Episode 73: When change becomes opportunity (1)
- 16 February 2023
Past learnings, present challenges, future opportunities
This podcast will:
- Ask whether marketing is getting tougher as consumer needs change
- Show how to embrace shifts for commercial advantage
- Identify the trends that will shape the future of the sector
Sophie Peterson 00:03
Welcome to the CIM Marketing Podcast. The contents and views expressed by individuals in the CIM Marketing Podcast are their own and do not necessarily represent the views of the companies they work for. We hope you enjoy the episode.
Ben Walker 00:18
Hello everybody and welcome to the CIM Marketing Podcast. And today, we are gonna be looking back at the last few years, which I don't think on any measure have been easy for business, particularly for marketers. And but we've probably learned a lot from them as we've come out of this difficult period or we are emerging from this difficult period. And today to talk a little bit more about what those learnings are and how we can apply them as marketers. We have with us today, Ryan Miles, who is director of international marketing at a major brand, Microsoft, Microsoft advertising, how are you Ryan?
Ryan Miles 00:53
Really well thanks Ben, great to be here.
Ben Walker 00:55
And also, we have a great guy with us today who is very senior in the world of PR, and he's Mr James Ralph, executive director at Good Relations. James, how are you, sir?
James Ralph 01:07
Ben I'm very well and delighted to be on the podcast today. And Ryan, delighted to meet you.
Ben Walker 01:13
It's great to have you both on the show. I don't think I was being unfair when I said the last two or three years have been difficult. 2022 no exception, although we were out of some of the restrictions that make business difficult. But it's wasn't easy. Was it Ryan this last year or so. And that doesn't mean that we can't learn from it, though does it?
Ryan Miles 01:34
Any challenging time is always an opportunity for a lesson or two and 2022 certainly felt like it was full of them. Depending on which way you looked at it. Some of the things we took away from from the year that was was certainly this changing consumer behaviour. And we've had so much change in behaviours for all of us societal with COVID and all that transpired. But 2022 really felt like we've tried to get back to normal, but we didn't really know what that was anymore. And between work and as consumers as individuals, we developed new patterns of behaviour. One of those we certainly saw from our research was just how persistent hybrid work is now and how challenging it's been for businesses and employees alike to find that balance. And it's really interesting how we break up our day now following that COVID experience, but well into 2022 and beyond it appears in terms of how we spend our time. I think the other thing we continue to see is just a really complex set of channels and consumption habits in terms of the media we look at and as Gen Z builds critical mass as consumers and in the marketplace and grows up. I think they're driving some some really interesting trends in terms of how we reach that generation and how we engage them.
Ben Walker 02:57
James what do you do in your role? Or how does this connect to the things we'll be talking about today.
James Ralph 03:02
So, Good Relations, we're a public relations, and a content agency. And we're lucky enough to have worked with the Chartered Institute of Marketing for many years now. And one of the areas that we lead on is your thought leadership research. And and what we see in that is absolutely the same trends that Ryan has been speaking about that it has been very tough. Consumers have changed their expectations. And according to the latest Impact of Marketing Report that we put together last year, businesses are feeling out of touch with consumers changed expectations. And everybody is adapting, we're all getting used to new ways of working 2022 was very much a year of bouncing back. But bouncing into new habits, not necessarily into old habits. So yes, we're back at work, but we're not back at work full time. Yes, we are spending more leisure, travel has resumed but the patterns aren't quite the same as before. And for marketers, the challenge is how do we adapt to those and really lean in to those opportunities?
Ben Walker 04:19
Do you think it's getting easier, or it's getting harder based on the changes that occurred in the last year or so?
James Ralph 04:26
For marketers I think it is getting a lot tougher. The research shows that over a quarter believe their brand is out of touch with changed consumer needs and obviously from a marketing point of view, big part of what we're here for for brands is really listening to consumer needs and and really acting to help our organisation's adapt, so it is getting harder. But the good news is the another piece of research that we carry out for CIM is the CMO75, which surveys 75 of Europe and indeed the world's top CMOS, and they're really leaning into this. So for marketers, there's a really good opportunity. So actually they are bolstering their marketing budgets to compensate for all of the change. And because of the the economic challenges that we see ahead of us. So is it getting harder? Yes. But I think as marketers, we're well placed to help the businesses that we represent, really lean in to the opportunity
Ryan Miles 05:39
Couldn't agree more. I think it has been tough for marketers these changes. And I think there's that additional pressure of, of where the world has been around doing more with less. Certainly, resource constraints are a theme we hear often from our clients. And it has to be thought about really careful, there's a there's a real, natural inclination, I think, to look for the lowest hanging fruit or what looks good on a report. But that comes potentially at the real cost of brand, as well. And continuing to build that brand, we know from research that Nielsen did around marketing mix models, that there's up to 2% long term revenue per quarter lost by ignoring the need for brand building during tough times. So I think this is a really important way to look at as a marketer doesn't make it any easier initially, to get budget, sometimes that's a tough discussion. But we can't ignore those challenges for what feels like short term ism. And that challenge is probably not going away from 2022 through to certainly first half of 23.
Ben Walker 06:43
You know, though, I'm seeing potential positive here, from what you're saying, if you can get ahead of it as a marketer, in the marketing department. If you can get the requisite resources to do it, you can very quickly open yourself out into better market share and into an advantage because if it's difficult for everybody, those people who succeed are going to do disproportionately well, presumably.
Ryan Miles 07:08
There is there's opportunity for exponential impact, I would say when times are tough, and I think the space that your competitors create where they pull back is opportunity, as you say Ben to lean in and grab that and potentially more efficiently than you would otherwise in good times.
Ben Walker 07:26
What are the real the nitty gritty of the changes in consumer behaviour that we have to be absolutely hot on to make sure that we are the ones that go on exponential growth?
James Ralph 07:35
I find it really encouraging to to hear Ryan from Microsoft Advertising be talking about brand building campaigns, because that's something that we definitely recognise on our side, particularly in the in the field of public relations. Social advertising is really effective activation. But it is also really effective at brand building as well and those are two different disciplines. And the latest research from Bennett and Field shows that they are distinct things, if you try to do both together, they're not as effective. You need brand building campaigns, you need activation campaigns. And when it comes to brand building, the opportunity that the we see is in creating ideas that live it's all about that earned potential. It's not just you pushing out a message, but it's about other people hearing, listening and responding to that message. It's really going back to the core principles of of the profession that I'm involved in public relations, which is about third party endorsement. We want other people to care about our campaigns. And what I find really interesting is that I see this happening in the advertising space as much as it is in the public relations space. So if we think about campaigns, for instance, such as the Cadbury Secret Santa, that's that's a fantastic campaign, it's getting people involved. It's not just putting out a great jingle. But actually, what you're seeing is advertising picking up on some of the the earned potential ideas that live that traditionally, public relations campaigns would have done. And for us, the perfect mix is when it all comes together. So for us, it only works if it all works together. And so from that side of things, talking about brand building and the potential that that has, through advertising, and through social media is really exciting.
Ben Walker 09:31
Do you think there's a step change in the demand for sort of what we'd call authentic content James, since how the landscape looked pre pandemic to how it looks today?
James Ralph 09:41
Yeah, absolutely. So when we talk about ideas that live they have to demonstrate three behaviours. And so we carried out research amongst 75 brands, about those behaviours, and they're connected, memorable and trusted. And really, we see that foundation that authenticity, you know, 46% of the influence that a campaign has is about how well it is trusted. But trust and authenticity will only get you so far, you know, campaigns have to be memorable, they have to be distinctive, they have to be things that you want to talk about, and you want to share. And that contributes another third 32% to the effectiveness and influence that a campaign can have. And then the final one, and really this, this is, I guess, Ryan's area of expertise, it's about how well connected these campaigns are, who do they reach, and that for us makes up 22%. But coming back to your point Ben it is around trust, it is around authenticity, you have to have a strong base for that. But that's only the beginning for brands, they they really need to create campaigns that stand out that live and that reach as many audiences across many different channels as possible.
Ben Walker 11:03
So as memorable, trusted and connected, Ryan and Microsoft, I think what our audience would be fascinated to hear one of the world's biggest brands in order to hit those. But click tick if you'd like of success.
Ryan Miles 11:16
Yeah, well, I think there's, there's no simple or easy way to make all three of those things work together harmoniously every single time. But I would love to acknowledge what James said there about the partnership and the relationship between paid and earned, I think often these things get put into mutually exclusive buckets and often they sit siloed in organisations as well. And they are so important to one another in terms of being effective in campaign building and in long term marketing, and especially in in brand building. I think that's a, that's a really, really key point, particularly with connected, and I think what marketers can do in the context of of doing more with less as well, it's really important to look at how times have changed and the landscape, the tools available to us. Digital marketing has changed this so significantly. And I think even today, if you don't have to look too far to see the excitement around automation, and AI, and what this might do to marketing as of today, let alone in the future. And this is kind of really gaining momentum but it also lives in lots of various ways already, not just in maybe the headline grabbing, natural language sense that we all talk about at the moment. And these tools have made us so much more efficient as marketers in bringing connectedness around cross platforms, across channels and with each other as as well through that proliferation. So I think that's a really exciting element. And everything we see at Microsoft, and for our clients around trust is totally aligned to what James said, this is just fundamental. And it taps into so many other elements around marketing in terms of commitments for ESG, and sustainability and diversity, inclusion really important things for our audiences for our customers, but but also for the brands to get right and have in their fabric in their culture and their purpose. These are big things though, these are not just marketing things either. And they have to be built through the organisation. So tying these together, the right messages, the right business practices, and then delivering that message nicely wrapped in a consumable way that makes you laugh or cry or remember. I mean, it's it really is a holy trinity for sure. And I think we we have had much success and also many learnings in that process.
James Ralph 13:57
One of the things I think I sort of pick up on Ryan's point is about innovation and AI because I think one of the things Microsoft in particular has been leading on is chat GPT. And it's been so exciting to be having a play with that over Christmas, and beginning to understand the possibilities are there for really connecting with consumers on another level. And and I think technology companies are really, really good and technology brands are really good at being memorable, coming up with innovations that we all love to engage with and around connection. But then there is this question of trust. And I think chat GPT is a good example of that. For this technology to really take off. We have to put our trust that what the AI is coming up with is the right answer and the our interactions with the brand via something such as Chat GPT can be trusted and aren't hallucinations. And I know that there's been some shade cast by some of the competitors on that. But for me, the possibilities for marketers, of being able to train an AI to interact directly with your customers is really exciting. But our job as humans, as marketers is secure, because we need to act as that sort of that that level of empathy and that listening and the understanding to train up the AI in the right way. So for me, it is very exciting time. And I'm very eager to see Ryan, what else is coming up for from, from you guys in that space?
Ryan Miles 15:41
Definitely exciting times as this technology evolves and comes to light. And as we see, yeah, our products in Azia take shape with various integrations and as open AI continues to push the boundaries, I think, a lot more to come in the future.
Ben Walker 15:58
James has been talking about chat GPT for those few people who don't know what this thing is, it's a robot effectively, that curates the totality or the near totality of what's out there in terms of content and rewrite in new prose. Copy, which can be used for all sorts of purposes, marketing, potentially being one of them. Interesting as well, to say that is an AI becomes a colleague, it doesn't become a replacement, as James was saying, we're still the marketers there to train it and work with it. And it becomes one of our team, not a replacement for the things that we do as marketers, which actually makes it more exciting. Beyond those technologies, right? And how is Microsoft generally been responding to the change in the landscape, and there's less than a year or two?
Ryan Miles 16:46
Yeah, it's been such an exciting time and certainly at Microsoft Advertising, we we've been really, really busy I think we've got some really exciting things that have been happening. One we acquired the company called Zander, which does a range of things in terms of programmatic advertising, DSP SSP, really opens up the length and breadth of the internet in terms of display, video and a variety of other formats. So I think that's really exciting. We've had our push into connected TV recently announcing our partnership with Netflix, and that ad supported tier. Another really exciting trend that we see with connected TV just exploding as as a medium for consumers to reach content, but also for marketers to reach reach their audiences. Another one is retail media, this is a space that's been growing really rapidly and has been getting increasing prominence, as marketers have shifted focus towards performance and how they can drive short term value to the business. This is probably proliferating through Amazon, a number of other players in the market. And for us, we've got promote IQ, we've just had some really big announcements with offsite advertising opportunities here. And that wealth of consumer behaviour and retail data that lives on so many retailer sites that historically hasn't been monetized. But also, there hasn't been the opportunity for marketers to engage with end retailers who might own that consumer relationship, but aren't actually the OEM producing the goods. And so I think retail media creates that really fantastic relationship and creates access and brand and preference. It's not just an end of the funnel tool, it can do much more as, as consumers look in all types of places for their category search.
Ben Walker 18:42
People hear the name Microsoft, and they probably their instinctive responses that well Microsoft are going to be super responsive, super quick to react to trends and leave the rest of us in our way. But presumably, to some degree, it has the same challenges that that other organisations have its size can be presumably a an advantage as well as a disadvantage.
Ryan Miles 19:05
Yeah, absolutely. I think there's lots to consider as, as trends and technologies emerge. And as marketers, specifically, how to implement those where can you implement those, what infrastructure is required? What do we really know or understand about the technology and and how to apply it and how quickly could you adapt that the other challenge consistently can be skills? Have we got the right people to leverage that because that is often a challenge and I think in digital marketing, we've seen that be pretty consistent in a number of ways. And I'm sure our friends in various agencies would agree hiring great talent that can do these really complex cutting edge things is really tough with no matter what side of the fence you're on. So certainly there are all considerations, but you have to, I guess, make bets and also lean in where you think it applies most not every trend or technology is going to be the right thing for a given given market or a given business to activate.
James Ralph 20:08
I think that's a really good point. Technology has opened up more ways than ever in which we can connect with potential customers or with stakeholders, but not every connection is a positive one or is possibly the best one. So I think one of the big challenges if I, if I kind of lean in and look forward is, you know, it's very easy for us to talk about engagement and we can have a brute numbers approach to achieving marketing objectives, if it's, you know, an engagement rate of 2%, and two and a half percent. And it is a matter of throwing money at the problem to reach sufficient people that we're going to be able to, to cut through and achieve the sales we need. Really, I think our challenge as marketers, as real humans, of challenging the machine, is about making those engagements as memorable and as trusted as possible. And that's what really strong brands, brands, such as the John Lewis partnership, for instance, are able to achieve and enable to leverage when you see an advertisement, whether it is served to you on YouTube, or whether it is popping up in Netflix, as a consumer, you tend to lean forward, you want to know what's happening there. And I think that really is the critical opportunity. What we like to talk about is it's about excess share of voice or excess share of influence, because otherwise, if all you're achieving is what your marketing budget can afford you, or what your share or what your market share entitles you to, you're not really doing your job as marketers, what we really should be doing is helping our clients and helping the firms that we work for to achieve excess share of voice an unfair advantage, through our marketing.
Ben Walker 22:13
It goes back to what we were discussing earlier, to get that unfair advantage, you really do have to be ahead of what the technology can do. And the stereotype you might be correct me if I'm wrong here Ryan being a man it works in that sector is that people have technologies and use a very small percentage and what they those technologies can actually do. And we're sitting here using Microsoft Teams other brands are available for video conferencing, we wouldn't have probably been using any form of video conferencing before the pandemic, because we this would have been done in the studio. But when I do this, I wonder, are there more things that we could be doing using this technology to do that, or open tours, but we're not leave bridging as marketers?
Ryan Miles 22:54
Yeah, absolutely. I think the technology is only step one in pushing forward and innovating. It's always having the vision and the ideas about how to apply it, and then the executional ability to actually go ahead and do that. And ideas are cheap. Execution is expensive and difficult. It's a good consistent challenge. And I think we rely on talent to consistently believing in as well. I think it's a really interesting dynamic when you start to see more of Gen Z who are true digital natives in a way that no prior generation has been coming to have this familiarity or this perspective on technology that as much as we might try or educate ourselves I don't think we ever really gain that, that perspective. And that's powerful, that's gonna really rip through the industry as marketeers I expect in the coming years as they take a bigger, bigger share of those important roles.
Ben Walker 23:50
That's fascinating isn't it James, to get that access that you're talking about. You've got to do a bit of pushing, there's got to be some push somewhere, pushing the client, the client pushing us or us pushing each other, or in gauging different people to get that access. How do you go bad and as a marketer to make sure that pushing is going so you get more than you're entitled to you get that unfair advantage as you described?
James Ralph 24:13
Yeah, I think you're absolutely right, that and going back to, to Ryan's point, the pushing and getting eyeballs can be really expensive. I might just challenge the idea of of ideas being cheap. Many years ago, I was working for an engineering startup and the chairman of it a very wise man picked me up on this because I was using the I was using the word idea and innovation interchangeably. And what he said to me is, anyone can have an idea, but an innovation an idea that's applied correctly, that takes real skill. And I think that's that's the critical part of it. It's we can flatter ourselves and I think a lot of marketing is potentially flattery because they're ideas that aren't really living. They are ideas that are put in front of people and people don't respond to them they don't love them, they're not things such as, and I have to apologise maybe but but your our wider agency VCCP partnership is responsible for Alexander the meerkat. But look, there is a fantastic example of an idea that lived that challenged the sector financial comparison sites are boring. They brought humour in and they reinvented the marketplace, they reinvigorated the marketplace. And they didn't do it in the way that their competitors were doing, which was a brute force approach to blanket advertising across the press, blanket advertising across TV, what they did is they had an idea that lived and helped them achieve that unfair advantage over everybody else. So ideas, Ryan's right, they are cheap, it's ideas that live innovations that we really need to focus on.
Ben Walker 26:18
He may not be the universally popular Alexander the Meerkat, but no one could deny that he was an innovation that works. I mean, in terms of impact and cut through. He's a legendary piece of marketing, whether or not is someone that we all like. I'm going to risk ire from my guests here, because this is not always a universally popular question. But I'm going to ask you, gentleman, to wield your crystal balls and have a look to the future the year ahead of us 2023. And up to this Christmas, what do you expect to be the big changes the big shifts in the landscape and marketing in the coming year? And I will start with you, Mr. Miles?
Ryan Miles 27:03
Well, thank you very much, I think it's gonna be a really interesting year in terms of where we start, and where we finish. And hopefully, there's a little less, a little, little less, do more with less than a little bit more, do more with more. And that opportunity comes to us. There's some really interesting studies coming out at the moment and predictions right across the marketplace. One that I found particularly interesting recently was was Shopify reporting that 94% of consumers are more likely to purchase a product when viewed in AR. But AR and VR has been hanging over our heads for some time now. And various organisations have tried to push in with with various consumer products, and it hasn't yet hit that real critical mass or that energy, it still feels like it's on the periphery that sits very close to this idea of the metaverse and again, companies starting to push into this starting to define it in various pieces, I think some very exciting collaborations that have gone well for various brands, particularly in luxury retail, where I think they have high cachet and high brand equity to leverage that and potentially sell digital goods. These two things probably live hand in hand, and they will see some maturity this year, whether they take off, I think it's a bit longer, but they're going to come to us in a significant way. And that, again, is really important and powered by the AI discussion. We've we've already touched on where that goes, that has to be the hottest topic right now. And it's just getting started and it's at very low penetration and there's walls coming up every single day, I think particularly for for small businesses for side hustles for entrepreneurs, there's a real accessibility thing coming where they can do a lot more with a lot less, it's gonna be very helpful for that growth in the short term. So interesting to see how that comes to life.
Ben Walker 29:04
It is really interesting, isn't it that you're saying that it actually increases the chance of completion of the sale when people see it in AI in particular, in sectors like furniture, my wife works for a major retail brand not to be named, where they're trying to introduce more AI because so people can see it in their space, see it in their home. And as you save actually increases the chance of them completing the sale. It's not a gimmick, it actually helps people buy things that suit them. Nevertheless, it still has that little way to go you say before it becomes something that is common place that we can expect to get and work properly when we go shopping on the internet.
Ryan Miles 29:42
Yeah, absolutely. I think they're more of the ambitious and really exciting trends are going to shift big shifts. I think there's some things to acknowledge also that are a bit closer to the now and to mature, like come to maturity in 23 one of those, certainly from a marketing perspective is connect to TV, we're seeing so many streaming services now I'm sure we will have many, many subscriptions, half of them we've forgotten about. But ad supported tiers coming to those, we obviously work with Netflix. But it's not the only one, there's a forecast out there that that spend around connected TV could increase from 17.4 billion in 2022 to 27 billion by 2025. That's a big shift. It makes it a huge channel for creating that connectedness that James mentioned earlier. It's also a very rich medium, and it's very leaned in and it's a big screen. This is quite different to a mobile experience or something like in app, which has been kind of, I guess, all the rage or a major channel of dissemination in recent history, it reference bit of a shift there. And I think it's a very Gen Z focus shift as well. This is how they always interacted with TV, there's not the same connection to say, linear or programming and waiting for the 7pm News or your favourite sitcom. But these things are changed, that's significant. And it's hitting critical mass and scale now, much less than in the future. And the only other one I would love to call out here is that consumer behaviour shift we talked about, it's been 22 has been really challenging and interesting as we found our way out of COVID. And that has been difficult in different ways. And so I think we will continue to see businesses, employees and consumers alike, try and find that balance lots of tests about four day weeks, which seem to be proving very well, long may that continue. But hybrid work is certainly going to be here to stay. It feels like an old trend. But I would argue that it's still very much finding its level and people are still figuring out what that means. It does allow us to do many different things in our workday that typically in the office just weren't possible shopping, researching all those exciting things. And it's definitely brought back the PC in a new way. So I think they some longer term building things and some more right here right now hitting maturity trends that that we're looking at closely.
Ben Walker 32:09
Fascinating future gazing. I mean, James that are the practical AI practical AI that helps us buy things and be happy with them connected TV, and continuing change in the working day, the hybrid patterns, the four day weeks, innovations like that. But are still, Ryan Miles are saying, settling down. These are the three big things that we need to keep our eyes on as marketers in the coming year.
James Ralph 32:33
Yeah, absolutely. I think technology is really important. And and marketers have a really good opportunity just just to, to be at the forefront of that. But I think the other thing we all must pay attention to within the marketing community is the impact of the cost of living crisis. And that is really going to continue to bite throughout the year. So we have to show empathy, you know, we have to not only be connected, but we have to be trusted by consumers and be seen to be playing our part in helping them make ends meet. And so that would be my, my key trend for 2023 Is that times will be tight, are we going to respond? Are we going to help our customers?
Ben Walker 33:20
We're going to help a lot in society. We're gonna help with making people's lives better if we do things well and we get these technologies, and we use them to their maximum potential. Gentleman, thank you very much indeed for your time today. Ryan Miles from Microsoft Advertising and James Ralph, from Good Relations. I hope you enjoyed the show. certainly enjoyed having you. And thank you again for your time and your insight of what it looked like in the past and what it looks like in the future.
Ryan Miles 33:48
Thank you Ben, thank you, James. Great to be here.
James Ralph 33:51
Thank you. Thanks both really enjoyed participating in today's discussion. Thank you.
Sophie Peterson 33:58
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