Tom Knox, one of the most respected people in advertising, has a unique position to understand what has changed and what really matters in advertising. As President of the industry trade body, IPA, and Executive Partner at MullenLowe, his thirty years’ experience in the industry is evidence of a sharp analytical mind.
As Tom told us, Byron Sharp and the Ehrenberg-Bass Institute’s quantitative research has shown that much of the received wisdom around advertising is false. Brand loyalty doesn’t really exist — people do not love brands. What matters is a consistent message and physical and mental availability.
At the same time, marketers need to realise how ill-conceived and unimaginative online advertising has damaged the industry as a whole. Particularly, ad men need to maintain the magical aspect of the business, and continue to charm, entertain and wow people. Advertising supports our free press and media, and it’s important that people continue to have trust in it.
The consumer does not care. Brand loyalty doesn’t really exist. What really matters in advertising is physical and mental availability.
However, advertising needs to retain a sense of magic. The industry has always been a collision of show-business and commerce. It needs to continue to charm and entertain people or it will become less effective.
When pitching, give clients an emotional experience they can’t live without. Presenting your ideas compellingly is the most important skill in advertising.
A lack of class diversity is an issue in the industry. Closely linked to a lack of gender and racial diversity, it’s not representative of the country, not fair, and bad for advertising.
What’s your career journey?
Well, I'm shocked to say that I've worked in advertising for thirty years. I read English at university and then thought I ought to become a lawyer for no better reason than that was what my father did. I realised I didn’t enjoy law during my conversion course, so I decided to get into advertising.
I used to use a smart-ass argument in job interviews to try to explain my failed legal career, in which I said that lawyers and advertisers were both advocates, but differed in the way they used language. Lawyers attempt to contract the meanings of language down into one specificity. Advertisers do the opposite. We try to expand meaning, and cram as much meaning as possible into snatched moments of dialogue with consumers.
“Advertising tries to pack an entire world of allusion, references and meaning into a very short piece of communication.”
I started at a small agency, called Delaney Fletcher Delaney (DFD) — there are a lot of Delaneys in British advertising! The agency was then bought by Americans, so I worked in New York for a year, which was a formative experience. Certainly in regards to client service and professionalism the Americans were far ahead of slightly arrogant and lazy London agencies, but in other ways they were behind us.
In New York, I had the idea that I would like to be part of my own agency, and in 1999, we were lucky to get the opportunity to do so. At that time, DFD, which had expanded to DFSD/Bozell, was bought. We didn’t want to go through with the merger, so we bought ourselves out and became Delaney Lund Knox Warren (DLKW). To cut a long story short, we became part of Lowe eleven years later. We wanted to become part of that network because it would give us a global platform.
“We had become the largest non-network agency in the UK, and we knew from people who’d done that before that you have to run incredibly hard just to stand still.”
What have you learnt from your time in the industry?
Advertising is a business for people with butterfly minds. However, the fundamental difference between client- and agency-side is that when you’re client-side, you tend to think about one problem deeply at a time, while working agency-side involves shifting category and industry really quickly.
I disagree with the idea that advertising had fundamentally changed, or is existentially threatened. No form of media has yet killed all the other ones, which is what people always predict. Television was supposed to kill the cinema and outdoor advertising. Of course, the internet was supposed to kill off all of them. Commercial television has remained incredibly robust — absolute hours of commercial have not decreased significantly. Michael Wolff’s recent book, Television is the New Television, is fantastic on this subject, and the complementary relationships between online media and TV.
“Broadcast media will always do some things — such as communal sports events — better than online media. In addition, the industry is still working out how to use social media as an advertising medium.”
The industry has been and will be a very good place to be for a long time, because of all these changes and the constant influx of young people. All those clichés about it being a young person’s business are true. It’s sobering that I’m fifty-one, and close to being the oldest person in the building.
What are the key skills that you've acquired?
One of the challenges in advertising is that much of it is done on gut instinct, and so there is not much structured learning. It certainly took me time to realise that some of the skills with which I entered the industry could be improved.
The first was people management, involving persuasion and team leadership. My job is principally about getting people to do what, at first, they don’t necessarily want to. Negotiation is the main area in which I’ve benefited and acquired skills from specific training to help deal with sophisticated procurement teams at clients.
The most important skill in advertising is presenting your ideas. It’s vitally important to make your ideas compelling. What we now realise in advertising is that pitching involves what Daniel Kahneman calls system 1 thinking — fast, instinctive and emotional. We have to give clients an emotional experience that they can’t bear to be without. That happens in the gut, so we pay a lot of attention to how a presentation will make you feel. It’s difficult, though, because your tendency is to make it more rational.
What’s the best book you’ve read recently?
Possibly the most influential book on marketing over the last few years is Byron Sharp’s brilliant How Brands Grow. Sharp works for the Ehrenberg-Bass Institute in Melbourne, which has a lot of quantitative data about brands and how their advertising works. He demonstrates that a lot of the rational constructs around marketing, which have become nostrums and rules, are wrong.
“The most difficult thing for marketers to hear is that consumer do not care. People do not love brands.”
The most difficult thing for marketers to hear is that consumers do not care. We have to be constantly reminded that people do not ‘love’ brands. They do not care. That’s true even of brands that advertising industry loves, like Apple. If you look at quantitative surveys, the degree to which Apple is differentiated from, say, Acer is minimal.
Loyalty programs are a waste of time. Don’t segment the market. Brand loyalty doesn’t really exist. Advertising is all about physical and mental availability. You just need to advertise as consistently and broadly as you can to as wide an audience as possible.
Most people, most of the time, don't give a damn. Obviously all brands have a small segment of extreme advocates, but they are not important in the grand scheme of things. The vast majority of people are just grazing through brands — they don't care. You need to make yourself top of the mental and physical availability of that landscape. A good example of that is Coke. I understand Coke —it's red, it's always there, it's always red, it's always the same thing. It's about happiness, it's a sugary drink, and it's always f****** available.
But so many brands don't get that right. They're inconsistent, they chop and change, they don’t say the same thing — and they over-exaggerate the extent to which people are engaged.
“A good example of that is Coke. I understand Coke, it's red, it's always there, it's always red, it's always the same thing. It's about happiness, it's a sugary drink, and it's always f***** available.”
What’s on your learning playlist?
I’m President of IPA, the advertising industry’s trade body, so certainly our events — that’s how I became interested in Byron Sharp. My other learning sources are the key industry publications, including the magazine Market Leader. There are some classic TED talks that everyone in advertising watches, such as Simon Sinek talking about the role of purpose.
One of the recent interesting developments in advertising is that everyone goes to SXSW now. I went five years ago, and it was eye-opening. The culture of Silicon Valley — ‘we’re going to solve all the world’s problems’ vibe — was actually quite energising, even if I came back with lots of english skepticism.
What do you think the future of advertising holds?
In some ways, the future looks a lot like the past. Advertising will always exist while we have market capitalism because it lubricates the machine. And, despite what people say, quite a lot of it will still be broadcast media. It’s still by far the most effective medium on the planet — it’s emotionally engaging and it allows you to tell a story. You can’t do that another way.
However, there are enormous challenges ahead in terms of how digital advertising will work. The degree to which adblockers have been adopted is scary. It’s an indictment of our industry that we have produced lots of terrible advertising — ill-conceived, intrusive, and unimaginative. It’s damaged the industry as a whole, and we need to get back to enchanting people, rather than just shouting at them.
“We need to get back to enchanting people, rather than just shouting at them.”
Data, and what we do with it, also presents challenges. We have to win the hearts and minds of consumers in order to convince them that the value exchange is worthwhile. Currently, we’re not doing well enough. As a consumer, my experience of personalised advertising is currently clunky. It’s like interacting with someone who has barely met you, and doesn’t really understand you. Particularly, re-targeting often doesn’t even understand basic behavioural science — it will re-target products you have just bought! That erodes public trust and acceptance of advertising.
What does that mean for an agency like this? Is it going to impact on the type of people you're going to hire?
Clearly, we’ll hire more analysts and data scientists. That said, I think you still need creative people with great ideas. Increasingly, there is a challenge in reconciling logic and magic, and ensuring that we’re not superficial, facile or irritating. What we need to do is charm, entertain, and wow people.
“The reason why advertising is still so much fun after thirty years is that it’s always been a collision of show-business and commerce.”
If we lose that sense of magic, we will — and perhaps we already are — become less effective. Margins will continue to tighten, and general acceptance of advertising will continue to decrease. That’s bad for everyone — brand owners, media owners, and consumers.
It’s not sufficiently understood that almost everything we take for granted in the world is paid for by advertising. Take Google — their revenues all come from advertising. Our free press and information is, by and large, underwritten by advertising. It’s important that public trust is maintained, because otherwise we will have an impoverished media landscape. An entire generation of kids have grown up believing that content is free. We need to remind them that it’s not free — it’s paid for by advertising.
Is there anything else you’d like to say?
What worries me, perhaps more than gender diversity, is the class makeup of advertising, and a lack of social mobility. It’s not just our problem, but when I look at our grad intake for the last few years, it’s pretty white and pretty middle-class.
That’s clearly not representative — and that’s not a good, or fair, situation. When I make the conscious effort to stop and ask, say, how many women are in a meeting, it’s often disappointing. We’re all getting unconscious bias training, and we’re trying to do more blind CVs, as it’s undeniable that people hire on their own image. There are a number of circumstances involved, including housing issues in London, but I think there are some important inbuilt issues.