During this period of uncertainty, Simulmedia is talking to clients, partners and prospects on Simulmedia Live about the importance of principled media investment. Being grounded in timeless marketing and media principles help us navigate turbulent conditions without becoming too reactive.
ANA Chief Executive Officer, Bob Liodice, and Simulmedia CEO, Dave Morgan, joined our livestream remotely to identify and share principles that will empower and reassure marketers. They suggest ways to use this time to rethink how to do business and reconnect with customers through creative and empathetic ways. Plus, they outline why marketers should prioritize increasing their share of voice and brand equity for the short term and long run.
Hey everybody and welcome to Simulmedia Live. My name is Matt Collins and I’m the senior vice president of marketing at Simulmedia. I want to thank you so much for joining today. I know it’s a busy time. I know it’s a turbulent time and it really means a lot that you’re taking some time out to join us on a Friday for what I can promise you is going to be a great conversation.
As challenging as times are today, this is not the first time nor it will be the last that we face heavy headwinds and just even in my lifetime, I reflect on the things that I can recall as a professional. Going back to the Gulf War of the 90s the attacks of 9/11, the great recession of the late aughts.
And in each of those instances I can recall thinking to myself, “I’ve never seen anything like this before.” This is unprecedented in my lifetime. In other words, echoes of the things that we hear in today’s very difficult moment. And what I have found to be a comfort and what I’ve learned in my career is that actually there are ways through this.
There are principles and campuses, if you will, that we can get our hands on, that we can build and we can form in our careers, in our lives that help us navigate the hardest of times. And people tuning into Simulmedia Live over the next several weeks are going to be treated to people who have this type of experience, this type of point of view, and that begins today.
I’m so pleased today to be joined by the president and CEO of the Association of National Advertisers, Bob Liodice and the founder and CEO of Simulmedia, Dave Morgan, both of whom have obviously great career success, but also the benefit of perspective and of having seen through crises like these before.
And they’re going to talk about how to help marketers get through this today because we will get through it and get to the other side. So gentlemen, thanks so much for joining us on Simulmedia Live.
Delighted to be here. Thank you.
Excited to be here.
Bob, I’m going to start with you. For perhaps a generation, maybe two of today’s marketers this moment in time of battling COVID-19 and economic fallout that it is wrought is the first time they’ve ever been through something quite so severe, so shocking.
I’m curious, what advice are you giving to marketers who are encountering this generally but also especially those who might be going through something like this for the very first time?
Right. Yeah, it’s a great question Matt, and I think we need to start with a basic understanding that yes, it is a brand new time and I think everybody needs to step back and pause and reflect on the current situation, take a deep breath and then decide how to be able to move forward. Moving forward really needs to come with a respect for the core fundamentals of where you are and what you have the capabilities to do.
It’s a time to step back and transform your brand messaging for the short term. I was on a call with a COO the other day who had a great way to position it. He said, “This is a time, not necessarily for storytelling, but for story doing.”
Because this is an opportunity to increase the usefulness and purpose of your brand and to be able to talk to your consumers in a very different way, which is consistent with what is so necessary today. Which is let us all gather together, help each other to be able to move beyond this crisis and to have a softer landing as we possibly can.
And what this means is that we have to coalesce as not only as a country, but almost impossible before we ever to think about this, to even come together as competitors and to ensure that we are flexible in our approach, that we have consumers in mind, that we have messaging that makes sense. And that we in fact convertible brands and businesses can do something, which is truly helpful.
It’s just an amazing set of stories that are out there such as GM, Ford and Tesla converting their auto factories to produce ventilators like Anheuser-Busch taking an non-alcoholic plant and to convert it into a hand sanitizer area and the same kind of thing goes for LVMH, which is now moving their manufacturing facilities to produce masks for the medical community.
It’s just been an incredible transformation and they are not worried about storytelling for their own businesses, but they’re in there to talk about story doing and doing something very productive for society, while improving their overall image.
Thanks Bob. Dave, Bob’s obviously talking about a sort of coming together as one big team and really focusing on how we can harness our energies in creative ways. What advice are you giving marketers and brands that you’re talking to?
I think I love the story doing, not just story telling that Bob was just talking about. The things that we’ve been trying to emphasize a lot of our conversations are that it’s critical not to be too myopic just on surviving this moment, but really to have and to live a longer term vision. I think that we need short-term plans. We need to understand how to best move companies through these difficult times, how to move employees through these difficult times, how everybody is going to get through this.
But having a vision five and 10 years from now, having a vision even a year from now, two years from now for how the economy comes out of this, how the health and safety of everybody comes out of this. We’re clearly have, we’re learning so much now. And it would be unfortunate if we don’t really take that in, learn to change new behaviors and then actually project leadership into the marketplace.
And I think like the examples that Bob talks about with some of these extraordinary American based marketers, they’re showing the adaptability of their systems and their manufacturing capacity and their logistics and their financing and their employee base to convert very quickly to solve problems for the greater good, not just for the quarterly profit. And I think that’s critical.
Matt, if I could just jump in with an additional thought or two on that. It’s very important to build on Dave’s point about demonstrating leadership. Another COO said to me, “This is a time to get your CEO out there and to demonstrate that leadership in the marketplace.”
So that the brand is in fact conveying that notion that this is not a time for profiteering, but a time for us to be able to come together. And the specific CEO can certainly bring to the forefront what their particular business stands for.
And it’s a great opportunity to be able to connect with consumers in a non-commercial way, in an empathetic way that demonstrates care and concern, not only for all those out there that are suffering, but for all those that are out there that are very, very uncertain. To me, what is paralyzing is the level of uncertainty that we’re all going through.
We don’t know what to do. We don’t know where to go. We’re afraid to even go out to the grocery store because we’re afraid of contracting the virus. And we need to demonstrate a level of empathy that heretofore has not existed. And in that way, we have to be able to reach out and demonstrate how we show that level of empathy.
One case history I heard was that they were mobilizing their employees to be able to do some of those communications and outreach to individuals and to try to bring a level of calm and serenity. While we are battling this craziness in the marketplace.
So there are things that we as brands and as leaders can do to convey a notion of we need to be patient. We need to be calm. We are doing something that we’ve never done before.
This whole concept of social distancing has been embraced by everybody as a means that collaboratively we can come together, work together and our brands can in fact lead the way to be able to do that.
Yeah. So I’m going to piggy back on what you just said there, Bob, about leadership. The one thing that has become very obvious I think in the last 15 maybe 20 years in the corporate structures in the US is the core constituents for most CEOs of US-based companies and global companies today are their capacity to serve really just two constituents, investors and their board.
And a lot of the people that have ascended have become expert at that and they’re extraordinary at that. And they know how to manage stock buybacks, how to calm Wall Street down. They know how to collect the right kind of board that can support those kinds of initiatives. And what Bob’s talking about is the CEO becoming a leader for the brand and a leader for the company to a more important constituency.
Users, consumers broadly of the goods, but then everybody because everybody that can be impacted and touched by those goods and those employees. And those people will think, act and talk much more like marketers. You mentioned, empathy Bob, like their capacity to listen, understand project division. I wonder if we’ll see that.
I’ve been taken by seeing brands like Zoom in video conferencing or FedEx in logistics and delivery that had been business to business brands, are they now on the cusp of becoming maybe some of our most important consumer brands for the next 10 years?
Yep. So we’re feeding off of each other, Dave. So let me pivot off of that. And it’s terrific that you said what you said because what we’re starting to see among brands, and I’m seeing it in my own tiny trade association.
Is that the level of creativity that is happening in this period is extraordinary. We’re rethinking the way we do business as companies and we will likely continue to rethink the way we do business as brands.
One idea that I stumbled across in some of my conversations was that Anheuser-Busch has created an internal creativity fund to focus in on content, on brand activation, and the ability to connect it with their respective consumers in very new unusual kinds of ways that just emanate from what has been latent in so many marketers for such a long period of time.
For too long, we as business people in this industry, we’re often constrained by budgets were often constrained by protocols and what this is allowing us to do is to kind of break down those walls and allow ourselves the opportunity to be able to inject creativity in almost experimental kinds of ways.
But candidly, there’s very little downside in being able to unleash your business in this time when your traditional brand messaging has in fact been by the coronavirus right now. So use this time very, very productively in that way. Unleash your organization in a traditional ways because you may not have that opportunity to do so again when things start to settle down.
Sorry Dave, go finish your thought and then I’ll transition to our next topic, which Bob is teeing up perfectly.
Yeah, I want to follow that a little bit just because I was reminded of a story of, I heard a talk given by one of the Jacuzzi family members the brand of we know of like saunas and hot tubs. And I don’t know if you know the origin story of the company. I assumed it was some Italian interesting, Italian spa that created it.
And it turns out, they were immigrants to the United States. They actually made, they had a crop dusting company and one of the family members was badly injured in burned in a crashing crop dusting plane and in trying to rehabilitate it’s very difficult when you have burns to be able to slough the skin off.
They realize that the same kinds of mechanics and plumbing they using crop dusting planes could be used to use water to inject against the skin to have a much better therapeutic treatment for burn victims and thus they created, they shifted from the Jacuzzi crop dusting company to the Jacuzzi bath and sauna company entirely responding to, in that case it was a personal crisis to reimagine what their business could look like. And ultimately build an extraordinary brand around that. It’s just become generic like Band-Aids.
There are so many moments like this that I think are going to arise from the crisis and that they are going to be forced by creativity coming to bear to help solve a problem. Bob, I wanted to ask you about what marketers should be doing right now and it occurs to me listening to you, you’re calling to mind something I know my grandmother believed very strongly.
If that woman ever had a motto, it would have been useful. And it seems like right now the call to brands is be useful, right?
Yes. It’s the right way to say it and I’m glad you actually positioned it like that. We had been talking about it as purposeful marketing, but most distinctly in today’s day that we’re all navigating it is about being useful. And one of the things, one of the challenges that brands have had as technology’s advanced and as we’ve been leveraging technology to be able to communicate with consumers and customers.
The concept of brand loyalty has changed for the better, I think. And that it’s just not about product attributes, but it’s the authenticity of what a brand is all about. It’s can you be as Mark Pritchard of P&G often says, “Can you be a force for good while being a force for growth?” And I think that the connection of those two concepts is exactly what brands should become about.
And some of the things that, the examples which I mentioned before, are representative of what that level of authenticity can be. It is not just about trying to figure out different ways to artificially build that brand loyalty, but to do so in a very sincere and authentic kind of way.
And in that way, I think you can demonstrate that you can create a more vibrant connection to the consumer and customer universe because you can be a force for good and a force for growth. And that becomes part of your permanent DNA, that you will never be able to separate from unless you’re going through some revolutionary transformation of your brand, that needs to stay in place and that needs to become believable.
And importantly, that becomes, in my mind, a very, very key differentiator. We always talk about unique selling proposition. Well, that level of authenticity, even though I hate to connect it directly to sales, is something that I think will allow you to be able to connect with consumers through any medium because that authenticity will transcend whatever medium you’re on.
So Bob, I’m following that. It seems to me that one of the things that I’ve heard you talk about for years has been the need for your members to get the guts and the courage to push forward and to lead and to change. And you’ve been talking about this for some time when marketing growth in consumer growth has lagged a lot of other areas.
I mean, I’m struck by the fact that this, the message you’ve been driving now I’ve certainly heard for most of the better part of the last decade or more has never been more important than it is today.
And do you also see what’s happening now as not only it’s now moving from a nice to have or a want to have or a need to have it’s becoming an existential requirement for survival in the future is for that kind of courage that you’ve talking about and that kind of guts on the part of the market or like this is their time. It’s like step up or step out of the way.
Yeah, Dave, you’re right. And what we kind of had is a revelation a number of years ago, is that many marketers we’re losing sight of the fundamentals of business building. And we started to recognize that there became an affinity for trying to be the next greatest thing and follow the shiny object and become a part and a component of all the new media that was taking place out there. And we lost sight of those fundamentals.
And as we started to reflect that there is one common theme that transcends all businesses and brands, and that’s growth. We all need to grow. We all need to place the emphasis and finding those ways that we can in fact be able to build our businesses and build our brands. And to kind of put it in company terms is that when you are successful at that, you actually appeal to the CEO, the CFO and shareholders.
And while right now stock price isn’t necessarily the most important thing to be concerned about. They are a part of the long–term DNA that a company needs to embrace. And in order to do that, we have to have courage and bravery to be able to transcend the commonplace business practices that we have.
We have to break out of this pension to be satisfied with zero to 2% growth and defined ways to be transformative, but to do so in such a realistic way. And this goes through the entire business enterprise that we have to be thinking about this.
Growth just doesn’t happen because you have a great creative new idea. Growth comes in the form of becoming more proficient in data, analytics and technology to become better measures, to have a social standing for gender equality and diversity and inclusion.
To be purposeful, as we talked about before, to recognize that we have to have a focus on marketing innovation and creativity while recognizing something which is so critical that we’ve spent so little time on and that is advancing talent.
This is a great opportunity right now in this window to push your talent to learn. One of my board members said, “Learn like crazy. Take this time to go online, take courses.” The ANA has a whole suite of free training that’s available to our members, but we’ll find a way to get more and more people and companies that are involved.
So we have to be thinking broadly and comprehensively and we’re not necessarily used to doing that and in and of itself to be able to take that expanded vision requires a substantial level of courage, an incredible level of bravery to break out of the traditional slow growth ways that have handicapped us for way too long.
Bob, there’s a moment right now I think that it is really important for companies to nail and it’s lurking in the form of what many organizations right now are dealing with in the way of a threat, which is the desire, understandably to preserve capital on the balance sheet.
And so, it’s not uncommon right now, I’m sure in companies all over America for CFOs to be prowling the virtual halls of work from home, looking for their CMOs and looking for a budget that they can claw back.
We know from history that companies that make the wrong turn in a downturn and go too far in the direction of protecting their budgets can really impair their ability to find that path to growth that you speak of. So practically speaking, what, what advice can you give a CMO to say to her CFO when the CFO comes calling for a 20, 20%, 25% reduction in media or marketing?
Yeah. Yeah. It’s always the toughest argument. I know we don’t always win that argument, but just some basics that I think became very much in focus, particularly during the ‘08-‘09 recession period. It’s a great opportunity to gain share of market. Share is so difficult to gain no matter what industry that you’re in.
But when you can spend, when others can’t, you can win share of market and make that almost a permanent new level. And so, if you take the time to invest, think about the share of market gains that will stick to your ribs for a longer period of time, number one.
Number two, and this is something that isn’t very clear because it’s a blemish on our industry and that is, is that we don’t spend enough time talking about brand equity. We know empirically that when you build the value of your brand, you build the long-term value and a great level of sustainability that will add to your financial wealth, will add to your shareholder wealth, will have tremendous implications for the long-term.
And when you can build that into your level of compensation, remuneration, no matter what it is, that you will have a sustainable long-term asset that you’ve never considered before. Now the reason why many marketers have not necessarily embraced this is because it’s not always an easy thing to measure.
There are a lot of different models out there that that people should consider, but we do know that the stronger your brand is, the stronger results that you will have over the long-term.
And if you can convince the CFO and the CEO in particular that the investments in your brand are fundamental for building that both the short-term and long-term equity in your brand, it will pay huge dividends short and long-term. So those are two of the areas that I would suggest that markets consider.
Yeah, I want to follow that, Bob, because I think you’re hitting such an important point about the fact that what brands say today is really going to have an enormous impact on how they come out of it, we all come out of this in the consumer perceptions.
I’m reminded of that Henry Ford quote that “Shutting off your advertising to save money is like shutting off your watch to save time.” This is what defines them and if you build on your point you made earlier, that this is the time for story doing not just story telling.
What the brands need to be doing is story doing and then doing storytelling about what they’re doing, because that’s going to define what they become. And I do think probably one of the real challenges and opportunities for all of us is to help redefine the concept of brand equity in ways that it can be more tangible.
And I know the ANA is supporting initiatives in this area, so that we can make brand equity really tangible. Because my hope is that we come out of this with a recognition that just buying back stock is not the best way to build companies and build value. And building a brand, building a consumer base, growing share is the most important way that can be done.
Couldn’t agree more.
It’s a perfect segue to our final question before we wrap up and Bob Liodice, I’ll start with you. We are going to get through this. We’re going to come out the other side. There will be life through this turbulence.
What should marketers and brands do today to prepare for coming out into the end of this and the beginning of something new?
Right. I think that it goes back to a little bit about what I said before and that is don’t panic. Certainly be patient and don’t run away from the fundamentals that have made your brand successful. Anticipate when this crisis will end. I don’t know whether it’s going to be three months, six months, but it won’t be very, very long.
It’s a narrow window of time and when that crisis has passed or has certainly diminished, you need to be able to return to the fundamentals that made your brand successful in the first place, number one.
And number two, to be able to take the lessons that you’re learning right now and to be able to infuse them selectively within your investment spending as you move forward. I think you’ll have the best opportunity to be able to move forward, retaining the integrity of what your business is about and ensuring the longevity that you can resume normal business operations when fears are calmed and when consumers and customers can get back to some degree of normalcy.
We are in an unusual time and let’s carve out this window to do what is absolutely necessary to help people and to be able to help our employees that we shouldn’t lose sight of that. And that is something which I think is absolutely fundamental.
Take care of your employees. They have made your companies what they are today. While we know that we may not be able to service them in exactly the same way because cashflows are drying up and financials are certainly becoming hurt.
But let’s do all we can to ensure that our greatest asset, which is our people is properly taken care of and positioned appropriately to restore normal operations when Tom gets back to normal.
Dave, any thoughts for you from you about how brands should be preparing for life on the other side?
Yeah, I think that the point that Bob ended on there is the most critical. It’s really understanding how your employee base is going to transition through this. I think that if marketers are focused on how re-imagining and re-envision to those core principles of their brand and what this is going to look like next year in the next year as we’ve transitioned out in our building the next X new normal, it’s how how will your employee base transition through that and how are they going to be impacted by things?
We’re certainly going to see a lot of really, really significant structural changes. We’re probably going to see people much more centered on home. We’re going to see less air travel. We’re going to see probably less hoteling, and that’s going to change things.
We’re going to see more people at home eating at home, time with families, there’s going to be some real shifts. And understanding how people will be transitioning and how that’s going to be important. It’s interesting, I just had an exchange yesterday with a friend of mine who’s marketing for milk and that milk consumption in the United States is up 40%.
People are home. They’re drinking it, not just in their meals, in between. We’re going to see all sorts of things change. And so, what’s the new you’ve got milk? What’s the new delivery service? How does food come into here? What’s the new way we entertain?
There’s so much that’s going to change that requires our best creative thinking and that’s not just going to come from leadership with the CEO, that’s going to come with empowering people for that to come in the ground up.
And the last piece I’d love to hit is, Bob, your point about the opportunity for talent to emerge I think is the most important thing. Whenever we have seen crises before, whenever we have seen times, we have seen some people step up. And this is the time to leap frog structural and organizations that have that would otherwise have a slow ascension and I think that we are going to see some extraordinary talent emerge.
We’ll see extraordinary brands, but extraordinary talent within our companies if we permit them. And my hope is that one of the areas that we’ll probably see really big change is in more inclusion in gender and in diversity. Because this is going to be what you do, not what you look like and how you have otherwise been able to fit into the old norm.
Well said gentlemen, I really, really appreciate you both taking time out on a Friday under again, some very unusual times to share your experiences with the marketplace and with brands and agencies, and all sorts of different folks who are trying to find their own compass to navigate their way through this.
And I don’t want to again, remind everybody watching this is going to be the first of several conversations with people you’re going to want to hear from, who have a strong point of view about how to do just that. So Bob Liodice, president and CEO of the ANA and Dave Morgan, founder and CEO of Simulmedia. Thanks so much for joining.
We will be back with Simulmedia Live on Tuesday of next week with Gordon Borrell of Borrell Associates, who’s going to be giving advice about how local advertisers and local brands should be navigating the current situation.
So join us then until then, have a relaxing weekend and we’ll see you next time on Simulmedia Live. Take care, everybody. Bye-bye.