Australian insurance brand NRMA was redefining category codes and creating distinctive work well before COVID-19. IAG Group’s CMO, Brent Smart, speaks to WARC’s Gabey Goh for the Marketers Toolkit 2021 about why investment in brand-building is non-negotiable, the need for relevant creativity and the threat of “sameness” in digital experiences.
How have the developments of 2020 impacted your marketing operations and strategies?
I feel like everything's changed and nothing's changed. Whilst the way we are working has fundamentally changed, the things we believe in and the things that we believe to be important haven’t.
I think brand building is more important than ever. We're seeing in times of crisis that people turn to brands they trust, and brand building is a way that you can help protect your business from some of those shocks we’re seeing.
As we're heading into a recession, I think that creativity becomes more important, not less, as budgets are squeezed and competition increases. Creativity becomes an important point of differentiation, and I also think it can be a moment of joy in this really shitty world we find ourselves in.
What we've really focused on is our culture. I'm a big believer that culture eats strategy for breakfast. It's one of the most important things we do as leaders – not just managing teams, but building a strong culture. We're really focused on making sure that we're really connected, and that all our ‘rituals’ still take place… Just doing everything we can to make sure that our people feel connected, supported and that our culture stays really strong through this period.
- As a marketer, you need to be aware of the cultural context in general, but particularly for the brand’s category.
- During a recession you must defend the budget allocation for long-term brand investment and resist the temptation to get too focused on driving short term results – a difficult but critical stance.
- A key challenge for marketers is creating a unique digital brand experience that’s memorable and worth people’s time.
In your opinion, what determines how well a brand can survive or even thrive during a crisis like this?
There are some categories where you could never have predicted or prepared for this. But in some other cases, it's what you did before the crisis that determines how you are getting through it.
If you've been building your brand before the crisis, then you enter the crisis with a much stronger, more trusted brand. If you’ve been building the culture of your team before the crisis, then you can cope much better with working remotely and the challenges that gives. If you've started some of the digital transformation that's required, you're able to better capitalise once crisis hits.
It's quite fascinating to me that all these people suddenly woke up and went “Shit! I need a strong brand!” Well, too late. Or “I need lots of digital transformation, I need to go digital!” Okay, but you can't just flick that on and make that happen instantly.
I think the work you did prior really determines how you get through something like this. That's the big lesson for a lot of marketers. If you weren't building the brand before, then good luck having a strong brand that will get you through something like this.
In the case of insurance, the issue of financial security and wellbeing has quickly become top of mind for many. How has the team leveraged this unique context?
We're talking [about going] from incredibly low attention to slightly lower attention. It’s still a low-involvement category and if you think about what happened when COVID first hit, we actually saw a dramatic decrease in the amount of switching behaviour. People just had other priorities: getting their hands on toilet paper or hand sanitizer, dealing with home-schooling… there was just a lot of other priorities in people's lives. So we actually saw insurance switching dramatically decrease, but what we also saw was this need for security and safety and this need for protection at a time when the world feels pretty crazy.
We really focused on the brand-building opportunity that the situation created and invested very heavily in brand. When COVID hit, I saw two opportunities. One opportunity was all these people were staying at home. We saw media consumption change significantly, where TV audiences grew and digital video massively spiked. Some other media were hurt, like out-of-home and cinema. In addition, some categories were immediately placed under stress – like retail and travel – so we saw a lot of advertisers pull back, cancel spend and go dark.
With those two things combined, we thought “here's a ‘share of voice’ opportunity for the brand”. We increased our media budget by about 65% to really try and capitalize on that opportunity. Once we saw that business activity was starting to come back, we then went with an offer that we thought was right for the times. Those two things for us worked really powerfully, hand-in-hand.
As a marketer, you need to be aware of the cultural context in general, but particularly for your category. At the start of the crisis, the context for insurance was that it was not really high on people's lists of things to worry about. That doesn't mean there's not a great brand building and mental availability opportunity – when they are ready to think about insurance, you've done the work, you've built the brand and you can convert.
The pandemic has forced a lot of brands to seek new and creative ways to engage with homebound consumers. What is the best way to stand out in a digital-centric and hyper crowded marketplace?
I think this is the biggest challenge that marketers have faced for the last few years, and it's only intensified. There's just too much content in the world. The thing I find is, there’s all this content, and yet every customer you talk to in a focus group says, “I've got no time”. We’re all time-poor so that equation just doesn't make sense. You need to be worthy of people's time. That is the crux of the challenge that marketers face.
The most important part of our job as marketers is to be distinctive... If you take financial services, it's all generic lifestyle imagery, and you could put any logo at the end of it. Look what happened during COVID: everyone rushed to make a COVID ad that was all full of empathy and “we're here for you” with a sad piano tune. It all looked the same. It was the same problem, but intensified.
I think the problem that many marketers have is they start from the wrong place, where the focus is “isn’t my brand incredibly interesting and this message that I want to say”. Whereas I start from the point of view that no one cares about advertising, and they certainly don't care about insurance. You better find a way to make it interesting, because no one is sitting there waiting for another insurance marketing message. I think you have to start with that mindset.
It's a real battle to find something that’s unexpected but also relevant. That's a real challenge and good marketers know how to combine those two things. There's no use having something that's incredibly original creatively, and yet your brand is an afterthought or doesn't have a relevant role within it – that's not going to work.
A great example from us has been the koala campaign. All home insurance advertising looks the same, it's all lifestyle imagery of families, feeling very protected with peace of mind within their homes. Instead, we wanted to find a really original way of talking about insurance. What we saw bubbling up in culture and media was that koalas, one of our most loved national animals, were at risk of extinction, because their homes are being destroyed.
It's a lateral thought but it's linked to the idea of protecting homes, so the link back to our product is there. The koala is incredibly distinctive and looks like nothing else in the category. Therefore, it brands really well for us because people see the koala and think about our brand. It’s a really great branding device, it allowed us to tell some really interesting stories, like a koala chatbot. When the bushfires hit – a crisis that Australia has had before – we very quickly bought a partnership with a koala hospital that was feeling the brunt of all these koala injuries.
That gave us this whole new dimension to the stories we tell. When COVID hit and kids were stuck home-schooling, we did a virtual excursion to the koala hospital so that kids could feel like they're getting out of the home and learning.
It's given us an incredible dimension and a really interesting narrative. Unexpected stuff for an insurance company but at its core, it's still that idea of protecting homes. That's what we need to challenge ourselves to do as marketers – to really find something that's unexpected and distinctive, but still really relevant to the brand we’re trying to build.
This year has really highlighted the need for marketers to rethink brand experiences and re-design them to be more seamless and digital-friendly. What are your thoughts on this increasingly important element?
We've seen years of digital transformation take place in months, so there's no doubt that we have to be focused on delivering a digital experience for customers. It's not a choice, it's a must. That's something that every business has to be thinking about.
I'm seeing what I call “bland versus brands”... A lot of digital experiences are the same. What's important is finding out the unique digital experience for the brand and having a bit of stickiness or, dare I say, friction in the experience if it makes it different, memorable and worthwhile.
The challenge is similar on standing out with content: how do you stand out by creating experiences that are memorable and unique? Because it’s all the same tools, the worry is that it’s all becoming very templated and generic… I’m not saying it should be difficult [for users], but the issue is that a lot of people go ‘user-first’ rather than ‘brand-first’. I’m saying it should be brand-first.
Obviously, you still need to be customer-centric and build things for customers, but really put your brand at the heart of it: what's my brand's point of view on this? What's the unique digital experience for my brand? How can I really create something memorable and really create something that’s worth people’s time? I'm not seeing enough of that in digital experiences.
How will you be prioritising your marketing spend in the year ahead?
There are two golden rules when it comes to our marketing plan, and I think they're critical in good times, bad times and everything in between.
Number one is that 50% of your budget has to go to media. Too many marketers, in my mind, spend too much money on martech, data and analytics. I think the important thing is to spend your money on what touches the customer – that's what builds your brand and that’s what will drive sales. There's a Gartner study that says the average marketer is now spending only about 25% of the budget on media, which I find quite scary.
Second is with that media investment: 70% goes to brand and 30% short-term. [That] is how I cut it and I think that certainly stands us in good stead. During a recession, that’s when you've really got to defend that sort of budget allocation. You have to really resist the temptation to get too focused on driving short term results. It’s really hard to do but really critical.
What’s your goal for the marketing team and the brand for 2021?
The goals for the team are always the same. The goal is to create what I call ‘an unfair share of culture’. I love this idea of an unfair share of culture. I think there are certain brands that are way bigger in culture than other brands, Nike being the best example. Because of that, these brands get so much earned media and so much conversation. So it's unfair for the other brands, and it's really hard to compete.
That's my big ambition: create an unfair share of culture for the NRMA brand. If you think about our category, we start from a really negative place when it comes to share of culture, which is we're not in culture. So, we're trying to do things that are going to get us that similar unfair level of engagement versus our competitors and versus the rest of our category.