As part of the WARC x Ogilvy Image to Impact report, Jonathan Halvorson – Global VP - Consumer Experience, Mondelez International – spoke about navigating media fragmentation, balancing the art and science of marketing, and why authentic purpose makes an impact.
If we look at how marketing has changed over the past 10 years, what are the biggest shifts that you have seen personally in that time?
I think how [brands have] disproportionately won over the last decade was based on three things:
- Your brand having a clear purpose, so, purpose-driven branding.
- Your acceleration of digital, so, how fast did you shift to digital and keep in line with consumer behaviour/media consumption?
- How integrated you were across media and creative.
I would argue that the next decade is probably won and lost based on your understanding of commerce, so, your ability to sell your product ubiquitously and also explore new business models. The second is 'identity' – the evolution from data to identity. How well do you know your customer because that will drive your personalisation efforts? Third, how good are you at creating brand platforms? So, not just things that are transactional, but rather exist over the long term. It moves from a campaign mentality to a platform mentality, which changes how you think.
Then lastly, how human you are. Your ability to understand human behaviour and decode the world is what allows you to fight against commoditisation, which runs rampant. You can look at really good examples like airline and mobile apps. They do the first three things right, but I don't think they create a truly human experience for their customers.
How did you define Mondelez’s approach or philosophy when it comes to the idea of creating impact?
I think for us, we see great creative as having three things: it's distinctive; it's engaging; and it has impact.
An impact would be: is the consumer somehow changed or transformed as a result of it? I think it speaks to the fact that it evokes an emotional response. There's a range of emotional responses, but having seen what we have done or put into the world, is [the consumer’s] behaviour or how [they] feel changed?
There's a lot of talk right now from brands and media about empathy. Is that part of the vocabulary at Mondelez, in one way or another?
Our entire personalisation effort is called Empathy at Scale. Empathy is part of the vocabulary. I think if you start with consumer-centricity, you start to talk about empathy being a core quality of marketers to succeed. This is because it's the pivot from talking about the consumer being at the centre, to living there. I think empathy is all about seeing the world outside of you and outside of your four walls.
I think every client catches moments of empathy, but I don't think there's any marketer in the world that can claim to be truly consistently empathetic. This is because – maybe some small DTC brands can do it – but I can’t think of any scale brand that makes me say "Oh, wow, that brand shows amazing empathy, consistently". There are always forces that tie us back to the P&L, tie us back to our internal environment, or take us away from doing the consumer-centric thing. I can't think of [a brand which is] always emphatic.
It might not come off as authentic, if you know that the brand is constantly trying to be empathetic. Is that also a factor that balances out empathy?
How do you be truly who you are and empathetic? If brands have too much empathy – we all have that friend who's a little too sensitive to what's going on – they lose their compass so it becomes “well, what do you stand for?”
I always worry that I don't operate in the context of culture. There are some brands who believe that the best marketing is done through the context of culture. I happen to not think that. I care more about personalisation as the driving agenda for marketing in the future.
If you are a very culture-sensitive advertiser who is focused on winning by being connected to culture, you - at some moments - have to have some real trials of conscience about what you're doing. I worry, how do they keep their moral and brand compass? And I expect they just have to have a lot of conversations every single day about what's our brand purpose? And what's our human tension that we're trying to solve? Who are we and why do we exist? Whereas I think if you're not living in the context of culture, it's easier to stay true to that.
With your focus on being customer-centric, how does this relate to that empathy at scale idea? How did Mondelez arrive at this and what were the drivers and trends that brought you to this conclusion?
We hired Ogilvy to develop empathy at scale. I think the drivers were: we believed that the tried-and-true method of mass advertising wasn't going to be the most effective way to grow for a CPG company, that the world was more diverse than the past and that with focus we could solve these challenges.
Our starting point was work done in 2017. We were doing a bunch of campaigns and we had our segmentation too far forward in the briefs, so we got very fractured creative ideas. We would put in the briefs, questions like “hey, we're targeting Millennial Hispanics, Millennial Moms, Millennial Women, Women, Millennial Mothers without kids”, you get the idea.
What you got was personalisation that was very mirrored. It was like a series of shoots where we just changed the models, and that's a real problem. That got you, roughly, a 15–20% lift. Just because people could see someone like themselves, you got lift.
However, we had one campaign where we broke out of mirroring and the results were multiple times stronger. We asked why. What we discovered is that the best personalisation isn't based on demographics or weather or even location. The best work is based on your empathy pattern. And so, our focus was that we use personalisation to scale our empathy became the rallying cry for how we would do personalisation.
This is very different from other advertisers who put data technology and segmentation first. So in that way we have a different point of view on the world. Those brands would say their way is better, then I would say, our way is better and that's fine.
Did you do something different in how you collected your insights from that ad that had so much more lift with empathy?
No, it was the creative, the creative process didn't follow our codified personalization at scale process. We had a very detailed process for how you do personalisation at scale. The very first thing you do is you put in your segmentation, you think about your media segments, and then you brief. Then you create an idea that works for those segments. The creatives didn't do it, they instead got a big idea and then they said, "Hey, we got this really cool idea. How do we make it better through personalisation?" Changing that question and really the order of those questions is what created the unlock and then you get to bigger ideas versus smaller, fractured ideas.
It wasn't my brilliance. It was someone fixing what I did. I had to go back to the organisation and say "I was wrong", which is a bit embarrassing.
Is the consumer's increasing access to information a consideration, after strategy, positioning and thinking where the brand should go?
I am very classical about how I think about brand positioning. I think we mastered a lot of how to do brand positioning in advertising, and I don't mess with it too much. I think what's important is brand positions need to be based like human tension, and great brands have some tension they play off of. It must be based on what is happening in the world and also a product truth.
As long as you are grounded in that and you can say it in a very exciting way, in five words or less, we're good. I don't think that we're going to dramatically improve how we build brand positioning over the next decade. We can improve how we execute a well-crafted art.
You mentioned that you're not someone who is super-happy to be part of culture with your brand, although you do have to pay attention to what's happening in culture.
You have to be relevant to it. To use examples, Pepsi is a CPG marketer that plays it very differently. They're around big tent poles, Super Bowl, NFL, those types of things. There is a model that wins there. Coca Cola is timeless and Pepsi is timely.
There are two companies that have made a ton of money: Amazon and LVMH. Amazon makes money with high turnover of product and low margins. LVMH makes money with high margins and low turnover. The key thing is they both have a strategy. I believe that personalisation and living in culture are two different strategies. What's important is that you have one and are committed to it. If you try and do a little bit of each, you get killed.
If you're focused on personalisation, you can't be blind to what's happening in the world because your empathy to consumers should keep you clued in.
If you were building a modern marketing model around culture, you would invest in different things than personalisation and you don't have money to do both. Even if you had the money, you don't have the mental space in marketers' minds to do both. So, you need to make some tangible choices.
How important is it for brands to have authenticity from the boardroom to customer interaction?
I think there is a big movement to improve in authenticity. One of the things that the CMO is very responsible for among the executive leadership team is decoding the world. We need to have a strong CMO presence in companies to be bringing that consumer perspective about what the consumer's experience is, what their life is like.
We have a way to go on that. I think if there's something I'm happy about, it's that when I'm looking at creative work, it is more reflective of the diverse reality we live in. So, I think there's been real strides and improvement in that. It's not like I look at commercials and go 'Who is this family anymore?' So that's improved. But I don't know if anyone is really hitting a homerun yet either. I think everyone has room to improve and I will be politely dissatisfied with our current situation.
Diversity and inclusion is seen to be a big push that is on everybody's list as something that has to happen. Is there probably always room for some improvement there?
Significant room for improvement. The other thing to note is that we have lost a bit of our ability to create insights. There's a lot of data and not a lot of insights. There's a lost art in organisations about how you build insights as they're not created, they're built. I think the art of building insights is a little bit in short supply.
You define [impact] as emotionally affecting people but it can also mean its social impact, its profitable impact, and also its effect on society, the planet, etc. Do you think that this kind of thing can be measured?
Sure, it can. Measuring your profitability and impact is easy. Changing perception, I think, can be the best equity measure.
On a scale of one to 10, how easy is it to prove effectiveness of social impact marketing right now, in the way things are going now? What would you give that?
Eight. It's no harder than anything else when you measure whether marketing impacts the bottom line. Is societal impact created or campaigns harder than anything else? I think you can hold these to the same standards.
If anything, there's a lot of examples of great work being done that is creating amazing results for companies. This is because you either believe in it or you don’t. There's a pretty clear business case for the ESG agenda – it's super clear. If you don't believe that business case, then we have a bigger problem.
When you measure that, how are you measuring Mondelez’s impact?
MMM, net-revenue, market share, regression analysis to identify what are the drivers of business. It's not perfect, but it's no less than that of any other creative campaign that gets put into the world.
It's also looking attitudinally on how consumers are perceiving the brand and feeling about the brand - what does the brand do for me and things like that?
That is the equity part, which is part two, and I think that's pretty established science. Is it perfect? No, but it's not poor.
To what extent is your core brand strategy for Mondelez consistently integrated into customer journeys or across channels? What's the philosophy around how to reach them?
CPG brands think about the customer journey every day, they measure every part of it, whether it's awareness or consideration. That's the bread and butter of CPG on a brand level. That defines where you're going to spend your money.
Thinking about the shift over the past 10 years where brands used to be just on television and now, do they have to be in five different places?
You certainly have a change in mix. Today, we woke up and we're 50% digital. With new channels, you have to care about e-commerce. You spend your money how you do, but I think the art and science behind making those choices is consistent.
So, they should be spending money on…?
They should be spending money at the point of buying and on e-commerce. Also, I think we're still lagging consumer behaviour in certain areas.