| Rob Malcolm The Brands Lecture 2003
President of Global Marketing Sales and Innovation
Diageo
100% Marketing
Rob Malcolm was born and raised in Southern
California, USA. He graduated from the University
of Southern California in 1974 with a BSc and an
MBA in 1975.
He joined Procter & Gamble in the USA in 1975.
During a 24-year career with the company he held
various marketing positions until his appointment in
1988 as Vice President/General Manager for Personal
Cleansing Products in the USA. He then began his
international career, first as Vice President/General
Manager for the Arabian Peninsula in 1992 and then
as Vice President/General Manager for Beverages
in Europe, the Middle East and Africa in 1995.
Rob joined United Distillers & Vintners (UDV) – the
wine and spirits arm of Diageo – in 1999 as Global
Scotch Category Director, located in London.
In December 1999, Rob was appointed Global
Marketing Director for UDV – responsible for driving
the growth of the global priority brands and building
a world-class marketing and innovation organisation.
He was appointed President, Global Marketing, Sales
and Innovation, GuinnessUDV (the merged beer, spirits
and wine business of Diageo) on 1 September 2000.
GuinnessUDV became Diageo plc officially on 1 July
2002, coinciding with the divestiture of Pillsbury, the
acquisition of several Seagram businesses and the
announced divestiture of Burger King. Diageo is now
the world’s leading premium drinks business.
The Brands Lecture
17 June 2003
Rob Malcolm
Diageo
100% Marketing
A warm welcome to the third British Brands Group
Lecture. It is a terrific honour for me to be invited to
speak for this Group and a particular honour to follow
in the footsteps of such distinguished academics,
practitioners – even legends – in British marketing,
Tim Ambler and Jeremy Bullmore.
In the inaugural talk three years ago, Tim did a
fabulous job in establishing the critical importance
of brands in creating shareholder wealth. He somewhat
provocatively asked why do senior management of our
companies spend such a small portion of their time and
energy, individually and collectively, on the government
of these precious assets. He concluded by issuing a
clarion call for us all to step up our own stewardship
and championship of brand equity. He called on us all
to make sure that everyone understood that maximising
the value of our brands was tantamount to maximising
the value of shareholder equity.
Last year Jeremy built from this challenge to illuminate
some of the difficulties and challenges brand builders
face. There is a great quote from his talk that I want to
borrow when he talks about brands and brand builders:
‘Ours is a difficult concept to grasp and an even harder
one to sell. Fiendishly complicated, elusive, slippery,
semi-real, semi-virtual entities.’
I wonder if he was talking about brands or those of
us in brand building. I choose to think he was talking
about brands. But he did end up with the particularly
memorable declaration, ‘when CEOs think about brands,
their brains hurt’. Now I am not sure I am going to try
to sell that to my boss, and I would not endorse any of
you trying to sell that to the heads of your companies,
but it does underscore the size of the challenge we have
and the scope and opportunity we have as brand
builders and marketers.
So here we are, a year later on, and as I was
contemplating following these two long-term masters
of their craft and considering what I could bring to
advance the debate, I felt a little like Hank Morgan,
the protagonist in Mark Twain’s memorable book
A Connecticut Yankee in King Arthur’s Court. For those
of you who are not familiar, Hank Morgan was a
nineteenth-century New England mechanic who suffered
a blow to the head and wakes up in King Arthur’s Britain
some fifteen centuries earlier. (I was feeling on safer
territory at this moment.) But he soon realises that the
world is not a world of fairy tales and gallantry but a
cruel feudalistic society. Ever resourceful, he sets out to
modernise and improve things through an ingenious mix
of magic and technology, chivalry and sheer tomfoolery.
So I felt I was now beginning to find some of the
inspiration for my talk, the challenge we face as
marketers, so I stiffened my spine and headed onward,
or in my case I actually started heading a bit backwards.
I decided that the best course of action was to draw
on a very different set of experiences to our two prior
speakers: that of global client companies, where
marketing is taken seriously, where brands and brand
building are at the front of the Chairman’s and the
CEO’s agenda, and where developing the discipline of
marketing is taken seriously. I could draw some lessons
from these experiences to help us along our journey,
and to introduce a bit more of the magic and
technology and a bit less of the tomfoolery.
I am referring largely to the years I spent at Procter &
Gamble, where I cut my teeth on marketing, and more
lately in Diageo which is one of the world’s leading
premium drinks businesses. Between these two great
brand owners and brand building companies, one very
established in its practices and expertise and one,
despite the age and strength of its brands, at the early
stages of building its capability, I spent the past twentyeight
years living, learning, studying, rebuilding, teaching
and even nurturing brand building and marketing people.
This is my first and my pervading love.
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100% Marketing
I have also learned first hand about the challenges from
working with, at the last count, more than 200 brands
across the globe in more than 160 countries, with a
number of years in general management as well as in
marketing. So I sometimes think of myself as both
poacher and gamekeeper, with experience in central,
regional, global and local roles of all kinds.
So with that background and framework, and assuming
that Tim has convinced us of the value of brands and
Jeremy on the difficulty of getting our arms around
them, I thought I would take a crack at how we can
move the task of brand building and building marketing
capability forward in more practical terms. I have
approached the challenge precisely as we would any
marketing problem, with typical analytical discipline.
I looked at the marketing function and brand building
across four dimensions:
• First, look at what is happening in the market in
which we are competing – that is the corporate
world in which we exist today.
• Second, focus on the consumer, to try and
understand what our consumer wants. In this
particular case the consumer of brand and
marketing functions would be the senior
management or the other senior stakeholders,
shareholders, and Board.
• Third, look into what your product delivers –
the marketing function itself.
• And finally, take a close look at the competition
and what they are up to.
The analysis and interaction of these four factors
hopefully will lead to a marketing plan for the
marketing function for brand building, just as it does
for any brand that we purchase today. That is the theory
anyway, so let’s see how it works. Let’s look at these
one at a time.
The market, the corporate environment in which we
compete today, is more focused on performance than
ever, with a keen focus on growth; to be precise, not
flash in the pan growth but on profitable, sustainable,
top-line growth. Translate that to mean maximising
total shareholder return, ruthless cost control,
accountability, return on investment, fact-based
analysis, increasingly good government and
transparency about everything we do. The consumers,
our core stakeholders, want consistency and
predictability in the quality we offer. They want the
delivery of promises. They don’t like surprises. They
want a higher degree of discipline, analytical rigour
and above all, a consistent and known return for the
investment that they are making in this important
part of their balance sheet and P&L statement.
Turning to the product, our own marketing function,
unfortunately it represents to many, smoke and mirrors,
rather more art than science, a lack of professionalism,
sometimes a lack of accountability, few guarantees on
return on investment, and even worse references to us
in print as ‘slack ad guys’. The competition – the other
functions in the enterprise, particularly our most
understood and respected competitor, the finance
department – offer on the other hand professionalism,
ruthless analysis, promised return on investment,
rigorous and well-understood analytical tools, sense of
science and not art. And our junior cousins in public
relations, well they believe they can get all the results
of marketing but just without spending any money.
Chris Ingram, who most of you will remember as former
Chairman of Tempest, sums it up well in an article just a
week and a half ago in Campaign magazine. I quote:
‘For too many on both sides of the fence,
marketing has been regarded as a science or art
in its own right, with members of this exclusive
club happy to spend their time talking their own
language to their own group and giving each other
rewards. The result has been that marketing has
allowed itself to be separated from business. It has
not allowed itself to be judged by business criteria.’
British Brands Group
The Third Brands Lecture
The market,
the corporate
environment in
which we compete
today, is more
focused on
performance than
ever, with a keen
focus on growth.
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That is pretty damning stuff from one of our own. So if
you are one of our owners or stakeholders what are you
going to do? Are you going to invest in the ‘trust me,
I’m an ad man’ function or put your energy and money
in the ‘believe me I can guarantee your cash return’
function and show you the spreadsheet and regression
analysis. Recent financial and corporate debacles aside,
most would still find this an easy and certainly a
defendable choice.
The fact is far too little has changed in the world of
marketing and its perception since Lord Leverhulme’s
famous quote: ‘Half of what I spend is wasted. The
trouble is, I just don’t know which half.’ Some seventy
years on from that quote, this is all too often how the
marketing function is seen. Less than 50% effective,
with serious, often high profile doubts about which half
is the effective half. We really do still have a long way
to go. So if marketing and brand building is to become
a core part of the corporate DNA and to live up to the
challenges that Tim and Jeremy have set for us, we do
need to effect a dramatic shift.
Essentially, by my reckoning, we need to move the dial
from 50% to 100% marketing. So how are we going
to do this? I believe we should take our cues from
situation analysis and return to our core competitor,
in this case the finance function. Finance has three
things going for it:
1 people know what the finance function does
for the company and this is particularly true
in British PLCs
2 people believe they do it professionally and with
rigour, with titles like Chartered Accountants, and
3 most can prove their contribution absolutely, or at
least they can prove it empirically.
While there may be some doubt about the proof, we all
know numbers can be deceptive and at odds with reality
but the fact is numbers tend to be trusted implicitly.
Your own Disraeli first said, ‘lies, damn lies and statistics’.
He may be right but that hasn’t stopped the statistician,
let alone the CEOs and CFOs. So, in contrast, what does
marketing offer today? Too often, I believe, there is a
lack of clear understanding of our role, a feeling that is
often magnified in either financially oriented or salesoriented
companies.
A slightly dilettante image: is it really a profession like
the law or chartered accountancy or something else
that we don’t really comprehend? And truth be told,
we do have an all too unimpressive record of proving
a solid return on the investment. So what must we do?
What is our functional game plan to address this issue
once and for all? I would offer three core suggestions
for your consideration.
First and foremost, it is critical to get corporate
understanding and more importantly ‘buy-in’ of what
marketing contributes to the good of the enterprise.
No more hiding behind the veil. Second, we seriously
need to build true professionalism and capability
throughout the function everywhere it operates. And
third, we need to establish clear accountability and
measurement of the contribution that we are making.
If we can make progress against these three challenges,
we can move ourselves well along the journey from
50% to 100% marketing, building both the brands we
steward and the brand called marketing along the way,
and in the end getting the return to shareholders on
which our enterprises are founded.
Let me dive into each one of these in more depth,
and I will draw directly from my experiences with
the companies in which I have spent my life, each of
which started from very different places on its brand
building and marketing journey. I will also draw on the
studies I have done of the other great brand building
companies in the world, including Unilever, Nike, Coca
Cola, L’Oréal and others, and the work of innumerable
consultancies and some of the best advertising agencies
in the world.
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We need to move
the dial from 50%
to 100% marketing
100% Marketing
Corporate understanding and buy-in
So let me start with the first imperative: how do you
get corporate understanding and buy-in into the critical
role of marketing and brand building? I will admit that
in some companies it was already well established so
the real challenge was then getting universal buy-in
across the whole organisation. But for those where
marketing and brand building is not yet at the forefront
of the enterprise and established at the core, I would
offer these suggestions.
First, do the financial analysis that will reveal, and then
illuminate, the difference between the book value of the
assets of the company and the share price. While not
100% tied to intrinsic value of the brands, most often
share prices reflect the investors’ view of the future
earning potential of the business and this usually comes
from the outlook and the strength of the brands in that
business. If you look at the Interbrand tables that are
published annually, there are some great examples of
the value of brands over and above the full asset value
of the company.
Second, do another financial check. Do the
financial returns on the brand building companies
that consistently put their brands at the forefront of
their corporate agenda and leverage that growth and
strength in bottom line efficiency. It is no accident that
total shareholder returns in a consumer goods company
are consistently led by those companies who put
marketing and brand building first. It is companies like
Colgate and L’Oréal which have the highest track record
of delivering leading total shareholder returns in the
past forty years.
Now it is no accident that my first two examples
of what to do begin with finance. We experienced
marketers know that you always start from your target
audience’s perspective!
The third suggestion I offer you is gather some case
histories, both from within your company and others.
There are some fantastic examples out there of brands
that have transcended some short-term crises that you
might think would otherwise seriously damage the
business. Is there any doubt in the value of the consumer
trust in the Tylenol brand in the US, where it withstood a
tampering challenge that resulted in numerous fatalities
yet emerged a stronger and more trusted brand in the
end? Or some of Coca Cola’s mis-steps with handling
quality issues in Belgium, bouncing back as soon as they
had dealt with them. Or Unilever’s own challenge with
Persil on a product formulation issue, which a few years
ago set the brand back but it is stronger today than ever.
Or even Nike, as it overcomes its ethical working
conditions issues in the Far East. It is not the functional
product that protected these brands, it is the consumer
trust built over the years in the brand itself. That is
where the value of the enterprise lies.
The fourth suggestion is look at the brand’s ability to
evolve and change throughout the years, against
consumer changes and through dramatic technical
upheavals. But still the great brands retain the loyalty
and following of the consumer base in the longer term.
I am amazed to look at two brands in our own portfolio.
Guinness continues to build loyalty and is stronger
today than ever, yet the origins of the first product date
back to 1759. Now I submit to you that it is not the
advertising profile that has kept it strong all these years.
There is something more about the imagery, trust and
belief in the brand that has carried it through. Or
Johnnie Walker, born in 1820 and still going strong.
Now, look at how a company like Procter & Gamble
has turned itself around over the last twenty-four
months by rededicating itself to its ten global brands,
rebuilding its brand building capability after being
focused on technology for a number of years. It doesn’t
undermine the importance of technology but it does
say brand building is at the heart of the enterprise.
5British Brands Group
The Third Brands Lecture
Most often
share prices reflect
the investors’ view
of the future earning
potential of the
business and this
usually comes from
the outlook and
the strength of
the brands in
that business.
Finally, understand the value creation of faster top-line
growth relative to the other economic levers. When
financially engineered or cost-driven companies run
low on supply chain savings and acquisition efficiency,
consumption-driven top-line growth begins to look like
it is the future of the enterprise.
Now some would argue that it helps to have a marketer
at the helm of the company, and often it does, but there
are many great examples of great marketing and brand
building companies which are not led by marketers.
Interestingly, our own company, and just about all of its
predecessor companies too numerable to mention, is
probably known more for its financial prowess and
acquisitive appetite than marketing or brand building. Yet
the number one global initiative throughout the company
across all functions which has received the most time,
investment, support and dedication is in brand building,
and that is not just about the marketing function.
These all may be great examples but the bottom line is:
we in marketing and brand building need to get a seat
at the top table and begin to put our function and our
reputations on the line.
So my charge to all of us is to keep at it because it is worth
the effort. In fact I don’t know if there is any alternative.
Building professionalism and capability
Now turning to the second challenge: how do we
build marketing professionalism and real functional
capability? This is simply a must, it is an imperative,
whether we have a seat at the top table or not. We
marketing leaders, whether of consumer branded goods
companies or services, whether on the producer, services
or agency side, we must raise our game and do so
significantly. Harping back to Chris Ingram’s comments,
I fully endorse his challenge and I quote, ‘It all boils
down to two things, professionalism and trust’ – and
believe me it does.
Drawing on the two polar extremes of my own
experience, of Diageo and P&G, I would offer a couple
of suggestions. First is a concerted plan to build and
sustain functional mastery in your corporation and
second is a commitment to great talent, particularly
the development of great marketing talent.
Make marketing functional mastery a top corporate,
not just a marketing, priority. Declare it publicly, put
yourself and the function on the line and then get on
with making it happen. This has got to be a long-term
commitment. Do not for one moment kid yourselves
that there is a quick fix here. It requires money,
investment, great people, time, tenacity, love, patience
and some more tenacity. Once you have done this,
obtained that kind of commitment and put yourself on
the line, I would add a few ‘how to’s’ to help you along
the journey:
• First enrol top management in the journey. There
is no substitute for CEO, Executive Committee and
Board ownership and sponsorship. When you have
that, you might hear around the organisation,
‘Hey, these guys are really serious about this stuff.’
• The second tip I give you is train it yourself
internally. Do not delegate this important task to
anyone else. Core functional professionalism and
capability must be your day job as senior marketing
leaders. If you do not live and role model the
We marketing
leaders, whether
of consumer branded
goods companies
or services, whether
on the producer,
services or agency
side, we must raise
our game and
do so significantly.
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100% Marketing
Our journey; from 50 to 100% marketing
How do we motivate our stakeholders to understand
the importance of brand building, and buy-in to
marketing as a professional function and discipline?
> understand and be ready to articulate difference between
book value of your assets (brands) and the share price
> garner the evidence that a consistent brand building
ethos and capability improves shareholder return
> research or develop case histories where strong brands
saved the day
> brand continuity through change – evolution, not revolution
> understand growth as a value driver, relative to cost
savings and efficiencies
> lobby for the CEO to be a marketeer?
values, the tools, the language, the culture and
nurture it, you cannot expect anybody else to.
• Third, make it output and growth-oriented so you
can see the results. There is nothing that will
embed this more by people seeing it work and
saying, ‘Hey, this stuff really does work.’
• Fourth, make it simple. If it is not simple, it won’t
happen. It won’t stick.
• Fifth, make it creative and fun. Marketers love to
play with fun things and create things. Feed this
discipline in a fun, engaging way, so they not only
get it but they feel great about it.
These characteristics are the hallmarks of the best
sustainable marketing companies and capability
programmes I have observed over the years. Most are a
well-established part of the culture. Some, like ours at
Diageo, are being built from scratch as we speak today.
I do believe there is something that you can learn
from the revolution that is going on at Diageo at the
moment, as we shift ourselves from a conglomerate,
built more on robust mergers and acquisitions, into an
organic grower of brands with world-class marketing
in the forefront.
This is a journey that you too could undertake from
wherever your current business is. At the time of the
Guinness and Grand Metropolitan merger, now more
than five years ago, the leaders of the company, who
by the way were largely from the financial function,
determined that there would be only three things that
Diageo would be known for: people, performance and
brands. Quite literally, attracting and retaining the best
talent, building world-class brands and out-performing
the competition were the three central themes of the
corporation. Given this challenge, daunting though it
was to create consistent and deep functional mastery
across radically different businesses and people from all
different cultures and company backgrounds, the senior
marketing leaders put themselves and their organisation
on the line.
Pulling a number of the absolute best and brightest highflyers
from the marketing function around the world into
a central team full time, we went off to develop a topto-
bottom marketing capability programme and branded
it as all good brand owners would – the Diageo Way of
Brand Building. It has become known affectionately as
DWBB, for short. I am not sure ‘I’ve been dweebed this
week’ goes down very well, but that is where we are.
Drawing from the diverse experience of its own senior
management, benchmarking the best practices that we
find in the industry, from our competitors, from
agencies, from academic literature, consultancies and
advertising groups, the Diageo Way of Brand Building
attempts to bridge the gap between the art and science
of brand building and to build a sustainable marketing
discipline into the corporation, into the very fabric of
how we do business. Notice that I mention ‘the
corporation’, not just the marketing function, as the
asset through which we channel our message today.
Some fun facts will illustrate the magnitude of this
effort and the journey that we have been on. More
than 6,000 people have been trained in five full days’
interactive training in the past three years. 100% of
all senior management started in the first training
programme with the CEO and the Executive Board.
100% of the marketing function, all of the executive
teams and all functions in every market, and
representatives from global supply and other global
functions have been trained. It also includes training
our agencies and joint venture partners. The Diageo Way
of Brand Building is now how we market our brands.
It is not just a programme or this month’s seminar.
It has become the day job and has permeated the
language and approach to the business in every function
and in every level of the company. I knew we were
beginning to get on the right track, that we had started
to arrive, when about eighteen months ago one of our
senior sales directors said, ‘Hey, we need a dweeb for
sales. Please develop it fast as the marketing folks are
moving ahead of us.’ Does that ring any bells for anyone?
Quite literally,
attracting and
retaining the best
talent, building
world-class brands
and out-performing
the competition were
the three central
themes of the
corporation.
7British Brands Group
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8
We do all of the training ourselves. More than 350
internally qualified people have been trained to do this.
Our senior marketers invest two weeks every year on their
own training. I train two courses myself. It includes all
aspects of marketing, from the start of the journey with
the consumer through to the brand positioning and all
executional elements of the marketing plans. It includes
the core principles and philosophies about brand building
that we believe in, the language, the processes and tools
that are now common throughout the organisation.
Critically it includes both high level conceptual learning
and deep dives into specific subject mastery areas, and we
are constantly striving to make it better and improving it.
We estimate the corporate commitment in investment
terms over the past four years to be in the order of £35
million. That includes the cost of the days invested as
well as all the programme and training costs. That is
a very, very big commitment but one we feel has an
almost immediate payback. As a percentage of the total
investment in marketing, advertising and promotion,
that number is actually less than one half of 1% of that
asset. If we just increase the efficiency or effectiveness
of our marketing programmes by only 5% a year, the
payback is virtually instantaneous.
Let me now turn to talent, which is a critically
important subject and one which I think we take all too
frivolously. If the marketing function and brand builders
are going to be a function that deserves a seat at the
top table and delivers sustainable and predictable
results over time, we need to step up our investment in
talent and development. I would pose three questions.
Are we attracting the right talent into the marketing
function? Are we developing, nurturing, growing that
talent over time? Are we building sustainable expertise
and sustainable experience?
The best and most sustainable brand building companies
invest seriously in finding and attracting great talent.
They recruit the top raw material, talent that would be
equally attractive to the top management consultancy,
accountancy or legal firms. Talent with intelligence,
leadership skills, people who are driven and, perhaps
more importantly for our particular function, have an
insatiable curiosity. Are we prepared to be competitive?
Are we professional enough to compete for that kind of
talent? In too many cases today we are not.
The best and most sustainable brand building companies
invest also in building people over time. This encompasses
the kind of training that I have described earlier at
Diageo, and what you see in many of the best brand
building companies. But it is also about planning and
road-mapping the right set of experiences for marketers
to ensure they get the depth and breadth of experience
that builds true mastery. It is almost an apprenticeship
mentality that is planned and nurtured and it enables
us to sharpen the sword of functional mastery.
And finally, do we respect the value of continuity in
building a track record of learning and achievement
over time? One often-looked-at statistic in most
companies in the marketing function is the time in role
of our critical marketers. I have found it is one of the
killer areas that directly leads to a lack of delivery,
a lack of professionalism, and a lack of trust in our
function. The great brand building companies ensure
that there is a balance between continuity and the
freshness that change brings.
Chopping and changing brand managers or marketing
directors every twelve months is a sure route to both
business demise and ensuring your marketer’s focus is
on getting lots of activity out the door, not building
sustainable performance over time, true professionalism
and trust. If you do not know how long your marketing
directors or brand managers have been in their current
role, and if you are not watching this, I have a hunch
you have either a challenge or a great big opportunity.
The net of all this for the marketing function is to be seen
and to deliver as professionals and to earn our stakeholders’
trust. We have to invest the time and resource consistently
and religiously. After all, if Lord Leverhulme was right, we
have seventy years to make up for it.
If we just increase
the efficiency or
effectiveness of
our marketing
programmes by
only 5% a year, the
payback is virtually
instantaneous.
100% Marketing
9British Brands Group
The Third Brands Lecture
Accountability and measurement
Finally, the third area that I want to address tonight is
the importance of establishing a clear line of sight and
accountability for delivery. If we marketers are going to
have a seat at the table and have the talent and
capacity we need, it can still go pear-shaped if we do
not pay attention to government and accountability of
what we do.
The good and great sustainable brand building
companies are rigorous in their analysis and in the
measurements of the results over time. They improve
their track record of delivery by constantly learning, and
sharing this learning, embedding this learning, in the
organisation. This rigour takes many forms and needs to
be fit for purpose and you are all familiar with many of
them; quality business reviews, pre-market testing,
concept and advertising research, the right kind of
consumer tracking, and some return on investment
analysis. Simply stated, we will not earn a seat at the
table, nor earn the investment in our brands and the
investment in building our functional capability, unless
we prove that we deliver a return. It is darn hard, it is
time consuming, but the value of strong delivery and
the metrics that measures it are inescapable.
If you just think about it in financial terms, if we could
improve the efficiency or effectiveness of our marketing
spend by just 5% per year, it is a small part of the 50%
that we are looking for. The value we can create for the
commercial enterprise is tremendous. The supply chain
guys in your organisations are killing themselves to find
1% or 2% of cost savings and cover the cost of
inflation. They near-constantly radically restructure
organisations to get 2% to 3% out of overheads. When
you think of the amount of money that is spent in
building our brands, the 5% improvement in that
efficiency may be the best return your company can get.
Why is it then that so many of us marketers shy away
from the cost and efficiency challenge? I have to admit,
as a long-term marketer, part of it has not intrinsically
been part of our culture. Marketers invent and create
stuff and accountants measure it. In my view this is
bollocks and is faulty thinking and the sooner we
recognise it as such and address it the better.
The key thought I would leave you with on metrics and
measurement is to make it simple and you will have a
chance of getting it done. Make it complex and you
won’t. At Diageo we have invested in a very simple tool
for our marketing investments with a bit of rigour
behind it and it is shown on this chart.
We call it the Dogs and Stars Chart and it is a simple
two-by-two chart with the return on investment – that
is, the sales and earnings divided by the investment –
on the vertical axis and the effect on the consumer on
the horizontal. We then plot our activities and measure
them against those two simple measures, effect on the
consumer of the brand building power and the
efficiency of the investment. Obviously the stars are
those that go in the upper right-hand corner and the
dogs are those things that go in the left-hand corner.
We then do a very simple exercise. If we have done
some great things in the lower right-hand corner that
are working with the consumer but are not providing a
return, we go to work on how to do them more
efficiently. And on the top left-hand side, if we get
great return on investment but are not brand building,
When you think
of the amount of
money that is spent
in building our
brands, the 5%
improvement in that
efficiency may be the
best return your
company can get.
Return on investment (5 year)
(Efficiency)
Impact on the consumer
(Effect)
100%
0%
-100%
Sampling F01
Media F02
latest estimate
RM F01
Cons PR F01
Brand events
F02
Measuring effect and efficiency – ‘dogs and stars’
10
we go and look at it and say, ‘why is this not having an
effect – a sustainable effect – on the consumer’. We
then go to work on that. Those that find the bottom
left-hand corner we don’t do again. It is as simple as
that. It is a very simple visual tool that marketers can
understand and buy into and finance directors love.
Actually come to think of it, I better go back and raise
the bar to a 10% savings target if it is this simple.
But beyond this, how many of us who are leaders of our
marketing function have clear deliverables, clear metrics
for the output, for ourselves and for the function itself?
I have got a few starters for ten that are on my list of
measurables:
• The number of critical brands that are growing
market share, at a given point in time.
• The number of brands that are improving their
equity measures.
• What percentage of your advertising is being spent
on campaigns that are proven effective in the
marketplace?
• What is your yield on innovation?
• What is your speed to market?
• What percentage of your marketing spend have
you analysed and then improved the efficiency of?
• What percentage of your marketing people have
mastered the core training courses?
• What is your continuity and talent profile in key
people and key jobs?
• How does your talent stack up against the needs
of the business and those of the corporation now,
and what targets do you have for three years
from now?
• How many winning programmes have you sought
out and spun around the business?
These are the kinds of hard number measures on what
is admittedly a soft subject that any Board, Chairman,
CEO or city analyst would recognise and begin to trust.
To give you a sense of how seriously I take this, I would
like to show you a tracking chart that I review with our
Executive Committee once a quarter. It is an analysis
of the effectiveness of our advertising by brand, by
medium and by market for our top eight brands worldwide.
When I first shared this chart I was a bit nervous
as it put on the line for all to see one of the most
closely guarded marketing secrets – does our advertising
really work? Does it really grow the business?
The blue lines are where the advertising has been
running for more than a year and proving itself in
business results and equity measures. The green lines are
less than a year but all the testing and equity measures
are positive. The yellow are ‘we don’t know’, and the red
is ‘we have a problem, we know it doesn’t work, and the
agency and we are working hard to solve it’. The arrows
up or down indicate the change from the last quarter.
I review this with our Executive Committee every single
quarter for all the global brands in every market.
I knew we were on our way to building trust by the
reaction of the CEO when I first put this chart on the
table about eight months ago. Two admittedly imperfect
score cards that looked like this and he said, and I quote,
‘This is the most honest and transparent presentation
I have ever seen for marketing and I really do trust that
you are on track to making the progress we need.’ That
is the start of the journey for the kind of professionalism
and trust that we need to build for this function.
How many of us
who are leaders
of our marketing
function have
clear deliverables,
clear metrics
for the output, for
ourselves and for
the function itself?
100% Marketing
GB
NA
Ireland
Spain
France
Portugal
Greece
Australia
South Africa
Mexico
Thailand
Proven effective
Judged effective
Not yet proven
Unsatisfactory
Improvement
Decline
Activity added
Activity discontinued
BRAND X BRAND Y BRAND Z
TV PRINT O/D TV PRINT O/D TV PRINT O/D
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new
new
new
11British Brands Group
The Third Brands Lecture
So let me wrap up with a couple of final comments.
I hope I have given you some helpful thoughts from
one practitioner to another. I have seen some wellestablished
marketing close up, some not so good
marketing, and a lot being built rapidly. There is no
question in my mind that this is possible. It is possible
to get ourselves on the corporate radar, to earn
ourselves a place at the top table, but it is going to take
a different level of professionalism to build the trust
that is needed. As leaders of the marketing function and
builders and stewards of our great British brands, it is
up to us to create the vision, provide the sometimes
interventionist leadership, embrace the hard work,
commit to the delivery, find and develop the talent,
devote the time and nurture this child as it grows.
I hope I have convinced you that the journey is worth it.
To move from 50% (or some would say half-baked) to
100%, I will take the fully baked answer every time.
This is our opportunity and our responsibility. We should
insist on 100% marketing every time. Now, as I have
said, there is no quick fix. One great ad does not a
marketing function make. One great ad, however, gives
you the wherewithal to lobby for more great ads. Take it
from me or take it from one of the greatest British ads
of the 20th century.
eferences
Victoria Beckham, Learning to Fly, The Autobiography,
Michael Joseph, 2001
Tim Ambler, British Brands Group Inaugural Lecture,
2000
David Boyle, The Tyranny of Numbers, HarperCollins,
2001
Niall FitzGerald, Marketing Society annual lecture,
2001
Jean Aitchison, 1996 Reith Lecture
Robert Heath, The Hidden Power of Advertising,
Admap Publications 2001
Rick Levine & others, The Cluetrain Manifesto, FT.com,
200
Naomi Klein, No Logo, Flamingo, 2000
Lynn Upshaw and Earl Taylor, The Masterbrand
Mandate, John Wiley 2000
8 Henrietta Place, London W1G 0NB
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