Warren Hebard vowed never to make the same mistake again. The 34-year-old Australian marketing chief at betting site William Hill needed to fill a slot on the team that booked online advertising. Hebard is obsessed with measurements and he tests every applicant for their verbal, analytical and mathematical skills.
This time, he was desperate and broke his own rule by hiring a candidate who hadn’t aced the test. Not long after, Hebard had to fire him. The recruit couldn’t keep up with William Hill’s high-pressure culture, where performance is literally assessed on an hour-by-hour basis.
Hebard epitomises a new generation of chief marketing officers: technologically savvy experts who are rewriting the marketing rule book.
At alcoholic drink maker Diageo, marketing and innovation director Adam Ballesty is reimagining Smirnoff vodka as a music producer.
Over at National Australia Bank, chief marketing officer Andrew Knott is strategising around the impact that China’s obsession with WeChat, an instant messenger system, will have on bank marketing.
And Andrea Martens, the head of marketing at cosmetics retailer Jurlique, wants to create an international Australian brand as respected as Qantas, mostly by word of mouth.
Seismic shift
Marketing and advertising are at the sharp end of business success. No matter how good its product, no company can thrive unless it knows how to sell. And few business practices have been forced to change as much as marketing.
The industry used to be based on relationships, hallowed golden rules such as the 4Ps (product, promotion, price and placement) and the power of the giant ad agencies: Omnicom, WPP, Publicis and Havas. A quote from US department store pioneer John Wanamaker was widely held to be true: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Now, the seismic shift in media consumption is reshaping marketing. Chief marketing officers don’t waste half their budgets any more. Consumers are more sophisticated and telling them that they need a product doesn’t work anymore.
“Marketing used to be about making people want things,” says Ballesty. “Now it’s about making things that people want and I think that’s a really huge point.”
Almost everyone knows Diageo’s brands. But, in a world of short attention spans, convincing drinkers to single out Bundaberg rum, Johnnie Walker whisky, Smirnoff vodka or Captain Morgan rum is harder than ever. Australians are consuming more media, which should make it easier to get ads in front of them. But more brands are competing for attention on more websites, social media feeds, TV channels, radio stations and other media.
Diageo, one of the world’s biggest drinks companies, advertises on media outlets that many people over 30 have never heard of, including Vice, Junkee Media, Broadsheet and Pedestrian. In July 2016, it broadcast video from the Splendour in the Grass music festival at Byron Bay over instant messaging service Snapchat. Smirnoff vodka’s staff roster now includes The Sound Collective, a group of DJs who perform in clubs.
“I could see one day Smirnoff being a music producer,” says Ballesty, the Diageo innovation director. “One of the biggest challenges in marketing to 18- to 35-year-olds is what we call the attention economy. There’s a lot of things taking their interest, and there’s a lot more options than going to the pub and watching the footy on a screen.
“If I make an ad, not even a campaign, that does not add utility to their life, it will be completely ignored. That is scary.”
Playing to win
William Hill’s Australian betting websites operate at the cutting edge of digital marketing. At least 60 per cent of its burgeoning marketing budget of more than $50 million goes online, and most of that is on Google, Facebook, Twitter, Instagram and YouTube. The rest goes on sponsorship, making television ads and buying TV spots.
At any one time, William Hill will have bought 250,000 words or search terms on Google and other search sites. Search for “AFL betting odds”, for example, on Google and ads for William Hill and its competitors will appear.
The one-day spending record on search engine Bing is held by William Hill but Hebard won’t reveal how much was spent. He has a team that works out what to bid for these search terms based on how many customers they expect to recruit and how much revenue each customer will generate. They use Adobe Media Optimizer, a program that emerged from calculating effective share trades on Wall Street. “Every hour the results come in,” says Hebard. “We get value metrics per customer. It is high pressure [on staff] because it is very transparent.”
Hebard was one of the key employees who made online betting agency TomWaterhouse.com a household name and came up with the ill-fated idea to have Waterhouse discuss live odds during sports broadcasts, which ended with a reprimand from then prime minister Julia Gillard.
In 2013, British betting company William Hill bought out Waterhouse, who became Australian chief executive. He made Hebard head of marketing for the whole business, which included the Sportingbet and Centrebet brands. William Hill competes with Ladbrokes and Tabcorp for the $2.5 billion in annual wagering revenue with profit margins of 10 to 15 per cent. William Hill’s customers are growing 20 per cent a year, with revenue-per-customer growing by about the same amount, Hebard says.
Realising how competitive the online betting market was, TV networks hiked prices of ad spots during highly desirable programs, such as live and exclusive sport, using “Dutch auctions”. Hebard cut TV advertising last year by more than 50 per cent in response. “TV is very important,” Hebard says. “But it’s very hard to work out how well a TV spot works.”
TV is part of the mix for Diageo’s Ballesty. He decided to pool the marketing budgets for all Diageo’s brands. The bigger brands, such as Bundaberg, Smirnoff and Johnnie Walker, have their own substantial budgets, but the lesser known tipples have been grouped under a Drinks Culture heading, which promotes drinking in general rather than specific brands.
To sell a popular drink such as Pimms, Ballesty bought a slot during MasterChef. The show’s host, restaurant critic Matt Preston, appeared in an ad making drinks using spirits, solving the problem that people don’t know the recipes for common cocktails.
“After 8.30 at night, in comes Matt Preston telling you how to make a whisky spritz. Really, really simple. It looks absolutely delicious. We showed the food pairing it went for. That’s adding utility.”
Natural beauty
Andrea Martens may be the most ambitious woman in Australian marketing. The 45-year-old ex-GlaxoSmithKline and Unilever products manager wants to make Jurlique the most popular expensive cosmetics brand in China, Japan, Hong Kong and elsewhere using word-of-mouth marketing.
To do this, she needs to fix – in both senses of the word – the marketing strategy of a company that has gone through nine chief executives in 10 years, with a small budget.
Eleven months ago Jurlique hired Martens, one of the most experienced consumer product marketers in Australia. She had sold Banana Boat sunscreen, Neutrogena and Dove soap, Streets ice-cream and Omo laundry detergent at Unilever, GlaxoSmithKline and FH Faulding. Her mission at Jurlique was simple but difficult: to set a marketing strategy that could succeed around the world for years to come.
Founded in Adelaide 30 years ago, Jurlique lost popularity among Australian women in recent years as it concentrated on Asia, where its natural-but-stylish image and exotic provenance was a surprise hit.
“Everyone that sees the brand says that it has huge potential,” Martens says. “No one has worked out how to unlock it.”
Martens’ approach relies on analysis. Just before she started at Jurlique, the company commissioned detailed research on more than 2000 customers in Australia and China: their ages, interests, income and other information, including what they thought of the product.
Most of the marketing staff hadn’t even been to China. Borrowing from Unilever, where even the CEO may spend time in consumers’ homes, Martens almost immediately took five of her staff to China and Japan, where the average woman has a 13-step beauty routine each morning and a dozen-step routine at night, compared with just three in Australia.
When she saw the research, Martens was stunned. Jurlique had misunderstood its own brand. It had marketed itself as “natural”, thinking this was a crucial distinction. But the typical Jurlique customer was more interested in products that worked, rather than how they were made. “She wants it to work and would be pleased that it’s natural.”
Martens approved more research, including focus groups, to get as much information as possible about her markets and customers. Her strategy was going to be based on hard data. “You’ve got to balance your logic with your magic,” she says.
Martens and her team are now working on an entirely new approach for Jurlique that will cover everything from packaging to what its stores look like, based on “the power of nature and the purity of the South Australian hills”.
Out of control
Close to 90 per cent of Australians have smartphones and mobile is fast becoming one of the primary means of consuming media. NAB’s Knott was surprised when he moved to Australia from Asia, where many people pay bills on mobile applications such as WeChat, that Australian marketers were not talking more about specifically targeting mobiles.
“I think probably the biggest transformation for me was – and it’s one that’s still to occur – when brands finally realise that they’re not in control,” he says. “The consumers are in control and the sooner we realise where that power sits and what our role in that relationship is, the better outcome we can create for them, and the better outcome ultimately we can create for enterprise.”
What does this mean for marketing, especially at a time of enormous public cynicism about banks? Less than a year into the top marketing job at National Australia Bank, Knott has overseen the biggest brand refresh since the famous 2011 “Break up” campaign where it tried to differentiate itself from Australia’s other big banks. With it’s “More than Money” campaign, the bank wants to be seen as aiding its customers’ lives.
“We aim to show we understand and treat them as more than a product or a transaction, and that life and business is more than money, although money is an important enabler to help them get where they want to go,” he says.
Better analysis of the massive amounts of customer data that the banks accumulate is an increasingly important part of the marketing effort. With millions of transactions a year through credit and debit cards, banks have a rare insight into consumer assets, income and spending habits, and are increasingly willing to use it to build engagement.
NAB uses data analytics firm Quantium, which is part-owned by Woolworths, to make sense of its anonymised debit and credit card transaction records. When combined with Woolworths Everyday Rewards loyalty card data to analyse consumer trends, it allows NAB to understand the profile and behaviour of different customer types, as well as market and category trends across the industry.
Knott says it can help the bank advise clients how to better manage their finances and run their business.
“We recently analysed the customer data of an organic food store in an inner Melbourne suburb so that the owners could better understand who was shopping with them, and what times of day they were shopping. By providing this kind of insight, this customer can make better business decisions, which is good for our business too; it’s a virtuous circle.”
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