PepsiCo Exec Says The Unmentionable: The Ad Business Is Out Of Touch

Last week Ad Age reported on The Association of National Advertisers annual “Masters of Marketing” conference. Specifically, it discussed a barn-burning speech by Pepsico exec Brad Jakeman. Mr. Jakeman took a long look at the “elephant in the room” and named it for what he believes it is: The ad industry is out of touch with the globalization, digitalization and democratization of its audience.

It’s ironic that this speech comes in a period of continued ascension of Marketing’s in retail. In fact, at one major retailer, the merchants now report to the Chief Marketing Officer. That’s a rant for another day. Suffice to say that the CMO has as good a chance of running a successful merchandising group as the chief merchant at Target had at running the global Supply Chain.

But back to today’s story. Brad Jackman, president of Pepsico’s global beverage group, had harsh words for the Agency business and marketers in general. Yes, Mr. Jakeman has a book to hawk, “Designing For Disruption,” but he also made some points that we saw in own data, gathered about a year ago and detailed in our benchmark report “Retail Marketing 2014: On The Digital Road” last fall.

Here’s a list of his points:

  1. He really, really hates “pre roll” advertising
  2. Measurement models are outdated
  3. The ad industry lacks diversity
  4. The phrase digital marketing should be dumped

Let’s take a look at each.

Pre-roll Advertising

This is not a phrase I was familiar with, but once I looked it up, I knew exactly what it was and wanted to yell “Hallelujah!” Pre roll advertising is those annoying TV-like ads you are forced to watch when you go to YouTube to see a video you like…or the advertising that pops up when you’re trying to make your move in “Words With Friends.” Does anyone EVER listen to or watch those videos? You know the answer. As Mr. Jakeman described, it’s a “model for polluting content.” Ouch! In fact, he seemed to suggest that ALL advertising does the same. After all, most of us watch some kind of delayed version of TV shows we like, because we want to get past the ads. The only exception might be the Superbowl, where watching the ads is a spectator sport. And yet how the heck does one really measure the efficacy of those ads? And that brings me to his second point.

Measurement Models are Outdated

Most marketers I talk to are really bullish on “impressions.” How many people actually see something? But one thing I’ve learned in my brief forays into Facebook advertising, digital impressions are really cheap. They’re also basically useless. I was able to achieve three million impressions for $350 a few years ago with Facebook ads. Did anything concrete come of it? Not really.

In our Marketing benchmark we found measurements were muddled or non-existent for digital marketing. Fifty-four percent of respondents cited “Measuring the effectiveness of different marketing tactics” as a top-three digital marketing implementation challenge.

Maybe it’s time to take a holistic view of marketing, put all divisions under one roof, and take some time to determine new success metrics in a global, digital world.

The Ad Industry Lacks Diversity

Here’s a direct quote.

“I am sick and tired as a client of sitting in agency meetings with a whole bunch of white straight males talking to me about how we are going to sell our brands that are bought 85% by women,” he said. ‘Innovation and disruption does not come from homogeneous groups of people.’”

Boom! Here’s one thing I know. The level of micro-marketing needed just to market to the group called “Hispanics” is completely absent in national advertising. After I listened to the CEO of a major traditional market analytics company give a speech explaining how to market to “them,” I asked: “Don’t you see a difference between marketing to Cuban-Americans vs. Puerto-Ricans, Mexican-Americans or Colombian-Americans?” He did not. I wished he could come to Miami and ask an innocuous question of a Colombian-American, “Are you Cuban?” I would have been happy to shield him from the blows he would have received. And that is just the tip of a very large iceberg. I was shocked that he didn’t know the differences. But then, he was a middle-aged white guy, from a largely homogeneous community. No disrespect intended to anyone. At all. Some of my best friends are middle aged white guys.

The Phrase Digital Marketing Should be Dumped

The over-arching theme of our marketing benchmark was that measurements and understanding of digital marketing were confused at best, absent at worst. Perhaps that’s because it’s an artificial distinction. In fact, isn’t TV a digital medium? Hasn’t the news business gone digital? And when is someone going to tell those news outlets that festooning your web sites with so many ads that they look like Indian buses is a poor strategy? Do advertisers really believe that a view of those ads matters at all?

It’s time to take a fresh look at marketing. That message was loud and clear at the conference. The more I see of how marketing is working, the more presumptions and assumptions come clear. “Baby Boomers” are considered a homogeneous group who are very different from Millennials (the new Holy Grail). In fact, neither is true. I probably have more in common with some Millennials than I do with some of my Boomer brethren. I could list some of those presumptions and assumptions here, but I won’t.

I hope retail marketers listen carefully to the message delivered at the ANA. It’s time to change.