Mark Ritson on the ‘brilliant piece of BS’ D2C might be

From the C-Suite newsletter: The pundit also weighs in on how to utilize emotion and balance awareness with performance.
Ritson

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Mark Ritson isn’t exactly known for holding back, whether it’s in a column, onstage, in a lecture hall or in an interview.

The marketing pundit, professor and columnist arrived in Toronto from Australia last week to speak at an event for ThinkTV, where he gave a rundown based on his analysis of more than 6,000 Effie cases. The talk focused on what actually makes an ad effective, generates the most ROI and helps build brands.

Strategy caught up with Ritson after his talk to get the story behind the numbers – and to soak in some of that classic Ritson candor. Although the event was hosted by a group that promotes investment in television, Ritson smirked at the idea that platforms matter all that much – at least, when it comes to effectiveness (for Ritson’s lessons on media, check out last week’s piece in Media in Canada).

“We’ve spent the last 10 years obsessed with media, the pipe, rather than what we’re putting in the pipe,” says Ritson. Messaging will never not be crucial, and brands that put every last dollar into making sure their ad is seen by the right person are probably off-base.

With a half hour to chat, a private table at Soho House and a few cappuccinos to pound back, strategy tried to get as much out of Ritson as we could before he had to hop on another international flight. True to form, he held nothing back.

1. We might be getting too clever for our own good…

He referenced a recent two-minute spot by French auto-maker Renault, which told the story of two young girls who fall in love, drift apart and then reconnect. It’s a beautiful spot, he says, but does it actually tell you anything about the Renault brand or preserve its image in your head? Storytelling and emotion are important, he says, but it can lend itself to a fundamental problem.

“Most ads here [in Canada] and everywhere else don’t look like the brand,” he says, adding that consumers can only recall and link 16% of ads back to the brand the day after watching them on TV. That means more than 80% of TV ads, in Ritson’s mind, are “fundamentally failing,” because they’re “too creative and too clever, but they’re not distinctive to go along with that creativity and cleverness.” It’s not enough to differentiate from competitors, he says. “How much do you look like yourself?”

2. …but we can’t become robots.

The antidote to keeping ads engaging but also informative and connected to the brand isn’t to strip away all the story, the nuance and the emotion. In fact, Ritson says, you do need emotion – it just doesn’t always have to be a tearjerker. “People forget that humour is an emotion,” he says.

In fact, he says, the most effective ads on paper usually have some emotion in them; it simply has to be woven in with the brand messaging itself. “You want emotion in your video. Marketers have moved away from it a little because they’ve been tasked with doing more short-term stuff.” He says emotion might not drive instant conversion, but it can’t be left out of the mass play. “It’s very good at creating those long-term associations.”

The emotion simply has to be married with distinctive assets – what Ritson refers to as “codification” – in order to create those links in the brain. Citing research from BrandZ, the most effective codes for mental retention were shapes and patterns associated with a brand (such as the Sephora black stripes), followed very closely by logos. People also tended to remember company founders and iconic fonts, but had lower recollection for elements such as celebrity spokespeople or associated colours.

3. Sorry, David, Goliath just wins.

The factor that Ritson says ended up being the most effective for advertisers unfortunately isn’t one that will make a lot of CMOs at scrappy start-ups happy. “It’s really about how big of a brand you already are.”

Brands that already have a large market share – around 20% or higher – tend to deliver more ROI on their media investments, he says. Specifically, that tends to deliver returns that are 18 times higher. “You already have the existing infrastructure over smaller brands,” he says. “The David and Goliath story is bullshit. Goliath always wins because he has a bigger share of mind, so he gets more money back for what he spends.”

That is not to say smaller brands should throw in the towel. Ritson says that although factors like research, multichannel planning, the proper balance of brand-building and performance marketing or creativity, combined, can generate comparable ROI. They simply have to ensure that all of those parts work together.

4. Without scale, D2C just might be “a brilliant piece of BS.”

Some Davids have indeed been triumphant, says Ritson – because they think like Goliaths. Or, at the very least, they spend like them.

He says this has been particularly true in the recent influx of D2C brands. The space is getting more crowded, he says, but if the plethora of new entrants continues to spend primarily on conversion-friendly social video and banner ads, those spaces are likely to become graveyards of brands that never could become the next Peloton or Casper.

And why is that? Ritson says the brands that did break through were smart enough to know when to pivot their focus from lower- to upper-funnel targeting.

“The way they were positioned a few years ago was an alternative model. Brands like Peloton got investors on board because they were a different model with a different way of growing, and they could literally break that David and Goliath narrative. You get investors on board when you’re still at a smaller scale, where TV and national media are off your radar.”

But at a certain scale, he says, those brands need to shift their budget. He’s seen it with the brands he’s consulted with in Australia, which have had to make the pivot to national ad buys on radio or OOH. “When they get to that stage they can usually see that conversion rates at the bottom of the funnel are drying up, so they need to go mass to get the renewed action.”

There’s a “bubble” around Instagram with D2C, and Ritson says “most of these brands won’t make it.” Without the scale, he says, “the D2C trend is a brilliant piece of BS.”