CMO’s Notebook: SXSW Interactive Speakers Talk Marketing ROI, Media Disruption
“Ignore conventional wisdom. It is a trap,” said Bob Pittman, chairman and CEO of iHeartMedia, who participated in a fireside chat—featuring plenty of hot, strategic insights—with Scott Kauffman, chairman and CEO of MDC Partners.
Amid the jam-packed SXSW Interactive schedule of programs, CMO.com was granted front-row access by MDC Partners to an invitation-only event during which luminaries and leaders from the marketing, media, mar-tech and advertising community shared their perspectives on the state of the industry and how all players should collaborate to succeed.
The event highlight was a fireside chat between Scott Kauffman, chairman and CEO of MDC Partners, and Bob Pittman, chairman and CEO of iHeartMedia. Pittman is one of the most accomplished marketing and media innovators of the past 30 years, having been the CEO of MTV Networks (also a co-founder), VH1, AOL Networks, Six Flags Theme Parks, Time Warner Enterprises, AOL Time Warner, and more.
I think all CMO.com readers will find the following transcript valuable, regardless of the vertical you work in.
Pittman: Media channels and content are so diverse now. It is hard to break through. At iHeartMedia, we’ve become marketing partners with brands and agencies versus being media sellers. We ask, “What are you trying to do? What are you trying to accomplish?”
I think the media business is eventually going to move to agencies and brands buying ROI from content providers with all of the data we now have. We’ll go figure out what the return on the media dollars spent are and what the attribution is to achieving goals. I think this is the breakthrough in advertising in terms of how we buy and sell it and how marketers can use it. At some point, agencies and brands are going to come to iHeartMedia and pay us to deliver an ROI. Then it will be our responsibility to deliver that ROI.
Kauffman: You’ve got a deal, Bob! We are looking for similar outcomes for our clients. So many of our agencies today are challenged with bringing a digital footprint to our brand clients and making sense of the ever-changing digital world. We like to say that our agency’s business is to help with job security of the CMO—the most endangered member of the executive suite—who has to make those hard decisions about where to spend their company’s money. So if we can get smarter about how buys get made and how we get the ROI our clients are looking for, then we will have win-win-win situations, and we’d have a symbiotic relationship between brand, agency, and media partner.
Bob, you’ve been called a visionary. Take this audience through the next two to three years and what things are going to look like for media, broadly defined.
So what I do is watch and study my consumers. I’ve been logical. I ask, “What should we make for them?” Someone told me early in my career that “marketing is the mix of math and magic.” I think this is true. The math is: What is the consumer doing? Once you know this, you can’t be boring. You have to create something that gets their attention; that is the magic.
So in the next couple of years, while we have disruptive trends going on, anything new could pop up at any time. I think the key to all of this disruption is to watch the consumer, and if you really watch them closely and are committed to responding quickly, you’ll get some great opportunities that are unforeseen.
I also always look for the edge. I don’t want to be where everybody else is. I’m looking for someplace that is undiscovered. I want my brand someplace where my competitor is not.
Kauffman: It is not lost on anyone who has walked the SXSW Interactive halls that the youth shall inherit our industry. Any advice for those starting their careers today or launching new businesses or brands?
Pittman: Yes. First, I think you should ignore conventional wisdom. It is a trap. It will keep you from succeeding. You’d be playing by rules that are built by the incumbents to protect the status quo. Absolutely pay no attention to their rules. And, if anything, flaunt it.
Second is don’t be afraid to make mistakes. Make them often. Mistakes are the by-products of innovation. Steve Ross, former CEO at Time Warner, used to say, “You’ll never be fired for making a mistake. At our company, you’ll be fired for not making a mistake because not making any mistakes tells me that you are not innovating.”
Third is to welcome and look for dissent in an organization. Dissenters write the road map for the future. This is hugely important. It’s something that, if you are not careful, you can crush an organization. I think if you want to be flexible, nimble, you’ve got to love your dissenters.
Fourth, accept and embrace chaos. When you do something new, it has no structure around it. It is going to be chaotic. Don’t try to stamp out chaos. Let it live because you are letting new ideas live and move ahead. You also need a bias for quick decision-making. There is no such thing as “I’ve got to get all of the information.” No one will ever have all of the information. You should make the decision based on having just enough information.
The Conversation Continues
Back stage after the event, Kauffman shared some additional thoughts with me. Among them:
• “I don’t even know what the word ‘advertising’ means anymore”—it could be advertising, promotion, branding, social, digital, event, experiential, video, public relations, crisis management, etc. But the word ‘agency’ never changes in meaning because we are agents for our clients.”
• “Great marketers are all about finding out what resonates with the end user, being a student of the consumer.”
• “It is so easy to get left behind. You should tell your kids that they will not be fully educated unless they understand the concepts of coding and know how to code. You’ve got to stay open-minded and experiment at every turn. Get immersed in the latest tech, software, and apps, even if you don’t initially understand the value and utility.”
• “In an increasingly digital age, if you are not constantly delivering utility, I can assure you that there are 2,000 companies planning to take your customer away from you. You have to love your customer every second of every day. It’s a dialogue, not a broadcast. It is understanding what motivates and moves your customer every day.”
I also spoke to Michael Bassik, MDC Partners’ president of global digital operations, who orchestrated the event. (You might remember my interview with Bassik last May about the rate of technology change in marketing, and how to smartly select and integrate what is right for your business model.) Back stage, Bassik highlighted his biggest takeaways from the fireside chat.
• Media realignment: “We heard about the billions of people who are using messaging apps. We heard from the first discussion about radio being the largest reach medium, more so than TV. We heard about the continued decline of TV. We heard about the rise of social. And we heard about ad blockers and the pressure that is putting on publishers. So we are seeing a realignment of all media channels like we have never seen before. It will take a really intelligent collaboration across agencies, brands, and media providers to figure out how to best connect audience and consumers to a brand’s message. All the rules that existed one or two years ago, let alone a decade ago, no longer apply.”
• Agency opportunity: “We heard from our brand, agency, and publisher panelists that every day of the week, they are getting a new email from a new startup or a new tech vendor. If you work in an agency, brand, or publisher, you are being bombarded by opportunities to learn about a new platform. Trying to figure out which platforms will really matter through all of this noise is really complicated. An important role agencies can play today and tomorrow for their brand clients is to filter out which platforms really matter.”
• Brand impression: “I think there are going to be two complementary factors that play into the mind of a marketer over the next few years. Part A is the brand gestalt—the overall impression that one has of a brand. It is no longer possible to expect that someone is going to watch a 30-second TV spot or pay 100% attention to a print ad or a banner ad. It is going to become all about the overall brand impression, and it is going to be very confusing to figure out how to build that brand impression given all of the disruption in media. But this is going to become very important.
“Part B is still going to be about direct response. Did this move the needle? Did it improve my brand reputation? Did it result in sales? Luckily, we now have the tools to measure the metrics to determine [this] at the same time that we are trying to reinvent what a brand might stand for given all of the media disruption. So there’s good with all of the disruption.”
For more about SXSWi, check out the @SxSW Twitter feed, where most of the online conversation is taking place.
Read related article, CMO’s Notebook: SXSW Interactive Uncovers What’s Now And Next
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