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SBP 230: The Barber's Brief - Are We Measuring Marketing Value — or Just What’s Easy to Measure? · Sleeping Barber - A Marketing Podcast

• 0:00
  SPEAKER_01: Welcome to the Sleeping Barber Podcast.
• 0:03
  SPEAKER_00: Welcome back to the Sleeping Barber Podcast.
• 0:06
  SPEAKER_00: And if you're Let's go.
• 0:08
  SPEAKER_00: Yeah.
• 0:09
  SPEAKER_00: If you're new around here, this is the Barber's Brief, where Mark and I break down what's caught our attention in marketing over the last couple weeks, the good, the bad, the overhyped.
• 0:17
  SPEAKER_00: There probably be some data, definitely some few opinions, and at least one unnecessary reference to marketing effectiveness that we often do.
• 0:23
  SPEAKER_00: Now, we'll always wrap with ad of the week because amid all the dashboards, data, and debate, Great Creative still deserves the last word.
• 0:33
  SPEAKER_00: Mark, how's it going, my friend?
• 0:35
  SPEAKER_00: I was gonna say good morning, but I'd be lying.
• 0:37
  SPEAKER_03: I know it's not this is off cadence for us.
• 0:39
  SPEAKER_03: We're doing something in the afternoon.
• 0:41
  SPEAKER_03: Oh my gosh.
• 0:42
  SPEAKER_00: The sun's still out.
• 0:44
  SPEAKER_00: It's great.
• 0:45
  SPEAKER_00: I know.
• 0:45
  SPEAKER_00: I can't even do my mood lighting.
• 0:46
  SPEAKER_00: I gotta get a shade for my window because like I'm now back lit.
• 0:50
  SPEAKER_00: It's terrible, anyways.
• 0:52
  SPEAKER_00: First world problems.
• 0:53
  SPEAKER_00: Yeah, exactly.
• 0:56
  SPEAKER_03: The backlighting is making me look as good as I normally do.
• 1:00
  SPEAKER_03: Terrible.
• 1:00
  SPEAKER_03: It's terrible.
• 1:02
  SPEAKER_03: Yeah.
• 1:03
  SPEAKER_03: Uh no, things are good.
• 1:04
  SPEAKER_03: Yeah, things are good.
• 1:05
  SPEAKER_03: It's it's hard to believe summer's almost over.
• 1:08
  SPEAKER_03: Uh leaves are falling, leaves are turning colors.
• 1:11
  SPEAKER_03: It's crazy.
• 1:11
  SPEAKER_00: I told my wife, I think the leaves are falling.
• 1:14
  SPEAKER_00: She's like, no.
• 1:14
  SPEAKER_00: I'm like, yeah, I think it's happening.
• 1:17
  SPEAKER_00: Yeah.
• 1:18
  SPEAKER_00: It's not good.
• 1:18
  SPEAKER_00: It's not good.
• 1:19
  SPEAKER_00: So, V, what do you got in the news?
• 1:22
  SPEAKER_00: Yeah, I got the first one this week.
• 1:25
  SPEAKER_00: I got the honors.
• 1:26
  SPEAKER_00: So the one that caught my attention, the title is The Marketing Industry's Truth in Pricing Problem and Why Adland is to blame.
• 1:34
  SPEAKER_00: So this caught my attention from uh authored by Darren Woolley.
• 1:38
  SPEAKER_00: He's the founder of Trinity P3, and he points out a pretty uncomfortable contradiction in our industry.
• 1:44
  SPEAKER_00: Think about luxury brands.
• 1:47
  SPEAKER_00: Advertising agencies have spent decades helping these companies create brands capable of commanding enormous price premiums.
• 1:54
  SPEAKER_00: We tell them not to compete on price, build distinctiveness, create perceived value, protect that premium.
• 2:02
  SPEAKER_00: And then those same agencies walk into a procurement process and sell themselves based on hours, headcount and increasingly who can do the work the cheapest.
• 2:13
  SPEAKER_00: As Woolley puts it, we teach our clients how to be indispensable, then sell our own expertise by the ton.
• 2:20
  SPEAKER_00: And I think that's an interesting part of this.
• 2:23
  SPEAKER_00: Marketing has become incredibly good at measuring costs and surprisingly bad at defining value.
• 2:28
  SPEAKER_00: We benchmark agency rates, we benchmark media CPMs, we benchmark marketing investment as a percentage of revenue, and increasingly we celebrate efficiency simply because something got cheaper.
• 2:40
  SPEAKER_00: But cheaper isn't necessarily better.
• 2:42
  SPEAKER_00: A$5 CPM that nobody notices isn't better value than a$20 CPM that actually builds memory.
• 2:49
  SPEAKER_00: And an agency that costs 20% less isn't a bargain if the thinking is materially worse.
• 2:56
  SPEAKER_00: Now AI comes in and it makes this tension even more interesting.
• 3:00
  SPEAKER_00: So if agencies charge clients primarily for people's time, an AI allows those people to produce that same work in half of the time.
• 3:09
  SPEAKER_00: What exactly are clients then playing for?
• 3:11
  SPEAKER_00: Are they paying for the hours?
• 3:13
  SPEAKER_00: Are they paying for the outcome?
• 3:14
  SPEAKER_00: Because if it's the hours, agencies have a pretty serious problem.
• 3:18
  SPEAKER_00: But if it's the quality of thinking, the strategic advantages created, or the commercial outcome delivered, then perhaps AI is forcing the industry to finally confront a pricing model that has been broken long before AI arrived.
• 3:33
  SPEAKER_00: So Woolley's broader argument is that our inability to articulate value has consequences.
• 3:40
  SPEAKER_00: When agencies can't confidently charge for value at the front door, the industry finds other ways to create margin, rebates, commissions, principal media, and other less transparent revenue streams.
• 3:53
  SPEAKER_00: So these are where essentially two ideas collide.
• 3:57
  SPEAKER_00: So my question to you here is if agencies stop selling hours tomorrow, what should clients actually be paying them for?
• 4:05
  SPEAKER_03: Dude, that is such a great question.
• 4:12
  SPEAKER_00: Oh man.
• 4:12
  SPEAKER_00: As much as the people will give us.
• 4:14
  SPEAKER_03: It's so it's so it's such a tricky question.
• 4:18
  SPEAKER_03: I remember I want to say Lisa De Bono, maybe is her last name.
• 4:26
  SPEAKER_03: I know it's not, I don't think she was related to Edward DeBono, but the Six Thinking Ads guy.
• 4:30
  SPEAKER_00: Okay.
• 4:31
  SPEAKER_03: Um anyway, I believe she was with a company called Huge.
• 4:35
  SPEAKER_02: Okay.
• 4:36
  SPEAKER_03: And that was changing their agency model from it being hourly-based to value-based.
• 4:42
  SPEAKER_03: Um and it was a relatively large organization.
• 4:46
  SPEAKER_03: And so it it was substantial that they were doing that.
• 4:50
  SPEAKER_03: I don't know how you there's so many industries.
• 4:55
  SPEAKER_03: Like I have a friend that's in engineering and he runs a firm there.
• 4:58
  SPEAKER_03: They're all engineering firms charge by the hour.
• 5:01
  SPEAKER_03: Lawyers, accountants, they all charge by the hour, or by project.
• 5:05
  SPEAKER_03: So I think by project is a reasonable alternative.
• 5:09
  SPEAKER_03: But then there's the whole public Picasso problem, which is there's that story about him being asked to sketch something, and he does this, he whips up this sketch in like three minutes, and then and then he's like, that'll be like uh whatever it was.
• 5:24
  SPEAKER_03: Ten thousand dollars.
• 5:25
  SPEAKER_03: And like, it only took you three minutes.
• 5:27
  SPEAKER_03: He's like, No, it didn't, it took me a lifetime to do this, yeah.
• 5:30
  SPEAKER_03: And so I think there's that kind of thing where we don't we don't have uh principles and and a set um governing body that tells the way we do things is like this.
• 5:45
  SPEAKER_03: Like there's not a bar that we have to pass or an association that we have to get creditation from.
• 5:51
  SPEAKER_03: And so there's without any of that kind of creditation, there's no standardization in in rates.
• 5:56
  SPEAKER_00: That's a good point.
• 5:57
  SPEAKER_00: Yeah.
• 5:58
  SPEAKER_03: Um, and there's no perceived value in like the risk of picking one agency over another.
• 6:03
  SPEAKER_03: Like if you go with somebody who's not a lawyer to try and do your legal documents, like that's a problem.
• 6:08
  SPEAKER_00: That could be a problem.
• 6:10
  unknown: Right.
• 6:12
  SPEAKER_03: And so there's safety that comes with that kind of or an engineering stamp, there's safety that comes with that.
• 6:18
  SPEAKER_03: And so we don't have that, and I think that's part of our challenge.
• 6:22
  SPEAKER_03: But you're right, like what should clients be actually paying for?
• 6:28
  SPEAKER_03: I mean, it takes you can whip.
• 6:30
  SPEAKER_03: I will last week literally whipped up a website in a few hours on Clot.
• 6:34
  SPEAKER_03: It's not great, and it probably is tons of code problems behind it, but I did it.
• 6:39
  SPEAKER_03: Yeah.
• 6:42
  SPEAKER_03: For me, is it worth the couple hours?
• 6:45
  SPEAKER_03: Absolutely.
• 6:46
  SPEAKER_03: Is it worth$30,000 or$40,000 if I were to pay an agency?
• 6:50
  SPEAKER_03: Probably not.
• 6:52
  SPEAKER_03: So I don't know.
• 6:54
  SPEAKER_00: It's a tough one.
• 6:56
  SPEAKER_00: Genuinely, it's hard.
• 6:58
  SPEAKER_00: It's hard because like you have large clients that want, you know, either you're on a commission model, you're on a retainer, what what it everyone approaches this differently.
• 7:08
  SPEAKER_00: But then again, of course, the only way agencies can make money is when they can put as little amount of time into the account for the greatest output, if that makes sense.
• 7:20
  SPEAKER_00: Right?
• 7:20
  SPEAKER_00: So then they can put their people across multiple things, and that's what generates essentially, you know, your your uh your positive revenue.
• 7:28
  SPEAKER_00: And it's it's hard.
• 7:30
  SPEAKER_00: I I I don't even know what the the real solution is here because if you you can try to go that project base, but that's one off usually, you can kind of get away with it.
• 7:41
  SPEAKER_00: That's not really how agency models are built, at least not at the enterprise level.
• 7:48
  SPEAKER_00: And then at the end of the month, they reconcile the hours, right?
• 7:51
  SPEAKER_00: Like how many hours the team put, so they'll tell you that hey, you went over by X amount of hours, but you were under in this side.
• 7:59
  SPEAKER_00: So it's hours is still a big part of the model.
• 8:05
  SPEAKER_03: Yeah, I think everyone wants to know they're getting fair time put into their contract.
• 8:11
  SPEAKER_03: Um, that's fair.
• 8:12
  SPEAKER_03: For sure.
• 8:13
  SPEAKER_03: And so there's like a but I think that only comes up when there's problems.
• 8:17
  SPEAKER_03: That only becomes an issue when there's other problems.
• 8:19
  SPEAKER_03: And then you're trying to like troubleshoot, well, why aren't we getting the things that they told us we were gonna get?
• 8:24
  SPEAKER_03: And it turns out, well, nobody's doing shit over there.
• 8:27
  SPEAKER_03: They're just taking our money.
• 8:29
  SPEAKER_00: That's true.
• 8:29
  SPEAKER_03: That's true.
• 8:30
  SPEAKER_03: It's tricky, man.
• 8:31
  SPEAKER_03: You must see a lot of the because you've got a lot of agencies that you work with.
• 8:35
  SPEAKER_00: Yeah, and it's again, I don't think there's a perfect model out there.
• 8:39
  SPEAKER_00: Really, and well, and the reason why I empathize with this note is like I understand exactly where the author is coming from.
• 8:45
  SPEAKER_00: I get it.
• 8:46
  SPEAKER_00: But in in in in the context of the business realities, is like you need to anchor something.
• 8:53
  SPEAKER_00: You need to anchor the cost to something, and it's usually going to be hours.
• 8:58
  SPEAKER_00: Because you'll say, like, I have I'm assigning this team to your to your business, and they're gonna spend X amount of hours.
• 9:04
  SPEAKER_00: You get 20% of my time because I'm a VP, you're gonna get 100% of their time who's, you know, the boots on the ground as an example.
• 9:12
  SPEAKER_00: I don't know how you get away from that.
• 9:14
  SPEAKER_03: Well, and and like, yeah, just to kind of go down this rabbit hole a little bit more, like there's also this idea that you know AI is gonna save us uh time or or costs and resources and stuff.
• 9:27
  SPEAKER_03: But so far, like there's not many people that I've heard that are talking to that are it's saving them a ton more time.
• 9:33
  SPEAKER_03: No, you can get things done faster, but it doesn't mean that there's less things to do.
• 9:37
  SPEAKER_00: No.
• 9:38
  SPEAKER_03: Um I agree.
• 9:39
  SPEAKER_03: So there's one of those things that's a challenge.
• 9:41
  SPEAKER_03: Plus, then like I just did this analysis this morning trying to figure out like what does it actually cost to do stuff on AI?
• 9:47
  SPEAKER_03: Like, there's a lot of cost for tokens now.
• 9:50
  SPEAKER_03: And you know, are we getting to the point where like when the internet goes down, nobody can work?
• 9:56
  SPEAKER_03: But if we don't have AI, does that mean we don't have any intelligence anymore?
• 9:59
  SPEAKER_03: We can't do any more work.
• 10:02
  SPEAKER_03: And so like the cost, yeah, like is if for a just a chat conversation back and forth, it's like you know, pennies uh for for a conversation.
• 10:12
  SPEAKER_03: For a blog post, it told me the blog post I wrote this morning was eight dollars.
• 10:18
  SPEAKER_03: But if you're doing an agent that's constantly by your side doing everything, it's like thousands of dollars a month.
• 10:26
  SPEAKER_03: Yeah, multiply that by however many people, like you're not there.
• 10:32
  SPEAKER_03: I don't know like where the where all the money's gonna come from to cover off all that.
• 10:39
  SPEAKER_03: Like it might actually increase fees.
• 10:42
  SPEAKER_03: Maybe it's interesting.
• 10:45
  SPEAKER_00: Yeah.
• 10:46
  SPEAKER_00: Anyways, I didn't mean to go that deep of a rabbit hole, but it's it's a thing.
• 10:50
  SPEAKER_00: And yeah, I don't know.
• 10:51
  SPEAKER_00: AI is the answer for a lot of things, but I don't know if it's the answer for everything.
• 10:56
  SPEAKER_03: Totally.
• 10:57
  SPEAKER_03: We should ask AI.
• 10:59
  SPEAKER_00: We should ask AI.
• 11:00
  SPEAKER_00: Yeah, exactly.
• 11:01
  SPEAKER_00: All right.
• 11:02
  SPEAKER_00: What did you find?
• 11:04
  SPEAKER_03: Uh cool article.
• 11:06
  SPEAKER_03: Uh this guy, Paul Worthington.
• 11:08
  SPEAKER_03: We've I've talked about him before.
• 11:10
  SPEAKER_03: Yeah, he's he's a great guy.
• 11:12
  SPEAKER_03: He's got a really thoughtful uh sub stack.
• 11:16
  SPEAKER_03: This is called Off Kilter is this is is his blog post.
• 11:20
  SPEAKER_03: This one was called the availability track, uh trap, I should say.
• 11:24
  SPEAKER_03: So he had this opening line that I thought made a few well made me twitch for sure.
• 11:30
  SPEAKER_03: Um and really caught my attention.
• 11:33
  SPEAKER_03: So if all we did was follow Sharp, in other words, Brian Sharp or Byron Sharp.
• 11:37
  SPEAKER_00: Byron Sharp, yeah.
• 11:38
  SPEAKER_03: Yeah, we'd be screwed.
• 11:41
  SPEAKER_03: I'm like, okay, got my attention.
• 11:43
  SPEAKER_00: Okay.
• 11:44
  SPEAKER_03: Uh and so it goes like it's a really well constructed article.
• 11:49
  SPEAKER_03: You'd have to kind of read it.
• 11:50
  SPEAKER_03: And he's not saying that how brands grow was wrong by any stretch.
• 11:55
  SPEAKER_03: Um, but he is saying mental and physical availability are kind of like table stakes.
• 12:01
  SPEAKER_03: And I agree with him in a lot in a lot of ways about this.
• 12:05
  SPEAKER_03: If you get those wrong, it doesn't matter what else you do, none of that's true will work.
• 12:10
  SPEAKER_03: And I think that's one of the things that is so helpful about mental and physical availability is that like it really does a great job to synthesize a whole bunch of research into one uh simple framework uh to check off your list.
• 12:28
  SPEAKER_03: Go, did I do this right?
• 12:30
  SPEAKER_03: And did I do this right?
• 12:32
  SPEAKER_03: Like before doing anything else.
• 12:34
  SPEAKER_03: Like if we can't get that done, then we should really uh think about what we're doing.
• 12:39
  SPEAKER_03: Yeah, and so we should be exceptional at building mental and physical availability.
• 12:43
  SPEAKER_03: But if every competitor is doing it, uh it can't be any strategy for winning because everybody's doing it.
• 12:50
  SPEAKER_03: And then that's where like big brands, big brands are growing in part because they have more resources to put at their mental and physical availability and they have more customers and blah, blah, blah.
• 13:00
  SPEAKER_03: So he makes this conversation around uh or argument around private label.
• 13:05
  SPEAKER_03: So it didn't beat brands with better marketing.
• 13:07
  SPEAKER_03: There's this rise of private label in his article he talks about.
• 13:11
  SPEAKER_03: And I've seen it a lot at the grocery store.
• 13:13
  SPEAKER_02: Yeah.
• 13:14
  SPEAKER_03: Um, but I think they're using the availability playbook from inside the store where they're just removing competing brands and replacing their own brands.
• 13:22
  SPEAKER_03: So they're taking the mental and physical play of uh playbook and using it to their advantage.
• 13:28
  SPEAKER_03: So when the retailer owns the shelf, the retailer owns the availability.
• 13:32
  SPEAKER_03: Um, and so when your edge is the thing that can is the thing your competitor controls, then it isn't an edge.
• 13:39
  SPEAKER_03: And that's why I think um what Paul points to is really ultimately Roger Martin, the idea around where to play and how to win.
• 13:48
  SPEAKER_03: So if if you think about what customer value you're creating and then why you deserve to win with it, I think that's something other than just mental and physical availability.
• 14:00
  SPEAKER_03: It's the way you do it, it's not so much that you do it.
• 14:03
  SPEAKER_00: Right.
• 14:04
  SPEAKER_03: And so he's ultimately coming down to this line about how um Paul is, about how the Ehrenberg Bass Institute's work helps us ensure that we don't lose through a lack of operational excellence in marketing, which I think is so critical.
• 14:19
  SPEAKER_03: There is a definite discipline there.
• 14:22
  SPEAKER_03: Um, but it doesn't on its own tell us what we should do to win and break out of cycles of like we're a fourth place brand in the market and how do we break out of that?
• 14:32
  SPEAKER_03: That's true.
• 14:33
  SPEAKER_03: Um because that's a conversation about strategy.
• 14:35
  SPEAKER_03: What are the choices we're gonna make to break free from this position that we're in?
• 14:39
  SPEAKER_03: It's not just about executional uh operational excellence.
• 14:46
  SPEAKER_03: So I don't know, what do you think about um how to break out of it?
• 14:52
  SPEAKER_00: No, the reason why I agree is because you know this.
• 14:55
  SPEAKER_00: I I've been trying to create like a framework, uh repeatable strategic framework that touches everything from commercial strategy, marketing strategy to media strategy.
• 15:06
  SPEAKER_00: And it's all anchored in the playing to win framework from from Roger Martin up front, up top, right?
• 15:12
  SPEAKER_00: Then it moves into you know defining like mental availability, physical availability, then you know your category entry points, et cetera.
• 15:19
  SPEAKER_00: So I I agree with what Paul's saying here.
• 15:22
  SPEAKER_00: Mental and physical availability is table stakes.
• 15:25
  SPEAKER_00: At minimum, you need to be doing these really well so that you have enough storefronts, you're you're out there talking about your product and services as consistently as possible.
• 15:36
  SPEAKER_00: But that isn't the how you win, right?
• 15:39
  SPEAKER_00: The how you win is really you have to define it upstream on what territories you really want to own, which comes back into the marketing strategy and anchoring in things like category entry points as an example.
• 15:51
  SPEAKER_00: So yeah, I I yeah, I agree with this.
• 15:54
  SPEAKER_00: And the best way to break out of this cycle is just simply go back and say, well, if all things are equal, what am I doing differently for my competitor today that sets me apart?
• 16:07
  SPEAKER_03: Yeah, it's yeah, it's such an interesting thought.
• 16:10
  SPEAKER_03: Like as we've had Dale on before, Harrison talking about um brands that are just running to stay in place.
• 16:16
  SPEAKER_03: And I think the one that I think about a lot, which is why I did this availability trap, kind of caught my attention.
• 16:23
  SPEAKER_03: And you and I've kind of discussed this a little bit, but like if your budget, let's just say it's 5% of total revenue, and everybody in your category is also getting 5% of the revenue, how do you break free from that?
• 16:36
  SPEAKER_03: You know, you gotta do something radical in order to get more share of voice, or within your budget, allocate it differently.
• 16:47
  SPEAKER_00: Again, though, don't wouldn't you have still two levers to pull?
• 16:51
  SPEAKER_00: Because there are the sorry, there could be bigger levers like uh logistics, things like uh like from an operational perspective, you could probably look at, but let's just kind of bring it back to our side.
• 17:03
  SPEAKER_00: We've been talking about showmanship and that being a great differentiator from a creative perspective, right?
• 17:08
  SPEAKER_00: So that that could be something that you're just gonna level up your creative, your creativity as a brand that makes you stand out a little bit more than say your competitors.
• 17:17
  SPEAKER_00: So that could be an angle, a creative angle.
• 17:19
  SPEAKER_00: The other one is like how you're choosing to bring all of this to life.
• 17:23
  SPEAKER_00: We've seen the rise of the creators, right?
• 17:26
  SPEAKER_00: If your competitors are not playing in that space, that could be again another great differentiator where now you're working against the mental availability side of it, but through a different source.
• 17:38
  SPEAKER_00: So I think like there's still ways that you can break out of this, but you just have to have the courage.
• 17:43
  SPEAKER_00: And if I cite one of the things, one of the things that Karen Pierce, uh one of the partners there over at Rethink, told us.
• 17:49
  SPEAKER_00: It's like you you need you're almost like need to make those calculated risks.
• 17:55
  SPEAKER_00: Or sorry, a risk shouldn't feel how does she position it?
• 17:58
  SPEAKER_00: Risk shouldn't be shouldn't feel scary.
• 18:01
  SPEAKER_00: Shouldn't feel scary, exactly.
• 18:03
  SPEAKER_00: It needs to be calculated.
• 18:04
  SPEAKER_00: So I think there's there's ways.
• 18:06
  SPEAKER_00: The one thing I just quickly wanted to say that just popped in my head, mental physical availability are also a great diagnostic diagnosis tools, diagnostic tools.
• 18:15
  SPEAKER_00: Like, okay, let's talk about you know, physical availability.
• 18:19
  SPEAKER_00: Are we are we actually at par or not?
• 18:23
  SPEAKER_00: Or are we actually is there an opportunity there for us to do more?
• 18:27
  SPEAKER_00: Same thing on the mental availability side.
• 18:29
  SPEAKER_00: Maybe you don't have an always-on program, or you can't afford one, or how you choose to market those dollars in those in those moments.
• 18:35
  SPEAKER_00: Like, how do you do that, right?
• 18:37
  SPEAKER_02: Yeah.
• 18:37
  SPEAKER_00: So um, yeah, I think there's a couple ways you can get out of it.
• 18:41
  SPEAKER_00: Proper diagnosis against mental and physical availability, but then I don't know if we're using the marketing lens.
• 18:47
  SPEAKER_00: There's a medium, and then there's the creative output that you could probably look to shake up.
• 18:53
  SPEAKER_00: Good point, C.
• 18:54
  SPEAKER_03: Okay, what else you got here?
• 18:55
  SPEAKER_03: There's a really interesting one, speaking of creators.
• 18:58
  SPEAKER_00: Speaking of creators, those is gonna be my segue.
• 19:00
  SPEAKER_00: Yeah.
• 19:00
  SPEAKER_00: How to measure the true value of creators and review content.
• 19:04
  SPEAKER_00: So I went back to the well here in the search engine line.
• 19:07
  SPEAKER_00: I just love that website, I really do.
• 19:09
  SPEAKER_00: Um, and this one is something that Mark, you and I have kind of talked about uh a bit attribution versus incrementality on enough.
• 19:17
  SPEAKER_00: I know we have a great conversation with Avanish, it would have been a few years ago, um about this.
• 19:23
  SPEAKER_00: But this time we're I wanted to kind of anchor this in this example that this article had around influencers, reviewers, and affiliate marketing.
• 19:30
  SPEAKER_00: Because there is a problem.
• 19:31
  SPEAKER_00: So imagine you pay a YouTube creator to review your product.
• 19:35
  SPEAKER_00: Your PR team pays the creator and sends them the product, then your affiliate team gives them the commission link.
• 19:42
  SPEAKER_00: Your social team sees the content performing and puts paid media behind it.
• 19:47
  SPEAKER_00: Then your SEO and AEO team sees a review, and search and AI results are starting to invest in that correlationship as well.
• 19:56
  SPEAKER_00: So everyone looks at their dashboard and thinks that their channel is working.
• 20:00
  SPEAKER_00: But there's a pretty important question nobody has asked.
• 20:04
  SPEAKER_00: Are we actually creating additional demand?
• 20:06
  SPEAKER_00: Or are we paying three or four times for the same customer?
• 20:11
  SPEAKER_00: And that's what I really liked about this article because it argues that a review content can become what the author calls parasitic over time.
• 20:19
  SPEAKER_00: Initially, a creator might genuinely introduce your brand to a new audience and generate incremental customers, but months later, that same review might rank when someone searches for your brand up here and they're comparing two products at that point, or become the final piece of a reassurance for someone who's already going to buy.
• 20:39
  SPEAKER_00: So the content is still valuable.
• 20:41
  SPEAKER_00: I'm not we're not second-guessing this or changing that.
• 20:44
  SPEAKER_00: But I think now all of a sudden, that same content, the role has changed within it.
• 20:49
  SPEAKER_00: And that's the distinct distinction I think marketers sometimes miss.
• 20:53
  SPEAKER_00: So if an affiliate platform tells your creator generated$100,000 in revenue, that doesn't mean removing that creator would cost you$100,000 in sales.
• 21:03
  SPEAKER_00: Attribution tells you who touched the transaction.
• 21:06
  SPEAKER_00: Incrementality asks whether the transaction would have happened without them.
• 21:10
  SPEAKER_00: So those are fundamentally two different questions.
• 21:13
  SPEAKER_00: And there's another wrinkle here when we start thinking about the lens of AI search.
• 21:18
  SPEAKER_00: Third-party reviews are increasingly becoming potential source of material for AI assisted discovery.
• 21:24
  SPEAKER_00: That means creator content could have value well beyond its original campaign, shaping how your brand is understood, connecting the products to a particular use cases or buying situations, building credibility and potential influencing what gets surfaced in an AI generated answer.
• 21:42
  SPEAKER_00: Again, that's value.
• 21:44
  SPEAKER_00: So I think there's a bigger lesson that we have to stop expecting every marketing activity is to justify itself using the same metric.
• 21:52
  SPEAKER_00: A creator might start as an acquisition channel and eventually become social proof.
• 21:57
  SPEAKER_00: A review might begin as awareness and let Later become conversion support.
• 22:02
  SPEAKER_00: The value hasn't necessarily disappeared.
• 22:04
  SPEAKER_00: The job it's doing has simply changed.
• 22:07
  SPEAKER_00: And I don't know if you saw the yeah, of course you did, because you reacted to it.
• 22:11
  SPEAKER_00: Um James Herman, he tagged us in a post around podcasters.
• 22:16
  SPEAKER_00: This is a perfect, it's a perfect example where it's because there's longevity in a podcast, by the way, why you should all be supporting us and um sponsoring the this episode.
• 22:27
  SPEAKER_00: But it's lots of sponsorship opportunities here in the sleeping barber.
• 22:32
  SPEAKER_03: Call us right now.
• 22:38
  SPEAKER_00: But yeah, anyways, the the the big question here is like have we become so obsessed with that attributing every sale that we've actually become worse at understanding how marketing grades value?
• 22:49
  SPEAKER_03: Yes.
• 22:50
  SPEAKER_00: Yes.
• 22:51
  SPEAKER_00: Moving on.
• 22:52
  SPEAKER_00: News story number four.
• 22:55
  SPEAKER_03: No, but I mean you've got uh you you put some really good stuff up uh over a long time, but um just in general, like when we've got a conversation coming up on Sharp Cut about ROI, it's one that keeps coming back over and over and over again.
• 23:12
  SPEAKER_03: It does.
• 23:14
  SPEAKER_03: Um like we have more data than ever before, and confidence in marketing is arguably lower than it's ever been before, which are two weird things to actually be true simultaneously, but somehow they are.
• 23:33
  SPEAKER_03: It's weird.
• 23:34
  SPEAKER_03: Like, how do we have all this data and but we can't answer like did it work?
• 23:41
  SPEAKER_00: Yeah, no, we can't.
• 23:43
  SPEAKER_00: It's weird.
• 23:45
  SPEAKER_00: Not confidently, at least.
• 23:47
  SPEAKER_03: No.
• 23:48
  SPEAKER_03: So I think that's the thing about incrementality.
• 23:50
  SPEAKER_03: Like, it's it's not data, I agree with you, we need it, and it's not data that's readily accessible.
• 23:56
  SPEAKER_03: You have to kind of go out of the box to find it.
• 23:59
  SPEAKER_03: Um and you have to be willing to go, no, this is the right way to do it, instead of just saying, you know, for everyone that goes, Oh, here's my numbers, here, here's my numbers, I can get that to you in a second.
• 24:09
  SPEAKER_03: Here like here's my numbers, right?
• 24:11
  SPEAKER_03: Yeah.
• 24:11
  SPEAKER_03: We have to be able to be able to say, let's just take a step back and actually figure out what this means and what we're trying to do.
• 24:19
  SPEAKER_00: Yeah.
• 24:21
  SPEAKER_03: All right, final story.
• 24:23
  SPEAKER_03: Uh from our friend Mary Kitty Gitty.
• 24:27
  SPEAKER_03: How's my Greek there?
• 24:28
  SPEAKER_03: You did great, man.
• 24:30
  SPEAKER_03: Yeah, thanks.
• 24:31
  SPEAKER_03: Must be all the food I've gifted you.
• 24:33
  SPEAKER_03: Oh, I've been eating so much fat over the whole Christmas.
• 24:36
  SPEAKER_03: The summer break has been great.
• 24:39
  SPEAKER_03: I almost and I started eating without like uh vinegar in some cases.
• 24:44
  SPEAKER_03: It made me think every time I did that.
• 24:47
  SPEAKER_03: There you go.
• 24:48
  SPEAKER_03: Yes, sometimes it's not to my taste.
• 24:52
  SPEAKER_03: Um yeah, Mary um had this great post on LinkedIn.
• 24:57
  SPEAKER_03: Um so she gave a really good definition of pricing power that and one of the best ones I've I've read.
• 25:04
  SPEAKER_03: So it measures permission, not intent, which I think is really interesting.
• 25:09
  SPEAKER_03: If it so pricing power tells you whether people are ready already think you're worth more than the alternative before you even ever ask them to do anything.
• 25:18
  SPEAKER_03: So Cantar, uh, who she works with, tested whether that permission shows up in the PL.
• 25:24
  SPEAKER_03: And so they matched brands equity data with uh financial data from 2019 to 2020.
• 25:31
  SPEAKER_03: And for every hundred dollars of sales, the brands with the weakest pricing power kept ten dollars of profit, so like a 10 10% profit, essentially.
• 25:46
  SPEAKER_03: Everyone else kept$14.
• 25:49
  SPEAKER_03: So it's four extra dollars on every hundred, straight to the bottom line.
• 25:53
  SPEAKER_03: Same economy, all that kind of stuff.
• 25:55
  SPEAKER_03: And so it's that that particular gap isn't actually that interesting.
• 26:01
  SPEAKER_03: The the one that's really interesting is that the very best brands you might think would be like sky high, like 20 or something, but they're not.
• 26:09
  SPEAKER_03: They're they kept$15 of profit on average.
• 26:13
  SPEAKER_03: So the average ones kept$14.
• 26:15
  SPEAKER_03: So being exceptional earns you an extra dollar per 100.
• 26:18
  SPEAKER_03: So being but being bad at it costs you four.
• 26:22
  SPEAKER_03: And so the risk um was never that you fail to become a premium brand.
• 26:27
  SPEAKER_03: The really the risk is that you slide to the bottom and the market starts setting the price for you.
• 26:33
  SPEAKER_03: Remember, we had Herman Simon on Weback Wan V with Um, I think I forget what episode it was.
• 26:40
  SPEAKER_03: He was on a few times, but there was an episode on price that we talked to him about.
• 26:44
  SPEAKER_03: And so I remember like having a lot of interesting aha's with him going, what do you mean it's not the objective isn't profit?
• 26:52
  SPEAKER_03: Because you know, revenue is sometimes profit or is sometimes the objective, and so people don't care about profit.
• 26:58
  SPEAKER_03: Yeah.
• 26:59
  SPEAKER_03: But if the if the objective is profit and not revenue, then price is the biggest lever.
• 27:06
  SPEAKER_03: Um, and he had talked about uh for every uh dollar or percent increase in profit um that you can get, or sorry, impro improvement in price generates about six, ten percent more profit, whereas volume and and uh cost control measures only equal about 10 percent 10% additional uh value on their own.
• 27:30
  SPEAKER_03: So price is the single biggest lever to drive profit.
• 27:33
  SPEAKER_03: And then there's another study that came out that that validated that.
• 27:37
  SPEAKER_03: But not everyone is incentivized by profit, as I mentioned.
• 27:40
  SPEAKER_03: So plenty of teams get paid on revenue, and so then they spend the permission on discounts.
• 27:47
  SPEAKER_03: And so Mary wasn't talking about just you know raise your prices.
• 27:51
  SPEAKER_03: Um, she's actually just making a great point about you should find out whether you have the permission to or not to see if people are willing to pay.
• 28:00
  SPEAKER_03: Yeah.
• 28:01
  SPEAKER_03: Because you might be leaving a ton of money on the table.
• 28:04
  SPEAKER_00: That's a really interesting way of framing it.
• 28:06
  SPEAKER_00: I was just gonna say, I keep thinking about like luxury brands.
• 28:08
  SPEAKER_00: It's as consumers, we have this expectation that it's good, I'm gonna pay 10 times more.
• 28:17
  SPEAKER_03: I don't know where else I was going with that, but it's just but even if you're not a luxury brand, you like we we have all these things like Black Friday, we need a 60% off message.
• 28:29
  SPEAKER_03: Or no, no, no.
• 28:31
  SPEAKER_03: Last year was 60, everyone's gonna go higher this year.
• 28:33
  SPEAKER_03: We need a 70% off message.
• 28:37
  SPEAKER_03: It's almost like this race to the bottom.
• 28:38
  SPEAKER_03: And so what if you didn't?
• 28:41
  SPEAKER_03: Like, does that matter?
• 28:43
  SPEAKER_03: Like, if you just did 20, 30, like is what we're selling gonna drive maybe smaller volume, but is it driving more profitable sales?
• 28:54
  SPEAKER_03: Like, how much are we willing to give away?
• 28:56
  SPEAKER_03: I know there's a whole thing around like the numbers, sometimes the thing that appeals to people, they don't actually buy the thing that's 70% off, but the up to messaging.
• 29:06
  SPEAKER_03: We lived up to you really need up to all the time, like a giant ridiculous, like why not a thousand percent off?
• 29:15
  SPEAKER_02: Yeah.
• 29:16
  SPEAKER_03: Obviously, you can't do a thousand percent, but a hundred percent off.
• 29:21
  SPEAKER_00: Free.
• 29:23
  SPEAKER_00: And we'll ship it to you, and we'll walk it, walk it to your door, and we'll walk your dog.
• 29:28
  SPEAKER_00: I'm trying to think of like a re like our shared experience in retail.
• 29:31
  SPEAKER_00: The thing about Black Friday, any any core retail moment, your up to message was the thing that set the tone for the consumer.
• 29:39
  SPEAKER_00: And we would always say, at minimum, give me what I had last year.
• 29:44
  SPEAKER_00: So make sure that I can drive traffic, engagement, all the KPIs that we thought mattered at the time.
• 29:51
  SPEAKER_00: And that only happened with those deep discounts.
• 29:55
  SPEAKER_00: Now, if I'm a consumer, have I now already been trained to wait for Black Friday?
• 30:01
  SPEAKER_00: And if I don't see 60% off, that I actually then I'm either going to try to find it elsewhere that is giving me that 60% off.
• 30:09
  SPEAKER_03: Yeah.
• 30:10
  SPEAKER_00: I don't I don't know.
• 30:11
  SPEAKER_00: I guess it it matters on the sense of the side.
• 30:12
  SPEAKER_03: This is where the satisfaction I think kicks in, and that's why I think her comment is interesting.
• 30:17
  SPEAKER_03: Because find out if you have to give it.
• 30:20
  SPEAKER_03: Because like just because I can get it 60% somewhere else doesn't or 20 bucks off.
• 30:26
  SPEAKER_03: Like I might just go fuck it.
• 30:27
  SPEAKER_03: I'll just get it from here because it's too much of a pain.
• 30:30
  SPEAKER_03: Maybe.
• 30:31
  SPEAKER_00: Yeah.
• 30:33
  SPEAKER_00: Yeah, I think I think finding out if you have permission to do it is a whole other exercise then.
• 30:40
  SPEAKER_00: I don't disagree.
• 30:42
  SPEAKER_00: But like again, if you're a big box retailer, how do you even test that?
• 30:46
  SPEAKER_00: I don't even know how you test it.
• 30:48
  SPEAKER_00: Maybe geo.
• 30:50
  SPEAKER_00: But then if someone finds out that actually they could have bought it cheaper if they just were in a different province, picking on Canada here or let's say the state in in in the United States, then like the competition bureaus after you.
• 31:03
  SPEAKER_03: Yeah.
• 31:04
  SPEAKER_03: I mean it applies in uh things beyond beat like retail even because in a lot of things there's not like there's MSRP on a lot of retail.
• 31:13
  SPEAKER_03: But you don't have MSRP on a lot of services.
• 31:17
  SPEAKER_00: No.
• 31:18
  SPEAKER_00: Anyway, we don't interesting idea.
• 31:21
  SPEAKER_00: That's a really interesting idea.
• 31:22
  SPEAKER_00: Yeah.
• 31:24
  SPEAKER_00: Good fine.
• 31:25
  SPEAKER_00: Well done, Mighty.
• 31:27
  SPEAKER_00: Uh out of the week.
• 31:29
  SPEAKER_00: Out of the week.
• 31:30
  SPEAKER_00: Out of the week.
• 31:31
  SPEAKER_00: Out of the week.
• 31:32
  SPEAKER_00: Spotify turns playlist names into hyperlocal punchlines.
• 31:38
  SPEAKER_03: Love this one.
• 31:39
  SPEAKER_00: Yeah.
• 31:40
  SPEAKER_00: So I think uh this started hit.
• 31:42
  SPEAKER_00: I think Spotify's done this before.
• 31:44
  SPEAKER_00: Um, and they've basically done it again.
• 31:48
  SPEAKER_00: And it feels like it's one of those campaigns where the idea is almost as ridiculous.
• 31:53
  SPEAKER_00: It is ridiculously simple.
• 31:55
  SPEAKER_00: It really is.
• 31:56
  SPEAKER_00: Spotify has taken uh real playlist names from its platform and turned them into hyper-local outdoor ads, uh, pairing those playlists with specific locations and cultural observations to create the punchline.
• 32:09
  SPEAKER_00: What I love about this, and I'm gonna for the video for those on YouTube, you'll I'll insert some of the images that we have.
• 32:14
  SPEAKER_00: What I love about this is Spotify has essentially found a way to do, dare I call it, personalization at scale without failing or falling into the trap of making advertising feel overly personalized.
• 32:28
  SPEAKER_00: Because I think that's the biggest difference.
• 32:30
  SPEAKER_00: Now, we've spent years talking about personalization as a technology problem, more data, more targeting, more dynamic, creative, more versions of the ad, which at the end of the day doesn't really work.
• 32:40
  SPEAKER_00: Um, Spotify, however, is approaching it as a creative platform instead or a creative problem that they're trying to solve for.
• 32:47
  SPEAKER_00: So the ad doesn't need to know who I am.
• 32:50
  SPEAKER_00: It needs to understand something about where I am and the culture I'm part of.
• 32:55
  SPEAKER_00: And Spotify in particular is really good at this because the product itself gives them an almost endless source of cultural material.
• 33:04
  SPEAKER_00: Playlist names, listening habits, artists, genres, and all the weird ways people use music to describe moments in their lives have become ingredients for advertising.
• 33:15
  SPEAKER_00: So they've actually been doing versions of this, like I said earlier, for years.
• 33:19
  SPEAKER_00: Some of Spotify's best outdoor work has taken uh data that could have been incredibly boring and turned into something that's quite human.
• 33:27
  SPEAKER_00: It's funny, it's very rec also culturally recognizable.
• 33:31
  SPEAKER_00: That's what, and it's what I think a lot of brands uh miss when they talk about being data driven.
• 33:37
  SPEAKER_00: Spotify is putting the data in the ad.
• 33:40
  SPEAKER_00: They're finding that human truth hiding inside the data, and then they're allowing the audience to complete the joke.
• 33:47
  SPEAKER_00: And there's something else I really like about this too.
• 33:49
  SPEAKER_00: This is advertising designed for the media.
• 33:52
  SPEAKER_00: You're walking down the street, you may be two or three seconds, there's a local reference, you immediately recognize a playlist name that becomes the punchline and Spotify.
• 34:03
  SPEAKER_00: That's it.
• 34:04
  SPEAKER_00: No product demo, no QR code to scan, no six benefit statements.
• 34:10
  SPEAKER_00: It's just a distinctive brand using something only it could credibly own to make the marketing really entertaining.
• 34:18
  SPEAKER_00: That's the out of the week.
• 34:20
  SPEAKER_03: Yeah, I love it.
• 34:21
  SPEAKER_03: It's a good one.
• 34:22
  SPEAKER_03: I know they did those other ones where it was like, I don't know, Sally Johnson uh listened to this song 348,000 times.
• 34:34
  SPEAKER_03: Those kinds of things.
• 34:35
  SPEAKER_03: Thanks, Sally.
• 34:36
  SPEAKER_03: Yeah.
• 34:37
  SPEAKER_03: Yeah, there's some really good ones in here.
• 34:40
  SPEAKER_03: I noticed they didn't put any of mine in the list, but no, mine missed it too.
• 34:44
  SPEAKER_03: Like summer 2026, I thought it would have been a shoe-win for one of these.
• 34:50
  SPEAKER_03: Um yeah, there's some good ones.
• 34:52
  SPEAKER_03: Yeah, it's interesting.
• 34:54
  SPEAKER_03: Like, it's a great way to like show their platform, show how people are using their platform, make it relevant.
• 35:01
  SPEAKER_03: But relevant isn't just like one-to-one, it's for like the geographic cultural targeting.
• 35:06
  SPEAKER_00: Totally.
• 35:07
  SPEAKER_03: And the creative is the target, like the medium is mass, but the creative is the targeting tool.
• 35:13
  SPEAKER_03: I love, I love lots of things about this.
• 35:15
  SPEAKER_00: Yeah.
• 35:16
  SPEAKER_00: It just makes sense on so many levels.
• 35:19
  unknown: Yeah.
• 35:19
  SPEAKER_03: And it's why they got their logo.
• 35:21
  SPEAKER_03: It's the product actually, like a screenshot of their product in use.
• 35:25
  SPEAKER_03: Like it's amazing.
• 35:26
  SPEAKER_00: Oh, exactly, right?
• 35:27
  SPEAKER_00: So it's immediately recognizable.
• 35:30
  SPEAKER_00: So you know exactly what you're looking at.
• 35:32
  SPEAKER_03: Yeah.
• 35:33
  SPEAKER_03: So good.
• 35:34
  SPEAKER_03: Well done.
• 35:36
  SPEAKER_00: Well done.
• 35:37
  SPEAKER_03: And that, V, brings us to the end of our Barbara's brief.
• 35:41
  SPEAKER_00: Wait, what's coming up later this week?
• 35:44
  SPEAKER_03: Well, I'm so glad you asked.
• 35:46
  SPEAKER_03: There's so many things coming up.
• 35:50
  SPEAKER_03: But first, we've got a new sharp cut coming out uh around effectiveness and the challenge that there is with leadership on bringing effectiveness inside of an organization, which is gonna be really good.
• 36:02
  SPEAKER_00: I really like this one.
• 36:04
  SPEAKER_03: Yeah, and then next week we've got a great guest.
• 36:06
  SPEAKER_03: Who do we have, V?
• 36:08
  SPEAKER_00: Fiona Stevenson.
• 36:10
  SPEAKER_00: And uh, guess what we get to talk about?
• 36:13
  SPEAKER_03: Uh pickles.
• 36:16
  SPEAKER_00: No.
• 36:17
  SPEAKER_00: We'll talk about pickles in the postpod.
• 36:19
  SPEAKER_00: No, we talk about innovation.
• 36:20
  SPEAKER_03: I love kosher dill pickles.
• 36:23
  SPEAKER_00: Yeah, exactly.
• 36:24
  SPEAKER_00: Um no, we get to talk about innovation.
• 36:26
  SPEAKER_00: Um Fiona recently with Shelley uh penned a great book called Built for Breakthrough: Why Innovation Fails and How Smart Leaders Get It Right.
• 36:36
  SPEAKER_00: I have it right in front of me here.
• 36:37
  SPEAKER_03: That's how I was like I can I can cite it that way.
• 36:41
  SPEAKER_00: Um it's such a great read, but I'm even more excited that we get to get we get to get into it with Fiona and just kind of um get like some of the thought process behind some of the material in here.
• 36:52
  SPEAKER_00: It's just really strong though, really well written.
• 36:55
  SPEAKER_03: Yeah, it's great.
• 36:56
  SPEAKER_03: I had so many flashbacks to our MBA when we were doing that, the innovation courses.
• 37:00
  SPEAKER_03: Yeah.
• 37:01
  SPEAKER_03: So great.
• 37:02
  SPEAKER_03: Really and that brings us to the end of our sharp cut or Barbara's brief.
• 37:07
  SPEAKER_03: Oh, wrong episode.
• 37:09
  SPEAKER_03: Thanks for keeping us in your ears.
• 37:12
  SPEAKER_03: Stay sharp, everybody.