Kraft shifting spend to reach more consumers. But at the cost of effectiveness?

On August 7th KraftHeinz took a billion+ in charges and the stock plunged. The next day on an investor call the CEO Miguel Patricio said this:

“In marketing, we are increasing investment, but media spend is declining because we are putting money behind other things [like] agency fees, production and research. [Investment in] the things consumers see are declining to pay for other expenses. These are inefficiencies we can redeploy,”

It’s hard to argue that they would not benefit in spending more to increase favorable opinions and behaviors among consumers. This money is apparently coming from what we frequently call “non-working” spend (things consumers don’t see) to “working” spend (the media dollars which translates to more eyeballs). There’s nothing inherently wrong with running a tight ship. It’s good to make sure that your balance of working to non-working media is in line. The danger is that you over-correct. Here’s an oversimplified equation.

Quality of the creative (the ad) x Exposure of the creative (media $) = Results

What makes for a great ad? A solid strategy grounded in deeply resonant consumer insights that leads to a great creative idea from your agency brought to life by excellent production.

Therefore, we want to maintain the balance of the equation. Are you cutting the research that leads you to great insights? To understand what it is about your brands that people find different and special? Research costs can get out of hand and in CPG there is arguably too much research (focused on justification rather than illumination). Just be careful.

Let’s move to the agency fees. Ask the agency to take a 10% fee reduction, and they will remove 10% of the expenses (people) off your business. Maybe they will take time from the most expensive and experienced people working on your business. Good agencies cannot just accept lower margins; they need to balance their own books. Great agencies will probably just walk away. Could you find a smaller, less expensive agency that is a diamond in the rough? Maybe. The expense is not driven by the fact that agencies are rolling in margins. The number of different agencies involved and the inefficiencies of the marketing planning /development cycle drive much of the expense. Agency time is agency money. Shorter, sharper development cycles might be a smarter choice.

Production expenses show up in the quality of the ads. A cheap director and production company will shoot your ad inexpensively. A great director will make your ad better than the version you handed her. The costs for producing advertising vary widely and there are more options to save money now. You do not always need to spend a fortune and certainly, money is wasted in over-produced ads. However, you do generally get what you pay for.

David Abbott, a famous British advertiser, once famously said, "Shit that arrives at the speed of light is still shit."

Do look for efficiencies. Do prioritize spend on the areas that generate the most return. Do hunt for those diamond in the rough agencies and production resources that can deliver top quality at a great price.

But don’t be naïve. Don’t spend more money showing people worse ads. The equation just doesn’t work. 

Journey Mapping Can Guide You To A Stronger Brand

This originally appeared on on April 4, 2019 -

Marketing our brands used to be simpler. We had just a few options: TV, print, a mailer, a radio ad, a brochure for the sales force. This has all changed.

In 2018, digital advertising surpassed traditional advertising in spend for the first time and, I would argue, made quantitatively clear that digital marketing is marketing. It’s important to make this point because the ever-emerging new tactics in digital can lead us to think that the branding game has completely changed. In truth, while some of the rules and tactics have changed, we still need to reach a group of people and influence their perceptions to be the chosen brand. And we need to do this in an environment where choices abound as to where and how to reach them.

Now, I wish I could tell you which channels are the right ones to choose. Unfortunately, I can’t because what’s “right” changes. Benchmarks quickly become outdated. What makes the most sense for your brand and your customer evolves. And trying to stay on top of all these changes can be overwhelming. The only way to consistently make better choices is to systematically view the palette of options through your customers’ eyes.

To do this, it is helpful to create a hybrid journey map. For the past several years, digital experience designers have used journey mapping to create a holistic view of the various stages of the customer experience, plotting actions, attitudes, and pain points. Marrying this customer-centric view with the business- and brand-focused sales funnel model allows for a combined perspective that prioritizes touch points and provides guidance for creating the most value for all parties involved.  

Generally, a journey map follows a simple five-stage progression: pre-need and trigger, consideration/evaluation, purchase, usage, and post-purchase evaluation. At each stage, the map looks at the customer side—primary needs in that specific phase, most relevant attitudes and beliefs, and most frequent, relevant behaviors or touch points. From this baseline, we can identify very specific business and brand goals for each stage, along with associated key performance indicators. And it can open our eyes to new places to intersect with the customer to create differentiated value and drive preference for our offering.

Having worked on journey maps across a variety of different industries, I’ve found several best practices.  

1. Start by creating a rough map: In a three-hour workshop, it is possible to sketch out a “70% right” map. Leveraging precise customer information will lead to a better end result, of course, but there is immediate value in a “rough” version.

2. Focus your research plan: Frequently, firms have been a bit hesitant to start this process, concerned that research needs will be time-consuming, expensive, and hard to define. The initial mapping process usually clarifies the places where insight is needed most and helps to scope out the research needs.

3. Bring together all of your research findings: To create a customer map, it is useful to tap into a range of market research studies. One client I worked with found immense value in the simple act of consolidating multiple studies into one central source.

4. Use the customer map to drive the brand plan: A customer map is a powerful tool for creating a marketing plan. With it, you can identify priorities and develop specific tactics solutions to impact the customer journey.

Making brand decisions in our complex world can be an enormous challenge. A customer map, grounded in customer-centricity and the user experience, highlights what action firms need to take.

Diversity & Inclusion in Marketing Communications

I was recently asked to sit on a panel to discuss diversity and inclusion in advertising. As a 44- year-old white guy, let me start by saying, “Really? Me?”  But, in truth, all marketers need to be aware of how brands can pursue diversity and inclusion in their communications in the right way. We see great examples like “Always, Like a Girl,” and we see some tone-deaf executions.

To dig in, I started where I believe most should start in this space, and that is by recognizing your ignorance. To prepare for this panel, I spoke to many wonderful people at my agency and learned quite a bit.
What I learned is that success requires three things: 1) an authentic purpose that runs deep and starts inside; 2) an execution that brings the message to life by making sure diverse communities are represented in both research and development;  3) it has to be meaningful to your target customers.

Be Authentic

When we trod sensitive ground, brands can be great or be terrible. Consistently, the brands that do it right are not taking advantage of an opportunity to run a short-term program—they are acting from conviction. The first question people ask is, “Why are they doing it?” What is the authentic purpose behind it? Are you supporting Dr. King’s causes with a significant investment, or are you just leveraging his memory to enhance your brand on MLK Day?

Start inside. Believe it. Act on it internally first. Dove established themselves as a leader by breaking the historical beauty standards and supporting the self-confidence of women. This was part of their core brand values. The Canadian Dove ad “Evolution” was one of the first viral videos and a good example. It wasn’t a stunt; it was an authentic shift.

Patagonia took a stand grounded in their long history of conservation that alienated some people, but it was right in the wheelhouse of their core target.  AirBnB took a perceived stand against Donald Trump with their WeAccept campaign—this came from an issue where they found racial biases in who was being denied rentals. They started inward, introduced policy changes, partnered with impacted groups and then went public.

Execute Right  

Dove has also had a couple executional missteps, such as the 2017 ad that showed an African American woman turning into a white woman after using Dove lotion. Hearts in the right place, but they missed something.  I don’t know what happened in the Dove case, but typically this happens to companies when they don’t involve people within that community in the execution of the communication/marketing/etc. You need to have substantial representation of that community on the team—not just a token person—in order to gain full perspective.  

Be Meaningful

It’s important to be inclusive and culturally sensitive as a baseline for business. Practically speaking in many companies, the amount of support for higher-order brand messaging rests on the ability of the program to deliver business results.  The goal of marketers is provide a solution to our target customers that is better than competitive offerings. In many categories, the offerings have lost any functional differentiation. Standing for a higher-order purpose can be both the ethically right thing to do and a great business decision that creates meaningful differentiation vs. your competition.

In a previous post, I talked about Lyft making a stand for immigration rights (and some people thought I was trying to make a political point). The reason it seemed like a sound marketing strategy, regardless of the politics, is that they are undifferentiated vs. Uber, and that association could provide their target customers a reason to choose Lyft over Uber. With price and service being undifferentiated, their authentic stance can make all the difference for consumers.


1)      Be authentic

2)      Execute with the folks you are representing

3)      Create differentiated value for your customers

I welcome builds/comments. This is something I’d love to get better at, and I know I have plenty of room to learn.

Lyft alienates half of their user base with an email?


ver the weekend, I received a politically charged email from Lyft expressing their fervent opposition to recent presidential moves, strongly outlining their brand beliefs and promising to proactively support their cause. Many company leaders issued similar statements. But this article is not about politics—it’s about marketing.

Stepping back from the emotions, what impact does an email like that create? At the surface level, we could assume that roughly half the country supports the administration’s actions and about half don’t. Then it would seem that Lyft may have engendered more support among their anti-administration users and alienated their pro-administration users. Therefore, it could be that the business impact of the decision may have been to shear their market in half (albeit one could argue for a more lucrative half). I’m not sure how much business or marketing thought went into the decision, and I’m not here to argue about the place of business goals over political or social goals.

What I find interesting is that the decision to “shear their market in half” may have been brilliant. At a high-level, we have Uber and Lyft in a race for dominance in the ride-sharing market. Lyft is clearly an underdog, with various reports putting Uber at around 80% share. As both fight fiercely, we consumers have won with down-driven prices while the ride-sharing services bleed profits.

This phenomenon happens quite a bit. When we find offerings to be parity on nearly all elements, consumers default to price. Commoditization is the great evil to brands, as it nearly always ends in a value-destroying price war.

So what are brands to do? As I’ve mentioned in the past, strategy is choice. A brand must decide to be different than the competition. Not incrementally cheaper or slightly better in ways that are copied immediately, but fundamentally different. With this choice, the brand will make trade-offs. They will not serve the entire market equally as well as their competitor. They will choose to provide less value to some segments of the market so that they can provide more value to other selected segments. You have seen this at play and made a choice based on it within the last 12 hours. You paid a little more for coffee that you prefer, while someone else refilled their travel mug at 7-11.

Rather than serving everyone at parity, brands find a segment for which they can create an offering to serve better than competition. Let’s say Lyft has a 10 share and no point of difference. With their stance, they chose to segment the market into two halves, and for one of those halves, they have potentially created a higher-order benefit that aligns with the needs of that segment. So that’s a start. But two more issues arise.

First, did they choose the more lucrative half? When segmenting, it’s crucial that you align on a segment for which you can provide differentiating value and that can also create value for you. One could make the assumption that large, metro areas are the highest volume potential markets for ride-sharing and that consumers in these markets may also over-index on Lyft’s higher-order benefit positioning. Therefore, the segment for whom they might be targeting could have greater potential value. That’s just an assumption. I’m sure someone could make an argument another way.

But couldn’t Uber just copy the stance? Yes and no. Uber apparently had a bit of a hard time over the weekend clarifying their position, but they eventually landed on refugee support in some way. The rub is that it probably doesn’t make marketing sense to copy Lyft. Do they also alienate half the market, particularly the pro-administration half that Lyft left them? Probably not. Does it make sense for Uber to take the opposite political stance? Arguably no. With 80% market share, Uber won’t want to split up their pie at all. Their most likely action is one that is apolitical and uncontroversial. At the end of the day, 50% of the market may agree with Lyft’s brand beliefs, but that doesn’t correlate to 50% market share. Not everyone who aligns with Lyft’s beliefs is aware of the positioning. Lyft may not even choose to differentiate on this higher-order benefit longer-term to cement the positioning. And not everyone in their “half” cares to the same degree. On the spectrum, there will certainly be some people that use this as the deciding factor in choice. But some people who agree with Lyft's position will stick to their routinized behavior and use Uber. Alignment with brand belief is one element that impacts the behavior of different consumers in different ways.

The marketing take-away is that ties are broken by price. Brands who are not structurally designed for a price battle should look to differentiate for an attractive segment. Success comes from molding their entire offering to be a better choice for that segment rather than a lukewarm choice for all segments.

In the meantime, I invite our nation to come together over some delicious, famous brand ice cream—whichever one is on sale this week.

Update: 2/2/17 - The website AppAnnie tracks the downloads of apps and has some preliminary data on the potential impact based on daily download numbers. Lyft went from around 50th in total number of downloads in the U.S. to peak at 7th over the weekend. They also went from 3rd (behind Yelp) to #1 on travel apps during the buzz. The impact already appears to be wearing off a bit, as they're back down to 20th overall and 2nd in travel. Uber is back to 15th overall and reclaimed #1 in travel. It will be interesting to see if Lyft tries to make this into a long-term differentiation play and, if so, how consumers prioritize that aspect of the brand when it comes to making a choice in ride-sharing apps.

What is Strategy?

I was trying to explain my job to an Uber driver last week.

“So, what do you do?”

“I’m in strategy for a digital agency.”

“Oh, so what do you do?”

“Uhmmm, lots of stuff…”

This question has come up from friends, family, sometimes co-workers, and it’s led me to think about my role. If it’s different than the “strategy” that exists in everyone’s title everywhere. And what “strategy” really even means.

My favorite answer comes from Michael Porter at HBS who wrote the seminal article “What is Strategy?” in 1996. This outlines strategy as it relates to the competitive positioning of a firm. The essence of the argument is that advantage is to be found by choosing to be different—serving different customer segments with different offerings supported by different company activities/competencies. This is commonly illustrated in a Southwest Airlines example: choosing to serve different customers through different hubs with a different model of employee engagement.

I think Porter is absolutely right, and we can take the notion of strategy up one level using a quote of his: “The essence of strategy is choice.”  I believe this is the core. Said slightly differently, the essence of strategy is focus. What do you want to accomplish? Where should you focus your time, energy and resources to reach your goal?

The word strategy is misused more often than not, but in the end, your strategy should be your guide to making the right choices to help you achieve your goals. There are always competing goals, competing opportunities/problems and competing potential actions for a firm (or even an individual).  Applying a strategic lens is applying focus:

Goals – What do you want to accomplish? Why? Are they competing goals? Are there too many goals? What are the most important goals?
Problems/opportunities – What are the most important things that need to happen in order for you to accomplish your goals? What are the problems that need to be solved?
Tactics – What can you pursue that will have the greatest impact? How many? At what scale?
When someone says, "We need a strategy," they need direction, prioritization and longer-term guidance. When you hear, “This needs to be more strategic,” typically the proposed tactics need to be shown to be the most likely to make progress against the greatest opportunities that will have the greatest impact on the established goals.  

Very practically, my job is to work with our teams to help our clients understand their specific landscape (company goals, customer goals, competitor impact, market and macro forces). Align on goals. Organize and prioritize the key challenges/opportunities. Then finally, approach the swirling mass of ever-changing digital options clear-eyed about what we need.

Or, as eloquently put by my good designer friend, “You write the first part of the deck.”

So that’s strategy. Bringing focus and prioritization to goals, opportunities and tactics—or more simply, “Write the first part of the deck.”