A History of Marketing

A History of Marketing / Episode 54
Few people have challenged how I think about marketing more than Professor Byron Sharp. His book, How Brands Grow, might be the most influential marketing book of the contemporary era. It told a generation of marketers that much of what they’d been taught was wrong, and it had the data to back it up.
Sharp is the director of the Ehrenberg-Bass Institute, the world’s largest center for marketing science research. You may remember my conversation with Professor Rachel Kennedy that covered the institute’s history and the two researchers it’s named for: Andrew Ehrenberg, who discovered law-like patterns in buying behavior, and Frank Bass, who believed marketing could be studied like any other part of the real world.
This episode picks up that story, straight from the man who carried their work to a global audience. It’s a conversation that spares no sacred cows: Kotler’s STP, brand purpose, behavioral science, and personalized advertising all take hits.
We cover:
* How a young academic in Australia took on giants like Philip Kotler, and why marketing had the data to become a science long before it acted like one
* The difference between looking scientific and being scientific
* A round of overrated / underrated: Sharp’s hot takes on positioning, brand purpose, behavioral science, and personalized advertising
* Whether AI opens new questions for marketing’s most famous empiricist
Listen to the podcast: Spotify / Apple Podcasts
Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Nick Asbury, who you may remember from episode 53 of this podcast, for introducing me to Byron.
Andrew Mitrak: Byron Sharp, you’ve been at the top of my list of people to interview since before I started this podcast. So I’m looking forward to a conversation with you about marketing history and “the arrival of science.”
Byron Sharp: (Laughs) That’s not true because you interviewed Philip Kotler first.
Andrew Mitrak: Yes, well, I’ve interviewed a lot of people. I feel like I’ve had a chance to do my homework prior to interviewing you. Of course, I read and re-read How Brands Grow and then, for the first time, I went through How Brands Grow: Part 2. So that was excellent. So I feel like I’ve done my homework prior to speaking with you, between that and the other interviews I’ve done.
Byron Sharp: Excellent, excellent. At the end of your Philip Kotler podcast, he said, you know, “an inquiring mind” and “read a great deal of things,” and he was excited for the next revolution in marketing. He’d like to be part of it. I don’t know, when was that recorded? When did you record that with him?
Andrew Mitrak: I recorded that in October of 2024.
Byron Sharp: Okay, well, gosh, there has been a revolution. He’s obviously missed out on it.
“Have you looked?”: The Shift to Marketing Science
Andrew Mitrak: Let’s talk about that. So let’s talk back to sort of the Kotlerian era of marketing, and when you first encountered marketing, when did you realize that the prevailing marketing wisdom wasn’t sufficiently evidence-based?
Byron Sharp: You know, when I did my master’s by research, I read a lot of the American literature and things, and it was researchy. You know, it’s researchy. But it’s not terribly—it’s not the sort of science that we learn when we’re at high school. There was sort of, I don’t know, it’s weird. It’s a weird thing in the—I mean, Andrew Ehrenberg wrote this amazing article, published it in Nature, right? The world’s most famous scientific journal, called “Even the Social Sciences Have Laws.” And in there, he said that there was this sort of belief that you could not have scientific laws that concern human beings or crazy things like advertising and stuff. And it’s a great line from Andrew. I don’t know if it was ever published, but when people said there can be no laws in marketing, he would say, “Have you looked?” You know, if you don’t look, you’re not going to find. Because that’s always been—I mean, science is actually quite a new thing, and it’s only a few hundred years old. And it was just people looking systematically, taking systematic measurements of things. It’s not actually rocket science.
In the podcast with Philip Kotler, he talked about how—what was it?—in his time, finance was seen as science and marketing wasn’t. But even he is not talking about science; he’s talking about engineering. He’s talking about using numbers and spreadsheets and things like this, which is just not science. Science is repeating studies over and over and looking for repeatable patterns and then building—then when you find those, you can make predictions, and you can start to understand how the world’s working. And you can start to—you realize that some explanations work, fit with those laws, and some don’t. And you find weird things because the world is weird. There is only one science, right? People often say, “Can marketing be a science?” I’m like, “No, there’s only one science, it’s called science.” Science studies the real world. It can study marketing. It can study turtles. It can study whatever is in the real world.
But it follows a method that is designed to establish laws that are so reliable that we don’t, you know, I always joke, no engineer asks, “So what’s Brazilian gravity like?” We know. And that repeatability—so a lot of academia was always about new things, new words, or just coming up with new titles. “Social marketing” we’ll call it, as if people in charities didn’t realize that beforehand. I don’t, yeah, or buzzwords and things.
Applying Scientific Method to Marketing
Andrew Mitrak: So was there ever a moment where you were in some marketing lecture or reading a marketing book and just realizing, “There is no science here”? Like, what was the spark or the initial moment where you felt like, “Oh, this is not sufficiently science-based and therefore I could actually be part of the movement to make it more science-based”?
Byron Sharp: I don’t know. I think because I read philosophy of science, and I read writing by people like Frank Bass and Andrew Ehrenberg, and Andrew was actually doing it. And so I was very keen on replication, and I started a journal. I was advised, “Do a journal, it’ll be really widely cited.” It wasn’t. But I invited Andrew Ehrenberg onto the advisory board and then started working with him, and then sort of the rest is history, I suppose. But I came from the Phil Kotler school. I always liked how Phil Kotler was quite down to earth. He wasn’t like the Cannes crowd that I’ve just been with, you know. He was quite skeptical of the idea that advertising could manipulate people. There is a famous line about, you know, “People don’t have garages full of cars they don’t drive and fridges full of food they don’t eat” and things. They are quite experienced. And I liked that down-to-earth thing. So I sort of rebelled a little bit about the mystical part of marketing, the sort of magic advertising that subtly changed people’s psychology and things like that. I was quite skeptical about that. And at the same time, I thought, “Why aren’t people talking about memories? Why aren’t they talking about what we now call mental availability?” It seems that this is really underplayed. And that sort of got me doing research and discovering stuff.
The Pareto Law That Wasn’t 80/20
Andrew Mitrak: Do you have any hypotheses as to why it was that marketing was not more scientific, or stayed unscientific for so long? Or do you have any instincts, or have you looked at why—why wasn’t Phil Kotler more science-based, or why weren’t the folks of his era more science-based? Was there some bottleneck preventing them from being more scientific? Did they not have access to the research or the tools and processes to be more scientific, or do you feel like there was just something that went wrong very early on and they kind of went down the wrong path?
Byron Sharp: Academia is very competitive, quite vicious, particularly in the North American schools. Incredible pressure to be “new, new, new,” even if the new isn’t that new. It’s just what we call old wine in new bottles. Like today, people don’t talk engage. If you’re in an advertising festival like I was, they don’t talk about engagement much anymore, but they talk about attention instead, and it’s the same thing. So, yeah, there’s incredible pressure for that. So the leading North American journals are quite anti- if someone blatantly says, “This article is—so-and-so did a really interesting study, but we don’t have any idea, really, about how does that generalize, where does it generalize to? We need to do more studies. And so I’m going to do, first of all, a very close replication of it just to check that they haven’t made mistakes.” If you send that to a leading journal, they’ll go, “Well, no, we don’t publish close replications. No.” And particularly, “How dare you question that an article that we published in our journal might not actually be correct, that they might have made a mistake,” which is deeply unscientific. So, yeah, the lust for new—”new, new, new”—is, I think that is, yeah, it is deeply unscientific. Prestigious journals are deeply unscientific, too. I mean, we shouldn’t—you should be judged not by which journal you get into. If we judged Einstein by which journal he got into, he’s a total loser. We judge people on discoveries. Some guys won the Nobel Prize a while back for discovering graphene, which had always been—it’s graphene, it is only one molecule thick. It’s amazing. It’s spawning a multi-billion dollar industry. And they discovered it by putting graphite—you know, the stuff that is in lead pencils—between some sticky tape, and shearing the tape off over and over, and each time it sort of removed layers till they got down to one molecule thick. I think if someone sent that to a marketing journal, it would get rejected just by being, “That’s just too simple.” So, it is a cultural thing.
Our journals celebrate style over substance, rather than a discovery. So, when Jenny Romaniuk and I, and Andrew Ehrenberg, published on Pareto law—and we, before we published, right? So we looked at the Pareto law, you know, that the top 20% of customers should give you 80% of your sales. And we asked two questions. One was, is it law-like? Because we were already interested in laws, right? So does it—is it law-like? Does this cover a lot of different things, different categories, services, durables, is it law-like? And is it that the top 20% generate 80%? And we discovered, yeah, it is remarkably—it is actually remarkably law-like, once you account for time period of analysis and things like that, which had already been quite well documented. But it’s not 80%. It’s never near 80%; it’s much closer to 50%, which has quite profound marketing strategy implications. And we wrote that up and sent it to a friend of ours who was the editor of a journal called Marketing Science. There’s a journal called Marketing Science in America. And he went, “Oh, that’s fantastic, that’s so interesting. In fact, I’m off to a class, I’m going to use that in the class, like this afternoon.” And I went, “Oh, great, so do you think, you know, Marketing Science might be interested in publishing it?” He went, “Oh, no, no, it’s—you’d have to do some sort of optimization routine or...” In other words, some statistical gymnastics. He went, “That’s just a discovery.” And a physicist would never say that, I don’t think. I don’t hope. I hope. So, I think that’s—I think that’s the answer to your question. A culture developed that looked scientific but wasn’t.
The Long History of Marketing Proclaiming to be Science
Andrew Mitrak: So, as you’re looking at marketing becoming more scientific, but you mentioned that there is already a journal of Marketing Science, right? And there’s this long history of marketing and advertising presenting itself as scientific. You know, like Claude Hopkins publishes Scientific Advertising, which is more than 100 years old. And so—
Byron Sharp: Which was all just a set of case studies and musings of a consultant, yeah.
Andrew Mitrak: Exactly. So as you’re wanting to make marketing more scientific—
Byron Sharp: It was definitely Andrew Ehrenberg who was the first to, and that’s because he—no one told him not to. And he hadn’t been—he didn’t have a PhD from a North American school. He—so he just applied sort of high school science, and he never thought that was a big deal. He didn’t—I remember him saying to me, he thought his actual greatest contribution was his work on—most original contribution, sorry, was work on presenting data, which is actually not so well known. But, yeah, he didn’t think it was—he just did basic follow the scientific method. “Well, you know, you see something, you go, does this hold a second time? Does it hold? Does that hold for a different product? Does it hold in a different country? Does it hold like, you know, how regular is this? And then can we build an explanation on that that fits?”
“Don’t Trust Me. Don’t Trust Anyone.”
Andrew Mitrak: Yeah, that’s right. So kind of given that you’re actually being scientific and that you’re actually following the scientific method, how do you distinguish yourself and the work of Andrew Ehrenberg and your colleagues—your body of science—to sort of the pseudoscience that presented itself as science to begin with, right? How, as you’re communicating to the marketing world, was there a worry that people might roll their eyes like, “Yeah, people present marketing as science before. How are you any different this time?” Were you kind of conscious of that you’re going into a field where it’s often presented itself as scientific even when it’s not?
Byron Sharp: By plainly showing the data and not hiding behind—Andrew used to call “showing off our secondhand statistics,” you know, when you have these marketing journals that look as if they’re mathematics journals. He did do—I mean, he was—the Royal Statistical Society made him a fellow, which is a very rare honor. He was a real statistician, but he didn’t feel that, “I’m working in marketing now, and I don’t need to—I’m not at the forefront of mathematics. I don’t need to show off that stuff.” So, the amount of times I visit a company—I mean, I did several companies in Paris recently—and they would say to me, “Oh, I’ve got to show you. We’ve looked at our own data to see if your laws apply.” And it’s like, “And did you find anything?” And they’re like, “No, it applies everywhere. It’s amazing.” And so, that is science, right? Don’t trust me. Don’t trust me. Don’t trust anyone. And certainly don’t trust anything that’s trying to hide behind—a while ago, I actually had to use AI to, “Can you take this article and can you translate those coefficients there and turn them into an elasticity, you know, what we’d be used to: 1% change in price, what change in sales?” And it did it for me. But I thought, “That is so hidden in the paper. It’s ridiculous.” So, the real world loves discoveries about the real world. And if you can show them a discovery that’s reliable, to the point where they can go, “Well, why should I trust you?” “Well, go get your own Nielsen data, do a survey, whatever. Just gather the data the same way and see if it applies.” That is—you don’t have to convince anyone. They’re just like, “Wow. Wow.”
Andrew Mitrak: As you were kind of getting started or in the earlier years of sort of evangelizing, you know, your work and the work of Andrew Ehrenberg, were there any early customer wins or early sort of businesses, or how did you kind of get businesses to sort of take you seriously and look at the data? Was that easy because the science sort of sold itself, or was there initial kind of evangelism you had to do to even kind of market your own ideas?
Byron Sharp: Well, Andrew Ehrenberg had already always had some supporters. I mean, companies before he went into academia, big companies like Unilever and things like that, he had a little consultancy where they would give him the first panel data they had and then sort of say, “What does this mean?” And so he had supporters for that. And then when I sort of took that over and running that for Andrew, we sort of practiced what we preach and went, “Well, we need to be much more mass marketers and then much more easier to buy, and more friendly.” And we spent an enormous amount of, I think, very good work in working out what things mean and how to present that. Andrew quite rightly always said, “The D in R&D takes a lot longer than the R.” So, yeah, so there were some evangelists inside companies. But no, the book How Brands Grow was a huge breakthrough in the sense that it’s become the best-selling—that is, according to ChatGPT etc., that is the best-selling research-based book in marketing of all time, which, yeah, I don’t think we expected.
Andrew Mitrak: Yeah, that’s amazing. And there might be some listeners who haven’t read How Brands Grow yet. They certainly should.
Byron Sharp: Yeah, the marketing world is sort of divided into those who have and those who haven’t, I think.
Lightning Round: Overrated or Underrated
Andrew Mitrak: I thought to kind of introduce some of the concepts of it, we could play a game called overrated or underrated as kind of a lightning round. It’s a game that I stole from Tyler Cowen, an economist. I’ll share a concept and you can tell me if marketers—traditional marketers—sort of overrate or underrate it. And if you want to explain, that’s also fine, too. So—
Byron Sharp: What the science says, yeah, okay, okay.
Andrew Mitrak: Okay, positioning. Overrated or underrated?
Byron Sharp: Oh, overrated, yeah.
Andrew Mitrak: Why would positioning be overrated?
Byron Sharp: Well, I just heard because I was just listening to your podcast with Philip Kotler, and he said, “So you do segmentation analysis and you work out that there’s heterogeneity, there are segments.” And then he says, “You know, you can’t go for all segments, so you need targeting.” And that’s like, well, you might need some targeting, but you can actually go for all segments. And the science is very clear: when brands grow, they pull from all segments. Isn’t that weird? Right? I mean, it’s like—so, but he goes, “No, no, no, you do positioning, so you appeal to a particular segment.” Well, if that were true, when brands grow, they would not pull sales from all segments, and when you looked at where they shared customers, they would not share customers with all the other brands in the market, which is a scientific law that just keeps on holding. And so, this is where you go, “Oh, so targeting is misunderstood, and positioning, yeah, really quite overrated.” Yeah.
Andrew Mitrak: I asked the follow-up on that one. So I’ll go back to the lightning round version of overrated/underrated. That’s a helpful explanation on positioning, though.
Next one: Creativity.
Byron Sharp: That’s a complicated one because I would say it’s sort of underrated or underutilized, in that we have a lot of boring stuff in marketing. Right? Even in the sexy areas of advertising and things, it’s astonishing how much boring stuff there is. So you sort of think, “Well, we could do better than that.” That said—because I’ve just been, I’ve just come from the Cannes Lions, where, you know, it’s a celebration of creativity, and you’re not allowed to question the religion that creativity is everything and that more creative advertising must work better—that’s not true. That’s not true. Right? The job of advertising is to lay down memory structures, and sometimes creativity can really help that, and sometimes it can completely get in the way. So it’s not a simple message.
Andrew Mitrak: Here’s an easy one: brand purpose.
Byron Sharp: Oh, well, the evidence is pretty clear, right? It’s just, it’s pretty—it’s sort of a dud marketing strategy, yeah.
Andrew Mitrak: Behavioral science.
Byron Sharp: Oh, way overrated, yeah, for marketing, definitely.
Andrew Mitrak: Survey-based research.
Byron Sharp: In some ways, underrated because people don’t realize just how reliable surveys can be, in the sense that, you know, you measure something, and 17% of people say they do something, whatever. You do another survey, and it’s still 17%. You do another one, and it’s still 17%. It’s like, “Oh.” You know, it’s like, “Wow, my measurement is actually working.” And so I push back on people who say things like, “You can’t trust what people say,” and things like that. There’s some truth in that, but no, people actually find it quite hard to lie. It requires a lot more effort to lie. So, and we know a lot about the responses. So no, survey research can be very, very, very useful to us. As long as we don’t get the surveys filled in by bots. We do need real data from real people.
Andrew Mitrak: Yeah, not synthetic data.
Byron Sharp: Yeah, that’s when you just let the bots go completely wild. You don’t even let a human—you feel like only bots can fill in the survey.
Andrew Mitrak: Last one, hypertargeting and personalized advertising.
Byron Sharp: Okay, the evidence so far is that it’s not really needed that much because it doesn’t seem to have a big effect. Tons of hype, though, in—that is not what people think. People seem to think it will be super powerful, “If only I can unlock personalization.” And they worry—their problem at the moment is so much hype and people say that they can do it. People just blindly say, “Now in this age of hyper-marketing, how it’s so possible.” Yeah, really? Is it possible? Is it? It isn’t; it’s actually very difficult to do. But the evidence of when you do do it, when you do like control trials—so you have got personalization—is it doesn’t seem to have a big effect. So I am slightly puzzled, given that evidence, why people are trying so hard to get it to work if it’s not going to give a—if it’s going to be really hard to do and give quite a miserable return. It’s amazing there are people who believe stuff just because, I don’t know, persuasive salespeople keep saying it over and over. I like to remind people, we don’t even have smart traffic lights yet.
Andrew Mitrak: It’s wild that we don’t. You’re right.
Byron Sharp: It’s so obvious, you know, stick a camera on the traffic light so it knows not to stop traffic when there’s nothing coming the other way. It’s like, really, that would speed up cities so much. All the tech’s there now, but obviously, it is a lot harder than I’m making out. So when people say that they can do this magic with online data, it’s like, “Can you, really?” The tests have been pretty miserable on that.
Andrew Mitrak: Well, yeah, thanks for playing that game in that lightning round. I do think it’s, obviously, there’s a whole lot more to the book, but I think it was somewhat instructive of how the work in How Brands Grow is different than sort of the Kotlerian view of marketing.
Where does this all leave Kotler and STP?
Andrew Mitrak: My last Kotler-related question is, where do you think it leaves those models? Like, are they entirely without merit? Should marketers still learn them even as a reference point? Or what’s your overall take on where they belong—like sort of pre-How Brands Grow type marketing? Where does it belong in a marketing education, or how should marketers even think about those, if at all?
Byron Sharp: Well, the Kotlerian STP, you know, in his books became quite cookbookish, you know. “Do this, then do this, then do this.” And we now know that’s—no, there are actual real problems with that. I mean, it’s not how brands compete. It’s not how buyers buy. And it would mean investing a whole lot of time into things that were never going to pay off. So, no, I think we do need to say, “Understanding that consumers—there’s some heterogeneity in the client base.” Great. Okay.
Then we need to, but then we need to practice sophisticated mass marketing. There’s not—when Phil said on your podcast, “Oh, we can’t, we can’t reach all the segments,” it’s like, well, no, that’s your job. That’s your job! And you can. And it might need some tailoring, right? You might need to tailor and have different sort of shops for some people and different channels. But that’s what you’ve got to be striving for all the time. So the real danger of STP is that it sort of waves a white flag immediately and says, “No, our brand doesn’t sell to those sort of people, it only sells to these sorts of people.”
Andrew’s Case for Teaching the Evolution of Marketing Thought
Andrew Mitrak: Here is how this case for the reason why marketers should still learn it. I’d make an analogy to something like cognitive behavioral therapy, which is like a more evidence-based form of therapy. And like for CBT to exist, it needed to kind of build on and react against prior forms of therapy. And if you’re taking a psychology class or learning that, you’d kind of at least still learn about Freud, even though Freudian psychoanalysis is pseudoscience, right?
Byron Sharp: Yes, yeah.
Andrew Mitrak: I look at how my boss or marketers before me might have learned the Kotler in school. I need to understand that and speak their language, and I also need to learn the “How Brands Grow” school to explain to them why there’s a new way of thinking that’s even better, right? That would probably be my argument for the merits of learning both.
Byron Sharp: Yeah, look, I have a lot of sympathy for that. And of course, that’s what I went through.
So you sort of want other people to go through it, too. I think, yes, I think when I see young marketing scientists, their knowledge of the sort of the old STP and things helps them—I think it motivates them, right? They’re part of a scientific revolution.
That said, I see more lazy undergraduate students, and they hate it, with their, “What? You spent a whole hour telling us about that and at the end you told us it was wrong? Why are you wasting our time?”
Andrew Mitrak: Oh, fair enough.
Byron Sharp: Lack of intellectual curiosity, perhaps, but—
Andrew Mitrak: Yeah, okay, that’s a fair point. Some people just want to get to the—get to the right way to do it. “I don’t need all the work that came before it.”
One Page on Behavioral Economics
Byron Sharp: Yeah. When we were writing our university textbook, I know I had to have a chapter—I had to have some stuff on behavioral economics, behavioral psychology. But I ended up, I think it’s one page. It’s like a table of, well, there are all these heuristics that have been identified that show that consumers, you know, use heuristics. Yeah. But I didn’t torture the students with the whole chapter because it was like, well, actually, in the end, they’re not actually terribly relevant for marketing, and they’re quite weak effects, and they’re not persistent, right? If you—like, a lot of the experiments that they’re based on, the ones that weren’t faked—and there are a lot of faked, but only did the experiment like once or twice. But if you do it with the same respondents multiple times, the effect disappears. So, you know, you have to cover it, but I hopefully covered it with a proportional thing. It’s possibly more useful for salespeople, you know, knowing certain persuasion things, but its relevance to—yeah, you had Rory Sutherland on, right, on a podcast. And Rory is a huge fan of it, which I think is sort of odd because Rory works in advertising, and its implications for advertising—its implications for how you show prices or something, yes, but for advertising?
Andrew Mitrak: It is surprising how often Rory’s things seem so unrelated to advertising.
Byron Sharp: Well, maybe it’s his hobby. I think it’s his hobby.
Andrew Mitrak: It’s his hobby, yeah.
Byron Sharp: Because he has to work in advertising, and so, yeah, he’s interested in these other things in the world.
Logo Simplification and the Risk of Losing Distinctiveness
Andrew Mitrak: I wanted to ask about sort of trends in marketing practice and how they sort of intersect with some of the thesis in How Brands Grow. Your work emphasizes distinctive brand assets. Sometimes these graphics kind of go viral on social media where it shows the trends of brands getting more simplified over time.
Byron Sharp: Oh, yes. Yes, yes.
Andrew Mitrak: If you look at like the logo of Pepsi, or McDonald’s, or Starbucks, there are all these flourishes to their early designs. And overall, as the decades progress, all those flourishes get stripped away and you get sans-serif typography, and you lose a lot of some of the things that make them—well, I’m wondering, it is certainly simplifying. Are they losing their distinctiveness as they’re simplifying? Is that trend a mistake, or what’s sort of your reaction?
Byron Sharp: Well, the danger is—and that’s the problem that we use outside—we use design agencies, right? And obviously, they go through fashion cycles. And they obviously copy each other a lot, because you see this big trend towards, yeah, sans-serif fonts or something. And then it’ll go the other way. And you can almost look at old print ads, and you can tell by the typefaces and the colors and the things what vintage it is.
Andrew Mitrak: Yeah.
Byron Sharp: Which is a little—yeah, that is a little scary because the science says that brands are important to consumers, but not for falling in love or deep emotional attachment, but rather because—most of your buyers are so incredibly infrequent, and they screen—they want to just get on and make their purchases. They screen most things out, and they need to see you to be bought. So you need to look like you.
Byron Sharp: So anything that makes you look like the other guys is potentially dangerous, and anything that makes you look not like you. So any change is potentially dangerous. So, yes, you’re right. Those fashion trends, yeah, they come with risk.
Byron Sharp: It’s so weird, isn’t it, though, that people go, “We’ve modernized, here it is, it’s new,” and you’re like, “You mean it’s new just like everyone else.”
Andrew Mitrak: Exactly.
Byron Sharp: That’s like high school students, you know, the day they are allowed—we have in Australia, I think they call it Mufti Day, you know, when they don’t have to wear their uniform.
Andrew Mitrak: Okay.
Byron Sharp: And then people will joke they’ve swapped one uniform for another uniform, and that they’re all wearing the same casual clothes. But—
Andrew Mitrak: Yeah, that’s right. They all kind of get the same haircuts or they’re, “Yeah, I’m unique like everybody else.”
Byron Sharp: Yes, yeah, I think that’s part of being human, which is being tribal or something. But I think what you’ve highlighted—that may be very well for getting on with your friends, etc., and that’s how fashion works. But that shouldn’t be the way you run a brand.
What About Facebook? A Case for Segmentation and Targeting
Andrew Mitrak: Right. That’s right. I have a couple of questions I label this section “what abouts” because I’ve listened to interviews with you and people always ask, “What about brand X?” and “What about brand Y?” I’m sure this must be a little annoying for you, and I’m really sorry to do it to you. I’m going to limit it to two examples, though, okay?
Byron Sharp: Okay. Okay.
Andrew Mitrak: I started in startup marketing, B2B marketing, and one of the books that was helpful for me was Crossing the Chasm, this Geoffrey Moore book. It’s about like, hey, you start with a small target market, you jump to the next one, but you do a bowling pin approach. And so my “what about” to illustrate this is Facebook. They started with Harvard to build their initial network. They jumped to the Ivy Leagues. Then they jumped to Stanford, eventually they went to all colleges. Then they went to high schools, and then they went to everyone. And I’m wondering if—if, you know, Mark Zuckerberg had read How Brands Grow before starting Facebook, I’m not sure that he would have taken that approach. And I’m just wondering if that strategy sort of tracks with some of the thesis in the book, or how does that sort of line up with it?
Byron Sharp: Yeah. The book presents the availability theory, the market-based assets theory, that brands and companies become more valuable when they have more—these two assets: mental availability and physical availability, purchase availability. But it didn’t talk about how you need those overlapping. There’s no point getting distribution in a store if 99.9% of the people who go into that store just don’t see you on the shelf because they don’t know what you are, they don’t—you know, you have nothing, no memory structures. And likewise, there’s no point building memory structures for people who are there, but they never buy you because you’re just difficult to buy, right? You’re not in their stores. And so, this helps us answer that question of should a new brand start small and scale, or try to go big straight off. And it depends on can you get overlapping mental and physical availability. And if you don’t have the resources and you can’t, then you need to start somewhere where you can, and then build from there. But whenever you’ve got the resources and you can do it, you should try to, because otherwise, competitors will see what’s happening and someone will sort of, you know, gazump you.
Byron Sharp: In retrospect, you look back and go, the iPhone launched tied to one cellular network. That was a dumb decision of Apple, right? That was a dumb decision. But that’s with the beauty of hindsight. Why did they do that? Because they were brand new to the mobile phone industry, and there were huge players—the Nokias and Motorolas already. And they worried that those guys would just tie up the physical distribution with the networks, right, and in the network stores, and they wouldn’t be able to get in at all. And so, they went, “Well, at least if we sign—” was it T-Mobile or someone? They signed an agreement with one of them.
Andrew Mitrak: It was AT&T. They launched with AT&T, and then some years later they started with Verizon, which was the biggest. But, yes, it was AT&T to start.
Byron Sharp: And now, the idea that you would—”What? You can only buy an iPhone in some places, and it can only work on some network, but I don’t use that network. I mean, are they trying to push me away?” You know, like, that seems bizarre. But it was—the strategy is you’ve got to go with the resources you have. And Apple, remember, was nowhere near the size company it is today back then. And they were against very big competitors who might have locked them out.
Overlapping Mental & Physical Availability vs. Targeting
Andrew Mitrak: So, the earlier point and like the Facebook thing and the need for overlapping mental and physical availability, especially as you’re early, it sounds to me a lot like targeting. And I know that there’s probably nuance to it, and that’s overly simplistic.
Byron Sharp: Yeah, yeah, no. Targeting’s appropriate, but it’s to be used strategically of like, “Okay, I do not have the ability to do that. Well, then find somewhere where you can.” Or, the example I always use is, you know, in the United States, you have a significant portion of the population that speaks Spanish, and in some areas, you might go, “We should put some ads in Spanish as well.” But that’s targeting to expand and to cater for heterogeneity where it’s really important. But it’s not making the decision of saying, “We won’t play in the whole market, we’ll just ignore some customers or try to turn them away.” I mean, you can do that if you want to, but only if you want to be a really small brand.
What About Nvidia? A Case for Heavy Buyers
Andrew Mitrak: I said I had two “what abouts.” And my other “what about” is about Nvidia. I feel like the hero of How Brands Grow—or one of the heroes at least—is the light buyers. To grow through penetration, you need to get more light buyers. I feel like light buyers are somewhat underrated, or there’s a bias for marketers to, “Embrace your heavy buyers.” But you read this book and think, “Oh, wow, those light buyers are really important.”
But Nvidia is a very heavy buyer company. I think SEC reports say four—just four—customers make up 60% of their revenue. And they’re now the largest market cap company in the world, and so much of their revenue is very much from their heavy buyers and not from reach and acquisition of light buyers. Do you have just a general reaction to the largest company in the world being a heavy buyer company?
Byron Sharp: Well, they make very specialized chips, right? I mean, I’m not going to buy them; you’re not going to buy them. So they don’t have many potential customers. I’m sure they have got lots of lighter buyers, but light probably still means only orders a billion dollars’ worth a year. It’s just the market. It’s like if you build nuclear power stations, you know, you don’t have many customers. And the smallest amount you can buy is one. You can’t buy half a nuclear power station. So—
Andrew Mitrak: So, is it that even within that, they’ve built a highly specialized, very high-margin, very expensive tool? It’s also scarce right now; there’s always a chip shortage, there’s a backlog. So, the thesis—the reaction would just be like they’re just in a relatively small market of buyers, and so the concentration and the heavy buyers would make sense there?
Byron Sharp: I’m sure they have lighter buyers, but they make an ingredient that can only be sold to people who have massive scale. So, who’s going to knock on their door and say, “Hi, can I buy two chips?” That kind of customer just doesn’t exist, I don’t think. So.
How New Categories Grow: A Strategy to Skip Double Jeopardy
Andrew Mitrak: I think most of the book is also about sort of growth inside of a category, or most of the examples of how brands grow focus inside a category and not how new categories are made. And I think Nvidia also might somewhat be sort of reflective of a new category being made—
Byron Sharp: Oh, yeah, absolutely.
Andrew Mitrak: —or AI broadly. I think like OpenAI was tiny five years ago, and when the new category was created, it presented an opportunity to maybe skip double jeopardy. Have you ever studied category creation, or is that an area of research—
Byron Sharp: We’ve studied category growth, yes. But a brand-new innovation creates a brand-new category, and then that category grows according to the laws, right? I mean, it grows largely through increasing penetration as the size of the customer base grows and grows and grows. There’s quite a lot of controversy here in Europe at the moment that—was it one in five European homes has air conditioning? It’s crazy. They have more heat deaths than in any other place and have had for a long time. So, you know, the market is expanding and growing because people visit other countries and go, “Wow, this air conditioning, you can have it just in your home as well. We don’t have to go to Galeries Lafayette to get air conditioning.” So, it’s growing in the same way that any category does grow, and that’s acquiring new users, which is even more extreme than the light users’ story, isn’t it? These are non-users. They don’t use the category at all, and you’ve got to get them to buy.
Is the US Lagging on Evidence-Based Marketing?
Andrew Mitrak: In my last section of questioning, it’s kind of about expanding scientific marketing and adopting it. And I’m based in the US, and it does strike me that many of the leading proponents of marketing effectiveness and evidence-based marketing come out of Australia and the UK.
Byron Sharp: You’re not the first person to notice, yes.
Andrew Mitrak: Yeah, exactly. I’m wondering, why do you think the US has lagged behind in producing and adopting this? And even just like—not even on the researchers, but I’d say who shows up in my LinkedIn feed, actually, who listens to this podcast, frankly, is surprisingly overrepresented with Australia and the UK. So, I’m just wondering, what explains it, and what can the US do better? Or how can I, as an American, help spread the word to get more of it over here?
Byron Sharp: Yeah, there’s a degree of serendipity. There’s also sort of a belief—there is a bit of parochial—all countries have a degree of parochialism, don’t they? But no, actually, that’s not true. Well, sort of, I think Australia would be much more—we used to joke we’re much more famous in New York and London than in Australia, right? Because in Australia, they sort of can’t believe that Australia could be producing, you know, the leading institute in marketing science. So, in Australia, it was sort of a reverse of what is in the US, which tends to think, “Well, no, but surely we know everything already. This is the US.” So, yeah, there is a bit of that. I mean, but now, our North American advisory board, which we just had, had the CMOs of companies like General Motors and Coca-Cola. So, we are reasonably well-known. But I would agree with you, marketing science has taken off slower in the United States. And that’s in both knowledge of the research and also practitioners learning how to do it. But the US will catch up pretty quick. That’s the thing: science, I do believe that science always sort of outs, you know. Darwin and Wallace—that was sort of famous. But who was Mendel who did the pea genetics stuff? He was like a monk in a monastery. That’s pretty obscure. But it got out. Real discoveries—they eventually, people hear of them.
“The Dogs Bark, but the Caravan Moves On”
Andrew Mitrak: I’m a marketer—say I’m a middle-management marketer, and I’m not the CMO who can remake a company overnight. How can marketers internally advocate for the principles of How Brands Grow to change organizations kind of from the inside? Or how can marketers embrace it in their daily practices, if they’re not the CMO who has the magic wand to kind of change marketing for a whole org just as they wish? How can marketers who practice sort of embrace the principles of the book?
Byron Sharp: Well, by learning, by reading the book, giving the book. That’s what it was written for, right? It was to encourage that sort of dissemination. And just—it’s exciting, but don’t expect everything to change all at once, because that’s not how the world works. It takes time. But it is happening. There’s a lovely quote from Frank Bass—who was at UT Austin, he’s the Bass in Ehrenberg-Bass Institute. And he said, when people say there’s no need for the science in marketing, he had this lovely Middle Eastern expression, which is something like, “The dogs bark, but the caravan moves on.” The caravans are moving, and you might not like it, but the fact is it’s happening. It’s going to happen. It’s happened in every other discipline, right?
Andrew Mitrak: Yeah, that’s a fair point.
AI Can’t Fix Bad Marketing Literature
Andrew Mitrak: My last question is around AI. You’ve mentioned using AI a bit. How are you using it either at the Ehrenberg-Bass Institute or in your research? Does it open up new areas of research? Does it change how you’re performing research? Obviously, you mentioned synthetic data is a bad path to go down, but how are you broadly sort of thinking about how to employ AI?
Byron Sharp: Well, our researchers use it for coding and things and on massive sets of data. It’s a lovely, lovely tool. But we’re also—because the Ehrenberg-Bass Institute provides non-artificial intelligence, really, that’s what our sponsors get when they financially support the Institute—so we’re looking at how on earth we curate knowledge so that AI tools that are used by other people in marketing understand the science. That’s not just simple; you don’t just sort of whack a whole lot of literature into ChatGPT and suddenly it becomes this great marketing scientist, because it doesn’t. I think everyone’s learning this with AI: to make it really powerful, you need experts to do very careful curation of material, and then it becomes super powerful. I’m sure people are building AI to help heart surgeons and things, and they’re doing it carefully because AI’s not that good at handling if there’s a huge weight of—which there is in marketing, right?—there’s a huge amount of weight of things that have been said that are wrong. Well, it thinks they’re right because, you know, “Well, Phil Kotler said it. It must be true.” So we’re working on that. It’s moving very, very quickly, but it’s very complicated, yeah.
Andrew Mitrak: Yeah. Byron Sharp, I hope listeners, obviously, read How Brands Grow and its sequel. You’re easy to find online and on LinkedIn. Are there any other places you’d point listeners to to learn more about your research and your work, and the work of the Ehrenberg-Bass Institute?
Byron Sharp: Check out the Ehrenberg-Bass website. There’s a lot of resources there, even if you aren’t a sponsor. There’s a lot of resources, and of course, there’s great podcasts like this.
Andrew Mitrak: Yeah, and that’s marketingscience.info is the Ehrenberg-Bass—
Byron Sharp: Which I now follow. I now follow A History of Marketing.
Andrew Mitrak: Oh, yeah, thanks. Yeah, marketinghistory.org. Thanks for plugging this own podcast as well. So, this was so great. Byron Sharp, I really enjoyed this conversation. Thanks so much for your time.
Byron Sharp: Thank you.


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A History of Marketing / Episode 53
Nick Asbury is a creative writer, one half of the design partnership Asbury & Asbury, and the marketing industry’s most persistent critic of brand purpose.
He’s the author of The Road to Hell: How Purposeful Business Leads to Bad Marketing and a Worse World (And How Human Creativity Is the Way Out). It’s a title that tells you exactly where Nick stands.
For 15 years, “Purpose” was an idea marketers weren’t supposed to question. It dominated creative briefs, advertising awards, and TED Talk stages. Brands from chocolate bars to social networks climbed what Nick calls “the ladder of abstraction” until they settled on something like: “we’re here to make the world a better place.”
The Road to Hell is a rarity: most marketing books tell you how to do something right. Nick wrote one about why a whole movement got it wrong. He also argues there’s a way out: human creativity, lateral thinking, and humor.
In this conversation, we cover:
* How the 2008 financial crisis kicked off the capital-P Purpose era, and why the 2024 election may have ended it
* Why even Dove’s Real Beauty, the most celebrated purpose campaign ever, doesn’t hold up to scrutiny
* Why the most prominent purpose advocates are late-career marketing legends
* Why AI can’t make the lateral leap behind slogans like “Just Do It,” and why that’s good news for human creativity
Listen to the podcast: Spotify / Apple Podcasts
Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity.
Why Write a Whole Book Against Purpose?
Andrew Mitrak: Nick Asbury, we’re here to talk about your excellent book, The Road to Hell. I love this book, I read it cover-to-cover in one sitting, and I hope marketers everywhere read it. And it’s all about how purposeful business leads to bad marketing and a worse world, and how human creativity is the way out. And I wanted to ask you about this because most books about marketing focus on how to do marketing the right way versus why a certain approach is wrong. And so I’m wondering, why focus on why the purpose movement was a mistake? Why write a whole book about this?
Nick Asbury: Yeah, that’s a really good question and first of all, yeah, thanks, thanks for reading it, thanks for having me on to talk about it. Yeah, I think, I think first of all, there is a, I hope, a kind of noble tradition of books that argue against something rather than for something. Like, I know Bob Hoffman has done some brilliant stuff against ad tech and advertising. You can even look at books like No Logo by Naomi Klein—books that are kind of polemics against prevailing wisdom. And I, I guess I would put this book in that category. I mean, it is arguing ultimately for something, in that the last of the five sections is arguing for creativity and humor and humanity. But yes, most of the book is an argument against purpose.
And I guess it’s just been a kind of, you could almost say a kind of unfortunate fact of my career, I think, that I happen to be working at a time where I do think this huge idea of purpose has dominated the industry for, well, you know, 15, maybe even 20 years. I think you could say that period is, is waning now. But, yeah, I just found it was a very omnipresent idea that was affecting almost every kind of brief coming across my desk and was dominating industry awards, industry conversations. So, it felt like a—and I guess, one thing I’d add is it also felt like something you weren’t meant to question that much. There was a slightly taboo feeling about, you know, how could anyone be against this? And I guess when I sense that taboo, I do almost feel drawn to challenging it. Not for its own sake, but just because—
The Risks of Challenging the “Purpose” Orthodoxy
Andrew Mitrak: Yeah, it still somehow, to me, it feels a little bit riskier than something like No Logo, which was sort of like punching up. It’s sort of like taking aim at the brand bullies, or something that is anti-tech. Like there’s so much anti-tech, or is sort of more consensus to, like I feel like there’s more people to nod along. This one somehow feels almost a little bit riskier because how could you, how could you have an argument against purpose? Purpose sounds so nice. And did you worry at all that this might alienate potential clients or colleagues who had embraced the purpose-driven marketing?
Nick Asbury: I guess, maybe on one level, I think I am, I’m maybe fortunate in that it’s fairly low risk for me because I’m basically a lone traveler in the industry. I’m a self-employed writer. So, it’s not like I work for a big employer who might be unhappy with it. I, ultimately, as a writer, only need enough work to keep one person busy. So, if a few clients don’t call me because of the purpose position that I have, then, you know, there will equally be clients who do call me because they like the arguments being made.
But I didn’t really write it as a, as a kind of strategic business career move for myself, really. I just felt the urge to write it because I felt there were important things to say. I guess on that kind of punching up, punching down thing, which, you know, I, I would definitely think of it in my own mind as a kind of punching up exercise in that—and this kind of brings us on to the whole subject—but I see purpose actually as quite a big corporate, top-down kind of movement. I kind of consider myself, I guess, arguing for the smaller businesses and the consumer who kind of often gets slightly patronized by some of this stuff, I think. So, yeah, I would see it as kind of challenging an orthodoxy imposed by powerful people.
The Origins of Capital-P Purpose
Andrew Mitrak: Yeah, fair enough. And let’s, I think that is how it comes across, it’s just that at a high level, it seems like such a sacred thing. But as you’re saying, let’s get right into it because I think that, taking this sort of historical lens, you start with a moment as you’re seeing purpose and typing it out. And I’m wondering, when in your mind does this, does purpose become a movement? When does it become sort of the big behemoth omnipresent thing that you’ve experienced?
Nick Asbury: Yeah, well, I think the simple answer is I see the kind of purpose with a capital P movement, I think, started after the financial crisis of around 2008. So, I think—and that’s not to say that none of these questions ever existed before that, I think you can see purpose as the latest manifestation of very old arguments about kind of stakeholder versus shareholder capitalism arguments that Milton Friedman was having back in the 1960s. You can basically take it as far back as business itself, really. People have always argued about the ethics of business and, you know, how they relate to the—can capitalism be ethical? You know, there’s all these big philosophical questions that have been debated for a long time.
But I think the purpose movement in advertising, and in the kind of corporate boardroom, really did take off post-2008 when, I think, the story I would tell was there was kind of a reputational crisis for big business. A lot of people were turning against business, kind of blamed them for the excesses that led to the crash. And, you know, you had the Occupy Wall Street movement, kind of quite a large, widespread, anti-corporate kind of feeling in the world. And I think, I definitely sensed this at the time, even in some of the clients I was working for, was there was this sense that, oh, we need to tell a better story about business. Rather than people thinking of us as the enemy, we need to kind of tell a story about how we can actually be a powerful ally to important social causes.
And I think that became a really persuasive, powerful thing that people wanted to believe in. There was this whole mantra of “do well by doing good,” which was kind of the slogan of the purpose movement, I guess. But this idea that you could, yeah, do good things in society, and that would, through a kind of virtuous circle, it would lead more consumers to buy from you because consumers, so the argument went, consumers are more concerned about ethical issues these days than they have been before. And therefore, the more good you do in the world, the more profit you will make. And that really was the argument coming from TED Talk stages and the industry press and, you know, no doubt many podcasts as well. So, yeah, that’s where I think it came from.
Before Purpose: When Ads Were Absurd
Andrew Mitrak: Yeah, so the great financial crisis, it happened right when I was sort of a graduating senior in high school and then just entering into university. And I kind of, I do remember this moment, and I do remember sort of the vibe shift, you know, with TED Talks taking off. And I feel like things got much more serious. And if I recall, I’m wondering, did this feel like a counterreaction to anything that came before it? Because if I also think of the ads that came before it, there was sort of this era of the Old Spice “The Man Your Man Could Smell Like“ that was all very silly, you know. There had been a Betty White Snickers Super Bowl commercial where, you know, an old woman in her 90s was tackled by a football player. And there was this era that in hindsight feels pretty brief, but there was this moment where ads felt very silly and irrelevant and random and absurd. Skittles had surrealist ads. And I’m wondering, did you feel like this seriousness, of course there’s the great financial crisis, but does it feel at all like a counterreaction to you to what came before it, or do you want to speak to what immediately preceded the sort of this capital P purpose movement?
Nick Asbury: Yeah, I think, yeah, it’s an interesting point. And I guess I don’t explore that much in the book, but I think you’re right that the kind of early 2000s, and certainly the 1990s, were full of a kind of, yeah, as you say, often quite absurdist, postmodern kind of advertising. A lot of humor, a lot of larger-than-life kind of stuff. A lot of which was very good and worked very well.
But I think you’re probably right that there was a yearning for, well, two things, really. I think one was, you know, advertisers are always looking for something, some new angle. Because at the end of the day, you know, a lot of the great ideas have been done in the ‘60s, ‘70s, ‘80s. And there are only so many ways to sell beer or chocolate or washing powder. So, I think partly when purpose came along, it was a relief to people to think, oh, we don’t actually have to talk about your teeth being whiter than white or something. We can talk about, you know, mental health or something instead. So, there was that kind of aspect to it where it just felt like a different thing to do, I guess.
And I think also there’s always been this kind of angst within the ad industry that, oh, are we really doing anything serious here? It’s all talking animals and catchy jingles and memorable characters and slogans, and it’s all great, but sometimes, I think maybe particularly kind of older generation people in advertising think, oh, is this all there is? You know, I’m a serious person, I want to do serious things. And so maybe there was a bit of that as well, wanting advertising to seem like a more noble thing to talk about at a dinner party or whatever.
Simon Sinek, Jim Stengel, and the Books That Built the Purpose Movement
Andrew Mitrak: Yeah. Let’s talk about that. When purpose first showed up, there were, you know, there were people who were proponents of it. And I don’t think it’s any one individual’s fault to blame. I don’t think you assign like this is the single person. But if you were to speak to, how did it show up in the market and who was sort of promoting it most, and what are some of the key cornerstone examples of purpose sort of becoming a thing? Who would you say is sort of behind that? Where were you first observing it and who were you hearing it from?
Nick Asbury: Yeah, I think you’re right that there’s no single author of it, really. It’s not like it all came from one influential book or intervention by some one. I think there were a kind of a cluster of people in the early 2000s who were starting to use this purpose word. So, it was kind of there in the ether when the financial crisis hit and people kind of grabbed onto it.
I think purpose has never been just a marketing and advertising movement, but it’s surprising how much of it has roots in that world. So, you know, certainly Simon Sinek, for example, he came originally from the advertising world. And his TED Talk, you know, still one of the most viewed ever, and the whole “Start with Why“ ethos, that certainly played a role in this kind of purpose, kind of grandiose idea that you need to be driven by a larger mission and, you know, it just so happens we make computers, or whatever it is, but really we’re driven by this grand, grand mission in life. So, that was one of them.
But I think also you had a guy called Jim Stengel. You may have talked to him before, I’m not sure, but he was at Procter & Gamble. He wrote one of the more influential early books around the same time as that Simon Sinek book, a book called Grow, which was making this case for the commercial effectiveness of purpose-led marketing. And it made, very specific and sweeping claims about how purpose-led companies outperformed non-purpose-led. But it was, you know, it was almost immediately dismantled by some quite smart writers. Byron Sharp, actually, way back in 2012, I think it was, wrote a deconstruction of it. So did a guy called Richard Shotton, really good article.
Andrew Mitrak: The gist was that he had like kind of cherry-picked certain companies that were the top performers and it’s almost sort of like a confirmation bias type thing, like, oh, you, you pick the top ones and just attribute it to purpose. And there is like, you know, you can almost do that at any point in time in the market, you can like pick certain things as the winners, and then if you play it forward, well, hey, we should just invest in that portfolio. Oh, it happened and turns out you don’t really beat the market that way, right?
Nick Asbury: Yeah, no, absolutely. It really was as simple as that, really. He just picked the, I think, 50 best-performing companies and then went looking for anything in that company that you might call a purpose, and said, well, it must be because of that. And he never even looked at the, you know, the 50 worst-performing companies to see if they also had something called a purpose. So, there were all sorts of flaws with it.
But I know the back of that book had a glowing tribute from Martin Sorrell, who, certainly at that time, was the most powerful person in advertising in the UK. So, I think the ad industry really did get behind it and really wanted to push this story to their clients. I’m certainly not saying it all came from the ad industry, but I think that was a big part of it. And we’ve seen it in the ad industry kind of institutions as well. I think, you know, Cannes and D&AD and places like that have all pushed this narrative pretty hard as well.
Andrew’s Awkward Run-In with Simon Sinek
Andrew Mitrak: As an aside, you mentioned Simon Sinek and I have a funny Simon Sinek story I’ve never told before.
Because his whole idea is you start with “why”, right?
I was at a conference and it was actually in London, and it was a pretty small conference. It was a fancy exclusive thing called Founders Forum. And Simon Sinek was among the people there. And I was at a technology startup doing some fundraising. And he came by our booth for a demo and me being a marketer for the company, I’m like, “Oh, I’ve got to, I’ve got to talk to Simon Sinek, not just about the company, but I also want to tell him about myself, and I tried to start with ‘why’ for myself.”So I’m like, “I’m here, and my purpose is to tell stories that really connect…” And it just felt like everything came out so jumbled.
Then I felt, “Poor Simon Sinek, people must always be coming up to him telling him about their why, right?” Because I must not be the only one who’s trying to start with “why” with my own story as I’m greeting Simon Sinek.
Nick Asbury: Yeah, it’s probably only in paragraph five that they say, anyway, I’m a dentist, or whatever it is. They spent the rest of the time talking about how they’re driven by improving health and well-being for everyone or something.
Andrew Mitrak: I still cringe when I think about how awkward I was about it.
Nick Asbury: Oh well.
The Ladder of Abstraction: Why Purpose Makes Brands Sound the Same
Andrew Mitrak: But yeah, so, so one of the things I also want to dig into is you sort of break down why it leads to bad marketing and positioning for a company. It leads to everything sounding the same. And could you sort of make that articulation of why is it that purpose leads to things sounding the same, or what are sort of like the key reasons why purpose is actually sort of detrimental to marketing and to business and to advertising?
Nick Asbury: Actually, one of the earliest things I kind of wrote about this whole subject, I used this phrase, “the ladder of abstraction,” which I think is what brands tend to climb up when they start thinking about purpose. So, you’ve got your kind of mundane product, which is, you know, a bar of chocolate or something. And in order to get to your purpose, you have to keep asking more and more abstract questions. So, you know, it’s not really about chocolate, it’s about delivering a tasty experience. But then it’s not really about that, it’s actually about delivering a tasty experience you share with someone else, so it’s actually about community. But it’s not totally about community, you know, it’s about X, Y, Z.
And you, you kind of end up in a place where just about every brand is saying, “We’re here to make the world a better place,” because that’s where that ladder kind of ends, in a way. It just ends in this kind of, yeah, we’re here to make life better and happier, and we just happen to do it by selling bars of chocolate, or we just happen to do it by selling toothpaste, or whatever it is.
And it may sound unfair or simplistic to say that that’s exactly how it turns out for every brand. But I think on a kind of mass level, if you consider all the millions of brands in the world, I think it is this big pressure that’s pushing them in that more generic direction rather than a more specific direction. Because often the most interesting thing about a brand can actually be something quite quirky or very specific to that brand, something about the product itself. And that kind of gets lost a bit, I think, when you go in search of this higher purpose. So, yeah, I think that is, it’s not the only reason that I would give against purpose marketing, but I think it is one of the big ones, yeah.
Andrew Mitrak: Yeah, that everything ladders up to making the world a better place, in some combination of happiness or some connection or shared experience. You give examples of Airbnb and Starbucks and other major brands, like Nike, that all just kind of, if you read their purpose, it almost sounds the same, even though they provide totally different services, totally different products. There are different reasons for going to them, but if you look at their purpose, it’s connecting the world, right? It’s like, oh, that just sounds the same.
Nick Asbury: Yeah, no, I used to have a slide when I did fairly frequent talks about this, and one of the slides was exactly that. It was taking the purpose statements of Airbnb, Starbucks, and Facebook, and putting them all together, taking the brand name away. It really was very hard to tell them apart or tell what they did, you know. Yeah, it’s a strange thing for marketers to do.
Andrew Mitrak: Well, this also applied even to startups because again, at this time, I was at the same company I was at when I told my Simon Sinek story. I was at a startup and I was doing our pitch decks, and there was all this pressure to add like, “But why are you making the world a better place?” to your deck. And there was even this TV show on HBO called Silicon Valley and they had this episode where every startup that’s doing their pitch is like, “We’re making the world a better place through optimizing data centers,” or, “fine-tuning your targeting algorithm, we’re making the world a better place.” And there’s even competition like, “Oh, I don’t want anybody else to make the world a better place before we make the world a better place.” It’s a silly thing that was just part of the whole ether of like, “Oh, you can’t just raise to make money and have a good product. You have to make the world a better place.”
“Purpose” Theater in Startup Pitch Decks
Nick Asbury: Yeah, but the irony, of course, is that all of this is happening in a context where you are raising to make money. You’re literally telling a story to venture capitalists trying to get them to give you the next round of funding. But yeah, in order to get that, because it was in vogue at the time, everyone is telling these kind of moral, societal kind of stories. It’s been a really distinctive part of the culture. What’s gone on at WeWork, what’s gone on with Elizabeth Holmes and Theranos, and all these people with incredibly grandiose ideas of their purpose and then it falls apart pretty dramatically.
Kendall Jenner’s Pepsi Ad and Other Purpose Disasters
Andrew Mitrak: So, do you have any favorite examples? Sure, there’s WeWork and Theranos, but are there other examples within advertising or marketing where it goes obviously wrong? What are some of the key points where you can, because when people see a certain ad, they’re like, “Oh yeah, I get that. That’s why purpose is bad.” Any favorite examples of yours?
Nick Asbury: There should almost be a game show where I have to answer that question without mentioning Pepsi. Because it is always the one that gets mentioned, and you know, I’ve mentioned it myself, but I think it is such a good example of the genre. It came out in 2017. It was this ad featuring Kendall Jenner. It actually only ran for one day because it was withdrawn because of the outcry. But yeah, it was basically projecting this story about a protest march, and then Kendall Jenner hands a can of Pepsi to the police officer and defuses all of these tensions. It was just an almost charmingly ridiculous ad looking back in a way. But it did cause an outcry at the time and I think that showed some of the dangers.
And there was a wave of stuff around that time. This is like the earlier purpose years, 2017 kind of time. There was one for McDonald’s. It may have only run in the UK, but it was a young boy and his mother, whose father has sadly died as part of this script, and the boy is eating, I think, a Filet-O-Fish at McDonald’s, and his mom says, “Oh, that was your dad’s favorite.” And there’s this kind of bonding moment. And it’s meant to be a story about how McDonald’s stands for so much more than food—it’s about connection and memories and family. But it actually just came across as so crass and manipulative.
So, those were early examples. There’s obviously been countless ones since. I mean, just most recently, certainly in the UK, there’s been a wave of—it’s like everyone in the ad industry has decided that toxic masculinity is the subject du jour, right? And everyone has started doing ads about it. One of our biggest telecoms companies, EE, is doing a campaign about boys and men at the moment. McCain Foods, who are a big supermarket cooking brand, are doing something similar. John Lewis, you know, their annual Christmas ad is one of the big events in the UK, that was all about a father-son relationship.
And it kind of fascinates me in a way that—and I guess it goes back to this question of why brand purpose tends to lead brands in a similar direction—because another dimension of it is brands tend to latch onto whichever socially purposeful issue is currently in vogue. So, they’re all doing toxic masculinity ads right now. But in a couple of years’ time, it might be ads about girls’ mental health—or I guess we’ve already done that with Dove and so on, but they tend to flock to the same issues at the same time.
The Case Against Dove’s Real Beauty Campaign
Andrew Mitrak: I was going to ask you about Dove as well, because I think that one came out at a time where, if you think of magazines from the 1990s, the models were just absurdly thin, and there was photoshopping. There was a lot of attention around that, and I think that the Dove Real Beauty—which you, I think is great that you take aim at it in your book because you’re almost like taking aim at the king there. That’s one that I feel like is revered and has gotten so much attention, and is very recognized and awarded over the last 25 years. It is one of the ones that you kind of highlight in the book, I think because you don’t want to just make a straw man argument, you want to find the best examples. So, how would you sort of describe where even Dove Real Beauty is wrong? What is sort of the argument against that one?
Nick Asbury: Yeah, no, you’re totally right. That’s really why I tackled it, because you could write a book just making fun of Pepsi ads or something, but those are kind of easy targets. I think the more interesting question is apparently successful campaigns like Dove. And you’re right, it is continually cited as the outstanding example of a long-running purpose campaign. There are multiple things I find interesting and kind of objectionable about it. Obviously, with all purpose marketing, you’re kind of asking two questions. One is, did it work commercially? And the other is, is it actually delivering on the social purpose it claims to be delivering on? So, those are two questions to have in mind, I guess, while talking about it.
But yeah, I find with Dove, first of all, you’re right that it came on the back of lots of ads with photoshopped, almost anorexic models, and there was a reaction to that, which is a perfectly worthy thing to have in mind if you’re a beauty brand. But it was quite clumsy at first. One of the earliest executions was a series of posters where they would have—there was certainly one with an older woman, maybe in her 60s, and it had two options: wrinkled or wonderful. And the idea was you had to pick which one she was. Which, maybe at that time felt progressive in some way, but actually, you’re still putting a woman’s face on a billboard and asking people to judge her by her appearance. And I believe there was even an interactive one in Times Square where people could vote and, predictably, trollish people voted for the wrinkled option.
And then they did other ones where they did a kind of purported social experiment where there was a door marked “ordinary” and a door marked “beautiful,” both entrances into the same office building. And they kind of monitored which door women chose to go through.
They read a lot into the fact that women were walking through the ordinary door because this was somehow scientific proof that they weren’t beautiful enough or didn’t consider themselves beautiful enough. But actually, again, I find that a pretty manipulative, kind of pop science stunt, really, that doesn’t tell you anything about what women really think about themselves. It might just be that they have no self-esteem issues, but just don’t want to appear vain and show off.
But yeah, there were lots of the Dove ads where I kind of think the overall vibe is that you’ve got this brand which thinks of itself as extremely important and morally upstanding. And it’s kind of talking down to its customers and, you know, sitting them down in these cavernous rooms, making them the subject of these social experiments and kind of teaching them a lesson. You get women kind of weeping at the end when they realize, “Oh, actually I am beautiful. I didn’t realize it.” And it’s all like the wise, all-knowing voice of Dove has kind of taught women that they need to have more confidence and more self-esteem and so on. I find it—and I know I’m not the only one because there’s been a series of articles, especially by women journalists over the years—there’s lots of people who find this stuff very uncomfortable. Because it’s doing that purpose thing of kind of saying, “Hey, your looks aren’t important, beauty is not just about how your skin looks,” whatever. And yet, it’s all with a goal of selling more beauty products, because that is just structurally what Dove is and what it has to do. Marketers can kind of convince themselves there’s no contradiction there, but I don’t think consumers see it that way. They still think, “Yeah, you’re still trying to sell me soap, though, aren’t you?” I find it a really interesting case.
Andrew Mitrak: I think it’s a really interesting case. One of the criticisms of purpose is that it’s so navel-gazing and inward-looking, and that brands are kind of thinking, “What’s my purpose?” instead of being customer-focused, instead of thinking, “What does my customer need? What do they need to hear?” And to this campaign’s credit, I think that it is a little more customer-focused in that it is interviewing women who are their target market. It does feel like it is a little less inward-looking for Dove, at least. That said, it’s almost like adjacent to Dove. It’s almost like looking at something that’s not really Dove at all in some ways, because it feels so far removed from the actual product they’re selling. But to its credit, I think it is at least looking at the consumer and putting the customer at the center of the story versus putting Dove at the center of it.
And I think that, even though it’s manipulative and even though it’s skewing data, at least it’s telling a story with it. And even if the music’s heavy-handed, at least there is music that’s trying to create an emotion, where I think a lot of purpose stuff is so corporate and about ourselves, and is emotionless in a way. Those are, I guess, some of the strengths. Not that I have to defend a thing that already gets a lot of attention and awards, but I think if I was to take the other side of it, those are things that I think the ads sort of have going for them. Would you react to that, or any thoughts about that?
Nick Asbury: Yeah, no, I know I come across as the hardened old cynic. But I would dispute that they put customers in the focus of it, because I actually think the hero of every Dove ad is very clearly Dove itself. Dove is the wise, socially purposeful actor that is kind of using members of the public in a performative way to make a point, by conscripting them into these kind of contrived scenarios. You know, the one where the women sit down and describe themselves to a male sketch artist who draws them, and then I think the partners come in or their best friends come in and describe them and the sketch artist does it in a much more attractive way, I guess.
And that is supposed to be making some point about women, but I think that’s not listening to women. That is actually just manipulating them to take part in this story, this kind of brand stunt, which is all set up on Dove’s terms, I think.
There’s a fundamental lack of honesty about it, I think. Which, you know, maybe honesty is a strange word to use in marketing where we don’t expect every ad to be sincerely honest. Obviously, all marketing is about manipulation to some extent. But I think there’s a real difference between—you can have all kinds of exaggerations and manipulation and distortion in ads. You can say your beer is the tastiest one ever, or your biscuits are way better than someone else’s. But once you’re making ethical claims, I think it gets really uncomfortable. And I think when Dove is setting itself up to be a kind of social actor—because they really do, I know some people see this as a strength, but I think it’s a bit weird that they go into classrooms. They have classroom packs about how to teach girls self-esteem and this kind of thing. And this is a corporate brand, you know, from the same company, as many people point out, the same company that owns Axe and various brands that aren’t so progressive.
But you know, they’re kind of going into schools and teaching about really delicate issues involving mental health. And I think, by common consent, all those issues have kind of got worse over the last 20 years rather than better, which, you know, you can’t blame Dove, but it’s not evidence that it’s, despite all the plaudits in the marketing world, it’s not like it’s solved any problem. I think, if anything, it is raising the salience of this self-esteem idea which can have unforeseen consequences and can actually just spread that insecurity more than it actually fixes it. But yeah, I dig into it in the book in a bit more detail if people are interested.
Andrew Mitrak: Yeah, no, you’re right. And also, you just brought back a memory. I definitely saw the Dove advertising, one of their three-minute videos, in school—in high school probably at the time—because I think it was among the early sort of YouTube ads. I remember distinctly it being played in the classroom, and in hindsight, it’s like, “Wow, that’s weird. Why am I getting this ad?” Because it has this veneer of science to it, and that’s probably just not a good thing. How do you think it went down in the classroom?
Nick Asbury: Yeah, how do you think it went down in the classroom?
Andrew Mitrak: I don’t recall. I think at any school, it’s like, “Oh great, we’re watching a video instead of listening to the professor.” So, we probably enjoyed it for that. Maybe there were some tears in the eyes, I don’t remember, but it was seen as almost—it wasn’t seen as watching an advertisement, that’s for sure. It was seen as some research video or something like that that almost seemed like some other sort of documentary film you might see in a classroom. So, I think there is some perverseness to that.
Nick Asbury: Yeah, yeah.
Pepsi’s Protest Ad vs. Coke’s Hilltop: What’s the Difference
Andrew Mitrak: Yeah, it’s a strange one. I wanted to come back to this—was it Kendall Jenner or Kylie Jenner? It’s one of the Jenners in the Pepsi ad.
Nick Asbury: I think it’s Kendall Jenner, yeah.
Andrew Mitrak: Kendall, it was Kendall. It was Kendall. And I’m wondering with that advertisement, something that came to mind was comparing and contrasting that with the Coca-Cola Hilltop ad, which is also among the more kind of iconic ads.
If you Google some list of greatest advertisements of all time, that might be in the top five by some people. It seems almost like there’s actually a lot of similarities between those as far as the message: our soda is about bringing the world together. And very poorly executed on—Coca-Cola wasn’t tied to an ongoing protest that was sort of related to civil rights, it was more like just kind of... but there are a lot of common themes to it. And I mean, if Coca-Cola had released Hilltop within the last 10 years, it could very well be in your book about part of the purpose movement. I’m wondering, do you feel like you would put the same kind of criticism towards Coca-Cola Hilltop, or do you feel like it points to purpose being a kind of nuanced thing where a lot of it is in the details of how you actually execute the ad? Just any kind of reaction to that sort of comparison?
Nick Asbury: Yeah, it’s a really interesting one because I’m sure you know that ad was used in the last episode of Mad Men, you know, Don Draper kind of dreams up that ad, you know, within the series. And it’s a brilliant—it’s such a well-chosen moment, I think, by the screenwriter because he’s been going through this crisis of this emerging ‘60s hippie youth kind of culture, a kind of anti-commercial culture. And yet, he’s an ad man.
So, he’s going through this kind of crisis, and then he has this kind of Zen-like moment while doing the yoga and the meditation where effectively he works out how to commercialize this anti-commercial vibe. Where, you know, you actually embrace it and lean into it. And it’s a very, within the drama of Mad Men, it’s a very heavily loaded, symbolic kind of moment.
And I do think you can look back at advertising history and see that ad as a kind of precursor to the purpose movement, because it is, yeah, it is a kind of moment where a big brand is kind of doing that ‘if you can’t beat them, join them’ kind of thing. Let’s, rather than being worried about this kind of anti-commercial hippie kind of spirit, let’s embrace it and let’s lead the charge. You know, we can put a bottle in the hand of everyone who’s singing. So there is—there are, you know, all sorts of interesting philosophical points you can make about that.
I think what it retained though, because I actually noticed that Coca-Cola ad got—the Hilltop ad got remade, I think, just in the last few months, I think a new version came out. Maybe it’s the anniversary or something, I’m not sure.
But they reshot it, obviously with different actors. But it had a very different vibe because I think the thing about that original one was it was a communal thing, you know, there was no like lead singer or something. It was just a group of actually quite weird-looking people on a hill singing this song in unison.
Whereas the updated version is very—I don’t know, if you want to get into the kind of pretentious semiotics of it all, it’s got a very different feeling where there’s kind of a solo singer who’s singing very performatively, and the crowd are kind of joining in, but there’s a sense of kind of hierarchy in it that there isn’t in the original Hilltop ad. So, I think there’s kind of a thesis to be written on what’s happened in those years since.
All of which is a long way of saying I think you’re right that there’s interesting parallels to be made between, yeah, that Hilltop ad and the purpose movement. But I think, I guess, a key difference is “I’d Like to Teach the World to Sing“ is still occupying this kind of happy, apolitical, humanitarian, inclusive kind of vibe. It’s not Coca-Cola purporting to solve a social issue or intervene in politics in some way. It’s more just embracing a vibe of a generation, really.
Andrew Mitrak: And people, and they sing “I’d like to buy the world a Coke” at some point. So, it’s almost not hiding itself that it’s an ad. It’s like saying, it’s saying “I’d like to buy the world a Coke” and it’s not like hiding—it’s not trying to pretend to not be an ad, in a way. It is, so I think that is almost by acknowledging that it’s an ad, it kind of—it’s not like it’s pretending to solve the Black Lives Matter or Occupy Wall Street protest or whatever. It’s like, hey, at the end of the day, I want you to buy a Coke.
Nick Asbury: Yeah, there’s an honesty to that, which I think consumers actually, you know, respect, whether it’s like conscious or not. But yeah, you know, they’re—”I’d like to buy the world a Coke.” I’d like you to buy a Coke. You know, it’s, yeah, so it didn’t—it never forgot that it was an ad.
Can Small Businesses Do Purpose Better?
Andrew Mitrak: We did—we, you had mentioned startups and entrepreneurs like WeWork, Theranos. Although I don’t know if those two always belong in the exact same sentence together. Like, I don’t think they both crashed and burned, but you know, Theranos seemed to be a little bit worse than WeWork. But anyway, there are startup founders who kind of embraced the purpose movement.
But I’m wondering, like, do you feel like purpose has a place for like people who are newly founding a business? I think Unilever and Dove, it’s—or Pepsi, these are very like old brands where the people who are now embracing purpose, it feels like more of a management decision where they’re doing this kind of from strategic management, kind of inheriting a brand versus newly forming a brand and having a purpose with like... there’s a founder or a set of founders, they have a shared purpose to build a company. Do you feel like it could belong in either whether it’s a startup or even like a local small business that’s not necessarily like trying to raise a bunch of money? Do you feel like purpose has more of a place there? Or do you feel like it’s equally whether it’s a large company or small company or any... an old company or a new company, purpose can still kind of lead people astray?
Nick Asbury: Yeah, good question. I think I would definitely make a clear distinction between the kind of local family business and the typical startup. Because I think, as we were kind of saying before, startups are very much in that world of venture capital and, you know, they’re part of that self-reinforcing system where everyone thinks purpose must be important because everyone else does, if you know what I mean. So, VCs kind of ask, “What’s your purpose?” the startup founders kind of feel like they should have one. It’s just part of the kind of game everyone’s playing, really. So, I think if anything, startup founders are more susceptible to getting carried away by grandiose ideas of purpose in a way that can actually lead them to do some quite dodgy ethical things.
I think in the case of more just kind of down-to-earth local, privately-owned businesses, yeah, I think there is something more interesting there. I think, in theory, a privately-owned business can take decisions that put principle before profit, you know. They have the freedom to do that if they want to. If you’re a publicly-held company, you run into problems because if you’re continually overtly saying that you’re going to put principles and purpose ahead of profit, then the shareholders are probably going to have something to say about that. And, you know, ultimately, when the calls get tougher, you always end up having to put the commercial interest first.
But yeah, a smaller family business, I think, can maybe have more freedom to do that kind of thing.
But one thing I would say, certainly in the UK context, is you do see businesses that have a very good ethical record. There are various ones like Timpson in the UK, is a chain of franchise kind of operation where it kind of repairs shoes, cuts keys, all this kind of humdrum stuff. They actually have a very good record on employment practices, you know, employing former prisoners and this kind of thing, doing useful stuff.
But they don’t make it the center of their marketing. They just market the fact that, you know, they fix shoes and cut keys and they’re nice people. And so, you won’t go to their website and find a massive purpose statement claiming that they’re, you know, making the world a better place. Even though, arguably, they’re doing more on that front than some of these big purpose businesses.
And I think that’s not a coincidence, in a way. I think, if you are doing good stuff, you’re doing it because it’s good stuff, you know. You’re not doing it so you can make more money, necessarily. That’s the whole thing that makes it good in the first place, really. And I think this idea that you do something good and then you go and make it the center of a massive global marketing campaign, you know, it naturally makes people cynical about, well, what’s your real motive here? You know? If you’re so keen to tell us how good you are, that kind of makes me doubt the claim, somehow.
Is Elon Musk the Most Successful Purpose-Driven Founder?
Andrew Mitrak: I was asking about founders and entrepreneurs and one who comes to mind is Elon Musk, who I’ve avoided talking about him on this podcast so much because he already gets so much attention on so many things and he’s everywhere. But, kind of unavoidable. And with this, I would say, like, he’s probably the most single successful entrepreneur of the purpose era that’s covered in the book, if you kind of just look at the number of companies, the rise of those companies, the market cap of those companies, his general mindshare of things.
And do you think that he or his companies have purpose in some ways? Because if the reason that I ask about this is actually, you know, you tie purpose to like Occupy Wall Street. And SpaceX, my—I have a family member who used to work at SpaceX. And one of the employees have like a shirt that says, “Occupy Mars.” And the idea actually is like it’s also stenciled on, almost a play on the Occupy Wall Street movement. And people will say, like, “Oh, our goal is like, Oh, I’m working here because I want to make life multi-planetary,” which kind of sounds insane, but I think they kind of believe it a little bit, right? And, and of course, he also, you know, he’s become extraordinarily wealthy, and of any of his employees have, and that, you know, probably also helps them kind of stick around. But it does seem like there is at least some purpose tied to it. And I guess, would you, I don’t think he appears in your book at all, and I’m just wondering if you have any reaction to whether he has a purpose, or how, or if he’s bringing purpose to his marketing in kind of a different way.
Nick Asbury: Yeah, no, it’s a fascinating question because I think he’s been on, obviously, a very particular kind of journey in the last 10, 15 years. And, you know, I think anyone who called themselves a purpose advocate these days would be horrified at the thought that he’s an example of what they mean. He’s probably the exact opposite. But I do think he is quite—there’s a lot of heavy irony in it all because certainly if you went back to like 2010 or something, he would be seen as a kind of purposeful leader who was making a lot of money by selling, you know, pioneering electric cars and so on.
And I think at that point, lots of purpose supporters would say, “Yes, this is exactly what we want. We want big, successful business people to be purpose-driven, to bring their politics to the workplace, to not separate out these kind of business from making a kind of social impact.”
And obviously, he’s then been on a trajectory where, you know, he’s now been on the side of Trump and, you know, a much more kind of right-wing coded figure. And I think at that point, all these purpose advocates who have previously been saying, “Yes, bring your politics to work and, you know, enact your political beliefs through your businesses,” they would all suddenly say, “No, that’s not what we meant, you know.” Because really, the underlying, I guess, ethos of purpose is, yes, bring your politics to work, but make sure they’re the right politics, you know, with... it’s only the approved causes that we really want chief execs to be pushing in their work.
So, I think he’s become a kind of—you know, he long ago, I guess, became a kind of embarrassment to that purpose movement, and is now, you know, public enemy number one.
Why Ads Got Serious — and Why Funny Is Coming Back
Andrew Mitrak: That’s right, because, and I don’t want to like, personally, share any opinions on the political aspects of this, but like, purpose as it evolved, it also kind of coincided with like other broader trends that were sort of in the general zeitgeist of purpose. You know, there’s the rise of things like DEI, ESG, which is sort of purpose-related. There’s sort of, you know, the quote-unquote woke, there’s generally like, I’d say, like a decline in like the R-rated comedy movie, and sort of a rise in like prestige drama TV, and there’s all these—all these things that kind of come together in this era, and leads to ads also being sort of more homogenized as well.
And when somebody like Elon says, “I have a purpose,” he probably thinks he has purpose, his employees probably think they have purpose, but it’s a very different purpose than sort of the rest of that sort of, you know, zeitgeist stuff that was sort of tied with purpose. It’s like, well, is it purpose that’s wrong here, or was it more of all that other stuff? Could there be an argument for like, sure, have a purpose, but also like, you can, you know, as long as your purpose is original and distinct and not being undifferentiated, in a way, could there be a place for purpose to be successful?
Nick Asbury: Yeah, well, I think, yeah, you’ve made many good points there. I do think, I totally do think all of this, purpose within the business and advertising world, I think all of it is connected to that larger cultural shift that we’ve been going through over the last two decades, I guess. And I think you’re right that the same cultural shifts that have made Hollywood films or TV dramas kind of more serious and less funny... there are connections between that and the same thing happening with advertising where, you know, there’s a real urge to be, to be kind of more serious and to have a kind of some kind of purported political message in what you do.
Ironically, I think the take-out for marketers there should be, you know, consumers are craving a bit of light relief, I think, you know, in a very serious world, where, yeah, you know, everything from stand-up comedy to films to music to other forms of culture are getting more and more serious and more and more kind of tight about stuff. You can at the very least just have a few funny ads in the ad break. And ads that you can laugh at and enjoy, whether you’re a Biden supporter or a Trump supporter.
That’s, I think, ads can be actually quite therapeutic and, you might even say purposeful that way with a small p, in the sense that they just add a bit of entertainment to life, they create a bit of common ground that people can agree on. And, yeah, not everything has to be loaded with this very earnest sense of purpose, I think. And I think that’s where advertisers have really kind of let people down, I think, in recent years. I think it is turning round. I think there’s been a shift in the last year or two.
But, yeah, it remains to be seen to what extent or, you know, where that will evolve to next.
The Vibe Shift of 2024: Are we past peak “Purpose”?
Andrew Mitrak: Coincidentally, I think it did shift right around the time you published your book—maybe not coincidentally.
Nick Asbury: Oh yeah, it was all down to me.
Andrew Mitrak: I wanted to talk about that because I think there has been sort of the vibe shift, I guess, right around 2024. And I think it is hard to decouple whether that’s a marketing or business purpose shift, or more of just a general tone in a cultural counterreaction to what came before it, more broadly. Some people kind of call it the Overton window of what you’re allowed to say is kind of shifting open again. And I guess, do you have any thoughts on sort of, are we past peak purpose?
Nick Asbury: Yeah, I certainly think a lot of the power has been kind of drained out of the purpose movement by all sorts of shifts that have taken place. I think if some kind of historian of advertising or of business was writing about this in 100 years’ time or something, I think the basic bookends to the purpose era, if you like, would be the 2008 financial crash at one end, and I would say the reelection of Donald Trump at the other end in 2024. Regardless of your politics, I just think there was a real sense of that being a real marker culturally where people kind of felt, “Okay, certain narratives haven’t been working.”
And it kind of gave the lie to a lot of these things that were fueling purpose, you know, the idea that younger generations were craving businesses to get involved in politics and push progressive causes, and then it kind of turns out that more than half of them are voting for Trump, or certainly on the male side, and a large proportion on the female side as well, and the vote was increasing rather than decreasing.
So, there were lots of sobering realities that came home, I think. And I certainly think now, if you go into a boardroom and start talking about purpose, regardless of your position on it, it will just feel like a bit of an old, yesterday’s idea, kind of thing. Which isn’t to say—one thing I’m always very anxious about with this is that I don’t think that at all means that suddenly we should just not talk about ethics anymore, or trying to advertise responsibly, trying to do business responsibly. I think all of that is a permanent conversation. If anything, I would hope that conversation can happen more clearly and seriously and in a more grown-up way than this kind of purpose fantasy that people have been living in for too long, I think.
So, yeah, I do think it’s shifted, but I also just wouldn’t want to overstate it because it’s very much woven into the fabric of a lot of industry institutions. The award shows, you will still find, are full of purpose work—maybe not quite as intensely as they were, but certainly there’s a lot of of it still there. And a lot of people still fundamentally hold the same belief, even if they know it’s not quite as fashionable to talk about now. So, yeah, I don’t think the argument will go away, but I think the most intense period of it has maybe passed.
Why Are Purpose Advocates Mostly Late-Career Marketers?
Andrew Mitrak: A question I also wanted to ask about is, I think that you kind of alluded to this, that a lot of the people who are proponents of purpose tend to be a little later in their career. They tend to be maybe even almost retired, or kind of in a reflective mode. Maybe they’ve been very successful business leaders and have spent a lot of time in the office, and they might be thinking about their own purpose in life. They might be thinking, “Oh, well, I spent a lot of time making silly advertisements, did that do anything?” Maybe these advocates—and I don’t want to speak for any individual exactly, but they think that if they can inject purpose into business, it might give their life more purpose, as well, or justify their time spent on advertising.
I will share one example, and it’s somebody who I’ve interviewed on this podcast two times, who is kind of a mentor to me, and that is Philip Kotler, who’s in his 90s. He has written articles that say, you know, he’s famous for popularizing this idea of the Four Ps of marketing: product, price, place, promotion. He has written articles saying, “Oh, the fifth P is purpose.” He is a very accomplished person, who legitimately wants to make the world a better place, and has that top of mind. And I’m wondering—not just to respect our elders, but these are people who probably have some wisdom, or who knows, in several decades’ time, you might have some conversion yourself, who knows. Does who it’s coming from, or where they might be in life, does that change your view at all? Do you agree with the premise of my hypothesis here, and what is your reaction to that hypothesis?
Nick Asbury: Yeah, I think it’s a great point. And I would totally share the same observation that a lot of this has been driven by people closer to the end of their careers than the start. But I would take a very different kind of reading of it, I guess.
The way I would see it, like in the UK, for example, just looking at the advertising world, the kind of D&AD world—and this is not to personalize it too much, but just to give a couple of examples—there would be guys, the generation of kind of a Steve Henry, who’s a bit of an advertising legend through the ‘80s and ‘90s, and Tim Lindsay, same kind of generation, who’s now chairman of D&AD and has been a very vocal advocate of purpose. They and quite a few others come from a certain generation where they’ve actually had immense fun in their careers. They’ve flown around the world, making fun ads for Levi’s and inventing silly characters that have caught on, and just having fun doing commercial advertising, famous commercial advertising. And then, towards the end of their careers, there’s a kind of sudden discovery of conscience, in a way, where it’s suddenly like, “Oh, well, we personally now want to rebrand ourselves more as kind of guru-like figures at the end of our careers who are now going to impart some wisdom about the importance of being ethical,” and so on.
But I actually think there’s something a little bit, what’s the word, self-serving about it, in the sense that, yeah, fine, that may make a good positioning for you as a kind of elder statesman of the industry, but actually, in a way, you’re pulling the ladder up behind you. You’re saying, “It was okay for us to have fun. It was okay for us to make silly ads that were funny and enjoyable to make. But all you lot now, you need to be super serious, and you need to cut down your carbon emissions, and don’t make silly ads, make worthy ads, and otherwise you won’t get an award from us,” and that kind of thing. I’m putting it in a slightly simplistic way there, but I do think there’s been a real sense of that. It’s easy to say that now that you haven’t really got a stake in the game in the same way.
But having made your name, and made lots of money doing that kind of work, I think to then turn around and say, “Ah, but now everything’s different, you all need to be ethical and purposeful.” I just think there’s something a little bit convenient about that. And I’ve got great respect for Philip Kotler’s contribution over the years, but I do think this kind of—I know he’s written versions of that “fifth P is purpose” article. It first came out in 2013, and has come out every two or three years since in various forms. I just find there’s something a little bit opportunistic about it, if I’m being unkind. Which doesn’t undermine his previous work at all, but I think it’s maybe just an attempt to feel more relevant given the cultural climate, and it’s not really being done with the same rigor that he would have brought as a practicing marketer back in earlier times. So, yeah, and all of that may sound a little bit unkind, maybe. But I do think, given that the movement often portrays itself as a kind of youthful uprising, I think it’s surprising the extent to which it’s led by actually quite men getting on in their years, and kind of rebranding themselves late in their careers.
Andrew Mitrak: Yeah, for sure. And I think there’s almost sort of like a survivorship bias to it where, “Oh, we’ve made it this far, I’ve already done the hard work in my career, you can kind of give that advice later,” but it actually doesn’t work in the moment in the same way.
Nick Asbury: Yeah, yeah.
Andrew Mitrak: And it’s not what got you to where you are now in order to be in a position to give that advice. It’s kind of a post-rationalization, really.
Nick Asbury: So, but yeah, I do think there’s something. I actually, you know, I write my Substack, and I think I have had something in the drafts for a while that I never got around to finishing, but it was kind of about this issue of, I guess, the more psychological reasons that some people get into this stuff. So, yeah, maybe I’ll get around to finishing that at some point.
Human Creativity, AI, and Lateral Thinking
Andrew Mitrak: Yeah, I’d definitely read it. As we sort of approach the end here, you mention how about 80% of your book is more of sort of the takedown of purpose, and that’s where we’ve spent most of our conversation. The last half, as in the subtitle, is about how human creativity is the way out. And you specify human creativity, not artificial creativity. So, I guess on that last bit, and sort of on the more optimistic, forward-looking note, what’s so good about human creativity? Why is that the way out?
Nick Asbury: Yeah, I do think—first of all, I’m very glad you asked, because I know I can sound negative sometimes. But I hope there is a very positive argument in the book. And I think human creativity—if you go back to so many of the great brands, the real magic comes from moments of human creativity. Someone, somewhere, comes up with the line that defines the brand, you know, the “Just Do It“ or the “Beanz Meanz Heinz,” or whatever it is. And it’s a moment of human inspiration and lateral thinking, and verbal or visual creativity that actually gets endlessly post-rationalized. People build strategic arguments around things, but really it starts with a creative spark, I think.
It’s always been a difficult thing for the ad industry to talk about, because how do you quantify creativity and sell it without just sounding like some kind of hippie weirdo in the boardroom? But I think that is the truth about advertising: it’s quite hard to predict what will work, and it’s often the little lateral step, the little play on words even, that can end up building a billion-dollar brand.
So, yeah, I kind of think brands need to center themselves around that, really. I talk about purpose being a closed mindset and creativity being an open mindset, in the sense that as a business, I think if you’re defining your purpose in advance and you narrow in on it, it’s a goal-oriented way of looking at the world. Whereas I think if you put creativity first, it’s actually about being curious about all the little side routes you might go down, and what other opportunities there might be, and it just leaves you open to serendipitous things happening, in a way that I think purpose doesn’t. Purpose tends to squash you into a particular place where everything has to be very earnest and worthy. So, yeah, there’s a lot to say on that, but I essentially see creativity as the flip side to purpose, really. And, yeah, I think we should talk about it much more than we do as an industry.
Andrew Mitrak: A phrase that you used a few times was lateral thinking and taking lateral steps. I think that’s actually one of my favorite concepts, and I think it’s such a useful one. It’s also one where you kind of emphasize human creativity, especially looking forward in this current era of artificial intelligence. For all of how powerful and useful AI is, it’s not actually very good at lateral thinking yet, or bringing together disparate ideas. I think it might actually be, sometimes, how the models work. They are “thinking models” that kind of go down a train, and you can feed it a lot of disparate information, but I feel like humans are, at least at this point, the ones that are able to make lateral moves and lateral ideas, and kind of take side steps. That’s so much of where lateral thinking happens.
“Just Do It,” I think, was inspired by Gary Gilmore, a person who was about to be executed, saying “let’s do it.” No AI—I doubt it, I’d be almost worried if an AI was looking at execution records to inspire my ads. But it’s something that is so uniquely human. And as you say, AI models are trained almost on the purpose era of advertising. I think they probably are pretty good at helping your brand purpose if you wanted them to. But also, I feel like lateral thinking and creativity are ways to stand out now more than ever, both to differentiate from the purpose era and from the current AI era.
Nick Asbury: Yeah, totally. I’m a great fan of—there’s a book, which may be more famous in the UK than elsewhere, called A Smile in the Mind. It’s kind of a classic book that came out in the ‘90s all about witty thinking and lateral thinking in design and advertising, which I always thought was a brilliant book. Actually, in 2016, I was lucky in that I ended up co-editing a kind of updated edition of the book. But it’s all about that kind of work that relies on a twist of some sort, some kind of lateral leap.
I think that’s a really powerful way of looking at the business world and trying to—because so much of it is about taking familiar messages and trying to make them feel a bit new again. So, if you can think in that kind of lateral way, I think it’s really powerful. And I think you’re right that AI—in theory, AI should be good at it because it’s full of all these reference points; it knows way more than any human can fit in their brain. So, you would think it could generate more of these connections, but I think where it falls down—and I’m actually a big fan of AI, I think it’s quite exciting to be living in this period—ultimately, it is making statistical probability-based judgments about which word to put next. So, it’s never going to take the most surprising lateral leap. It’s going to take one that maybe has already happened somewhere before. So, yeah, maybe it will take humans to make those connections. Yeah, interesting times.
Where to Find Nick Asbury
Andrew Mitrak: That’s right. By the way, I’m a big fan of it too. I use it quite a bit in my work. But also, I think that, at least currently—and hopefully for a long time, as a humanist and a fan of humans in general—we’re at this moment where it’s sort of the humans plus AI that can do really interesting things. Maybe humans can still sort of find the lateral moves with AI as an amplifier tool. The combination of the two is really exciting to me today. When it’s all AI, you recognize it as slop. And when it’s all human, that’s great; it’s great that there are still humans doing things entirely. But also we’re at a unique moment where there’s a chance for the two to blend in interesting and surprising ways, and I agree it’s an exciting time to be in.
Nick Asbury: Absolutely.
Andrew Mitrak: You mentioned A Smile in the Mind, and I’m going to pick that up. I hadn’t come across that, so I’m going to order it. And also, you mentioned your Substack. Can you tell listeners where to find you online and read your work?
Nick Asbury: Yeah, at the moment, Substack is the best place. I’m not a regular poster, but when I post, I tend to go long. So, nickasbury.substack.com. And then LinkedIn is probably the one social platform where I’m most active, although for some reason, I haven’t been in recent months. But yeah, I’m quite often involved in all sorts of arguments on there if you want to go and join in.
Andrew Mitrak: Great. Yeah, listeners should definitely check out your Substack, and also find you on LinkedIn and read the book, The Road to Hell. I think, of all the books, just as far as how impactful it could be to how you think and see patterns, and how great it is as a marketing book—I hadn’t come across it until recently, I think I maybe saw Byron Sharp post about it as well, so it came across my feed and I was like, “Wow, this is actually really great.” I hope more people read it as well, because it’s a really exciting read. If you’ve listened to this conversation, you should definitely, definitely read that book. Well, thanks so much, Nick. It’s so great to connect. I really enjoyed this, and I feel like we covered so much ground. I learned a lot from you and feel very inspired by the conversation, so thanks so much for your time.
Nick Asbury: Oh, thanks. That’s very kind, Andrew. I appreciate being asked on. I know you’ve had some great guests, and, yeah, really enjoyed the conversation. Thank you.


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A History of Marketing / Episode 52
Gian Fulgoni has spent 50 years as a pioneer in market research and audience measurement. From his work on scanner data at IRI in the 1970s to co-founding Comscore in 1999, Gian helped invent how marketing gets measured, first in supermarkets and then on the internet.
His career sits at the center of two transformations that reshaped the field. At IRI, he helped pioneer the use of supermarket scanner data and built one of the earliest controlled experiments in television advertising, a system that could send different ads to different households in real time, in 1979. Two decades later, he co-founded Comscore to bring that same measurement rigor to the chaos of the early internet, building the panels and tools that defined how digital audiences and e-commerce got counted.
Gian has lived through every major shift in modern marketing measurement, and he’s candid about what went wrong along the way. He has watched the industry get seduced by metrics that are easy to capture but don’t actually measure whether advertising works.
In this conversation, we cover:
* Why digital marketing metrics like click-through rates and ROAS are misleading, and why the industry keeps using them anyway
* How scanner data accidentally flipped CPG spending from advertising to promotion and handed power to retailers
* Why data shows that creative is the biggest driver of advertising effectiveness, and why the industry keeps ignoring that lesson
* What the dot-com era might tell us about today’s AI revolution
Listen to the podcast: Spotify / Apple Podcasts
Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Tod Johnson, whom you may remember from episode 51 of this podcast, for introducing me to Gian.
Andrew Mitrak: Gian Fulgoni, welcome to A History of Marketing.
Gian Fulgoni: Well thank you. Thanks for the invitation to be here today.
Andrew Mitrak: I want to start right at the beginning. You studied marketing in London and then moved to Pittsburgh to work in marketing. How was the marketing scene different between the UK and the US?
Gian Fulgoni: Well, you know, marketing was kind of viewed as having originated in the US, but that’s really not the issue that I was focused on. So my undergraduate degree is in physics. Right? And while I might have been good at it in high school, it was like going from the minor leagues to major league baseball when I got to university. I had no competitive advantage in physics. I was trying to figure out what to do next, and it was the beginning of marketing, actually, in the US and certainly in the UK. I did some research and realized that marketing might be a good place for me to be.
I did, I think, anticipate correctly that data and computers and the like, analytics, would become more important in marketing as time went by, which kind of reinforced my decision to major in marketing. I got a master’s degree in it. Then I got offered out of the blue. I got a job while I was still at school that took me to Pittsburgh, and it was a company named Management Science Associates that was started by a professor out of Carnegie Mellon who wanted to do research on things he was interested in. He started a company that was focused on analyzing data, basically. Processing and analyzing data. And that’s where I ended up.
Is Marketing a Uniquely American Discipline?
Andrew Mitrak: I want to follow up on, you said that it seemed like marketing had originated as more of an American field. It’s something that on this podcast I’ve actually encountered. Like I’ve talked to Phil Kotler, who is often called the father of modern marketing, and he kind of says that marketing is uniquely American or comes from an American tradition. And I’ve talked to folks though from abroad who reject that or they push back on that, and it’s just sort of like a North American bias. So it’s interesting as somebody who was in the UK, you kind of perceived it that way. Can you speak to that?
Gian Fulgoni: Yeah, I mean there’s no question in my mind. There’s no question in my mind. For example, where I got my master’s was the only university in the UK that had a master’s degree in marketing. That was in 1969. I mean, you could get a master’s degree in marketing in a bunch of universities at that point in time in the US. There were only two MBA programs in the UK at Manchester and London. You know, you had dozens of them. So, if you look at all of the people who pioneered marketing, they’re really from the United States. So I don’t think there’s any question that the US was ahead at that point in time and maybe to this day is still ahead.
Andrew Mitrak: So did you go into marketing knowing you wanted to go to the US eventually?
Gian Fulgoni: No. No, it was, I had done some research, talked to some other people who were going on to MBA programs when I was in my undergraduate final year. And that’s what I decided that marketing looked really interesting. As I said, I think I anticipated the data and analytics, computers, would become more important there. But I had no idea, no intention of coming to the US. It was when the job offer came along that I suddenly thought, man, this is the opportunity of a lifetime. I gotta do this.
The Early Adoption of Computers and Data in Marketing
Andrew Mitrak: You were really early to computers and data in marketing. Marketing as a field in the UK was early, and then attaching computers and data onto it. How did you make that connection initially?
Gian Fulgoni: I think in large part it was because the company I worked for, Management Science Associates, their business was helping companies use whatever marketing data they had. And that would involve taking raw data, if you will, and processing it, analyzing it, whatever data it was. It could have been panels of consumers, back in those days it was diary panels. Or it could have been shipment data that companies had, or it could have been Nielsen audit data, or another database was SAMI warehouse withdrawal data, or whatever data they had. And so I was able to learn the basics of what was available as data, how to process it, analyze it, how to improve it, and I think started to get a feel for what was not available that maybe could be a home run if it became available.
Riding the Technology Wave in Market Research
Andrew Mitrak: It strikes me, this is a little bit of an odd question, but have you seen the show Mad Men?
Gian Fulgoni: Yes. Yes.
Andrew Mitrak: It strikes me the analogy I was thinking of like people like you who adopted computers early. In that show, there is a character, Harry Crane, who adopted TV, and he became the head of television and sort of rode the wave of TV. And people like you were very early on to computers and data and sort of rode that wave. I feel like marketers who can identify the right technology ride a wave, it can propel you in your career. Do you think of it that way at all, like part of it is timing and finding the right technology and positioning yourself as the expert in it?
Gian Fulgoni: Absolutely. Oh, absolutely. I mean, I have often said I didn’t create any particular technology. I just took advantage of breakthroughs in technology that allowed for the creation of new applications and new products. But I think I did see early on that it just had to evolve, right? Computers, it was pretty clear, were getting faster, at that point bigger by the way, we hadn’t reached the trend when things were getting smaller. But you could see that the data that was becoming available, that was changing. The way that data was being analyzed, things that could be done with data that wasn’t available at the time. I mean, the emergence of scanner data was a great example, because that changed everything in how consumer packaged goods marketers operated. One truth at least that’s evident to me is that data, the availability of data, can change markets fundamentally. And I think there are numerous examples of that in history, if you will, certainly over the past 40 years or so.
The Founding of IRI and the Emergence of Scanner Data
Andrew Mitrak: Can you tell me the story of what led to you founding IRI?
Gian Fulgoni: Yes. Well, I wasn’t the founder. Let me say I was hired shortly after they had started the business. And as it happened, the person that started it, John Malec, had worked at Management Science Associates where I was at, so I knew him. And what they did was pretty amazing, even looking at it today. So basically, scanning was beginning to be installed in supermarkets, but it was nowhere near pervasive. And so what IRI did is they bought the scanners for the retailers in two small cities, Pittsfield, Massachusetts and Marion, Indiana. And they gave the scanners to the retailers with the understanding that the retailers would stock new products as they came along that IRI would bring to them, that they would only supply the data to IRI, and that they would accept an ID card from households who became members of the IRI panel. Alright? So that was the scanning part of it, and that was a breakthrough because then we were able to cover the entire city. And there was no other city in the US that you could measure.
Inventing the “Black Box” for Targeted TV Advertising
Gian Fulgoni: And then they did a second thing that maybe was even more dramatic. They invented a black box that sat on the television set of these households. In these towns, you couldn’t watch over-the-air television, the broadcast signals weren’t strong enough, so you had to have cable. They gave the panelists, with permission, a box that allowed IRI to change the television advertising in real-time without you knowing when that was occurring. Okay, so it was targeted advertising in 1979. Crazy to think about it today, right? And so what we could do is we could send one advertising campaign to one half of the panel and a different campaign to the other half then read the impact by looking at the scanner data and seeing what they were buying. It was a home run! … In 1979.
Andrew Mitrak: I have to ask. So this black box, how did that work? Did they detect there was a commercial break and change advertising was it just like almost any broadcasting?
Gian Fulgoni: Technically they way it worked is that we had an agreement with the cable company and so we had a studio at the head end of the cable system and so we knew when the ad was coming down that we had to change. So if we wanted to reduce ad spending, we would substitute a commercial for anti-smoking or something like that, or otherwise we would be able to ride the ad over another ad that the client owned. Okay? And then the box, we would direct the boxes that we wanted to see advertising A to get A, and the other ones would get B. But it all happened in real time. So if you were a panelist, you gave them permission for this to occur, but you were never aware of when it was actually happening. And as I said, it was a home run in terms of its ability to measure advertising effectiveness. It was just a beautiful A/B test design. Very profitable business. And we took the company public in 1983. So that was way before scanners had become pervasive. And then there’s a separate story around that as we built out the capability nationally.
The Tension Between Data Measurement and Creative Quality
Andrew Mitrak: It sounds just, that tech sounds way ahead of its time. It’s so ingenious. As you got all this data and you ran these AB tests, were there any myths about consumer behavior that IRI helped debunk or what were the key learnings that you found?
Gian Fulgoni: Yeah, that’s a really good question. So I’ll give you one example. I won’t mention the client, but it was a client that was spending a lot of money on television advertising. And they wanted to see if they could move the needle in sales. So they came to us and they said, we’re going to spend six times what we’re spending, and we want to do that as an experiment. And that was putting the equivalent of a ton of money. And so off we went. We ran the test for six months. I’m looking at the results and there’s no increment in sales. There’s nothing. Right? I’m thinking, oh, this is going to be trouble. I gotta go and present these results. And so before going to the meeting, I was talking to the head of research who had commissioned the study and I said, this is going to be really a problem, isn’t it? And he goes, no, no. And I go, why is that? He goes, well, six times nothing is still nothing. And his point was that the creative had never tested well. And so you put six times the money behind poor creative, and you get nothing. And that was a real learning point for me. Because it pointed to the importance of creative. And then we did other work that confirmed it. That basically, and others have done the same thing, it basically points to the fact that typically two-thirds to 70% of an advertising campaign’s impact is because of the creative, not the money that you’re spending or the media plan. And I think that lesson is kind of being forgotten today. It’s all become a question of how many impressions you shove at people.
Andrew Mitrak: I feel like sometimes, and I’m generalizing here, the creative people are almost at odds with the data people, or that they feel like they’re in different camps of marketing. But in this case, your data was supporting the importance of creative, and it’s sort of a better together type story.
Gian Fulgoni: Well, yes, except for the creatives who wrote the creative that we just tested. They probably didn’t like the results. Yeah, I mean, there’s always been that tension, and I suspect it’s probably still there. I mean, there’s just this feeling that they don’t like being measured. I don’t know whether it’s fear of failure, if you will, or just the ego saying, “Well, look, I came up with this great piece of creative. Why do we need to measure it?” I don’t know what it is, but I do know that it’s always been an issue. But as I said, I think one of the really troubling aspects of advertising today in the digital world is that we’ve gone to a point where the attention paid to creative is minimal compared to all of this automation that’s going on that I think is just trouble personally, but that’s my view.
The Pitfalls of Modern Digital Advertising and AI Automation
Andrew Mitrak: Yeah, for sure. That people just think, oh, just automate away your creative. It’s like, well okay, then your creative is going to look like everybody else’s.
Gian Fulgoni: Right. Exactly. And now we’re going to use AI to create the commercials. Right? And AI is going to decide where it’s going to run. And then we’re going to use synthetic panels that are AI-built to figure out the response. I mean, it just seems idiotic to me. But I think I know the drivers of this. I think the drivers are the technologies available, and there’s a need for speed and low cost. And that overwhelms sensibility sometimes.
Andrew Mitrak: Have you seen that story play out before at all? Or does it seem uniquely different? Like, you’ve gone through a handful of technology shifts and a lot of excitement around a thing where “this will change everything.” And of course, it does change a lot, or things change a lot, but maybe the changes might be misunderstood. Do you feel like this feels like a familiar moment to you, or does it feel like something different?
Gian Fulgoni: No, it does. It feels like an exaggeration of the availability of technology and maybe a lack of focus on, it seems to be technology’s ability to drive the metrics and the system, but nobody seems to be paying enough attention to whether those metrics are really meaningful or not, right? Or how to deal with them. I can talk a lot about that in a second, but I’ll give you one vivid example.
The Unintended Consequences of Scanner Data on Market Share
Gian Fulgoni: And it’s scanners, right? So at the time that scanners became available broadly in the US, if you were in the consumer packaged goods world, the only way to know what was selling at retail was Nielsen’s manual audits. So Nielsen would have 10,000 people or something like that around the country who would manually audit stores. They’d go in, they’d look at what was stored in the back room in the store, they’d get the invoices for what was ordered from the warehouse, and derive what was sold over a two-month period. And so marketers were using two-month data points. Alright? Now, if you use two-month data points, everything seems to smooth out, and it becomes, the lines of market share seem to look flat. There’s not a lot of variability in it. Well, imagine when one day scanning data became available, and it was measuring weekly sales movement. All of a sudden you saw those weekly sales responses that were hidden in bimonthly data. Right? And it was caused by the promotions that were running. Promotions in packaged goods had been running week to week. A manufacturer would pay a retailer to lower the price for a week, they’d get an in-store display, they’d run an ad in the newspaper, and then next week it would be another different manufacturer, probably in the same category doing it, right? Well, if the only database you had to measure the impact was two months of data, and these events were running week to week, you could never figure out what was really happening. And then scanning came along, and it was dramatic because in a flat world where change doesn’t seem to be occurring, advertising thrived. And typically, two-thirds of marketing spending in packaged goods went to advertising, television predominantly, and about a third went to promotion. When scanning came along, it reversed itself really, really quickly. Because all of a sudden the retailers could see what was happening, and the retailers had such power that they were able to demand more promotions. And the manufacturers had to go along with it. And suddenly all of their spending started shifting to promotion. And it went from 70-30 in favor of advertising to 70-30 in favor of promotion. And I’m not sure that enough thought was given to the impact on a company’s financials. And the retailers became much more powerful to this day.
The Short-Term vs. Long-Term Debate
Andrew Mitrak: As you do promotions, there’s sort of this race to the bottom, and then that led to this whole brand equity thing too, right, where companies started to say, “Well, you gotta, you can’t just measure sales week to week, you gotta measure your overall brand equity, and if these promotions are hurting it...”
Gian Fulgoni: Yeah, I mean it’s a real issue. I mean, race to the bottom, you know, is maybe a little bit of an exaggeration, but if price becomes the driver of people’s buying behavior, that’s not particularly healthy, I would think, you know, speaking as a marketer. So, speed was a big driver of it, and the data, the ability to understand what was going on. And you know, if you then fast forward through the years, things get faster and faster, and the ability to run promotions becomes faster and faster. And if you were to say to a marketer or a CMO or a CEO today, “Hey, I want you to run a campaign, an advertising campaign, but it’s going to be a branding campaign, I’m not going to be able to give you the results for six months.” They’d laugh you out of the room. Right? I mean, I can’t wait that long. I gotta know within a week or within a day what’s happening. And the moment you have that perspective, you know, I think you fall into the trap of fast digital marketing with metrics that are available but may not mean anything at all. And so I kind of trace it, you know, the evolution, at least in my lifetime, from the availability of scanner data through to today when digital marketing is pervasive, and the next step is going to be what does AI do to all of this.
How Scanner Data Favored Promotions over Creative Advertising
Andrew Mitrak: That’s really interesting. I don’t know if I’ve heard it articulated that way, that the scanner, of course I was aware that scanners were related to promotions, but that scanners were almost the causality of accelerating promotions and amplifying promotions, and that because this is something that’s measurable, you kind of over-index on this channel because that is what’s being measured. Right. And it’s just interesting, you’re somebody who’s made your career in this form of analytics, and just kind of hearing that you’re able to reflect on some of the unintended consequences or it kind of being taken the wrong way or going too far, is just kind of an interesting reflection.
Gian Fulgoni: Well, I mean, maybe I had too negative of a view of it. I mean, when all of this reality hit home, a new area of analytics emerged, which was trade deal evaluation, price promotion strategies. And the big consulting companies took it over, right? It wasn’t the market research companies that owned that. I mean, the charge for those big studies was way, way more than we would ever charge. And you had to have the credibility of McKinsey or Bain to be able to get away with it. But it did drive a lot of thinking about, you know, how do you run these promotions, you know, with these retailers, and, you know, what should your price strategy be, etc., etc.
The Early Days of E-commerce Measurement
Andrew Mitrak: So, you were early to adopting computers and data with marketing. When did the internet come on your radar? And what was your initial encounter with the internet? And as somebody who’s an early adopter of technology, what was your initial impression of, “oh, this is going to be big, this is going to be important for marketing”?
Gian Fulgoni: Yeah, I was probably not as early as I should have been in the impact of the internet. I was invited to join the board of a company called Yesmail that was doing email marketing, basically. Around 1999, it became clear that the internet was accelerating, I mean, we didn’t anticipate the dot-com bubble at that point, for sure, and that there was the opportunity to kind of replicate what we had done at IRI on the internet. Alright? And my business partner and I, who had been president of IRI, and you know, when I was CEO there, a gentleman named Magid Abraham and I started Comscore. And the idea was, there were two aspects to it. One was e-commerce was emerging, why don’t we build a system to measure e-commerce trends across all categories, not just consumer packaged goods? And as a byproduct of that, we’ll be able to measure the effectiveness of digital advertising on online sales. Easy to say, not too easy to build. There’s no UPC code. So we had to develop all these screen-scraping technologies to just pull the data off from the computer screen. And then you had to have massive panels of people. And we had to figure out how do you recruit 2 million people who will let you, who give you permission to put our measurement software on their machines. So we figured that out and started measuring e-commerce, and we were the only independent company doing it. So we’d get invited onto Squawk Box or Squawk on the Street, and during the holidays, Black Friday, we would always be on predicting what was or reporting on, you know, what had happened. Um, so you know, it worked out well, and we started measuring advertising effectiveness around the same time.
The Dot-Com Frenzy and 24-Hour Financial News Networks
Andrew Mitrak: So Squawk Box, was that CNBC or like Fox Business?
Gian Fulgoni: It was CNBC.
Andrew Mitrak: And this is like the rise of CNBC as well, as another part of the internet dot-com era, is that 24-hour news is a thing, and then all of a sudden 24-hour financial news and stock markets. And this is when people kind of, I feel like, an early wave of consumers sort of getting into the market and trading and all that. So you found Comscore, and you’re kind of a thought leader who’d appear on those types of shows?
Gian Fulgoni: Yeah, we always looked for that. I think one of the things we did pretty well was marketing ourselves. And you know, we knew that if we could get onto Squawk Box first thing in the morning when a lot of stock analysts and traders were watching it, and you know, eventually we were public, that’s going to be good for the business. But this was in the early days, this was like 2001, 2002. We went public in 2007. So this was before we went public, but we got the publicity, and you know, that just helped the business, that helped the customer base, if you will. We started getting a lot of inquiries from companies wanting to buy our information and so forth.
Bringing Market Research Rigor to the Wild West of Digital
Andrew Mitrak: Let’s go back to founding Comscore. Something that I’ve observed is that when a new technology paradigm emerges, often people kind of bring things in from the previous paradigm. Like, if you look at the very early movies, for instance, like the silent movies, they almost film it like it’s a play. A lot of movies just sort of point a camera at the stage. And then sometimes you see this with tech too, where early internet advertising kind of looks like newspaper advertising. It doesn’t sort of look like internet native, per se. Were there any things as you were figuring out and building Comscore that you’re bringing from IRI that did or didn’t translate into this sort of new paradigm?
Gian Fulgoni: Probably more in the area of the underlying technology than anything else. What I mean is, as opposed to us figuring out how marketing was going to evolve. I don’t think it was that so much, but we certainly did understand the importance of scale in our data collection platform. That it had to be scalable in a massive way because it was clear that we would need to measure more and more and more things. And remember, at the beginning there was no social media, there was no search, there was no video. All of those things emerged later, but we had to make sure that the basic technological infrastructure was able to handle it. We did also though, um, bring over analytical methods that had worked for us. I mean, we knew the importance of measuring individual consumer behavior at the individual consumer level and then aggregating it up. We also knew the importance of A/B testing. We understood clearly the difference between causality and correlation, which I still think haunts digital marketing to this day. So, you know, we built out a company that used a lot of what worked for us at IRI in terms of technology and analytical approaches. And you know, how do we market the company? And what’s the best way to build it and grow it, and what kind of people do we need and where we’re going to get them.
The Comscore Competitor Landscape
Andrew Mitrak: It’s an interesting story of a dot-com era company, that’s a startup being founded by veterans of an industry. You’re well into your career at this point, you have this long track record at IRI. Were there any competitors that were young, fresh out of college startups who didn’t really, maybe they knew the tech but they didn’t understand the fundamentals of marketing and running an analytics business?
Gian Fulgoni: Uh, that’s a really good question. I don’t think so. I mean, the two competitors, the two competitors I can remember, you know, was NPD and Media Metrix [See Tod Johnson episode to learn more about NPD and Media Metrix], right, who were the first to measure audiences. And then Nielsen was doing it. And neither of those companies were being headed by young executives. So I don’t think I, I can’t maybe I’m not remembering accurately, but if you were to say to me, so who were the competitors you were worried about at that point in time? It was Nielsen and Media Metrix, you know, no question. So that’s an interesting question. I’m wondering what the implication of that is.
Andrew Mitrak: It’s an interesting example because usually, very often when a new technology emerges, it paves the way for some new disruptor or somebody who’s kind of native to that category to have an opportunity. But it sounds like sort of the bigger, more established players, I guess Comscore was a new company, it wasn’t part of IRI, right? But it was founded by people who are veterans.
Gian Fulgoni: Yeah, Comscore was really new. You know what it could be, Andrew, as I think about it, is that where the young kids were going was into the, they were forming the companies that were executing things online, whether it was e-commerce or advertising or whatever. And the whole industry was still young and relatively small. And so the need to measure some of these things maybe wasn’t as obvious as it was to us, where we came from legacy businesses that were pretty big. Right? And maybe we were anticipating that as e-commerce got bigger and as digital advertising got bigger, the need for these measurements would just become more and more important.
How Cookies Inflated Metrics
Gian Fulgoni: Now, that’s not to say that there wasn’t a need for certain data elements at that point in time. And the one I will point to probably more than anything else is audience measurement. Alright? That was there because to get the advertising dollars, you had to show what, you know, how many people you were reaching. And that led to a big issue. A big, big issue. Because most of the website operators, the publishers let me call them, right, whether it was a newspaper or an e-commerce site or whatever, but you know, they wanted to get advertising dollars so they needed to show the size of how many people were visiting their website.
And so they would turn to their analytics, their website analytics. Could have been, I don’t know if Google Analytics was around at that point, but there were a bunch of different, I think Adobe had some. And the problem that we highlighted is cookie deletion. And so all of these analytical tools running on the website were basically counting unique cookies. Well, if the cookie, if Jack Smith visits the website, goes off, deletes his cookies, and comes back, he’s going to be counted as a new visitor. And the cookie deletion was prevalent. And so the audience counts were grossly inflated. And we came along with much, much lower numbers. And so the arrows were being fired at us at that point, but you know, I think we did a pretty good job of clarifying that issue and pointing to what the real numbers were.
Andrew Mitrak: Interesting. So the publishers have an incentive, because they want to charge more money to advertisers, to sort of raise their profile and say they have more numbers than they do. They kind of have an incentive to sort of overlook these cookie issues or other things. And you’re kind of coming in as a more neutral third party who’s calling balls and strikes and saying, “Ah, this is a different approach.”
Gian Fulgoni: I’m not saying that they were doing this on purpose knowingly, that their counts were inflated. I mean, a lot of them didn’t. Nobody realized it. Nobody understood the degree of cookie deletion. I mean, we at Comscore produced reports that showed how often these cookies were getting deleted. Right? And then what did that mean to the overstatement of the audience. But you know, not everybody liked to believe it, and so it became a kind of a rough time, if you will, because the advertisers wanted to know what the true numbers were. The publishers wanted the highest number possible. I mean, no surprise there, right?
Andrew Mitrak: Yeah, and at the time also, this is, I was probably a teenager or something like that at the time, using the internet, and if I recall on your browser, it was sort of just a hygiene thing. Like, “Oh, it’s running slow,” “Oh, whatever, delete your cookies, refresh.” And it was sort of just like a thing that you’d do. A listener who’s younger might not delete their cookies every day now, or cookies don’t really even exist anymore, right? So in some ways you’re vindicated about that. But it was just a behavior that you’d do, almost like defragging your computer, which you used to do or something like that. You just sort of like delete your cookies more often.
Gian Fulgoni: Yeah, but you were also, what you also needed to wipe off was malware that could have been on your machine. And so the systems you were using would do both. I mean, it would just clean, you know, very few people would say, “Well, delete the malware but leave the cookies on.” Right? And so everything got wiped off, and you could, as I recall, you could delete it as frequently as you wanted. And so we had these charts developed that showed according to the frequency of deletion how much the overstatement was of the visitor counts.
The Flawed Fixation on Click-Through Rates
Andrew Mitrak: Interesting. So something within this is that you kind of pivoted from doing more e-commerce tracking to doing audience measurement, right? Was this sort of a deliberate pivot for you?
Gian Fulgoni: Well, we always, so let me separate advertising measurement into two buckets, if you will. There’s the audience measurement part, and then there’s the effectiveness measurement part. We always were after the effectiveness measurement part. Because we had the sales numbers so we could do it. So we were doing that from the beginning. In terms of the market for the straight, you know, counts of how many people were visiting a website, that, the importance of that, I think emerged for us a little later. And you know, that’s when we went, you know, full tilt and introduced our product, which was built to scale and it was very successful. But yeah, I mean, we did know that there were multiple market segments that would emerge if we could capture the data, the variables for all of the elements that we were interested in. What we didn’t anticipate is the degree to which these computers were spitting out metrics that were irrelevant. But if you wanted to ignore that and leverage them, you could do that, and I’m heading straight down the path of identifying the click.
Andrew Mitrak: Yeah, click-through rates.
Gian Fulgoni: Pioneering work on that. I personally did a lot of it, where we basically showed that in a controlled test, so we’d look at click rates and then we’d look at the advertising effectiveness measured by an A/B test. There was no correlation. No correlation.
The “Punch the Monkey” Era and Misaligned Metrics
Andrew Mitrak: And it’s funny from this era as well, the advertisement that I have sort of a vivid memory of like on the internet was this “Punch the Monkey” thing where like it was a banner ad where like a monkey would dance around and it’d say “Punch the monkey,” and if you move your click over it or mouse over it, it says you just want to like click the monkey with something. And the trick of the ad is that anywhere you click on it, it works, whether you hit the monkey or not. But it’s just like, I don’t even remember what it was advertising. It was probably some scam or something like that, but it’s like it was everywhere at the time. And it was just purely designed to click on it. And it’s like, and they’re just like amping up clicks.
And I think a lot of ads that were display ads or banner ads that we now almost think of as like a type of like a brand advertising and not necessarily optimized for a click in the same way, at the time, you’re sort of forcing those into clicks because that’s what got measured. And so it’s just sort of like a lousy ad that was sort of hacky. And so people kind of played games like that.
Gian Fulgoni: Yeah, well if you were getting paid per click, you know, you’d want more clicks. Right? The problem was if you looked across the internet, the click rates were one in a thousand on average, right? And yet they were being used to evaluate the effectiveness of ad campaigns. I mean, the numbers were so small they were ridiculous, but then we provided more than enough evidence that it was irrelevant. Right? And here’s the problem, right? We could never get the entire industry to stop using clicks. Because they’re fast, and they don’t cost anything to produce. And I remember doing surveys of the industry, and I asked advertisers, publishers, and agencies, “How often do you use click rates to evaluate the effectiveness of ad campaigns?” A third of them said always. And this was after all this research had been published.
The Overstatement of Digital Advertising’s Impact
Gian Fulgoni: And I think if you fast forward now, you know, years later to look at what’s going on with digital marketing, there’s something really wrong with it, in my opinion and others, that the metrics that are being used are completely wrong, and they’re not measuring advertising effectiveness. It’s been said, you know, if you were to take and believe all of the studies that have been published about the effectiveness of digital advertising, the size of the US GDP would be double what it is today. And I think it’s a valid point. Not everything that can be measured matters. I forget who said that, it might have been Einstein, but it’s true. And unfortunately, in a digital world, these computers are throwing out digital markers all the time of likes and interest and clicks. And then the... I might be old enough to know the way that one should evaluate advertising effectiveness and the difference between causality and correlation, but I think the industry has gone crazy for these metrics that just don’t seem to be doing what they think they do.
So I’ll give you an example. There’s a metric called ROAS, return on ad spend, that you might be familiar with. Right? Well, when you look at “return” on ad spend, it suggests it’s measuring the effectiveness, right? And the incremental lift you’re getting, right? Well, there are so many stories circulating where a CMO goes into the CEO and says, “Oh, great news, you know, the ROAS on our campaign is fantastic, here it is, it’s 4.6.” And the CEO goes, “Well then you explain to me why our sales aren’t growing.” We are in my opinion, in a phase where the effectiveness of digital marketing has been grossly overstated. I’ll go on record as saying that. And I think the drivers are you got so many metrics that are available and it doesn’t cost anything to use them. And you need the results quickly. So speed is another driver. And you end up using approaches that don’t necessarily do what you think they do.
Andrew Mitrak: Do you think on net it’s overstated more because of bad practices and waste dragging it down or do you think it’s overstated because there are fundamental limits to how effective it can be?
Gian Fulgoni: That’s a really good question. I would say both. I’d say both, and I would add a comment on the second one, which is creative doesn’t seem to be getting a lot of attention in digital marketing these days, right? And if one believes that an AI system can create the kind of creative you want, good luck with that one. I mean, as you said, I mean, if one believes that then all the advertising that’s coming out is going to be the same, everybody’s going to be using AI applications. An interesting thought is one AI application going to be better than another one at creative things.
Andrew Mitrak: Yeah, for sure. It’s silly. There’s this Disney Pixar movie called The Incredibles. And there’s this villain in it, is this guy named Syndrome. And one of the things he says is he wants to give everybody superpowers. And he says, “If everybody has superpowers, nobody has superpowers.” And I kind of think of that with AI sometimes, of like if everybody has an equally capable AI to do all their stuff, well then how do you stand out in that world? Right? And play that. And I do think that the answer is actually that there is sort of a human element plus AI has to be part of the equation, that some “what are the things that I could uniquely make with AI, or AI could not make uniquely without me,” and then having some human touch. I just, maybe it’s just me being too sentimental for the value of humans, but I think that human touch has to be a part of it.
Gian Fulgoni: I think you’re right. I hope you’re right. You know, and maybe, maybe it’s the prompting that’s going to be the solution there. Or maybe some of the other data that you need to collect on your consumers. I think that’s the other thing that seems to be slipping is, you know, “Well, how much do you know about your buyers as human beings?” Right? You know, and that kind of leads to this whole thing of “are we going to get AI doing automatic buying for consumers?” There’s a big split on that today, right? Some people say it’s crazy. I’m probably in that bucket. You know, that maybe it’s because I’ve just been around buying measurement for so long that I know that it’s not as rational as we’d like to think it is. It’s not. I mean, people don’t, you know, a lot of things affect the decisions people make about what they’re going to buy. You know, so I find it hard to believe that an AI, you know, ultra-logical system is somehow going to emerge as the way that the average consumer buys. That’s just me.
Andrew Mitrak: Yeah, it’s funny. I am sort of in both worlds. I definitely am, I think it’s actually really useful to look at history and look at big trends and see what happened before. And then I am also like, I am very bullish on AI and a lot of things. But also, I don’t want to get over my skis, and I want to learn from things. Like you went through the dot-com crash, and it’s not to say that the internet wasn’t important, the internet was really important, but maybe it just got a little ahead over its skis. And I’m wondering, like, if you think of that era, are there lessons you draw from that? As somebody who navigated that, still had a successful business after that, probably went through some pains through it. Do you think of lessons from that era that you kind of have in mind today?
The E-Commerce Bottleneck
Gian Fulgoni: Yeah, no, I do, and I think it’s a good, very good analogy. Because if you look back at the internet and say, “Well, what happened with the bubble?” Well, it got way over its skis, right? The pricing and the valuations were crazy. I mean, you had companies that had no revenues, let alone no profits, were getting these crazy valuations, and then it was all hyped up, maybe inadvertently, but you know, and then it crashed, right? And a whole bunch of companies went out of business. Right? But what was left was a real foundation of technology and infrastructure, I think, that was then built on by the companies that either survived it or that then came along. And it became stronger than ever. And you know, if you look at, if you had bought a bunch of these stocks after they had crashed, you’d make a fortune given what happened to the right ones. I mean, a lot of the companies went out of business. But it is, it’s fascinating to me to see.
And the one example I’ll give you that people point to is Pets.com. “What a stupid idea that was. I don’t know what thought of that.” Well, all you gotta do is look at Chewy today to realize that somebody made a lot of money, you know, on that basic idea. So, I think a lot of the ideas maybe failed because the capital infrastructure needed for them evaporated and so they were gone. But they came back in a different form later. And I think that might well happen with AI. I mean, the amount of money that’s being pumped into it is such that I personally believe it’s got to lead to a whole bunch of companies failing. Right? The question is which are the ones that, you know... some of these applications just seem to me to be way out there.
Advice for Marketers Navigating Tech Revolutions
Andrew Mitrak: We’re looking at it kind of like on the company level or the sector level. Do you have any insights on like at the level of an individual marketer, or somebody who works in marketing and is thinking of like their career ahead? Are there any takeaways from that besides, I guess, looking at which companies will navigate it well and wanting to align yourselves with them, sure, but as a marketer are there any thoughts you have for an individual?
Gian Fulgoni: It’s a great question, Andrew. The one thing I will say that I think has been true in my time on this planet is that if you are running a business, it’s a lot, lot easier to reduce your costs than it is to build your sales. And I would say that my feeling is that I am no doubt that AI is going to reduce costs dramatically for a whole bunch of companies. Now, is it at the same time going to help them sell more? I don’t know about that. Because if everybody has the same capability, I mean, you go back to what we were talking about earlier, right?
What’s the competitive advantage that allows you to sell more than your competitor? I don’t know.
I’ve heard one theory say that, and I think this was referring to companies in the service world, whether it’s consulting companies or auditing companies or whatever, right, where their assets are people. And they could reduce their operating costs pretty significantly using AI, I have no doubt about that. But once that’s done, is everybody then at parity? And what are clients going to say? A client’s going to say, “Well wait a minute, I’m not going to pay you the same amount of money I was paying you before, if you’re now making three times what you were making before.” So, I’m not clear in my mind on the impact of AI on the sales end of industries. I’m very, very bullish on its ability to reduce costs, but I also think there’s been hype about it. You know, maybe I come from the analytical world, but man, we’ve been talking about AI and its analytical contributions for years now. This isn’t, you know, like the past two years, and I’m still waiting to see more evidence of these breakthrough analytics that weren’t possible before AI. I mean, I’ve heard of a few, but nowhere near what the hype would suggest. I am worried that the purity of the analytical methods that I kind of grew up with has been kind of laid by the wayside today. And we are just dealing with a lot of hype and a lot of exaggeration.
By the way, one other thing that I will go back to, just go back to the internet, that I think is important to realize that I didn’t comment on. If you look at the financial results of internet companies, you have to separate them into e-commerce companies and then advertising-related companies. The advertising ones are making a fortune, okay, the ones that survived. Maybe the newspaper industry was decimated by it, but if you look at the amount of money that’s being made through advertising, it’s mind-boggling, right? If you look at e-commerce, there aren’t many companies who can point to profitable operations if they have to ship products that are in any way, shape, or form heavy. I spent about 20 years on the board of a public e-commerce company that got around that issue called PetMed Express, and we sold pet medications. You had to have a prescription from your vet. But we were shipping products that didn’t weigh much. And so as Amazon forced retailers to go with two-day free shipping, and then, you know, the pressure’s on to do one-day free shipping, we were able to, you know, just survive and actually thrive in it, because the cost of shipping these light prescription products was not a constraint. And you know, maybe that’s another thing that will play out in some way with AI, is that depending upon the type of application of AI, you’re going to be making a lot of money versus not. I’m just kind of throwing that out as a hypothesis.
Anticipating the Next Bottleneck
Andrew Mitrak: That’s right, that you optimize up to the bottleneck, and with the internet and e-commerce, the bottleneck is heavy freight shipping, right? And that’s just a problem that the ones and zeros and digits of the internet can’t kind of solve the atoms and weight and things of the physical world. And that I’m wondering what there are blind spots of the optimization of where are the next bottlenecks, where it gets up to this point and then there’s something, and then how long do these bottlenecks last? It’s kind of an interesting one.
Gian Fulgoni: Yeah. No, that’s really interesting to think about. And I think it is also really valuable to look back and see what one can maybe decipher from the technological shifts that have occurred in the past.
Andrew Mitrak: Gian Fulgoni, I really enjoyed this conversation, and I think listeners will too, so I just want to thank you so much for your time and for your insights. I really had a good time.
Gian Fulgoni: You’re welcome. You’re welcome. Thanks Andrew. I appreciate the invitation.


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A History of Marketing / Episode 51
My guest Tod Johnson, a market research pioneer who was among the first people to measure the Internet. He’s an inductee to the Market Research Council Hall of Fame and former chairman of the Advertising Research Foundation. Tod is President and CEO of the Board of the Metropolitan Opera and is a member of the board of the Lincoln Center for the Performing Arts.
Tod led The NPD Group for over 50 years, building it into one of the largest consumer research firms in the world. NPD became the company retailers like Mattel and Hasbro relied on to understand what was selling. In 1995, he founded Media Metrix, essentially the Nielsen ratings of the early internet.
In this conversation, we dive into:
* The era of pencil-and-paper diary panels, when consumer research meant tracking grocery purchases by hand and mailing the booklets back every month
* Why Tod’s analysis showed that brand loyalty is mostly a myth, long before anyone in advertising wanted to admit it
* How he accidentally discovered the internet was about to change everything
Listen to the podcast: Spotify / Apple Podcasts
Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Tod.
Why spend a career in market research?
Andrew Mitrak: I watched a speech you gave while accepting a lifetime achievement award. And at the start of the speech, you quipped that you’re tempted to aim for a second lifetime achievement award and do it all over again. I take that as a sign that you spent your career really doing something you love, and your career was in market research. So, what do you love about market research?
Tod Johnson: Well, I’ve always been a very quantitative-oriented person. I’ve loved numbers, I’ve loved facts supported by numbers, and I’ve always had an interest in psychology as well. In fact, I taught what today would be called cognitive psychology when I got out of graduate school for a while. Market research just puts those two pieces together very, very naturally. So it fit into what I really found exciting and wanted to do. I have to say, I never started out thinking market research was my career objective. I kind of fell into it by accident, but once I got into it, it was where I wanted to be.
Innovation and Innovation Models in Early Market Research
Andrew Mitrak: You were an academic doing quantitative analysis, and these were real-world business practitioners. Was this seen as new pioneering research that they could apply to their business? What was that dynamic like with them?
Tod Johnson: Well, the dynamic was interesting and different in those days. These companies had their own staffs oriented to innovation and development, and they were always open to new ideas. Today, that’s not so easy to get into a company with a new idea because there’s just too many of them out there. But back then, it was kind of open arms, wanting to explore new ideas. We were solving real problems like new product introductions with trial and repeat models, which hadn’t really been focused on much before, market structure work, and consumer packaged goods (CPG) companies had a curiosity to want to learn that.
The Era of National Purchase Diaries
Andrew Mitrak: Can you set a scene of what market research looked like at the time? Was it ever influencing a certain product launch, or a certain product strategy, or messaging or positioning type?
Tod Johnson: In those days, virtually every new product launch would go into a test market. We would set up a diary panel of consumers to record purchases in the appropriate category. We would do the trial and repeat analyses that would predict the long run success or failure of the particular product. That would be the most common application. On a national basis it would be more about consumer trends in those categories uh and how they were structured and what was changing.
The other thing that was very good, I’m now jumping ahead to when I became involved in developing NPD, was in the mid70s, General Mills started to diversify from CPG into a lot of other categories like food service, toys, apparel, jewelry, and I was fortunate enough to be the person they looked to to set up how to track those industries similar to how CPG had been tracked.
Andrew Mitrak: Amazing. They embraced the general in their name and kind of not so much the mills part of their name.
Tod Johnson: Well, the general went away about 10, 15 years later.
Andrew Mitrak: You mentioned National Purchase Diaries. What was the actual purchase diary? You mentioned like purchase diary panels and what does it look like? Walk me through the nuts and bolts of what a purchase diary panel would look like.
Tod Johnson: Well, it would be a booklet which was about 20 pages and each page had a couple of categories on it like toilet paper, facial tissue, and paper towels might all be on a page, and they’d be structured in a way that if you bought one of those items, you answered some questions.
The panelists would get a new booklet every month and mail the old booklet back in to us, which we would code up. Back then, it was pretty easy to get good representative samples because women typically weren’t working. They were interested in doing projects and interested in helping, and we made it clear how they were helping manufacturers make better products for them by providing this kind of information. That relationship with the consumer in market research just doesn’t exist anymore, but it was what a lot of the industry was based on in the ‘40s, ‘50s, ‘60s, and ‘70s.
Measuring Product Success and Consumer Loyalty
Andrew Mitrak: The consumers were part of the panel who had these diaries. They would kind of punch in their purchases for the week?
Tod Johnson: No, they’d fill them in by hand with pencil.
Andrew Mitrak: Do you have any favorite examples of how this data was used? Especially in the early years of these manual diary entries.
Tod Johnson: New product introductions, which were elaborate test markets for the most part back then, was perhaps the most common use. The other use was it was a way to track demographics. It was a way to track loyalty. I can remember in the ‘80s, I did a lot of publishing about how consumers weren’t very loyal because we’d see their purchase patterns. That was at a time when advertisers and advertising agencies believed in loyalty. You were always talking about their loyal buyers. It didn’t really exist, but that was the basic premise. I know I was swimming upstream for a while with those publications, but today, everybody accepts that as the truth and the fact, and that there’s enormous brand shifting and much less loyalty than once was thought to exist.
The Growth and Diversification of NPD
Andrew Mitrak: You joined when it was a $300,000 revenue company.
Tod Johnson: $400,000. Give me the full credit.
Andrew Mitrak: sorry, I also want to give you credit because it grew to a lot more than that. How did the small kind of regional firm that was doing 400,000 revenue a year over the course of your next 30 years? It became a global market research firm that the world’s largest retailers rely on. What were the major inflection points as far as it growing? How did you grow it?
Tod Johnson: Well, I mentioned one, and that was General Mills taking us into a bunch of general merchandise and food service categories. Our toy clients encouraged us to get into Europe. We worked with everyone in the toy industry, whether it was Mattel, Hasbro, or Lego—all the big players, all the smaller players. Mattel had a huge variety of products; it owned Fisher-Price, so that was a whole different set of products. They were a great client, are a great client, and had a wonderful mix of products. The toy industry has evolved a lot—electronics came along, how kids use time, and the definition of toys has evolved quite a bit from there.
Managing Industry Rivalries in Market Research
Andrew Mitrak: It’s interesting because advertising companies or advertising agencies have this concept of conflict. So, if I work with Mattel, I can’t work with Hasbro—that’s a competitor. But a market research firm actually could be more neutral and work with everybody in that, right? Do you ever run into things like conflicts where, if we’re doing this survey for Mattel, that might lead to some conflict of interest to do it for Hasbro? How does that work?
Tod Johnson: That’s a very interesting question because in the CPG world, that conflict orientation tends to exist even today. If you work for Coca-Cola, you don’t work for Pepsi. If you work for General Mills, you didn’t work for Kellogg’s typically. Now, the company might work for both of them, but the individual people don’t.
When you got into general merchandise, the client was much more interested in being sure that they were working with someone who really understood their industry. To understand an industry, you don’t learn an industry just by working with one company in that industry. Each of those general merchandise industries—whether it’s toys or consumer electronics or office supplies, which all have very different distribution structures—also had very different product structures. It took a lot of learning to understand it, so they viewed it as a benefit to work with someone who really knew their industry.
The Birth of Media Metrix and the Internet Lightbulb Moment
Andrew Mitrak: Can you tell me about Media Metrix and the introduction of software meters?
Tod Johnson: What happened was one of the categories NPD was tracking was software. This is in the early ‘90s, and software back then was shrink-wrap that you bought in a store. Our software clients were saying the purchase data is really interesting, but we’re wondering if you could get us usage data.
So, we developed a piece of software which we had 300 panelists download onto their PCs to see if we could track their usage. After a couple of months, they all sent us back that database. And of those 300, literally three of them had really strange data included on it, which it took us a couple of months to figure out what it was. But what it was was their internet surfing, which we were capturing frankly by accident.
In other words, this is 1994. 1% of consumers were on the internet—three out of 300. That was the lightbulb moment—the internet is really going to grow and this is a way to measure it, just like television was being measured then or radio or magazines. That led us to say there was a bigger opportunity to measure the internet than there was to understand software usage.
The Digital Landscape of 1996: Universities and Search Engines
Tod Johnson: We kind of switched our focus and published our first internet ratings data in January 1996. Just to give you a feeling for what the internet was like then, the top five sites were AOL, WebCrawler, Netscape, Yahoo, and InfoSeek. In the top 20 sites, actually four of them were universities. The internet was a very, very different place, and we developed Media Metrix and what we called the PC Meter to track the evolution of that business.
Andrew Mitrak: It’s amazing. You shared a slide with me of just these top 20. So, you mentioned the top five. The EDU ones are the University of Michigan, Carnegie Mellon, MIT, and the University of Illinois Urbana-Champaign. Why were universities ranked so highly?
Tod Johnson: This is a little embarrassing answer to me because of my involvement with Carnegie Mellon, which not only was I a student and teaching there, but I’ve been the longest-serving trustee and vice chairman.
Starting with the University of Michigan, my understanding is that NOAA published its weather data through Michigan.edu. So, back then, you went to the University of Michigan to get weather data.
Carnegie Mellon is my embarrassing answer. It was sort of the leading porn site on the internet back then. A graduate student, who I won’t name because he’s well-known right now, developed a methodology of mousing over something on your screen and moving it. He demonstrated that methodology by letting you mouse over a picture of himself and removing all of his clothes.
I’m not sure what MIT was, and University of Illinois, I think, related back to the history of Netscape, if I’m not mistaken.
Andrew Mitrak: Oh right, yeah, that would track. Interesting. It wasn’t like the CMU.edu homepage.
Tod Johnson: Some website that wanted people to see the technology. I don’t think CMU stayed in the top 20 for very long, but it was ahead of Penthouse Magazine, which was number 18 back then.
How the Internet Transformed Market Research Operations
Andrew Mitrak: Yeah. I was going to say there’s a couple that was not safe for work websites that I saw on there. It’s funny. We all know it’s like a big part of the internet, but it kind of usually doesn’t make these top lists these days too often anymore. But it’s out there, that’s amazing.
You saw this three-in-300 moment where it was like, “Wow, that’s strange.” And you see that they’re presumably using some web browser or spending a large number of hours using software. I imagine you had an early view into seeing this growth where it wasn’t three-in-300; it then went to six and then 12 and then 30, and you saw some of the exponential.
Tod Johnson: I think if I remember right, by the time we published the first report in January, it was up to about 35%. It really just skyrocketed during that period.
Andrew Mitrak: What did NPD’s clients do with this information? How did they respond to seeing this and getting an early view into “Hey, the internet’s going to be big”? Do you feel like they heeded the call and got on quickly, or do you feel like there was still some skepticism? Or how did people react? Because I’m always interested in when there is something new and somebody has compelling data that says something is coming but it’s not quite here yet. Do companies make the switch and start to act on it soon enough to really capitalize on the opportunity?
Tod Johnson: The key initial application was to sell advertisers on using your website. So you needed a currency or data to do that. Back then, the PC Meter data—Media Metrix data—became that currency which the websites used to show the size of their audience and the demographic profile of their audience as well. It was trying to make your internet site competitive with a television program or a radio station or radio program and things like that. That was the primary application.
The secondary application was understanding how consumers were surfing the internet and what you had to do as a website to both get someone to come to your site and stay in your site. People would look at competitors, how they were doing it, and adopt strategies that way.
Andrew Mitrak: I will ask broadly: How did the internet and this explosive growth change market research and change NPD?
Tod Johnson: At the time, NPD had two businesses: one was the diary panel business and the other was what was called a mail panel back then, or was really a survey research business. Starting around 2000, you had to become online interactive to be a successful business.
The first change it made is I made the decision that if we were going to make that transition, we weren’t going to make it well if we tried to transition both businesses simultaneously. So I sold one of the two businesses and just concentrated on the diary panel business at the time. Clearly, timing changed. You didn’t have a month to deliver information; you had to deliver it much more real-time. The presentation of the information changed; it was now presented on a screen much more often. It was more interactive and analytical, and you had to have the capabilities to do that. Pulling together disparate pieces of information, rather than just providing independent separate pieces, became much more critical and required a lot of investment and a lot of change.
A Legacy in Arts Patronage and Andy Warhol
Andrew Mitrak: I want to shift gears and ask you about the arts, because you’re also a major patron of the arts. You’re on the board of Lincoln Center and the Metropolitan Opera, where you also serve as the president and CEO of the board there. You alluded to your background, which I noticed were a couple of Andy Warhols, which I imagine are original. It’s really impressive that you have such great taste on your wall. When did you develop your interest in the arts?
Tod Johnson: I grew up with it. My family collected art. My aunt was a major art dealer—in fact, she was one of Andy Warhol’s primary dealers. So I was always exposed to contemporary art.
Andrew Mitrak: Warhol was from Pittsburgh, right?
Tod Johnson: Yes, he went to Carnegie Tech.
Andrew Mitrak: Oh wow, okay, I just put that connection together.
Tod Johnson: One of the benefits of having offices like NPD is I have lots of walls for art. There were like 40 Warhols in the NPD offices at the time I sold the company.
Andrew Mitrak: So when you sold NPD and the Warhols were on the wall, does that show up as a line item on the balance sheet or?
Tod Johnson: Oh no, I got all of them. It wasn’t part of the sale; it was an exclusion.
The Intersection of Entrepreneurship and Marketing
Andrew Mitrak: As you’re working with visual arts institutions like the Met and Lincoln Center, do you feel like you bring your marketing expertise to the table there on how they’re marketing themselves?
Tod Johnson: Marketing to some extent; probably entrepreneurial business acumen to a greater extent.
Andrew Mitrak: Do you distinguish between entrepreneurial business acumen and marketing a lot? Because when I think of actually a lot of the best entrepreneurs, they’re also talented marketers. What part of their success is marketing instinct or intuition and prowess versus entrepreneurial business fundamentals? It seems like they overlap a lot. Do you distinguish between those two?
Tod Johnson: I kind of think they go together. Marketing doesn’t necessarily mean entrepreneurial. I think entrepreneurial is more likely to mean marketing directionally.
Andrew Mitrak: To be a great marketer, you don’t necessarily have to be an entrepreneur as well, but to be a great entrepreneur, you have to be a great marketer.
Tod Johnson: I think you said it better than I did.
The Future of Data: AI and Real-Time Insights
Andrew Mitrak: I know this is kind of a history podcast, but I want to talk to you about the future because you’re the co-founder and managing director of Duo Partners, and that firm invests in and consults with early-stage information and data companies. Do you have a vision for the future of market research when it comes to investing in companies? Can speak behind your investment thesis and what do you look for when you invest in information and data companies, but presumably also companies that will impact the future marketing as well?
Tod Johnson: Well, my partner Karen Schornbard and I are looking for really disruptive technologies to measure things in new ways—to measure things more accurately that isn’t dependent upon what a consumer recalls or says. To do it much more in real-time, continuous types of measurement.
I can give you a couple of examples. One of our investments has developed really physical AI technology where you can attach a tag to a product. You can see when the product is moved, you can see how much of it is used at each usage. You know when that happens so you can contact the consumer at the exact moment that they’re doing something rather than being dependent on “can they recall what they did two days ago?” You just get different information that way.
Another has built a fabulous database of food trends by scraping over the internet various restaurant menus and delivery service recommendations, seeing what’s changing, what’s growing real-time, and just things like that. These are going to lead to new ways of getting better information, particularly since the old methodologies are starting to be constrained by consumers not really having the time to think about it.
Andrew Mitrak: When you find a company that has the right underlying technology and product, where does marketing fit in on your calculation as to whether to invest or not at an early stage? Does marketing and their ability to tell a story and find a market and take this to market, does that play a part or do you kind of assume “Hey, these founders will hire the right marketers and they’ll figure it out if we invest in them”? How does that enter your calculus?
Tod Johnson: People who are developing products like that are developing them to take to a particular market. They usually know where the clients are by the time we get involved. There’ll at least be enough of a business that they’ve proven that clients can respond, so it’s built into the organization at that time.
Andrew Mitrak: Tod Johnson, thanks so much for your time. I’ve really enjoyed this conversation, and I’m grateful for all of your wisdom and your stories. It’s just such a great pleasure to hear about how market research has evolved over all the years. I had a lot of fun.
Tod Johnson: Andrew, I’ve enjoyed doing this with you as well. Thanks for inviting me.



This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 50
My guest Tod Johnson, a market research pioneer who was among the first people to measure the Internet. He’s an inductee to the Market Research Council Hall of Fame and former chairman of the Advertising Research Foundation. Tod is President and CEO of the Board of the Metropolitan Opera and is a member of the board of the Lincoln Center for the Performing Arts.
Tod led The NPD Group for over 50 years, building it into one of the largest consumer research firms in the world. NPD became the company retailers like Mattel and Hasbro relied on to understand what was selling. In 1995, he founded Media Metrix, essentially the Nielsen ratings of the early internet.
In this conversation, we dive into:
* The era of pencil-and-paper diary panels, when consumer research meant tracking grocery purchases by hand and mailing the booklets back every month
* Why Tod’s analysis showed that brand loyalty is mostly a myth, long before anyone in advertising wanted to admit it
* How he accidentally discovered the internet was about to change everything
Listen to the podcast: Spotify / Apple Podcasts
Special thanks to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, for reviewing and editing transcripts for accuracy and clarity. And to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Tod.
Why spend a career in market research?
Andrew Mitrak: Tod Johnson, welcome to A History of Marketing.
Tod Johnson: Hey, thank you. Glad to be here.
Andrew Mitrak: I watched a speech you gave while accepting a lifetime achievement award. And at the start of the speech, you quipped that you’re tempted to aim for a second lifetime achievement award and do it all over again. I take that as a sign that you spent your career really doing something you love, and your career was in market research. So, what do you love about market research?
Tod Johnson: Well, I’ve always been a very quantitative-oriented person. I’ve loved numbers, I’ve loved facts supported by numbers, and I’ve always had an interest in psychology as well. In fact, I taught what today would be called cognitive psychology when I got out of graduate school for a while. Market research just puts those two pieces together very, very naturally. So it fit into what I really found exciting and wanted to do. I have to say, I never started out thinking market research was my career objective. I kind of fell into it by accident, but once I got into it, it was where I wanted to be.
Innovation and Innovation Models in Early Market Research
Andrew Mitrak: You were an academic doing quantitative analysis, and these were real-world business practitioners. Was this seen as new pioneering research that they could apply to their business? What was that dynamic like with them?
Tod Johnson: Well, the dynamic was interesting and different in those days. These companies had their own staffs oriented to innovation and development, and they were always open to new ideas. Today, that’s not so easy to get into a company with a new idea because there’s just too many of them out there. But back then, it was kind of open arms, wanting to explore new ideas. We were solving real problems like new product introductions with trial and repeat models, which hadn’t really been focused on much before, market structure work, and consumer packaged goods (CPG) companies had a curiosity to want to learn that.
The Era of National Purchase Diaries
Andrew Mitrak: Can you set a scene of what market research looked like at the time? Was it ever influencing a certain product launch, or a certain product strategy, or messaging or positioning type?
Tod Johnson: In those days, virtually every new product launch would go into a test market. We would set up a diary panel of consumers to record purchases in the appropriate category. We would do the trial and repeat analyses that would predict the long run success or failure of the particular product. That would be the most common application. On a national basis it would be more about consumer trends in those categories uh and how they were structured and what was changing.
The other thing that was very good, I’m now jumping ahead to when I became involved in developing NPD, was in the mid70s, General Mills started to diversify from CPG into a lot of other categories like food service, toys, apparel, jewelry, and I was fortunate enough to be the person they looked to to set up how to track those industries similar to how CPG had been tracked.
Andrew Mitrak: Amazing. They embraced the general in their name and kind of not so much the mills part of their name.
Tod Johnson: Well, the general went away about 10, 15 years later.
Andrew Mitrak: You mentioned National Purchase Diaries. What was the actual purchase diary? You mentioned like purchase diary panels and what does it look like? Walk me through the nuts and bolts of what a purchase diary panel would look like.
Tod Johnson: Well, it would be a booklet which was about 20 pages and each page had a couple of categories on it like toilet paper, facial tissue, and paper towels might all be on a page, and they’d be structured in a way that if you bought one of those items, you answered some questions.
The panelists would get a new booklet every month and mail the old booklet back in to us, which we would code up. Back then, it was pretty easy to get good representative samples because women typically weren’t working. They were interested in doing projects and interested in helping, and we made it clear how they were helping manufacturers make better products for them by providing this kind of information. That relationship with the consumer in market research just doesn’t exist anymore, but it was what a lot of the industry was based on in the ‘40s, ‘50s, ‘60s, and ‘70s.
Measuring Product Success and Consumer Loyalty
Andrew Mitrak: The consumers were part of the panel who had these diaries. They would kind of punch in their purchases for the week?
Tod Johnson: No, they’d fill them in by hand with pencil.
Andrew Mitrak: Do you have any favorite examples of how this data was used? Especially in the early years of these manual diary entries.
Tod Johnson: New product introductions, which were elaborate test markets for the most part back then, was perhaps the most common use. The other use was it was a way to track demographics. It was a way to track loyalty. I can remember in the ‘80s, I did a lot of publishing about how consumers weren’t very loyal because we’d see their purchase patterns. That was at a time when advertisers and advertising agencies believed in loyalty. You were always talking about their loyal buyers. It didn’t really exist, but that was the basic premise. I know I was swimming upstream for a while with those publications, but today, everybody accepts that as the truth and the fact, and that there’s enormous brand shifting and much less loyalty than once was thought to exist.
The Growth and Diversification of NPD
Andrew Mitrak: You joined when it was a $300,000 revenue company.
Tod Johnson: $400,000. Give me the full credit.
Andrew Mitrak: sorry, I also want to give you credit because it grew to a lot more than that. How did the small kind of regional firm that was doing 400,000 revenue a year over the course of your next 30 years? It became a global market research firm that the world’s largest retailers rely on. What were the major inflection points as far as it growing? How did you grow it?
Tod Johnson: Well, I mentioned one, and that was General Mills taking us into a bunch of general merchandise and food service categories. Our toy clients encouraged us to get into Europe. We worked with everyone in the toy industry, whether it was Mattel, Hasbro, or Lego—all the big players, all the smaller players. Mattel had a huge variety of products; it owned Fisher-Price, so that was a whole different set of products. They were a great client, are a great client, and had a wonderful mix of products. The toy industry has evolved a lot—electronics came along, how kids use time, and the definition of toys has evolved quite a bit from there.
Managing Industry Rivalries in Market Research
Andrew Mitrak: It’s interesting because advertising companies or advertising agencies have this concept of conflict. So, if I work with Mattel, I can’t work with Hasbro—that’s a competitor. But a market research firm actually could be more neutral and work with everybody in that, right? Do you ever run into things like conflicts where, if we’re doing this survey for Mattel, that might lead to some conflict of interest to do it for Hasbro? How does that work?
Tod Johnson: That’s a very interesting question because in the CPG world, that conflict orientation tends to exist even today. If you work for Coca-Cola, you don’t work for Pepsi. If you work for General Mills, you didn’t work for Kellogg’s typically. Now, the company might work for both of them, but the individual people don’t.
When you got into general merchandise, the client was much more interested in being sure that they were working with someone who really understood their industry. To understand an industry, you don’t learn an industry just by working with one company in that industry. Each of those general merchandise industries—whether it’s toys or consumer electronics or office supplies, which all have very different distribution structures—also had very different product structures. It took a lot of learning to understand it, so they viewed it as a benefit to work with someone who really knew their industry.
The Birth of Media Metrix and the Internet Lightbulb Moment
Andrew Mitrak: Can you tell me about Media Metrix and the introduction of software meters?
Tod Johnson: What happened was one of the categories NPD was tracking was software. This is in the early ‘90s, and software back then was shrink-wrap that you bought in a store. Our software clients were saying the purchase data is really interesting, but we’re wondering if you could get us usage data.
So, we developed a piece of software which we had 300 panelists download onto their PCs to see if we could track their usage. After a couple of months, they all sent us back that database. And of those 300, literally three of them had really strange data included on it, which it took us a couple of months to figure out what it was. But what it was was their internet surfing, which we were capturing frankly by accident.
In other words, this is 1994. 1% of consumers were on the internet—three out of 300. That was the lightbulb moment—the internet is really going to grow and this is a way to measure it, just like television was being measured then or radio or magazines. That led us to say there was a bigger opportunity to measure the internet than there was to understand software usage.
The Digital Landscape of 1996: Universities and Search Engines
Tod Johnson: We kind of switched our focus and published our first internet ratings data in January 1996. Just to give you a feeling for what the internet was like then, the top five sites were AOL, WebCrawler, Netscape, Yahoo, and InfoSeek. In the top 20 sites, actually four of them were universities. The internet was a very, very different place, and we developed Media Metrix and what we called the PC Meter to track the evolution of that business.
Andrew Mitrak: It’s amazing. You shared a slide with me of just these top 20. So, you mentioned the top five. The EDU ones are the University of Michigan, Carnegie Mellon, MIT, and the University of Illinois Urbana-Champaign. Why were universities ranked so highly?
Tod Johnson: This is a little embarrassing answer to me because of my involvement with Carnegie Mellon, which not only was I a student and teaching there, but I’ve been the longest-serving trustee and vice chairman.
Starting with the University of Michigan, my understanding is that NOAA published its weather data through Michigan.edu. So, back then, you went to the University of Michigan to get weather data.
Carnegie Mellon is my embarrassing answer. It was sort of the leading porn site on the internet back then. A graduate student, who I won’t name because he’s well-known right now, developed a methodology of mousing over something on your screen and moving it. He demonstrated that methodology by letting you mouse over a picture of himself and removing all of his clothes.
I’m not sure what MIT was, and University of Illinois, I think, related back to the history of Netscape, if I’m not mistaken.
Andrew Mitrak: Oh right, yeah, that would track. Interesting. It wasn’t like the CMU.edu homepage.
Tod Johnson: Some website that wanted people to see the technology. I don’t think CMU stayed in the top 20 for very long, but it was ahead of Penthouse Magazine, which was number 18 back then.
How the Internet Transformed Market Research Operations
Andrew Mitrak: Yeah. I was going to say there’s a couple that was not safe for work websites that I saw on there. It’s funny. We all know it’s like a big part of the internet, but it kind of usually doesn’t make these top lists these days too often anymore. But it’s out there, that’s amazing.
You saw this three-in-300 moment where it was like, “Wow, that’s strange.” And you see that they’re presumably using some web browser or spending a large number of hours using software. I imagine you had an early view into seeing this growth where it wasn’t three-in-300; it then went to six and then 12 and then 30, and you saw some of the exponential.
Tod Johnson: I think if I remember right, by the time we published the first report in January, it was up to about 35%. It really just skyrocketed during that period.
Andrew Mitrak: What did NPD’s clients do with this information? How did they respond to seeing this and getting an early view into “Hey, the internet’s going to be big”? Do you feel like they heeded the call and got on quickly, or do you feel like there was still some skepticism? Or how did people react? Because I’m always interested in when there is something new and somebody has compelling data that says something is coming but it’s not quite here yet. Do companies make the switch and start to act on it soon enough to really capitalize on the opportunity?
Tod Johnson: The key initial application was to sell advertisers on using your website. So you needed a currency or data to do that. Back then, the PC Meter data—Media Metrix data—became that currency which the websites used to show the size of their audience and the demographic profile of their audience as well. It was trying to make your internet site competitive with a television program or a radio station or radio program and things like that. That was the primary application.
The secondary application was understanding how consumers were surfing the internet and what you had to do as a website to both get someone to come to your site and stay in your site. People would look at competitors, how they were doing it, and adopt strategies that way.
Andrew Mitrak: I will ask broadly: How did the internet and this explosive growth change market research and change NPD?
Tod Johnson: At the time, NPD had two businesses: one was the diary panel business and the other was what was called a mail panel back then, or was really a survey research business. Starting around 2000, you had to become online interactive to be a successful business.
The first change it made is I made the decision that if we were going to make that transition, we weren’t going to make it well if we tried to transition both businesses simultaneously. So I sold one of the two businesses and just concentrated on the diary panel business at the time. Clearly, timing changed. You didn’t have a month to deliver information; you had to deliver it much more real-time. The presentation of the information changed; it was now presented on a screen much more often. It was more interactive and analytical, and you had to have the capabilities to do that. Pulling together disparate pieces of information, rather than just providing independent separate pieces, became much more critical and required a lot of investment and a lot of change.
A Legacy in Arts Patronage and Andy Warhol
Andrew Mitrak: I want to shift gears and ask you about the arts, because you’re also a major patron of the arts. You’re on the board of Lincoln Center and the Metropolitan Opera, where you also serve as the president and CEO of the board there. You alluded to your background, which I noticed were a couple of Andy Warhols, which I imagine are original. It’s really impressive that you have such great taste on your wall. When did you develop your interest in the arts?
Tod Johnson: I grew up with it. My family collected art. My aunt was a major art dealer—in fact, she was one of Andy Warhol’s primary dealers. So I was always exposed to contemporary art.
Andrew Mitrak: Warhol was from Pittsburgh, right?
Tod Johnson: Yes, he went to Carnegie Tech.
Andrew Mitrak: Oh wow, okay, I just put that connection together.
Tod Johnson: One of the benefits of having offices like NPD is I have lots of walls for art. There were like 40 Warhols in the NPD offices at the time I sold the company.
Andrew Mitrak: So when you sold NPD and the Warhols were on the wall, does that show up as a line item on the balance sheet or?
Tod Johnson: Oh no, I got all of them. It wasn’t part of the sale; it was an exclusion.
The Intersection of Entrepreneurship and Marketing
Andrew Mitrak: As you’re working with visual arts institutions like the Met and Lincoln Center, do you feel like you bring your marketing expertise to the table there on how they’re marketing themselves?
Tod Johnson: Marketing to some extent; probably entrepreneurial business acumen to a greater extent.
Andrew Mitrak: Do you distinguish between entrepreneurial business acumen and marketing a lot? Because when I think of actually a lot of the best entrepreneurs, they’re also talented marketers. What part of their success is marketing instinct or intuition and prowess versus entrepreneurial business fundamentals? It seems like they overlap a lot. Do you distinguish between those two?
Tod Johnson: I kind of think they go together. Marketing doesn’t necessarily mean entrepreneurial. I think entrepreneurial is more likely to mean marketing directionally.
Andrew Mitrak: To be a great marketer, you don’t necessarily have to be an entrepreneur as well, but to be a great entrepreneur, you have to be a great marketer.
Tod Johnson: I think you said it better than I did.
The Future of Data: AI and Real-Time Insights
Andrew Mitrak: I know this is kind of a history podcast, but I want to talk to you about the future because you’re the co-founder and managing director of Duo Partners, and that firm invests in and consults with early-stage information and data companies. Do you have a vision for the future of market research when it comes to investing in companies? Can speak behind your investment thesis and what do you look for when you invest in information and data companies, but presumably also companies that will impact the future marketing as well?
Tod Johnson: Well, my partner Karen Schornbard and I are looking for really disruptive technologies to measure things in new ways—to measure things more accurately that isn’t dependent upon what a consumer recalls or says. To do it much more in real-time, continuous types of measurement.
I can give you a couple of examples. One of our investments has developed really physical AI technology where you can attach a tag to a product. You can see when the product is moved, you can see how much of it is used at each usage. You know when that happens so you can contact the consumer at the exact moment that they’re doing something rather than being dependent on “can they recall what they did two days ago?” You just get different information that way.
Another has built a fabulous database of food trends by scraping over the internet various restaurant menus and delivery service recommendations, seeing what’s changing, what’s growing real-time, and just things like that. These are going to lead to new ways of getting better information, particularly since the old methodologies are starting to be constrained by consumers not really having the time to think about it.
Andrew Mitrak: When you find a company that has the right underlying technology and product, where does marketing fit in on your calculation as to whether to invest or not at an early stage? Does marketing and their ability to tell a story and find a market and take this to market, does that play a part or do you kind of assume “Hey, these founders will hire the right marketers and they’ll figure it out if we invest in them”? How does that enter your calculus?
Tod Johnson: People who are developing products like that are developing them to take to a particular market. They usually know where the clients are by the time we get involved. There’ll at least be enough of a business that they’ve proven that clients can respond, so it’s built into the organization at that time.
Andrew Mitrak: Tod Johnson, thanks so much for your time. I’ve really enjoyed this conversation, and I’m grateful for all of your wisdom and your stories. It’s just such a great pleasure to hear about how market research has evolved over all the years. I had a lot of fun.
Tod Johnson: Andrew, I’ve enjoyed doing this with you as well. Thanks for inviting me.


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