconnected we are, how the internet can help you reach anybody.We're both here in Seattle, Washington, and I have a bias towards thinking about our local community or thinking about the United States or the English-speaking world. But when I look at the Substack subscribers, only like 29% are from the US. And the next biggest is Brazil and India and a lot of countries where English is not the dominant language there. But folks from all over the world will share a really nice note about how they are enjoying the show or share some LinkedIn post about this interesting conversation they found. And I search the show name and I come across and I'm like, "Oh wow, this person in Sweden liked it. That's so cool."You see the numbers of how many hours cumulatively that have been listened to, and even though it's still a relatively small niche podcast, it does break your brain to think about, "Wow, a lot of people have actually heard this and reacted to it and reached out about it." So that's been super fun.Scott Morris: How do you view engagement with that audience and how do you think about connecting with them? Is that something that's been on your mind?Andrew Mitrak: Yeah, a theme for me personally, producing the show, is questioning whether I'm doing it for me or whether I'm doing it for listeners.Selfishly, a lot of me reaching out to people is because of my own curiosity. It's because of my own interest in talking to some of the guests, doing things because I want to have a conversation or learn about a certain topic. And that's what makes the show fun to do is that it's not me trying to optimize for engagement or optimize for listenership or optimize for what some other audience wants. It's just me doing what I want to do, having the conversations I want to have, meeting the people that I want to meet.But then people respond and they have feedback and they've dedicated their time to it. Everything has been super positive so far and everything's been very encouraging. So because I haven't really seen any negative feedback per se from listeners or things that would lead me to do anything differently than what I'm currently doing, I'm following my own interests for the most part. And whenever I receive a note or an email or anything, of course, I respond and am really grateful for it. It keeps me super motivated.Starting with Philip KotlerScott Morris: When thinking about your own curiosity, right? And cold emailing. I know that reaching out to Philip Kotler was a pivotal moment in your decision in terms of whether to do this podcast or what it would look like. When you got that email back from him agreeing to the interview, what was that like?Andrew Mitrak: Yeah, doing the podcast, I had this idea for A History of Marketing, but the question is, how does it become real? How do you actually do it? Because I've had a lot of ideas. I've probably shared a bunch of ideas with you of fun projects to do and documentaries to do or domains that I purchased and then never actually set up as a website.And then this became real because when I was looking up which guest to talk to, Philip Kotler, who is sometimes called the father of modern marketing, he wrote my marketing management textbook that I used in grad school to learn about marketing. He is a legend. And I'm like, "Wow, he has to be one of the first guests."So I purchased his autobiography. I think it's called My Adventures in Marketing, and read it. And the autobiography had his email address in there. And so I sent him an email. And since listeners have asked about this before—how did you get Philip Kotler?—I'm just going to read the exact email that I sent. And it's called "Podcast Interview: A History of Marketing" is the subject line.I sent that to him at the start of November, and he responded within a day. You could tell there are things I said; I kind of made this podcast feel official as if I'd actually recorded one before. But it's a very transparent, truthful email. And I think partly the reason he probably agreed to do it, if I had to surmise, is that I clearly had done my research on him, read his book. If I was in his shoes and I'm looking at a podcast called A History of Marketing, why wouldn't I want to be a part of that, right? It's almost elevating marketing to a historical status.So not only did he agree to do the interview, which was a huge win—that would have been gracious enough—he right afterwards emailed the people who would be my next several guests on the show: David Aaker, Jag Sheth, V. Kumar. And they then emailed folks who I should talk to as the next guest after that. And that really spurred a lot of the guest booking, especially for the first 12 episodes or so. Phil Kotler and his network really helped launch the show.Scott Morris: Well, sticking to that email that's going to go down in history now, it's going to go in the PR museum. You chose a very specific amount of time for what you were asking for. I wonder if you could talk about why did you choose 45 minutes?Andrew Mitrak: I always ask for 45 minutes because it tells somebody that is longer than a half hour, and usually if they agree to 45 minutes, they'll also agree to an hour. And also, it's not too big of a commitment. Also, I'm not Joe Rogan or whatever doing three or four-hour podcasts or something like that. I have a life, and so do the guests.Marketing history is still being writtenScott Morris: We talked about some of the surprises that you found from audience members. What's something that's surprised you in terms of the content that you all have covered in these episodes?Andrew Mitrak: Yeah, so I went in not knowing a whole lot about marketing history. There's this really silly throwaway joke from The Simpsons where Marge is thinking about how to make money and get a job or something like that. And she's like, "Oh, I'll be a piano teacher." And Lisa's like, "But Mom, you don't play piano." And Marge says, "I just have to stay one lesson ahead of the kid." And I kind of feel like Marge.I know more than the average listener or even the average marketer. I've done some research, and especially now, I have really spent, I don't know, six months or so generally researching it. But I'm also not an expert. I'm not so deep in it that I'm doing really, really, really niche things. So all of that to say, I've learned a lot from the guests on the episode themselves.The most surprising thing is that the history is not written in stone. There's relatively little of the historical record as it is, but even what exists is kind of debated over. I published that interview with Philip Kotler, and he talks about the early 1900s as the start of marketing.And then I got some inbound from really smart professors who were like, "Phil Kotler, obviously smart, accomplished person, but I'm going to disagree with him there. Actually, I think it started earlier than that."Or I think that the idea that marketing emerged as a field of economics, I'm going to dispute that and say it actually emerged much earlier, and there are things. I published this interview with Giana Eckhardt about how there were branding elements in Imperial-era China a thousand years before the 1900s. And Giana was one of those people who reached out to me where she had seen the Phil Kotler one. She's like, "Thanks for doing this. This is great. I want to add a unique perspective that hasn't been shared where I'm going to introduce some of my own research to this that'll kind of contradict some of what was shared before." And I think that's great. That's wonderful.It also, this is part of why—we didn't talk about the naming of the show—but the name of the show is A History of Marketing, not The History of Marketing. I don't pretend to get everything right. I don't pretend to not have my own biases. I don't pretend to try to cover everything out there. And even the people who I interview, they might contradict each other or introduce new information. And I think that's a really exciting thing. So if you had asked me at the start, would I be talking about branding practices in Imperial-era China, I would have laughed at the idea that that was happening. So, all sorts of surprises across the board.Selecting Marketing Legends and “Primary Sources” as GuestsScott Morris: Speaking specifically about the guests that you've had so far, a lot of the folks that you've talked to have been more towards the end of their career or maybe even retired. And so it's created this opportunity for this great career retrospective that your interview ends up being for them. But I'm curious if you are thinking about interviewing folks more mid-career and what kind of more modern types of campaigns or other things are interesting for you as you look forward?Andrew Mitrak: I think starting off, I thought, "Well, Phil Kotler, the father of modern marketing" Really sharp as you can hear the interview, but he is 93 years old. And he is somebody who may not have the capacity to do that forever. We're all mortal. And some of the guests are primary sources. Phil Kotler literally wrote the book, experienced a lot of this and a lot of change firsthand, was an active member in some of the changes in marketing, many of the changes in marketing. Same goes for Dave Aaker, Jag Sheth, V. Kumar, George Day—folks who had a big impact of lived lives. And I figured, prioritize them and start by going to the primary sources as much as I am able to, and then work my way forward.Covering recent marketing historyAndrew Mitrak: And what's good about the podcast is that marketing history sounds like a niche, but where do you cut off the line of history? There's a lot to cover. I barely have really focused on the internet era, the first banner ads. There was this banner ad that I used to see all over—maybe it was on Netscape Navigator or something like that—of Punch the Monkey.And it was this banner ad where there's this annoying little monkey that danced around, and you moved your cursor, and your cursor controlled a glove, and then you'd punch the monkey. And of course, the thing is, it wanted you to click on the banner. It didn't matter whether you actually hit the monkey or not.And I'd like to meet the people behind these little ads that are really gimmicks, because there basically is this life cycle of an ad or a tactic where something gets launched, and then it works, and then people catch on, and maybe a bunch of other marketers and advertisers do it. And then so people see it everywhere, and then it stops working, and then you have to find something else. There are so many little stories of the Punch the Monkey type ad or early viral ads, how much web has changed, e-commerce, the marketing funnel. There are all sorts of history that's really more recent history that I think will be fascinating to dive into. But to start, I wanted to go to some of the earlier generations and hear from the primary sources as much as I could.Working Towards a “Marketing Mix” of Guest VoicesScott Morris: Looking back at this first block of episodes, how do you feel about them now? What do you feel like is the story that you're kind of telling with this first block, and then where you kind of want to go?Andrew Mitrak: You can hear in the Kotler email, I say I interview professors, authors, CMOs. And I think this first block especially was a little more biased towards professors. That's mostly who we've talked about so far. And while there were great authors—I was really, I really enjoyed the interview with Larry Tye about Edward Bernays. Really enjoyed Shelley Spector, the curator of this museum that also touched on PR. Mark Tungate, I thought that was a really fun one on covering advertising history through the ages. Obviously Guy Kawasaki and Sergio Zyman who had great stories about Apple and their own careers and Coca-Cola.So I'd like to get more of a mix. I feel like it's probably been 70-ish percent professors, and then the remainder being divided between authors and more practitioners. I'd like to develop a mix where I'm hearing from everybody because I'm really interested in seeing the intersection of where academic ideas meet the real world, how marketers can learn from academia and research that's being done, and on the flip side, how marketing theory can be enhanced by case studies that are from the real world or real-world marketing campaigns. That mix is something I'd like to keep developing.Frankly, interviewing professors is a little easier because you know exactly what their research is, it's all published. Usually, professors have their email on their website, and so it's easier to get in touch with professors. But I want to be mindful and I don't want to over-anchor on academics, and I want to bring in more biographers and authors and historians and other marketing practitioners themselves.Going back to me being selfish about it, I see them as me getting mentorship from these folks. I have so much to learn. And getting the excuse to sit down with somebody like Sergio Zyman, the first CMO of Coca-Cola, or Guy Kawasaki, somebody whose marketing books I've read and have influenced me, and hearing from them firsthand, it's so inspiring. I'm so grateful for it. It's one of the beneficial growth hacks of having a podcast is all these people get to talk to me. And I want to learn from more of them as well—professors as well, but also some of the marketing practitioners and authors out there.Scott Morris: That's one thing that's really stuck out to me that you, a claim that you made in your trailer that turned out to be true, which is that a lot of these folks are really good storytellers. Guy Kawasaki and Larry Tye and Sergio Zyman, these are some really not great stories in a history of marketing, but great American or even broader stories that are being told. You guys have covered the 1984 Apple ad or New Coke or bacon as a breakfast food.Future marketing campaigns to cover on the podcastScott Morris: For you personally, what are the kind of ad campaigns or marketing campaigns that you kind of have most been affected by or influenced by?Andrew Mitrak: I don't know if I've been affected or influenced by it yet, but one campaign that I've become a really big fan of over this show and I want to keep exploring more is the Pepsi Challenge. I haven't booked this person yet. I'm trying to get him on, so if anybody listening happens to know him, his name is John Sculley. He's best known as being the CEO of Apple. He was played by Jeff Daniels in the Steve Jobs movie that Aaron Sorkin wrote. He has this incredible career, but before Apple, he spent a decade or more at Pepsi. And Pepsi was like 10% market share to Coke—a total underdog. It was like Coke was everything, and then it was Pepsi and the other guys. And then all of a sudden, Pepsi became pretty close to a 50-50 competitor, or maybe 40-60 or 45-55 to Coke. But in the 70s and then in the 80s, they were this juggernaut.As a storyteller, I love the story of an underdog. As somebody who spent a lot of my career in a startup, you're always an underdog when you're a startup. And hearing how they took on the big guys who totally outspent them—they did the Pepsi Challenge.And what is the Pepsi Challenge? It's kind of the truth. It's using a taste test, biasing the taste test to favor Pepsi, because if you take a sip of Pepsi versus a sip of Coke, you're more likely to prefer the sweeter of the two. It might be different if you drink a whole can or a whole pack, but they designed a test where it favors their product.They filmed participants, almost like an early version of reality TV, reacting to it. They reported on the accurate results: most Americans or most consumers prefer Pepsi in a blind taste test to Coke. And they do that, they do the Pepsi generation, they do a bunch of underdog campaigns. They're not even mean-spirited at Coke; they're just like, "Hey, most people prefer Pepsi, time to give it a try."And it has everything. It has, in classical rhetoric, ethos, pathos, and logos, right? Ethos is sort of, "Oh, I trust that because other people are doing it, or it's like some authority." And you see other people, most Americans, liking Pepsi. You see the pathos, the emotion of it. There's an ad where a grandma is like, "I've been drinking Coke my whole life. I guess I do like Pepsi more." And there's this emotional element to people realizing that they like it. And then there's the logic to it that most people prefer it. It's this ad that is new, it's an underdog, it works clearly for them. As somebody who's interested in how underdogs can use marketing to gain market share and to have that David versus Goliath type story, that's one campaign that I'm really interested in.Scott Morris: I mean, as you're talking about it, I have very fuzzy memories of the Pepsi Challenge, but not nearly that solid memory that you have. So, yeah, it was fascinating.Andrew Mitrak: One of the other things that sparked me in doing this podcast is I was referencing the Pepsi Challenge to a co-worker, and she had never heard of it. She had never heard of the Pepsi Challenge. And it did primarily run in the late 70s or the 70s and 80s, and I saw little elements of it in the 90s and maybe early 2000s. But I thought, "Wow, if marketers don't know about the Pepsi Challenge, we got to preserve this. We got to make marketers more aware of this. Marketing needs to be taught as a history just so you can learn about good ideas." So that was one of the other things among the things percolating that gave me the idea to pursue the podcast.Applying Lessons of History to Marketing TodayScott Morris: You are a marketer. You work as a Marketing Director for a large company. You've done this work for a long time.Andrew Mitrak: [Laughs] I'm not a Director, you gave me a promotion. I was a director at startups…Scott Morris: Soon to be marketing director. Has working on this and the interviews that you've done changed your view of marketing?Andrew Mitrak: This is probably the most selfishly rewarding part is that speaking to these—many of them legends in marketing and people with great careers—is so inspiring, and it's absolutely changed how I work. There are a few ways how.First, a big theme throughout the podcast is that marketing strategy, when implemented well, is not limited to the marketing department. Really, marketing as a function should be the interface between the company and the market that it serves. And it's a two-way job. You should be communicating the company to the market that you serve. You should also be analyzing the market and taking in market feedback, and then feeding that to the company to influence what the company does, how it builds its products, how it prices.The first person that I spoke to was Philip Kotler, and Philip Kotler is famous for the 4Ps. He didn't invent the 4Ps, but he popularized them. And they're product, price, place, promotion. And it's something you learn about in a marketing textbook. And then what happens is you enter the marketing world, and you're basically just focused on one of those Ps, which is promotion. Right?Maybe there are certain elements of place as far as if you call internet advertising or channel advertising or promoting on a certain channel. But marketing so often is lumped in with promotion, and the product and the pricing of it even today is often owned by a different team within a company. And I think marketing just can perform this strategic function where you have to think beyond promotion. You really have to think more holistically about what you can do. And I find myself stepping out of my lane as a marketer to try to advocate for other things the company should be doing or communicating upward on where the market I serve is at, things we can be doing, other trends are there. And I just see that as my job as a marketer to communicate upward and outward throughout the company.The other one, at a more tactical level, is the interview with Robert Cialdini. I had read his book Influence way back when, and I read it again in advance of interviewing him a few months ago. And the way that he frames things, he has a language for stuff like the principle of reciprocity. Right? Now when I am running a campaign that means providing somebody an ebook about some services or something, I'm talking to my stakeholders about, "Hey, the reason we're doing this is the principle of reciprocity that when you give somebody something of value and you're not taking stuff from them, they like you more. They want to give something back. This is a sense of goodwill, and this is why you do these things. It's because of these psychological elements." I don't know if it works. I bet a lot of my colleagues just roll their eyes at me. But anyway, I'm using more and more of the language that these professionals use. I hope it makes me sound a little smarter...Both in terms of the scope of marketing and some of the really tactical language I use around campaigns, it's totally influenced. And also, just publishing the podcast itself, a lot of what goes behind the scenes, I get to learn a lot of tools, AI tools even that I don't use in my everyday job. And so as a tactical person, I'm doing something that I don't do in my day job every day, and I'm getting to learn new tools and work new muscles. And I use my company's products a lot when I produce the product. So I get to empathize with users as well. So all those things, I think, accrue to influencing how I am as a marketer.Scott Morris: That's so cool. And yeah, the episode with Robert Cialdini. I felt like if anyone hasn't listened to that, especially if you're a small business marketer or just marketing in general, it's like, yeah, I feel like I gave me a to-do list essentially is what I felt like, which was really exciting.Andrew Mitrak: Yeah, if you are 30 minutes into this conversation with me and Scott right now, you should pause it. Go listen to the Robert Cialdini one.Marketing and Measuring ROIScott Morris: You also talk a lot with a number of folks. I think particularly Guy Kawasaki with the 1984 ad and how that was, essentially, there was a lot of pushback about that ad, trepidation essentially about whether they should do it. And then also how effective was it in terms of ROI on the millions of dollars that they spent in producing it. Now that you've gone through these interviews, how are you seeing that relationship between that kind of the art and commerce aspects of marketing and advertising?Andrew Mitrak: I think that's an interesting one because that 1984 one, it's come up a lot, often cited as one of, if not the greatest ad of all time. And among the, not negative comments, but some LinkedIn reply guy is like, "Actually, this ad didn't work because the Mac was a failed product line." And it's funny how these things can still be debated to this day. And I think that's great. I think it's really cool that history is a living thing, it's being reassessed, re-evaluated. It's why a podcast like this, I think, has a lot of interesting material to cover.Yeah, the relationship between art and commerce or another one for me is data and intuition. There's certainly a lot of the best marketers and campaigns seem to rely a lot on intuition. Somebody like Steve Jobs, I think he could be persuaded with data, but also clearly had a lot of intuition. Sergio Zyman and the Coca-Cola folks clearly used a lot of data, but they also did things with their intuition as well. I think that's an interesting idea too. The measurement and the ROI of marketing—marketing as an expense versus as an investment—on what time frame do you consider that investment? How important is measurability?I think they're all really, really interesting questions, and I think it's good that there's not one single definitive answer to saying, "Oh yeah, the answer is 1.25” And that's it and it's settled and now we're going to… It's not that. It's something where, hey, it is a little squishier, and that's what makes it fun. That's what makes it exciting. That's what gives it a lot of rich history and stories behind it.Favorite Moments from the Series (So Far…)Scott Morris: I don't want to ask you what is your favorite episode, but I am curious if you have a favorite moment or a favorite insight that you've gleaned from these marketing legends that you've interviewed thus far. Do you have a favorite thing that you've done?Andrew Mitrak: Yeah, I definitely wouldn't pick a favorite episode. A favorite moment was actually with the Sergio Zyman one where a lot of my episodes are very cheerful, happy, conversational. And I am not asking really super hard gotcha questions, and it's a very easygoing conversation that hopefully is insightful and well-researched but has positive vibes. He's a little confrontational. He's a little jabby. That's his style. He likes to poke. He kind of was interrogating me about describing the taste of Coca-Cola.Sergio Zyman Clip:Sergio Zyman: Do you drink Coke? You drink Coke sometimes?Scott Morris (from Zyman episode clip): Yeah, of course. I've had a Coke. I don't drink it every day.Sergio Zyman: What does it taste like?Andrew Mitrak: Well, first you feel the bubbliness of it, the sweetness to it, and then there's a bite.Sergio Zyman: No, no, no. I didn't ask you how it feels. I ask you what does it taste like.Andrew Mitrak: It's hard to say other than it tastes like Coke. It's hard to describe other than a Coke tastes like a Coke.Sergio Zyman: Basically, a Coke has no taste memory.Andrew Mitrak: Yeah.Sergio Zyman: If you go and you say what does Pepsi taste like, people will say sweeter than Coke.Andrew Mitrak: Coca-Cola is your baseline for comparing everything else.Andrew Mitrak: He kind of put me on the spot and I'm like, "Gosh, I have to describe this to the guy who was the CMO of Coke." And he's kind of, he's like interrupting me. And I actually like that a lot. I think a lot of good podcasts have some tension to them, have some sense of drama, that there is a dynamic between the host and the guest and always respectful and everything, but also that there's a little bit of tension there. And I think that came up. So that strikes me as something that I'd like to explore more of. I want to have a really positive relationship with the guests, but I'm thinking about how do you inject more drama, more tension into the guests without, while it's still being an overall positive and informative experience?Scott Morris: I did want to ask you actually, if you wanted to have another take of answering the question, what does Coke taste like? Now that you've had some time to think about it.Andrew Mitrak: Last weekend I was thinking about this question, and I actually had a Coca-Cola for the first time in, honestly, probably like 10 years for me. I don't drink much soda in general. I've had some Diet Cokes here or there, but I hadn't had a Coca-Cola Classic in a long time. I'd kind of like to answer it exactly the same. It is mostly about the initial bubbliness. If you leave it in your mouth long enough, it gets very caramelized and sweet to it.Scott Morris: [Interrupts] The taste, Andrew.Andrew Mitrak: Here's the thing, if I was to push back on him, the thing about taste is taste is a sensation that really does encompass every other sensation. The sense of touch—people will describe themselves as a texture eater, right? And if something smells a certain way, that has a really big impact on how you actually taste it. If it looks a certain way, it'll actually really impact the taste. And I think he was being provocative there, but I would just push back on his idea that taste is only just what is the flavor in your mouth. It is—taste is actually a number of other things. And me describing the texture is a perfectly valid response to taste. So, if I was to defend myself, that's what I would say about it.Wrapping Up and Listener FeedbackScott Morris: Well, it made for a great moment. It really did. Well, thanks so much, Andrew. I mean, I've really enjoyed this conversation. I think it's been really fun and insightful to learn more about the behind-the-scenes of A History of Marketing and what's been motivating you and what have been some of your favorite moments. Is there anything else you want to hit on before we close out?Andrew Mitrak: No, that was great. I'm laughing because you sound like me; you're clearly doing the same wrap-up thing that I always do. Any things you want to plug?Scott Morris: The thing I was to ask you is, where can we find your work online? Is there anything that you'd like to plug?Andrew Mitrak: No, this has been fun. Hopefully, it's been fun for listeners too. I think of a good podcast as having some education to it, some entertainment to it. Then there's also this idea of companionship to it, that there is, you form some relationship with the host. And I can tell it's happened with folks who have reached out to me and sent me nice notes. I'm hoping this does some of that, shows a little bit of what goes on, how I'm thinking about it. But also, I think the guests are the most interesting people. I just want to hear from them.So listeners, if you've made it this far, hopefully you liked it okay. But also just let me know, shoot me a note: [email protected]. I read all the emails. I respond to them. You can find me on LinkedIn and shoot me a note there. I really like hearing from listeners. And if you like more things like this, let me know. With the caveat that, like I said at the beginning, I'm doing this selfishly to learn from the best—the CMOs, the authors, the professors, and the guests themselves—and I want them to be front and center of the shows.Scott Morris: Do I get to promote anything or what?Andrew Mitrak: [Laughs] Yeah, do you have any things you'd like to plug?Scott Morris: People could to my website wakaseattle.com. I make videos for businesses like Pike Place Market, Bloodworks Northwest, and a lot of folks in the Pacific Northwest, but that's what I love doing. So if you want to go check it out there, you can also find me on LinkedIn.Andrew Mitrak: I'll post a link to wakaseattle.com and your LinkedIn in the blog. And Scott, you're selling yourself short. Scott is an incredibly talented filmmaker, documentary maker, video producer, all-around great person to work with who does really great videos for great brands. So if you are in the Seattle area or beyond and are interested in working with a really talented video producer or somebody to guest host your podcast, he's good at that as well.So with that, thanks so much, Scott. This has been a lot of fun.Scott Morris: Thanks, Andrew. Take care. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 16Tune into any major sporting event, and corporate sponsorship saturate the screen. Colossal logos sprawl across stadium rooftops. They adorn the smallest patch on a player's jersey. From pre-game shows to post-game analysis, from breakfast cereal to beer cans, from charitable causes to gambling apps, sponsorships are inseparable from sports.Sports and sponsorship are so interwoven, it’s easy to think it was always this way. But it’s a relatively new phenomenon. It doesn’t happen naturally either. Behind the scenes marketers, brands, teams, and athletes navigate complex sponsorship-linked marketing arrangements that aim to benefit all parties involved. My guest is T. Bettina Cornwell, a leading expert on sports and sponsorship. She is the Philip H. Knight Chair and Head of the Department of Marketing at the University of Oregon's Lundquist College of Business. Professor Cornwell literally wrote the book on the subject. It's called Sponsorship in Marketing and the 3rd edition of it comes out today. I read an earlier edition to prepare for our interview, and I really enjoyed it. So, if you like our conversation, I recommend checking it out.Our discussion was an absolute blast. We cover some of the best-known successes and revealing failures in the world of sports and sponsorship.Now, here it is – my conversation with Bettina Cornwell.Find more: marketinghistory.orgHosted by Andrew Mitrak This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 15This is not a current events podcast, but this episode is more timely than usual.I’m joined by Gabriele Carboni, a marketer, author, consultant based in Italy. I met Carboni through Philip Kotler. Together they co-authored the book, “Enlightened Management” which is about how Impact Marketing can have a positive impact for people and the planet.Gabriele Carboni is probably the only marketer to have a book endorsed by the late Pope Francis. The Vatican issued this comment on Carboni’s book, “Civil Economy.” (Translated from Italian) “His Holiness encourages every reader, every business leader and every person of good will to take inspiration from this work, to transform every professional environment into a place of growth, not only economic but human and spiritual.“I'm publishing this episode just a few days since we learned of the passing of Pope Francis. But I recorded this conversation with Gabriele Carboni in February, when Pope Francis was alive but had been in the news due to health issues.Carboni shares some great stories about meeting Pope Francis and earning an endorsement from the Pope. He also shares about what it’s like to write a book with Phil Kotler, and speaks to the rich legacy of the Italian Renaissance, Enlightenment, and Italian Humanism. We discuss how the ideas from these eras and schools of thought influenced marketing as a field and inspired Carboni to focus on impact marketing.A Marketing Collaboration with Philip KotlerAndrew Mitrak: Gabriele Carboni, welcome to A History of Marketing.Gabriele Carboni: Hi Andrew, thank you for having me.Andrew Mitrak: So we connected via an introduction from Philip Kotler and you recently co-authored a book with Phil. So let's start the conversation there. How did you first learn about Philip Kotler and when did you first meet him?Gabriele Carboni: I was already beginning my company, which is a marketing company, obviously, digital marketing company. Digital marketing was my hobby and then we started a company with two business partners.Because, of course, I was good at building websites, I was good at creating graphics, so the operational part I had. But I needed to understand the strategy better, so I bought a copy of Marketing Management. And then I read it. And then since I'm also a journalist, I was invited to Milan in 2017. Philip Kotler was speaking there. And this is a fun story because in Italy you need to be part of an association to be a journalist. It's not just you write and you are a journalist, you need to get trained and then to be part of an order, there is the order of the journalists. So you have your press badge.So I went to the event with my badge and I said, "I am a journalist, this is my badge." Of course, I was not known as a journalist, it's not even my job. But I was there with my badge and I said, "Look, I'm a journalist, I have the badge. Can I interview Philip Kotler?" And of course they said, "Of course you cannot, because you are we don't know you, you're not in our list. So go and listen to the speech, but you're not going to meet him."Then I said, "Okay, at least I get a free event with Philip Kotler, I'm going to listen." After the event, the event was very small, it was in a university in Milan. And I saw that there was a press room. Then I went to where there was a person on the door and I said, "Look, I'm a journalist, this is my badge. I want to interview Philip Kotler." And he said, "No, you're not on the list."I took a look inside the room and I saw a pregnant woman who happened to be the press manager, and I told her that my wife, which was true, was pregnant too. So they were both at the seventh month of pregnancy. And we started talking, I tried to be nice with her and since, I don't know, we connected somehow. She said, "Okay, after everyone, if we have like 30 seconds, you can have a picture with him and this is the max I can do."It happened that at the end of everything, he was drinking a coffee, eating something. I had my occasion, I had my photo with him and then we had half an hour to speak. So I happened to be the last, but I got all the time in the world and it was very nice because I gifted him my first book, which was in Italian, but he liked the approach. I tried to explain to him an idea I had at that time which then became this card deck which actually was awarded one of the three best marketing innovations in the world in 2019 and he gave me a lot of advice. And then I asked him to write the book together and he said, "No," because, of course, he didn't know me.Andrew Mitrak: Yeah, you're pushing your luck a little bit there. You've already gotten in, you've gotten to meet him, you've gotten a half hour and right in the first meeting you've asked him to co-author a book.Gabriele Carboni: Exactly.So a year later, 2018, he came to Bologna, which is near where I live, so it was easier. Still with the journalist badge. At that time I was already known by the organization, so I got an interview and I asked him again to write a book together and he said, "No."Then in 2019, I made the card deck and again I went to visit him in Rome. It was the last time he went to Italy because after that there was COVID. And he said, "Oh, this card deck is very nice, we can do something together." And so we started to have an email exchange and we started to write something, he wrote a forward for a book on digital marketing I released. And then I went to Sarasota to visit him. And at last he said, "Okay, we are going to write a book together."Actually, in your interview with him, he was talking about a small and medium enterprises book and that is the book we have written together, which is this one, Enlightened Management. And now it's available in English since December last year and it's going to be translated into Italian in a few months. So it was pushing my luck as you say.Andrew Mitrak: I'm going to ask you about Enlightened Management and your work on small and mid-sized businesses. I want to ask, what is co-authoring a book with Philip Kotler like?Gabriele Carboni: I write very fast, so in three months I wrote the first part of the book. In like three hours he replied with all the modifications. So the problem with him is he's very active, also Saturdays and Sundays, even nights. He's super fast, so I had difficulty keeping up to his timing.Andrew Mitrak: It is amazing. At the time that you met him he must have been into his mid-80s and at the time I interviewed him he's in his early 90s and he's remarkably fast, remarkably sharp and smart and you have to keep up with him.Getting a Book Endorsement from Pope FrancisI want to shift gears and ask about another very influential world leader that you met. Pope Francis. And we're recording this in late February of 2025 and there's been a lot of news about Pope Francis's health and we certainly wish his holiness a speedy recovery.You are the first person I've ever met who had his book endorsed by the Pope. And I want to read this quote:"His Holiness encourages every reader, every business leader and every person of goodwill to take inspiration from this work to transform every professional environment into a place of growth, not only economic, but human and spiritual."And first off, congratulations on earning an endorsement from the Pope. I'm sure that's very meaningful to you. Can you tell me the story of meeting Pope Francis and how you came to earn an endorsement from his holiness?Gabriele Carboni: Yeah, I was invited after COVID to a very big event they had organized in Assisi, which is the city of San Francesco. There were like 1,000 young economists and marketers from all over the world, so it was very lucky to be invited. And I saw the Pope from afar. And that was the first time, but it was very exciting because it was with 1,000 people all together waiting for the Pope, it was very emotional.And then I visited him for a private meeting the year later, so it was two years ago. And I asked him to write a forward for my book. The book was not already written and of course they replied by his office, not him in person, they replied that they were not interested.Actually, part of that book is now Enlightened Management. So some of that content was presented to Pope Francis before Philip Kotler. It happened that I wrote a book with other very famous professors in Italy about the civil economy. And that was published by a Catholic Association. So I wrote to the Pope's offices because they said no, but they gave me their email address. Again, pushing my luck, I wrote them and said, "Hey, I have another book. It's already done, it's published by a Christian Association. Can you please write something?" And they replied with a full letter and it was crazy. It's really nice to have a comment by the Pope.Then I met him again last year. I gave him a butterfly as a gift. And actually, Philip already knows this, but no one else knows it. I sent a copy of Enlightened Management and I asked for another comment. So I'm a lucky guy and I push it.Andrew Mitrak: Being politely pushy, that's definitely a lesson for marketers. Just shoot your shot, right? You got to give it a try.Can you set the scene of what it is like to meet the Pope? What are you feeling? What is the environment? Because I never will in my life, very few of us are lucky enough to meet the Pope and you're the first person I've met who met him. So what is that like? Gabriele Carboni: Well, you are usually not alone because they are private meetings but with I don't know, 30 people, 100 people, 200 people. And he is very kind, he shakes hands with everyone. So we were 300 and everyone got a handshake and a picture with the Pope. It's like three seconds, of course. But everyone. And also he gives you a small gift, very emotional and then he always gives a lecture. Last year it was about AI, so it was very interesting.And then you have, if you want, you can say something, like again, two or three seconds. But he's very kind, nice, and of course… holy, we can say.Italian Humanism's Influence on Business and MarketingAndrew Mitrak: So I want to talk about some of your philosophical background into how you became a marketer. And in our email exchange prior to this interview, you mentioned that you began your journey with exploring Italian humanism. And can you share more about what Italian humanism is and how you went from this philosophical pursuit to becoming a digital marketer and a marketing author?Gabriele Carboni: It's about humanism. Also Philip wrote his second autobiography, My Life as a Humanist. Italians have in their background the Renaissance and humanism, which helped us a lot to think business in a different way.One thing I've learned is that in the past, more or less where we have humanism, which was before Renaissance, companies had God as a shareholder. Meaning part of the profits were given to the community, because, of course, they didn't fire the money to God, they just gave to the community. And which is now something we do to benefit corporations or companies that have a purpose. So that intrigued me very much and I bought some books, one I have here for you, it's a book, an original book from the 1800s. And it discusses the economies of the 1700s. It was before the industrial revolution and everything was about people.Andrew Mitrak: What was the name of this book?Gabriele Carboni: Yeah, of course it's Italian, Economics Ideas of economists around 1848, about Augusto Graziani. I think one copy may be available in the world.Andrew Mitrak: And for listeners, it's not some reprint. This looks like an original physical copy… very withered.Gabriele Carboni: And I really appreciate the fact that as Italians, we always put people at the center of our business. Before the Industrial Revolution, of course, agriculture was the main business and it was a business between man and environment, which is something we are looking for now, maybe without a good success.The Renaissance and the Ideas of Patronage and BrandingAndrew Mitrak: In our exchange, you also mentioned that Italian humanism has a direct lineage to the Italian Renaissance and that a lot of modern branding practices could be traced back to the Renaissance and Italian humanism. And if you think of things like the Medici family, which is a name that you just hold in such high regard today, centuries later, that clearly there's some branding element there. And I'm curious if you have any other examples or of branding practices that have roots in the Renaissance.Gabriele Carboni: Well, everything in the Renaissance was related to the arts, not only paintings or statues, also music. The point was to give emotion to people and to give a sense of beauty in the cities, in the houses, the castles, even churches, of course, also the church was a very important player of the Renaissance. Everything in Rome, basically, you can see now, aside from the ancient Romans, they are from the Renaissance.I think art is one of those elements you can use to touch the heart of people and when you do that, then people attach to your brand. In that case, the brand was the name of the family or the church itself. And that was a great branding for Medicis, for example, so great that everyone knows who they are even now. If this is not marketing, I don't know what it is.“The Book of the Art of Trade” by Benedetto CotrugliAndrew Mitrak: And from this era, you introduced me to a book called The Book of the Art of Trade by Benedetto Cotrugli.He wrote this book in 1458. And this was a fascinating book to dive into. And it's not a marketing book per se, but it covers business practices that tie into marketing. It talks about accounting, running an ethical business, and professionalizing business practices.He even talks about the importance of merchants to have proper attire and to be well-informed about areas like cosmography, geology, philosophy, astrology, theology, and the law.So the idea of personal branding in a way, if you're a merchant selling something, know things and just be an erudite individual, be well learned, present yourself because you want to come off as trustworthy to your potential customers and then they'll buy your products. So, not exactly marketing per se, but definitely personal branding and certainly salesmanship.I'm curious how you came across the book The Art of the Trade and what takeaways you had from it.Gabriele Carboni: Well, let me say that it's available also in English, so The Book of the Art of Trade, it's actually the title, the English title, so it is available on Amazon or I don't know, anywhere.Andrew Mitrak: It's published long enough ago, it's all in the public domain too, so you can find it free online as a PDF of it, yes.Gabriele Carboni: Good. Yes.Gabriele Carboni: Well, it's good because again, it puts people and environment at the center. I found it because I was studying civil economy, so the economy before the industrial revolution, which is now fancy in Italy, and there are some universities teaching civil economy and one of the books they suggest is exactly this one. It also teaches you how to relate to what we now call stakeholders.So, marketing and business in general is all about relationships. Of course, with customers or potential customers, but also with employees, talents and everything that we now call stakeholders.The Italian EnlightenmentAndrew Mitrak: Moving on from the Italian Renaissance and some of this area, I want to also touch on the Enlightenment, or the Italian Enlightenment. And Enlightenment is very important to you, it's part of the title of your book. You know, we talked in our exchange on email about the Italian Enlightenment and when I as a somebody growing up in the United States, when I learn about the history of the Renaissance Enlightenment, the Renaissance was focused on Italy, and a lot of the Enlightenment tends to focus on the northern countries and if you even if I look at the English Wikipedia page of the Enlightenment today, you see France and Germany and England and Scotland, they're referenced a lot more and Italy's mentioned but it's not quite as prominent there. So can you tell me about the Italian Enlightenment and what differentiates some of the Italian Enlightenment thinking of this period versus some of the other countries I mentioned?Gabriele Carboni: Well, maybe someone will be mad about this, but we didn't have so much of enlightenment because we had humanism way before that. So Enlightenment is kind of a humanism after a few hundred years. Andrew Mitrak: So the Italians were so far ahead of the curve, it's like you had your enlightenment centuries earlier.Gabriele Carboni: Exactly, exactly what I mean, it's my fault if someone is mad I said that. (Laughs)But during humanism people started to read because at that time not a lot of people could read and not a lot of people could have access to books because books were handwritten and mainly people of the church could read and could have those books, aside from some very rich noble people. And then they started to spread ahead some books about also ancient philosophy and that, of course, created a movement that then brought us to the Renaissance and then spread around the world and at one point, they invented the printed books and that helped to spread the word and I think Enlightenment it's something came before the printed books.Andrew Mitrak: The Enlightenment and the Renaissance era might have been captured by some of the handwritten stuff, but the printing press and that changes everything as far as what's available to people and who gets the privilege of owning books and who gets to learn these ideas.Gabriele Carboni: Principles of the Enlightenment are the same that we are reading now in civil economy. Actually, the civil economy was invented by enlightened economists in Italy. And also Adam Smith was a reader of civil economy, but then the industrial revolution pushed everything to profit and product. So we kind of forgot the person, the people and decided to go for the product and the profit.Civil Economy Pioneers: Genovesi and ParadisiAndrew Mitrak: And so this idea of civil economy, which you've brought up a few times, the people most associated with this are Antonio Genovesi and Agostino Paradisi. They wrote and are kind of the thinkers that are most associated with the Italian Civil Economy.Gabriele Carboni: Exactly. Antonio Genovesi was the first in Europe, meaning maybe the first in the world, to have a course at the university about economics. So the first university course in economics was in Naples with Antonio Genovesi. And then Agostino Paradisi, who was born here where I live, it's called Vignola, it's a city called Vignola in Northern Italy, he was born right here and he had the first course about civil economy at the university of Modena.And mainly they put people at the center again, but they gave us something that is now you can now reuse for sustainability, which is the relationship between companies, the government and the community and third sectors. So they already knew that the market it's going to be rich and prosper if companies work with the government and with the community together. They didn't have the environmental problem, of course. That is the main point.The Arrival of “Impact Marketing”Andrew Mitrak: Yeah. So all this tour through history of Italian humanism, the Italian Renaissance, the Enlightenment, all of this, I hope listeners have come along with us on this journey through philosophy and history and thinking, how does this tie to marketing? Well, it all sets the stage for impact marketing. you know, you've spoken about these ideas of business not just being for commerce, but being for people, that everything is kind of all connected and marketing has an impact on everything. So, this area of impact marketing is a specialization of yours. And so in your own words, could you define what impact marketing is and how it differs from traditional marketing?Gabriele Carboni: Yeah, you can define traditional marketing as the profitable satisfaction of needs. It's the short definition, which is the one I always remember, but it is correct. So the profitable satisfaction of needs, meaning marketing cares about profit and customers. Which is kind of a small definition in today's environment.So impact marketing instead is the strategic approach of the company, which relates to the community and the environment to create a positive impact. In this definition, profit is just a result of the positive impact of the company. So this is marketing, impact marketing. So while marketing just cares about profits and clients, impact marketing cares about all stakeholders, including the environment, to create a positive impact, which results in profits.The Evolution of Impact MarketingAndrew Mitrak: Thanks for that definition. And how has impact marketing evolved as a field over the years? Or when do you feel like impact marketing first entered the lexicon of marketing and how is it moved over time?Gabriele Carboni: I defined impact marketing when I was reading civil economy, studying civil economy. Since economics is a big field, I wanted to bring some of the ideas to marketing, which is maybe more modern than economics, at least in my industry. And then I brought those concepts to marketing and it was just a few years ago. More or less during COVID, which was also in some ways the better environment to start an idea like that where we have seen people care more about other people, about the environment and so on.Andrew Mitrak: The reason I'm kind of asking about how it's evolved is these ideas of companies doing good not just for their shareholders, but also for the environment. It's something that I feel like has probably ebbed and flowed over time. And Phil Kotler himself wrote the book Broadening the Concept of Marketing and has social marketing ideas and economists have also pushed back on this over time. There was somebody in America named Milton Friedman and he would argue that the social responsibility of business is to increase its profits and almost like nothing else. And so then there's also ESG is kind of being part of companies as well and there's been almost a push and pull, I think, between companies purely focusing on their bottom line and returns to shareholders and then these ideas of, well, what else can a company be doing as well? And then not just what the company could be doing, but could marketers within that company be doing? And so it just seems like there's always been kind of a push and pull, at least for the last several decades or so, between the social responsibilities and impacts marketing and businesses should have.Gabriele Carboni: I always use this analogy of the butterfly. Companies are like caterpillars: they go from leaf to leaf to find new customers, new profit and to evolve themselves. But they don't know they will evolve into a butterfly. And that's good because caterpillars need to live, to sustain themselves. Of course, the first sustainability is the financial one.And then they evolve. They create the chrysalis, we can say they start recognizing their values and they create this chrysalis with values. And at a later stage, they evolve into a butterfly and they start flying around and they see there is not only that tree with only leaves, they see they are part of an environment and then they discover they can relate to that environment. So this is mainly the concept of impact marketing and enlightened management.Real-World Examples of Impact MarketingAndrew Mitrak: I love that analogy because if we if you think of yourself as a small business, of course, you want to do good for the world, but to do that you have to sustain yourself and earn some profit, so you need to evolve over time to be able to have the full positive impact on the world that you'd like.I'm wondering if you have any examples of either impact marketing in action or businesses that have kind of gone this caterpillar to butterfly journey and started one way but evolved to really embrace impact marketing as they grew. What are some of your examples of impact marketing in action?Gabriele Carboni: Well, of course, benefit corporations. In the US and some other countries like Italy, you can have a benefit corporation. My company is a benefit corporation, meaning as a company it is written that we aim for profit, but also we have some sustainable goals and we need to achieve that year by year and they have the same value as the profit goals. So, for example, my company gives 20% of the net profits to community projects. And that's an example.And we have the B Corps, so those companies, mainly big companies, that are B Corp certified. And many companies, and this is one point, many companies already do a lot of good, they generate a positive impact, but they do not communicate it. And this is very true for small and medium enterprises. They always donate something, they support some community local causes and they do not share the good they do, which can be good. But if you share what you do, then other companies can bring your example and do the same.Andrew Mitrak: Yeah, I think of examples of companies that have done that successfully like there was this shoe brand called Tom's Shoes and they were very popular, probably especially 15 years ago, they were really at their peak or that was around the time they launched and they really brought attention to the importance of shoes for the poor or specifically for shoes in regions of Africa. And there was this idea of buy a pair, give a pair. And that their relatively low cost made shoes but they were sold at a premium price and the premium that you're paying is as a consumer is understanding I'm supporting a good cause, I'm supporting shoes for the world, I'm willing to pay for these and it almost became a social status symbol in a way. Like I'm wearing these Tom's shoes, I'm not wearing some big fancy other designer shoes, I'm showing that I care about a cause and it made, Tom's a more popular brand, it also brought more attention to this issue, and consumers benefited in that they got to wear shoes and signal to others that they care about causes like this.Gabriele Carboni: Yeah. Another example could be Patagonia, which is very well known around the world, maybe the first B Corp. Yes, many big brands like Danone even are B Corp certified and you can read everywhere what they do. I know Danone very well in Italy and they do a lot of great projects for the positive impact.Obstacles to Implementing Impact MarketingAndrew Mitrak: When it comes to other companies adopting impact marketing, what are some of the biggest challenges or obstacles that need to be addressed for impact marketing to be more widely adopted?Gabriele Carboni: Well, it's the mindset. For those who already do charity or are already active in their community, it's to start communicating. Also because customers care more and more about products. Even if it's B2B, they're starting to care about suppliers that care about sustainability. This is also forced somehow in Europe because big companies need to share their sustainable report, for example. But also many companies ask for the ESG rating for their suppliers. And customers prefer to buy sustainable products. So that is one point.Another point is that many companies think that sustainability is a cost instead of an investment. Now we already have a lot of studies saying that sustainability is not a cost, it is an investment and there is a return of investment even shorter than we thought before.Enlightened Management: Impact Marketing for SMBsAndrew Mitrak: I want to come back to your book Enlightened Management and how marketers, especially small business marketers and entrepreneurs can really apply impact marketing from the start. And this book is all about how to take these ideas of impact marketing and apply them for small and mid-sized businesses. I love this area because I've been a small business owner myself, I came from a family of small businesses, my professional work today is about marketing products to small businesses. And I just think that this is a really cool idea of how do you build a business that has social good and thinks about long-term impacts beyond just your profitability right from the start as you're building and founding and growing your business. So why did you focus on small businesses and what are some of the top lessons and takeaways that you have for small businesses and entrepreneurs?Gabriele Carboni: Well, big companies, they have more money and they are somehow forced or anyway invited by governments to do something. So they are already on the path of sustainability at least. And you can also think about Unilever with Paul Polman that brought the purpose at the center of every product. Small companies as said, they usually don't have the mindset or the money to start this kind of new way of marketing and of business. So we tried to give practical advice in the book. There is a whole chapter, a whole part about tools that small and medium enterprises can use.One concept I want to bring you is the concept of the new P's of marketing. So we have redefined the four P's, which are product, price, place, and promotion, of course, thinking about just one P, which is people, to the third power. So it's going to be People X Purpose X Planet, which equals prosperity. It works very well, it's also on the cover of the book. “People, purpose, planet” and P cubed. It works even better in Italian because people to the third power, we say people elevated to the third. I don't know if you say it also in English, but we say elevated. So meaning that people is the person is elevated if they work with purpose and it works for the planet.Andrew Mitrak: I see what you're saying because it's people and to the third power, the three would be elevated on top of it. We don't use that term, but I can visualize exactly what you're describing. Like just another example of the Italian language being much more poetic and pretty than English.The Importance of Purpose and ActionAndrew Mitrak: Are there any other takeaways for marketers and entrepreneurs into really applying this into practice or if somebody is a marketer who's listening to this today and they're inspired by some ideas of enlightened management, what could they do as a daily activity or is there planning their next marketing campaign to bring some of these ideas into their work?Gabriele Carboni: Well, something that was very difficult for me was to find my purpose. And it took me a lot of time. I explained it in another book, but there are those nights you cannot sleep because your brain still works. And I understood that my purpose was to help companies to function differently, to do business differently. This is because my father had a small company and he was one of those who focused on the product. It was a car repair garage and he was always focusing on the car. And the car was perfect, everything was great and you could trust that company that your car was perfect every time. But they forgot about the people who drive that car. So they were always late, they were not treating employees very well. And so I wanted to explain to companies that you can do business differently. So one thing is if you can find your purpose, you wake up every morning knowing what you are doing and why you are doing that. I think everything will be easier.Andrew Mitrak: I can relate, and I think everybody can relate, to those nights as you're thinking, “Am I doing the right thing with my life?” Even when you feel like you're successful, or you had what you thought you wanted, that time passes and you kind of get restless or you think of second guess things. I found that becoming a father and having kids also changed my perspective on a lot of things too. I think about the planet they'll inherit, the types of companies they'll work at, the types of jobs they'll have, and how you want them to spend their time. So it is something that. Thanks for sharing that was part of it because I certainly relate to it and I think listeners relate to that as well.Gabriele Carboni: Yeah. And I always follow Yoda's quote, which is, “Do or do not, there is no try.”Andrew Mitrak: You're totally right and you've exemplified it by asking Philip Kotler to co-author a book the first time you met him, asking the Pope for your endorsement. I think also even for me I relate to it somewhat on this podcast. You think about the things you want to do, the projects you want to do, and you're like, I can think about it, but how about I just do it? How about I just send Philip Kotler an email and see if he wants to talk? And then sometimes he will say yes and the universe pulls you in a direction or gives you a signal that you should keep kind of pulling on that thread and exploring those ideas.We've gotten very philosophical here…I've really enjoyed speaking with you. It's been so much fun going back from Italian humanism, the Renaissance, the Enlightenment. How all of these ideas from 500 plus years ago can impact how we think about marketing, what we choose to prioritize. And also I just loved hearing your stories both about meeting Phil Kotler and Pope Francis and it's just been a really fun conversation.Where can listeners find you online and how can they learn more and support your work?Gabriele Carboni: Well, LinkedIn is the best way to reach me. I always respond also to direct messages, so if you have any questions, just write to me and I'll reply.Andrew Mitrak: Thanks so much for your time, I've really enjoyed the conversation and I look forward to staying in touch.Gabriele Carboni: Thank you very much. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 14If you listened to my first podcast with Philip Kotler, you heard Phil discuss marketing emerging in the early 1900s as a form of “applied economics.” This week, my guest Mark Tadajewski shares research that casts doubt on that version of events, revealing a narrative of early marketing history that is much more complex than the traditional story and veers into surprising, supernatural territory.Mark Tadajewski is Professor of Marketing at The Open University and Editor-In-Chief of the Journal of Marketing Management. He’s a marketing historian that I admire for two reasons: First, there’s his dedication to his research. For the past two decades he’s pored over seemingly every artifact related to marketing history. When you listen to this conversation you can hear how he has an encyclopedic knowledge of the evolution of marketing thought and practice. I’m only a few months into exploring marketing history on this podcast, so speaking with Mark Tadajewski was a humbling experience.Second, there’s his bravery. Tadajewski’s research pokes holes in a narrative that’s endorsed by giants in the field of marketing. There’s considerable professional risk in second-guessing the likes of Philip Kotler. But Tadajewski is unafraid of surfacing what his research reveals, even when it links marketing’s development to fringe topics like telepathy, hypnosis, spiritualism, and other forms of psychical thinking. This podcast is called, “A History of Marketing” not “The History of Marketing.” There isn’t one single definitive story of history, so I enjoy presenting multiple perspectives of marketing’s development alongside each other through conversation.Here’s my conversation with Tadajweski:Myth Busting Conventional Marketing HistoryAndrew Mitrak: Mark Tadajewski, welcome to A History of Marketing.Mark Tadajewski: Andrew, it's nice to be here. Thank you for asking me.Andrew Mitrak: Yes, it's so great to meet with you. When I started this podcast, you were the exact type of scholar I was hoping to meet with, so I'm so glad we had this opportunity to connect. You've thought deeply about marketing's history and evolution and early beginnings and you published a great deal of research around this.Your LinkedIn profile states quote, "I challenge conventional perspectives to encourage a critical examination of marketing thought in the broader political economic environment.” And you've also been described as quote, "the foremost myth buster of marketing thought." What are some of the top myths you've busted or the non-consensus ideas you put forth? How have you sort of earned this reputation for challenging conventional perspectives?Mark Tadajewski: The myth busting thing, I think it's a result of somebody else's paper; [D.G. Brian Jones] a colleague that I worked with a lot actually in the last 20 years wrote a paper called "The Myth of the Marketing Revolution." And you see lots of similar titles to that. And so what I've done basically, whether it's the marketing concept, relationship marketing, service dominant logic, the history of motivation research, the history of marketing education generally, with all of those, I've generally looked at the literature and gone, okay, this is great.But I know from being a bit of a sad character who sat in offices at midnight, looking through the Harvard Business Review from the very first issue and going through everything, this doesn't seem quite correct. And so if I get a sense that there's an argument that I think is problematic, then I tend to start digging a little bit more.Rethinking "The Marketing Revolution": Did the Marketing Concept really start in the 1950s?There's a paper by a guy called Robert J. Keith, published in 1960 in the Journal of Marketing. It's called "The Marketing Revolution." Now Keith's core argument basically is that throughout the history of marketing, what we see is a progression. We've gone from—he's talking about the Pillsbury Company in particular, but he's generalizing his argument to business generally—So he says we've moved through a number of stages. He talks about a production era, which is roughly 1869 to about 1930. Then it's a sales era, 1930 to 1950. Then the marketing era in 1950. And that's where people usually stop. But he also mentions a couple more. He talks about marketing control, about 1958, and he talks about something later called “change.”Now, a lot of people, you know, if you open an introduction to marketing textbook, any of them pretty much, they'll say the marketing concept—this idea that the organizations should be orienting all their activities around the consumer—appears about 1950. I was like, really? You really survived in business, if you're a production-oriented company, just by producing whatever you could and hoping everybody buys it? Or through hard selling? You just sell people as many things as possible. You don't worry about overloading them? You don't worry about telling them fibs because you're never gonna see them again? It's a transactional orientation. You don't expect to see them again in the future, so you can get away with it now.And so what? In the 1950s people suddenly saw this light and went, "Oh, you know what we should be doing? Actually, we should be making things people want." And I thought that just doesn't sound really true.I started reading again some of the other historical papers that have been written in that area and people were contesting it; the textbooks were never picking it up. It was like, okay, this is really interesting.John Wanamaker: A 19th Century Relationship MarketerSo I started writing my own papers on how you should think about this differently. I found earlier examples like, you look at the merchant princes from the 1850s onwards basically.John Wanamaker for example, a really famous retailer, would walk around his store with customers and he would be offering them, you know, whatever sweets or nuts or whatever he was eating and chatting to them really nicely and kindly. And he was really smart because he would give gifts to the children. You know, so immediately you're impressing the parents, the kid loves it massively. And the kid goes away with a really positive impression and when it comes their turn to buy, they come back to you. And Wanamaker's there selling them the things that they actually want.Andrew Mitrak: Wanamaker also has one of the most famous quotes in marketing, which is something along the lines of, "I know that half my advertising is wasted, the problem is I just don't know which half."I gotta do a full episode on Wanamaker because he seems like a really fascinating guy.Mark Tadajewski: His stores are fantastic. But I used Wanamaker to say... I'm dipping about a little bit, but you get the marketing concept, and then you get later developments called relationship marketing that people say appear in 1970. That's complete fiction as well. You know, people have always been interested in long-term relationships.You read Henry Sidgwick, who was somebody that Harlow Gale used to read. He would talk about how people like to find organizations, you know, even in like 1850, that they actually like to deal with because if you could deal with them once and they sold you something great, you could go back and it meant you didn't have to think or worry about who you're buying from. So this, again, none of this was new.But when I was looking at the Robert J. Keith paper, I was like, okay, he says Pillsbury are orienting themselves all around the consumer, that's great, but I know that argument also appears in Percival White's work from 1927, where—and this is a pretty much near verbatim quote—it says, "the thesis of this book is that the beginning and end of all marketing is the consumer." It's like, oh, okay, that sounds very much like Robert J. Keith. So okay, we can critique it on simple grounds. People have mentioned this before.When you look at some of the citations of people mentioning Keith's work, they usually cite a guy called [JB] McKitterick, who actually says in one of his papers—and it's a really interesting thing that should have been the giveaway—you know, [paraphrasing], “People that take their time to read earlier business periodicals will usually find out that most of the ideas that we think are original to us have usually been articulated way before.”Not So “Customer-Centric”: Pillsbury’s Price Fixing CartelMark Tadajewski: So I go and read this material and I knew the history was really flawed. We're trusting Robert J. Keith quite a lot here. His narrative sounds a little bit self-serving. Pillsbury's gone from ignoring the consumer in 1870 to orienting everything that they do around them.I said, well, how can I find out what they were really doing? So I read the histories, that didn't tell me much more.I thought, oh, I know what I can do. I wasn't sure whether this would work, but I knew that the Freedom of Information Act in the United States—there are loads of reasons why you might not want to do this, but I did it anyway. So you basically write to the FBI. And you say, can you send me any information you have on this company, these people? And as long as they're dead or it's a company, they'll generally, depending on whether the information needs to be redacted or kept back, they'll send it to you. And they sent me the file on the Pillsbury Company.And so I was reading this. And as I'm reading this one Saturday morning, I'm sitting there and I've got, you know, bits of an idea for this paper and I'm reading it going, wait a minute. The period when he's saying we're now revolving everything we do around the consumer? Pillsbury was involved with a price fixing cartel, which is about the least customer friendly thing you could be doing, and the FBI were investigating them. And so it traces how they were doing this. Basically they were flying into, I think it was the Twin Cities. They were flying in there.The FBI were monitoring who was traveling, what they were—you know, they were finding out from hotels who had stayed where, what people had talked about. And it seems like they had people that were feeding them information, informants, saying there's price fixing going on amongst these 12 companies. And interestingly, when they confronted senior executives at Pillsbury with this information, they went, "No, no, no, no, no, no. We haven't done this," you know.I probably wouldn't do that with the FBI. Because they're going to find out. And so the FBI keep digging and they do find out substantial evidence that price fixing—basically people have been meeting. You can technically talk about past prices, yeah, that doesn't violate the Sherman Act, which is basically an act that deals with restraint of trade. But what you can't do is talk about even speculatively what prices might look like in 12 months. And that's where they really landed in a horrible bind.Andrew Mitrak: By the way, this is Pillsbury, the company that in America is best known for the Pillsbury Doughboy that goes "tee hee." Behind it are these people who are engaged in a price fixing cartel to undermine consumers.And what year are we in by the way? What year are these meetings happening?Mark Tadajewski: They say—the FBI seem to think it was happening before the period that they managed to investigate it, but they say at least since 1958 and up to the mid-1960s. And the company actually did say, well, this won't have impacted the consumer because even though we control this massive market for—it was flour, the product they were controlling the price of—they said, well, we're only dealing with business buyers basically, flour millers that will buy from us. So we're not actually dealing with the consumer. Which is hugely disingenuous because companies don't often go, "Oh, I'm paying more for this, we'll just deal with that and not pass it to the consumer." Prices, you know, get passed on to the consumer.So eventually, after the evidence was passed to them, in this period that would effectively be where Robert J. Keith is talking about marketing control. Now marketing control in Keith's article, or in later speeches, was basically the idea that the whole of the organization will revolve around marketing and marketing is in charge of all decision making effectively. At this point when Keith's talking about marketing control, they're actually engaged in trying to control the market in a far more nefarious and insidious way that has negative consequences for the consumer.So not only can you contest the history of the marketing concept by saying, well, it appears much earlier than lots of people think it does, and here are all the examples... but also, when Pillsbury were mentally orienting all their activities around the consumer—and they put it like this, "the consumer should be the center of the business universe"—they were actually doing what they could in this particular case to ensure that they maximize their profits rather than delivering, you know, more competitive prices to consumers. And again, you know, you can only study this using methods like asking for information from the federal government.Beyond “Applied Economics”: Psychology's Forgotten Role in Early MarketingAndrew Mitrak: There's an amazing use of the Freedom of Information Act. So I'm starting thinking about all the historical characters I'd like to do a FOIA request on. My first interview on this podcast was with Philip Kotler. I asked him about the origins of marketing and Kotler described it as emerging as a field of applied economics.Mark Tadajewski: Yeah.Andrew Mitrak: And this framing of marketing as applied economics, this is one of those conventional perspectives that you challenge. So what's your take on this description of marketing's origins?Mark Tadajewski: You see, it sounds really plausible. I mean really, really plausible. And again, when you've got people like Philip Kotler or Jag Sheth or Professor Kumar as well actually, in a paper in the Journal of Marketing, saying—Kumar said something like, "until 1945, it was generally accepted that marketing was developing out of economics," and I was like, okay, this is really good.So I started to look and see, well what are the connections here? And people didn't really explain it. And so that was where I was going, well this doesn't—right, so people assert it but they don't really tell me what happened. And when you start to look at what might have been the case, you read Bartels's History of Marketing Thought. And the chapter where Bartels is talking about marketing's connections to economics—something that was explored by a guy called Don Dixon in much more detail—Bartels actually goes, here's what marketing theorists and thinkers could have taken from economics, not what they did, what they could have taken. So it's speculative. And there's about three references at the end of the chapter, so it's like, you know, he's guessing a little bit, it seems.Now that some people have looked at what marketing has taken, Dixon does it really well, and it's been a long time since I've read it. But so I was looking at that and going, okay, the links seem to be a lot weaker. So, okay, maybe we need to be a bit more tempered. You know, we can't just assert marketing developed out of economics. Perhaps there are lots of different intellectual trajectories there. And so that's where I was thinking.And what Bartels actually does seem to suggest more clearly is that if anything, marketing was basically springboarding off economics. In the sense that, here's this fairly abstract science, yeah? Okay, but the marketplace is much more complex. So when you read a lot of the papers around the subject in the early history, what you find are early people that were trained in economics going out to the marketplace because they were aware that their abstractions didn't map onto what people were doing in the marketplace very well. So they do stuff like going into the shops, literally following goods as they were moving from production through to the ultimate consumer to see which intermediaries were adding value, who was important, who was not, where was cost being wasted effectively.So the picture was more complicated. And as I started to dip into this a lot more, it was like, well, okay Bartels suggests economics could have been important, but he also suggests that economics certainly wasn't the only major strand of thought that was influencing marketing thought. And he says psychology clearly is really important because, you know, if you're trying to understand the consumer, then you need to be getting into their mind in some way shape or form through appropriate research, even through introspection.But what I found really interesting about Bartels the more I looked at it, I was sitting there just trying to make sense of this. And he says, what's really, really, really important that psychology's told us a lot about? It's about the power of thought. I was like, okay, that's an interesting angle. And Bartels seems to imply that, you know, there's something there to be looked at. I started exploring, “Well, how's psychology influenced marketing thought generally?” And so that led me to people like Arthur Frederick Sheldon, Katherine Blackford who was a psychologist character analyst, and people at Harlow Gale. A lot of these figures aren't really written about very much in marketing, or if they are, it's very partially explored.And so I started exploring the different connections between psychology and marketing and that took me along, yeah, some really interesting pathways.Arthur Frederick Sheldon: The Correspondence SchoolThe more I looked at people like Arthur Frederick Sheldon and his correspondence course for example, which I wanted to explore particularly the early parts of marketing thought, how psychology and economics were vying for engagement there. And Sheldon in his textbooks basically that he would give to students, was talking about again the importance of studying the consumer and providing them with goods and services that they really want. And he made the really important point that people don't really buy products. They buy the services that the products provide, and people buy services that are useful. But to understand what useful actually means, you need to study the consumer and you need to understand how they might be thinking about a product, what types of goods might be really applicable to them.And you see multiple strands of psychological thought appearing at this time. Now, one of the most problematic, but she published with Sheldon in his correspondence course, was Katherine Blackford, and she was one of the earlier writers on psychology and marketing basically. And she called him—you know, she had a very high opinion of Sheldon and she called him like the equivalent of Shakespeare and he was called the philosopher of selling. He was a really prominent figure.But she was using something called character analysis, and this is never written about in textbooks for a very, very, very obvious reason. It was basically based on physiognomy—so the way people look, making judgments about their intellect by virtue of the slope of their forehead and how far back it goes, that thing—but also phrenology.Now that might be a little bit familiar. It was basically this idea that the brain is this cluster of localized organs effectively. And the more active they are, the more you can feel them, you know, through somebody's scalp basically. Really, really quasi scientific, but it was really powerful at that time. So this whole idea of making judgments about people and their psychology on the basis of the way that they look or the bumps on their head was being explored.Andrew Mitrak: You've talked about Arthur Frederick Sheldon and let's just ground listeners into it. Where are we in history? So who was Arthur Frederick Sheldon? I'm just looking him up here. He was born in 1868, lived through 1935 and within that period, when did he make most of his contributions to marketing thought or why consumers buy things?Mark Tadajewski: Right. Well, he started correspondence school in 1902.Andrew Mitrak: What exactly is a correspondence school?Mark Tadajewski: It's basically like distance learning, but 100 years ago, 100 plus years ago. So people would write to him, they'd subscribe to his school and he would offer discounts for cash, all this stuff to get people to subscribe. And you'd get a course basically, and you get all of these little manuals. In fact I might have one. So yeah, this is what you would get.Andrew Mitrak: So yeah, you're holding up a pamphlet. I see you have your post-it notes in it. How many pages is that?Mark Tadajewski: So the pamphlets, it's quite a small pamphlet, but this is 112 pages. They would be up to like 32 in each curriculum, okay? Again, these are nightmarish to get hold of now.But students would write to him. He would send them these booklets. And they'd have exercises in for people to do. But his whole philosophy of selling as I'd mentioned, it links very much with what Vargo and Lusch have more recently called service dominant logic, and it's this idea that people don't buy the goods, they buy the service that the good provides. And he said to his students, the people that employ you, that you work for, the people that you serve, they're interested in buying the service that you can provide. All everybody ever does is provide service, which is usefulness. So the more you train, the more useful you can be to an employer.Andrew Mitrak: So the students in this school, what are they hoping to get at the end of this program? I've signed up. Am I looking to have a career in sales, am I looking to have a career in advertising, am I hoping to become an early type of marketer? Like what is it that they hope to get out of it?Mark Tadajewski: All of the above. So the people taking these courses are the people that couldn't afford to go to university because obviously universities, you know, it's still the preserve of pretty affluent people or people that are willing to get into a lot of debt to get through it. Now, at this point, you've got universities full of relatively wealthy people and you've got a vast amount of people that are moving into sales oriented trades, working in shops, that thing. So this was like, okay, how can I improve my prospects going forward? Oh, I can take these and I can read them at night, I can upskill that way.And Sheldon would issue a certificate. I think it was—this was really intelligent—it was valid for three years or thereabouts. And every three years if you came back and did the course again, you would be regiven the certificate. So you could train in—you know, it covered salesmanship basically, but it would give all the students basically all the cutting edge buzzwords that they needed. It would give them insights into some of the most advanced thinking of the time, and character analysis and stuff like that was pretty advanced at that point.But he was, Sheldon was a very, very, very savvy marketer and this is something that we can all take from these people. Sheldon was connected to the Rotary Club. You know, these huge amounts of business people that start forming service clubs in the early 1900s or thereabouts, 1908, 1910 onwards. And so his students basically would do these courses, they would generally then get their certificate, they could then say to their employer "this is what I've done," and for a lot of people at that time, that would demonstrate the progression their employers wanted to see. They wanted to see students that were actually engaged and were willing to go home at the end of a day, read these booklets.Now, what was good about the booklets, I mean this is really smart. They not only gave you all the business, sales, marketing knowledge that you needed in a really succinct form and they're really clearly written by and large, but they also gave people advice about health, wellbeing, the types of exercise they should be doing. You know, encourage people to drink a lot more water, avoid alcohol, avoid cigarettes. You know, recommendations like, before a job interview, maybe don't stop at a saloon for a glass of whiskey because that's not gonna look great. You know that thing. But it was basically like a university course in miniature.But universities were incredibly jealous of this material when it started to appear because these courses were selling for relatively limited amounts of money to lots of people. And I mean Sheldon's school went pretty quickly from, you know, a couple of thousand students to 15,000, and then by the time Sheldon dies, it's estimated that he's taught at least 250,000 students across the world.So he was an influential guy.Andrew Mitrak: It's this early distance learning, hundreds of thousands of students have purchased and signed up for these pamphlets, they've read about that and this is years before the MBA program emerges. This is the certificate you can get if you want to be in sales and show to your employer that you have the knowledge, that you're eager, that you're learning about it in your own time and this can help you stand out from other candidates. Was the word marketing used in these books or is it more that it had a lot of the fingerprints of marketing? It just wasn't sort of rolled up into marketing. Or how did marketing sort of fit into the Sheldon school?Mark Tadajewski: A lot of the time they're talking about salesmanship rather than marketing. But marketing as a word has been around since like the 16th century, 17th century maybe, but it's been around for a long time. At this point they're talking a lot about salesmanship, but in a lot of ways that have contemporary resonance.Sheldon's Ideas: Business Building, Relationship Marketing, and Customer Lifetime ValueMark Tadajewski: I mentioned relationship marketing. That's shorthand basically for forming relationships with consumers. Sheldon's whole business philosophy was oriented around what he called business building, which is this idea that once you've got a customer, you want to hold onto them. And so he talks about the permanency of patronage.Now there's a really cool example and this is all information that he's giving to students, you know, who haven't maybe got mentors or anything like this. So this is all really valuable. He talks about basically every interaction that you have with a customer can build and build and build and you can sell them more and more. And so he talks about a young couple who come into a store and they're after a parasol for their baby carrier basically. And he goes, you may or may not make the sale at that moment, but what you've got is information. You've got information that at this house live a young couple who are relatively affluent, who have a young child. And the child's going to grow through these years and you can probably every couple of years sell them something different that's right for their child at that point of development. And the ideal he said—and again this is pretty heavily gendered—is you want to keep the customer until the point when the mother of the family is buying a tombstone for the father. So, you know, when people talk about customer lifetime value, this is...Andrew Mitrak: That's literally customer lifetime value.Mark Tadajewski: Yeah, you've got them from the beginning till the end.Andrew Mitrak: The other thing that you bring up with these Sheldon books is that it's not just about salesmanship, but it's about lifestyle. It's about how you present yourself, how you're healthy.Mark Tadajewski: Well you've got to remember that, you know, it's an early professionalization move because you've got traveling salesmen at that point who are quite well known for living, you know, fairly alcohol infused lives and socializing with people to get them to buy. And Sheldon's point is, no, no, no, no, no. If you want to have a long career and if you want to be the professional individual that you are, this is how you should live your life. You know, you shouldn't tell rude jokes. You should drink in moderation if at all. And he provides exercises that people should be doing as well. And he says, you know, if you do all of the things that I recommend—now, this is a bit dark—you could live till you're 100 years old. Now Sheldon didn't. He lived till he was like 67. So, you know, there's a mixed message there.This has been happening for a long time. And you can understand why because it's great for employers. If you've got somebody that's been through this course, you're going to get employees that know how to take care of themselves. They know about relevant business practices, and you're probably going to get quite a lot of mileage out of them because if they're young and they're healthy and they're engaged and they're not drinking heavily, they're going to stay in your employment for a lot longer. It's not coercive. You know, it's power relations in a really positive way. In other words, I become a great employee by doing all of these things. I live a long, happy, fruitful life that works well for my employer, it works well for the banks that fund my employer's expansion of his business. Everybody benefits effectively. So it's a really seductive discourse.Weird “Science”: Phrenology, Hypnosis, Telepathy, and Psychic InfluencesAndrew Mitrak: There's that seductive discourse that is, you know, overall towards health if you're encouraging people to exercise, not drink or reduce smoking and things like that. But there is also sort of this thread of the weird ideas of psychology. Phrenology you mentioned. What was his relationship to Katherine Blackford? Do they collaborate with each other?Mark Tadajewski: Yeah, it's a complex one. Sheldon basically sought out people that were at the cutting edge of whatever discipline they were at or involved with. And he saw Katherine Blackford—she was apparently a trained medical doctor, there's some uncertainty on this front. But whatever she was, she was extremely well versed in then popular-ish ways of looking and understanding people: phrenology, physiognomy. These were not massively obscure at this point and marketing did a lot to try and beat it out of its early practices.But so he's looking at people like that. But when you read his books, you get a lot of very up to date perspectives, you know, business building, service, all these kinds of things, the importance of market research in different ways. But then there's also really what strikes the contemporary reader as a bit of a shocker, because he's there going, "Oh, and now I'm going to talk about hypnosis and its role in sales." You're like, okay, that's unusual. And then it moves on fairly quickly to telepathy, which in case people aren't familiar with it, it's mind-to-mind communication without the mediation of the ordinary senses. So thought transfer effectively.Andrew Mitrak: Telepathy is having a comeback. There's a very popular podcast right now...Mark Tadajewski: The Telepathy Tapes. Yeah, yeah.And again, what people need to always remember when you look at this material and even in the contemporary present—because there's telepathy being brought back into business through materialist telepathy and you've got brain-to-computer interfaces and a whole bunch of things—it's not dismissing these things outright, but looking at this literature and going, well what were they really talking about?Now Sheldon in terms of hypnotism, he's dead against it, because he's very much of the mind that marketing and sales education or engagement basically with the customer should always be about educating them. It's not about deadening their will, which is how he viewed hypnosis. You know, imagine let's go a bit extreme, the people on the stage that you've seen being hypnotized where they're suddenly, you know, dancing like a duck or quacking or all this stuff.So that's what he's reacting to. It's like the hypnotist is seen to be somebody, like Demare's work, you know, somebody that's got immense power over the person that they're hypnotizing and it deadens the will entirely. Now Sheldon was very savvy because he realized that wasn't a good look, you know, then you don't want to be doing that. So he's very critical of hypnosis, but very positive about telepathy. Right?And so this makes a lot of sense when you start looking at the intellectual foundations underpinning it. So he's using a lot of the material from a guy called Prentice Mulford, who talks about mind-to-mind communication in his own way. And also a guy called Thompson J. Hudson who wrote a book where it was all about psychic development basically, but he talked about the self as divided into the objective self and the subjective self. Now what this should be telling a lot of people is the idea that the conception of how Sheldon and people at that period were understanding who we are and how we act and how we think is way more complicated than a lot of the early literature tells you. It just tells you if you read EK Strong's work from the 1920s, it just talks about consciousness. It doesn't talk about the strata of the mind or anything like this.And Sheldon's drawing upon this literature. He says actually there's effectively a subconscious and a superliminal consciousness. And that material feeds into the discussion on telepathy in the sense that the subjective self that Sheldon's actually referring to were seen to be the conduit for where our memories are stored, is the facility that enables telepathy effectively. And it will eventually become—you know, the subjective self is also defined as like the most suggestible part of who we are. They often split the self into two brothers. The objective self being the smart logical one who doesn't take other people's opinions without extensive critique, the rational part of our mind. And the subjective self is the brother that's been left in charge of the business that's not really that skilled at it and is ripped off by sales and other people who can tell them basically whatever they want.So Sheldon's there using all of this material and he says, well, the literature on telepathy suggests that this is actually very productive. So he explains how you can think about using it in your own business practice and he basically encourages the neophyte salesman to be as sensitive as possible, so that you can sense when the psychological moment in terms of making the sale is there before the consumer themselves is actually aware of the moment. And he says, and you can do this through telepathy. And this is going to, you know, 250,000 students."Telepathy" in Sales: Literal Mind Control or Enhanced Sensitivity?Andrew Mitrak: And if I was to steelman telepathy or try to take it as seriously as I could. Obviously there's reasons to be skeptical of telepathy, but if I also think of all of the sort of unconscious communications and there's what's spoken but then there's—if I'm a salesperson, there's how I present myself, how I dress, how I greet you, all of the things that are like non-verbal communication that can influence somebody. How products are packaged, how they're presented, the idea of desires and keeping up with your neighbors and all of the irrational thoughts that we have.All of that to an early thinker who's trying to find new words for it could think of that as telepathy in a way? Or it's something that's magical that's hard to quantify. Was that what was influencing this word of telepathy or do they literally mean like, I'm going to use brain to brain transmission of thoughts and stuff? Was it sort of that first sense or more of like that literal sense of how we think of it today?Mark Tadajewski: Both. Yeah, so in other words, all the things that you mentioned about appearance, your knowledge of the products, your ability to engage with people, a lot of that was associated with being personally magnetic. You know, having some charisma that would engage people, being interested in their interests and trying to discern what would most appeal to them.But they go beyond this, quite considerably beyond it in some cases where it's very much not only do you need to know about the consumer, but in an ideal sense, the person interested in telepathy should—or the salesman that's thinking about using it—you know, wants to find themselves a nice quiet location where they can visualize the consumer they're trying to target and try to imagine them in their life and what they're doing at that moment and send, you know, whatever messages you're trying to convey, literally project them. One of the examples is, try and imagine the person that you're seeing like they're at the end of a long tube and that will help you funnel your thoughts towards this person. I know, I know how this sounds. But they took it deadly seriously.Now, when you read William Walker Atkinson's work, who's similar in orientation to Sheldon. Atkinson's there going, well, you know, we might not be successful the first few times we try telepathy, but you've got to practice this and there are lots of ways you can practice it. And he basically gives people exercises to do. So you know, there's a phenomenon called the sense of being stared at basically, and you may or may not have experienced it yourself.Andrew Mitrak: So this is the idea of if I'm at a restaurant and somebody across the restaurant is looking at me – or if I'm observing somebody else, there's some sense that you know you're being watched. Is that sort of the idea?Mark Tadajewski: Yeah, and that was one of the exercises that he recommended to try and enhance your psychic sensitivity. You know, to see whether you can make people turn around when you stare at them from the back. And there's a lot of this. You know, like trying to justify telepathy by going, it's a bit like wireless telegraphy. So you see people like Mark Twain talking about this, Samuel Clemens. So they give them lots of examples about how to do it.But what you seem to find is that there's a date often given for when there's a shift away from these arguments. And it's 1912, it seems to be. And so William Walker Atkinson in particular, who's similar in orientation to Sheldon, in his work in particular, in the early literature you see him very occult oriented. You know, "Here's hidden knowledge that I'm imparting to you as a student," that thing. But later on he suddenly reverses. He suddenly says, actually no, people aren't taking psychology seriously because we've tied it too closely to the occult, to telepathy, to all of these kinds of unusually esoteric knowledge that people, particularly business people aren't seen to take too seriously. So he reverses and moves away from those perspectives. But, you know, irrespective of where you look, again, I got tons of this stuff lying around.[Holds up booklet] So for people that can't see that, that's a booklet on Practical Mind Reading by William Walker Atkinson.Mind Reading and Sales Management: The Impact of “New Thought”Andrew Mitrak: What year was Practical Mind Reading published?Mark Tadajewski: This was… 1906.Andrew Mitrak: And so what's the relationship between this and early marketing? Practical mind reading and early marketing? What is the connection between the two?Mark Tadajewski: Well William Walker Atkinson, who was a very astute promoter of this literature, so he would write on really occult subjects and also really sales managerial stuff, because his background—he worked in his dad's retail store at a greengrocer as a child and then later became a lawyer, when that career didn't flourish in the way that it was intended, turned to a lot of this material.And they're all—all of these people basically at this time, they're all very much immersed in a literature that's called New Thought, okay? This is not sales or psychology that's necessarily underwriting a lot of what they're thinking, it's New Thought, which is the idea that thought, the way we think generally, has an ontologically powerful role in the world. In other words, our thoughts can shape reality. That to some people may sound a bit like, you know, the book The Secret or the Netflix film.Where it's like, "Oh, you know, if I treat the universe like it's a vending machine, I can manifest whatever I want." You hear this stuff everywhere. Now they cite a lot of the New Thought literature, but what they do not tell you in The Secret in other places, which William Walker Atkinson and Sheldon do is, yeah, you know, have your subjective dreams, have your wishes, mobilize them to actually get out and do something in the world. It's basically a way of encouraging people to be optimistic and, you know, people that didn't have the financial backing that other people had to go, "Well I can do something with my life," and it was meant to encourage them.But they said, okay, your practice as a marketer or a salesperson or whatever hinges on subjective realization—having those dreams, having those wishes and mobilizing them—but then objective realization. In other words, your subjective wishes will come to absolutely nothing if you don't go out into the marketplace and work really, really, really hard. The “work really hard” stuff's forgotten from The Secret. Everything just appears for people in The Secret, money and parking spots and all this stuff.But so that's what they're all working with. And so that literature gets very occult. They start talking about how the unseen world—and by the unseen world, I mean dead people—can help you and can give you energy and can help you generate your ideas and get them out into the marketplace. And it seems very, very occult, but it's—and a lot of it is quite esoteric, but it has a really optimistic undertone, which is, okay, life may have dealt you a really nasty deck of cards, but let's go into the world with our best foot forward and here's how we can make a success of ourselves. Positive thinking, being enthusiastic, being engaged with people, reading this literature that was meant to improve you, enhance your sales presentations and skills and engagement and healthy living. In other words how you can actually do something really successful with your life. So that's where a lot of them are coming from. And they'll take any scientific perspective that they think will advance their interests to do so and it was, you know, hence the number of students, very successful.Harlow Gale and Psychical Advertising ExperimentsAndrew Mitrak: So continuing down this sort of unusual branch of marketing, one name that you brought up earlier is Harlow Gale. He's a relatively little known person today, but he lived from 1862 to 1945 and you wrote about him in a paper called "Rethinking Harlow Gale: the psychical influences on his contributions to advertising and their enduring reverberations." So can you share with listeners who was Harlow Gale and what were his contributions?Mark Tadajewski: Gale, really challenging figure. I mean really challenging in the sense that he was supremely smart and also very forthright in terms of pursuing views that he felt were correct. So he had a very short academic career effectively. He was basically forced out of his institution. I think it was a really short span of time; people can find it in the article. But Gale's an interesting character because he was a member of the Society for Psychical Research. Now the Society for Psychical Research study things like telepathy, clairvoyance, apparitions of the dead, all of these kinds of things.Now Gale becomes interesting in the sense that he's known as an experimentalist in advertising, one of the earliest. What people don't get from previous studies on Harlow Gale is the fact that before he becomes the experimentalist in advertising, he was actually going to seances and all these kinds of things where he's looking at people that are trying to make other groups think in certain ways and he's very interested in what they're saying, what they're understanding.But when somebody's there saying "I can see, you know, God or Jesus or the saints in front of me," Gale was noticing how these dynamics operated in the seance context. And Gale goes, "What's the unifying thread here?" It's suggestion. These people are all being encouraged to see the saint, to see—in one case it was a floating vegetable above somebody's head—you know, all of these kinds of things. And so Gale's there going, okay, this tells me something about human nature effectively, that people can be very suggestible.Gale's immersed in the Society for Psychical Research, their literature, especially F.W.H. Myers's work on the subliminal consciousness, and what Gale will call the multiplex self. Now that just basically means as intelligent human beings, we're both intelligent, we're also suggestible, but we also have a superliminal consciousness and a subliminal consciousness. Note the term. I'm not saying unconscious because even your subliminal consciousness was believed to be processing data constantly, okay?So it's a really sophisticated view. Think: if I go to sleep and I dream about a work task, the dream can sometimes provide the solution if your brain's relaxed and it's thinking in different ways.Now Gale's bringing all those ideas to his advertising work as well. So he's studying his students. And he goes, okay, I'm going to mail practitioners, see what advertising media they use, how they promote their goods. And I'm also going to get my students to look at some of these adverts as well because I'm interested in, you know, what gets their attention effectively when they look at an advert. Is it the text, is it the imagery?Now, what he's trying to identify there is, right, not everybody will be affected by advertising in the same way. Some people will be much more critical and uninfluenced than others. There will be some people that can't articulate why an advert or why a particular brand or why a product influences them at all.That was his cleavage point for trying to theorize how the subconscious plays a role in advertising interpretation. His argument—and this is where we have to give him loads of credit because it's really early on—was if somebody can't really explain why they bought a product, maybe they've been influenced at a subliminal level, and that's the influence that's going on there. Now subliminal and subliminal self, this isn't framed as a negative thing. It's not Hidden Persuaders. Gale's just going, there are other ways for us to be absorbing information and making sense of it.Now, Gale's work really can only be understood if you combine the background in the Society for Psychical Research with his studies in advertising. That in short is what he did. But when you read earlier studies, they would just mention, "Here's Harlow Gale, published on advertising, did this, did this," and published in a journal called the Journal of the Society for Psychical Research.But nobody decided for whatever reason—and I'm not judging anybody—nobody went, "Well, that's an interesting journal." And when you do start to dig into the background you go, okay, he's making sense of human suggestibility in these contexts and he's studying people in seances, he's studying people that are claiming clairvoyance, seeing distant sights way beyond what you can see literally in front of you. And so he's trying to explore whether some of these things exist or whether there are other dynamics in play. And the dynamics that they come together on is some degree of suggestibility that gets in below our conscious analysis basically.Walter Dill Scott vs. Harlow Gale: Reframing Subconscious Influence as “Suggestion”Now, the difference between him and Walter Dill Scott: Walter Dill Scott really doesn't like psychical research at all. He thinks it's something that is making psychology look ludicrous, in other words. Now Scott was publishing a lot on psychology and was well connected to the business community. And so he was explicitly trying to demarket psychology as he understands it away from earlier psychical perspectives. Now the turning point for him seems to be, he goes home to visit his family and a friend of his goes, "Wait a minute, why are you studying psychology? Why would you be interested in all these occult weirdnesses?" And he seems to take that really to heart because when you read his books, he's there going, "You know, this is all medieval superstition." Doesn't engage with the literature like Harlow Gale who has been a member of the Society for Psychical Research, read all of the literature, undertaken experiments himself, been really involved with all the key figures in it.Walter Dill Scott, 1869 –1955And so this seems very odd. And my point when I was looking at Walter Dill Scott's work was, okay, this is interesting. What you get here is you go from a multiplex interpretation of the consumer—this consumer who is stratified, so you've got subliminal, subconscious, it's a multifaceted consumer—to Walter Dill Scott who just goes, no, the consumer's not—he doesn't say multiplex, he just goes they're duplex. In other words, they can be rational and they can be suggestible. But most people are—and this is where we're problematizing the notion of economic man in a really big way—most people aren't rational at all. We like to think we are, but most of us are really the creature of suggestion, he argues. Now that's a perspective that's really common at the time.But Scott is there, so Scott's there going, psychology is not psychical research. People are influenced by suggestion much more. And he dismisses psychical research as superstition, doesn't engage with the work. And for me, my point in looking at the transition between the two was, Scott's there claiming he's a scientist and yet he completely voids any engagement with the scientific method. He doesn't read the literature, he doesn't make a rational reasoned interpretation of it and critique of it.He just goes "this is medieval superstition" and dismisses it. So the idea is that psychology as it's imported and incorporated into marketing isn't necessarily stretching our critical faculties, in other words. When it's introduced at that point, it's introduced in a really, really unscientific, uncritical way. That's why I wasn't a big fan of Walter Dill Scott's work. He had a huge impact, but Gale was more interesting.Andrew Mitrak: On Walter Dill Scott's biography—so born 1869, lived until 1955. He was the president of Northwestern University, wrote a book called The Psychology of Advertising in Theory and Practice in 1903, and continued to write about the psychology of advertising. He was a professor of advertising and psychology. So an academic clearly held in high regard as president of Northwestern, early thinker in psychology and advertising.But the quibble with him is not so much whether telepathy and other sort of weird parts of advertising were wrong or not, it's more that he dismissed them just because of all of the baggage that they carry, or that there wasn't a critical analysis of it. He was more, "Hey, just call all that stuff suggestion instead." Is that sort of the right way to think about it?Mark Tadajewski: That's pretty much it. But you know what the really hilarious thing was? Walter Dill Scott—remember I already said to you that Sheldon was very critical of hypnosis because he saw it as deadening the will—Walter Dill Scott taught suggestion by hypnotizing his students because he was a trained hypnotist, who was really highly skilled. So the way that he would teach them would be to say, "What do you think of this product?" and it would be like, you know, some soap or something. And it would smell horrible, or perfume. And he would say "It smells—you think it smells really sweet," and they would say it smells really sweet. And he would say to their students, "You see, this is what suggestion is. Of course, of course though, business people don't hypnotize like this, but they do engage in suggestion," which of course is meant to limit the way the consumer's critical of your offerings.But you know, he's an interesting character but he's full of contradictions. But he was really smart in the sense that he went, spoke to practitioners, wrote really easy accessible books for them. And then every time he rewrote material he would introduce case studies where people had applied his ideas from his earlier books and he would summarize them. So in other words, you got theory, you got people that have used the ideas and here's how they benefited from it. So he was super astute. And again, I'm not dismissing his contributions, I'm just saying if you're going to claim to be scientific, then it would be nice to see you actually apply the scientific method when you critique something.Fom AIDA to the AIDAS Model: Sheldon's Lasting Impact on AdvertisingAndrew Mitrak: Just to recap. We've talked about A.F. Sheldon who had a massive influence on marketing especially because of the sheer volume of people that he educated through his correspondence schools in the first half of the 20th century.Mark Tadajewski: His impact was huge in the sense people that you've spoken to have mentioned the AIDA framework: Awareness, Interest, Desire, Action. Well Sheldon said, yeah, that's great, but remember we're trying to create the permanency of patronage. You don't just get people to buy your product, they've got to be satisfied because if they're satisfied they then become confident in your offerings and come back. So the AIDA model was transformed into the AIDAS model with Satisfaction being on the end. So he actually impacted advertising theory in a really substantive way as well.Why Was This History Lost? An Accidental Omission or a Deliberate Burial?Andrew Mitrak: That's right. So Sheldon is impacting advertising theory. Gale has this sort of unusual strand of thinking where his work has touched on clairvoyance, telepathy, spiritualism, and he's also one of the first experimenters in marketing and advertising. There's this whole body of work in the early 1900s that is these weirder things that are sort of lost to history. The question is, why was all of this lost to history? How did it sort of get buried in the history of marketing?Mark Tadajewski: You know, history's written by the winners by and large. And people like to tell really progressive narratives about themselves. You know, when I refer to the Pillsbury narrative earlier, it's a really progressive narrative that suggests marketers have gone from this point to now being much more enlightened. And it doesn't look great to be looking back on your history and go, okay, we talked about phrenology, we talked about telepathy, we talked about hypnosis, and there's a lot of occult material embedded in all of this. That's not a great look in an introductory textbook.So I think a lot of this material disappears because one, the material's really fragile, that disappears. It's not saved, it's not scanned by a lot of people. And then, you know, as these narratives like "marketing's applied economics" get repeated, they just become a—you know, I don't mean this in a rude way—but they become a shortcut to thinking. You know, so it's like, well that's that history and that's what I've got to teach. I don't need to think about it anymore than that. And it can become, you know, it smothers critical thinking effectively. But we're all guilty of it, you know, in lots of areas of our lives. We have to just assume that what we're being told is correct.And that's really it. History's written by the winners and a lot of this stuff is written by people who have been written out of history in lots of different ways.Finding Marketing History Through Foucault and the Cold WarAndrew Mitrak: I want to ask you what initially drew you to marketing as a field?Mark Tadajewski: The honest answer is, it was really the only first subject, you know, that I really enjoyed. I really didn't like school full stop and then I got to college. Not college in the American sense, college in—I was 16 and I'd failed most of my exams, so I went to the local college where they helped me a lot. And I took a business studies course and it was the first time things seemed to drop into place, you know, and it was just fluid for me. So the minute we got to marketing in that course, I was kind of—it was just really interesting. I really enjoyed it. And of course, the minute you enjoy something, you just immerse yourself in it, so you improve much more rapidly anyway. And it was off the back of that really.And then I very luckily went to a great university where I did political economy and politics, but then as a master's degree, I went to the University of Leicester and did an MSc in marketing. And there were some amazing scholars there. And again, this probably makes me look really shallow, but I went to see the professor of economics who was the head of the school at that point. And I walked into his room and it was just—it looked like an Amazon depot. It was just crazy books everywhere. And I just thought this is so cool. This guy just sits and reads and thinks and lectures and writes papers. I mean, what an amazing job. And I was like, okay, this is interesting.And he was really good. He'd recommend readings to us every week and I was that student—I always get to lectures and stuff really early because I always dread walking in late. And I'd be there like an hour or two before the school opened because I'd go on the train. And I used to sit and read all the material he'd recommended, which I didn't think was unusual. I just thought I was doing the right thing. And he used to say, "Oh, what do you think about Coca-Cola's valuation?" or something like that. And I'd have all the figures because I've been reading Kellogg on Marketing that he'd been flashing up the week before. And so, you know, we'd developed a bit of rapport and he said, "Well, we've got, you know, a PhD program." And I went, "Well I'm broke," which has been the story of my life at least up to that point. And he said, "Well we can figure something out," and he got me onto the program and I was surrounded by really, really talented people who basically gave me a lot of freedom to do what I wanted. And that's really unusual. So I was just incredibly fortunate in so many different ways.And when I got to the PhD program, they said, "Well, what are you interested in doing?" One of the people that supervised me was an organization studies theorist. No, I wasn't supervised by marketing scholars. And they said, "Well, do you like history? What do you like?" you know, thing. I said, yeah, that sounds good. And they recommended certain readings. They told me to go and look at Michel Foucault's work in particular. Really prominent French theorist who writes books that scare everybody to death. My supervisor, he was a really smart guy, his name is Campbell Jones, and he said, "Well here's a book called The Order of Things and it's about all these transitions between different disciplines and how they change. Oh it's the scariest book you'll ever read." And he said, "Could you do something like that?" And I went—because you don't want to say no—I went, "Yeah, yeah, sure, sure. I'll give it a go." And that was my introduction to it. We didn't have any formal training in terms of studying the history of marketing. Didn't know anybody that had really done it. So I just started reading and reading and reading and it started from there basically.Andrew Mitrak: You found marketing when you were around 16 years old then. Yeah. And it was this Foucault example that sort of led you to dive deeper into marketing history. Yeah. Where did you start? You have this assignment, you have this big ambitious goal. What do you look for first?Mark Tadajewski: I was really interested in how people come to think in the way that they do. How does our world become taken for granted? And so I knew that there've been lots of studies on the development of marketing, but very few of them had actually really linked them to the political, economical, social changes going on. There'd been a few papers but very, very, very few. And the reason is because it's really hard to do and it requires a lot of leg work. So I went, okay, that's something I could do.So I started to dip into, you know, looking at the history of the business school, looking at the development of marketing and then going, okay, what important turning points have we maybe not paid much attention to? And one that hadn't at that point really been noticed particularly—because I'm talking about 2002 at this point—was the Cold War. I was like, okay, this clearly had massive ramifications, you know, 1947 to 1990. How did this impact on marketing and the business school?And so I started reading around it generally and I chanced upon a—it was a book review and it was in the Journal of Marketing and it was a book called Philosophical and Radical Thought in Marketing that was being reviewed. And the person reviewing it was a guy called Hal Kazanjian. Could be pronouncing that very badly wrong. Sorry Hal. And in it he talks about how, you know, philosophical and radical approaches to marketing, this is really cool, this is really different. But he goes, you know, previously we wouldn't have done it. He doesn't really explain in a huge amount of detail why not. So because I've never really had a filter where this stuff is concerned, I just emailed him and said, "Why? What does this mean? Can you tell me?"And he went, yeah, yeah. He goes, "Well, you know, at this point in time, of course there's a really virulent anti-communist movement." And he said being called liberal was bad enough. But if you so much as looked a little bit, you know, much further left leaning, then it became a real issue. What was scary enough when you started to dive into this in a bit more detail, it was enough for somebody to point at you and say "This is this guy's political economic orientation. He's a fellow traveler or he's interested in reading left leaning newspapers," and it could get you into a world of trouble. And Hal said his doctoral chair, the person on his committee, hadn't been very quick to sign a loyalty oath, you know, basically saying "I'm not a communist, there are no weird views being espoused here," and that was enough to get him basically, I believe, fired, ruined his career, had severe implications for his life.The Cold War's Chilling Effect: How Politics and Funding Shaped Marketing AcademiaMark Tadajewski: What I started finding the more I dug around this, this wasn't unusual. So you'd see people turn up at lectures that you were doing, you know, at that point and you wouldn't know who they were. There were just two or three people stood at the back. It was external monitors evaluating what people were saying. And did you—in other words, were you being critical of the United States and its stance and its political economic system? Were you mentioning Russia too frequently? Were you mentioning it in a positive way? And if you did, there'd be serious consequences for you.Now, at an individual level that sounds scary enough, but this was a fairly widespread phenomenon at this point in time as I started to find. And so I was there going, okay, there are lots of individuals that are being affected quite negatively by this. You hear about McCarthyism and you know, everybody gets the image, you know, it's real red scare terror and going after people in Hollywood, but also really badly in the university. And so I was like, okay, here are individuals being affected, but where are the institutional shifts? Are there bigger factors in play?And I noticed that the business school was being criticized for producing overly descriptive research. The staff were being criticized because they didn't have PhDs generally. The students weren't seen to be very good. And so at this point it's like, okay, they suddenly start to get a lot of funding from the Ford Foundation in particular, which is a big philanthropic organization. That's an interesting link.And what I noticed was that the Ford Foundation and the Carnegie Foundation and the Rockefeller—the big three they're called—they were focused upon by a number of really prominent government committees, you know, in the mid to late, I think it was the 1950s, but in a big way. And what the committees were focusing upon—so there was a report in 1952 and I think another one in 1953—they said, okay, we're looking at the philanthropic foundations and their funding and they seem to have been supporting social science in quite a big way. And so they'd been looking at racism, inequality, how they can handle some of those issues basically. Now the big problem was that the label social science, for a scary number of people, was conflated with socialism or some form of social philosophy.And so you've got these foundations who are very powerful, very affluent being targeted by the government effectively. And they're there going, "Oh no, no, no, no. No, we're not. This isn't a social philosophy. In fact, what we've been doing if you look carefully is by studying some of these issues, we've basically been looking for ways to relieve the pressure in the system." You can get a sense of the desperation. And so they thought it very appropriate to suddenly twist their funding a little bit, to start funding something that would be perceived to be ideologically neutral or preferably a big support for the US political economic system. The business school was an ideal candidate.Ford Foundation's Role in Promoting "Behavioral Science"Mark Tadajewski: [The Ford Foundation] poured a lot of money into this, into the business school generally in an effort to upgrade it. In other words to make the business school, the research that was being funded, the people that were being trained, as scholarly, scientific, as objective, as neutral, as behavioral scientific as they possibly could. Now you'll hear a lot of people toss about the label behavioral science. That wasn't developed off the back of academics coming together and deciding that that was the label that fit what they did. That was a label that the Ford Foundation actually coined and then said "This is what we're funding. Do you fit into this specialism?"Now they funded lots of business schools, but lots of individual professors in particular. One name that I'm sure you've heard before, in fact I know you have: Wroe Alderson was given a visiting professorship because his research was very interested in improving marketing management and in improving executive decision making, a lot of his work in that area. But also people like Philip Kotler.Philip Kotler received money for computer simulation. Again think: computer technology enhancing executives and their decision making ability, very ideologically neutral, very positive in other words. And then, thinking about Jag Sheth. Jag Sheth mentioned in his discussion with you that he'd been connected—well he was obviously connected to John Howard. John Howard was funded in multiple different ways by the Ford Foundation because not only did they fund institutions, training programs, individual scholars, but they wanted to fund textbooks because how do you get this vision of what marketing and business research should look like out to as many people as possible? You produce textbooks.Now Howard—the first book he did, it was something like, I can't remember the title of it off the top of my head, but the first book that he produced, Marketing and Executive Behavior or something like that, was funded by the Ford Foundation. The second one was a book called Marketing Theory which was a general version of the first book that he produced. And then the third, that material fed into the Howard and Sheth book that Jag was talking about. So the Ford Foundation's fingerprints were on a lot of this material. And a lot of the mathematical specialization that you see growing in the 1960s developed off the back of the Ford Foundation and their training programs in advanced mathematics and statistics.Now, pretty much any big name from the 1950s, 1960s, 1970s either came in contact with the seminars themselves. Kotler was at one for example. Kotler's a very skilled mathematician, and the first edition of his textbook was much more mathematically oriented but he was told to revise it because it didn't have enough pictures, quote unquote, which I thought was cool. But so you see then, they funded these really prolific researchers and you had to be, you know, somebody that they thought was super talented, highly likely to be very research productive. And people like Kotler, Perry Bliss, John Howard, they all fit that mold, and they did end up making huge contributions. So Ford's money went a long way to turning marketing into the positivistic, managerial, quantitatively oriented discipline that it is by and large in lots of countries. And that's really a result of the Ford Foundation's funding. And that you can trace back to the Cold War. And so the way the discipline looks isn't just a natural occurrence of scholars coming together. It's tied firmly to political and economic factors and the need for scholars at that point in time to be pledging that they were in the fight against communism effectively, which, you know, it's understandable, isn't it?Risks of Researching Marketing's PastAndrew Mitrak: Researching the history of marketing, it requires a lot of legwork. And I think that's for a couple of reasons. One, you're researching the history of ideas and there are certainly physical outputs like advertising or public relations things or textbooks where you have a physical record that's written and captured in some way, but a lot of those things, they can be ephemeral. They sort of disappear. Also you're studying the idea of thought, which is an organizational structure which may not be captured in the same way. So are those the reasons why it requires a lot of legwork to study marketing history or are there other factors at play that make it a particularly difficult or labor intensive field to study?Mark Tadajewski: Well it's high risk, you know? Because when you've got a lot of people saying, here's the way the discipline developed or here are the core theoretical traditions and this is how they've developed. You've got to go, well, that seems reasonable, but I think there's something more there. And you have to, to some extent trust your gut and then start to go digging around. And you can go down lots of blind alleyways and that kind of, you know, if you're going to do that as a PhD student, you could run up to the time that you're actually allowed to do research for and you could get nowhere, so it's really risky.But you're right, getting hold of a lot of this material. In fact I've got—I'll show you this—getting hold of stuff like this is really tricky. This is from 1906 I think this one.Andrew Mitrak: And for listeners who are listening and not viewing, can you describe what you're holding there?Mark Tadajewski: Yeah this is The Business Philosopher which is the journal that Arthur Frederick Sheldon published. So if you were subscribed to Sheldon's correspondence school you would get a collection of these where you get an annual subscription to The Business Philosopher, you get all of his other books as well. But material like this, you know, you can see it's very flimsy. It's over a hundred and something years old now and to get hold of it's hard enough. But to get even earlier versions of the course is tricky because there are earlier versions.And again, to find this material you've basically got to go, okay, here is all this received wisdom. I don't think this is correct. I don't think this is correct. I don't think this is correct—which could make you sound extremely egotistical. Right. But it's also incredibly dangerous as a researcher because if I'm saying, "No, I think everything all of these really established professors have said before me is wrong," and you're this newly minted PhD student or new lecturer or new assistant professor. I mean you're on really risky territory. So it's really tough. So you've got to be in an environment that encourages it, which is rare in itself. You've got to be very lucky in terms of actually getting to the end point with this project as well. And you've got to find journals that will publish it, which is really tricky because a lot of the very high profile journals don't tend to engage with a lot of historical research. They'll say things like, "Okay, this is great, but how can we operationalize this to improve management decision making this, this or this?" So there are a lot of factors that can discourage you basically.Andrew Mitrak: History can be debated, history is political, history's all sorts of things. That's why I used a hedge. I called my podcast A History of Marketing—not The History because I always felt like the definitive article "the" puts a lot of weight on it. I'm like, you know what? “A” history, I have no skin in this game. I just want to hear everybody's ideas, learn everything I can and so this is “A History of Marketing.”Mark Tadajewski: You know on that point, I think it was my external examiner for my PhD who told me—he was a reviewer on a paper I'd submitted to a journal and I think I'd called the paper at that point, "The Something, Something, Something." And he said you really need to change it to "A" or—because I was running out of how many times you could use "A," I was putting "Towards a History," you know, like everywhere you could.Learn More from Mark TadajewskiAndrew Mitrak: Mark, I'm sure a lot of listeners are interested to learn more of your work and dive deeper into these strands of marketing history. Where would you point listeners to? How could they learn more about your work and what of your published articles would you point listeners to?Mark Tadajewski: I would probably go to LinkedIn and then look at my academia.edu page. That's where I can upload a lot of the material that I've written. Start with whatever grabs your attention. That's the best way to approach any of this material because if you're not interested in it, it's not going to stick or resonate with you. So, yeah, find what you like and I hope you enjoy it.Andrew Mitrak: I certainly enjoyed it. Well, Mark, thanks so much for your time. I really enjoyed this conversation.Mark Tadajewski: My pleasure. It's been really, really nice to talk to you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 13"Place" might be the most often overlooked of the four P’s in the marketing mix, but it encompasses channels and distribution. Power dynamics and conflicts between companies (and sometimes within them) shape how products reach their customers. Few have influenced our understanding of marketing channels more than Louis Stern. Lou is the John D. Gray Distinguished Professor Emeritus at Northwestern's Kellogg School and the namesake of the American Marketing Association's Louis W. Stern Award, which recognizes contributions to marketing and channels of distribution.Lou is also the author of books including Marketing Channels, Management in Marketing Channels, and Marketing Channel Strategy. Lou drove renewed interest in channels by bringing a fresh perspective. Where prior researchers saw channels as logistics and warehousing, Lou viewed them as dynamic systems governed by power and conflict. Lou brought these insights to clients of his consulting practice which included IBM, Ford, and Johnson & Johnson.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsThis conversation explores the evolution and strategic management of marketing channels, covering:- How channels evolved from analysis of physical places to corporate strategy- IBM’s consumer PC launch and its failed attempt at operating retail stores- Whether sales or marketing should own distribution- And much moreNow here’s my conversation with Professor Lou Stern.The Two Critical Issues of Channels: The Amassing of Power and Resolution of ConflictAndrew Mitrak: Dr. Stern, thanks so much for joining us.Lou Stern: You're welcome. Good to be here.Andrew Mitrak: Is it okay if I call you Lou?Lou Stern: You sure can.Andrew Mitrak: So, Lou, how would you describe your career in marketing to somebody you're meeting for just the first time?Lou Stern: Well, I followed a path that not a lot of people do follow. I focused on a subject called marketing channels, but I did it in a very unique way.Andrew Mitrak: Before we get to marketing channels, how did you get into marketing as a general field to begin with?Lou Stern: When I was an undergraduate, I took a course in industrial organization economics. Part of that course had two particular readings in it. One was by a professor at Harvard by the name of Joseph Palamountain, and it was called The Politics of Distribution. And it was fascinating. It dealt with the battle between automobile manufacturers and automobile dealers, and how the dealers coalesced in order to make sure that the manufacturers didn't overwhelm them.The manufacturers were in the mode of overwhelming dealers, and so the dealers felt they had to protect themselves. It also dealt with other industries in which similar battles were taking place. So that was one thing that really sparked interest.The other was by Kenneth Galbraith, a very famous economist. He wrote a book on countervailing power. The focus was on how retailers square off against manufacturers in order to be able to protect their rights, their properties, and their way of doing business. So those things combined to spark the fire.As I became interested in marketing channels and got deeper and deeper into the subject, it became obvious to me that the field was really dismal. It was dismal because it was descriptive. It was telling stories of how retailers did things, how wholesalers did things.And it was focusing on such wonderful topics as, "What's the difference between a one and two-story warehouse?" That has to spark all sorts of fervor in the hearts of men!I kept saying to myself, how can I make this field much more interesting, particularly for myself? I had no interest in going out and describing the functions of warehouses. I had an interest in having an intellectual pursuit that was something that would stimulate me, but also stimulate all kinds of young scholars coming along behind me.I discovered that two critical issues in channels were the amassing of power, which I already looked at in industrial organization economics, and the resolution of conflict because there's all sorts of conflict in channels of distribution. So that led me to all sorts of doctoral students who became interested in the subject, and the rest is kind of history.Elevating Marketing Channel StrategyAndrew Mitrak: It sounds like when you were in school, it was almost approached from a mathematical sense, but what you found was that there are all these interesting power struggles.If you look at a company, how those companies interact with other companies, there are different points in a value chain and distribution where somebody's trying to take more.Companies face all these decisions: do I work with this partner or that partner? Do I build it myself? And these are all strategic questions that companies make when it comes to their marketing channels and distribution.Lou Stern: Absolutely. And I would talk to executives about my perspective of channels – how to look at them, how to manage them, how to figure out how to go to the marketplace, how to work with different kinds of distributors. I developed a kind of a framework for that, and I found that they really loved it. They were really enthusiastic about it. The business world ate it up.They said, "That's where we live, that's what happens to us." We need to be able to understand how to work with these strange people, whether they're suppliers or shippers, or retailers, or manufacturer's reps, or whoever they were.They needed more schooling on how to look at it, and they needed more schooling from about 30,000 feet. They get so wrapped up in the minutia of channels – and believe me, anybody that's worked in that area in a company understands that – they needed to be able to stand up on high.Inside IBM's PC Launch and Brief Retail ForayLou Stern: So, for example, I got a call from an executive with IBM, and they said, "Professor Stern, we've got an issue that we'd like to discuss with you. We are bringing out something called a personal computer in a very short period of time, and we don't know quite what to do with it."They knew what to do with it from the point of view of how it functioned, technologically, what it was, but they had very little concept of how to bring it to market.So they asked me, would I work with them and a consulting firm in Chicago to answer the question? My response to them was, "I wouldn't know a personal computer if I fell on one!”Right? I have no concept. I surely don't know how to use anything like that.And they said, "We'll teach you. We'll come up to your place. We'll spend three days with you and teach you how to use the personal computer, we'll give you one, as long as you're willing to spend some time with us and help us think through this issue."And that was real fun. That was a magnificent time, and we worked together so that they learned how to work with dealers – ComputerLand, Businessland, all those guys sitting out there.They at one time said, "Should we open our own stores? Should we have IBM stores?" And I said, "If you do, I'm going to throw the computer out the window." I said, "Don't touch it. You guys don't have the mindset to be able to work at a retail level."IBM did open some stores, but then they closed them almost immediately. So at any rate, that's the kind of fun stuff that I got involved with.Andrew Mitrak: What an iconic company for such an important time in history.Who Should Own the Distribution Channel: Marketing or Sales?Andrew Mitrak: I want to ask you about this example because your books and literature are on marketing channels. Were you working with a marketer at IBM, or was it more of an operations executive or a finance executive? Sometimes these companies didn't even have marketing teams yet. So I'm curious, who was your sort of main point of contact and who were you working with?Lou Stern: That's a great question, Andrew, because most people don't realize what the answer is. Marketing channels is probably... I don't think an advertising executive in a corporation would know a marketing channel if he fell on one, okay?Marketing in most corporations – it may have changed some since I was involved – has to do with advertising, product design, all the other Ps, promotion. It doesn't have to do with place or distribution.The salesforce owns distribution. It's a selling function. I don't agree with it. I believe it's a marketing function. I believe that marketers have to be the people to determine what happens, because all of these things have to be coordinated. You don't just have a marketing channel for the sake of marketing channels; you have one because there's a product that has to be developed and thought about to some extent as you think about what channels it's going to go through.So the issue is, sales owns it. They shouldn't own it, but they do. And because a salesforce orientation is focused strictly on making sales, they don't think strategically, because they don't get it. And IBM at that time was a salesforce. The salesforce dominated the whole corporation.Andrew Mitrak: Yeah, if I was to think of IBM up to that point, they were probably selling mainframes, which at that time took up a whole room in an office building. It's a very one-to-one salesperson meeting with an individual company or individual buyer. Maybe they're buying one, maybe they're buying a set for a number of their offices, and it's a very manual install.When you're launching a PC, it's a personal computer, that's a mass-market product, or supposed to be a mass-market product, and you're dealing with a larger scale.I think of one way to split marketing and sales: sales is usually more of a one-to-one process, marketing's more of a one-to-many process. If you're IBM going through a retailer like ComputerLand or precursors to Best Buy, you're finding the right channel, the right retailer to reach scale, which is very different than selling a mainframe to a company.Lou Stern: That's exactly correct. They had a mainframe mental set, and of course, I was not involved with the mainframe end of the business. But figuring out how to use this kind of new consumer product was a real shakeup for them, and they tried very hard to learn what it would take to be much more marketing-focused than they had been in the past. It wasn't that they were at all a bad company; they were terrific. It was just that they were not used to this new world of marketing channels run the right way, so to speak.Marketing Beyond Promotion: Channel Focus on How Customers ShopAndrew Mitrak: If I had a job description for a channel marketer today, the assumption would be that this person's a digital marketing channel manager. They do our emails, they do our website, they do our search engine optimization. Maybe they're doing our paid media. And it's all very focused on the promotion of those four Ps, and it's not thinking about product or thinking about place.Do you know when that happened? Was there a time when marketing was a little more holistic and less focused on promotion? That doesn't sound like it was the case as much when you were developing marketing channels?Lou Stern: I suspect that the emergence of Amazon was a hammer that smashed into the heads of many, many folks. The key to getting this focus, to incorporating marketing channels as a mainstream marketing issue that you must take into account just as you take into account products, promotion, and price – the key to it is something that you do all the time in advertising. And that is focusing on the customer, focusing on the end-user.You have to define your end-user, and you have to then do research to determine how the end-user – whether it's a corporation, or an individual, or some other entity – how that corporation or person likes to shop.Everybody shops.And so the question becomes, how do they like to shop? Do they like to shop online? Do they like to shop by going into stores? And it isn't where they want to shop, it's how they want to shop.There are attributes of shopping. That is, some people need rapid delivery, some people want to see variety. Some people have other issues that are of concern to them as they think about purchasing something. And that focus – the focus of how your customers want to shop – is the key to the kingdom.And what you know from everything else you learned about marketing is that there isn't one customer. There are lots of customers, and there are lots of customers that fit into segments. So you've got all sorts of different segments out there who like to shop differently.Oh, wow, hello, right? So eureka! You've found it!So then the question becomes, how do I deliver those shopping attributes? We call them shopping behaviors. How do I deliver on those? What kind of folk can I employ that will allow these people to shop the way they want to shop? And that's a marketing thing. It takes segmentation-type research.And then once you've determined how people want to shop and how you'd like to reach them, then you have to manage the thing. Once you set a channel up, you got to manage it, just like you would manage a corporation. Only you may not have the power. Someone downstream may have the power.You want to try to tell Amazon how to operate? Good luck! Right?!You won't be able to. But you'll be able to go to Amazon and say to Amazon, "I have found out how customers of yours like to shop for my products. And I want to work with you to enable you to be able to give them what they need." It's a total different mindset. Okay, and that's marketing.How Lou’s Textbook Sparked Marketing Channel Theory & ResearchAndrew Mitrak: You wrote the book, Marketing Channels. I think the first edition was in 1977. What change in thinking did that present, and how did companies and academics respond to it?Lou Stern: What that book did was it gave people who were interested in the subject a vehicle to use in teaching. There was nothing before that, really.I shouldn't say nothing, there was one book I think, but it wasn't exceedingly popular. But this gave them a kind of a research vehicle. And what I mean by that is it laid out an approach to the subject, which they could then use in their research in attempting to write articles that would be published in learned journals.So it evolved a whole area – for a while it was relatively hot – called inter-organizational relations and relationships between companies, and then eventually it evolved into something called relationship marketing. Relationship marketing is how do you deal with people – both your customers, your suppliers, your middlemen, whatever, salesforce – how do you deal with them and work with them so that the relationship can be effective? All of this came spawned out of that book. It gave them something as a framework.And what has to happen is that you have to have theory in academia in order to be able to test it. So if you have a theory about make or buy, that's a big issue. Do you do it yourself or do you get somebody to help you? And there is a wonderful theory called transaction cost economics. It was developed by Ronald Coase at the University of Chicago, Nobel Prize winner, and Oliver Williamson at Berkeley, Nobel Prize winner. They were different eras. Coase started it, Williamson advanced it.And what transaction cost economics basically says is that it is the transaction costs that make you decide whether you ought to buy or make, whether you ought to vertically integrate your channel of distribution, own the outlets – that IBM question, right? Should we go into the business of retailing or not? And Coase and Williamson argued it's determined by the level of transaction costs, and transaction costs are influenced by the state of opportunism in a channel.Put bluntly, how much are they going to screw you when you deal with them?How opportunistic are they? Do they simply look for their own interests and are they willing to take steps to promote their own interests against yours?That's a very key point because the more opportunism there is, the more transaction costs elevate. So that said that the book, the textbook and the issues that I was trying to address to the whole field – power, conflict, relationships, all of that stuff, trust, you can think of all the issues that go with it – they became fodder for academics.Breaking Silos: Why Channel Strategy Requires System ThinkingAndrew Mitrak: As I was reading your book, a few things came up for me. I realized I, as a marketer, have such a bias towards thinking about one company or my own company or my own product or my own brands.When you're on a marketing team, whether you're leading it or a cog in the machine, it's so hard to get even a team aligned around the brand, the growth strategy, the messaging. And when you introduce another company or another partner or another organization, it gets even more complicated.I have this bias towards thinking single-company. If you ask me to describe a marketing job, I'd probably describe somebody working for a single brand or a single product.When you wrote this, did other marketers also have that bias, or did this change that for people to think a little more not just about a single company, but about how multiple companies interact with each other to bring something to market? Did that shift thinking in some way?Lou Stern: Well, anybody that certainly came to my class walked out of the room with that perspective, right? But the idea of relationship and thinking in that term is a pretty difficult one to swallow. It's hard to put it into effect.You often have to go through the salesforce, and the salesforce is not generally intellectually oriented. It is difficult to make that case when they feel that the distributors are simply sitting in yachts, smoking cigars and living a life of Riley. They have a terrible bias against downstream people.So, in many cases, it's the great salesman that understands that they're dealing with the system. And in order to be able to deal with the system, the parts have to fit together, and the more they fit together, the better.Look at Walmart, who's changed their perspective a lot over the years. Their first perspective was to beat the hell out of suppliers, and that's what they did. And I think that what they've learned, especially in their relationship with Procter & Gamble, is that they've learned how to make a system out of their relationship, and they made it a win-win situation for both of them.Further Reading on Modern Marketing ChannelsAndrew Mitrak: Lou, this conversation's been a lot of fun. I'm so glad we were able to do this. If somebody is learning about marketing channels for the first time or has listened to this and wants to learn more about your work, where would you point them? What would you suggest?Lou Stern: I suggest they get a hold of the ninth edition of my textbook. I'm no longer writing it, but my name is on it. The lead author is a guy by the name of Rob Palmatier. He's at the University of Washington. He is a brilliant guy. It's something that you can read and enjoy parts of it. Just skim around and read what you want.But don't forget, it's power and conflict that's going to determine whether you're going to win or lose. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 12“My philosophy about the marketing function is that it's the interface between the organization and its markets.” - George DayThis week, we’re joined by Professor George Day, a renowned author, educator, and researcher. Day is the Geoffrey T. Boise Emeritus Professor at the Wharton School of the University of Pennsylvania, where he founded the Mack Institute for Innovation Management. Day co-authored Marketing Research with David Aaker and V. Kumar, who were previous podcast guests. However, Day perhaps best known for his work on strategy. We spend most of this interview on his 1990 book, Market Driven Strategy: Processes for Creating Value. Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsMarket Driven Strategy was a breakthrough because it shifted the focus from a company’s internal capabilities towards an outside-in, customer-centric approach. While newer strategic frameworks have emerged, you can trace many of them back to the ideas popularized by Day in this book.Now here’s my conversation with Professor George Day.Foundational Work in "Market Development"Andrew Mitrak: George, thanks so much for joining us.George Day: I'm delighted to be able to share my story and reflect on the history of marketing strategy—or what I would call strategy from a marketing perspective.Andrew Mitrak: Sounds great. Well, let's start with the early days of your story. You started as a mechanical engineer at the University of British Columbia. And in less than a decade, you were teaching MBA students at Stanford's Graduate School of Business about marketing. So how did you go from engineering to marketing?George Day: It began when I started as a junior engineer in a chemical plant, as an operating engineer. I decided that was arduous and painful, so I talked my way into the Market Development Group. I joined the Market Development Group as part of the R&D Group. They were trying to find applications for the products they were developing. We had a lot of capacity to produce hundreds of products, so my job was to find markets for them.Andrew Mitrak: A product in search of a market. That sounds like a fun, challenging line of work.George Day: I transferred to headquarters, and the day I arrived, they fired my boss. So there was a two-person Market Development Group, and I was the lead person. I had to learn a lot very fast.Talk about the blind leading the halt. I was thrust into an environment and a job which I really didn't understand, was certainly not prepared for. Because with an engineering degree, I was focused and rigorous.I think a lot of my perspectives came from the questions I asked and the inability of the senior executives of the chemical company to answer them. I decided then, to understand better the situation I was in, I'd get an MBA, and that was a really transformative experience.Andrew Mitrak: Were there any professors or mentors during that time that shaped your early views of marketing?Early Influences: David Leighton and John HowardGeorge Day: Yes, I encountered an enormously influential figure in my life, who I consider a mentor: David Leighton, who subsequently became chair of the American Marketing Association. To illustrate his capacity, he also was asked to be brought in to run the Canadian Winter Olympics, and then became the chairman and managing director of the Canadian government library, symphony, and museum.So Dave influenced me and encouraged me to go on and get a doctorate. That's when I went to Columbia. I had a Ford Foundation fellowship that I could use to pretty much talk my way into most schools. I went around and interviewed three or four schools and selected Columbia, largely because of John Howard, who was a rigorous, leading-edge scholar. He had an enormous influence on Jagdish Sheth and also on me.Andrew Mitrak: I talked to Jagdish Sheth a few weeks ago, and he spoke about his collaboration with John Howard on developing the theory of buyer behavior. What was your relationship with John Howard, and did you have a chance to collaborate with him on any of your research works?George Day: Jagdish at that time was a research assistant or associate of John Howard's, had gone to work with him, and I came in as a doctoral student into the doctoral program. It happened that I worked very closely with him and ran a big research project which we called the buyer behavior project. It was a major research collaboration with the General Foods company.So I spent a lot of time on that, and that's where I learned a lot of my research skills.The Analytical Edge: Engineering Meets MarketingAndrew Mitrak: And did you find that having this engineering background gave you a unique perspective on marketing? Were you sort of an odd person out with an engineering background, or was that more common?George Day: I think the engineering background certainly helped me because in the PhD program at that time at Columbia, there was a real emphasis on rigor and statistics. So that was pretty easy for me. My dissertation was on continuous time, discrete state stochastic models in marketing. If you can follow that, don't ask me any questions.Defining Market-Driven Strategy: Where to Play, How to WinAndrew Mitrak: I want to jump ahead to 1990. This is when you published Market Driven Strategy: Processes for Creating Value. When we were emailing in advance of this show, you mentioned Market Driven Strategy is a good place to start because that book represents your views on the scope of marketing strategy. So, can you share with us, what is the scope of marketing strategy?George Day: Marketing strategy— there are various ways to define it. I take an expansive view as the answer to the two classic strategy questions: where to play and how to win. Those have been the bedrock questions for all companies throughout time.But market-driven strategies advocate starting from the market and your previous commitments—that's the nature of your capabilities and culture that shape both the choice of customer value proposition and choice of service market. I think ultimately the core of marketing strategy is how to achieve customer value leadership and continuously innovate new value that customers will pay for.The other side of it is the companies that win—and I take a strong competitive advantage approach to it—but a lot of my subsequent work over the last 20 or 30 years has dealt with the ability of companies to foresee trends, events, and opportunities. These often come about as weak signals that are flickering out there on the periphery of the organization, and the winners detect and act on those weak signals faster than anybody else. A selection of books by Day: Market Driven Strategy (1990), Advanced Introduction to Marketing Strategy (2022), Market Driven Organization (1999)At the core of an innovation discipline is the ability to foresee trends and events that create great opportunities or possible great threats and position yourself to capture them ahead of any of your rivals.Bridging Academia and Practice Through ConsultingAndrew Mitrak: I love how you frame it as "where to play and how to win." As I was researching this book and your work, unlike a lot of books on marketing strategy that can feel kind of esoteric and abstract, this one feels really grounded in real-world business applications. How much of this was sparked by your academic research versus being informed by your experience hands-on consulting for companies?George Day: That's a very insightful question, and the answer is both. I am a product of a case background; I use a lot of cases. At the time I got my degree at the University of Western Ontario, that was strongly influenced by the Harvard Business School emphasis on cases. I love cases. I love teaching cases, and the cut and thrust of the dialogue debate in the classroom is really energizing.I take a little detour there so that you can understand how I came about and developed my consulting practice, which was largely as a leadership facilitator. I had probably maybe a hundred engagements where a company would come in, and I would only work with the division general manager or the CEO. That was my client, but we would agree that it was my meeting. And so I treated them as live cases.My job was to identify the critical issues and get everybody on the leadership team to agree these were the top five issues, and then come up with an action plan. We would not disband—stop the meeting—until there was a detailed action plan assigned to individuals with dates and times when they would deliver it. I made myself extremely unpopular by dragging meetings out until I was satisfied and the CEO was satisfied—you're not going anywhere. But more importantly, Andrew, these were ultimately live cases.Marketing: The Interface Between a Business and its MarketsAndrew Mitrak: So these live cases you were consulting with—these are some of the best-known companies in the world: AT&T, Ford, Nike, IBM, Cisco, Coca-Cola, Best Buy, JCPenney, Wells Fargo, dozens of others, I could go on. You mentioned that you were often working with the full executive team, not just a marketing department, but your main client was the CEO. Even though you're known as a marketing professor at Wharton, and 'marketing' was in your title or focus, this market-driven strategy was much beyond the scope of just the marketing department in an organization. You were working with the whole leadership team?George Day: Oh, absolutely, the whole leadership team. No, I take a comprehensive, integrated view of the organization and how it can compete in the future.Andrew Mitrak: So back to market-driven strategies, you write about some of the common misconceptions. The first that you cite is that some people misinterpret it as being reactive to the market. I'm going to quote your book here:"The real gains from being market-driven come from anticipating market opportunities and getting to them ahead of rivals."So to be market-driven, companies can drive the market and even create new markets where they didn't exist?George Day: You mentioned the distinction between market-driven and market-driving. To me, that's a distinction without a difference. A market-driven organization is constantly looking over the horizon—maybe out as far as three to four years—and trying to anticipate from the market back what the big threats and potential opportunities are.My philosophy about the marketing function is that it's the interface function between the organization and its markets—defined by collaborators, competitors, customers, and consumers. One of my jobs as a facilitator, going back, was to force them into looking at their company through the eyes of their customers and competitors. I would get them to role-play their major competitor. I would flip the script and have, for example, the chief operating officer take the role of his counterpart, ditto the operations manager and the marketing director and the CEO. They all got into their roles, and then I would get them to play out a role as though they were the leadership team of their major rival and think about the moves they would make. That's an example of outside-in thinking.Andrew Mitrak: That sounds like a lot of fun. Often on a marketing team, I take a somewhat similar approach of trying to role-play being a customer that uses a competitor's product.George Day: That's precisely it. Andrew: One of the other misconceptions that you write about regarding market-driven strategies is around adopting a customer focus. You describe customer focus as a necessary but not sufficient condition. It doesn't mean giving all of your potential customers everything they could potentially want. You write, and I quote, "Market-driven firms achieve superior profits by selectively nurturing the customers with the highest profit potential."George Day: Exactly. So there are two aspects to what I consider to be a market-driven strategy: that is, think like a customer and always benchmark yourself against your major competitor. I consider customer value to be a relative concept.Andrew Mitrak: Right, exactly.George Day: The customer picks the one that delivers the most value, whether it's price value, relationship value, quality.Understanding Customer Needs: Beyond the "Faster Horse"Andrew Mitrak: Right. I'm reminded of that Henry Ford quote that might be apocryphal about, "If I had asked customers what they wanted, they would have said a faster horse." Somebody could read the title of Market-Driven Strategy without reading the substance and taking the message, "Oh, you have to think of the horse market or think of how to build the fastest one." We're not realizing—well, truly being customer-centric is understanding the job to be done, understanding what it is they really want at the end of the day, and building products that satisfy their needs, even if it means going to a new market or building a new product.George Day: Exactly. Yes, it's adopting the customer's perspective.The Role of Path Dependency in StrategyAndrew Mitrak: One of the themes of the book and your work more broadly is this idea of path dependency. Can you elaborate on this notion of path dependency and what it means for marketing strategy?George Day: We are dependent on our past choices. There's the old saying, "past is prologue." We are constrained by our past choices—our culture, our capabilities, where we've been, and the market positions. But those are also strengths that we can leverage and adapt. So the ultimate question for all organizations is, what's coming next? And how do we position ourselves with our capabilities and our culture to capture the value that's created?Case Study: Sonoma County WinegrowersAndrew Mitrak: When it comes to market-driven strategy, and when you first released and published this book, did you have any favorite stories of companies that adopted this mindset and successfully implemented market-driven strategies to turn their product lines or their business around?George Day: I have lots of those stories, but I'm going to jump to my favorite long-term client. I have been running a think tank for Sonoma County Winegrowers. Sonoma County Winegrowers was my laboratory to put all these ideas into play.Sonoma is the second largest wine-growing region in the world after Bordeaux, and it's enormously complex. So I'm looking at all the strategic issues that affect them: regulations, the changing political climate, changing markets, distribution methods. Obviously, immigration and worker policies are huge. Now we're working with the president, who's a real visionary, in designing the farm of the future.I'll frame this aspiration as part of the overall perspective on strategy. Strategy is about the choices of markets and directions, but it's also about your level of aspiration and ambition. Their ambition is to be the Silicon Valley of farming, using advanced technology, mechanical pickers, on and on. We have a lot of advancements in generative AI because if you put a sensor in every square meter, that's an enormous amount of data. So I love looking over the horizon and saying, "Okay, what's coming next? And how are we going to prepare for that?"Andrew Mitrak: By the way, I love that example because you're taking wine, which is one of the oldest consumables ever, but you're talking about applying generative AI to it, applying robotics to picking. The innovation story in the market strategy portion of it just never ends.George Day: Yes. You absolutely hit the nail on the head there.“Market-Driven Strategy” in the Evolution of Business StrategyAndrew Mitrak: So when you look back on Market Driven Strategy, where do you think it sits within the evolution of business strategy overall? Because as I was researching it, for me, it felt like a direct predecessor of The Innovator's Dilemma by Clayton Christensen. You talk about the idea of market leaders and their “advantage erosion” from new entrants, which sounds a lot like disruptive innovation. So I guess where do you think of it sitting within the overarching arc of how business strategy has evolved?George Day: I see market-driven strategy or strategy from the outside in as interchangeable terms that reflect on the progress of the organization in satisfying its multiple stakeholders, including anticipating technology changes. I knew Clay [Christensen] pretty well, and it was a tragic loss when he passed away. But I think market-driven strategy is a much broader concept than disruptive innovation because it certainly feeds it and is a valuable perspective, but technology trends and developments are only one factor in the evolution of a strategy.See Sooner, Act Faster (2019)Further Reading: See Sooner, Act FasterAndrew Mitrak: Well, Professor George Day, thank you so much for sharing your experiences and wisdom with us today. The time just flew by. I wish we had more time together. Where would you direct listeners who want to learn more about your work?George Day: I wrote a subsequent book with a colleague of mine, Paul Schoemaker, called See Sooner, Act Faster that is really literally a manifestation of outside-in thinking. Not only does it require you to take the perspective of competitors of various kinds, but also to understand market evolution and position the organization. Ultimately, it's all about leadership. That's perhaps the defining message of my experience.Andrew Mitrak: George, thanks so much for speaking with us. I had a lot of fun.George Day: Well, I hope we can continue this conversation. Thank you, Andrew. I really appreciate you taking the initiative to do this and bring us all together. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 11When and where did modern branding really begin? The usual narrative suggests it started during the Industrial Revolution, when the UK and the US began mass producing goods.This week, we’re challenging that story with my guest Giana Eckhardt, Professor of Marketing at King's College London, whose research reveals sophisticated branding practices thrived in Imperial China centuries before the Industrial Revolution.Early examples of Chinese brands like the "White Rabbit" show how sophisticated targeted marketing and brand symbolism are much older than originally thought. We also explore Eckhardt’s work on The Rise of Inconspicuous Consumption and analyze how conspicuous and inconspicuous consumption have trended over the 20th and 21st centuries, with cameos from Marty McFly and Larry David.----------------Challenging the Traditional History of BrandingAndrew Mitrak: Giana Eckhardt, welcome to A History of Marketing.Giana Eckhardt: Thank you for having me, Andrew.Andrew Mitrak: So the typical narrative is that modern branding originates from the Industrial Revolution. But you have research that shows that branding practices date way back further than that, all the way back to imperial era China, more than a thousand years ago. Before we dive into this research, could you give a high-level overview of what the traditional version of this story is?Giana Eckhardt: What you'll read in every branding textbook that's used with MBA students, for example, is that yes, there are examples of the place origin of where something was from that exists in antiquity. So in other words, if you look at a vase or something that's been found in an archaeological site, it may say the name of the country or even the region from which it was from.But in terms of modern branding practices, which basically refers to the symbolic uses of brands to say something about who you are as a person and being much more identity focused, that first came into being around the Industrial Revolution. So in the 1800s and typically the UK and the US are the places that are referred to where modern branding practices originated. So this is things like brand mascots, for example. The first brand mascot is Bibendum, who represents Michelin tires.Andrew Mitrak: I didn't know he had a name.Giana Eckhardt: He does. Bibendum, yeah. So things like elements where the brand starts to become anthropomorphized. Consumers are willing to pay more for something because it has a particular name on it. All of those types of things originated around the Industrial Revolution and are typically tied to capitalism.Discovering Branding's Ancient Roots in ChinaAndrew Mitrak: So if the traditional story is that brands emerged out of the Industrial Revolution tied to capitalism, when did you start to second guess this version of events?Giana Eckhardt: I did my PhD research in China and what I was doing it on was the symbolic uses of brands in China at the time. And so I have some really, really great stories, which we can talk about some other time about how brands, which were brand new in the 90s in China like McDonald's, what they came to mean in a culture that was so different. But during the process of being over there and doing the research for my PhD in the late 90s, I started to realize that there were all of these brands that were way, way older than that. Meaning like millennia older than that. Using very sophisticated and symbolic uses of visual images or textual words that you can see in brands from basically the Song Dynasty, which is around 900 BC onwards.Andrew Mitrak: When you say you saw these and found them, how literally did you see them? Did you see them in books? Did you see them at museums? And like what was that aha moment where like, hey, this actually, this looks like branding and this predates the Industrial Revolution by millennia. What was that “aha” moment like?Giana Eckhardt: Yes, there are brands in museums actually, which you don't really see in a lot of countries outside of China. So that is definitely one place that I saw them. There have been books written on this, although in Chinese only. So we worked with some different people to help us translate a lot of what these ancient brands actually said. And also, some of the brands from that time are still around. So Tong Ren Tang, which is a pharmaceutical brand, for example, still exists now. And the white rabbit, which although not for needles, it's used for candies now, but in terms of a branding symbol from then is still used now as well. So they're still around.Early Branding Practices in Imperial ChinaAndrew Mitrak: As you came across this research, what led you to dive in and start to publish literature to correct the narrative and change the story? What drove you to this as an area of interest to keep pursuing?Giana Eckhardt: I've always been interested in Chinese culture and philosophy in general. And so I think when I realized that all of this had existed, and although it had been written about in Mandarin, it hadn't been written about in English, I really wanted to bring that knowledge to the canon of what people read in the West.Andrew Mitrak: Let's talk about bringing it to the canon in your article, A Brief History of Branding in China. What were the earliest traces of branding practices that you came across and shared in this article?Place Branding: The Changzhou Comb and Maotai LiquorGiana Eckhardt: Yeah, so place branding, so in other words, calling a product by the region in which it's from, is one of the oldest branding practices in general. And in China, we can see this as well. The Changzhou comb is a particular style of comb that was made in the region of Changzhou. And so when people wanted combs that looked like that, they just started calling it the Changzhou. Which one do you want? Oh, the Changzhou comb. And eventually, it became a brand in terms of like a legally protected brand, etc. But at the beginning it was not. So early branding practices of the place brands evolving into more symbolic brands is definitely one.Andrew Mitrak: This is so interesting because today we see place brands all the time. There's Kentucky Fried Chicken, there's Fiji Water, there's Philadelphia Cream Cheese. Almost every sports team is a place brand as well because it's tied to a city or an area. And how did a region become associated with Combs?Giana Eckhardt: Well, that's where they were made. That style of really brightly colored and having a person on the comb. Again, things that aren't necessary from a utilitarian standpoint, that was only happening within that one region. And there are a lot of other products that are similar to that too. It was very organic. We tend to think of branding as something that is very intentional, right? That it's something a company is doing or maybe a country is doing, branding itself or whatever. But it's very intentional and actually, if you look at a lot of these older brands, they just evolved into the brand rather than having it be a managerial decision.Andrew Mitrak: Yeah, and another place name example that you cite is Maotai liquor. And I thought it was so interesting to see a liquor example given that we associate alcoholic beverages with the region so much, whether it's breweries and microbreweries or macro breweries like the Rocky Mountain Coors lights and the macro beers of Michigan or the scotches of Scotland and the wines of France and of Napa. But here you have Maotai liquor as being associated more than a thousand years or so before modern day liquor brands evolved and it's a region known for its liquor. So I just think that's really fascinating that this seems like an organic way for a brand to emerge.Giana Eckhardt: Exactly, and you have to support it as it grows. You can't just leave it there to continue that way organically. For Maotai liquor, the key moment was when Richard Nixon went to China in the 70s. That was the first time that a US president visited since the Communist Party had come in charge. It was the first time that a US president had been invited. And when Nixon arrived to China, he was served Maotai. And all of a sudden the brand became so famous. Oh, what is he drinking? What is that? It's still very difficult to get Maotai outside of China now. So it's not like it had a huge boom in terms of sales after that outside of China, but it definitely had a boom in terms of brand recognition.Andrew Mitrak: Let’s go back to Imperial-Era China, well before Nixon’s visit. Let’s say we’re in 960 AD or some time like that, and I'm looking for a product. What is my experience of branding in these early days? If I'm or if I'm a merchant selling a product, what are the forms of branding? What are the primary functions that it's serving? Because this is outside of capitalism as well. So like who is involved in creating brands and who is involved in purchasing and identifying brands? What does that look like?Giana Eckhardt: It often stemmed from consumers themselves wanting to have a way to be able to find the same thing of the same quality that they wanted the next time. That's the Changzhou combs, right? How do I know that this is going to be made in the way that I'm looking for? You need some sort of language in which to explain that, right? So consumers would oftentimes come up with their own names, like which sometimes were place brands, but some sometimes weren't.The government also as well. The government realized that this was a way to help regional development. And also, in the same way that in the UK, the royal family will still endorse particular products, the emperors always endorsed particular products. And they realized that that was very strategic also. And so it was their way of helping saying, “Oh, why don't you call yourself this and we'll give you a seal that says that the emperor has endorsed this.” And so these are some of the ways outside of, we have a company and a brand manager who makes these decisions. These were some of the ways that were happening then.The White Rabbit: A Case Study in Early Brand SymbolsAndrew Mitrak: One of my favorite examples in your paper from this era is the white rabbit, which we referenced earlier. And can you tell listeners what the white rabbit is and what the brand of the white rabbit is?Giana Eckhardt: The white rabbit is widely considered to be the first modern brand. So in other words, a brand that just goes beyond identifying where it's from or something like this, but has more symbolic aspects to it.Andrew Mitrak: And it was for needles, right?Giana Eckhardt: Exactly. So it was needles that typically women back then would be using to sew. And it's important to say that the women who were the target segment for this were largely illiterate. So there is text on the brand. So there are the characters for a white rabbit. But people would recognize it, just who couldn't read that. And the reason why they would recognize the white rabbit is because that is a key character in a Chinese myth that everyone would know. And it's a character that represents females because the white rabbit is an empress ascended to the moon in a particular story that is very long to tell. But she ended up on the moon and the only thing she brought with her from Earth was her white rabbit. And so it's a symbol that's associated with women who were the target segment. And where you would see these images of a white rabbit is in the wrapping paper. So when you would buy your sewing needles, they would wrap them up in a brown paper and it would have the symbol of the white rabbit on it. It was also outside of the store, the first store, to show people where it is you could go to buy it. So it really served so many functions that current brands serve, in terms of making people feel seen and feel like this is for them because they can understand and relate to the different images and messages that are associated with the brand.Andrew Mitrak: So the artifact that's preserved with the white rabbit and is an image that's copied in your article is an etched metal stamp that would be used to imprint on a piece of paper. And in this image, you have it all. You have an image of the white rabbit. You have text around it and the text, the translation that I read is quote, we buy high quality steel rods and make fine quality needles to be ready for use at no time, unquote. And it sounds like it has all the hallmarks of a very modern advertisement. The image of the rabbit, of course, is on something that could be stamped and repeated and be consistent and you have positioning that emphasizes the quality and the speed of use. And it just seems remarkably contemporary, even though it's from close to a thousand years ago.Giana Eckhardt: Yeah, I 100% agree. And I would just highlight that in addition to everything that you said that leads it to sound remarkably modern, it's also speaking to a specific target segment, which brands that just identified things they did not do. And this is something that I think is really important to emphasize because it's one of the keystones of modern brand management now, right?Early Chinese Celebrity Endorsements and Target AudiencesAndrew Mitrak: So we've talked a lot about some of these keystones. We've talked about branding places. Are there any other favorite examples of early branding practices in China that you want to highlight?Giana Eckhardt: Celebrity endorsements. This was during the 1900s, but there is a cigarette brand that's featured on their packaging, the different generals that had fought in the war and been successful. And so you can have this idea of hero worshipping and promoting nationalism, using people who were well known and widely admired. Especially in the age of social media, a lot of people think this is something that is so new. And yeah, maybe the medium in which it's being disseminated is new as compared to cigarette packaging or something like that. But what they're trying to do is remarkably similar.The Spread (or Lack Thereof) of Branding Beyond ChinaAndrew Mitrak: Let's look at how this might have influenced branding outside of China. Do you see these early branding practices as a unique offshoot that developed within China and didn't influence the outside world or do you feel like these early beginnings of brand development influenced how areas outside of the Chinese region also practice brand development?Giana Eckhardt: China was remarkably insular for thousands of years. And this was because China was never a colonizing power over other areas. If you think about like as when we were talking before about modern day branding practices and those stem from the Industrial Revolution. Well, think about the UK at that time, for example, like and how many colonies they had. So that way of doing things, it's easy to see how it spread. With China, it wasn't until others went to China that even that this was even that these practices were realized. Of course, there was the Silk Road. So, products from China had been going to Europe for a long time. But the branding practices that went along with them because you need a level of cultural understanding to get what these brands mean and why they would be important. And so they didn't travel. And this is why we don't know about a lot of these brands and these types of practices even now in the branding literature. It's something that has been under the radar. And of course, now some Chinese brands are starting to become more prominent globally. Now, we can of course see this with Byte dance and TikTok, for example. It's been something that's been insular to China for a long time.Independent Development of Eastern and Western Branding PracticesAndrew Mitrak: The idea of branding and consistency and stamping sounds like within China it was identified and developed first and then almost independent of that years later, then the Industrial Revolution also adopted these practices, not necessarily influenced by what happened early in China, but they just came to a lot of the same ideas independently at a later time. Is that the right way to think about it?Giana Eckhardt: Yes, I think so. In terms of the symbolism attached to branding, that's something that yes, I think that definitely developed during the Industrial Revolution, but also in China, as we've seen and been discussing. So I think it's yeah, similar practices that developed from different cultural milieus that didn't, yeah, so they developed independently even though as you said, they can be so similar now.Conspicuous and Inconspicuous ConsumptionAndrew Mitrak: Let's just segue into a separate topic. There’s another area of your research that I wanted to cover with you, which is this idea of conspicuous consumption and inconspicuous consumption. And by the way, these words are a mouthful and I'm gonna probably get tongue tied. But I think that this idea of conspicuous consumption, it was an idea I've heard this phrase before, but admittedly I had to look it up and catch up on who Thorstein Veblen was and where these ideas came from. But could you define what conspicuous consumption is for listeners and how it relates to ideas of luxury and branding?Veblen and Defining ‘Conspicuous Consumption’Giana Eckhardt: Veblen is the first person and still who people look to when they think about conspicuous consumption. He was writing at the turn of not this past century, but the one before. So in 1899. And this was the era of the robber baron. If we think about the Rockefellers of the world and those types of people.He defined conspicuous consumption as the purchase of expensive goods to wastefully display wealth rather than to attempt to satisfy the more utilitarian needs of the consumer. For the sole objective of gaining or maintaining higher social status. So it's the idea that consumers buy things, expensive things, not because they need to, but because they want to signal something to others and it has to do with social status.So we can think about contemporary brands now, like people are always asking, why would someone pay $1,000 for a t-shirt when you can buy a t-shirt in Walmart for $10. And so it's about what you're signaling to others. And I think this notion that Veblen had about wastefully displaying wealth, it's this idea that this isn't something, yeah, that I need in any way and because it is wasteful, that's what makes it valuable to me because it tells other people that I can afford to be wasteful and they can't.And back in Veblen's day, the symbols of what was called conspicuous was for example, having a tan because if you at that time, if you had a tan, you were either a laborer who was working outside and so getting tanned from the sun, not because you wanted to, but because you had to. But if you were a person of leisure who was outside playing tennis, you would get a tan from that. And so it morphed from a symbol of not having high social status to having high social status. So those are just, yeah, that's how Veblen was thinking and writing about it at the turn of the last century.Andrew Mitrak: So Veblen coined this term in 1899. That's not to say that it didn't exist before then of course, you think of Pharaohs in Egypt being buried in extravagant tombs with all sorts of things that their dead body probably doesn't need. Of course, there's always been displays of wealth that are extravagant, but for the first time we had this in economic words, a phrase conspicuous consumption to identify it.Inconspicuous Consumption: IYKYKAndrew Mitrak: And that if this extravagance and luxury and perceived wastefulness of spend is conspicuous consumption, then inconspicuous consumption must be the opposite of that, right? It's consumed in a more subtle, less flashy way.Giana Eckhardt: So inconspicuous consumption is when you consume not because others will be able to recognize these symbols, but so that they won't be able to recognize the symbols of what a brand is saying. There's a term that's used, if you know, you know. (IYKYK) And inconspicuous consumption is embodied by that, right? And we can think about more modern terms like quiet luxury, which you hear a lot as well now, which is that no one would be able to know because there isn't anything that people can immediately recognize that says, this is the brand that this is. So along with that, this is the strata of society that I am from. It's keeping that more quiet and more hidden. And so there's a lot of talk now that inconspicuous consumption is more desirable than conspicuous consumption. I think it depends on who the people are and what the context is. But that's the contrast between the two.Andrew Mitrak: So they can of course coexist with each other and it's not to say everybody's conspicuous or inconspicuous, but there are cultural trends where one seems to dominate more than the other.Trends of Conspicuous vs. Inconspicuous ConsumptionAndrew Mitrak: If you think of how conspicuous and inconspicuous consumption have trended over time since since Veblen introduced this concept in at the turn of the last century, how would you describe the ebbs and flows or the pendulum swinging between one and the other?Giana Eckhardt: Yeah, it's really interesting. I mean, you can look at some of the most expensive brands at the moment and I would definitely categorize them as an inconspicuous brand. There's a new luxury brand in China that's partially owned by Hermes, but it's called Shang Xia and it is extremely expensive, but you would never ever know that it was a Shang Xia from, you really have to be in the know to even. So in terms of luxury, the highest levels of luxury have switched almost in a complete 360 from Veblen's Day when it was very obvious, if someone was a laborer versus a robber baron. Whereas now you really can't necessarily tell that immediately anymore. So think about one of the most expensive bags from the past few years, one that looks like an IKEA plastic bag that they give out at IKEA for you to put your purchases in. And IKEA sells them for like $3, right? But so this idea that something is inconspicuous, it actually has more social cache now, flipping Veblen's theory on his head.Economic Cycles and Consumption PatternsAndrew Mitrak: I think of the roaring 20s and flapper dresses and extravagance. Then the great depression happens and it's probably you probably don't want to be seen wearing the fanciest things and it doesn't quite strike the right tone to be flashing your wealth when a lot of folks are in poverty. And how much do the trends in this tie to how the macroeconomy is doing in the culture?Giana Eckhardt: It definitely does tie into that. So when we started to see a rise in inconspicuous consumption was after the 2008, I don't know what exactly we're calling it, but...Andrew Mitrak: The great financial crisis of 2008 to 2011, 2012-ish….Giana Eckhardt: Exactly. So during that 2008 to 2012-ish period, we may not have seen a lot of inconspicuous consumption immediately, but from 2000, yeah, kind of, well, actually 10, I would say onward, it was very evident to see. So I think that connection is definitely still there.Cultural Examples: Marty McFly & Larry DavidAndrew Mitrak: An illustration you give in one of your lectures is Back to the Future where Marty McFly, of course, is from the 1980s and wearing 1980s clothes and he's transplanted back to the 1950s. Could you tell the story of the branding example in particular of what this tells us about conspicuous consumption and how the 1980s contrasts with the 1950s?Giana Eckhardt: So there is one scene where Marty McFly, the main character in Back to the Future, has his pants off so you can see his underwear. And his underwear says Calvin Klein on it because that's what he was wearing when he left the 1980s.And so the 1950s folks, when they see him think it's his name and start calling him Calvin. When he has to explain like, no, this is the name of who made this underwear and not my name. They don't get it. Well, why would you have the name of someone else, of some other person on your own underwear? And hearing him try to explain that is quite humorous.Andrew Mitrak: One of the examples that I wanted to share with you is from a favorite show of mine. It's called Curb Your Enthusiasm. Have you ever seen the show at all?Giana Eckhardt: I have. Yeah.Andrew Mitrak: There's this episode called the Anonymous Donor and Larry, he sponsors a hospital wing and it's called the Larry David Wing.But then somebody else at the same time gets another wing at the hospital and it's the anonymous hospital wing. And Larry looks like a jerk because he put his name on it, the inconspicuous. Somebody else and it turns out to be his friend Ted Danson, gets the anonymous wing. and he gets all the cache of being anonymous, but people know that it's Ted Danson and Ted Danson looks like a hero because he's doing something but not getting credit, but everybody he is getting credit even though because everybody knows he's the one behind anonymous.It's a funny interplay of how the elites who have all the wealth to sponsor a hospital wing, they want to show off their wealth, but they don't want to be perceived as showing off their wealth. It also ties into how there's psychological mind games, and reverse psychology to how conspicuous and inconspicuous consumption can interact with each other.Giana Eckhardt: I love that example. I love that TV show too, although I haven't seen this episode, but I love this example because it shows that there's always a tension between wanting people to know what it is, what status you have in society, etc, but also, yeah, wanting to be thought of as a good person, right?So a lot of people, the critiques of brands for super expensive brands, for example, are like, well, you could take all the money that you just spent on that and why haven't you donated it to people who need it in other parts of the world or something like this. So this idea that you can be a good person but not necessarily reap the social rewards for it. That's directly against Veblenism, right? So not that a lot of people even know what that is anymore, but really it's a great example of showing that there are still downsides to publicly consuming in this way and I'm going to go and watch the episode now to see how this one humorously plays out.Luxury Brands Shift to InconspicuousAndrew Mitrak: I'm wondering if you have any favorite examples of how how marketers or companies and their brands have tapped into the cultural zeitgeist when it comes to conspicuous versus inconspicuous consumption, either adapting their brand or launching new product lines that embrace the the tone that's in vogue at the moment. Do you have any favorite examples of that?Giana Eckhardt: One of my favorite examples is Louis Vuitton, and their famous LV brand. In terms of the iconography and the way that it visually looks, the brand visually looks. And they will go from having the word Louis Vuitton printed as large as it could possibly exist on a handbag to a handbag where you can't even tell it's a Louis Vuitton. There may be an LV inside of it somewhere, but that's it. And so some brands will try and play in and have both of these in their product line, right? So think about the Ralph Lauren pony. Yeah. It can be very small on a shirt or it can be very large and that can be changed and you can see the changes over time when this conspicuous versus inconspicuous, when either one is more in vogue and you can see that. So yes, I think that brands adapt to the zeitgeist, absolutely. But they don't necessarily have to embrace one versus the other. That can change over time or even to target different audiences at the same time.Read Giana’s article: Luxury Branding Below the RadarGiana Eckhardt: Further Reading and ResourcesAndrew Mitrak: Giana Eckhardt, this has been such a fascinating conversation. I've really enjoyed getting this new look into the well both what we were just talking about the history and the ebbs and flows of conspicuous versus inconspicuous consumption, especially over the last century. But then even dating back further the origins of branding in China. I think this is really fascinating and this is just exactly the type of stories I'm hoping to uncover in this podcast. The things that listeners may not be aware of and that might change how we think about the history of marketing, of branding. So I think this has just been such a fascinating talk. Thanks so much for your time. Where can listeners find more of your work online?Giana Eckhardt: I've been doing some work recently on digital nomads and the fact that when people don't have a permanent place to live, it really changes how they consume as a consumer. That's a Harvard Business Review piece. I've also been doing work on the rise of analog consumption as compared to digital. And why consumers want to go back to analog. And I have a book that's coming out with Princeton University Press. It's called In Praise of Inconvenience. So it's about why consumers are seeking out the inconvenient rather than the convenient and what benefits that brings them. So keep your eyes open for that when it comes out as well.Andrew Mitrak: That's great. Thanks so much for your time. We might have to do a follow-up conversation at some point because I feel like we just have scratched the surface of these fascinating histories of brands and all the great research and work you've done.Giana Eckhardt: Sounds good. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 10 (Part 2)“Some critics will say Coca-Cola has made a marketing mistake, and some cynics say that we planned the whole thing. The truth is we're not that dumb, and we're not that smart.” - Don Keough, Former President of Coca-Cola in 1985We go beyond the headlines of New Coke and hear Zyman’s first-hand account of:The Internal Battles: How resistance to changing Coca-Cola's iconic (but stale) advertising led to the fateful decision to change the product itself.The Research Blind Spot: Why focusing solely on taste preference, without considering purchase intent, led Coca-Cola astray.The "Kamikaze" Strategy: The audacious plan to kill Crystal Pepsi by launching the intentionally ill-fated Tab Clear.The “best feature of Excel is Word”: How Sergio influenced Microsoft to elevate its narrative of Excel and market the full Microsoft Office bundle.The transcript below and it features amazing vintage ads and helpful links. I recommend watching the video or listening to the audio to hear Sergio Zyman tell the story in his own voice. ----------------Coke vs. Pepsi: The Cola Wars in the 1980sAndrew Mitrak: Sergio Zyman, welcome back to A History of Marketing.Sergio Zyman: Hey, how are you?Andrew Mitrak: Good. Congratulations. You're the first two-part guest. And so, at this time in the mid-1980s, what was the dynamic between Coca-Cola and Pepsi? Was Coca-Cola very obsessed with what Pepsi was going to do next? Was Pepsi gaining market share? What was the sort of dynamic at this time between the two?Sergio Zyman: “The Cola wars” which have been documented 200 ways to Sunday… The media, and everybody else was basically figuring out how we were doing. And I think we were going to Wall Street, and so was Pepsi, saying, "Hey, we just gained a tenth of a share point," or whatever it was.Pepsi had become the marketing director for Coke because Coke was so passive. Coke believed in imagery and branding, and all that. They weren't forced to understand how to spend money to make money.At one point, we were in a conference in Naples, Florida, and I went for a run with my boss, Brian Dyson. He told me that we had just gotten wind that Pepsi was about to buy Seven-Up. And that was huge, right? Because we didn't want them to get any more leverage.One of the issues was that when Pepsi went to fountain customers like McDonald's, we always allowed for one valve on a six or eight-valve machine to be for a competitor, to be fair, because we're allowing for Dr. Pepper or Seven-Up to come in.I said to Brian, while we were running that day, "Well, what we have to do is we have to go buy Dr. Pepper." He said, "It'll never happen. Anti-trust is not going to allow us." I said, "Exactly." So we made an offer for Dr. Pepper, knowing that that was going to kill the Pepsi/Seven-Up acquisition, which it did. But to me, that was an honest, competitive environment.The Genesis of New Coke: Answering the Pepsi ChallengeAndrew Mitrak: That's very clever. Does this competitive environment plant the seeds for the origins of New Coke?Sergio Zyman: No. The New Coke thing was, as I told you before, McCann-Erickson had a dominance on the management of Coke that was unbelievable.The company liked to be able to go to the country club or to church and have people come over and say, "Oh my God, I love your commercial, I'd Like to Buy the World a Coke or Mean Joe Greene."So that social currency, that was enabling bottlers and company management, and all that, that's something that McCann exploited incredibly well. The top brass never went to see the marketing guys; they went to see the CEO of the companies. They were always kind of paying homage to the management of the company.And we had the Pepsi Challenge. My argument at the time to management was we have to change the positioning of the brand. We keep on basically saying we are the original brand. We have to come out with something; we have to change. Have a Coke and a smile, it's not selling us anything. We have to stop doing Mean Joe Greene commercials and Buy the World a Coke, which was blasphemy, okay? Because the company loved that stuff.Then, a project was created to try to figure out how to stop the Pepsi Challenge.Then everybody said, "Well, it's the product. People are going in, and they're choosing Pepsi. So we're going to change the product." And I got into the whole project, but there were absolutely deaf ears in changing the position.When I proposed that we actually use Cosby to be the guy that introduced New Coke, this guy, Ike Herbert, almost had me fired, right? Because they wanted to have these big songs with jingles.And the problem was the position of the brand was wrong. Yeah, we were the original, but we were old. We didn't have any value to the consumer, and the whole thing started going in that direction.The New Coke Launch: 77 Days of InfamySergio Zyman: I remember perfectly; we were in the last meeting before deciding to go on New Coke, and there was the New York bottler and a couple of other bottlers that were the kind of advisory board. Brian Dyson went around the room and said, "Do you agree this is the right thing to do?" And then he got to me, and he said, "Do you agree that is the right thing to do?" I said, "No, I don't. I think we should change the position of the brand, but I think that we've gotten to the point in which we relaunch New Coke." And we did.And we launched it with a big black-tie dinner, with Ray Charles singing.The next day, we had a press conference. And I was manning the Atlanta press conference, and Goizueta and Keough were in New York, doing the big press conference. And one reporter turned around to Goizueta and said, "So what if it doesn't work?" And Roberto said, "You don't understand. It will work." And this guy just went on a rampage, basically saying, "These guys are crazy. They don't know what they're doing."And then we launched New Coke. Then we got all kinds of consumer backlash.There was a group from Seattle that was flying planes around the company saying, "You guys are a bunch of jerks." We had to take our tags off our baggage when we were traveling. People would start harassing you, a hard time.The Psychology of Coca-Cola’s TasteAnd after four weeks, 80% of people in America had tried New Coke, and they hated it. And we only had 6% distribution. So, it was all in the head.77 days later, we brought Classic back. When we brought Classic back, 75% of the people had tasted it and said they loved it. We didn't have any distribution. They were drinking New Coke. So then we found out that Coke's taste was in the brain, not in the mouth.Andrew Mitrak: Right.Sergio Zyman: Do you drink Coke? You drink Coke sometimes?Andrew Mitrak: Yeah, of course. I've had a Coke. I don't drink it every day.Sergio Zyman: What does it taste like?Andrew Mitrak: If I was to describe it, well, first you feel the bubbliness of it.Sergio Zyman: What's the taste?Andrew Mitrak: The sweetness to it, and then there's a bite to it.Sergio Zyman: No, no, no. I didn't ask you how it feels. I asked you, what does it taste like?Andrew Mitrak: It's hard to say other than it tastes like Coke.Sergio Zyman: It has no taste memory.Andrew Mitrak: Yeah.Sergio Zyman: And by not having taste memory, if you go and you say, "What does Pepsi taste like?" People will say, “Sweeter than Coke”Andrew Mitrak: Right. Coca-Cola is your baseline for comparing everything else.Sergio Zyman: And look, you go and you say to people who drink wine once in a while, and you have all these crazy people like me who go and said, "Oh yeah, it has a leather smell, and it has berries." There's no memory. There's no taste memory. Coke didn't have it, and that was one of the big findings that we had. It was all in the brain, not in the mouth. It's how you felt is what you said. It's not what you tasted. And that was a big finding.But everybody talks about New Coke ad infinitum. Nobody talks about the fact that we brought Coke back in 77 days. Oh, by the way, in 77 days, the price of the stock doubled. It was unbelievable. It was a huge success.Andrew Mitrak: Yeah. There's so much to unpack with the story, and I'm so grateful that I get to hear it directly from you.The Role of Marketing vs. Advertising at CokeAndrew Mitrak: I want to go back to the influence of McCann and the reluctance to change the advertising and positioning. And this is from an interview that you did with Ad Age some years ago, and I want to quote,"The only thing left was to change the product or change the advertising. I think we were lazy in recognizing that we needed to reactivate or reposition the brand. If we had done that through an advertising process, I don't think New Coke would have ever happened. But there was such resistance to any kind of change in advertising position of the brand that we introduced to change the taste."It seems, as an outsider, that it would be easier to change the advertising than to change the product. But as you tell it, there was such an affinity for the smiles with a bottle of Coke and McCann-Erickson's influence at the company that it was actually easier to change the whole product than it was to change the advertising. Is that kind of the right way to think about it?Sergio Zyman: Well, there is a kind of bigger macro issue, which goes at the core of my life and my success, which was, what is marketing? And at the Coca-Cola company, marketing was nice commercials. That's all it was. It wasn't about positioning; it wasn't about understanding the consumer and consumption. It was about how much the consumers like our ads. And that was marketing.And I just thought that it was nuts because it didn't serve us well. Now, it served us well for many years in getting the brand to be viable, but it didn't serve us well in growing the business. And that's why Coke was struggling for so long.Diagnosing the Research Flaws Behind New CokeAndrew Mitrak: Something that you bring to marketing is research. You've highlighted how you look at research to make your decisions. And you have a quote about the research and New Coke. And you said,"We'd done taste tests and found that consumers seem to prefer Pepsi's sweeter taste to [the original] Coke's more biting taste. So we stopped right there and decided that if we made Coke taste like Pepsi, more people would drink it. But you know what happened? We came up with New Coke, and consumers weren't interested. The problem was that we didn't follow up that question with, ‘If we made Coke taste like this, would you buy it?’"It seems like there were some flaws with the research. I'm curious, how does a flaw like that happen in the research, or what's the takeaway from New Coke?Sergio Zyman: It wasn't only Coke. Every company in the world basically had this awareness disease, which was, is the consumer aware of your brand?Probably the best model of marketing is politics. Because in politics, if you don't get elected, if people don't vote for you more than the other guy on the second Tuesday of November, you don't get [elected] – look at Al Gore, okay? I mean, he ended up instead of being in the big plane and the big house, he went to teach school in Tennessee, right? Because he lost the election by a few votes, but it didn't make any difference.What you do in politics is you try to convince consumers to buy your candidate. Why doesn't that happen in consumer products? That's what we want to do.Consumer democracy is the right to choose. That's what democracy is. Everybody talks about democracy. And you say, "Oh, the democratic process." Democracy is the right to choose. But you also get the right to not choose. So, purchase intent, intent to buy, intent to consume is the only criteria that should drive marketing. Not how much people like you, but are they going to buy you? Are they going to vote for you?In reality, in 1985, we didn't know much about the consumer. I know it's kind of blasphemy to talk about the fact that a company like Coke would not know enough about the consumer, but in the research process, we used to track 13 image items, which was great, tasty, delicious, good with friends. That stuff did not drive consumption. What was driving consumption was price discounts, larger sizes, and plastic bottles.Announcing The Return of “Coca-Cola Classic”Andrew Mitrak: So, just tying a bow on the New Coke story, in 1985, you mentioned Don Keough, he was then the president of Coca-Cola, and he came to the stage of a hotel to announce that the original taste of Coca-Cola was back. And he finished his speech by saying, quote,"Some critics will say we've made a marketing mistake. Some cynics will say we have planned all this. The truth is that we are not that dumb, and we are not that smart."And some people are still conspiracy theorists that think, "Oh, this is all some intentional flop to make Coca-Cola more popular." What's your take on that, and is there any truth to that at all?Sergio Zyman: There was a research guy that was listening to the consumer center, the call center, and we were getting consumers calling, just screaming on the phone. We had this guy, Goldman, who was sitting there; he was a researcher. He came to give me the day's report. I used to get a report every day.And I said, "How'd it go?"He says, "You know, I got to give you an example of what is going to happen here. You've seen a lot of people who have been freed from Vietnam jails, and they've been found."Remember in those days, they were finding a lot of POWs. "And then you get the family of John Smith that's told that," this, by the way, is a true story. "The family of John Smith, we found him, he's been freed. He's going to arrive tomorrow in Minneapolis on the flight Northwest from wherever."And the family all gets dressed up, goes to the airport, and they're at the gate, waiting for John Smith to come out, and they don't see John Smith.This guy Goldman is telling me, and I said, "So what happened?"He said, "They made a mistake. The guy that they found was not John Smith."He said, "When you bring Coca-Cola Classic back, it needs to look exactly like the one that left. You cannot make it look different, be odd, be anything else. You can add 'Classic' to it, but it needs to be a red can." And that's what drove the whole thing.One day I get a call, literally, 6:00 in the morning and says, by the way, there's a rumor that you guys are going to bring back Coke and kill New Coke, and Wall Street stops trading on Coke, right? Because it was material, and we get stopped trading.So, we had a creative guy at McCann, very smart guy, John Bergen, very political, but very good guy. He was a copywriter. And he wrote that commercial. We didn't have any strategy or anything like that. That was kind of, we were writing as we went. We got Keough into a studio, and we recorded the commercial.And then, anytime you actually have a commercial, I don't know how it is today, but you have to actually fly it to New Jersey. In New Jersey is where you actually integrated the commercials into the pods.So Peter Jennings comes out on ABC. He interrupts General Hospital, right? And he basically says, by the way, we have a rumor Coke is going to bring back Coca-Cola. And so we had helicopters flying this commercial from New York to New Jersey in order to put it into rotation for the 7:00 news, and we basically opened up the 7:00 news with a commercial that says, "We're not that smart and we're not that dumb."And it was really well done, and it was so much in the personality of Keough. He was kind of the Santa Claus-like guy, and he had great credibility, and that's how that thing came about.Strategic Sabotage: Tab Clear’s “Kamikaze” takeout of Crystal PepsiAndrew Mitrak: To prep for this interview, I watched clips of your speeches on YouTube, and there's a quote from General Patton that you like to use. Do you know the quote that I'm talking about?Sergio Zyman: Yes.Video of Sergio Zyman: “He said, ‘The idea is not to die for your country, is to have the other SOB die for his.’ Don't die for your company. Have the other guy die for his. Let them lose share. Let them lose relevance."Andrew Mitrak: This quote reminds me of a story in your book about how you launched Tab Clear to take out Crystal Pepsi. Can you tell the story of Tab Clear and Crystal Pepsi?Sergio Zyman: One day, I was sitting in a meeting at Coke, and they said that they had gotten wind that Pepsi was going to launch a product called Crystal Pepsi because Pepsi was fixated on having a lemon-lime or a clear product to compete against Seven-Up.And Coke had Sprite, but it wasn't really doing great. So I said to the guy, "Send me the research. Let me see what the research says." So they sent me the research. It was a guy called Jerry Payne, who was the research guy, and we sat down.I was looking at the research, and I said, "You know, all of the characteristics of this product are the characteristics of diet products." And I knew a lot about it because I had done Diet Coke. So, I said, "I think we can position this product as a diet drink." He said, "Well, but it's not a diet drink." I said, "I know. Let me think about it."So I came back, and I proposed that we launch a product called Tab Clear. Tab was already kind of on the outs because Diet Coke was doing so well. They bought into it. I got the project as a consultant.And then we went out to work, we developed a product, which was nothing more than a diet product with all the characteristics of the same thing.We launched it in advance of Pepsi launching Crystal Pepsi at the Super Bowl. They spent a lot of money. And what happened was that we were so aggressive with it that the whole category collapsed, which was our idea.The idea was to launch Tab Clear and make it just a kamikaze product that basically just killed the category, and it did.Andrew Mitrak: That's right. I'm going to quote from your book, The End of Marketing as We Know It."From my perspective, Crystal Pepsi was just screaming for someone to reposition it. We decided to take the liberty of moving Crystal Pepsi into the diet segment, where it was bound to fail because it contains sugar. By meeting a sugared drink with a non-sugar drink, we only confused customers about what the category stood for."This is just not something they would teach you at any marketing school. What was the business value of this for Coca-Cola?Sergio Zyman: Well, I think that you touched on a very important point. You said, "Well, this is not something that they teach you in marketing school." Well, what do they teach you in marketing school? Do they teach you to actually be somebody who does stuff to drive top-line and bottom-line? They don't. They teach you about positioning, and they teach you about all kinds of stuff, but there's really no financial element in marketing.One of the things that I always drove for was, if it doesn't make any money, why do you want to do it? My riff with the ad agencies was that they said that you couldn't measure advertising. All advertising was image building for the long term.I'm saying, if I can't measure it, I don't want to spend it. So, there was a project that was coming into the market, and we were a competitor in the soft drink business, and we needed to define where the volume was going to be. So if Pepsi was going to get consumption from consumers that were going to pay money to buy a six-pack of Crystal Pepsi, by us killing the category, we eliminate one more competitor. I think that, to me, that's marketing.Inventing the Chief Marketing Officer Role at Coca-ColaAndrew Mitrak: You left Coca-Cola in 1988, and you returned in 1993, this time as chief marketing officer. And this was a newly created C-level role. What did it mean for marketing to be in the C-suite for the first time?Sergio Zyman: When I got called to go back to Coke, I didn't want to. I was doing great. I was skiing 50 days a year. I had great gigs in consulting with Miller Brewing, with all kinds of other companies. I had built this company called Core Strategy Group. I went through a year-long interview with Ivester because I was actually, quote-unquote, teaching him marketing.But when I went to meet with Goizueta, I said, "What do you want me to do, sir?" He said, "I want you to do the marketing thing." And I said, "I don't understand what you mean. What do you want me to do?" He said, "You know, the marketing thing." And he couldn't articulate what marketing was.So I said, "Sir, I'll tell you what I'd like to do. I'd like to go away and put together a deck about what I think marketing should do at the Coca-Cola company. Come back, I'll show it to you. If it makes sense to you and if you buy it, then I'll come back to the company."I went away with a couple of guys, one inside the company, and we wrote a 40-page deck. And I came back, and I presented to him and Ivester and a couple of other people. He said, "Wow, that's what we need to do." It was about positioning brands, about spending money to make money.I said, "By the way, I need to be part of the C-suite because I want to make sure that marketing is about making money. Marketing is not about spending money." And that's how we came about with naming me chief marketing officer. I was the first ever, by the way. I invented the title. If you go check it out on NexisLexis, there had never been a chief marketing officer before.Andrew Mitrak: I heard you say this, and not that I don't believe you, but I just wanted to verify it because it's a big claim that you're the first-ever chief marketing officer.And the search engines and the AI tools, they say, "Oh, that can't possibly be true. Sergio's misrepresenting." But they never point me to one that existed before you, either.I'm trying to find a person who's actually had the title of Chief Marketing Officer.Sure, there were presidents and CEOs who had marketing-type functions, and there were other people who were senior marketing leaders, but I haven't yet found another chief marketing officer out there that predates you at Coca-Cola.By the way, if anybody's [reading] and can find one, I’m happy to be proven wrong, but you do seem to be the first as far as I can tell. But it is a very surprising claim.Sergio Zyman: Remember, the C-suite at the time was Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, stop. Then, the head lawyer evolved to Chief Legal Officer. The head of HR evolved to Chief People Officer. And now, everything. I mean, you have the chief banana officer, right?But my objective at the time was I wanted to be part of the C-suite. I didn't want to be the advertising guy. I had a bunch of friends in the consulting business, and I remember I went to Wimbledon before I agreed to take the job, and I was with this guy, Rob Smith, who's another political guy. I had a lot of political consulting friends, and I was trying to help them find a way to not take the job.That's how we came up with the idea of being the chief marketing officer.Marketing's Role in the C-SuiteAndrew Mitrak: So, what was different about being chief marketing officer at Coca-Cola in the 1990s versus being a very senior marketing leader in the 1980s?Sergio Zyman: Senior marketing leader had no function in the company except be sideways to the advertising process. There was no marketing. We were at the time in which when Pepsi started, the trade, the supermarkets figured out that Coke was a loss leader, and then we engaged in – there was a company called Majors, who was measuring trade activity.And a big marketing effort was discounting. We used to go on the big holidays and have big displays and put displays in parking lots. But that was pretty much the only marketing thing that was going on. And then you had the commercials that were actually doing the thing to make people feel good.But there was no scientific way about going and getting volume.Microsoft: Elevating Excel and the Office BundleAndrew Mitrak: After Coca-Cola, you found the Zyman Group, and you have a long, successful career also as a consultant, as a speaker. One of my mentors and friends, his name is Mark Kroese, and he worked at Microsoft in the 1990s.He was somebody who reached out to me saying (paraphrasing), “If you're doing this podcast, you have to speak to Sergio Zyman.”And he has some great stories of you supporting Microsoft Office and the launch of Excel. It's hard to believe, but Excel at the time only had 10% market share, and they were a massive underdog to Lotus 1-2-3. And here's Mark's recollection."Excel was trying to go feature for feature against Lotus 1-2-3, and that you, Sergio, famously said, 'The best feature of Excel is Word.' And soon after, Microsoft started selling the bundle instead of selling Excel standalone.”They were in this low-level feature war, and you helped elevate the narrative. And that you also said,“Microsoft is creating the tools that are driving the productivity gains, and the productivity gains are what is responsible for creating the booming economy of the 1990s."I'm curious if you have any stories of your role supporting Microsoft?Sergio Zyman: Sure. They hired us, kind of the oddballs, to come in and work on all kinds of stuff. And it was incredibly disjointed. Microsoft was fighting the FTC because they were doing both applications. There was a guy that just died, Mike Maples, who got hired by Gates from IBM, and then Ballmer was doing the other side, okay? So you had two guys; you had Steve and Mike Maples.And the way Microsoft would launch products is they go into these developer things, and they had what's called the keynote, right? And Gates would come in and do a keynote, talking about how the future was going to be. And they'll demo the product.So one of the things that I said is that the DNA – I believe very much in brand DNA – the DNA of Microsoft was no product is ever finished. And the consumer is okay with that. The consumer doesn't expect a Microsoft product to be [finished]. So we used to have the meetings in Boston, in the cafeteria of the Lotus 1-2-3 building, for Excel. That's how competitive the Microsoft guys were in those days. It was unbelievable. And we were working on all kinds of stuff, and then we had Harvard Graphics (PowerPoint competitor), which was one of the products that was competing in the space, and there was Lotus 1-2-3, which was Excel. The comparative to Word was WordPerfect.And you know, I had all these disjointed things, and one day in a meeting, we said, "Why don't we just put it together? Just as an office thing." And that – I don't know who actually ran with it, but there were fantastic meetings. One day I went into Gates's office, and Gates was laying on his couch. Gates was just brilliant; he was unbelievable. And Ballmer used to call me “the soda guy.” And Gates is sitting there, and we're talking to him about something, and he turns around to me, points his finger and said, "Did you ever go to camp?"And I go, "Huh?" I said, "Listen, I'm Jewish, I'm from Mexico. We didn't go to camp."He said, "Well, I went to camp, to math camp for many years. I know what I'm talking about."It was an incredible culture being over there. Later on, I did a strategy for Xbox with some other guy [who] hired me for Xbox. That was after I had my company, and I turned around and says, "Why are you guys going to launch Xbox versus PlayStation?" I said, "Because Bill is going to do a keynote, and we're going to talk about it."And I got the project, and I went to actually look, and when I checked with gamers, gamers hated Microsoft. They thought it was the deep state. We came up with a different position, and we had some issues with the name with Xbox. We came out with alternative names. Working with Microsoft was an incredibly learning experience because those guys were true warriors. In those days, it was 24/7; it was great times.Product Naming: “It’s Cup-a-Soup!”Andrew Mitrak: Another friend of mine, who I talked to in advance of this interview, Joe Michaels, he's the person who actually put us in touch. And Joe was a leader at a startup in the Dot-com era, and he mentioned that you did some consulting for them at the time. And he was presenting a product branding idea to you, and then he said you interrupted him as he was presenting his idea, and here's him quoting you."Let me tell you how to name a new product. The best product I ever marketed was Cup-a-Soup. No one ever wonders why they buy it. The name says it all, Cup-a-Soup."I'm wondering, do you remember this? Did you ever work on Cup-a-Soup?Sergio Zyman: Well, no. But what happened, when those guys used to come with all these ideas. There was a company in Atlanta called E-Hatchery. You had all these brilliant guys who were innovators, and they'll come in. We got hired for $30,000 to do the initial analysis for these guys, venture capital firms.And I would turn around to the guy and I would say, "So, who's your oldest family member?"And they'll say, "My grandmother."I said, "How old is she?""79."I said, "Okay. So I'm your grandmother, explain to me what your product is. You're going to explain it to a 79-year-old person. I don't understand anything you're doing."And I was forcing them to come up with a way to actually explain the value proposition of the product, which is critical to marketing.And as part of that, they'll come up with these whacky names.And I would say, "Look, it's Cup-a-Soup. So tell me, how are you going to name your product? It's what you call it. I Can't Believe It's Not Butter – those are great names. You don't have to spend $20 million explaining to people what it is. Come up with a simple name." A lot of those were like that.Andrew Mitrak: Yeah.“The End of Marketing as We Know It”Sergio Zyman: The problem with that, if I might, is, look, I failed at changing the world of marketing. I failed because we're back at which commercial is going to be in the halftime at the Super Bowl, right?I used to do a piece of research every year about the Super Bowl, and they won the Super Bowl commercial, but their volume went to hell. I didn't succeed in changing the face of what marketing was. It worked good for me, right? But companies are back doing the other thing. They're back doing commercials that they can go brag about at the golf course or in church, really not focused on selling more to more people for more money.Andrew Mitrak: Yeah. Sergio, I just want to thank you so much for speaking with me and sharing all these insights. Like I said, you're the first person who I've interviewed twice – maybe someday we can do a part three or four. I just think that you have so many amazing stories and so many amazing insights, and we've just scratched the surface of it. So I just want to thank you so much for your time.Sergio Zyman: Thank you.Andrew Mitrak: You've written a couple of books. Do you feel like you're fully out of the marketing game now and are done with it at this point, or just enjoying life, or would you point listeners to any place where they can read your work?Sergio Zyman: I've published four books. The first one was The End of Marketing as We Know It, which became a bestseller. It's still taught around schools and universities. And then I wrote after that Building Brand Width, which was the whole thing about putting brand into the thing. And then I wrote The End of Advertising as We Know It, and I wrote Renovate Before You Innovate. And then I've written three more books, which I never published.We are at a very interesting time. Companies in general, like humans, develop plaque in their arteries over time. And if you don't take care of it through exercise and eating better, eventually, you need a bypass, right? I did a lot of consulting after I sold my company, and recently, I got involved in boards.People are still looking for… I don't know what the hell they're looking for.But they're not really interested in understanding the dynamics of – if you have somebody who's an entrepreneur who comes up with a brilliant idea, like… I evolved with a company, a couple of Israeli guys who worked in the military in Israel on voice recognition. And then one of these guys, and by the way, this guy was the wackiest guy you ever seen in your life. And one day he turned around to the other guy, he said, "By the way, voice recognition is noise recognition. What else can we do with noise recognition?"And they developed a company that actually developed a modem that was put in machines that run 24 hours a day, [that] will be able to predict the noises that were going to happen when a piece of the machinery started breaking three years ahead of breaking. And they use AI to put it into a model to try to actually predict what the thing was going to do.I developed a strategy for the guy, and all he wanted to do… was to hire an advertising agency. By the way, where is the company today? Nowhere.Andrew Mitrak: Smartest people in the world, but they don't see it.Sergio Zyman: They don't. They don't see it.Andrew Mitrak: Yeah, thank you so much for your time, Sergio. It's really been an honor.Sergio Zyman: All right, take care. Thanks so much. Bye-bye.A Special ThanksI want to extend a very special thank you to two people who were instrumental in making this interview happen: Mark Kroese and Joe Michaels. Their insights were invaluable as I researched and prepared for this interview. And it was Joe who put me in touch with Sergio, making this conversation possible. Thank you for your support, Mark and Joe! This is a public episode. 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A History of Marketing / Episode 10 (Part 1)“Marketing is about selling more stuff to more people more often for more money more efficiently. That's what marketing is.” - Sergio ZymanThis week, I’m joined by a marketing iconoclast: Sergio Zyman. Wikipedia describes Zyman as being “best known as the marketer behind the failed launch of New Coke and the success of Diet Coke, Fruitopia, Surge, and ad campaigns such as "Coke Is It."Zyman rarely gives interviews, and the few that are available tend to focus on the New Coke saga, which is frequently described as one of the biggest marketing blunders of all time. But New Coke is only a brief, and frankly misleading, snapshot of Zyman’s career full of marketing milestones.This is the first of my two-part interview with Zyman. This conversation explores his unlikely journey from Mexico City to the C-Suite of the Fortune 100, with stops at Procter & Gamble, McCann Erickson, assignments in Japan (working on Nescafe and General Motors), and even becoming president of Pepsi in Brazil by age 30.Ultimately, Zyman's path led him to Coca-Cola, where he launched iconic brands like Diet Coke and Cherry Coke...and yes, New Coke.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsHe was eventually named Coca-Cola's first Chief Marketing Officer – and, according to Zyman himself, the first CMO in history, period. I've tried to verify this claim, and so far, I haven't found anyone holding that title before him. (Listeners, if you have evidence to the contrary, please reach out!)In part one, we focus on Zyman's incredible rise. I’ve included the transcript below, but I recommend listening if you can to hear it in Zyman’s own voice. He's brimming with personality – too much to contain in a single episode.Joining P&G’s "Cult-Like" Brand ManagementAndrew Mitrak: Sergio Zyman, welcome to A History of Marketing.Sergio Zyman: Hey, how are you?Andrew Mitrak: Great. So, you've had a legendary career in marketing, but I want to start at the very beginning. You were born in Mexico City. I'm curious, what are your earliest memories of marketing and advertising when you grew up in Mexico City?Sergio Zyman: You know, I wanted to get out of Mexico. Pretty much my family was in the clothing business and stuff like that, and I had no interest. I went to school in Europe. I traveled around the world a lot. And then I joined Proctor, you know, through a variety of coincidences.And then I worked for Proctor in marketing, which at the time was kind of almost like a cult. And then from there, I went into the ad agency, and then on and on – I traveled around the world, lived in Japan, lived in Brazil, and so forth.Andrew Mitrak: Procter & Gamble is legendary for implementing the principles of modern brand management. What was joining Procter & Gamble in their marketing department like? You said it was almost like a cult. What was it that made it cult-like?Sergio Zyman: Well, most of the people that worked at Proctor in Mexico were either sons or daughters of expats, and primarily sons. They were primarily guys. And, you know, we joined as a staff assistant. There was a very orderly progression. Then, after a while, they sent you to sales training, which everybody hated.It was a locked wing of the company. It was basically housed across the street from the agency. And marketing was about managing products – well, not managing products, but managing brands or launching brands. It was a lot of advertising and, you know, a lot of promotions and stuff like that.Marketing Ariel to Transform Laundry in MexicoSergio Zyman: I was part of the team that actually introduced a brand called Ariel, which eventually became the largest brand in the world for Proctor. It was an enzyme detergent. I'm going to date myself many times here through this interview, but in Mexico at the time, people used to wash clothes on a stone with a bar of soap.Then, after that, there was a product that Proctor introduced in Mexico called Rapido. The whole premise was that you could actually speed up – rapido means "quick" – you could actually speed up the process of washing your clothes. From then on, we wanted to launch a product like Gain in the US. And, I can't remember who came up with it, but the idea was that Ariel made every bucket a washing machine. We had this visual where you put the detergent into the bucket and the bucket would start moving like a washing machine. It was a huge success.Andrew Mitrak: I want to quote from your book about Ariel and Procter & Gamble."So P&G had just introduced a detergent called Ariel, and the challenge was to convince skeptical Mexican housewives, most of whom did their washing by hand and didn't own a washing machine, that a packaged detergent could get the family's clothes as clean as whatever product they were currently using."So, you're a young man, earlier in your career. How do you research skeptical Mexican housewives? How do you know what will persuade them, or what the real challenge is to be solved with this?Sergio Zyman: Well, I think it was more about barriers than anything else. Research was very rudimentary. I don't even think that we used – I mean, we probably used some form of focus group at the time or something – but it was observational. You'd actually go look at the market, and every building on top had a place where it has a stone with little indentations in it.All you needed to know was how the product was being used, right? And I think that was the genesis of a lot of the products at Proctor at the time. The positioning of Safeguard was that it eliminated bacteria, right? But there was really no big piece of research. We just hit onto something that was – I mean, it was probably when we asked people, "Why don't you buy a packaged detergent?" they would tell you that. And I think that's how we ended up getting into that. But it was very rudimentary.Andrew Mitrak: Now, Procter and Gamble was your first job in marketing. Did you know that you wanted to be a marketer before you joined them, or did you kind of just fall into it once you came to this job at Procter & Gamble?Sergio Zyman: My number one objective was to get an American Express card. And you needed to have an X amount of money, which was $200 less per year than what Proctor was paying. So, when I was looking around trying to get a job – I had actually, before that, become the major coordinator for the Miss Mexico contest. And that's how I met some of the Proctor guys.So, I didn't have a real career vision. I wanted to make some money. I knew I wanted to get out of Mexico. I wanted to work for an American company because, usually, American companies worked Monday to Friday, not Monday to Saturday, which is what Mexican companies did. So, there were a lot of criteria there that were kind of dumb, if you wish.And I met with a guy called Al Frost. My English was broken, even worse than today. And he asked me at one point during the interview, "What do you want to do when you grow up?" And I said, "I don't know. I just want to have the power of knowledge to be able to make the decisions that I have to make down the road." And he fell in love with that thought and hired me.And that's how I got into Proctor. I really did not fit the Proctor criteria for being hired. I didn't go to school in the US at the time, didn't have parents that were expats in Mexico, my English was so-so – but that's how I got in.When I got hired by McCann Erickson to go work on the Coke business, I remember sitting in my very first meeting at McCann and they were doing media planning, and I sat there in panic and I said, "I don't know anything about marketing. I don't even know what marketing is. These people are talking about something totally different."Marketing became advertising. That's what marketing was. And I guess for a lot of companies today, still, marketing is advertising. It's not real marketing. It's not linked to the bottom line.McCann Erickson & the Coca-Cola AccountAndrew Mitrak: You mentioned you moved from Procter & Gamble to McCann Erickson. And for listeners who aren't familiar with McCann, they're a major advertising agency. I think they had been the agency of record for Coca-Cola since the 1950s. And for those who've seen the show Mad Men, this is the agency that swallows and absorbs Sterling Cooper at the end of the series. So what led you to McCann Erickson? Why did you join after Procter and Gamble?Sergio Zyman: Money.The natural progression – I mean, I know it was more romantic – but the natural progression at Proctor is you were at Proctor, and then after about seven or eight months of just basically sitting around doing shipment analysis, they sent you to sales. They gave you the worst car that the sales department had and they sent you over to sell soap into public markets and little mom-and-pop shops.And, I did that, and everybody hated it, and I figured I was going to do a good job. I ended up winning the contest, the three and a half months that I was there. And I ended up getting hated by all the Proctor guys, the marketing guys, because everybody didn't want to do well in sales.I came back and then I became an assistant brand manager. And then I started getting offers. The natural progression was that we were the source of, quote-unquote, "marketing people." So I got a job from Kimberly Clark, and then McCann – I had met the guy at McCann during the Miss Mexico thing. And I liked them a lot, and I went to be an account executive on the Coke business, which was sexy. And that's why – and it paid me double my salary.Andrew Mitrak: That's a good reason to move on and move upward.Sergio Zyman: It is.Andrew Mitrak: So what was the culture of McCann like – this is probably the mid-70s or so, right? So what was their company culture like?Sergio Zyman: The Coke relationship was very difficult because it was imposed by Atlanta. So, pretty much, you couldn't go and choose your own ad agency. It was McCann or else. And the guys at Coke had come from sales. Most of the guys that were in “marketing” – VP of Marketing or Marketing Director role at Coke was a sales guy.It was about dealing with bottlers and stuff like that, and there was always an antagonistic relationship."Pattern Advertising" and Challenging the Status Quo of Marketing at Coca-ColaSergio Zyman: We adapted advertising that was created in Atlanta. It was called "pattern advertising." And we did a good job with it, but there was always tension between us and the Coke guys. It was not a happy relationship. It was just to do what you needed to do.Andrew Mitrak: Yeah.Sergio Zyman: I was thinking about this interview. And, you know, when did marketing come to these companies? If you go back and you look at fast food, Wendy's head of marketing was a guy called Bill Welter. The marketing guy at McDonald's was Paul Schrage. I don't know who the marketing guy at Burger King was, but pretty much what happened to these companies as they started opening up more stores, they realized that they needed to communicate with the consumer and explain to them why they should go and buy their stuff, right?There was not a lot of competition. And the powers that be in these companies, whenever they wanted a marketing guy, they said, "Wow, I think that we better get it out of the agency." So it was the ad agency guy. Welter was the ad agency guy. And so was the guy at Burger King.So that's where the guy at Coke who was the head of marketing at the time, Ike Herbert, was a McCann guy. So it was all about advertising. Advertising actually dominated the marketing function in a lot of companies. It wasn't about truly doing marketing the way we knew it. And I always felt very uncomfortable about it. I didn't want to be an ad guy. I thought that it was not a great label for me. I was not a businessman. So that's kind of where my formation as the challenger of the marketing function began.Coca-Cola’s “Hilltop” Ad: An Accidental ClassicAndrew Mitrak: I want to ask you about your impression of the ads that were created for Coca-Cola because McCann, of course, they had created the famous Coca-Cola hilltop commercial with the jingle "Buy the World a Coke," and it really is an incredible commercial and it's one of the most famous advertisements in history.But Coca-Cola almost became kind of a victim of this ad's success, and ads like it, where they internalized this – happy, smiley people with a Coca-Cola bottle in their hand – and this was the formula for them. And it sounds like you were questioning, "Was this actually driving sales? Was this actually working at the end of the day?"Sergio Zyman: Well, look, I think that there is a lot of mythology about advertising, and about advertising for Coke. So, there was a guy at McCann called Bill Backer, who eventually left and went and built Backer Spielvogel. And he was a really creative, artistic guy. And there was a music guy there called Billy – my God, I just forgot his last name. And Billy had actually sung with the Four Tops before he became the music director for McCann.They were going to do a radio spot called "I'd Like to Buy the World a Coke" and they wanted to do it – they went to record it in London, because that's how you did buyouts. And the commercial became an accident. It had no strategy behind it. And then everybody fell in love with it. And Coke sales kept on going south for a long time because Pepsi was really the marketing director for Coke. Pepsi was determining the dialogue; Coke wasn't.Andrew Mitrak: Yeah. I just looked it up, by the way – it must be Billy Davis.Sergio Zyman: Billy Davis, exactly.Andrew Mitrak: That's it. Okay.Sergio Zyman: Billy. Yeah. Good guy.Pepsi: “The marketing director for Coke”Andrew Mitrak: You mentioned that Pepsi was really the marketing director for Coca-Cola. And I'm going to quote from your book again:"This was the 1970s and Pepsi had just started with their 'new generation' approach. McCann's philosophy, which was the same as the rest of the industry, including Coke's, was 'grab their hearts and their wallets will follow.' So we kept coming up with ads that made people feel good, made them cry and won us awards."It goes on to say that these ads didn't really seem to be working as far as new business and sales were going.Sergio Zyman: Well, they were not.Remember, in the old days, Pepsi was not a viable choice for people who drank soft drinks. By the way, we didn't have 10,000 different options. Okay, you had Coke and you had Pepsi, and then it was all done by manufacturing. Sprite was created in the UK in order to be able to actually fill the bottling lines because they weren't selling enough – there was no strategy behind it.And Pepsi then decided, in order to – they said to get out of the kitchen and into the living room – that they needed to become a viable option to Coke. And they had a very good strategy because they started discounting in supermarkets, they started multi-packing. Coke just didn't believe in that. They believed that all they needed to be was this – "grab your hearts and their wallets will follow."But Pepsi basically said – and they never said, "Coke sucks." What they said was, "Pepsi's for the new generation." And the implication was that Coke was for the old folks. So they called it the Pepsi Generation. There was a guy at Pepsi that was very smart about that, Alan Pottasch.And then, after that, they did the Pepsi Challenge, where basically they said – by the way, they never said Pepsi tasted better. They just showed that people chose it. So they were always doing that stuff. And then when I became marketing director – and by the way, you can look at the quotes out there – I became, you know, Pepsi basically said that I snuck up on them because I said, "Enough!"I hired Bill Cosby at the time to do a bunch of advertising to basically say, "There wouldn't be a challenger if there was not a number one." We launched Coke Is It, which was a very successful ad campaign. That, by the way, McCann took credit for, but it was developed in Canada for the Canadian market. So there are a lot of secrets along the way about how these things came about.Andrew Mitrak: Yeah, we'll get to all of those stories, but I want to come back to while you were still at McCann – you said you're an account executive on the Coca-Cola account. And over time, I've become less impressed when someone comes up with a good idea and more impressed when someone can convince their client to get behind the good idea. And that's kind of the role of the account executive in a lot of ways, right?Sergio Zyman: Well, Coke had this thing, as I mentioned before, called "pattern advertising." So they developed a series of commercials. They did "Have a Coke and a Smile." They did, at the time, "It's the Real Thing," right? The advertising is the real thing. I mean, it was shot down to everybody around the world. Our job at the agency was to translate it and adapt it. And then we had to go and sell it to the client.But we were not coming up with a lot of original marketing ideas to grow volume. It was all about – we were implementing whatever was coming down from the north. And even at headquarters, and later on when I was at headquarters, it was kind of – the agency drove and dominated the whole communication or marketing thing. The Coke marketing folks were ex-salesmen. There was no strategy.Coke was a distribution company. They had a great product and a great idea, and then they developed a distribution network around the world. There were a lot of people that wanted a franchise, and that's how they ended up growing for a long time. At one point, they actually needed to go vertical, and that's when the company started changing. But it was all about launching bigger bottles, or different sizes, or plastic bottles, or stuff like that. You didn't really have a real marketing strategy coming out of the company.There was a group at McCann who went off into this quiet lab, and they'd come in and they'd make a presentation about how we're going to go to the next level. And we had this stupid piece of research, which was "13 elements of imagery." And it was about, "How much do the consumers love us?" Not how much do the consumers buy us, but how much they love us. And, you know, it was very frustrating.International Marketing: From Japan to New York to BrazilAndrew Mitrak: You were at McCann and eventually, of course, you went to have a very successful career at Coca-Cola. But before that, you actually joined Pepsi, their top competitor, in Brazil, right?Sergio Zyman: No, so I went to McCann in Mexico, and I saw Gene Kummel, who was the president of McCann, came to visit in Mexico. And I got a call – the president of the Mexican company called me up at McCann and said, "By the way, Jean is here. Would you like to see him?" And I said, "Yeah, great." Or, "He'd like to see you."So I went down to meet Jean. And he said, "What do you want to do?" And I said, "I want to go international. I want to get out of Mexico." I told him all the reasons, and three months later I got a call that said I was transferring to Japan. And I said, "Japan? Why Japan?" And they said, "Because if you can make it in Japan, you can make it anywhere."So I went to Japan as an account executive again, to work on the GM business. They had bought Isuzu in Japan, and they were trying to create a pattern model for advertising around the world. And I also worked on Nestlé.And in Japan, the Japanese are very methodical, as you know. And they were selling Nescafé, which was the number one brand for Nestlé around the world. But then when it came to the spring, the Japanese went and got a haircut, switched their suits from winter to summer, and stopped drinking coffee – just stopped. So we came up with a cold drink out there, and I worked on that. I was there for a year and a half – an incredible experience, living in Japan.So then I got a call saying that they wanted me to go back to the States. I went to New York, and they offered me a job as account supervisor on the Coke New York – the bottler in New York. And I said, "You know what? I need to get the New York experience. I got to check that thing." So I took the job, and it was a nothing job. All we did was take the client to dinner. We didn't do anything meaningful.Becoming President of Pepsi in Brazil at Age 30And then Pepsi started asking me to join them, and they offered me like five or six jobs. They were all kind of ad jobs, and I didn't want to be in that. And then eventually, McCann – I went to Central America to be general manager of the Central American company. And then when I was there, they asked me whether I wanted to interview for a marketing job in Brazil.And I had just gotten married, my wife was pregnant. And I said, "You know what? Take a free trip to Brazil. What the hell? I don't think anything is going to come out of it." I went to Brazil, and the job actually was to develop an advertising campaign, even though I was a marketing guy. And I said, "Well, I can do that. I know how to do that."So I took the job as head of marketing for Pepsi Brazil, and we moved to Brazil, which was a great experience. My daughter was born there. We lived there for three and a half years. About two years in, my boss gets transferred to Venezuela, and I get promoted, at age 30, to be President of the company. And I was over my head – beyond anything. I didn't know what I was doing.The Pepsi Challenge: Growing Pepsi’s Marketshare vs. CokeAndrew Mitrak: In your book, you write,"When I got there, I found out that Pepsi Brazil had the same advertising philosophy as Coke, but to make things worse, Coke was outselling us there 10 to one. Not good. I knew that with the odds so heavily against us, and with comparatively no penetration in the market, the only way we could dig ourselves out would be an ad campaign that provided a contrast between us and Coke. So we came up with the Pepsi Challenge."And I'm wondering, what were the origins of the Pepsi Challenge? You were at Pepsi when the Pepsi Challenge was launched. What did the rollout of that look like? How did that start?Sergio Zyman: Pepsi was doing some spectacular advertising with the puppies and the "Pepsi Generation" – great jingles and all that. And there was an agency in Dallas, Texas, that came up with the Pepsi Challenge. And in the old days, you didn't go negative, right? I mean, you basically came out and told people why you were the right candidate or the right product, but you never went negative. The only time you went negative is when you had nothing to say.And Pepsi had tried everything to get out of the kitchen and into the living room. And all they were trying to find was a way to be equally considered by consumers. In Brazil, I had no money. I had no budget. And, you know, I didn't come up with the Pepsi Challenge. It came out of Dallas. But then we started doing it in Brazil. It didn't go as well as it went in the States because, in Brazil, people frowned at negative advertising. But all that changed over the years.Andrew Mitrak: At a tactical level in Brazil, when you're doing this, was it pop-ups in supermarkets and public areas where people could try them both? Were you filming these and putting them on TV? What were the mechanics of the advertising campaign rollout look like there?Sergio Zyman: We basically did taste tests, right? Blind taste tests. And you did a not-blind taste test until you won. The moment you won, you stopped. You didn't have to do any more. So you kept on filming these very rudimentary spots. And then once you got to the number where you could claim that more people prefer the taste of Pepsi to the taste of Coke, you didn't have to do any more.Andrew Mitrak: If you ever lose, you can just stop that ad and not run that one.Sergio Zyman: No, no, you don't. You never – you won't lose because the chances of a sweeter product, which is what Pepsi was... Eventually, you didn't have to win by a large margin. You could win. All you needed to do is have 51%. "More people prefer the taste…" – all you needed to say. "In taste tests in Rio, more people prefer the taste of Pepsi to the taste of Coke." That's it.Andrew Mitrak: Yeah.Sergio Zyman: And I would do things like, when we would launch a new flavor or something, I would take all the trucks and I would do a parade through the cities of Rio or São Paulo, as a way to do that. I didn't have any money. And I learned a lot.And then they decided to restructure Pepsi down in South America. They put together a group with Bolivia, Argentina, and everything else, and they brought in a guy called Roger Enrico. And Roger arrived in Brazil, and – the flight arrived at 5 o'clock in the morning. I sent a car and a driver and a letter saying, "Welcome to Brazil. I'm at your service. Let me know – I'm sure you want to rest." He got all offended about it. Hated me from day one. He came into the office; he wanted to take my office because he was now the guy for South America.Anyway, so he fired me a year later. So now I am in Brazil with my wife. She's pregnant with my second kid, and I'm fired. So I said to my wife, "We're going back to Mexico." She said, "I don't want to go back to Mexico." I said, "Guess what? That's the place that I can actually retool and figure out what I'm going to do."But then John Sculley, who was president of Pepsi North America, heard what happened, and he said, "We're not losing Sergio." So they moved me to New York against Roger's desires, and then I went to be director of marketing for Brand Pepsi in New York. But it was a nothing job, too, because it was all about advertising.Andrew Mitrak: I've got to ask you about – you mentioned John Sculley, of course, later became CEO of Apple. Did you work with John Sculley, and what were your impressions of him?Sergio Zyman: John was an incredibly cerebral guy. Very introverted. And I worked with him, and I worked with “Ted” Glover, who had then moved to New York as well.And then I got a call from Brian Dyson, who I had competed against in Brazil, and he said, "By the way, I'm back in the States. I'm running Coke North America. Do you want to have lunch next time I'm in New York?" I said, "Sure." And we went to have lunch at the Bar Americain at the Waldorf. And then as we were sitting having lunch, suddenly Don Keough, who was the president of North America, by accident, shows up at the window and waves at Brian. He comes in, sits down, and pretty much starts grilling me about what I thought about Coke.And I said, "I think you guys are screwed up. I think you've had so many advantages, and you're just giving more up." And I gave him a bunch of examples. And he said, "Well, we're not that bad." I said, "By the way, I'm not here – I'm just having lunch with Brian." I didn't even think that they were interviewing me. And then later on, Brian offered me a job to go down to Atlanta, and I went down to Atlanta. I got an offer – a very good job – and then from then on, lots of stories.Andrew Mitrak: Lots of stories. So, you joined Coca-Cola in 1979. To quote your book, you say,"That's when I found out exactly what happened after those ads I'd worked on at McCann were sent off to the media and aired 20,000 gazillion times, and I was shocked. Nothing happened. All those beautiful, heart-grabbing, award-winning ads that were supposed to be getting people to buy Coke weren't having much of an effect."So, was this really the time when you learned that the advertising wasn't really working at all, once you had moved in-house at Coca-Cola?Sergio Zyman: Yes. I mean, there was – Coke was really – I found out when I got hired, the reason they hired me was to pick up the secrets from Pepsi. And they really didn't treat me well when I got there. It was kind of almost like a joke. I was the token Pepsi guy and kind of a spy. And Coke was such a fraternal, "belonging-only," non-performing company.And all of a sudden, I started doing things which were so bad – like, I went down to lunch one day, and I'm an avid runner, and I was running a lot. And the only thing they had in the cafeteria was chili dogs and really fat stuff. So I convinced them to put in a salad bar. And I became like this terrible person. They'd scratch my car in the parking lot. It was awful.Andrew Mitrak: Do you think that you being from Mexico had something to do with that? Do you think it was prejudice?Sergio Zyman: No question. For sure. But, for me, being Mexican was kind of – I knew that I was in the minority. I knew that people didn't see me correctly. Even at McCann in New York, my own friends in New York were always kind of saying, "Why do we need a Mexican guy to be in New York?" There was always discrimination, but I just took it as part of the course. I had to work through it.But the advertising was very garbage at Coke, and it was managed by a whole different group, kind of corporately. You were not allowed to touch anything, do anything. I remember when, after a while, there were all kinds of people who left, and I was named director of marketing for the US. And I tried to hire people, and I had a couple of marketing people from Procter and other places.I remember there was a guy called Richard Ternowski, and he came to see me one day and he said, "Look, I tried to talk to the product guys about what's going on with the product, and they said I'm not allowed because that's a corporate thing. I tried to talk to advertising, to this guy John Gillen, who is kind of a protégé of the president and the son of a cousin, and I'm not allowed to talk about advertising. The packaging is done by corporate, and I'm not – what am I doing here?"That was the issue. So, the thing that – I started then becoming the guy that would come up with challenges. "How do we break this? What do we do in order to do something totally different?" We wanted to sponsor Hands Across America, and we did all kinds of things that were stupid in today's world.But then the thing kept on growing that way. Eventually, I became the head of marketing for North America. I ended up being the project manager on Diet Coke. It got canceled twice. And I did New Coke and Diet Coke and things like that, but it was so hard. It was really hard. It was counter-cultural.Launching Diet Coke: “Just for the taste of it”Andrew Mitrak: I want to ask you a little bit about some of these launches during this period. Can you share the story of Diet Coke? You kind of take it for granted that Diet Coke is one of the options today, but it didn't exist until you were there and really oversaw some of the launch of that. So how did that go?Sergio Zyman: Remember, I was Attila the Hun. I was there to destroy the status quo. So anytime Brian would call me up and say, "What do we do now?" I would come in with these cannonball things. Tab had a 3% share. Pepsi had two brands, Pepsi Light and Diet Pepsi. Together they had 4.1%. Anything that we did to grow Tab was just tough because Tab had been positioned as a diet drink. And the number one benefit of Tab was that it tasted sh****. Because of – I mean, it had saccharin, right? So people saw it as a way to punish themselves so they could go in and have three hamburgers.When I started the project initially, I started doing a lot of work on it with only two guys. I was actually semi-being the executive assistant to the president of the company as well. We went to Brazil – we were in Brazil. That's the time that Paul Austin, who was the chairman at the time, they discovered he had Alzheimer's, and there was a change in management. And then we got an email saying, "Stop all work on Diet Coke." And then the project got canceled.They had agreed with me that I was going to go to Harvard for the 13-week post-grad. And then I was leaving. So I was going to go to Harvard. Then Roberto Goizueta gets named CEO of the company. The project gets reinstated, becomes "Project Harvard," and I said, "I want to have a different ad agency." And they said, "Okay." Literally, after that meeting, I went to the airport, I went to New York, and I hired Lintas before McCann had a chance to react. And of course, that made me persona non grata. Remember, at the time, Madison Avenue saw me as destructive. I mean, they named me the “Aya-Cola.”Andrew Mitrak: So, Aya-Cola being a pun on Ayatollah, right?Sergio Zyman: Right. Exactly. And my view about it at the time was advertising needs to sell product. And they're saying, "No, no, no, no. Advertising needs to do these great commercials and entertain people. Look at the success of “Mean Joe Greene” and 'I'd Like to Buy the World a Coke,' and blah, blah, blah." And I just – I mean, we got into a massive fight for years about it. And I still believe today that the thing is all broken.But I just kept on going about it. And then, I got introduced to Goizueta, and I said, "Sir, I'm going to go away. And if I come back with a proposition to you, you're going to have no choice but to approve it. Because it's going to be an unassailable proposition." We walked out of the meeting, and Keough says, "You almost got fired there by talking like that to the chairman." I said, "What did I do? All I said was I wasn't going to just go play with this thing, that if I found out that there was no viability for the project…"So we went and we hired a design company – a very – I mean, I went non-traditional on everything. And we hired this guy, Alvin Schechter, who was really smart. He had done a lot of industrial stuff. I wanted somebody that had not done consumer products. That was – every time I tried to kind of do it sideways.And in one of the meetings, he was talking about the fact that the thinness of the lines on the Diet Coke can had to be enough to have the equity of brand Coke on it. And I was kind of rolling my eyes, and suddenly I said, "Wait a minute. We cannot launch a diet drink. We need to launch a regular drink with no calories." And everybody looked at me like an idiot."Wait a minute. We cannot launch a diet drink… We need to launch a regular drink with no calories."And I said, "It has to have all the imagery" because a brand is made up of five components of imagery: product imagery, user imagery, brand imagery, usage imagery, and trademark imagery. So eventually, making a long story short, we ended up with a product that was sweetened with saccharin initially. But basically, we launched it on a platform of taste, with a big jingle. Say, "You want to drink it just for the taste of it." And we launched it in Radio City Music Hall with the Rockettes.So that's how we got around the thing. And that's – I left. I went to Harvard, and then they, kind of corporate, took over the product. They tried to launch it around the world, and it failed miserably everywhere around the world. And the reason for that is because they were launching it as a diet drink. When I came back to the company, I just changed the nomenclature from Diet Coke to Coke Light, and volume went through the roof. And that's – I mean, Diet Coke, there's a lot of stories behind Diet Coke and a lot of insight about it. Same story with New Coke.Sergio Zyman: “I was the first-ever Chief Marketing Officer…”Andrew Mitrak: Yeah, there's a lot of stories, and we're at time for our interview today. We're going to do a follow-up because we've covered a lot of your career – from Mexico to Japan to the US, to Brazil, back to New York and Atlanta. But we're still… there's decades and decades of the rest of your career. I want to talk about Tab Clear and the takedown of Crystal Pepsi, of course, New Coke, the founding of the Zyman Group, your advising to politicians on political campaigns, also some of your consulting work with Microsoft. Just so many stories to keep going through your career. So I'm going to follow up with you and we'll schedule part two of this conversation.Sergio Zyman: Well, let me finish with one comment only. Remember, my philosophy is marketing. And I learned it over the years. Marketing is about selling more stuff to more people, more often, for more money, more efficiently. That's what marketing is, right?Marketing is about selling more stuff to more people, more often, for more money, more efficiently.And it's not just a moniker. It's selling more stuff, which is volume, or more money, which is profit, more efficiently, which is spending as little as you can. And then it's about penetration and usage. And I think that when we talk again, we've got to talk about those philosophies, which are still not embedded in companies today.I was the first-ever Chief Marketing Officer, and the reason I became the Chief Marketing Officer – and we can talk about it as well – is because I wanted to have a seat at the table. Now, everybody's a Chief Marketing Officer. They're not. They don't have any responsibility for the bottom line. So we'll talk some more.Andrew Mitrak: Absolutely. Well, I'm really looking forward to it, Sergio. Thanks so much for your time. This has been an absolute blast. I really enjoyed this conversation so much. So thank you again, and we'll talk again soon.Sergio Zyman: All right. Take care.**End of Interview — Tune in Next week for Part 2.**A Special ThanksI want to extend a very special thank you to two people who were instrumental in making this interview happen: Mark Kroese and Joe Michaels. I'm incredibly fortunate to count them as mentors and as friends. They both independently recommended I speak with Sergio Zyman for the podcast, and their insights were invaluable as I researched and prepared for this interview. And it was Joe who actually put me in touch with Sergio, making this conversation possible. Thank you for your support, Mark and Joe! This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 9This week, I sit down with Dr. Robert Cialdini, a NYT bestselling author and Regents Professor Emeritus of Psychology and Marketing at Arizona State University. Cialdini is regarded as “The Godfather of Influence” and The Harvard Business Review describes him as “the foremost expert on effective persuasion.”This is a special conversation for me. Cialdini’s 1984 book “Influence: Science and Practice” is a book I’ve revisited over my career, and I’ve recommended it to several marketing colleagues. Speaking directly with Cialdini was a true honor. He’s given a handful of podcast interviews in the past, but I haven’t come across one that’s specifically focused on the marketing applications of his research. Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsWe'll also explore Cialdini’s 2016 bestseller Pre-Suasion, which is all about how to prime audiences to be persuaded before a marketing message is delivered. Along the way, we’ll ground these principles in case studies, with examples of McDonald’s, Coca-Cola and the New Coke launch, Bose, Norwegian Cruise Lines, and Berkshire Hathaway. We’ll hear how Cialdini’s principles helped Warren Buffett and the late Charlie Munger — and had reciprocal benefits for Cialdini himself.Now here it is, my conversation with Dr. Robert Cialdini.Bringing the psychology of persuasion to marketingAndrew Mitrak: Dr. Robert Cialdini, welcome to A History of Marketing.Dr. Robert Cialdini: Well, thank you, Andrew. I'm looking forward to our conversation.Andrew Mitrak: So, you are the Regents Professor Emeritus of Psychology and Marketing at Arizona State University. That word “Marketing” is officially in your professor title. That stood out to me because I think of a lot of your work as primarily psychology. So, I'm curious about what your relationship has been to the field of marketing over the years.Dr. Robert Cialdini: Well, it's always been an interest of mine because of my larger, broader interest in the psychology of influence, and of course, marketers are influencers in many situations and ways. So, I've always had an eye toward what marketers are doing, what's been successful, and what isn't successful in the marketing arena.But my role as an academic with a marketing title comes from the fact that on a sabbatical leave, I went to Stanford. I was going to write a book, a new book, the book called Pre-Suasion, and I was asked by the Associate Dean if I could teach a marketing class. I was in the business school, the GBS, because I wanted to get the advice of various professors there about my ideas. And so, they gave me an office in the business school, and they asked me to teach a course to MBAs on effective business communications. So, inside that is, of course, the marketing element, and I began teaching that course, and it was very well received.When I came back to ASU, my marketing colleagues said, "Hey, Bob, how about if you join us, get a joint appointment, not just in psychology, but also in marketing, where you can teach that course, this time sharpened to effective marketing communications?" So, that's how the joint appointment developed, and I was very glad for it because the marketing students that I would teach would give me a side of the influence process that psychologists just didn't have a deep experience in. And so they were great sources of information for me.Andrew Mitrak: I would have loved to have taken that course at some time. I'm sure that marketers brought a new lens onto it that you weren't getting in psychology, but on the other foot, I'm sure you were bringing concepts that aren't really taught in marketing programs usually. Were there any notable reactions to some of the ideas that you recall from this time?Dr. Robert Cialdini: One of the things that was especially riveting for the marketing students was the idea that I was claiming that although we live in what is known as the Information Age, it's never been known as the Knowledge Age.Information has to be processed. It has to be structured. It has to be prioritized. And then, people will take it in, resonate with it, and then employ it in ways that lend themselves to assent if you're interested in influence. And so, that idea that information, no, we have to really think about how we construct it for marketing purposes rather than just sending it out there and expecting it to land in a favorable way. That's just naive, so the course was really reimagined in terms of that difference. We have information. We have a case to make. We have the merits of our offer and so on. That's not enough. We have to arrange it in psychologically strategic ways to make it knowledge that people will take with them and employ.Early Influences: Coke, McDonald's, and "The Hidden Persuaders"Andrew Mitrak: Let's go back to the beginning. You grew up in the Midwest. I think I have that right. And I'm curious about what your first encounters were with marketing as a young person.Dr. Robert Cialdini: Well, what I remember is Coca-Cola ads. I remember McDonald's ads and so on that had an emotional component to them that employed some of the things that I talk about in the universal principles of influence.The idea of unity that we're a community, we're a Coca-Cola community, a McDonald's community. Then information like we're the widest selling brand, McDonald's, ex-millions sold, and all those kinds of things that they were allowing us to recognize about their product that didn't have to do specifically with the features of it, just the response to it, the emotional response that people would have to knowing those, those facets of it. And that struck me as very interesting.I remember being interested in a couple of books back in those days. One was The Hidden Persuaders by Vance Packard. Back in 57. I was just 12 years old, so I didn't read it then, but a few years later, that whole idea of elements that you could put into an ad or a marketing appeal that would resonate with fundamental motives that people had, but they didn't even recognize them. You didn't have to be explicit about it. You could lay them into the background of the ad, for example, there was this great example of a set of ice cubes in a glass, a whiskey glass, and if you look close, you could see kind of racy images within the ice cubes that they laid in there and generating this desire for the product because there was desire that was coming into consciousness, although under the radar.And, Ernest Dichter, too, with The Strategy of Desire. I think it was his idea of underlying consumer motivations that weren't just about the product, but were about the things that people are looking for, striving for attainment and recognition and affection and so on. Those kinds of factors when aligned into the messaging were very effective, even though they were outside of the particular features of the ad, they were connected to it in terms of those fundamental drivers of human conduct.Going undercover to find the secrets of persuasionAndrew Mitrak: So you were really interested in the science and psychology behind persuasion from a very young age. And I'm going to read an excerpt from the introduction of Influence that speaks to a pivotal moment in your career as a researcher. I'm going to quote."For nearly three years, I combined my experimental studies with a decidedly more entertaining program. I systematically immersed myself in the world of compliance professionals, sales people, fundraisers, marketers, recruiters, and others."So, this period of being undercover in this immersion with these compliance professionals, I'm sure you have a lot of stories from this period. It sounds like a lot of fun. Do you recall any of your favorite interactions with marketers or public relations people while you were undercover for a few years?Dr. Robert Cialdini: Well, you know, I'm going to give you an example that I think is important, not because it took place in a marketing or PR setting, but because of its implications for the way as marketers and marketing professionals, we need to take this lesson into account.It has to do with the importance of establishing trust in our audience before we launch into trying to convince them to come in our direction. And in modern communication technology, we are separating ourselves in terms of human connection from our audience. We're using technology that allows people to buy or learn about our products and so on with no human connection, where you have experience with people, you've come to like them, you've come to trust them. And so, here was an example.So I was taking training in a sales program for very expensive heat activated fire alarm systems in the home. And I was undercover. I was incognito. I would just enter their training programs. I would learn what they were telling me was most effective in getting people to say yes. And I did this across a whole range of industries and programs and so on.In this particular one, there was one salesperson who, after you would get an invitation on the phone, you would recruit people to allow a salesperson to come into their home, and it was usually a couple, and tell them about this new fire alarm system that was superior to all the smoke based systems. And there was one guy who was always at the top of the sales lists. Every month he sold more than anybody else.In their sales training program, we were allowed to accompany the old pros on sales trips, and sales visits, to learn what they were doing. And I was especially interested in this one guy. Let's call him Jim. It wasn't his name, but let's call him Jim. And to see what he was doing. And it turns out he was only doing one thing different and it was designed to establish trust before he ever said a word about the products.Because if we, if we have that human connection with someone we trust, our defenses come down and we're more open to that person. There’s less skepticism and so on.So, what we would do with all the other sales people, there would be a big ringed folder of information about the product and all the benefits. And everybody would bring it in with them, introduce themselves and then start walking through this bit.This guy, Jim, left that binder in the car and would introduce himself and then everybody was all the sales people were asked to give the customers a little test of their home fire danger knowledge. So, and they would have, it would be a time test. They would only have five minutes. Okay, and so you give that to them and they're taking the test.And Jim would say, “Oh, wait a minute. I forgot some important information. Do you mind if I let myself out and back into your home while you're taking the test? I don't want to interrupt your test.”That often involved giving him a key to the front door of their home or to say, sure, let me unlock it for you and go ahead and leave and come back at your discretion. We did three separate calls that night and he did the same thing on all three calls.“Oh, I forgot the, do you mind if I get it and get access to your home?”And I asked him about it on the drive back to the office and first of all, he wouldn't ask, he wouldn't answer me. He said, he didn't want to reveal his secret.Finally, at the third time, he said, "Listen, Bob, what kind of person do you allow into and out of your house on their own with a key that you've given them? Only somebody you trust, right? I wanted to establish myself as a trustworthy individual before I began my pitch."It's the only thing he did differently. And he was at the top of the sales team. So, the importance of establishing trust before you launch in, right? How do you do that?Bose case study: Establishing trust with testimonialsDr. Robert Cialdini: Well, one piece of evidence that I have recognized from a marketing campaign from Bose. Bose Acoustics: you give them testimonials of experts on this topic on, it was the Bose wave music system. So, experts in acoustics and audio technology and so on.They used to have those expert testimonials buried in the message down below or you have to press a button to get to the to the testimonials to another page and so on. And we asked them to put the testimonials first. So they had the power, the trust that came from expertise of not, not the, not the marketer, but people outside of Bose who were recommending it. They now were able to get that trust in what was being said before they said a word, right? And it increased purchases by 16%.Now, the other thing about it is to optimize that trust from expertise, we didn't just put one testimonial. There will be a lot of advertising agencies that will tell you, no, no, just put your best testimonial first because the only, put that in there first. The others will just dilute its impact. That's not what the research shows. The research shows that subsequent testimonials, as long as the best one is in there, don't dilute it. They reinforce it. They reinforce what the best one said. They validate it. So that you can be you can trust that this wasn't just a cherry picked testimonial. They say that it's the only one that really raves about. No, there are several. So they put three up there, right? First thing. And that's what got them 16%. And the thing is it was the same material. It's where it went. It went in a place that established trust first, then led to compliance.Andrew Mitrak: There's so much to unpack with that. That example of Bose and the one best rating versus the multiple testimonials. I think today also of Google reviews and Yelp reviews where, which one do you trust? Do you trust the restaurant that has one single five-star review or do you trust the one that has 200 reviews that are 4.9?Dr. Robert Cialdini: Well, you're exactly right. Well, that 4.9 actually seems more authentic and it's better. And there's research to show it. The best conversion is not all five stars. It's a range between 4.3 and 4.7. Because you don't trust that person who's giving you just blanket positivity.Andrew Mitrak: You don't trust it, exactly.Dr. Robert Cialdini: No. Oh, and by the way, one of the things I'm going to recommend, because I think it's so important to build human connection back into our marketing even though technology is separating us. When you say there are “200 reviews,” right? Say “200 reviewers.”Those are people. We want people, not words on a page. We want people these days because we're, again, we're we're being drained of human connection through technology where we are just interacting with people separately from them, just pressing buttons.Influence: unpacking the seven principles of persuasionAndrew Mitrak: Let's, let's jump into your book Influence to ground some of this conversation, these ideas in the principles you lay out in the book. And when I first read Influence, there were six principles of persuasion you outlined. But this interview spurred me to purchase the new and expanded edition, which is not just a light, you know, rewrite with a new chapter here or there. It is a beefy, 400, 500 page book with a lot of material.Dr. Robert Cialdini: No, we added 215 pages. Yeah.Andrew Mitrak: Oh my gosh. Yeah. Well, knowing I was going to interview led me to purchase and read this new copy, which is just a delight in itself. And so, highly recommended to listeners. And so there were six principles initially. In this new book, you added a seventh principle, unity. Can, can you briefly walk through what the six principles are and why you added unity as a seventh principle?Dr. Robert Cialdini: Sure. Let's do that briefly.The first is reciprocation. People say yes to those people who have first given to them when they get a request from that person. We say yes to those we owe. So, we ought to be giving first, information. We should be giving various kinds of benefits, advantages and so on before people sign or or buy. Because they then feel appreciative. They feel grateful. And one of the things is to just, for example, there's research to show if you, if you just show people the amount of effort that you went through to provide this information to them, they're more receptive to it. They give effort back for having received that effort. That's the essence of the rule of reciprocity. What you give first, so you give benefits, advantages, information, evidence of your efforts and goodwill and so on. So that's one.Next is liking, the liking principle. Nobody would be surprised that we prefer to say yes to those people we like. Well, how do you get liking online, for example? How can you possibly do that? You don't know those people. They don't know you. They have no familiarity, no history with you. Well, there's a study of 6,700 online commercial sites, right? And they looked at AB tests to see which were the things that cause people to be more likely to go from visitor to purchaser, right? They convert. And the, the, fortunately, the principles of influence that we talk about are at the top of the list, but how do you get “liking” in there, right? Turns out that if you include on your landing page a welcoming statement, you get more conversion. You just establish, like, you approve of those people. You welcome them the way you would welcome somebody into your home. So on my, you know, we have a startup called the Cialdini Institute, where we teach ethical influence, and we have on the landing page, a welcoming statement, where it's said, well, welcome to our site. We're so glad that you're there. And then to make sure that it's personalized, I don't just have my name typed out in machine font, I sign it with my, I want a, I want them to see a person there. And there's a photograph of me. So, again, a person. So, those are the kind of things that bring, again, human connection in, increase liking and lend themselves to yes.Andrew Mitrak: It's not the “Institute of Influence” or “Institute of Compliance.” It is “The Cialdini Institute” and it's you–and you're a likable guy! So it's personalized.Dr. Robert Cialdini: And there's a, there's a photograph there, and. And you know how in, well, I'll give you an example, in marketing, two of the things that have shown the greatest increase over the last decade, influencer marketing. There's a person there. Somebody you know, somebody you were com- you're comfortable with, somebody you're familiar with, right? Big increase. And the other is handmade products. 37% increase. Why? Because there's a person there at a time when we're being separated from human connection, right? So, that kind of thing, anything you can do like that is gold. Yeah, so that's the liking principle.And how about social proof. The idea that if a lot of people are doing this, it must be the right thing to do. In our information overloaded world there are so many choices, so many options, so many challenges that we're dealing with, we're uncertain of what we should do. And people are looking for ways to reduce their uncertainty.We've already talked about one of them: authority. You give them evidence before you give them anything else, that of testimonials from genuine experts or, and here's the principle of social proof, which says people want to follow the lead of multiple comparable others. If a lot of other people like me are doing this thing or have done this thing, then it's probably the right thing for me too. Again testimonials or star ratings or quotes of one sort or another from others, a lot of others, multiple others will lend themselves to success. And we've already covered authority.Another is commitment and consistency. People want to be consistent with what they have already said or done. Okay? So, commitment and consistency.We've talked about scarcity. That people want more of those things they can have less of. So, the more we can give them evidence that what we have is unique, uncommon, rare, that Yeah. you can't get this from anybody else, not in combination. A lot of times it's not one thing that distinguishes us from all our rivals. It's a suite of things that together nobody else can match. That would be the thing to make very clear to people at the outset.Then finally, there is the new principle of unity, which says that people want to say yes, not just to those who are similar to them, but to those who are one of them, who share an identity or share a set of values or goals or or or category memberships. So I'm one of them. And how do you do that? Well, you, you can let people know if you know what their identities are, and you happen to share them, let them know that. But the way that works for me, we remember we were talking about getting people to feel connected. One of the great marketing advances of the last couple of decades, I think, is co-creation, where you ask your existing customer base to create with you the next generation of products or services. And the research shows that that not only increases favorability toward your brand, it increases loyalty. They're more likely to stay with you, even after there's been a stumble of some sort or another, right? If they've co-created something with you, they feel of you, part of you, of your brand.Now here's the latest research: One of the things we are doing with the Cialdini Institute is focusing on what we call small bigs. What are the smallest changes we can make to an appeal, an influence appeal, that will have the biggest impact on its persuasive success. Like, can you change one word and have that. Here's an example:Suppose you want to get your, you want to get co-creation and you're going to ask your customer base or your most important clients or customers to help you in this regard, and you will ask them for their opinion, can you give us your opinion on what we can do? Or you'll give them an outline or a summary or a blueprint of a new thing, can you give us your opinion on this? It's exactly the right thing to ask for that unity there.Right? Be, be one of us in this. Join us with this. Be our partner. It's a mistake to ask for their opinion. Because when you ask for an opinion, you get a critic. You get someone who does the opposite of unifying with you. They step back from you and they go inside themselves to provide a critique of your idea or your new initiative, let's say. Instead, if you substitute the word advice for opinion, you get significantly more favorable responses to your idea, right? Yeah. Because they're part of it. And here's the evidence that really sells the case for me. They give you better input into how to improve it, to change it or to emphasize features within your idea, right? Because they're one of you now. Yeah. The word advice asks for collaboration, partnership, unity, right?A small big for how you generate unity is not to ask for an opinion. And the newest research shows that's exactly the same thing for asking for feedback, which is the other thing we typically say. No, ask for advice and you get a better outcome.Andrew Mitrak: That's super interesting. There's this concept of the net promoter score and it's a question that's always asked by either product managers or marketers always using the same, the same text. It's it's, it's something to the effect of, “How likely are you to recommend this service to a friend?”And it's always that way. I think they always want to be consistent. In fact, I don't think they want to change it too much because they want to track it over time.Does that speak to unity in that you're bringing in friendship or do you the net promoter score could be improved upon?Dr. Robert Cialdini: Yeah, I think I would change it a little bit and say, what would be the single most positive feature of our product or service? Yeah. That you would tell a friend about. Now, they imagine themselves advising a friend, right? About this positive feature, that would be, I think, the most streamlined way.Andrew Mitrak: Yeah.Dr. Robert Cialdini: To get to the unity that we want. But I think that your point is very well taken that that general kind of questioning does that. It's an attempt at that.Andrew Mitrak: Right. Yeah. Well, you're inspiring my next listener survey for this podcast. So, just to recap, we've talked about:* Reciprocation* Liking* Social proof* Authority* Commitment and consistency* Scarcity* UnityInfluence through the agesAndrew Mitrak: This podcast is called A History of Marketing and so I'm very curious about how concepts and tactics and strategies have evolved over time.When you think about these principles, do you see them all as something that's innately human that's existed as long as humans have communicated and had something to sell to each other or or do you think of them as something that have culturally developed over time and that and that they've that they've changed over the years?Dr. Robert Cialdini: I think the majority of them have evolved over eons of human development. These are the things that if we, if they're truly in the situation, authority, social proof, we should want to move toward them, right? They will have evolved.There are a couple that have a very strong socialization component. Commitment and consistency, for example, the idea that you want to be consistent with what you have already said or done. Well, that's really about a reputation that you're spreading to people. That's the sort of thing you learn how to do. You don't get commitment and consistency effects in small children until they're maybe in fifth or sixth grade that they recognize that. So it's probably not innate. It has to be socialized into them. The other is reciprocity.All of these other principles, like scarcity and liking and what other similar others are doing, social proof and what, you'll see those even in non-human animals, that but reciprocity, especially a particular kind of reciprocity where the receipt of a gift or favor or service, piece of information, beneficial information, lends itself to future compliance with that gift giver. Animals don't have that. They don't have the ability to hold that sense of gratitude in their minds or obligation in their minds. I think this is something that is socialized into us.It's true in every human society. There's not a single human culture that fails to train its members in the rule for reciprocity. You must not take without giving in return. Because if you do, you're isolated, you're shunted off to the side. You're not somebody who will do well in that culture. The society benefits from people who receive to give back, which increases the likelihood that somebody will want to give in the first place, which increases human interaction and cooperation. I think those two, commitment and consistency and reciprocity are heavily socialized. The others are there already.Persuasion in marketing vs. salesAndrew Mitrak: You highlighted earlier the examples of the salesperson selling fire detection systems and then Bose, the audio system. And I think you were highlighting the differences between how salespeople can apply these and marketers and brands can apply these. And I think of marketers as they're influencing usually through the voice of a company or they're a voice of a product or a brand. They're kind of representing an entity that's like a non-human entity.This is different from a salesperson who's usually being more direct and personable and one-to-one with the person they're trying to persuade.How do you see these principles as being different? Or do you see them as being different for someone who's a marketer speaking on behalf of a brand or a sales person who's more taking an individual one-to-one approach?Dr. Robert Cialdini: Yeah, I think you're exactly right that they're different in that respect, but marketers would be well advised to bring those principles like liking, unity, reciprocity, that that produce a favorable connection, bring that into their marketing efforts, right? Let people know what you've already done for them or the effort that you've gone to present this information and so on.There was a study done in England where they were trying to get people to attend a particular meeting. And a lot of people just, it wasn't in their best interest. But if they were told how much trouble had been undertaken to set the meeting, find the location and get the schedules of everybody. They got a significant increase. Since, simply using reciprocity in terms of what we've already done might be something to do.The other thing about reciprocity, I think that's new over the years is not just material gifts, favors or services, but information, valuable information that's not designed to sell them your product because then it's a sales device. It's not really seen as a gift. Information in general about how to best proceed in this general area that you're working in, or just information about safety or whatever it is, that's the sort of thing that we can provide first and in a marketing context, we don't have to have a face-to-face interaction with people that can develop and has developed over the years. It's not just, you know, free samples.Coca-Cola: Comparing case studies of “Hilltop” and “New Coke”Andrew Mitrak: I want to ask about examples of companies and brands that have where their principles of influence have gone right and they've done it really successfully, then an example about where it's gone wrong or where maybe the lessons of influence weren't successful. And I think Coca-Cola could be a fun example to kind of compare and contrast.You mentioned Coca-Cola as one of the advertisements that made a big impression when you were a young person and of course, when I think of the concept of unity, I think of commercials like “I'd like to buy the world a Coke” and people holding holding hands. What did Coca-Cola do well with with these advertisements?Dr. Robert Cialdini: Yeah, they did exactly that. They made their product part of your upbringing, part of your youth, part of your history, part of your family experience. Even notice their ads for Christmas. There's a Christmas ad and Santa is drinking. I mean, just making it part of something that you've experienced that's a positive aspect of who you are. And that brand gets blended into that, right? They did a terrific job. Now, they also did a mistaken job on one thing, New Coke.Andrew Mitrak: Yeah.Dr. Robert Cialdini: Remember New Coke?Andrew Mitrak: Yeah, I wanted to ask you about this because I actually just last week I interviewed a man named Sergio Zyman for this podcast. He's the former Chief Marketing Officer of Coca-Cola and he's the marketer who's most associated with the New Coke launch. He did a lot of great things in his career, like involving the launch of Diet Coke, but we talked a lot about New Coke. So I want to hear you have a few pages on New Coke in Influence. What are your impressions of it?Dr. Robert Cialdini: So what they failed to recognize is the consequence of taking the old Coke away. So people couldn't have it anymore. And they produced what's called reactants where people reacted against the loss of this valued thing. It wasn't just that they introduced New Coke as another brand version or flavor with a little sweeter. No, they took it away. It produced a fire storm of protest. I mean, there were marches in the street. There were communities that developed with people raging against it. There were suits filed in court to bring back the old Coke because of loss aversion. That's part of scarcity. We want more of those things we can't have.Coke did this great job of establishing itself in the sense of self of their customers. And then they took that thing away that had been associated, that flavor, that taste, you can't have it anymore. And it produced this massive counter reaction to it. And actually Coca-Cola had the evidence in their testing data that this would happen, but they interpreted it wrong.New Coke: A lesson in loss aversionDr. Robert Cialdini: For three years they did taste tests, blind taste tests, the New Coke versus the old Coke. And the New Coke was rated more favorably by about 55% to 45%. They like the sweeter taste. Okay. And they thought, okay, well then people are and then they took away the thing they had established for decades and decades and decades and people and produced this fire storing. Okay, what was in their data that could have told them that this was going to happen? Some of the taste tests were not blind. They said, this is your usual Coke and this is the New Coke that's not yet on the market, right? And preference for the New Coke went up by 6%. And Coca-Cola said, this is great. This means that when we bring them something new, they will choose it. What it really said is when you give them the choice between something they can have, the classic Coke, the regular Coke, and something they can't have because it's not on the market yet, they liked it even more.In both cases, it was loss aversion. The thing that you couldn't have was the one that was elevated in preference. And then Coke went ahead and said you can't have our product anymore. The one that's, you know, embedded in yourself, we're going to give you this and that produced the reaction.So, in both cases, I think we can find evidence of a good marketing strategy and a poor marketing strategy in the history of Coca-Cola.Andrew Mitrak: That's right. The word you brought up a couple times is loss aversion. I think it's this idea that if I was to take something away from you and give something to you, the pain you would feel about your loss is actually greater than any positive feeling you'd have about what you gained.And people really felt that pain with Coca-Cola Classic that was now gone. What's more scarce than, “You can't have it”?Dr. Robert Cialdini: You're exactly right. Loss is the ultimate form of scarcity. You can't have it anymore.Andrew Mitrak: Yeah. To Coca-Cola's credit, when they brought back the classic Coca-Cola, they made sure that everything was exactly the same, that there were no changes to it. This is the same packaging, the same color, the same brand, everything that was there before. It's just the way it was.Dr. Robert Cialdini: So what's the implication for marketers, right? Here's one. Don't just tell people what they will gain, what they will receive from choosing your product. Tell them what they don't want to lose. Loss aversion is stronger than desire for the very same thing.Daniel Kahneman (and Amos Tversky) won the Nobel Prize in economics for his prospect theory that showed that the prospects of gaining something are significantly less motivating than the prospects of losing that very same thing. So, in that Bose ad I was telling you about where we added multiple testimonials of it, so that was the authority principle. We also had the scarcity principle when we changed the title of the ad from "New," the new Bose wave music system to "Hear what you've been missing in the new Bose wave music system." That produced a significant increase in sales. So tell people not just what they will gain, but what they will forgo. It's more powerful.Andrew Mitrak: That's a great line: “Hear what you've been missing.”Pre-Suasion: Setting the Stage for "Yes"Andrew Mitrak: Another book of yours that's a favorite of mine is Pre-Suasion. And speaking of great lines, I love this word, "Pre-Suasion." And did you coin this word yourself? and do you remember the moment you came up with it?Dr. Robert Cialdini: Yes, I did coin it, “Pre-Suasion.” The initial title of the book was “Moments of Power.” I was looking for moments when people were especially susceptible to a marketing or influence-based appeal. And they were always first. Almost always first.It's what you did first that changed the mindset of people to be more receptive to the message they haven't yet received. So, it was possible to increase people's agreement with a message that hadn't been sent to them yet. How could that be? Well, it's because if you put people in mind of a concept that is central inside your message, they have been readied for it when they do encounter it. Here's a great example, the Norwegian Cruise Line, one holiday season, had a marketing campaign where they were sending emails to all of their former customers that there was a great bargain for cruises during the holiday season of that year, right? But it was a limited time offer. So inside the email, there was a ticking down digital clock of how many hours and minutes you had to do it. Everybody got that. But half of them got that message with two ticking clock emojis in the subject line. So they were primed for scarcity. They were primed for potential loss, dwindling opportunity, before they encountered dwindling opportunity, which, according to the Norwegian Cruise Line, significantly increased purchases of cruises as a result. Yeah. So what do you do first? And how do you find those opportunities for mentioning something? We already provided one. Put, for example, a welcoming statement on your landing page before they get any information. You've established liking for them.Andrew Mitrak: That's exactly right. Recalling our conversation, almost everything you've mentioned is all about Pre-Suasion or or that's that initial moment, whether it's the welcome message on your your website, the salesperson who's selling the fire safety system, you know, he doesn't ask to leave at the end as he's signing the paperwork. He does it right at the beginning to build trust.Bose elevating those testimonials right to the top. It's both taking all of these principles of influence and persuasion and recognizing that, hey, often these happen right at, right at the beginning of an interaction and enter Pre-Suasion.Dr. Robert Cialdini: You're well advised to structure them for the beginning.Warren Buffett's Masterclass in Pre-SuasionDr. Robert Cialdini: You know who's the best at this is Warren Buffett. Okay. Maybe the greatest financial investor of our time. I get his annual letter to shareholders every year. Here's what he does on the first or second page of that letter. He mentions a weakness, something that went wrong that year and says, you know, we're human. We make mistakes, but this won't happen again because we've learned. We've made changes now.Every time he leads with a mistake, I say to myself, “Wow, this guy's being straight with us. What's the next thing he's going to say?” I'm especially interested. I'm focused now. I'm primed for trust. Then he mentions the strengths of Berkshire Hathaway. And why you should hold your shares and buy new shares because, and I am diving into that new. But it's not, he's waited until he's established his trust before he presents the strengths. Wow. What a brilliant guy.Andrew Mitrak: Very brilliant guy. And if I was to go down the principles of influence, the principles of persuasion and think of Warren Buffett, commitment and consistency. Is there anybody more consistent than him and the late Charlie Munger? Scarcity, they still have the class A stock and there's it class B? So there's like two stocks. There's one that I could probably afford and there's one that's like several hundreds of thousands of dollars and there's -Dr. Robert Cialdini: It's between six and $700,000 a share.Charlie Munger and the rewards of reciprocityDr. Robert Cialdini: Now, I'm going to tell you a story.I got one of those A shares 25 years ago in an envelope that had Charlie Munger's name on it. Charlie was Warren's long standing partner. It was worth $75,000.And he said, "Your book has made us so much money by understanding human behavior because we know that the markets are not made up of econometric models, they're made up of people. By the principle of reciprocity, you are entitled to this share."And I was sitting in a chair that had rollers on the back and I read this and it knocked me back and the chair hit the wall behind me. I was so shocked by this.Okay, so I've kept that share and it's recently, it reached $700,000 for that single share. That's how good these guys were not just at financial investing, but telling people about financial investing and how they did it and how and by establishing trust first. I mean, it's just brilliant.Andrew Mitrak: That's amazing.Will marketing internalize the lessons of Influence?Andrew Mitrak: So, your books have had so many answers to how marketers should position products and persuade audiences, and why do you think there's still so many marketing campaigns that fall flat and aren't persuasive? Is it just that more people need to read your books and sign up for the Cialdini Institute? Or why is it not fully known? Because the answers are there.Dr. Robert Cialdini: Yeah, I think it is that they think that my book is, well, “That was developed before the internet. Well so why would I pay attention to it?”And so actually, the book has been called the Bible of online marketing. It was written before there was online marketing and people have asked me, “How did you see ahead? How did you look ahead to see that it would be so successful in this new platform?”I said, "I never looked ahead. I looked in us.”I looked in us. What are the drivers of yes that have always existed across platforms, across populations, across situations. Those are the ones we need to.You have to think about not just the latest technology or approach. Look to the factors that have always driven. There's a Chinese saying, "The years tell what the days can't say.”Look to what has always worked. Don't get swept away by what happens to be the most novel or the newest. Go to the most primal features. Those are the ones that are going to drive behavior.Andrew Mitrak: I, of course, couldn't agree more. That's part of this whole podcast. I feel like everybody is is looking to the future of marketing or the latest tips and tricks today and I think a lot of the lessons are in history and they're they're from experts like you, like Dr. Kotler, like so many others who have gone through all this before and I couldn't recommend enough for listeners if they're in marketing to, you know, pick up a copy of Influence.It made Charlie Munger and Warren Buffett a lot of money, so definitely recommended. And Pre-Suasion as well, which is also just a delightful read. So, Dr. Cialdini, thanks so much for your, for your stories, your time, your wisdom. I've really enjoyed it.Where can listeners find you and learn more about you beyond purchasing these books to learn more about your work and to and to support you?Dr. Robert Cialdini: I think the easiest way would be to go to cialdini.com and then there's an array of possible options that they might want to partake of.Andrew Mitrak: Yeah. Well, Bob, thanks again for being on the show. It's been a lot of fun.Dr. Robert Cialdini: I've enjoyed it. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 8“Anytime there was a budget cut, marketing was cut first. So I took it personally to make executives believe marketing is an investment, not an expense. The only way you can prove that is to show the ROI of marketing.” - V. KumarThis week, we have a marketing titan joining us: Dr. V. Kumar, also known as “VK.” He's among the most cited and influential scholars in the field of marketing. He has published over 300 scholarly articles and 35 books. VK’s has been recognized with over 20 Lifetime Achievement Awards, including being inducted into the Analytics Hall of Fame and being named a Marketing Legend as part of the "Legends in Marketing" series, alongside the Philip Kotler and Jag Sheth. He was Editor-in-Chief of the Journal of Marketing and is the Goodman Academic-Industry Partnership Professor, Goodman School of Business, Brock University.In our conversation, we trace VK's journey from his engineering roots to how a talk by Philip Kotler sparked his passion for marketing.We also dive deep into the evolution of marketing research and analytics, from surveys and diaries to scanner panel data and the rise of database marketing and CRM. VK shares a behind-the-scenes look at his work measuring the Customer Lifetime Value of Coca-Cola consumers, revealing insights about Coke vs. Pepsi.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsWe'll also explore VK’s paper, "Evolution of Marketing as a Discipline," charting how marketing organizations have adapted, using Coca-Cola as a case study.Finally, we'll discuss the relationship between marketing academia and practice, highlighting VK's extensive collaborations with companies like UPS, IBM, P&G, Comcast, Home Depot, Wells Fargo, and Pitney Bowes, and how this work has helped demonstrate marketing's value as an investment, not just an expense.Now here it is, my conversation with V. Kumar.Early Influences: Philip Kotler and the Journey into MarketingAndrew Mitrak: Welcome, Dr. Kumar. It's an honor to have you here.Dr. V. Kumar (VK): My pleasure, Andrew. Thank you.Andrew: So, before we get into some of marketing's history with you, I wanted to talk about your history. Before you were a marketer, you studied at the Indian Institute of Technology, and you earned your master's in engineering and industrial management. So, I'm curious, how did you make the jump from engineering into marketing?VK: Both my undergraduate bachelor's in technology as well as my master's were from IIT. In the master's program, there was a segue. I majored in industrial engineering and industrial management, whereby we still continued with some engineering classes, but predominantly focused on the management of the engineering function. That was the time that Phil Kotler had come to India to give a few talks and meet with a few people. And I was blown away by the influence of him in the business field in general, particularly in marketing.And so, I started reading about what it is, and it was his textbook that we used in marketing in the master's program. So, when he came, and as well as I heard his talk, and I followed his book, I said marketing is what I'm going to do. And I reached out to him and he said to join Northwestern, but then I chose the University of Texas at Austin because they gave me a full scholarship, and it's a warmer place. I grew up in Southern India, Chennai, and, Texas being warm, it was a natural liking for me to join the University of Texas at Austin. There, I did both marketing and a minor in statistics. So, I brought in the engineering expertise throughout my life, even majoring as a minor in statistics. That's the segue that happened.Andrew: So, you came to the US to start studying marketing. What were your initial impressions of marketing as a consumer, versus an academic? Were there advertisements that made an impression on you when you were young? Were there specific brands or examples that stood out to you?VK: The first thing is, when you land in the US and start watching television, you see a plethora of advertisements. You get glued to that as to how colorful it is, how beautiful it is, and what the message is. We have this AIDA model: awareness, interest, desire, and action. So, I used to evaluate each of these ads as to where they stop. Are they just creating awareness, or are they going through the process till the end to make me go and buy that product?So, that was very fascinating. But the one ad growing up that really caught my attention, which for many people and the whole ad world talks about it, is the renaissance of advertising, the Apple 1984 Macintosh ad in the Super Bowl. That transformed Super Bowl ads from then on, and also the ad industry in terms of how to be creative and catch the attention of the consumers. So, that was there. Then after that, a series of Coke ads and Budweiser ads all followed through, but this was like a moment to reflect, and that still stands in the mind.Andrew: Yes, I think we can all envision that ad, almost frame for frame in our heads. It made quite an impression.VK: Definitely.Andrew: And so, you mentioned Philip Kotler, of course. Who were some of the other individuals that first shaped your understanding of marketing as you were first entering the field?VK: So, I was admitted to the University of Texas at Austin, and my advisor throughout my stay was Bob Leon, Professor Bob Leon. He was a significant influence then, and till now. He's the best friend, he's the mentor, guide, everything. So, he prepared me for life saying that there's only one thing you need to remember. You just put in your hard work, and if the expected outcome doesn't come, don't give up the hard work, keep persisting, putting it in.That was great advice because as an academic professional, you would see that when we submit manuscripts, rejection is the norm. So, every paper we write, we keep rejecting it. So, we cannot give up. So, he prepared me well. And then also in terms of quantitative marketing, he is a great quantitative marketer. So, he taught me some of the basic statistical techniques as well as advanced. I was his research assistant.But I was the one who was fortunate upon graduation, and then even before I got promoted to associate in the '90s, Dave Aaker and George Day adopted me and said, "V. K., we want to write this marketing research book with you. We have done something so far, but we want you to take over from here."I was like, is this a dream? And then I took it over and wrote the book, as the fourth edition or so was the first one that we co-authored together. And now, it's the 13th edition, and we'll release the 14th edition very soon. It is the standard. And then in the middle, somewhere, Jag Sheth also influenced me significantly, adopted me and said that the work that you do, make sure you also give back.You know, I was adopted by many people at different stages. So, what do I do? And now, fast forward to today, I've had 40 doctoral students I could mentor. And it was the most rewarding experience I have seen, and probably one of the largest numbers among the academics, to mentor, and they are all doing very well in the academic field. Most of them in the academic field, some in the practitioner world. They keep switching back and forth.The Evolution of Marketing Research: From Surveys to Scanner Data and BeyondAndrew: You've clearly taken these early lessons of hard work to heart because you've had a very prolific career. Of course, you've contributed to virtually every field of marketing in some capacity, but one area that stands out is marketing research, and you mentioned the book, Marketing Research, which is now in its 13th edition and the 14th edition's on its way. Can we dive into marketing research as a category? What was the evolution of marketing research, and how did it change and what was your role in shaping it?VK: This is a great point to reflect. So, when I came to the US in the '80s, we had one of the companies of marketing research was Marketing Research Corporation of America, MRCA. And they, prior to them, marketing research was survey research. Semore Sudman who was the pioneer of survey sampling and how to sample correctly and do the survey. So, surveys were the most common thing.From there, the evolution came with MRCA into giving diaries to people. You write what you buy and then mail the diaries on a weekly basis so that they don't forget. In the survey, there could be telescopic bias. I forgot what I bought, and so there could be errors, so diaries minimize those errors. And then, from there, we had A.C. Nielsen and IRI Information Resources Inc. introducing the scanner data, scanner panel data in the '80s, in a few test market cities. Port Washington was one of them.And one of my first jobs was after graduating, although it was short-lived, I was at the University of Iowa, and I joined there because the co-founder of IRI, Information Resources Inc, Jerry Eskin, was a marketing professor at the University of Iowa. He said, "If you join, I'll give you all the scanner panel data. You can build the models, whatever you want, and we will share it with the companies."I did that. He took me from Iowa City to Chicago over the weekends. We got a lot of data, built a lot of models for P&G and Kimberly Clark and published them in Journal of Marketing Research and JMR subsequently. But that is the revolution, from survey research to diary panel to scanner panel data. Then the revolution came in the '90s of database marketing, that we could really have databases of customers. The scanner panel is one part, the retailers collect, but also, manufacturers also started collecting data, buying data from the retailers, as well as with the credit card, they were also registering us. The loyalty programs emerged in a big way.So, they had not only what you buy, but who you are, and also through the models, we were able to generate why you are buying. So, that part came in the database marketing, and then, of course, the birth of 2000, the CRM came into the revolution, that is, which customer is buying what. So, what should I be showcasing to this customer in terms of ads, in terms of customization and personalization, that was the goal, but the goal was materialized later on in the 2011 to 2020 time period.And today, with the advent of new-age technologies, we are able to easily do that, the personalization, customization. But the question is, is every company venturing into this path or are some of them lagging behind? Still, if you take P&G, the majority of their products are all mass marketing. They are in many categories and multiple brands all over the world, and it's mass marketing. World of Coke, the same thing, Coca-Cola is mass marketing.Unlocking Customer Lifetime Value: Insights from the Coca-Cola Case StudyVK: Having said that, even Coke came to us and said, "can you tell me what is the lifetime value of a Coke consumer?" You know, never thought of it, because to measure the lifetime value, you need customer transaction data, exactly what it is, but then, who tracks it? A.C. Nielsen tracks how much you buy over a weekly period, but also the competition. So, we had to come up with a very new model. Me and one of my former doctoral students, Saran Sundar, we came up with measuring CLV of Coke, Pepsi, all soft beverages and published in JMR, which won the best research in JMR and the Donald Lehmann award as well as the best doctoral dissertation award for my doctoral student.So, this marketing research is the one that you can clearly see the barriers and then how we overcome these barriers.Andrew: Can we dive into that Coca-Cola example, just in a little more detail, because this is far before the age of really digital advertising as we know it today, as well. So, how did you approach that?VK: The data comes from A.C. Nielsen scanner panel. So, they had 20,000 people in the panel. They track over a six to seven year period as to, you know, what soft drinks that they buy. And so, we have like, if Andrew bought Coke in week two, three, four, and then switched to Pepsi in week seven, eight, then came back to Coke. So, we have all these switching as well as sticking to the brand.And some people are variety seekers, some people are die-hard brand loyal, some people are promotion sensitive, we call them deal-prone customers, and some customers are rational customers. They look for a coupon, cut the coupon, and go to the store and take it. So, we look at the buying pattern of a Coke, and then among these 20,000 panel members, you have a wide range of age.Then you segment also by, if you're a 20-year-old versus a 30, 40, 50, 60, how is the consumption pattern varying? And in this process of this data, we use something called a structural model. People often confuse with structural equation model. No, this is structural model, which facilitates what is the utility for consuming Coke at this instant by an individual. And so, we model the functional utility, and then see that at what time interval, because they buy and how often they switch.And if you can model this steadily, in the observation period, then you can project it across age group, so that what will be the lifetime value of Coke. The interesting thing in the study is, if I ask you this question, which would Pepsi have a higher customer lifetime value, or Coke will have a higher customer lifetime value?Andrew: My best guess would be Coca-Cola.VK: If you look at how much as a consumer, a Pepsi consumer consumes more Pepsi than a Coke consumer is consuming more Coke. So, the customer lifetime value was higher for Pepsi. But the overall consumption and profitability and the share was higher for Coke.Andrew: Right.VK: So, after this study, the plan was how to increase the customer lifetime value of Coke. How can we make a customer drink more Coke?And one of the ways that you do that is to introduce a lot of variations, of Coke, diet Coke, caffeine-free, zero, cherry Coke, zero, Coke, and all those things. So, that's the way you keep them in the family. So, overall, if you look at the family structure, then Coke manages that very well.The Evolution of Marketing as a DisciplineAndrew: I want to turn attention to a paper you published called "Evolution of Marketing as a Discipline." This is a long, dense paper, but if you were to take the 30,000 foot high-level view of marketing, say over the last hundred years or so, how would you describe its evolution from the highest level?VK: So, if you go back to 1936, and then, I will go like a decade, one decade, marketing was viewed as applied economics. Then from there, it became marketing as a managerial activity. And then the third decade, it became marketing as a quantitative science. Then after this, something happened that we started looking at consumer behavior. It became a behavioral science.And then how do they make decisions? And so, decision science followed. And then after decision science, it became an integrative science. And this is a very interesting period that integrative science between 1986 and 1995. Why? Because we borrowed a lot of theories from psychology, sociology, anthropology, to better understand the consumer's behavior. Why do they behave in a certain way?We were able to explain much better. So, and also the economics field was always infused, but then, statistics became very dominant. Prior to that period, prior to 1996, most of the research done, when you have multiple customers data on buying behavior, you would just run a regression model and get one coefficient for price, across all customers.And what is the assumption behind it? Is basically saying that every Andrew or V. K. or Phil Kotler or Jag Sheth, they all have the same price elasticity. But you and I know that's not true. So, in the mid '90s, where prominent modeling, unobserved heterogeneity, that's a technical term, in layman's term, all that means is that there are groups of customers who behave similarly.And so, all these latent class segmentation became so prominent, how to model that at the segment level, and at the individual level, we have advances in statistical models, through random effects model. So, we were able to really understand each customer at the individual level, what is their elasticity. And then market to them. So, that was a revolutionary period as to why my elasticity is different from yours. That's because maybe I belong to some socioeconomic class different from yours, or my lifestyle is very different from yours. So, we were able to explain all those things with the borrowed theories from psychology, social psychology, and sociology.Then marketing became a scarce resource, like people anytime there is a budget cut, marketing was cut first. The notion was that it's an expense. And so, I took it personally from 1999, 2000 onwards, for the last 24 years, to make executives believe marketing is an investment, not an expense. But how do we prove that? The only way you can prove that is to show the ROI of marketing expense. Whenever anybody invests, so, I invested, I give you $30 million, the CEO might tell the CMO, "Show me the return."So, when you do mass marketing, the famous saying, "Half of it goes wasted," I don't know which one. So, but when you do it individual-level marketing, who's buying, who's not buying, based on the marketing that you're doing, we are able to directly link the spend to the outcome. And so, that is what we did from 2000 onwards to measure the birth of customer lifetime value, came in terms of measurement, concept, definition, and implementation.IBM and Wells Fargo were the two companies that were the initial companies that we started working with. And then, I had students from Europe, so they also, roped in a Spiegel catalog company, and then, through marketing science Institute here, we got many member companies of marketing Science Institute, also share data and built a lot of models, fast forward today over 150 companies, implemented some of the models we have done, and they're all showcased as either practice price in inform society, and they're also available as practice price videos on my website.So, that is the investment part of it. To complete the story of this evolution, then, marketing became an integral part of the organization, that no decision can be made in isolation. They have to be even if it's an information systems or finance or operations, we'd say how we are going to market it, if you're going to change the operations.Example, rather than delivering the product from warehouse, you are now going to deliver it directly through mail. So, how will you market it? Because there could be a lot of delays in the mail system. So, what do you do? Or the vice versa from mail to warehouse, what can you do that? A famous example is Amazon also touted two-hour delivery window, but that didn't go far because that was impossible to implement.So, marketing promise has to collaborate with the operations. And then, in the late part of 2015 to 2020, we had the engagement marketing, and today, we are standing as transformative marketing.How Marketing Organizations EvolveAndrew: I want to come back to this early period, though. You started by citing the year 1936, and at the time, it was a field of applied economics, and you went from there to today. I'm curious how this would have impacted, say, a marketing organization. Take a company like Coca-Cola or Proctor & Gamble, or a company that existed from 1936 to the present. How did their marketing organization develop? What are the key changes or milestones? If I was a CMO and I was hiring a team, what did my team look like in 1936, and then what does it look like today, or what are the major changes in between?VK: This question is the right question because just four days ago, I was at the World of Coca-Cola in Atlanta, seeing the evolution of ads that they showed in the 15 minutes cinema that they screened.You know, that is one part. Just the evolution of Coke itself, the product formulation pretty much remained the same, in terms of selling it, they were in a situation where the more bottling plants, the more places they were present, they could sell more. So, the distribution era was the 1920s, '30s, '40s, and all, '50s. So, as they increased the distribution, then became the product era. So, they had variations of the product. Then they had like Fanta, Coca-Cola, Sprite, and a few other lime-based drinks all started evolving, the product era. Then the selling era, then they had competition.So, the salesperson went and said that why should they go through the selling era. But the commercials, if you look at it in parallel with this, they were showing colorful ads, colorful people, good-looking, attractive, and all those things they were showcasing that. Two benefits-based advertising in the '70s and '80s. That was a good shift that they followed through. Like what is the benefit of drinking Coca-Cola?And how often you should drink, and when you should drink, occasion-based drinking. So, all these expanded the scope for Coca-Cola in terms of advertising. And then with us tag teaming with A.C. Nielsen and IRI, using the scanner panel data, they found out which type of customers are buying more and less over as they age through, is the consumption dropping or increasing? And we find the consumption dropping.It's maximum when you're a teenager, 20s and 30s, and then it drops. So, what can we offer as a substitute drink to keep them in the family at that age, then they brought all these SmartWater and tonic water, all these water-based things came about. So, they were very clever in keeping a member of the household within the Coke family, Coca-Cola family with this understanding.And today, the biggest talk is about the AI-generated Coca-Cola advertisement, all over the world that we are seeing. And die-hard Coca-Cola fans, love it and saying that, oh, what, how colorful it is. And the critics are saying, "Oh, they've gotten down to this low level of using AI, they don't want to spend money, just AI." But if you focus on the ad itself, it is just combining the benefits, the occasions, and people all over the world.They are one company that throughout from 1896 have steadily done very well.Andrew: Yeah, it's such an iconic brand, of course, but you were mentioning how you tie it to a time. And we're entering, at the time of we're recording, we're starting to enter the Christmas time, and they're a brand that somehow is associated with things like Santa Claus and polar bears, but then their classic "I'd Like to Buy the World a Coke" ad, it's very summery, and it's part of the hippie movement. I'm sure that that was controversial to some extent at the time. And now, they are doing it again with AI.VK: But that's the objective, Andrew. That is everybody is talking about it. Good or bad, the awareness and what it is. So, it makes people curious to go and see.From Mass Marketing to PersonalizationAndrew: Another paper you wrote, along these lines is called "Conceptualizing the Evolution and Future of Advertising." And the paper describes how advertising has evolved from a one-way broadcast to a two-way conversation between brands and consumers. And advertising was focused on selling, but now it's more focused on engaging. And so, stepping back on this, what were some of the major milestones in how advertising has changed over the last century? And if you want to continue with Coca-Cola as an example of how their advertising has changed, that might be a useful framing for us too.VK: Yeah, Coca-Cola is one, but this study was done with Professor Shefali Gupta from India. A lot of thoughts went into this in terms of culturally how it has evolved, in an individualistic culture versus collectivistic culture, like India and China, or Singapore versus Europe versus America, North America, and so on. So, that was the thing. If you look at the traditional way of persuasion, advertising has got three objectives, inform, persuade, and remind.So, every ad focused on measuring it. Did I inform, how many people are aware, how many people intend to buy, and then how many people recollect the ad. So, those three objectives still, they would say that. But what the evolution has seen in advertising is that there was a mass advertising in television or radio, broadcast advertising was all there. Then came this beautiful media convergence, where you could have the confluence of the technology, multiple proliferation of media, and the ability to understand each customer's preferences.So, because of this media conversion, we had this split cable. Meaning like, if I and Andrew are neighbors in a city, in a zip code, we both are watching Jeopardy, and I will be seeing one ad, and you will be seeing another ad. And that was the media convergence, the technology allowed. Because I like to eat, say, Lays chips, or some chips, I don't eat that much chips at all, but some product that I'm eating, or maybe drinking Coca-Cola, the ad would be for Coke, and you consume Pepsi, then the ad would be for Pepsi for you.So, that is the way with the scanner panel data giving insights to the manufacturers and ad agencies that they buy this data, they can customize it.Andrew: So, if I was to go back to our Coca-Cola example, for instance, if I was in 1896 or so, I'm somewhat limited to print, or maybe out of home. And then radio comes along, and television comes along, and as a marketer or as a brand manager, how do these changing technologies change how I'm approaching advertising my products.VK: That's where advertising was always viewed as a creative component. And it was a mass marketing component. So, how can we infuse science into advertising? It is the messaging. So, advertising is nothing but creating a message to the audience, the relevant audience that they are targeting. Now, from mass marketing, general message, creating awareness or either to create an interest in that category, or the product, and to desire the product, I want to consume it, to actually buying it.The general-purpose advertising is to create awareness. So, what is the next step that they can do to induce interest? Then they focus on the benefits of consuming the product, the interest. Then what what can they do to make them consume, go to the desire, this is the one that I want to consume. I'm interested in this category, but I want to consume Coke, desire.So, for that, they'll say, "It is easily available and an attractive price, affordable." Affordability and availability became the message in the advertisements to create the desire. And the action is, there is a store next door to you. So, that is the completion of the circle or the cycle of advertising in terms of what it is. The reason I said circle is it has come back now to the beginning with the new technology again, they do the digital advertising, starting with like, how many people click, so that they become aware of it.Then how many people are now asking for more information, like not only seeing the ad, but clicking it to get additional information. And then, from additional information, what are, where is it available? So, which, so put your zip code and see where all it is available. So, then, you go to the desirability part of it, where affordability and availability is done in the digital world, and finally, you order from your home base. product gets delivered.So, the same cycle has repeated in the digital world, through the click through and conversion rate and so on.Applying Marketing Research to Inform MessagingAndrew: You brought up this relationship between marketing as a creative act, and marketing and advertising as a science. And it feels like there is, of course, a little bit of a natural tension here between being data-driven and being creative, but of course, marketing is, as you mentioned, it's strongest when measurement and creativity work together. And I'm curious if you have any thoughts on how the relationship between data and creativity and marketing has evolved over the years.VK: I can give you, explain this with one very nice example that we did with UPS. What happened there is that they have almost 4 million small businesses that they cater to, shipping packages. And they were communicating with them, sending them messages. So, they know they have to send them messages at some intervals. And the messages they varied are one is a relationship-oriented message, meaning like we can help you grow your business. If we come and spend a day with you, we can customize like what kind of shipping is good for you, for your business to grow. So, they, there's a relationship message.There is another message called economic message, which is, says that if you ship 10 packages, you get 20% discount, or 10 packages, pure economic discount. So, the creative part was done there. That is what what should be the creative economic message, what should be the creative relationship message. Now, the measurement part comes in where, who should get the economic message, who should get the relationship message, that's first question.Then for how long they should be getting that message, and when should it flip back to a relationship to economic. Or, they should bring both to some other group of customers. And that's where using the historical data for each of the 4 million small businesses, what messages they received in the last three, four years, how did they respond to each of those messages?And for how long they were responding. So, we built something called a time-varying parameter model, a dynamic model. Each time they get an ad at different times, the effect of that ad varies over time. We capture that. Using this historical data of measurement, we have the insight which small business should get economic message for how long, and then what should happen after that.We did this for them, and it was implemented very successfully, and we were able to also report. And some of the things that at that time, the CMO was Mr. Kevin Warren, and we also did a Harvard Business Review article of a variation of this, and he came and commented that how CMOs are when they are given strategic discretion, operational discretion, and financial discretion, that they can take decisions like this to move forward, that creativity and accountability or measurement part can go together, and they are very successful.Marketing Academia and Practice: Building a BridgeAndrew: Through this interview, you've cited several examples of how your academic research has closely collaborated with businesses. You mentioned Proctor & Gamble, you just mentioned UPS, Coca-Cola. I'm curious if you have any thoughts on how the relationship between marketing as an area of academics and scholarship and research has collaborated with marketing practitioners and CMOs. How has that relationship evolved over your career? And do you think that relationship could be even tighter than it is today?VK: Yeah, this is something very close to my heart. As I said to you, around about 2000, around that time period, marketing was relegated as an expense, it's not an investment. So, we went on a crusade, me and my team of doctoral students over the next 20 years to prove marketing is an investment. And we have done that. So, there is an organization called MASB, Marketing Accountability Standards Board, like FASB, MASB, which the focus of that board is to show marketing as an investment. We were all founding members, founding directors, and we did that.Now, what happened simultaneously at that time, because marketing was not able to prove its worth, CMOs were the most frequently fired executives in the organization. Their stint was less than two years, less than 24 months. So, how to reverse this? So, from then on, we took up the role of what should we give to the CMOs as ammunition for them to use?One of the questions that was asked by a company like Pitney Bowes was that if I give $10 million to my marketing CMO, they had, I think, director marketing or so. Should it be spent on building customer relationships, or should it be spent on building the brand?How do you answer that question, like, should you build the brand, or should you build customer relationships? It's like a chicken and egg problem. And so, to answer that, we started this journey of linking brand perception to actual customer lifetime value at the individual level. What Andrew as an individual thinks of Coca-Cola's brand awareness, brand trust, how much emotional attachment he has got, and how much he's willing to pay for that.And if the store next door closes, would, are you willing to go to the next street and buy it, and are you willing to advocate this, are you willing to repeat buy this? So, we came up with eight attributes to link it, and then showcase this branding, all these attributes to customer lifetime value. What you think of the brand today, link it to the customer lifetime value, which is the next three years value that you're likely to give to this brand.So, when we connect all these dots together and work with, here is where we work with the marketing practitioners, give it to them and say, "You have a tool here, and you can showcase to them, if you give me money, I can do both. Build the brand as well as build customer relationship." And that blossomed into working. And then down the line, we did another study which was published in Sloan Management Review as well as Journal of Marketing, is that if a CMO focuses on maximizing customer lifetime value, would that increase the stock price, share price.We did a field experiment with a B2B company and a B2C company, and Wall Street analysts observed it, and we showcased that maximizing CLV, customer lifetime value, results in increasing stock price or the value of the firm.And then Sloan Management Review immediately published this in saying, "This is great news for the marketers, the marketing field." So, that happened. Then, another five years later, we took a 10-year data, longitudinal data to study, help the marketing practitioners that if the marketing practitioners are given what decisions to make strategically, and which markets to enter, and how to enter the foreign markets, like operational discretion, and then how much to spend, doing the financial discretion, if you give strategic operations and financial discretion, then they can show global growth for the companies.So, 10-year data, and that was published in, it was an international study, so Journal of International Business Studies, but most importantly, it was published in Harvard Business Review again, repeatedly. So, everything we do, we get coverage from either Harvard Business Review or Sloan or California Management Review, because they have direct relevance to the practice. So, I feel that the close tie-ups that I have with the marketing field and the marketing practitioners to help them grow, this has worked out magically for us.Learn More and Connect with Dr. V. KumarAndrew: Dr. Kumar, I've really enjoyed this conversation. Your insights have been so valuable. So, thanks for sharing your experiences and your wisdom with us. And for listeners, what's the best way for them to learn more about your work and connect or follow your work online?VK: It's all documented in my website, drvkumar.com, and for all the the engagement work and the customer lifetime value work is all in vkclv.com is all there. But most importantly, they can Google search me and write to me directly. I'm a public figure, like everybody can find me easily.Andrew: Dr. Kumar, thank you so much. It's been so great meeting you on this podcast, and look forward to staying in touch.VK: My pleasure. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 7“Consumers don't make choices. They reduce choices.” - Jag ShethThis week my guest is a marketing legend, Dr. Jagdish Sheth. Dr. Sheth is a renowned scholar and has published more than 300 research papers and over 30 books. He’s the namesake of the Jagdish Sheth School of Management and recipient of the Padma Bhushan—the third-highest civilian honor awarded by the Government of India.In our conversation, we dive into the influence of psychology on marketing, Jag’s contributions to consumer behavior, and Sheth’s incredible life and career. Dr. Sheth co-authored a landmark 1969 book called The Theory of Buyer Behavior with one of his mentors, John Howard. This laid the foundational framework for what became known as The Howard-Sheth Model of Consumer Behavior. We also cover Sheth’s book, Marketing Theory: Evolution and Evaluation which chronicles the evolution of marketing theories and the rationales behind them.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsRead the interview transcript, enhanced with links and images:Dr. Jagdish Sheth’s Early BiographyAndrew: Dr. Jagdish Sheth, welcome to A History of Marketing. Thank you so much for joining me.Jag Sheth: Thank you, Andrew.Andrew: You've lived a remarkable life. You were born in Burma, now known as Myanmar, and your family immigrated to India when you were a child. You moved to the United States in your early 20s to enter business school at the University of Pittsburgh. What were your initial impressions of Western advertising and marketing?Jag Sheth: Quite a shock, because I came from a country where branded products were not as popular yet. For example, you had to make your shirts by buying the cloth and taking it to a tailor. Nothing was really branded except a few shampoos or Western company products, like Unilever products. I came to America, and everything was branded.Andrew: Everything was branded. Were there any other differences that you noticed in marketing or advertising?Jag Sheth: My first major encounter was that in India, in a tropical climate, you don't wear white shirts; you wear more colored shirts. So you could buy cloth material. All my shirts were in color – blue, yellow, and so on. There was a dress code at my university that said you have to have a white shirt and a tie, and wear a suit. But I needed to buy a white shirt.So, I went to a store and said, "I need a white shirt." The sales clerk was a young man. He showed me the white shirt, and I said, "How much?" He said, "$5." My immediate reaction was, "How about $2.50?" I said, "Look, $3, take it or leave it," because my friend was waiting in the car to go back to class. Then my friend educated me that in the consumer market, especially, prices are fixed. He said, "No negotiating." That was my first major encounter with a cultural difference.Andrew: That's right. We don't haggle too often here in the United States. I've been on the other side of that. When I've grown up here and then traveled internationally, haggling is part of the culture. It's something that's totally unfamiliar to me, and I need to get better at.Becoming an "Accidental Scholar" and MarketerAndrew: Your 2014 autobiography is called The Accidental Scholar. So, I take it that your career in academia and your specialization in marketing was not part of your original plan. Can you share what initially drew you to marketing as a field of research?Jag Sheth: It came by accident. My original intention was to learn production management because my brother had a factory that needed to be mechanized more and more, with a shortage of labor, especially skilled labor. So I said, "I'll go to America, get my MBA, learn the practical side for one year, and then come back and join the family business." That was my intent.But I got turned on by psychology. The most influential professor, by reading his material, was Maslow and his hierarchy of needs. I resonated with it. Because of that, I said I would like to go and do my doctorate in Behavioral Sciences, not in marketing. Behavioral Sciences. My minor was in social psychology, and then my applied field was marketing, which is understanding the psychology of customers rather than marketing a product.I needed money to bring my family. I was earning $287 as a monthly stipend; we needed $400. So I looked around, and by accident, John Howard, who was a marketing professor, had funding, and he gave me the extra assistantship. That's how I went into marketing. Otherwise, I would have been in management.Andrew: I suppose extra money is as good a reason as any to get into marketing.The Intersection of Psychology and MarketingAndrew: When it came to researching marketing, do you think that your status as an outsider, somebody coming from India, gave you any advantages compared to your peers who were born and raised in America?Jag Sheth: Absolutely. Having a different perspective, coming from a different culture and context, became an asset for me. I could see things in a way that others did not see. It's very much as if there's a galaxy out there, but you look at it, and some discover things, and some don't. The same thing happened to me. That has been an advantage, plus traveling all over the world as part of the academic career, consulting, and advising gives you multiple perspectives. So that has been an advantage.Andrew: You were studying psychology and marketing at the same time. When I spoke to your friend Philip Kotler, he told me about how marketing emerged from economics, but of course, psychology also played a major role. Can you share who the leading thinkers were in marketing when you were a student and describe how psychology came to play a bigger part in marketing?Jag Sheth: There was a whole body of writing by one single author called Wroe Alderson. He was a brilliant theorist, and he came out with a theory which he called functionalist. I still don't understand it; he used very complex language, even for academics. Pretty much like reading Greek or Sanskrit. But I had an expert who knew Alderson. There are brilliant theories that came out where they talked about sorting things, warehousing, in his own language.Andrew: I've come across Wroe Alderson in some of my research, and at some point, I'll have to do a full episode on his biography because he seems like a really fascinating person. Can you ground us – what time frame are we talking about here?Jag Sheth: This is all in the late '50s. Up to this time, then in the late '50s to early '60s, marketing began to shift toward a behavioral perspective, a non-economic perspective. Economics itself embraced behavioral economics much later; in marketing, we did it very early. That led to buyer behavior – let's understand the psychology of customers, not the offering of the market, essentially. That was a key aspect.And so that led to the buyer behavior school, that led to the whole consumerism movement. Ralph Nader was the world-class activist. The school of thought about the role of marketing with society began much more. Society and marketing – how can they coexist as true institutions?The Theory of Buyer Behavior and John HowardAndrew: You mentioned buyer behavior, and you and John Howard co-authored the 1969 book called The Theory of Buyer Behavior. Before I ask you about buyer behavior, can you share more about who John Howard was and what influence he had on you and your career?Jag Sheth: John Howard was an economist. He got his doctorate from Harvard University, and his professor was Joseph Schumpeter, who was a very well-known economist – "creative destruction" or "constructive destruction." John was heavily influenced by his own professor's writings, mostly about innovation creating competition.The main reason Howard became very important in the discipline is that he got a Ford Foundation grant to study the evolution of marketing. He published a book on this called Marketing Theory. And John was actually creating a theory of buyer behavior before I joined him. I joined him in '62, and he had a chapter on loyalty in his own textbook. He was very serious about loyalty.Then I began to work with him. A great human being, because all great scholars are great learners; they absorb knowledge from their own students. He became a very good listener. We would debate all the time, but he was a good listener. He said, "Do you have a cultural perspective that I don't? You have a psychology background," because my minor was social psychology, my major was economics, and I'm applying it to marketing. So we became very good partners in balancing economic perspectives versus non-economic perspectives.The fundamental message was that consumers don't make choices; they reduce choices. Think about economics: the trade-off between what's positive and what's negative, the money sacrifice you make – a typical managerial or economic perspective, the "rational economic man". Reducing choices requires a learning theory, a totally different theory. So we anchored to learning theory, and through learning and experience, you reduce the choices.We came out with three phases of learning. The first time you are buying anything, it's extensive problem-solving. You don't even know what criteria to use to evaluate a brand or a product, or the selection of the brands themselves.But with one-time learning and reinforcement, you reduce the choice from extensive problem-solving to limited problem-solving, and then ultimately routinized response behavior.John wanted to call it "habit," which is the right word, actually. I said, "No, don't do it, because 'habit' was criticized at that time." I said, "You will get into the trap of negative criticism because of the word you're using." So we called it "routinized response behavior," but habit is ultimately what we ended up doing.Andrew: That seems very academic – to take a simple word like "habit" and turn it into "routinized response behavior" so it's harder for lay people like me to understand.Jag Sheth: The second thing we added: I said, "There's a point of learning where you get satiated." I was studying psychology – novelty-seeking, variety-seeking. Dan Berlyne is a giant of the University of Toronto. So I borrowed his idea, and I told John that there is a psychology of simplification, to habit and learning, but then afterward, you have a psychology of complication from habit.That you have been using the same toothpaste, using the same shampoo, so you say, "I'll search for new brands, new experiences." I created a psychology of complication, which means don't take loyalty for granted. People may shift because they're just bored, satiated, looking for a change of pace. "We drink coffee; let me drink tea once in a while." It's a cyclical time.The Howard-Sheth Model of Consumer BehaviorAndrew: So what exactly was the conventional wisdom at the time you wrote this paper? You mentioned the idea of people reducing choices versus making choices. Was that the primary new contribution you made with this paper?Jag Sheth: One was clearly the economic trade-offs between what you are getting and what you are paying. But the second thing was that each decision a consumer made was ad hoc. We make it again and again – repeated consumable products, grocery products. We go and buy every week – milk is one of them, meat is another one, vegetables are there, shampoo is there. So economics never thought about repeated purchase behavior, which means there's a previous choice which has a huge influence in guiding the next time. Virtually, the previous choice will be the most predictive way of forecasting what choice you will make today. We call it consumer data mining, consumer insights. So in a Bayesian approach in statistics, conditional probability would be what you purchased last is what you will purchase again.Andrew: This has become known as the Howard-Sheth Model of Consumer Behavior. What was the reaction from businesses and marketing departments at the time? Did this have an impact on how companies performed their market research and marketed their products?Jag Sheth: What happened is that for the book that we were writing, he was able to get great publicity, which began to influence companies. At that time, there were several industry leaders, mostly from consumer packaged goods, who came out with the idea that we should take a consumer perspective, not a marketer perspective – from a product to a customer. Since this is repeated purchase, there was interesting panel data – longitudinal panels. And one large corporation at that time was called Market Research Corporation of America (MRCA). General Electric then started their own consumer durables panel, with a frequency more than every week; it's about three months, six months – dishwashers. So the market began to shift to having panel data. So that was a key change.Marketing Theory: 12 Schools of ThoughtAndrew: The Theory of Buyer Behavior was published in 1969. I want to flash forward nearly 20 years to your book Marketing Theory: Evolution and Evaluation. And in this book, you take a look at marketing history, and you identify 12 schools of marketing, buyer behavior being one of these 12 schools. What inspired you to take on this project?Jag Sheth: It was again by accident. At the University of Illinois, my department head was Kenneth L. He was a brilliant guy. He taught a marketing theory Ph.D. seminar, and unfortunately, he died suddenly. I was on vacation, and I got this call in December saying that Ken is gone. So they said, "Can you come back sooner than what you are planning to?" So I came back immediately.So I had to teach marketing theory. I like theory. I loved Robert Bartels' writings – a brilliant writer about the history of marketing thought, and I really enjoyed that. So given that interest, I said the best way to learn is to teach. So I designed this evolution…Andrew: So you designed this evolution of marketing theory, and it's a lens of viewing marketing history, which is what this podcast is all about. So I'm curious if there were any misconceptions of marketing history, or if there were parts of marketing history that seemed overlooked or underrated as you were writing your book?Jag Sheth: Three different areas are overlooked. The classical literature – many people did not even know that marketing began in the '50s with the managerial school, not realizing there were world-class thinkers before, mostly coming from either agricultural areas because marketing began in agricultural marketing, selling commodities. So going back, that literature was ignored by scholars and practitioners. It was a lot the functional school. Eventually, Michael Porter, through the value chain that he created, became more popular. So the old literature was missing. That was one, in practice. And there was also a pricing literature on psychological pricing – at what price, 79 cents versus 99 cents, makes a difference. Elasticity – very practical.The second thing that was missing, surprisingly, was taking multiple perspectives. In other words, there's a dealer perspective, there's an economic perspective, there may be a sociological perspective, an anthropological perspective, from the same entity called "consumer" or "customer." That was missing in the literature quite a lot.The literature had, in general, literature of industrial marketing, but industrial marketing was becoming more and more account management. Relationship marketing came later on. So, early history about how do you manage your sales organization in a B2B or industrial marketing area? There are journals for that one, but they were not in the mainstream. So that literature was generally not known.But most important, the conspicuous lack of understanding was the rise of consumerism. President Kennedy actually had a Bill of Rights for consumers. I was advocating consumerism, organizing social marketing as an area.Philip Kotler and Sid Levy began to write about the generic concept of marketing – marketing can equally be important for nonprofit organizations, not just for-profit organizations. That began to change as a new area came in. So those are the areas that were neglected in the mainstream literature.The Rise of the Consumer MovementAndrew: When it comes to the consumer movement, you mentioned President Kennedy's Consumer Bill of Rights, and earlier you mentioned Ralph Nader and his book Unsafe at Any Speed. So it really seems like the consumer movement had its renaissance in the 1960s. I'm wondering why the 1960s? Why didn't this start earlier? I'm thinking of figures like Upton Sinclair and his book The Jungle, and I think that's from back in the 1920s (Note - Andrew was wrong here. The Jungle was published in 1906). So it seems it took several decades for the consumer movement to emerge.Jag Sheth: Very true. If you look at the movement toward consumerism, it goes back to the days of mass production, the way you treated your employees, who had no life. Agriculture is the hardest work, but factory work is supposed to be more humanistic. So that whole area – a reaction by critics or thought leaders saying, "This is not acceptable. You can't treat humans like animals" – that literature began.Similarly, it happened with the consumer side. "We are offering products which are not qualified; adulteration is possible. We don't care about what happens to the consumer in the process; they're exploiting them." So that literature was coming back. By Kennedy, for example, J.K. Galbraith was a very influential economist at Harvard that President Kennedy relied on. He began to write in this area. So even the economists were questioning the traditional price theory, marginal utility theory, for example. Alfred Marshall was a giant writer at one time for consumer surplus in economics. Marshall was a deep person; we all studied Marshall. The other side was more macro – Keynes' foundational books in economics.Some of that thinking of consumer surplus began to spill over into the marketing area. And that all led to, basically, talking about: the consumer is defenseless, the marketer is so powerful, there's an asymmetry of power. How can you create consumer protection agencies, law that protects the consumer? Which led to – truth in lending, for example, came out. Truth in advertising came out. Eventually, legislation…you had the FCC, in communication, but the FTC became a very, very important agency.Four New Schools of Marketing ThoughtAndrew: You published this first edition in 1989, and that version had 12 schools of marketing thought. And you just recently published the second edition, and you added four new schools of marketing thought that have emerged over the last 35 years or so. Can you share more about these new schools or speak more broadly about the changes in marketing since 1989?Jag Sheth: One of the key new schools that came in, with its own perspective, is a focus on services industries. Everything was organized around manufactured products – its branding, its distribution, warehousing. And lots of consumer services, because America was becoming a service-driven economy. And that led to a whole start of services marketing being different than product marketing.For example, services are perishable. Services cannot be stored. Services are co-produced between the consumer and the provider. In healthcare, the patient has to cooperate, for example. In airlines, the passenger has to cooperate along with the flight attendants. So experiential marketing came eventually as the dominant force that we are experiencing now.Services marketing became a very large body of knowledge, and there was a journal that came out, Journal of Service Research, because traditional journals didn't think about services. It really took off when telecommunications became an interesting industry, from a regulated monopoly to a competitive one, especially wireless technology. So services marketing became one major school of thought, with hundreds of articles. So that's what we identified as one.Our second one had to do with relationship marketing, which I led. Back in that '89 book, I mentioned that what's more important in advanced economies is retention of customers. 90% of the consumers are the same as who were there yesterday. A new customer is... so market the acquisition. It's... consumers, you convert them into consumers from unbranded consumption or home-making things. So I said, in the advanced economies, we need to focus on relationship more – key account management, or in consumer banking, having a relationship manager. That was a second school of thought.The third school of thought that came in in the '90s was actually marketing strategy, or strategic marketing, as they call it. Michael Porter was coming in a big way. His Competitive Strategy book in 1984 launched a whole new discipline altogether. All of that led to strategic marketing, but marketing is an asset; brand is an asset. There's a value of the asset. Think about the future; do the SWOT analysis – strengths, weaknesses, opportunities, threats. For example, the Boston Consulting Group framework of cash cows, dogs, became very popular in marketing, because each brand could be positioned into one of those categories. So there's a whole new literature that arose around strategic marketing or marketing strategy. So we have a new chapter on that.And the last one is international marketing. International marketing was always there, but not in an organized way. In the '90s, when trade became the driver of economic growth, not GDP… so we abolished the GATT agreement – General Agreement on Tariffs and Trade – we instead created a WTO. Trade blocs and groups like NAFTA were created, where the EU… the EU started out with common market countries. ASEAN block was created. So trade became the dominant factor, and because of that, international marketing took a new approach to, basically, international business. So we have a separate chapter on international marketing.Learn more about Dr. Jagdish ShethAndrew: Wrapping up, I see on your virtual background you have a bookshelf that's full of your books. For listeners or viewers who have not read your work yet, where would you point them? What is the best way for listeners to find out more about you and your work?Jag Sheth: The best place is to go to my own website, jagdishsheth.com. Most of my articles and books are listed there, and I update it pretty regularly. This has been my bumper year in terms of publications. Several books have come together.One that just came out is Purpose-Driven Pricing. How Can You Use Pricing to Serve Societal Problems While Making Money? Pricing is the most powerful weapon; very immediately, I can do it. I can manipulate or change it instantly if I want – dynamic pricing. So I have a colleague, a young colleague, she's a pricing expert, and we worked together on this book – about three years to find case studies, interview executives. It has resonated very well with the nonprofit sector – their pricing mechanism, subsidizing, supporting – corporations, and also policymakers. So that just came out.My second book that came out is very different. It is India's Road to Transformation. In India, what matters is leadership. People talk about resource advantages, location advantages, historically, about the rise of a nation. This is what matters is leadership – managing a country as an enterprise. So we did transformative leaders historically, about all of them, from Genghis Khan to Kemal Atatürk, Also FDR, Lincoln. We found a common denominator: it takes 15 years of political continuity, a minimum requirement, to bring about a transformative change. It takes the same political leadership – not a leader, necessarily, like a party. And then you need a leader who knows how to execute as well as imagine. They have to be both a visionary, aspiring people about the future of the nation – positive view, ambition, aspiration – but executing on that. And then we compared, in India, three leaders historically among 14 prime ministers: Jawaharlal Nehru, the first Prime Minister; his daughter, Indira Gandhi, in the '70s; and now, Narendra Modi. And Narendra Modi scores very high on several dimensions. That's the second book.The third book that is coming out – it's a book that I'm writing with Can (John) Uslay called Navigating Brand Activism. We had a book out called Firms of Endearment with Raj Sisodia, which led to conscious capitalism, where John Mackey, from Whole Foods, embraced the idea. His company said, "I'll do the same thing." So that conscious capitalism… same idea we have taken to: Brands can serve society, but get active. But there is a double-edged sword. So we have stories after stories about how brand activism actually destroyed the brand because it was managed so badly, or how it actually enhanced the brand. Called Navigating Brand Activism.Andrew: Dr. Sheth, thank you so much for joining me for this conversation. I've really enjoyed it a lot, and I appreciate you sharing your wisdom, your insights, and your stories with me today.Jag: Thank you. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 6This week we are joined by Shelley Spector, founder and director of the Museum of Public Relations. Shelley's journey into PR history began with an unlikely friendship with the legendary Edward Bernays, the "father of public relations" and nephew of Sigmund Freud.In our conversation, Shelley shares personal stories of Bernays in his later years, and we use the Museum of Public Relations as a lens to explore PR's early history.I'm releasing this episode right after last week’s conversation with Larry Tye on the historic life of Eddie Bernays. If you haven't heard that one yet, I suggest listening to that one first, as it will give you richer context for Shelley Spector's personal stories about Eddie Bernays later in his life.But this conversation isn't just about Bernays. Shelley also highlights the often-overlooked contributions of women to PR, such as Doris Fleischman, Barbara Hunter, Inez Kaiser, and more.Listen to the podcast: Spotify / Apple Podcasts / YouTube PodcastsRead the interview transcript, enhanced with links, images, and videos:Note: This text is from a recorded conversation transcribed with AI. I have read it to check for mistakes, but it is possible that there are errors that I missed.Andrew Mitrak: Shelley Spector, thanks so much for joining me.Shelley Spector: Thank you for having me, Andrew.Edward Bernays and Founding the Museum of Public RelationsAndrew: To start, what inspired you to found a museum dedicated to public relations?Shelley: It's kind of a long story, but it grew out of our friendship with Eddie Bernays. He lived until 103 and a half, in a mansion outside of Boston, a mile from Harvard. One day, I happened to ask, "What are you going to do with all this stuff when you need to leave?"He immediately said, "I want to turn it into a museum. I want to turn my house into a museum." He was picturing what Freud's family had done in London. When Freud passed away, his children made his entire house into a Freud Museum. We've been there, and it's wonderful.I said to Eddie, "I understand where you're coming from, but, no offense, PR is not recognized as broadly as psychology is. Your uncle Freud was a little more famous than you were." He looked really sad when I said this. So I said, "How about we build a museum of public relations in New York?"He said, "Will you?" And I said, "Yes. It's not going to be an Eddie Bernays Museum; it will be a museum for the whole field."When Eddie died, the family called us. We came up and walked around from room to room to select those items and papers that we thought were important to have in the museum. We loaded up the truck and drove home, without having a home for the museum yet.Andrew: We released an episode where I interviewed Larry Tye about his book, The Father of Spin, which was all about Eddie Bernays. For listeners who haven't heard that episode yet, he's just this fascinating person who had all this impact on the world. It sounds like he inspired your Museum. The reason we have bacon for breakfast, bookshelves built into homes, UPS trucks being painted brown, and calling multiple sclerosis "MS"—all these things, including your museum, originate from Eddie Bernays' brain.You mentioned his being inspired by his uncle, Sigmund Freud. He had a very interesting relationship with Freud, and he was also Freud's nephew in two ways: his mother was Freud's sister, and his father's sister was Freud's wife.Shelley: Exactly.Andrew: Can you share more about what inspired him about Freud's museum? Had he visited it before?Shelley: No, he never went to the museum because he only visited with Freud while Freud was alive. The Freud Museum was built in 1938, after Freud had died. But while Eddie was still a child, his parents would go on vacation in the Austrian Alps. We have pictures of Eddie at age nine with Freud, who had a brown beard, which you don't really get to see.You can imagine growing up in a household where all they're talking about is Freud and his crazy theories of psychoanalysis. Psychoanalysis wasn't yet adopted in the US. Eddie and Freud were very close; they wrote letters back and forth. Those letters are now preserved at the Library of Congress.At some point in the 20s, after World War I, Freud wrote to Eddie, "I need a way to make some money. I don't have any money" because of the hyperinflation. He wanted Eddie to perhaps send him some money. Eddie did manage to send him cigars from Cuba, brought over by another PR pioneer named Carl Byoir.But Eddie proposed to Freud, "Why don't I get your book, Introductory Lectures on Psycho-Analysis, translated? And have you come over here? We'll do a media tour." It's a classic response from a PR person. It was very much Eddie's work that got Freud to be known as much as he is known now.So, he had the book translated by a disciple of Freud named A.A. Brill. The book was very popular. Eddie wanted Freud to write byline articles that Eddie would help him write for the popular press, but Freud was saying, "Americans are not going to get it. They're not going to get psychoanalysis. We're talking to an audience of people that are really not that smart and cultured." He really looked down on the US.Eddie could not get him to come here and sit for interviews with the Times or with Life magazine or Fortune. However, the ideas, because they were so big and relevant at the time, those ideas of Freud spread. And behind the scenes, you have the nephew, always behind the scenes.Befriending Eddie Bernays: A Personal Connection to PR's PastAndrew: Eddie is this fascinating character, not just in PR, but in history in general, in the 20th century. You met him and knew him before you founded the museum. What was it like first meeting him? What was his personality? Any stories or anecdotes about meeting Eddie Bernays?Shelley: You have to remember that during that time—this was the mid-80s—there were trade publications in PR that frequently covered Eddie and his gallivanting around the city with various women. This is how everybody got to know who he was, besides knowing his campaigns. On one side, you had all these campaigns that were being taught in the schools, and on the other side, you had this 90-something-year-old man who was said to be quite an adventurer with women in Cambridge.The series of events were that I was asked to give a seminar at the Doral Hotel, where there were a bunch of PR seminars being given on that day. One of them, right next door, was Eddie's. He had been giving these seminars called "Two Days with Edward L. Bernays."After the first day of the seminar, I went, stood outside his class, and I introduced myself. One of the first questions he asked me was, "Do you want to have dinner at the Waldorf?"Of course, I would love to have dinner, but I also don't want to wind up in the trade publication, being seen by paparazzi.Andrew: Just to remind, Eddie at this point is probably in his 90s, right?Shelley: He's 94.Andrew: 94, wow. Okay.Shelley: And so I said, "Can I call somebody to join us for dinner?" And he said, "By all means."The previous Sunday, I was on a bike trip, and I met this guy that I kind of liked. I had his phone number, and I called him from a pay phone. The fellow that I called was a graphic designer, knew nothing about Bernays. I said, "But he's very interesting. He's very historical. He's 94. He's worked with every president of the century. Please come to dinner at the Waldorf."So he was intrigued. Well, that guy turned out to be my husband and business partner all these years, Barry. Barry just could not—his mouth was agape while listening to Eddie talking about working with Calvin Coolidge's reelection campaign and bringing Al Jolson down to the White House. Stuff that made somebody who didn't know him question, "Is this guy senile?"Barry and I said, "No, all this stuff is true." And so Barry then said to me, "If this stuff is true, then we've got to go up to his house and do an oral history." So I said, "Yes."So it all worked out. We went that April to his house and started doing these oral histories. He had never seen a video camera before. We were using VHS—this is antique equipment; it was brand new, but look at it now—and it was really not anything that was sophisticated compared to what we have now.But it was fascinating. I remember that conversation was about Eddie's role in World War I with the Committee on Public Information and George Creel, and going over and working on the press release for the Treaty of Versailles. You're sitting next to somebody who's talking about something that happened...He wasn't just PR; he was a part of history.He was a part of history, and he was also an influencer in historical events.Andrew: Seeing footage of Eddie from this time period is strange because there's a clip of him on the David Letterman show from the mid-80s around this time, and it is this funny, uncanny feeling of almost seeing a time traveler or some sort of anachronism, telling stories from growing up with Freud and his family in pre-World War I, doing PR in World War I, and here he is talking to Letterman, who's still a person who does interviews today. It's just wild, his longevity and how early he got a start in his career and his impact.I also didn't realize how intertwined your life was with Eddie Bernays. I'd seen, based on some research, that he was a figure that influenced the museum, but not only your marriage and lifelong partner, your dedication to the museum, your career in public relations—all influenced by Eddie Bernays. That's really remarkable.Shelley: It was very fateful. We found him to be absolutely charming and brilliant. And you're right, it was time travel. To him, he's talking about events in the early 20th century, the teens, pre-World War I and post, and the whole period in the 20s, and he's talking about it like it was yesterday. It was like you and I just talking about maybe the financial crisis of 2008. The memory was spectacular, and he was so charming in the way he told these stories.So Barry and I ended up going up there three, four times a year until his last birthday at 103. Barry and I always had him sitting in front of the camera or just having the camera roll. Some of the footage that you see in documentaries is from Eddie just sitting at the table with food, not planned with questions. We would just plant the camera on a tripod and capture whatever we would capture.Andrew: He seems like somebody who kind of had his greatest hits and had his stories and told them so much, he really had them down, just every PR professional should.Inside the Museum of Public RelationsNow, we could spend hours just talking about Eddie Bernays, but I want to go back to the museum and cover more of it, use that as a lens to cover more of PR history. Just to ground listeners, can you describe what the Museum of Public Relations is in detail? Is it a building they can visit? Is it an online catalog? What exactly is the museum?Shelley: The museum, from its first day, was online. In fact, it was noted by USA Today to be the first museum to be online, which we had no idea. We just put it online because we knew that people would not necessarily come to see it, but the material we had was so important that we put it online in the 90s.Andrew: In '97?Shelley: Yes. So it's pretty old.So the museum today is in a large space at the PRSA, which is the Public Relations Society of America. They invited us in because we were outgrowing the space we had been in. At some point, we were at Baruch College for four years, and then we had to leave because of renovations they were doing. And so we were at various offices. Then we moved to, which we hope is our forever home, at 120 Wall Street.We have frequent visits from students, classes, educators, scholars. And it's amazing. At the beginning, most of the people who would contact us would be people who I've heard of or who I know. And now the people really are from all over the world, asking questions about the past and some of the early pioneers.Andrew: Listeners might also be thinking, what actually is in a museum of public relations? Is it just a big wall of press releases? I know it's not that. (Laughs) Can you describe what makes up the museum and some of your favorite artifacts?Shelley: When I think about the walls we have and what we've hung up, we only hung up one press release, but it was a very historic press release. It was written in 1952 by Harold Burson about the beginning of the firm Burson-Marsteller, which became the largest firm in the world. Harold Burson himself was a noted pioneer who started, several others, after World War II. They got trained in news writing, etc., during World War II, came out, started working in PR, and then eventually built their own agencies.So we do have this press release that was written by Harold, and we have the carbon copy of it, which we think is significant because nobody knows what "cc" means anymore. But this was the original press release that Harold typed himself.Andrew: And just for listeners, also for those who don't know, "carbon copy"—when you see "CC" on an email today, it's "carbon copy." And if I understand, you type something on a sheet of paper, there'd be a sheet behind it, and that would imprint with carbon, and that would be kind of the backup or the additional one, and that would be the “carbon copy” of it, which, 70-plus years later, we still use today in our emails every day. And that's what it is, right?Shelley: I'm glad you explained that because kids today have no idea. I do ask them about, you know, what is a CC? What is an inbox, for instance?And so I'll segue over to something else. They have no idea what an inbox is—a physical inbox. They only know the inbox on their email. But we have Eddie's inbox from when he died, and we have in there everything that he had. Because when you used to look at people's physical inboxes, it was papers that were important to them. And he kept the papers that were important to him in this inbox, on his desk. We've since put plastic around them, but I think it's fascinating to look at what he had in there. He had in there articles about himself, yes, but he had a lot of articles about Freud, and he had a lot of articles written about and written by his wife, Doris.Andrew: It's so fascinating how, when computers developed, they sort of used the analogies of the past, of the physical world. And I think there's a term for it in computer graphic design called skeuomorphism, where you take something from the real world and you put it in the digital... If you see, on my desktop, I still have a trash can, and it looks like a wastebasket. And the "save" might look like a floppy disk, even though floppy disks haven't been used in 30 years or so. And you kind of take things from the past, and you have them preserved in your museum, that are now still part of the digital world. It's just we think about them so differently.Shelley: You're absolutely right. When kids come to the museum, I go through things —I don't remember the word you just said...Andrew: Skeuomorphism. (Laughs)Shelley: ...and show them things that they had no idea existed, Edison's original phonograph, the cylinder phonograph. We have that there. Music didn't always come from a computer; it wasn't always MP3. Sometimes it was a scratchy cylinder.Ivy Lee: The Other “Father of Public Relations”Andrew: We've talked about Eddie Bernays. One of the other founding figures of public relations is Ivy Lee. Can you share a little bit about his impact? I'm curious if the museum has any artifacts from Ivy Lee.Shelley: We have plenty. We have also republished his original official biography from 1966. So we have a biography of Ivy Lee.He's a fascinating character. Both he and Bernays are noted as fathers of PR, and there are some countries that look at Ivy Lee and not Bernays; there are some countries that look at Bernays and not Ivy Lee.It was fascinating to study Ivy. He worked with the Rockefellers, and he also represented railroads. He eventually represented the introduction of the IRT subway. Now, imagine, at the beginning, subways were competitive. So one of the things that he did, which was masterful—remember, this is the time of the flu and tuberculosis—so he would put up customer posters where you see advertisements now: "Don't cough too closely," "Don't sit too closely," "Wear a mask." It was the first customer communications of its kind.But more importantly, he was counseling the Pennsylvania Railroad. One day, they had a derailment around Atlantic City. You can see pictures of this, with cars literally hanging off of this bridge, and people were jumping out of the windows. So the CEO of Penn Railroad said to Ivy Lee, "You've got to keep this quiet." Because that's what was done during the day, during the Gilded Age. Vanderbilt said, "The public means nothing," right? "The public be damned" is what Vanderbilt said. And the CEOs of the time would disregard what the public would think. "The best thing is, they're too dumb to understand it anyway. Don't let them know."Ivy Lee said, "You cannot do that. The press is going to find out about it eventually. If you don't talk to them, they're going to write a very negative story." So he wrote the first—what was not yet called a press release—it was called a "Statement from the Road," about what had just happened. He wanted to get the company's position out there. He wanted to look open. That was a very important concept back then; people just hid the news. But Ivy Lee said the best way for you to come off looking trustworthy, as a company that deals with your customers all the time, is to take preemptive action. And this became a founding principle of crisis communications.Andrew: There are so many firsts to unpack in that story: the first example of crisis communications, the first press release itself. Folks who aren't intimately familiar with PR might think of PR as, "They're just spinning things on behalf of companies. They're just trying to tell the best version of the story." And, of course, to some extent, you have to represent your clients in the best way possible. But also, this is a founding example of, "No, compared to what was before, this is actually a lot better." Before, they'd sweep it under the rug, try to hide an awful tragedy with a train derailment, and instead, they're bringing it to light. They're kind of understanding that this is a new age in communication, and you need to not sweep it under the rug but actually tell people about it.Shelley: Exactly. You've got to preempt the reporter. So the reporters are taking the information from your release, and they're going and interviewing the CEOs. And Ivy probably trained them beforehand to be honest and forthcoming. So it was a whole different way of looking at the relationship of what was then known as a publicist with the press.Doris Fleischman Bernays: The Unsung Partner in PR's Early EvolutionAndrew: I want to move on to somebody you brought up briefly, which is Doris Fleischman Bernays. You mentioned that when you looked at Eddie's inbox, he had letters and communications from Doris, who had passed away 15 years or so before Eddie. So he preserved these for years. And Doris was not just Eddie's wife; she was also a really important contributor to PR in her own right. I understand she was sort of more behind the scenes than Eddie, but they were equal partners. Can you describe more about who Doris was and what her contributions to PR were?Shelley: I'm very sorry I never got to meet Doris. And I think that PR history would be very different if Doris were able to be more visible at the time. She was not the first professional public relations person who was a woman—it was actually a woman two years before, who we only just discovered; her name was Zelda Popkin. And there were probably many others in the teens. But she did some very sophisticated work and writing. She was a tremendously good writer. She had ideas, but back then, women were not allowed to share those ideas. If Eddie had clients in the room, the only woman allowed in that meeting would be a stenographer.Doris stayed away from the main stage; she was behind the scenes. Now, a lot of people have asked me, did she have any impact on his big campaigns? I don't know. I have asked the family about this, and they say no. I've asked Bernays about this, but I think that for two of the campaigns, he had to have been influenced by her, even if it wasn't so obvious.So Doris was part of the Lucy Stone Society, which are a group of feminists of the time, suffragettes, former suffragettes, who believed that women should be independent and use their maiden names. Which is something that is a legendary story—that she insisted on keeping her maiden name on her passport.And on the first night after they got married, on their honeymoon, which started out at the Waldorf, here she is signing in as Doris Fleischman, with a fellow named Edward Bernays, and it doesn't look very kosher to these people in 1919.Andrew: And you mentioned her passport—she was the first married woman to have her maiden name on her passport in the US, right?Shelley: That’s right.Andrew: It's a lot of firsts in this group.Shelley: And Eddie instinctively knew that that would make news. As much as Doris herself really wanted to do this, Eddie also knew that that would be news-making. But he wouldn't send out a press release about it; he would just let the press find out themselves.So that the press feels that they were uncovering a piece of news.Andrew: And I think you were stating that there were certain major campaigns that she may have influenced behind the scenes. And, of course, there's the Torches of Freedom campaign.Shelley: That's the one.Andrew: That's the one that very prominently used women and turned lighting a cigarette into a statement about women's empowerment. Do you think she was sort of behind the scenes in that one, potentially?Shelley: Yes, I do. I have felt, even if she didn't work on the campaign directly, just who she was—she was a liberated woman. She smoked very heavily. And I guess when she smoked, she felt liberated. Now, at the time, it wasn't about making more women into smokers. Women were not allowed to smoke in certain theaters and restaurants, concert halls, all over the country. That's a crazy thing, that there would be signs and posters inside restaurants: "Women cannot smoke here." That's nuts.And so it was encroaching on women's freedom. And so that's why there was an appetite at that time for the Torches of Freedom, part of the Easter Parade. And it wasn't just these women in a separate parade; it was part of the Easter Parade, where everybody's already dressed up. And there's some marvelous pictures of debutantes and these men, these high-class men wearing these top hats, walking in the Easter Parade.But the brilliance of Eddie was that, again, he didn't announce it. He didn't send out a media alert and say, "If you get to the parade in time, you're going to see these women with cigarettes out in the open." That didn't happen. He knew that there would be photographers there shooting the Easter Parade, but when they started seeing women smoking out in the open, in public, that made news. But nobody knew who was behind it.Andrew: So he was kind of a magician in the background.Shelley: Absolutely.Andrew: That sense of showmanship and how to create a spectacle and a scene. And you suspect that... Doris was an equal partner at his firm, she was a smoker herself, they used the guise of women's liberation to break barriers, let them smoke more, and, of course, if they can smoke in more places, they can smoke more products for their client, Lucky Strike or American Tobacco. So it all kind of came together that way.Researching Doris, I saw she edited and published a book in 1928 called An Outline of Careers for Women: A Practical Guide to Achievement. And this, in itself, just that she edited and published a book all about women's careers, says a lot about her. And in it... It's all available online at this point; I think it must be in the public domain or something. And in it, she wrote a chapter herself on public relations. And I want to just quote the introduction:"The profession of counsel on public relations is so new that all who are engaged in it, men as well as women, are pioneers. No traditions have grown against women's participation in it, and women will share the responsibility of developing and shaping this new profession. It is so new that its ultimate possibilities for women lie in the future."I just think this is so prescient, that now PR today, I think, has—depending on what you read—it's 65 or 75% women who are in it and who lead it. Do you have a reaction to this quote? What's your take on it?Shelley: It's very prescient. I wish that Doris was alive in the 80s, 90s, to see women rising to the top of agencies. Because back then, she's talking about women who are doing the work of PR. She's not talking about women who are leaders of PR agencies. In her mind, she could not imagine how big agencies would be one day and how women would have a role in those agencies, and running those agencies, being CEOs. She could not imagine this because it was unheard of, just unheard of.But she was offering up her own experience as a public relations counselor. Now, one of the important things here is that it was Bernays and his wife who came up with the phrase "counsel on public relations." Before then, it was just "publicity."When Ivy Lee would just call it "publicity"—even though he could be talking about crisis management—"publicity" did not become a kind of low-class word until much later. But "counsel on public relations" sounded like a lawyer.Andrew: Exactly.Shelley: So, but she was pretty much saying, women can and should be part of this growing profession. But back then, there were no professional women. And the only professional woman that I know of during that very time, in the 20s, was a woman named Belle Moskowitz, who was a political consultant to Al Smith when he was running for presidency. And you can see in some of the old documentaries of Al Smith, there is Belle, a rather big woman with a hat and a feather in it.But yeah, it's really something that she would be so prescient, and she would be such a fan of women. And she wrote a book—I don't know if you've researched this—called A Wife Is Many Women, which says it all. A wife is a mother, a wife entertains in the home, a wife is a wife to her husband. We play so many roles. And this all came out, I think, in the 80s, when women—they were called "super moms"— when there was a front page of Newsweek with a working mom carrying a briefcase on one hand, in her business suit, and her baby on the other hand. That's what Doris was envisioning.Of course, Doris had the means to hire a lot of help raising her children. Most people don't. And we still have to juggle, as women, we still have to juggle, but we're doing it.Barbara Hunter and the Fight for Female Leadership in PRAndrew: So Doris Fleischman was the first woman to be a 50/50 partner at a firm, and I want to also ask you about Barbara Hunter, the first woman to own and lead a major PR firm. And before I ask, I also want to acknowledge an unfortunate coincidence in timing. We're recording this in December of 2024, and just yesterday, we learned the sad news that Barbara Hunter passed away at the age of 97. And in her obituary, the last line reads,"Donations and tributes in Mrs. Hunter's name could be made to the PRSA Foundation or to the Museum of Public Relations."First, amazing that Barbara Hunter had such a close relationship with you and the Museum of Public Relations; clearly, it meant a lot to her. And if you're able to, just share who Barbara was, what impact she had on the industry, and what your relationship was personally with Barbara Hunter.Shelley: Well, yes, I'll take the last question first. She was very active. She sold the agency, Hunter PR, which she created after working at another agency called Dudley-Anderson-Yutzy, and she had sold that off and created Hunter PR.So the founder of Hunter PR—or the person she passed the torch to—is named Grace Leong, current CEO, marvelous CEO. And we had worked with Grace for years—"Let's get Barbara on the panel," because... There were a few women who are of an age where, you know, you want to get them while they're still very sharp. Barbara continued to be sharp until the very last day. Amazing.But she would tell stories about what it was like to work in a very anti-feminist world. The business world was... If you look at Mad Men, that's what the world was.Even though Mad Men was set in an advertising agency, it's the same kind of interactions between men and women, and how men saw women, and what was allowed in the office, right? So despite all that, Barbara Hunter and her sister, Jean Schoonover, managed to work with the respect of men and actually bought an agency, renamed it Hunter PR, and managed a thriving business—thriving. It's amazing.Andrew: Yeah. Well, you mentioned how Barbara was sharp right up to the end. I listened to an interview that must have been recorded within the last year or so, where she tells this story. And she tells the story of how she and her sister bought the PR firm that was then known as D-A-Y, right? And the amount of sexism they were up against was just shocking to listen to. Of course, you've seen it portrayed in things Mad Men, but hearing it firsthand from somebody...And she said that when she bought this firm that she had been working at, and she purchased it, the men who worked at the firm, they all left. They didn't want to work for a woman. They took their clients with them. And then sometimes they'd get meetings with clients, but they just wanted to listen to them almost as a novelty, where they just said, " We just wanted to say we listened to the first women-led PR firm pitch." And they didn't really give them serious consideration, which just seems so rude and a waste of time.What she was up against then, it's kind of gross to hear about. It makes you sad. But then seeing what she kind of overcame and what she accomplished and what she built it into is so remarkable.Shelley: I think we have people like Barbara to thank for the industry allowing women to do the same job as men and for allowing them to rise to the heights, as far as they can go. As you mentioned, it transformed sometime in the 80s and 90s to a dominantly woman field. But, unfortunately, the top of the industry are all men, still—the CEOs of the holding companies who have bought a lot of the agencies.But Barbara was out there. She just didn't give a damn. If she had the best idea, that's the... If you look at all her ideas, they came up from her brain. During agency selections for new clients, you'd have to come up with a unique idea. And it wasn't good if the client prospect would hear an idea and then go to another agency. I'm sure that did happen. But with her, they came up with brilliant ideas, mostly about food. She introduced the idea of food product PR.And some of those products... Tabasco was with the agency—currently with the agency. And the last time I saw Barbara, on Founders Day, I got a whole souvenir bag of different kinds of Tabasco, which I still have. But yeah, it forced them to come up with unusual ideas and not just the standard way of doing things. I think it made women work harder and stand out and realize the value of big ideas. When I came into the business, there were no women professionals. I didn't know how to even find them.Andrew: Wow.Shelley: Because we didn't have an internet back then. So I'd see an occasional woman at an industry conference or a lunch, but usually, I was the only woman in the room. Like Peggy…Andrew: Like Peggy in Mad Men. Right.Did Barbara Hunter... Did she run her firm differently than other firms of the day? Did she lean into the fact that it was woman-led and as a sort of competitive advantage, or attracting brands that marketed to women as their clients? What was her approach to that?Shelley: Well, considering that she was handling food PR, she knew the consumer much better than the men did.And that was really what set her apart. That was her USP. She was... It wasn't like she was running oil... She was handling oil and gas companies or electric utilities or steamship firms. She really knew the consumer, because she was a woman herself. She was a mother. She ran a house, so she got it. And it was very smart for them to pick this category of client—of food—that they knew much better than the men did. It wasn't until years later that women started handling things that were not fashion and all this kind of stuff, which I personally hated, which is why I went into a niche part of PR, in financial PR, because there weren't many women doing it. And that, to me, was a very serious subfield of public relations—the financial services industry.Inez Kaiser: Breaking Barriers in Public RelationsAndrew: There are a lot of women to cover in the history of PR that are leaders, but one that I wanted to specifically highlight was Inez Kaiser. Can you share the story of Inez Kaiser with listeners?Shelley: Let me, just take a step back, because I think this is an interesting story. We had, as I mentioned before, we had the whole museum set up on the library floor of Baruch College and hosted a lot of student classes. And so one of the classes comes in one day, and they're a diverse class, and one of the young women was walking around and looking at the exhibits and shaking her head. And usually, people like this stuff; I didn't understand why she didn't like it. And she sat down and raised her hand, and she says, "How come no one here looks like me?"And so this was October of 2016, and I was just dumbstruck because she brought up such an important point, and I didn't know what to tell her exactly then, except that I was going to fix it. And I told her and the whole class... I made a promise to her class and the professor: we were going to change things. So from October to Black History Month, February of 2017, we started researching Black and other people of color and their role in public relations history. So that now, half of the museum is about diverse people in PR history, because that is one way to bring more diverse people into the industry.So Inez is one of those people. But she was the first woman, as far as we know, the first Black woman to open a PR firm. Now, it wasn't she opened it in New York or LA; she opened it in Kansas City, Kansas, where it was tough to be a woman, and it was tough to be a Black person. But one day, she decides she needs her own office to open up this firm, and none of the landlords of commercial property in downtown Kansas City wanted to rent to her, not only because she was Black, but because she was a woman.And so she said, "I'll tell you who's going to be interested in this story: ABC, CBS, and NBC. And if you want, I can go give them a call later this afternoon." Next thing she knows, all the brokers are coming in, giving her tours of various offices in downtown. To her, it made no difference if she was a woman or she was Black. "Give me an office."And this is during the Jim Crow era, 1957. That's what's most spectacular about this story, is that she just didn't care. She just didn't care. But for consumer product companies, she was a great bridge to the newly affluent post-war country, and the affluence also was part of the Black communities around the country. So they took advantage of that. Various consumer brands hired her to find a way to communicate with them, and she did that. She was also a Republican and worked for the Reagan administration as far as promoting the idea of Black people starting up their businesses, and this became part of the Small Business Administration.So the day I found out about her, somebody had called me, was writing a paper about her, wanted to know if she was still alive. I had no idea; I never heard of her.So a person in my office decided to Google her and found out that her son, Rick Kaiser, was living—and living in Kansas City. And so she just picked up the phone and called him.And she says, "How is your mother doing?" And he said, "Mama is doing just great. She's in the next town over, in the assisted living place, and she's 96. And would you like to talk to her?" And we said, "Are you kidding?" And so we have this two-hour phone interview with her that's on our website that, to my knowledge, is the only recording of her telling her life story.Andrew: Wow, it's amazing that you have that oral history from Inez. It seems like a treasure. I think that that kind of work is exactly what's inspiring me to do this podcast as well... so many marketers don't know the history of marketing. I myself am still just learning, at the beginning of this journey, and I think it's such cool work to capture voices, capture these stories, so they're not lost to history, and that listeners can find them, and that those who are curious can learn about this.Supporting The Museum of Public RelationsI've just really enjoyed this conversation, Shelley. How can listeners support the museum, follow it online? Where would you point them to?Shelley: I would say go to PRMuseum.org. There's a donation page there, there's listings of our events that are coming up, or events we've done in the past. We've done 37 events, programs, panels, mostly regarding DEI and history, and there's a lot of videotape up there, and oral histories. And I encourage everybody, whether you're a student or not a student, or whether you're a PR person or not a PR person, it's interesting in history regardless.Andrew: Yeah, absolutely. Well, I'll post a link to that in the show notes with this podcast. So, Shelley, thanks so much for your time. I really enjoyed the conversation.Shelley: Thank you, Andrew. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org