Run with Foxes. Paul Dervan

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СКАЧАТЬ like this are not just about facts and knowledge. Doctors are human. It is less risky to recommend amputation. If you amputate, you lose the arm, and perhaps save a life – but you wouldn’t know for sure if it were the right decision. If you wait – you find out, but it may be too late. I often wondered, many years later, how he made these decisions under such pressure, week in, week out. How can you become confident in your prediction, while not becoming overconfident? How do you push for the decision you think is correct, when it is personally less risky to go in the other direction? I think the answer is that he had all the characteristics of an effective decision-maker. He was a fox.

      “Study the past,” he’d tell me over and over. He’d remind me that any fool could learn from his own mistakes. The wise man learns from mistakes of others. But Dad was only partly right here, at least when it comes to marketing. We often don’t even make fool status. We do not learn from our own mistakes. We make them over and over. We get blinded by our views about how marketing works. We trip ourselves up with simple schoolboy errors. We believe things without questioning them. And we won’t open the door to the possibility that our beliefs are flawed. Ego plays a role. As does fear. And pain.

      But we can learn to make fewer mistakes. We can learn to make better decisions over time. I’ve been lucky to work with, and learn from, people who think and behave in ways similar to what Professor Tetlock described. Fox marketers. They study the past. They challenge assumptions. They have theories, but look for the evidence. They understand that human behaviour is messy and communications are nuanced. They are sceptical but not cynical. They have strong opinions, but these are loosely held. They are open to discovering that they are wrong. They think, not in certainties, but in probabilities. Which is why they experiment.

      While I suspect they were born foxes, I do believe that these characteristics can be learned. I say this, because I am a hedgehog. A hedgehog that believes in being a fox.

4

The first thing I’d do

      In every role I’ve had in the past decade, the first thing I’ve done is set out to do better work. Try to understand what most needed attention, and address that. Sometimes it was brand positioning. Sometimes media planning. Very often the creative.

      But that is not what I would do now. The first thing I would do is get a definitive number on what the payback is on marketing spend. So how much profit do we get back for every dollar, pound or euro spent? I won’t expect this process to be easy, fast or straightforward. But my initial hiring, focus and resource prioritisation would be on this.

      Without a number, we can’t make progress. We can’t improve on the number. We can’t go asking for more money even if we believe we have a tremendous opportunity to grow market share, or launch new products, or whatever. The urge is to go fix some creative or media planning, or other low-hanging fruit. No doubt they can be fixed in parallel, but they would not be my priority.

      Marketers tend to shy away from metrics. I see eyes glaze over when I start to ask about measurement. I suspect that when marketers signed up to their wonderful, interesting and creative marketing careers, they didn’t have things like negative binomial distribution or double jeopardy in mind. I most definitely did not.

      There is probably some truth in the accusation that we just prefer to make ads.

      Professor Tim Ambler, who I interviewed for this book, once said that marketers prefer to “make the runs than keep the score”.4 He added that “perhaps this is how it should be”. Of course, making ads is more fun than spreadsheets. But Tim is right – ‘making the runs’ is what creates real value for companies. This is what we’re paid to do. Marketers are just not great at proving it. So we end up with situations where it takes longer to get an ad signed off than it did to write it.

      Almost two thirds of CMOs do not successfully demonstrate their marketing return on investment.5 This does not go down so well with the board.

      Professor Patrick Barwise, another expert I quizzed for the book, once reminded an audience that CEOs and CFOs have a similar mindset to Ed Deming – “In God we trust, all others must bring data.”

      Lack of metrics is not the problem. We’ve buckets of measures. Too many. A mistake we make is bundling them all in together. Not all metrics are equal. Don’t talk about the sales figures data and your fans or followers in the same sentence. And presenting them as equal is going to worry some senior execs that you don’t understand the difference.

      Our role model here must be Direct Line Group in the UK, the company responsible for three brands – Direct Line, Churchill and Privilege. They set up a marketing effectiveness team that analysed what factors drove sales at each brand, measuring the contribution of brand and acquisition activity over the short and long term. Ultimately the team was able to show with confidence that their marketing had contributed £46m profit to its home and motor insurance businesses.

      They explained that if they had made budget decisions on a purely short-term basis, they would have disinvested their Churchill brand at this point. When just measuring the short-term profit contribution, the ROI of their brand marketing was contributing just £0.45 for every £1 invested. So, a negative ROI. But they were able to measure the long-term contribution, too, which gave them an additional ROI of £0.63 – bringing them to a positive contribution of £1.08. This was a number that was commercially sustainable to continue supporting the brand with marketing.6

      Mark Evans, managing director, marketing and digital for the Direct Line Group, also kindly agreed to answer some of my questions. He told me that building credibility is critical. This is about managing stakeholders in a diligent way and consistently demonstrating a strong sense of commerciality. Marketing lives in a world of many unknowns. This is why having credibility is so important; so that the function can be trusted to balance what’s right for customers and shareholders alike. He explained that “With research showing that 80% of CEOs trust their CFO compared to just 10% trusting their CMO, more needs to be done to build this trust”.

      In their gold-winning IPA Effectiveness case study, Mark explained that when recently responding to a cost challenge, they were not panicking since finance were saying that marketing “is the last place we want to have to take from”. He noted that there has been no greater accolade for the team than moving from the front of the cuts queue three years ago to the back of the queue today. Invaluably, their decisions carried as much standing as anyone else’s, which may not always be the case.

      So, effectiveness may not be an area of expertise for most marketers. Not the thing that helped you get to where you are today. But don’t put it on the long finger. Make it a priority to find out what the number is, so that you can get on with the hard work of making the runs that will improve that number.

      Fox lesson: Get a definitive number on what the payback is on marketing spend. Make this the first thing you do.

5

Differentiate, or die trying

      Around 2009, when working for O2 in Ireland, I attended hundreds of focus groups on the hugely successful mobile phone network. The groups usually had a mix of customers and non-customers. The moderator would get their views on various mobile phone networks. Why are you with O2? Why are you with Vodafone? Why did you choose them? What is different about each? “How would you describe the brands?” The response: “O2 is blue. Vodafone is red”.

      Most mentioned O2’s sponsorships. People struggled to remember the details of the advertising. But they all knew what the ads looked like. And sounded like. They knew what an ‘O2’ ad would be like. Everybody spontaneously mentioned the O2 bubbles. Since day one, the advertising has featured bubbles. These tend to generate a bit of lively СКАЧАТЬ