Latest / Brands, Beats & Bytes / Album 8 Track 16: Lead with Guts, Accelerate Growth w/Bob Kraut

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Album 8 Track 16: Lead with Guts, Accelerate Growth w/Bob Kraut · Brands, Beats & Bytes

• DC: Brand Nerds, Brand Nerds, Brand Nerds. Oh, we are rolling into summer, and Larry, you know that the producers do not like me to timestamp any podcast because we want them to be evergreen. So what am I about to do, Larry? LT: Of course you're gonna tell the Brand Nerds what time of year it is. DC: Exactly, that's what I'm gonna do. Last night, Brand Nerds, the New York Knickerbockers, who are in the Eastern Conference Finals of the NBA, playing against the Cleveland Cavaliers. Cleveland, by the way, beat my Detroit P'stones. I won't go into that. But- LT: Please don't for your sake. DC: Don't do that ... I'm not, I'm not, I'm not. The Knickerbockers had a historic 22-point comeback in the fourth quarter. And I mention the Knickerbockers because a friend of our show, another sports analog, like they have, uh, Fill-in Frank on P-E-T. Fill-in Frank on- LT: P-T-I. DC: Yeah, yeah, P-T-I. P- shout, shout P-T-I. On our show we have Tim Spangler, who we affectionately call Takeaway Tim. Takeaway Tim. And good people know good people. Yes. And Brand Nerds, our next guest is someone who comes directly from that lineage, and every single guest that Tim, Takeaway Tim, has recommended to us, we have had on the show and they've done great. In fact, at this point, we don't even ask. Like, Tim, Tim will say, "D- are you guys okay? Do you think?" We're like, "Tim, if you say the person's name- Right ... they're gonna be on the show." So this next person is going to be a Takeaway Tim special. But there's more stuff going on that's relevant to you Brand Nerds than sports analogs and Takeaway Tim, and it's this. Um, Millennials, Gen Zs, you all change jobs more than any other generation before you. And that's fine What I want you to take away from the guest today is this is a person that has been on the agency side, on the client side, and has done that more than once, made these different moves, agency, client. This person has done different industries, classic classical marketing. He's done QSRs. He's done automotive stuff. So he has not only different lenses on business in terms of agency lens and then client lens, but he also has a strata of different industries to pull from. So listen very closely to what he says because, Larry, what I believe is gonna happen in this show is the Brand Nerds are gonna learn things that they can apply anywhere Anywhere. And then in one of the areas, and then I'll, I'll flip it over to you to do the formal introduction, LT, is because I'm from Detroit, y'all know I love me some cars. I love some automotive, and this next guest also has deep experience in automotive. Larry, can you let the peoples know who we have in the building with us today? LT: Oh, DC, great setup. We have Bob Kraut in the house today. Welcome, Bob. Bob Kraut: Hi, Brand Nerds. LT: Yeah, that's, uh, we're, we're so excited to have you, and, uh, as DC alluded to, you know, Tim has provided us great guests, and each one seems like, uh, they get even better. So no pressure, Bob, but seriously, we're really thrilled to have you- in, in, in the, uh, building today. So okay, Brand Nerds, for you avid consumers of Brand Speeds and Bytes, you know we love the inspiration for why one chooses a marketing career. Bob has a really good one. The early inspiration for his interest in marketing and advertising was a fourth-grade school trip to New York City. The class visited a Broadway orchestra that played advertising jingles of the day and was led by a cool agency executive. He was hooked from that day on, eventually becoming a super successful CMO. Let's walk you through Bob's path to becoming a CMO. For college- DC: But, uh, I'm sorry, Larry, can I just, just ask a quick question here? LT: Yeah, sure. DC: Uh, that, so he goes to New York, Bob goes to New York, it's Broadway, he sees a super cool ad executive, so now he's inspired to get in, and he's in the fourth grade. Do you think he had three martinis at lunch when he was- Do you think, do you think he did that? LT: Hey, it was the Mad Men days probably, right, when he was young, Bob? Bob Kraut: Yeah, right. LT: I don't know. It might, might've been the ether in the air, DC. I don't know. DC: Might have been. All right. LT: So okay. So for college, Bob gets into and graduates from a great five-year program at SUNY Buffalo, where he earns his undergrad degree and an MBA in marketing. He begins his career at stellar agency, Foote, Cone & Belding, in their Chicago hub, starting as a project director, and spends 11 successful years at the agency with primary focus on the Pizza Hut account, and his last position there is VP account director. He then grabs a great opportunity, joining TAVIN Euro RSCG as partner and management supervisor, mostly working on the P&G account This agency work is truly foundational for Bob in building his career, and that's what DC was alluding to in his setup. Okay, brand nerds. We talk about major pivots in one's career. Here is Bob's. He is offered a huge opportunity to come over to the client side where he joins General Motors as director of advertising and sales promotion for Pontiac and GMC. In this position, Bob is responsible for $440 million Pontiac GMC brand marketing budget. Highlights include executing the highly visible You Get a Car! You Get a Car! Oprah Winfrey free giveaway of the Pontiac G6. He also leads the development and execution for GMC's long-running professional grade positioning, driving 10 years of sales growth. Yes, you heard me, 10 years. He also wins Alpha Awards in two consecutive years and the Chairman's Award. After this success, while still at GM, he then becomes the brand manager for Pontiac, where he oversees a $3 billion business for the Pontiac brand and Allstar brands, leading all Pontiac marketing strategy and planning, product development, and managing the entire Pontiac racing program in NASCAR, NHRA, and more. The company also sends Bob to Harvard, where he earns a graduate degree in advanced management. All right, with all of this success continued at, at GM, Bob then earns a huge promotion becoming the director of GM brand and advertising operations, managing six hundred million dollars in agency compensation for GM's twenty-two agencies at the time, and he chairs a successful transition to a new agency compensation system. In this position, highlights include, one, improving company's image asset system. Two, redeploying technologies to create more effective advertising more efficiently. Three, developing and implementing head and heart strategy to reverse negative perceptions of company via highly effective then and now campaign. And four, according to third-party CNW research, he, he and the team boost likability, attitude shift, and improved consideration among younger as well as older buyers. All right, so after all this success at GM, Bob then gets tapped on the shoulder to come back to something very familiar, albeit this time in a much different role. He joins Pizza Hut corporate as their VP of marketing communications, the same business he worked on back in his foot cone days. All right, in this role for the next three years, he manages a two hundred million dollar marketing budget. Highlights include, number one, successfully developing and implementing America's favorite pizza positioning and subsequent campaign resulting, resulting in positive same-store sales growth. That's the key metric in anything QSR, Brand Nerds. Reversing a six-year downward trend along with seven percent sales growth. Number two, leading company rebranding strategy, moving from pizza company to whole meal replacement company, including addition of pasta and wings and enhancement of core pizza quality. Number three, launching award-winning PizzaHut.com ordering website, tripling revenue in just eighteen months. And number four, creating the first ever iPhone pizza ordering application featured in Apple's TV ads. All right, as Bob continues to string more and more successes, others take notice, and he is now recruited to join Arby's as their SVP of brand marketing and advertising. Before Jo-- Bob joins Arby's, they had four straight years of declines. Indeed, no surprise, as Bob seems to do at every stop, he and his team turn the ship around and produce ten straight quarters of same-store sales growth through many new strategies and tactics such as Number one, successfully introducing We Have the Meats campaign, which I believe they're still running, which is awesome. Yes, DC: they are. LT: Right? Number two, price value repositioning of core menu, including $1 value member, uh, v- value menu. And number three, revamping entire menu pipeline and testing process. Now Papa John's comes calling, and Bob joins them as their CMO, where he is responsible for marketing and business development of the Papa John's brand in 38 countries with more than 4,700 locations. Guess what, D? No surprise. Bob and his team really make things happen, doubling sales growth, including 23 straight months of sales growth. Highlights include, number one, signing Papa John's NFL sponsorship with a campaign starring Super Bowl winning QB Peyton Manning. Number two, spearheading brand renaissance, elevating the quality of the advertising execute, execution. And number three, reforming the new product development and calendar planning process, integrating analytics and leading to winning product intros such as Philly cheesesteak pizza, garlic knots, and double chocolate br- chocolate brownies. He then joins fast casual seafood chain Captain D's as EVP CMO. Of course, with Bob in place, he reorganizes his team, introduces improved new product development process, and leads a rapid br- brand transformation resulting in sales rebound, improved marketing effectiveness and capability, catapulting Captain D's into becoming the nation's number one fast casual seafood restaurant. Currently, Bob serves on several boards, including Evergreen Trading, EDO, YEXT, Tips Treats Co- Co- Cookie Delivery chain. He is a featured instructor at SMU Cox School Bus- Business Leadership Center. He serves as co-chair of United Way of Metropolitan Dallas' Social Innovation Accelerator, and he also proudly serves as president of the Harvard Business School Club of Dallas. Welcome to Brands, Beats & Bites, Bob Krep. Bob Kraut: Well, thank you for that introduction. Now I'm impressed with me. You should DC: be. Well, you should be. You should be, Bob. Um, I, uh, just Brand Nerds notice the career fluidity, like going client, agency side, uh, working with classical CPGs like Procter & Gamble, QSR, automotive. The consistent thing, Bob, which Larry has, uh, gone over in his eloquent introduction of you, is growth. LT: Yep. DC: That's the consistent thing. It's growth. So Brand Nerds, when you're growing, you, you have lots of opportunities and many people come, they come knocking to find out how, um, you can grow. Now, we are moving to Get Comfy. Normally, Bob, I have one. In this case, I have two. Mm-hmm. One I'm just going to lament, and I don't need you to get into it unless you want to, and then I'm gonna get to the actual, uh, Get Comfy question. The, but allow me to lament as a Detroiter. Uh, Brand Nerds, when I was a youngster Um, I was really into cars. I still am into cars. And only occasionally would a few cars rise above all in the pantheon of cars that I happened to really like. And typically, the cars that rose above had some story connected- Mm-hmm ... to them. And one of those such cars was a Pontiac Trans Am. LT: Yeah. DC: Oh, I loved this car. I just, I just loved this car. And there were two reasons why I loved this car. First, Smokey and the Bandit. Smokey and the Bandit. LT: Yep. DC: I j- I just... I mean, that car was so cool. And then, uh, for those who may or may not know, 'cause it was not necessarily branded as such, and it was a different model, Smokey and the Bandit had the four lights. You know this, Bob. Then there was Knight Rider. Okay? Then, then there was Knight Rider. So th- th- like, th- those shows and that car, I was just madly in love with the Pontiac Trans Am. And then, I don't know, some- LT: As many other folks were, too. DC: Right ... as many other folks were, yeah. Yeah. Some number of years ago, I'm reading some GM, 'cause it's owned by GM, some GM announcement that they're... And, and I wanna get the King's English right here, Bob. This is the King's English- Yeah ... the Queen's English, so that everybody understands exactly what I interpreted from this GM announcement. And what it said was- Yeah ... "Ain't gonna be no more Pontiac." Yeah. Okay, all right. Okay, all right, all right. Th- I, I was so upset. LT: Yeah. DC: I was... Bob, Larry, I was, I was like, how can the brand associated with the Pontiac Trans Am- ever go away, even if they only make- Right ... even if they only make that one car, how could it go away? So I have a problem as a Detroiter with the Pontiac brand going away, and to my knowledge, having not returned, I just wanted to be on my soapbox. Bob, do you have anything to say about this before I get to my real, uh, uh, Get Comfy question? Bob Kraut: Well, I was really disheartened that, uh, the brand- Yeah ... was discontinued a- along with Oldsmobile and Saturn. GM was in a bankruptcy situation, so they need to make choices, and they, Chevrolet is the big brand, as to Ford and Toyota. Yeah. Cadillac's the luxury brand, and they, uh, uh, uh, kept a, a truck brand, GMC, which I, I, uh, worked on and actually launched the Denali on. And then they kept Buick because they were selling a lot of those in China. Okay. And the Chinese, that's a magical brand because the last emperor owned a 1911 Buick, so they kept that brand. LT: Interesting. Bob Kraut: So they had their LT: priorities. And I always wondered why. Thank you for ex- I always wondered why, 'cause to me, to DC's point, I always thought Pontiac was a better brand than Buick because- Yeah ... Buick is, is a caught-out-there brand. Bob Kraut: It's like a sort of- Yeah, Buick is a near-luxury brand, and- Yeah Pontiac was the sporty, exciting brand. LT: Yeah. Bob Kraut: Yeah. I got a story on Knight Rider for you, DC. So you, do you know how, uh, Pontiac Trans Am, uh, happened to, uh, be in that, that series? LT: No. Mm-mm. Bob Kraut: Well, we had a, a car carrier, and nine Trans Ams fell off of it. LT: Oh. Bob Kraut: And they were doing this, uh, television series, and we told them we, 'cause you can't sell them, you can't fix them, and we gave them the cars, and that's how we got into it. LT: Wow. DC: Are you serious? Bob Kraut: Yeah. DC: Wow. I had no idea. That's a great LT: story. Bob Kraut: Yeah, that is awesome. And by the way, that's how we penetrated Hollywood in a lot of movies. I, I worked on Transformers. We supply cars to the movie studios, and we let them do what they want with it, and- Wow ... uh, they, you know, now I think the brands have to pay fees, but we were just a re- reliable partner with, to them by supplying cars. DC: That's, uh, a very interesting one comment about Riviera, then I'm gonna get to my question. Oh, yeah. I mean, excuse me, um, not, uh, Buick. All right, so, uh, brand nerds, if you go back and look at some of the classic sub-brands within the, uh, Uber brand, and this is Buick is a, is a sub-brand of GM. But then the model that I loved in Buick was a Riviera. I know what you're gonna say. Yeah. Bob Kraut: Go ahead. DC: Was a Riviera. Yeah. So sweet, so beautiful, and also fast. So the, it, it had this positioning- Yeah ... where it had both luxury and speed. Bob Kraut: Mm-hmm. DC: It had both of them, and then they started doing funky stuff with the Bob Kraut: Yeah DC: ... Riviera, and I said, "Ah!" Okay. Ah. Yeah. Okay, but let me get to my real question. Oh. Would you... No, don't go yet. We're gonna say something, Bob, before I go to the, um- Bob Kraut: No, no, go ahead. DC: All right. All right. It's good. Uh, Larry mentioned that, um, you were involved in the Oprah Winfrey holiday, "You get a car, you get a car, you get a car." And we were, we were recently at, uh, at Georgia Tech. Shout, Tim Halloran, another Tim, Tim Halloran, professor over there at the, uh, is it the, uh, Schiller School? LT: Yes. Yep. The Shel- the Scheller School of DC: Business. Scheller. Scheller School of Business. Sorry, sorry. So we, we met, uh, Bob with their, uh, grad class and with their undergrad class, and they, um, e- each of the students did a one-pager after listening to an episode of Brands, Beats and Bytes. Mm-hmm. So we were just, we were just over there, and one of the things that they gave us feedback on is when something comes up that's interesting, really dig into it so that we as students can understand what happened sort of behind the curtain, backstage, if you will. Help the Brand Nerds understand, Bob, how this thing came about with Oprah going, "You get a car, you get a car." Yeah. Which people have used now since then in all kind of jokes, "You get a ring, you get a ring, you get a pool, you get..." It's like you get a fill in the blank. How did that deal come to be? Bob Kraut: Well, it's interesting. We were launching a replacement car for the well-known and beloved, uh, Pontiac Grand Am, but we were trying to go to an alphanumeric naming system- Mm-hmm ... to kind of imply more serious intent to the cars. Okay. And- Like a LT: BMW Mercedes, right? Bob Kraut: Yeah. Yeah. And, uh, so the, the idea is at, at the time you get... I, I, I had like $30 million to launch this and, uh, I am, uh, uh, I guess I was, like I said, my claim to fame in my career is breaking the internet before there was an internet. Yeah. By doing these kinds of stunts and events. So we wanted to take, uh, money that we may have put into television and print advertising and do something different. We happened to have a, an agency called, uh, Vigilante Marketing in Chicago. DC: Mm-hmm. Bob Kraut: Uh, and a gentleman named Larry Woodard was the president, and he really come, came to this, came to us with this idea, and he had a, um, an acquaintance or a friend at Harpo Studios. And then, uh, we were talking about it, like, what, what kind of proposition can we bring to them? Well, you know, Oprah, uh, at the end of the shows or holiday season, et cetera, she gives out one of her favorite things, and that could be a cushy robe or a box of chocolate or a book that she loves. And we said, "Well, how about if we blow people's minds and give them a car?" Wow. A Pontiac G6. Mm-hmm. So, uh, they liked the idea and, uh, uh, there's a, there's a, a, a well, uh, regarded documentary on this whole thing. It was listed as one of the top five- m- marketing ideas, uh, of the last 50 years. Oh, wow. But, uh, you know, you're sitting in the audience and, uh, uh, Oprah's talking about this car and, uh, you know, everybody is looking under their seats 'cause that's usually where they discover what they're getting, and they had keys to a, a new Pontiac G6. And, uh, spent about 5 million bucks on that, probably got $45 million in earned media as a result of that. Yeah. And it's a gift that keeps on giving. And I'll tell you an interesting story, and this, uh, I, I guess a little bit of a blunder on me and my team's part. So when you're giving away a car, which at that time was maybe $24,000, the people that received it, they're audience members, uh, they get taxed on it. DC: Oh, yeah. Right. Bob Kraut: Oh, yeah. And typically what you do in sweepstakes and things like this, you, you gross up the amount, so you give them more because they're gonna have a, a tax consequence. Yep. So, uh, so th- so you know, these were pe- people that didn't ... You know, $24,000, they didn't have the, the money to pay the tax bill. Yeah. So she came back to us and, let's say, insisted upon it, and then I had to go back to GM to come up with a million dollars to pay the taxes. So- Wow. Uh, and that was like, what do they call that in, in, uh, China? They have the same character for opportunity and risk. Well, that was the risk part of this opportunity. Ah. Uh, 'cause you don't, uh, you don't fool around with money like that at General Motors. So- DC: No, no ... at, Bob Kraut: at the end of the day, um, you know, it, it worked out. It was a great thing. It's memorable and, uh, is looked upon as one of the, the more interesting and clever, uh, marketing stunts of that era LT: It's, it's a great, it's a great story and it is a great, you say marketing stunt, but it, it, uh, here we are talking about it many years later, and brand nerds, if you were around then, everyone knew about this. Yeah. It was, it, it took over the culture from when it happened, like, "What? The people who were at Oprah got a free car? What kind of car was it?" And went right into that, right? Uh, and, and- Bob Kraut: And Larry was no bigger star at the time, so. LT: That's right. Yeah. That's exactly right. Yeah. That's exactly right. Did you get any, um, uh, spin out from that too with people who received the car and loved the car? Did you, were you able to even, you know- Yeah. Bob Kraut: I mean, we got, we got lots of, uh, letters of appreciation and people- LT: Oh, that's awesome ... Bob Kraut: loved the car. But, you know, immediately it, it gave us, like, instant brand recognition overnight. Oh, yeah. Oh, yeah. All the morning shows, like across country, there's 150 of them, they were covering this. And, uh, like I said, there are shows and documentaries about advertising which includes this. So anyway, uh, you know, sometimes, uh, success is preparedness meets luck, and I, I think that's what happened here. DC: What a great story. Uh, uh, Larry, you have any- anything more? I wanna ask Bob a question- Nope ... then we can push on to the next section. Did you happen to find yourself in the audience when this was going down? Bob Kraut: Yeah, yeah, yeah, of course, I was there. DC: Okay, so you were there, okay. Yeah. So what was it like sitting in the audience when they figured out everybody in this building is getting a car? Bob Kraut: It was absolute pandemonium mixed with elation. Mm-hmm. That's the only way I can describe it. They were so excited and, uh, uh, thrilled, and a lot of people needed a car. So, uh, you know, Pontiac GM was there for people, and, uh, the talk value for them and their networks of people that they know, uh, and, uh, in the industry, uh, in the automotive industry. And then also this hits, this hits households, right? Oh, yeah. Uh, this is the thing that makes you all the way to your, your, uh, your dinner table. So, uh- Right ... and I'm gonna talk about this. Back then when we were doing these ideas, we were always thinking about what will people remember 10 years from now? All right, good. I have a couple of those under the belt that they're still being talked about, and this was probably the premier one. DC: That's so good, Bob. Bob Kraut: We were always trying to do things that were great, that would be remembered. DC: So good. So good. Larry, anything more before we go to the next section? LT: No, I love this. All good. DC: All right, Bob, we are headed to five questions. Right. Larry and I will each ask questions back and forth until we arrive at five. I have the honor of beginning. Take yourself back, as far back as you'd like- There was some brand that you loved, like I love Pontiac and Trans Ams, or some brand experience that you had, and it moved your heart. You were elated to be engaged with this brand, enthralled, a bit like a first love. What was this brand or brand experience for you? Bob Kraut: Well, I, I think it was, it was cars . I was like, a, I was a car nut when I was a kid and then ended up working in the industry and then collected cars, so. But mine was a Pontiac brand. That's why it was so fulfilling for me to- LT: Wow ... Bob Kraut: live out a chi- like, br- dream. There's the, the first, the, the, what is acknowledged as the first, uh, uh, muscle car of the era, uh, was the Pontiac GTO. DC: Oh, yeah. Bob Kraut: And, uh, that was, um, uh, defined the era and then many other, uh, uh, Detroit manufacturers, uh, came out with muscle cars. It was basically taking a, a sedate car, which at the time was the Pontiac Tempest, and putting a big engine in there with, you know, cool tires and, you know, very sporty trim and so on. So, uh, that was my first experience in doing that. And, you know, a- again, uh, b- by, by 100 feet away I could tell you what year a different GTO was. Ah, okay. So, uh, I liked doing that. But, um, uh, you know, I also would like to tell you, I guess at the appropriate time, like, what my first assignment was when I, when I joined the agency, 'cause that was a memorable brand that I, uh, follow, follow today, so. Yeah. Uh, GTO. G- oh, oh, and to complete the story too- Yeah ... I, I have a lot of things that reoccur. Uh, GM actually brought back the 19- the, the, the GTO in 2004. And what we did is we, we positioned it as a modern-day muscle car. And, uh, so it wasn't a retro car like Mustang was doing. Yeah. But they appointed me the brand manager of that, and we, we imported a car that was a cool rear-wheel drive, big, uh, block engine from Australia. And, uh, I was able to lead that. And, uh, I was, uh, uh, very flattered to do that because the man that selected me to do that was Bob Lutz, who's a, a legendary figure in the automotive business- LT: Oh, yeah ... Bob Kraut: and probably the person that really made a big influence on my life and the way I see things and conducted myself as a marketer. DC: Mm. Larry, any, any thoughts on Pontiac and GTOs? LT: I, I, I just love that Bob was able to have that as a favorite, uh, growing up, and then somehow manifested it to, to work on that brand. That, you know, D, I'm reminded in, for myself as my identity and everything, the brand nerds know this, was as a, as a, as a, a hooper and basketball player. And then for me to then launch Powerade, I don't know, there was some manifestation. There was before you existed. Right. DC: Oh, yeah. LT: There, there's something, and D, you with Sprite, like, that's something you always had- Yeah ... right, like- So there's something really interesting about that, uh, for us marketers who can then work on a brand that is near and dear to you. Uh, it-- there's a passion level that emanates from that that is sort of irreplaceable. Bob Kraut: You know, I view it as, um, having a blessed life. LT: Yes. Bob Kraut: That I could, uh, again, go to this, um, concert of, of advertising jingles, and that ended up being my career, so to speak. And then, uh, loving the GTO when I was a, a kid and actually running the brand later. Uh, same, you know, working as a, like a, a low-level account executive on the Pizza Hut brand and then running marketing for them. So, uh, again, I see it's like, uh, I've been, I've been lucky and I've been blessed in all the things that, uh, I've been able to do and the people that I've encountered along the way. It's just, uh, it's been a great experience for me in my career and, uh, the personal relationships I've built. DC: I got a couple things. You're right, Larry. When, um Brand Nerds, when you find a way in your career, if, if you're blessed enough, to take something that is inside of you that, that i- ignites your soul, and you can merge that with some career thing that pays you, this is where things happen that you simply cannot predict. LT: Yep. DC: Yeah. Like, no, no wonder, uh, Pontiac was doing the things that they were doing. I know you worked on more brands than just Pontiac, Bob. Yeah. It's because of going back to your, your ute, your ute- Yeah ... and, and the, and your love of the, uh, of the GTO. A little nerd, a little nerding for a moment, automatic, uh, automotive nerding, and then we'll move on to the next question. Yes. So you heard Brand Nerds Bob mention a big block. So for you Brand Nerds that are not automotive people, that simply means the block of the motor is larger. So there were small blocks and big blocks, and back in the day with the GTO, the original, which I think was in '64, '65-ish Bob Kraut: That's, that's correct, yes. DC: '64 yeah, '64, '64, '65, was a 389. Mm-hmm. But, but in Detroit, we don't stop at just 389. This thing got up by the early '70s, now we're talking 455, 455 high output. 455, 455, right. Like, all of these different things, and then you're talking about the positive traction in the rear end so it can, like, do quarter-mile speed. So th- Right ... this is really a big deal. But in bringing the GTO back, I, I don't know if I remember this correctly or not. You certainly will know this, Bob, but I seem to remember something going on with 50 Cent. Like, am, am I remembering this right, Pontiac with the, with the, uh, the entertainer, rapper, now mogul? Bob Kraut: Well, uh, LL Cool J did, did events for, for us. DC: LL Cool J. Okay, my bad. Bob Kraut: And then we also worked with Ludacris later, so yeah. DC: Oh, Ludacris. That's right, that's right. That's right, yeah. Yeah. Ludacris. All right, thank you, thank you. All right. Yeah. Cool. All right. Uh, Larry, what would you like to go to next question, brother? LT: Uh, Bob, this is great stuff, by the way. Bob Kraut: Oh, thank you. Great. LT: So question two, Bob, who has had or is having the most influence on your career? Bob Kraut: Yeah, so I, I made reference earlier, is this gentleman. His name is Bob Lutz. He was the vice chairman of General Motors, but he also worked at all the big automotive companies. He was vice chairman at Chrysler. He had a very senior position at Ford, and then he was head of marketing at BMW. And, um, I think he's just a renaissance man, um, because he, uh, is, uh, he acts like, he acts very princely and, and courtly. He's the good king, the way I would say it. Right. Uh, smart and- Uh, complimentary and, and good to people and, and brings out their best. Uh, but the, the same time, uh, incredible instincts, uh, guided by information and data to make decisions. Uh, so you know, talking about what, you know, what we like as being marketers is the co-mergence of the right and left side of your brains, right? The emotional and rational. And like I found a guy that I worked for that had This thing was concentrated big time. He wrote a book, uh, that I loved called Guts. Mm-hmm. And, um, and I, I guess Brand Nerds, what I wanna share with you is that, uh, I think what, what has happened is that today, since a lot of the advertising is, uh, run by algorithms and so on, uh, y- you don't have the opportunity to use your judgment and the, uh, your understanding of what you have of the consumer, the marketplace, what you know about the internet, and kind of put it into, I call that, put it into your Cuisinart of a brain and crystallize all that thinking and leap from it and invent from it. And sometimes to make decisions like that, it takes guts. And that's what he personified. He really, uh, he embodied this thought of leader get out of the way. And, uh, and I also love this motto, which is, uh, um, "Oftentime wro- oftentimes wrong, but never in doubt." Oh, yeah. Yeah. And that really just, um, I guess it demonstrates and typifies his confidence in making decisions. And when you do make a decision, go all in and don't second guess and look back and work and refine and try to understand if some things could be improved, but stay with it. And the other thing, um- That the lasting impression made of me is that he said, "To be a great marketer and a great business executive, you have to be a little bit of a split personality." DC: Mm. Bob Kraut: And you have to have, you have to have, be guided by information and data. You have to have cold, hard facts and, um, be agnostic to, uh, uh, some of the, uh, incoming noise. DC: Mm-hmm. Bob Kraut: But you also need to have freewheeling creativity and, uh, creative ambition, and co-merge that with your rational side and your creative side, and leap out of that. I call it the, the leap out of the, the, uh, the collision of all those things that are in your brain, so to speak. So that's what I loved, uh, about Bob. He taught me about, um, uh, this, having this culture of a split personality, which defines what is a Renaissance man, and it really comes from, uh, actually a, a historical figure that I really, uh, admired, which was Leonardo da Vinci, 'cause he was a scientist and an engineer, and of course, a spectacular artist. He was the original, um, advertising person. So- Oh, yeah. ... all the things that he invented and leaped out of his mind based on what he observed in nature, nature and the human condition. JT: Mm. Bob Kraut: So, uh, anyway, and I think Bob is alive and well, and, uh, y- uh, jet-setting around the world today, but he made a lot of, a, a big impression on me. LT: Ooh, I love this, D. Do you have any, uh, thoughts? DC: Just one, a question. The book Guts, is that, is ... Did you say that Bob wrote that book or was it someone else? Bob Kraut: No, Bob, Bob Lutz wrote the book. I think he's written- Bob wrote. DC: Okay, okay, okay. Got it. Bob Kraut: Okay. Bob Lutz. Yeah. Yeah. Or Robert Lutz, yeah. DC: Yeah. All right. Got it. Okay. That- And he- Bob Kraut: That's the only thing I had ... he was frequently, you know, when they ask about advertising and marketing and adv- uh, uh, automotive, uh, frequently he's, he's guests on major, uh, news programs and so on. Yeah. So he's liked a lot. LT: Yeah, I love this, and I just looked it up. Bob Lutz is, is alive and well with us and, and also, brand nerds, you need to know, uh, that, uh, our Bob here, uh, Bob Kraut, painted a great picture of Bob Lutz and what he's about. And famously or infamously, Bob Lutz and Lee Iacocca were working together at Chrysler, and they butted heads big time. And Iacocca admitted after, years after that he should have anointed Bob Lutz to be his successor. Um, so this is a person who truly was a, uh, a, a, an incredibly special, uh, executive who, again, like our Bob Kraut, generated fantastic results wherever he went. And we, we are so... Bob, we're so about results, and so we, DC and, and I admire people. It's not an accident when you're able to do like you've done in many different places to generate results. And ultimately, you know, you can have the greatest marketing that looks good, but it's all about results. It's gotta generate, uh, re- results in sales, you know? And so Bob Lutz is somebody to really hold up, uh, in great regard in that way. D, you wanna take the next question? I Bob Kraut: do. Oh, and just one punctuation point to that. What I always like to say is you don't get paid for activity, you get paid for results. LT: Oh, so now I gotta do the John Wooden quote. John Wooden, we have John, we love John Wooden quotes on the show, and John Wooden, one of his best quotes is, "Don't mistake activity for achievement." Bob Kraut: Exactly. It's probably where it was derived from. LT: Yeah. DC: Um, I, I, this is not a quote, but it's along the, uh, same lines of both of your great quotes on activity, and it has to do with a rocking chair. And that is, you can do a lot of, lot of going back and forth, a lot of activity in a rocking chair, but you, you ain't moving, okay? You, you ain't moving anywhere. Exactly. See, that's a Bob Kraut: great metaphor. DC: Yeah. Yeah. Yeah. That's what it's like. So we, we too pride ourselves, as Larry has already said, on, uh, on results, not, not on activity. This is gonna be an interesting one, uh, Bob, this next question, because throughout your career, one word, as I mentioned earlier, has been resident, and that one word is growth. And you just put a fine point on the last, uh, uh, question about the difference between activity and, and, uh, and achievement This question has to do not with any of your wins that led to your wonderful periods of growth. This question has to do with your loss, a big, danky mess-up. We call it an F-up, the biggest F-up- Yeah that you can conceive or recall from your career. And what's most important for the Brand Nerds, Bob, is that you help them understand what you learned from it. Now, you might, you might go back to, you already mentioned it, the, "You get a car, you get a car," but you ain't, you don't get taxes for it. You got, that's a pretty big F-up. Right, right. But maybe, maybe you got some others. Bob Kraut: Well, I'll, I'll answer this with, uh, two examples. One which I personally made a mistake and our sales suffered, so I degrowth the company for a short period of time. I was a new CMO at Papa John's- Mm-hmm ... and we were introducing a new media strategy, uh, that we were, we were tr- trying to pursue, uh, greater frequency within programs of, of the spots, so it'd up our noticing levels. And based on the research we did, uh, the, the conversions to sales would be higher. In order to do that, um, and I, I didn't realize this to the extent that we did this, but you have to shave your media points. DC: Okay. Bob Kraut: Now, what happens if, if you're all about same-store sales growth, right? So we're always in the, like any retail business, I, I think there's a bunch of Brand Nerds that are in that, but in, especially in the QSR, quick serve industry, you live by same-store sales growth, and you have to lap the sales from the year before. DC: Yeah. Bob Kraut: Otherwise, you're not growing, and it's, it's bad. It's, it's bad for the company, franchisees, franchiseees that you, you have to support and, uh, fuel their businesses a- as well. So what you need to do is you need to look at your, week by week, you need to look at your year-ago media weight. And accounting for inflation, you just don't spend the same amount, you have to get the same media weight or exceed that. And because we did the shaving, there were actually two weeks that we didn't- Mm-hmm ... and our sales went down. So I guess the good news is advertising works. Right. If you're not doing it, you're not selling. But our sales went down and, uh, you know, I, I definitely was called into the CEO's office and, uh, it wasn't pretty. This was at Papa John's, and it was an owner, owner/founder, John Schnatter, and, uh, it was a difficult conversation, but, uh, you know, I owned up to it. I was, uh, not paying attention, uh, or maybe things were, uh... Well, I shouldn't offer excuses. I just fucked up, so. Okay. So that wasn't good. The other one I wanna reference, um, a situ- Hold DC: on, before you go to- Yeah Bob Kraut: before you DC: go to the other one What data- LT: Yeah ... DC: and/or instinct did you use to make the decision to change the media mix and impressions, et cetera? What did you see that made you think you weren't making enough of? You, you probably thought there was gonna be growth or at least savings. Bob Kraut: Well, I think, uh, like I said, I have to put this on me, but there was a, a team that was in place, uh, that I inherited and plus the agency, and they, they showed me a way, 'cause when we do a media plan, they, they, they... what we do is we translate it to sales. DC: Oh, okay. Bob Kraut: Uh, and they showed me a way where our sales were not affected. DC: Oh, Bob Kraut: okay. And when you're new, I mean, there's two kind of managers. I kind of tr- you know, there's, there's the, the CEO, uh, CMO that's actually hired to get a new staff. I've never really been that kind of a guy. Uh, and actually inherited a pretty good situation at- Yeah ... Papa John's, so I like to go in and assess, and I believe in trusting people's positive intentions. But at the same time, the learning, Larry, uh, I'm sorry, uh, and DC, that, that I think you want me to get at- Mm-hmm ... is this idea that you have to check other people's work no matter what position you're in. Right. You have to, you have to look at the spreadsheets. You have to go into it because you're ultimately responsible for all that. And, uh, so you, you've gotta do that or you, I guess the phrase is trust and verify. Yeah, I'm, I'm... let me do that, but let, let me take a couple of days to work with this myself to, to see, uh, if it's all panning out. The, the method that they used to demonstrate that our sales would go up, it wasn't sound. And I, I didn't do that, uh, and, uh, you know, it was, it was mistaken and definitely a learning moment for me. DC: Got it. Thank you, Bob. I wanna say this really quick before you get to your second example, but Larry, did you have anything on the first example? LT: Yeah, I wanna get th- th- th- this thread, DC, if it's okay. DC: Yeah. LT: How did you diagnose, Bob, that this was the... You, you see same store sales going down. There, there's a lot of variables that go into that. D- how did you hone in on that this was, this was a, a big part of it? Bob Kraut: Well, you look at historical data when you, you have media shifts and you can see the dynamic and you have an elasticity model that you use. LT: Got it. Bob Kraut: It's, uh, what's interesting about, you know, typically in the pizza market you're gearing up to... Friday night used to be something called pizza night. I don't think people do it as much anymore 'cause, uh, lifestyles have changed so much. So you start your new campaign on a Thursday- Mm-hmm ... and you're getting ready for selling. Um, and you know by Monday whether you're doing well or you're, you're cooked. And that was the fun about th- that industry is that you, you do all this work and you can see the results and feel it right away. Yeah. Whereas automotive, you work on something for two or three years. Uh-huh. Uh, very, very long lead cycle. So that was, uh, very appealing to me when I moved to young brands to, to work on pizza. LT: That's interesting. Bob Kraut: Yeah. DC: All right, so Brand Nerds, I, I wanna share this with you. Um, sometimes we humans will make business complicated, but I, uh, we, we believe on, uh, Brand Speeds and Bytes, we, we can simplify, makes it better. And I wanna introduce a model that to some of you Brand Nerds that you may not be aware of. It's called PITA, P-I-T-A. Every business has to be aware of PITA, and I, I'm gonna link it to Bob's point. The P is the population, so the, the, the addressable market that you're going after. The I is incident, so what percentage of this population can you capture? The T is transaction. So how many transactions will you get? This is the frequency. This is what Bob was talking about from a media perspective, frequency. And then the A is the amount. So the amount per transaction. Whatever a business is, whether it's in automotive, it can be in QSR, it can even be apps like the App Store, it's all about PITA. So when you are walking into a business, understand what the priority is, like the heartbeat of that business. Bob already mentioned, uh, same store sales. So same store sales are impacted by what percent of the population was Bob and his, his comrades getting? How many transactions, so frequency of consumption. And then are they, do they have the same, uh, check size or do they have a smaller check size? That would be amount. So just remember- LT: Adding a bro- like adding a brownie to the equation. DC: A- adding, adding a double brownie. Yeah. LT: Yeah. DC: A- a- adding a double brownie. So, so Brand Nerds, keep that in mind, uh, 'cause it can help strip away all the other stuff, so you can understand what the priority either is or what it should be to grow the business. Okay, Bob, next example. Bob Kraut: Okay. And I'll, I'll be brief. It's another pizza example, but it's at Pizza Hut. And, uh, what was interesting is that, um Uh, we look at trends and we found one that first of all, the, the general aging of the population in the United States. DC: Mm-hmm. Bob Kraut: And as you get older, you do consume less pizza. It's because you d- you don't tolerate it as well, but you don't have children in the household, right? Okay. Um, which was, uh... So we were a little bit concerned. We're selling this pizza. Uh, it's highly competitive, right? Uh, and, and at times it was profitless. And then we're going, "Well, the population's gonna get older. We're gonna have a diminishing base. We'll make less money." There was a, a, a business book out at the time called Blue Ocean Strategy. I don't know if you're familiar with it. Oh, yeah. LT: I remember it. Bob Kraut: Oh, yeah. So w- the blue ocean means that consider recontextualizing, uh, your brand to be in uncontested waters where there aren't sharks and competitors competing for the same resources. So swim in the blue ocean- DC: Mm ... Bob Kraut: where you basically develop a competitive moat around your brand that nobody else can duplicate, and you're swimming away from the red ocean. The red ocean is a competitive, price-driven, uh, market where, uh, you get bloodied up. You get, you get your nose punched, and you get... You're cut, you, 'cause competitors are trying to outdo themselves and lower their prices. And you end up- It's blood in the water ... in a profitless business, and then the water is a bloody red water. Okay. So what the team did, uh, was say, "Okay, we're a pizza business. We wanna be this home, whole meal replacement business," but pizza's one of the... Actually, it's the most, it's the most popular food in the world. But there are other favorites that go with pizza that are complementary called, uh, you know, wings and also pasta for a time. So we were gonna go from a, uh, a pizza-only brand to a "We'll give you some of your family favorites: pizza, pasta, wings." Mm-hmm. And that strategy, uh, was hard to duplicate for our competitors, Domino's and Papa John's, who are a little bit more focused on pizza. Mm. But, uh, what it is, it's a, uh, it was a, a strategy that was, uh- Uh, more expensive to, uh, implement because you actually have to open up stores, or your stores need to have, uh, in our case, Wing Street, they need to have fryers in them, equipment. You have to train people differently. So and then you've got three things that you have to promote, so your advertising becomes a little bit more fractionalized. Mm-hmm. So but we embarked upon that because if you think about the blue ocean strategy, it's a brilliant execution of that. But a couple of things happened. We had a financial crisis, and we had COVID, and in those c- cases where people economize, they turn to pizza 'cause you could feed, you could feed, feed people for $2 or $3 a person. DC: Oh, yeah. Bob Kraut: So the, the whole idea of the reduction in pizza consumption really never happened. So at the time, we were suffering because we, uh, we had this albatross we had to promote, which were these three things. It's easier to communicate one thing versus three. And you had competitors like, like Papa Johns, which I actually went on to lead, uh, that were just pizza only and delivery only, right? No restaurants, et cetera. Right. So that strategy, uh, uh, didn't work out as, as expected. It was difficult to implement. Great on paper, but, uh, the implementation and the execution of it, uh, maybe wasn't thought through. There's a book, uh, by Larry Bossidy, who was the, uh, former number two at General Electric, and th- this is an instance where y- you haven't thought about the execution of your strategy. He claims that his book is Strategy is Execution. So you might have a great strategy on a PowerPoint, but if you can't execute in the stores, then don't do it. DC: Yeah. Bob Kraut: And here's... It was an instance where it was difficult to execute, and I would say, uh, you know, s- since, since corrected, successfully corrected in the path that the Pizza Hut is on now, so. So anyway, that's, that's another one. And, uh, so I think what I learned from that is y- you gotta look at your strategy, but you gotta look at what's real in the store. What do the employees have to do? And if it's difficult to implement, if they don't remember, if it's too complicated, then you're not gonna be successful. LT: Uh, DC, I'm heartened by the, uh, story you've told many times of a certain someone at Coca-Cola saying, "That's a beautiful It's great, great thought, great, great thinking, but what are the unintended consequences?" DC: What are the un-... Chris Lowe. Right. What are the intended consequences of your brilliant idea? LT: That's a great example of that. What's the unintended consequences? Yes, shout out Chris Lowe. All right, should we go to the next question? DC: Let's do it. LT: All right. So Bob, regarding technology and marketing, you've seen a whole lot. Uh, can you tell us where you think marketers should lean in or best leverage tech? Or you can, uh, tell us areas that you think they should be leery or simply avoid. Bob Kraut: Well, um, great q- question. I'm gonna use an experience that I have and then translate it into today. Right. But I, you know, in the, the early days of w- web 1.0 and 2.0, um, and I would say I was at General Motors when that all started, um, we, uh, we were tasked to create our, our, our websites for our brands. You know, cars and trucks is a very imagery-heavy category. LT: Oh, yeah. Bob Kraut: So, uh, we embarked upon creating a, a beautiful website, and at the time, think about it, the hardware was not up to speed with what the software could do. LT: Right. Bob Kraut: So, uh, so the best site that you could have put up was m- maybe one that was the majority of it was text or bulletin board style peppered in with some images. But if you're the director of advertising and sales promotion and, uh, you're in the, the image business and you wanna glamorize and make your brand aspirational, that's not a good answer. You have to have a good-looking website. So myself and all my counterparts at Chevrolet and Buick and Cadillac, we did these beautiful websites that basically, uh, alienated customers because it took so long to load the visual images. So- You know, so DC, that goes to your unintended co- consequences. Yeah, yeah, yeah. So, you know, I'm in a meeting and being wined, "That looks great. You know, we're gonna sell s- a bunch of cars. It looks so great. You're able to animate it and deliver videos." But, uh, the, the loading factor, uh, was significant and, uh, the customer ... It did- didn't, like I said, you have to make it real from the restaurant. You have to make it real in the customer's household. So- Okay ... so that was it, but we were, uh, charged, uh ... We were spending money on digital, and you really have to think about this little case history today about what you're doing in and around AI, but we really didn't know what we were doing. You couldn't measure it. And, uh, you know, and you know, there, if you grew up in the TV and the print area, there's lots of different ways that you were measuring that kind of stuff, but we couldn't measure it. And then, uh, publishing sites, you used to, you used to advertise, do, uh, lifts of your 30-second commercials and put them on publishing sites, news sites, et cetera, or you'd do display advertising. They had no way of giving the measurement. Even in the early days of Facebook- Uh, they had no answers, uh, in terms of, you know, what they were doing and they were trying to monetize. In fact, it was funny, you know, we're at, uh, this big corporation, we couldn't even get a meeting there. So Oh, wow. Now times have changed and they're pretty sus- sophisticated and successful. So, uh, the idea is to know when there's a bright, shiny object out there and you're unnecessarily chasing it. And what we had to do is, you know, I was honest with the guys, you know, we are... This is new. We are gaining experience with this. Hmm. We don't know what we're doing. We're feeling our way through it. However, when it does come and the infrastructure catches up and the power of computing catches up, we're gonna be in a position to have a first mover advantage because we have experience with this new platform and this new medium. So as for AI I think, uh, you have, uh, actually so many more different options as a marketer. There are so many companies m- m- marketing various different tools, and you're in a, a ... It's okay. You're in a, you're in the era of, uh, fail fa- uh, fast failure, right? And then correct on the fly. DC: Right. Bob Kraut: So I think you can experiment with these AI tools k- knowing that you're in a more, little bit more forgiving environment. You gotta try something, it doesn't work, you move on from it. Uh, but just, uh, don't get into the trap that everybody's doing it. And I will, I will, uh ... An- and try to pick a couple of things that work and repeat it, and try to grow it, and get the additional capability and expertise so you can action it better with your consumer. But I'll tell you, I'll just give you my personal experience where everybody's doing it on an AI, and I don't think it works very well, is, uh, customer service, which is now being served by chat boxes. LT: Yes. Bob Kraut: And they basically prevent you from getting the answer, and, uh, they alienate customers because, uh, they only are loaded with an, a, a, a, a certain number of responses. And if you have a specific request that's case by case, they can't answer it. But then they spend so much time do looping, uh, the, the logic and the decision rules that they've been giving. And, uh, what I like to do is immediately try to get off of that and get to a live chat, and they prevent you from getting to the live chat, and it's maddening. And then sometimes when they're presenting you or say, "Okay, I give up, Bob. You said agent live chat 100 times. I'm gonna give up and get you to one," they put you on hold, and what you get in some instances ... I just had a real recent experience, uh, 'cause I just moved into a new home, and you can imagine what I had hooked up. And, uh, so I'm on the live chat, and it says, "We'll be with you in four minutes." Well, four minutes go by and then they tell me it's six minutes to get to live chat. So- DC: Mm ... Bob Kraut: in this particular company, I actually had an in to the office of the president and I got my problem solved. But if you have to create a whole other apparatus in your company to cover from the fallout and the alienation and the poor customer experience that you get by using automative, um, uh, and, uh, AI tools- Mm-hmm that's a problem, in my opinion. So, uh, just be watchful of that. And if you're gonna implement a tool that touches the customer- Pressure test that on yourself because you might be alienating the customer. And some companies, in my opinion, I'm thinking, well, they know it's not a great experience, but they save so much money by not having live people- Yeah to solve your problems. JT: Yeah. Bob Kraut: And, and basically if the status quo is people and a new generation of buyers and shoppers are conditioned by poor customer service through AI chats, then maybe that's what they think it... That's the state of the art, and that's what you get. So, uh, just be watchful of that. That would be my, my point of view. And, you know, of the last 10 years, there's been so much written and so much accomplished with, uh, customer experience. I, I just hope that, uh, AI can be used very purposefully to enhance that and to turn a, a problem into a... Make you a brand lover at ha- after having that touchpoint with the AI tool. LT: Well, Bob said a whole lot, dude. So I'm seeing two main things that Bob said. One is what brand nerds, if you're in, uh, if you're in a situation where you have a bright shi- bright, shiny new technology, and by the way, it always happens. AI is right now in 2026, and it'll be something else in 2027 and 2028. So what Bob is saying is jump in, learn, don't watch from the sidelines, even if you're spending money that you don't, you haven't figured it out. That's one thing. Love that. The second thing is completely different, and that's something that we've talked a lot about, Bob, on the, on, on, uh, on the show, the first one too. But if you're interfacing with a customer, B2B customer, B2C consumer, and you haven't pressure tested that, you don't know what that's like, oh, th- this is, this is trouble with a capital T. And we talk about this a lot, Bob. We have something called a brand activation wheel, and we, what we do with our clients is that's every touch point that a brand has with a customer or consumer. And it's just like with, uh, when, when you're working out with weights. You know, you're either building muscle or you're not, and every touch point should be something that enhances the connection that you have with the brand rather than detracts. And so you can have 10 wonderful positive things, but then you have this AI chatbot that's your customer service, and you're yelling, "Agent, agent," and then you still don't get the agent, and then you have... And that, that strips away all those 10 positive interactions and makes it really negative. And so you're saving money because the CFO says you need to save money, but in reality, you're losing a whole lot of money, and that's hard to be, that's, it's hard to track as it relates to the negative brand, uh, situation that you have with customers or consumers. So that's my take on your wonderful- Bob Kraut: No, that's a great summary. And I'll just add very briefly, that's what you call in marketing is the moment of truth. LT: Right. Bob Kraut: And you're gonna augment and amplify the customer's love for your brand, or you're gonna lose them. So, uh, and again, I was all big on moment of truth marketing and, uh, especially if there's a problem with a customer, giving them a reward and a solution almost on the spot- LT: Yep Bob Kraut: I found has, uh, been valuable 'cause people are c- completely disarmed. LT: Right. Bob Kraut: And all the negative energy that you generated goes away pretty quickly, so. DC: That's right. Oh, whenever we get into AI and tech, um, I, I go back to, hearken back to what's human. What can we learn from what humans actually do rather than- LT: Yeah DC: what we'd like humans to do? LT: Right. DC: So as you were giving your example of four minutes, then six minutes, I thought about a recent example I had. I won't name the company, but I'm on the... I have an appointment with them. I'm not able to make it. So I'm calling in and I know, and they have AI, and the lady says her name. And I'm like, "Well, this is cool." So I, I say, "Hey, I'm calling about an appointment." We go through. "Do you wanna reschedule?" "Yes, I do wanna reschedule." "Would you like to reschedule today, uh, or would you like to reschedule tomorrow?" It's all going well. And I said, "I'd like to reschedule tomorrow." "Great. Would you like..." And it gives these times. I'm like, "This is fantastic." Here's the problem: I'm driving. Yeah. So I say to this AI, uh, lady, "Give me a moment to check my calendar." This is a reasonable thing to say. I'm driving. LT: Yes. DC: Yeah, I can't, I can't pick the time now. Yeah. I then, I then look at my calendar. I find the time. I come back and say, "I would like," you know, 3:30 was three times. And this, this, this, this sucker took me all the way back to the beginning prompt. Oh. "What is your name? What's your..." It wasn't ready for that human real world- Right ... thing to happen. And so what I find is that a lot that happens with AI today across industry is the use cases presume an engaged person. JT: Mm-hmm. DC: It doesn't presume a distracted person, whether driving or scrolling or- Mm-hmm ... who knows, Bob, when you were looking at the screen, maybe, maybe your cat does something, and you look over there, and then you look back. You, you think it's four minutes, and now it says six. I believe that in this example that you have given, it's a wonderful opportunity for those in tech to have use cases built upon distraction- LT: Yes DC: not engagement. Bob Kraut: Great insight, DC. DC: Thank you. Thank you. LT: Should we hit the next question? DC: Let's do it. Bob Kraut: Yeah. Go ahead. DC: Bob, you may take... No, uh, you may take this question any way you'd like: What are you most proud of? Bob Kraut: Well, I, I think, you know, thank you for sharing my career with your your viewers. But, um, uh, I think I couldn't have had a career like this and generate growth, as you say it's all about, without having people that supported me and having a network. And I had great leaders that supported me. I was an adventurous marketer, so, uh, that could get you into trouble sometimes. But I was supported all the way if I did something, uh, a little bit risky. Um, uh, people knew me, they knew my reputation, and they supported me. You mean LT: like give away free cars on Oprah, like that? Bob Kraut: Yeah, that. And, and then the naming the Denali and, uh, at, at the time it was really questioned and people thought it was a terrible name, and they asked me to come up with a new name, and I slow walked it, and we ended up with Denali. So, but anyway- Yeah. ... I could, I could've gotten into trouble. But, um, so m- my, my greatest accomplishment is then when I got into positions of responsibility and influence, um, I took care of the, the, the people that were supporting me, and then also who, who helped me get there. So, uh, one, you know, before people, uh, care about how much you know, uh, they, they want you to, uh, show them how much you care. DC: Yeah. Bob Kraut: And, uh, I always tried to do this. I was at, I was at a, uh, an event last night, and, uh, it was a, a new museum director for the, the Dallas Museum of Art, and he'd said that he wanted to upgrade the people and take care of his people. And, uh, he says there's a, there's a saying that, uh, if you take care of your people, they'll take care of you. Mm-hmm. And then he goes on to say, "If you don't take care of your people, then they'll take care of you." Then they will take care of you, yes. Right? Right? Absolutely. So, uh, so anyway, I think that's, uh, you know, many of the folks that, uh, I hired that worked for me or even, uh, partnered with laterally, they've all gone to run big brands. I mean, uh, it's a who's who right now of top 10 brands that, uh, uh, and I'm very, I'm very proud that they've risen to those levels. And I'm, I'm hopeful that maybe there's one or two things that I left them with that, uh, gave them, um, uh, something they internalized to help them with their success. So, you know, bringing people with you is probably my greatest, uh, accomplishment and something I'm most proud of. DC: That's great. LT: That's awesome. DC: That's great, Bob. That's great, brother. Bob Kraut: Yeah. DC: I don't have any more on that, Larry, do you? LT: That's a great mic drop on that. Nope, I don't, I do not. That's really cool. All right, uh, we are now moving and grooving, Bob. We're going to the next segment. Okay. And next... Yeah, the next segment is what's poppin'? What's poppin', D? What's poppin', Bob? DC: What's poppin'? LT: So Bob, this is our chance to shout out, shout down, or simply have something happening in and around marketing today we think's good fodder for a discussion, and you have a juicy one. Hit us with it. Bob Kraut: Well, I'm gonna be controversial and I hope I don't insult anybody LT: Don't worry about that. Bob Kraut: But I think the state of advertising is a vast wasteland. That was used many years ago to describe the state of television 'cause there was a lot of mindless television programming going on. And, um, I, I think the way we market today and the platforms that we use actually train people to hate advertising. Mm. Think about it. If you're, you're going on YouTube, I'm trying to look at a piece of service content, and what's the thing that ... I'm eager to get to that content, but the first thing that's on my mind is to skip the ad in five seconds. DC: Yeah. Bob Kraut: And how have marketers and advertisers responded? Well, they've responded by shooting the, the name of the brand within the two seconds, first two seconds. Doing something so intervenative and, uh, jaw-dropping that you have to continue past the five, five minute, uh, five-second mark, uh, to wanna, to wanna know how this is gonna turn out. But it's not storytelling, it's shock. It's, uh, like I say, they're breaking the internet. A lot of what's going on now is, is shock or, uh, of, uh, uh, personal interest. It's, it's, uh, feuds, it's all that kind of stuff. So, uh, so the, the, the nature of those ads, I don't even think they're healthy. I think, uh, the most important thing if you wanna sell ads is to make an emotional connection to a consumer. LT: Yeah. Bob Kraut: Great storytelling never goes out of style. Mm-hmm. And, uh, you can't do it within six seconds. It's, uh, what I'd call it's a clip narrative, but people can't process that quickly. Mm-hmm. So, uh, rather than, uh, having ads that are created by really knowing the consumer, I mean, we used to go into people's homes and look how the products were used in their households. Okay. Uh, and, uh, we used to do, uh, reams of research, uh, that if they buy my product, what other product do they buy? And you can develop a day in the life profile of that person, so you can make more precise, uh, more resonant messaging to that person and build a relationship. Because really the best kind of selling is, is one-on-one selling, right? It's, it's being the salesman at the moment. You can't do that and you have to do it on a mass basis. And I think knowing the consumer and trying to identify insights that resonate with the consumer, that identify what I call latent demand, things that people need before they know they need it, until you tell them that they need it and present it in a, in a way that is, uh, revelatory to them And I think today a lot of the, uh, advertising and the messaging is, uh, is, um, uh, algorithmic. And instead of kind of looking for how did I build brand equity, what great qualities and attributes did I associate with my brand, uh, w- your likelihood to buy it again, those kinds of things, and you can measure an emotional connection to the brand, we're trying to look at can I plus up, uh, my, um, attribution levels, uh, 1.4% in the next seven days. DC: Yeah. Bob Kraut: So really what it's going for is behavior, and I don't think you can, um, uh, influence people in a long-term durable fashion by influencing behavior in the moment because it's almost like a drug. What do you do next? Right. If you build an enduring brand, you're building a partnership and a friendship with a person. I used to buy All these A- uh, Apple products, uh, for me and my kids and my household. And, and, and when my kids were younger, these products would break frequently or they'd lose them frequently. But you know what? I love the brand so much that I happily rebought them. I paid I paid the- Oh, yeah. JT: Yeah ... ' Bob Kraut: cause they just made an amazing product. And, uh, anyway, that is the, to me, is the, the high level that people should be sh- shooting for. And I think, uh, advertising needs to be a little bit more, um, less transactional and more, uh, partnering with the consumer. But importantly, emotional bonds can't be broken. They weather your awful experience that you had with the AI chat. Yeah. They weather that because you like the brand and you forgive them. DC: Preach, Bob. Preach. Bob Kraut: So that's my, that's my big deal, uh, right now is, uh... And here's the thing. I'm a complete student of the advertising. My... It started in fourth grade. LT: Right. Bob Kraut: So it's my hobby, and I can't really tell you many brands that I remember- Right uh, or a- advertising that I remember. Now, we have this thing called the Super Bowl. Yes. But that's where the big brands bring out their powerhouse talent, and they put time and attention to it. And they put the, the best people in. The, the CMO, the presidents of the companies are involved. You know, it's, whatever, I forgot what, $6 to $10 million to run advertising. The agency people put their best people on it. JT: Yeah. Bob Kraut: And you look at this past Super Bowl, there's a lot of great advertising that does exactly what I'm teaching or, or, uh, trying to promote and to, uh, uh, to preach about now. But why does it have to happen once a year? Uh, it used to be that that happened all year, that great ads that were memorable happened all the time. Like I said, we were in the business of saying our high-water mark is, uh, are people gonna remember this 10 years from now? What are we gonna be remembered for? DC: Mm. Bob Kraut: And right now, I don't know if you have that kind of mindset or people are trained to, to do that and think that. When we did the first iPhone app for pizza ordering, which was pretty cool, my brief to the agency, make this app so compelling that Apple's gonna wanna put it in their There's an App for That advertising. Mm-hmm. And, and that's what happened. They fulfilled the brief. Yeah. Nice. Uh, we got that accomplished. But I don't know if there's a lot of thinking like that today and, uh, you know, I'm just, uh, I c- I think very classically about marketing. I do believe you should be guided by data. I love the tools that could, uh, that, that are for, uh, uh, that are math-based, that, uh, that you can apply marketing with science to. But at the end of the day, you gotta influence people by building a relationship and telling a compelling story. It never goes out of style. LT: Bob, we violently agree with you. Oh, DC: that's, that, that is a salute. LT: Yes. DC: Salute. Oh. LT: Yeah, that's- DC: Oh. Well, uh, I do have a few thoughts. Uh, going back, Bob, to your comment of remember, are you doing something that people remember, uh, t- 10 years from now? LT: Mm-hmm. DC: Um, here is the fundamental issue. You used Super Bowl, talked about how this is when our industry brings their A-game on the client side and the agency side. Why is that? And I believe the reason why the Super Bowl is this sterling example of the best that we got is because during the Super Bowl, clients and agencies are striving to bring something that's accretive to the experience They don't, they don't, we don't view ourselves as separate from the game. We view ourselves during the Super Bowl as a part of the entertainment spectacle that is the Super Bowl. Yeah. So if there's going to be a, uh, fourth quarter, mid-fourth quarter game that's tied and people are riveted to their seats, and they've been riveted to their seats for a couple of quarters, and they want to go to the bathroom, we as marketers say to ourselves, "We gotta be so good that you will pee your pants- Right to stay in front of the screen to watch- Yeah ... these ads so that you c- you, you will not move, and then the game comes back on. So it's accretive. What happens when we're not in the Super Bowl, to your point, Bob, is we view ourselves as an, as an interruption. LT: Right. DC: We're interrupting. Disturbance. Mm-hmm. Yeah, yeah. We are disturbing. I like that word better. We are disturbing your re- uh, regularly scheduled program and ooh, ooh, I'm sorry. I, I, I, I don't wanna hold you long. I, I, I got 30 seconds, but maybe I only got six before you hit skip and I'm, uh, it lacks confidence. Mm-hmm. It lacks confidence, and wh- when you approach someone, just again, back to human, uh, you see someone that you're attracted to. They're across the room Two different approaches. One, a person comes over and says, "E- excuse me, I don't wanna, I wanna bother you. You seem like you're really, really busy. There's a lot of stuff going on here. Uh, uh, uh, can I, can I get a couple seconds of your time?" No. Get out. Okay? W- okay. If, if, if you, if you juxtapose that to the person that's holding court across the room in the restaurant, people are, like, laughing- Yeah with this person, and pe- coming over and, like, hugging this person, and then that person looks over the room at someone else and goes, "Hey, come on over." That's a whole different thing. Yes. They're not going, "Oh, I'm sorry, I saw you were busy," and ... They're just saying, "If you want some of this, this energy, come on over and join it. And if you don't, stay over there by yourself in your boring corner." Th- th- this is the difference, I believe. So th- that's what's up for me. Love the subject. Larry? LT: Yeah, no, that's awesome. I, I'll just add, uh, quickly, uh, Bob separated it great with Super Bowl and everything else. DC: Mm-hmm. LT: Uh, I was involved with a research study a while ago already that super, the, the ads are actually one of the biggest drivers of viewership for the Super Bowl, meaning people wanna watch them. Yes. And at, a- at all other times, as Bob said, they're a disturbance. But you know what? You can do two things as a marketer. Like Bob used the example, we've all been on YouTube. When you go on and you, your immediate reaction is, "Oh, shit, I wanna get to what, you know, what I'm clicking on." Yeah. So you see it as a disturbance. You can either embrace that and try and, a- and make light of it and be, be funny and bring people in. That's one thing. Second thing, maybe work with Google to say, "How could we do this better where you're getting your ad time but it's better for me?" Yeah. Or it's me, you sit it out and you just don't do things like that- Yeah where you're gonna be the disturbance, right? Like, you've gotta be that conscious is my point, as a, as a marketer. And that's why, Bob, we always talk about the Super Bowl's, while it's all that money, it's worth its weight in gold because people are leaning in, to DC's point, rather than seeing it as a, as, as a disturbance. So that's just my add of what you, what, what you so eloquently have, have, have brought up and said in this, uh, in this great conversation, so thank you for that. Bob Kraut: Great, uh, great observations. I think in the, and I like DC's ideas that you're part of the celebration. LT: Yes. Bob Kraut: Yeah. But, uh, I guess my advice again for, for people is whatever you're doing, have a mindset of creative ambition. LT: Yes. Bob Kraut: In whatever you're doing, strive for that. DC: That's great. LT: Love that. All right. We, we are at the close, Bob. You know, again, when we have wonderful guests like you, it feels like we've been talking for five minutes, and we've been talking a whole lot, uh, uh, longer than that. So, you know, this has been amazing. I'm gonna posit my learnings. DC's gonna go, and then if, if you have any closing thoughts about this wonderful conversation. Bob, I have a ton of learnings. I'm gonna just cull it to 10. So here, here we go, Brand Nerds. Number one, think big like Bob did with the Oprah Pontiac G6 giveaway. The question you should ask yourself, as Bob said a few times, are you doing something people will remember 10 years from now? That should be the intention. That's number one. Number two, talking to you up-and-coming brand nerd, what is your favorite brand, and how can you manifest working on that brand and you take it to the next level? Number three, Bob Lutz, quote, "Oftentimes wrong but never in doubt." Oh, yeah. The point of that is be, be, be both confident and humble to know that you don't have all the answers, right? Number four, again, Bob Lutz, split personality. And like L- Leonardo da Vinci, that, uh, that our Bob here, uh, Bob Kraut, so eloquently put, uh, be guided by left brain data, but you need to have free will and creativity. And the mesh of that is you having great ambition and co-mingle it to drive great results, which again, uh, Bob Kraut has done throughout his career. Number five, the John Wooden quote, "Don't mistake ac- activity for achievement." Like Bob Kraut and Bob Lutz, your work needs to generate real business results. Number six that, uh, Bob, Bob learned, uh, unfortunately with his F-up. Number six, you should always be think and trust and verify. Number seven, for technology, like Bob did with Web 1.0 and 2.0, you're best served to jump in and learn. You don't know what you're gonna learn yet. You know you're early, but you can't look up from, on the sidelines. You gotta jump in and be in the game. Number eight, if you have tech interfacing with customers, you better make damn sure that you pressure test it yourself, you and your team, so you're not hit with all these awful things that Bob and DC and I shared because invariably people themselves haven't gone through that because they would be so frustrated they wouldn't let that stuff go. DC: Mm-hmm. LT: Number nine, like Bob, all success is grounded on help from others. Show them how much you care. You take care of people that will take care or not take care of you. DC: Oh, no, they'll take care of you both ways. Go ahead. LT: That's exactly right. Bob Kraut: That's right. That's right, Keith. LT: And number 10, Bob said it just as, uh, like a minute ago. Have a mindset that has great creative ambition. Those are 10 awesome ones from Bob. Thank you. DC, you're up. DC: Bob, it's no surprise to me that you're teaching now. Because this podcast has been one where you have been teaching the Brand Nerds and you have been teaching Larry and I. LT: Yep. DC: You are an exceptional teacher. And at this part of the podcast, I attempt to bring forward, in my humble opinion, what is it that this person is bringing to us on this planet that only he can bring in the way that he brings it, and if we don't get it from him, we're not gonna get it. Uh, I, I go back to a, a comment you made on the question of, uh, what are you most proud of? Larry's covered this, and you said, uh, "I'm an adventurous marketer. Adventurous." And then you talked about having people support you in this role of being in adventurous marketing, having people support you, very important to you. And you, and then you talked about, and you support them, and they've gone on to these fabulous careers. You mentioned a quote about people don't care what you know or think until they know that you care, and that is a quote from Maya Angelou Maya Angelou, her mentee. So Maya Angelou had many people that she taught, but her prize mentee was Oprah Winfrey. LT: Mm-hmm. DC: Oprah Winfrey was Maya Angelou's prized mentee. And then that took me back to your connection with the Oprah Winfrey Show and Oprah Winfrey as a person. You get a car, you get a car, you get a car, you get a car. And I remember you mentioning, Bob, that to launch this new Pontiac G6, you had 30 million, 30 million large. And then I heard you say, I think I heard this right, that you decided to trim the media budget, which Brand Nerds and boys and girls, just know this, in any marketing, uh, department, most of them around the world, it's the media budget that's the biggest budget. There will be partnerships, there'll be celebrities, but typically media is going to be the largest line item in a marketing's, uh, plan's budget. I thought I heard you say, Bob, that you trimmed $5 million, $5 million from a $30 million, uh, media budget or marketing budget. You had 30 million, most of that was gonna be media. Um, Brand Nerds, that's 16.7%. And you don't take 16.7% of a marketing budget unless you got something going on- Bob Kraut: Mm-hmm ... DC: that makes you believe you should do this. And what's that thing that, uh, that Bob has going on? Well, that goes back to Bob Lutz. Bob Lutz. Bob Lutz, your mentor, you answered that as the most influential, uh, influencer of your career, and you talked about him as the good king, almost like royalty. And you also mentioned that he wrote a book, and the name of the book is Guts. Now, let me connect this back to your, your brand love. Your brand love, the one you mentioned that really blew your mind, was the Pontiac GTO. Pontiac. That blew your mind as a young person. You have collected cars. You then r- was a, a brand manager. You then did all of these executive things for the Pontiac. You did some other things on other brands as well in the automotive industry, but Pontiac. And I'm thinking, "Why Pontiac? Why Pontiac?" Brand Nerds who are from Michigan, you may think the, the, the word and name Pontiac comes from the city Pontiac, Michigan. And yes, there is a Pontiac, Michigan. But that's not where the word- Yeah ... that's not where the name comes from. I know where you're going. You know where I'm going here, okay. Bob Kraut: Absolutely. DC: The name comes from a Native American chief. Chief, yeah, Chief Pontiac. Bob Kraut: Chief Pontiac. DC: Okay. What was Chief Pontiac known for? Okay. Much smaller group of fighters against the Brits. Much larger, much larger army with the Brits. Chief Pontiac and his fighters, they were like, "We're not gonna submit to your bureaucratic control." Mm. And his legacy, Chief Pontiac's legacy, is courage, aggression, independence, and fighting spirit. LT: Wow. DC: This is Chief Pontiac here now. And guess what that aligns with Guts LT: Mm-hmm DC: Guts. Bob Lutz, in his book Guts, what he talks about there is bold products come from bold decisions. Emotion and passion matter. Leaders must sometimes challenge the system directly. All of what is in Bob Lutz, the vice chair at the time o- of, uh, of GM. Was it of GM or Pontiac? LT: It was GM. General Motors, yeah. DC: G- General Motors, okay. The number two guy, yeah. Yeah, G- General was Bob Lutz. Right. So th- th- Bob Lutz embodied Chief Pontiac, and this is why, Bob, you, I believe, loved the Pontiac brand as a kid, and this is why you've made all of these decisions across your career that resulted in growth. And that is because you have guts. So I'm going to say that what I believe you are giving to us that no one else can, a phrase that many of us have heard is guts and glory, but I don't think that's you. I think you are the penultimate example of guts and growth. LT: Ah. Bob Kraut: I agree. Totally. DC: That's you, brother. Bob Kraut: Thank you. Thank you. DC: How's that sitting, Bob? Bob Kraut: Oh, you know, it's great. This is, uh ... I've, I've really enjoyed my time, and, uh, what, uh, what I enjoyed about this is that we're having an intellectual discussion about, uh, something that we're so passionate of it. LT: Yep. Bob Kraut: And, and it's, it's so part of each of us, the three of us. So I appreciate just being able to participate, and, uh, the, uh, the, the notions that you put forward, uh, to, to your viewers, I'm, I'm hopeful if they can latch onto one or two of those things and, and help them, uh, I would be very happy and, and proud. Mm-hmm. LT: That's a mic drop. You've elevated this conversation in a big way, really. You really DC: have, man. Just, just outstanding, Bob. LT: This is- DC: Outstanding stuff ... LT: outstanding. Thank you so much. Bob Kraut: Thank you. Thank you. LT: Yes. And Brand Nerds, thanks so much for listening to Brand Speeds and Bytes. The executive producers of Brands, Beats and Bytes are Jeff Shirley, Darryl "DC" Cobbin, Larry Taman and Jade Tate, and Tom Dioro. DC: The Podfather. LT: That is he. And if you do like this podcast, please subscribe and share. And for those on Apple Podcasts, if you are so inclined, we'd love those excellent reviews. We hope you enjoyed this podcast, and we look forward to next time, where we will have more insightful and enlightening talk about marketing.