Mark Vandegrift
Welcome to the latest episode of the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me is the diva of differentiation, Lorraine Kessler. Thing one, you might be interested to hear that upon the recommendation of our friend, Dr. Scott Powell from Grove City College, I started watching ‘The Pitch.’ It was a series back in 2012 and 13, didn't last very long but it follows two agencies on each episode that are competing for a client's business. So these agencies pitch their creative. And the first episode covered McKinney and a middle-sized agency in Los Angeles I hadn't heard about before, WDCW. And they're pitching creative to win the work to advertise Subway's breakfast sandwiches. Have you seen this series?

Lorraine Kessler
No, but I hope that they got paid for their speculative creative.

Mark Vandegrift
No. In fact, the one guy says, yeah, we put tens of thousands of dollars into this, which we know that's very accurate. And after seeing two episodes, I really expected way more. If our listeners haven't seen this series, it might be worth a quick watch of at least two, those two episodes. I don't know if I'm going to go back and watch the others or not, but I think that if you watched it, you'd be yelling at the TV like I was. 

You quickly realize that even with the big agencies, there is rarely any positioning strategy. In fact, I couldn't find any strategy at all, let alone positioning. And what was worse was that the creative concepts and the pitch were awful. I mean, I felt bad for the juniors that were assigned the work because… they did. They assigned them to juniors and I get that it's made for TV and perhaps the general public wouldn't understand this, but from an insider's perspective, I was cringing. My wife was laughing at me because I was ready to throw something at the TV for how bad these agencies were doing. And the people that went into pitch, you know how this works, didn't do the work. And they gave these juniors like, no guidance at all, no strategy, no input. I mean, I was looking for a creative brief or something and it just felt so not real. If these agencies are really operating this way, it's no wonder the industry reputation we have is what it is today, which is probably not the best.

Lorraine Kessler
Yeah, and it's really, you know, I don't know how much of that is real and how much of that is put on. I mean, it sounds a little strange to have juniors present because we know one of the most important things about when you do pitch.

Mark Vandegrift
Well, they didn't present. They only, they came up with the ideas. The seniors did the pitching. Yeah. No, they were awful. It was really shameful.

Lorraine Kessler
But they were no better. No. It's like some sort of slave dumb or something. I don't know but you know, I think the devolution of Marketing if I could speak to this for a little bit without sounding too much like sour grapes. But I think there's been a devolution of marketing as a as a very important strategic function to just a function and a task.

And I've witnessed this systemic change over you know, what, four decades, right, since I started. And I think there's a couple of reasons. One, you know, one of the things that I think has happened is that marketers have lost the respect of C-level staff. It's so often, and you know, we don't even engage with C-level staff. So, they have seen us now as kind of a function rather than a strategic priority for the entire organizational principles that are going to take the company forward. 

And so, the result of that is they pushed decision-making down to mid-level type of people who aren't necessarily really marketing prepared. And added to this, CMOs, if you do get to that level, but very often they have no, they have little or limited experience in or accountability for sales. And ultimately, the real purpose of advertising is to increase revenue at top line and also your margin. So you're dealing with people who are disconnected from that overall objective and the objectives become very strange. They become weird things like engagement and we get into this kind of ad speak, right?

The other thing I've seen is that budgeting ceased to be based on goals and real world objectives. It's like you'd have these high ideals or aspirations that are maybe certainly visionary and aspirational, but there's no money put behind that, accomplishing that. So you've got this tiny budget with this big idea, this grandiose idea. And I think that's the difference between just playing and playing to win.

If you're going to play to win, you're really going to budget for the growth that you want. And I think a fourth factor, and I don't think we can discount this, technology for all of its benefits sometimes has drawbacks, right? So, the laptop gets created, and all of a sudden, the emphasis shifted from thinkers in our business to really finding holes and how they can attack strategy and where are the competencies of the company and what can we do better than anybody else? And how do we orchestrate our sales force to deliver and follow up and all that.. to makers? And that's a big difference because makers aren't necessarily thinkers. You and I knew that. And everyone's a maker today from kids in the family to someone right out of college.

And here's something I think, and it's really, I think this is important. I think the difference is a maker doesn't ask the right questions, right? And the right questions that a strategic thinker would ask is what is the essence of the problem? What are we trying to solve? Where are we trying to go? What will it take to solve it? What moves will the competition allow us to make?

So how do we navigate around the existing competitive set and what they stand for? And how, finally, do resources dictate our strategy? This is something the maker level doesn't even deal with. So, I think we've just, and it's all kind of fallen out. That's the level discussion and it's kind of all fallen out.

Mark Vandegrift
Well, you wouldn't believe the creative. I mean, the one gal came up with a concept that they actually pitched, where these little breakfast sandwiches were talking to one another. And that was the whole concept. And it had nothing to do with the Eat Fresh tagline or the slogan. It had nothing to do with their position. These breakfast sandwiches were talking to each other and was like, what's that all about? Fortunately, Subway didn't pick that. 

The guy that actually did the best job, so that same agency, which was McKinney, they ended up winning it. They hired a rapper who, he was brand new. He had just rapped about making pancakes on the stove and it was a YouTube video and it went viral. Okay. So they decided to hire him, but they didn't give him any direction. They just said, write a rap. His rap was the only thing that ever mentioned the fresh position of that. So the agency didn't even do the work to make the connection. Some random rapper they hired who's not in advertising was the only one in the whole group between the two agencies that ever made that connection. No matter the size of the agency, you can get it right or you can get it wrong. And I was just flabbergasted, but in the back of my mind, it didn't surprise me because these are the same agencies producing these big Super Bowl commercials that I complain about all the time.

Lorraine Kessler
Yeah. So, you know, this year they're not running any Super Bowl commercials just because of your complaints, Mark. 

Mark Vandegrift
Oh, good, good. I didn't know if they got my notice about that. So hopefully they'll just. 

Lorraine Kessler
Dick Maggiore has bought up all the airtime. Yeah. Yeah, right.

Mark Vandegrift
Oh good, good. Well now I can watch the actual game.

Well, anyhow, today is our season one wrap-up episode. For our listeners, don't worry, we'll be back again in the middle of winter once the holidays and our New Year's resolutions have passed. Lorraine and I are big family types. Of course, you're Italian, so that just comes with the gig. But we'll be spending our extra minutes preparing for some big holiday shindigs.

To get things going today, Lorraine, I felt it was worth talking about the highlights of season one. And of course, our interview with Roy Williams is probably our combined selection for the top highlight. I'm still kind of pondering all the information he shared. And I guess I really appreciated most his endorsement that we're the nation's leading positioning ad agency. Did you have a specific, you know, big takeaway from our interview?

Lorraine Kessler
Well, there's just so many. He just talked about so many things, some of them broader, about human nature and psychology and how the mind works and how we respond to sound much more than visual or than to written word. And I just loved all that stuff because I've always believed that to be true. But I thought there were two things, from a business perspective, that seemed a little practical. And I thought that they were really good and because maybe I've run client service departments for so long. Um, I thought these were really instructive. 

I think the one was that he emphasized that advertisers think about the life of the customer beyond the business, right? That, and you, you remember all the ADs where I'd have engineers or plumbers or doctors or whatever. And I'd have to tell them before you were a doctor, right? Well, let's just take it from the womb. You are a person. And as a person, you think, and your customers think like real people do. You don't put everything through the engineer focus or filter or the doctor filter. And so, he made the point that it basically is what's in it for me and what's motivating them. But I thought this was really important because it's where strategy and creative to me kind of have to come together in what we do as advertisers and that is it he said you have to win the heart and the mind will follow. The mind always creates logic to justify what the heart has already decided I love that is so true. And so you could have the best strategy in the world. But if you don't aim it at the heart, at the emotion, that’s the drive decision your ads not going to succeed. So

I actually think it would be really wise for us to add to the AD process a question, this question, how do we win the heart of the customer for your product or service? I think that would be an interesting, yeah, I think that would be an interesting addition.

Mark Vandegrift
When he was saying both of those things, you know how you have a flashback in your head? I could just see you saying that over and over and over again, both of those things, because that's where there's a disconnect sometimes between us walking in as business people thinking that somehow human nature changes and we are no longer consumers. We're somehow some kind of robot that presses buttons to buy things for a business. And it just, it doesn't make sense.

Lorraine Kessler
Yeah, so think about the life of the customer beyond the business… I think that's really good. The second one I had, and you'll appreciate this because you share client service duties with me, is the bravery and the courageous approach that he has to compensation which just blew me away. I mean, it informs who he chooses to work for and who he doesn't. 

It was quite a shock. It'll be quite a shock for most agencies to do this. Remember, he doesn't get paid a set fee for hours. He's not paid a percent of the ad budget. As he believes, this only incentivized the client to raise or him to increase the ad budget.

And he understands that at the heart of everything, the client has to trust him implicitly. So, you can't trust someone who's raising your ad budget because they get a bigger take, who makes more money when you spend more, in other words. So no, what does he do? Well, he takes a percent of top line growth. So, it's a promise and I'm going to grow your business. 

Now that is, you know, to our minds, we've always said that would be great if we controlled so much. Like we can't control sales follow-up or the competency of your sales team or whether they're saying the right things or doing the right things. But I picked up in his conversation that he controls the ad budget. And if he feels sales is deficient, he's going to allocate more budget to sales than to advertising itself.

So, he has more control and that's, I guess, the reciprocal grant he gets for the trust he creates with this model. I just thought that was brilliant.

Mark Vandegrift
It reminded me of the story, and I don't remember the advertiser that said it. You probably do. But what came to my mind immediately was, ‘You know the problem with agencies and clients these days? We're not in bed together.’

Lorraine Kessler
Yeah, that was Jack Trout. That was Jack Trout. Yeah.

Mark Vandegrift
Jack, okay, I couldn't remember if it was Jack or not, but I remember that line and it's so true because at the end of the day, if the trust doesn't exist, then you can't really take that route because how many times do we actually know the growth figures of our clients at the end of the year or the decline that they're facing? We don't get that. But what was interesting is he says he won't work with anyone except the owner who's going to make a decision, and we don't have that happen very often as well.

Lorraine Kessler
And moreover, and this is really important, he only works with smart, intelligent, and hungry clients. And he doesn't work with big brands. He works with smaller customers who have big ambition. And as he said, he believes in them more than they believe in themselves. So he's not going, he made the point, he's not chasing clients with budget. He's chasing clients with an attitude and a drive to play to win who are hungry, smart, and intelligent. I think that enough can't be said about that because so much of what we do as an agency has how an agency really does well has a lot to do with the type of customer or client you're serving, right? And, you know, if you can identify as he has those that he's passionate about serving, then he's going to take the north further and they're going to trust him more.

Mark Vandegrift
Yeah, yeah. Well, and you know, it was refreshing because sometimes you read books and you always go, ‘is this really the author that I'm reading here or is it heavily edited?’ But honestly, I think he was more eloquent even in person than what his books are. I was pleasantly surprised knowing that the author I read in those books is truly representative of the real Wizard of Ads. He touched on just so eloquently… you used that word several times. I wish I had the eloquence to do this or to do that. We teach on these principles on a daily basis. He just has such an eloquent way to express many of them. And it's not that we're not trying to get these across, but it's almost a mesmerizing presence that he has. And I thought that was real neat.

Lorraine Kessler
Well, and it's consistent. I mean, he's authentic. And I have found, I've had the occasion, and I'm sure you have too, of having met some authors who I really valued their books and their contribution. And Jack Trout is definitely one of them. But there was a theologian that I love, Robert Farrar Capon, and had the occasion to meet him. What I found is, they write the way they talk, they talk the way they write.

And that's such a beautiful thing because it's, you feel the person coming through the writing, but then when you meet the person and they're that too, it's a beautiful thing.

Mark Vandegrift
Yeah. Well, one area where I would depart a little bit from his assessment is on paid search. The point he made is correct, especially for B2C retail brands, etc. But this idea that branded keywords are the only thing to go after, I think that's spot on for big brands. But here's the issue.

Not all the clients we have, for instance, can boil the ocean with big brand campaigns around the globe. We have one client, which I won't state, but I know you know who it is, who has a pretty generic company name. And for under $100,000 per year in paid search, they bring in millions of new dollars in new business. In fact, one lead from one of their target industries can mean a deal over $1 million. And that's a return of, in just one year, if that's all I got, that's a return of 10 times. If they never received any other business from that paid search, branded terms for them, they don't work because they have a name that is probably the name of a thousand other companies in the U S. So Roy's point is taken, but it certainly isn't absolute. If we can make, if we could spend $90,000, making them not a household name, but a business relevant name, I think that you'd be hard pressed to be able to do that around the globe, let alone even around the country. And if they can spend $90,000 a year in paid search and make over $3 million, maybe almost $4 million in new business each year, it seems hard that you could take that $90,000 and do something else with it that's going to make it a household brand name or a business brand name like what Roy's talking. 

And then you have organic search on top of that we've done for them and their ROI numbers are off the charts. So that's an area that it's just nuanced a little bit based on kind of what the application is.

Lorraine Kessler
Well, I think you're right. There are no absolutes, and each situation has to be looked at uniquely, in terms of what is the objective, what are they trying to achieve? What's the market? What's the geography and what's the budget? I mean, these are the things, but Roy, I want to caution that Roy never was talking about big brands. We know he doesn't work for big brands, right? His history and his data, which is very compelling is based on smaller entrepreneurial clients. So, the data relative to top line revenue growth as against other metrics, search, engagement, and digital strategies, and all these kind of granular things. At the end of the day, that's the one thing we really want to affect. I think they bear serious consideration. And so rather than kind of push it off or find objection to it, and I'd also like to point out he doesn't advocate boiling the ocean. He's very clear in what he writes that the true secret of advertising, is to say the right thing to as many people as you can afford to reach over and over again. He's very big on narrowing the audience and hitting them more times. Versus trying to boil the ocean. So, I don't think that's where he's coming from. I just say, um, I think that where I think that we should take an objective look at his data, find out more about the type of media he's using. We know it's going to be sound heavy based on his expertise, radio and TV for good reasons, and our audio and video, however you wanna do that. 

And that we check ourselves because I feel like what happens is agencies get very comfortable with kind of a default list of media. We just kind of blindly make assumptions and you know the how you break down the word assumption, right? So, we have this default that these tactics without deeper, deeper analyses regarding the message and the means or the budget and the client's goals are the way to go.

So, I think we should check ourselves and step back. I'd really like to understand more about some of the data he shared with us and the real return on investment. And it's always that he could maybe have not done search the way we do it, because we think we have a secret sauce there, Mark, the way you do it, the way we do search, the way we do the things we do.

And then we have clients pushing us too, because they're in this world of digital and everything's got to be digital. Do you know digital? Do you know how to do this? I mean, how many times have we been in RFPs and the client, the questions aren't really high-minded strategic. 

They're like… How would you build an audience using digital media? Well, they've already made a presumption that that's how to build an audience. Strategically, is that right? I don't know. So, and you really can't challenge them in a pitch. You're trying to win their business, right? So this is kind of, I think, where we need to be.

Mark Vandegrift
Well, and one of the big takeaways of him pointing that out wasn't to say paid search never works, even for generic keywords. His point, and it's one we've been stressing quite a bit, is there's a balance between brand building awareness development versus the transactional media that are out there and there's nothing pure. Brand advertising can create customers as much as transactional can do the same and or transactional can build a brand. I think his point is that idea that you're saying is get the name in the mind and then of course we layer on that, make sure it's a differentiated idea associated with that name. Not everyone in the world has Nike-0level dollars to do whatever they want, but of course they've been successful because they not only have done that repetitively over and over again, but they also stand for the ultimate performance apparel. 

So, yeah, I agree with you there because we do tend to rinse and repeat, and we have to think a little differently. I found myself in a strategy session on Friday and as I'm hearing it, all I can hear in the back of my head is Roy's words because the client happened to be talking so much about targeting. And I thought, in this case, targeting doesn't make any sense at all. They were a perfect case for what Roy mentioned that targeting is 10% more effective, but way more expensive. And so in this case, I don't even know that you could target except geographically. There was no psychographic, there was no demographic that you could pick out in this particular case, and I just, I thought Roy was standing behind me going, just say it, just say it. You need more brand building. And so I said it, believe it or not. So that was a good point.

Lorraine Kessler
Yeah, yeah, there's just there's, you know, it is a both and world and you got to find the right balance and you have to have these things work synergistically. I would add that I think transactional media or transactional advertising creates more immediacy, but not long-term value. It doesn't always it does not create loyalty. Brand is the only thing that creates long-term loyalty. So, when you put the two together and it's in the right harmony, right, then I think you've got some things clicking. But it's hard to do that.

Mark Vandegrift
Yeah, you know, a good point to that is Amazon. When you think about the things that you buy off of Amazon, how many times you can actually name the brand that you bought off Amazon. Someone asked me the other day, I had something, I'm trying to remember what it was, and they said, oh, where'd you get that? And I said, oh, I bought it off Amazon. Oh, what company was it? I said, I don't know. It didn't even have a name on the product at the time. I know it was on the packaging, but I could not for the life of me remember what the name was. I said, it's called this thing, but I don't know. So just go Google it on Amazon. Well, if I ever wanted that again, I'd have to go through the whole process again. And who knows at the end of the day, if I would have found that same thing, other than of course going back into search or order history, but you know what I'm saying. Yeah, when you just grab those things as a transactional item, brand recall is almost zero.

Lorraine Kessler
And I think that brand marketers, right, I think they've probably asked this question. I think this is a really good point you're raising is the more I sell on Amazon, what does that do to my brand? Does it bring it down? Does it bring its value down? I would say it does, arguably. So, and I don't have any research to support that, but I bet we could do research and I wouldn't be surprised if that's what we found out.

I wouldn't tailor the research to give me the answer I want, but I think I'm in the same boat as you. Whether I ended up buying a Cuisinart or a KitchenAid becomes irrelevant. I went on Amazon and I saw I need a 12 cup and I want it black or I want it turquoise or I want this size. I got good reviews and this is a good price and they shipped it. If you asked me which one it was, I probably wouldn't know until I got it.

Mark Vandegrift
Well, what's more impactful anymore is to see ‘Amazon's Choice’ right next there to the product, because you know, it's a combination of reviews and price. And so it is taking away the idea of brand because now you're just look, you're doing the bandwagon effect. And who knows if all those reviews were real or not, because if the current price they're showing me was the same price that these people bought it for. I mean, there's just a whole host of problems with that.

Lorraine Kessler
Well, nobody gets it. Here's the thing. Ubiquity, more sales, more sales quickly, and or loyalty long term, they're on a seesaw. And you can get one and devolve the other or get the other and you don't have enough of this. So again, it has to come back to strategic balance as to really what you're trying to do.

We had a conversation with a very excellent wine maker. And he talked about when they're balancing wine, you know, for acidity and grapes and what the harvest gave and the fruitiness and it gets very technical. But he said, basically I need team members who play together well. And it was like, and he kept saying, and I thought it was really cute because he's German and he was making like a football analogy, but really team members who play well together ultimately is kind of what we have to strive for.

Mark Vandegrift
Anything else from Roy's interviews you want to talk about before we move on?

Lorraine Kessler
I mean, there's just so much to talk about. Certainly, his philosophies and beyond just the advertising. I think that the idea that he blends practical advertising with some of these more human, as you mentioned, kind of an understanding of the human insight, the human mind, how it works. And again, as I said, the idea that sound has been proven to be far more memorable than anything else. And I think that's extremely, when we're thinking about balance in media, we need to be thinking about sound. Whether it's delivered via video or audio, we need to be thinking sound. 

Because you know what, one of the things that we walked away from, and yet I have, my husband has a friend. Literally, he's like a jingle king. He can play any jingle he's heard from the time he was, you know, five years old. He can recall it. What is that? It's sound. And we've really kind of gotten away from some of that in modern advertising. I don't know. We think we're too sophisticated or what the deal is, but, it really made me think, are we missing something?

Mark Vandegrift
Well, good. Let's talk a little bit about season one outside of Roy's interview. I think the highlight for me this season was focusing, you know, a lot of our episodes on all the different ways that we differentiate, or we recommend differentiating. And in looking at the numbers, our listeners actually like those the best as well. Our Ways to Differentiate Leadership podcast had the highest number of listeners and viewers. So, we have a lot of leaders out there which makes sense, they're going to consume stuff to make them lead, right? 

So that's good. And they want to know how to lead their categories, obviously. I think these are attractive at the end of the day because if you do look at research, how-to information on the web is always shown to have the top search numbers, whether it's Googling how-to or viewing videos on how-to and other forms of consumption. These ways to differentiate really are a good start to how to do good marketing, although you and I know there's a lot of nuance to that comes with experience and application. So, I would say the ways to differentiate episodes this year were my highlight. Is there a particular episode or topic that jumped out at you?

Lorraine Kessler
Yeah, well, I'll jump on what you said about leadership. There's a lot of people, I think there's a lot of interest, but there's a lot of wannabe leaders. So, I think we have to kind of expose something about this. We've seen some people who self-proclaim leadership in a very uncredentialed, inauthentic way. Leader in… whatever, they just self-ordain it.

That's not leadership, right? I mean, that is, and so what happens is I've actually had clients who are leaders in their category and aren't claiming it because they've seen this other want to be advertising and they don't want to be like that. So you know, that brinkmanship, and we've seen a lot of it, kind of hurts the idea of leadership. But I think it's either three ways to lead. And if we stick to this, I think and help clients.

You can be a sales leader, you can be a performance leader, which means your product either extends the life of something or reduces gas costs because maybe your product is made out of lighter material, or technology, which is kind of you're an innovation leader. You're always leading like 3M or somebody like that. So the key questions, I think, that a client needs to ask before embarking on a leadership position in a category, are 1) Can we own, become the generic for this category? And related (2), do we have the resources and the competencies and the drive to accomplish this? Will we market with sufficient force and constancy to own the leadership in the mind of our target audience in this category? 

And I think you have to be honest about those answers. You can't just say, I want to be a leader and then not put any.

So, related to that first, can you own or become the generic? I think you have to be honest with yourself and say, are we going to market with sufficient force? I mean, are we really going to do the things that are needed to establish leadership relative to competition and what they're spending and what they're doing?

If you can't do that, then you ask the second question, can we set up a new category, a subcategory, that we can be first in? Because we know categories divide. So, can we be first to mine in a new divided category? You know, Taco Bell was the first fast food Mexican restaurant. Well, they didn't just get there because they put a pretty good name and brand together or logo, but they marketed the heck out of their products and what they were doing.

So, you know, you have to find a slice that you say, I can own because I do have the resources or we have a unique expertise in that particular area, we can deliver that. If you can't do either one of those two, then there's enormous value. And I think it goes sometimes uncultivated to becoming a really powerful number two.

In many categories, as we know, are two-horse races. They kind of, over time as they mature, become a two-horse race. So, the number two brand has the opportunity to reposition number one by going against them, right? We know if you're the most reliable, then we'll be the state of the art, right? If you're going to be made in the USA depending on the product, we might be made in Italy or Germany or France, fitting the product category, whether it's pasta and design or wine and fashion or beer and engineering. So, while repositioning does cover as a strategy more ground than this. I think essentially, it's what number twos can do, and there's a lot of number twos who are missing the boat, because instead of going opposite, they're copying the leader or they're trying to say better is better when really the only better that matters is being better at being different. So, I think that there's opportunity there.

Mark Vandegrift
Well, I think we can close things out now, but I do want to express my appreciation for your diligence and care that you take to help produce the Brand Shorthand podcast, Lorraine. Your knowledge and expertise are beyond compare, and it really was wonderful to capture your insights on brands and positioning and strategy and just on life itself. So, thank you very much for making this a good first season for us.

Lorraine Kessler
Well, Mark, thank you. You're a great host. You do a wonderful job. And I'm so proud of you having been able to present to Grove City College and Scott Powell's class. And he's one of the great professors in a university setting who is really raising or elevating marketing back to its strategic place or throne that it should have. And I appreciate that.

Mark Vandegrift
Very good, well thank you. Well, let's close the season. Thank you to our audience for viewing and listening. If you haven't liked, shared, subscribed, or told your friends about the Brand Shorthand podcast, please do. We'll be back in the dead of winter, as promised, to start season #2, as we discuss the core concepts of positioning. Until then, we wish you the warmest holidays, a happy new year, and a great start to 2024.