AI Is a Tactic, Not a Strategy: What CMOs Must Know with Gareth Turner, Part 2

[00:00:00] Gareth: We use AI for some stuff to, to try and get to things quickly. I use it. It comes out with this thing. I go, that's just wrong. I know it's wrong. And because I've been around the block so many times, it just feels intuitive. The fear is that for people who aren't exposed to that, with a combination of AI taking away that sort of junior research jobs and also the moving away from being in an office together, those two things combined I think are gonna be.
Hard work for for the next generation.
[00:00:29] Mike: My name's Mike Lander, and you are listening to Higgle, the B2B Sales Club podcast, where we bring you actionable insights about sales, RFPs, negotiations, and difficult procurement discussions from sales leaders, brand leaders, and procurement leaders. Please subscribe to get updates when new episodes are released.
Gareth, welcome back to part two. Of Higgle, the B2B Sales Club podcast. Uh, we did part one last week, so for those of you that missed part one, go back and listen to it. It's really good. Uh, for those of you that have just joined Gareth, who are you and what do you do?
[00:01:10] Gareth: I'm Gareth and I am the founder of a marketing consultancy called Big Black Door, and we work with FMCG Food and Drink Businesses to.
Help them get their strategy sort, help them get their growth plan straight before they dive into stuff and things. And my background. 30 odd years at places like Heineken, ala, and we bits before jacking it all in to start this business.
[00:01:37] Mike: So if you wanna find out what Gareth's favorite song is, go and listen to the one last week.
'cause he says it on the one last week. So I'm gonna skip that bit. So this episode or this two part episode as it is, he's all about how is AI changing the role of the CMO, the marketing team inside brands? I've done it because. Report called the Agency Reset Report. It's been very popular. People have asked for it, downloaded it, and it's prompted a lot of debate in the agency world about the future of agencies.
Well, the future of agencies relies upon what brands want from agencies. So Gar says, talk about what do brands need from not just agencies? What do brands need in an AI enabled world? And then what part do agencies play? So. Last episode, Gareth, we were finishing off on the kind of the strategy piece and templates and the need for someone that can sit by the CMO side and talk about where you invest your dollars, your pounds, your euros, to get the best return and make the vote go faster.
Do you wanna just kind of recount where that got to and then we'll carry on the discussion?
[00:02:44] Gareth: So yeah, I guess we were, we were chatting about the idea that internal, the CMO, the marketing leadership in a business is the conductor. And then, you know, they're, they're getting the, the right tune out of all the component parts, out, all the, the tactics, right?
They're setting the strategy and the, the map and then they're getting the right tune to mix my metaphors out, the instruments there and that. So AI is an amazingly powerful tool. But it's a tactic, not, not a strategy.
[00:03:14] Mike: Okay. So do you think AI completely changes the landscape, the system within which marketing operates?
So, and let me explain what I mean by that, because it could be a bit too ethereal. Otherwise, in the current world, within a lot of. Brands, they would have probably an in-house team. You'd have a CMO, you'd have some marketing leaders. You might have an in-house agency. You've got a MarTech stack, and you've probably got agencies that you use as well.
In a, in a bigger brand in the new world. If you took something quite radical and you said marketing has a job to be done, in Christiansen's words, there is a job to be done, which is to drive growth. And to drive longevity of the brand, then how do you get that job done? In the new world, there are huge network agencies.
There are big platforms that have been invested in by private equity that will say to you, we can do all this now using a ai, a Gen AI model, an agen model with an overlay of very high people, judgment on top, and it can do everything that you need. So you'd argue that takes away the need for third parties.
If it's all done on one by a a network platform, then why do I need anything else? Do you think that's true or do you think it's an evolution of the old model rather than a revolution?
[00:04:47] Gareth: Well, I guess a few things. I think there's something about the role of the, in the CMO, the the in-house team is to set that direction and what.
AI does, enables people to scale things faster. You can, you can you get a new website on tomorrow, today you can get scale
[00:05:06] Mike: and you can test and learn really quickly. Yes, you can test, learn, rebuild, adapt.
[00:05:11] Gareth: I'm not being neg on, uh, on ai. It's important and it's amazing tool. Not at
[00:05:14] Mike: all.
[00:05:15] Gareth: But what we're seeing is more stuff and things not necessarily.
More impact. Right. And it's, I was thinking about, it's like having a a, a shit sat nav in a supercar, right?
[00:05:27] Mike: Yeah, exactly.
[00:05:28] Gareth: If you have a shit sat nav in a supercar, you're just gonna get to the wrong place faster.
[00:05:32] Mike: Exactly
[00:05:33] Gareth: the wrong place. So I think the real question here, and, and things have evolved consistently, right?
We've moved from sort of back in the day before my time, a creative agency, the Mad Men era. Yeah. Creative media in one agency. Then that separate, you've then gone sort of full service agencies. You've got to experts, got in-house, outhouse, God knows what, but so I think. The agency model evolves consistently.
I think there's a, it's about having the right thinking and vision and what it is you're trying to achieve, what the strategy is, and then choosing the right, the right partners to, uh, to execute it. I guess because it's the execution
[00:06:13] Mike: and by partners it's about an e, so fancy word. It's about an ecosystem.
[00:06:18] Gareth: Yes. Yeah.
[00:06:18] Mike: Broadly, the CMO and the marketing team have got an ecosystem that they can. Play with.
[00:06:26] Gareth: Yeah.
[00:06:27] Mike: They can adapt
[00:06:28] Gareth: the endpoint, the absolute execution is being commoditized. Right? That's
[00:06:32] Mike: as in I've got a master brand campaign. I then want it in 10 languages in 40 countries, and I want to do that and do test and learn.
That now is relatively automated.
[00:06:45] Gareth: Yes. But that, I guess the, the challenge is, is relatively right. They're still, the best ones are, are still ones that are. I think have a degree of, of human in there. But it's the thinking and the creative idea level, not necessarily the exclusion where I don't think AI can compete at the moment, in my opinion, at the moment
[00:07:05] Mike: exactly
[00:07:05] Gareth: right.
It may and probably will come. Right. So I come back to the, I've lost track of which episode we're on now, but I've lost at some 0.1,
[00:07:12] Mike: episode two, episode one before exactly.
[00:07:15] Gareth: At some point I, I've spoken about, therefore, I see agencies now positioning themselves. As being more strategic partners, because that's the thinking, the expertise, and that's the right thing to do.
But the problem for an internal A CMO is that if that strategy always leads to the service that that person offers, then
[00:07:34] Mike: self-serving
[00:07:35] Gareth: is self-serving. And it's, it's biased and it's not agnostic. What, what the CMO needs is a. A buddy who can bounce that off. Exactly. Give them the confidence that a thing they're taking to the board is the right thing for their business.
Exactly. It's not the thing that Agency X,
[00:07:53] Mike: so this is critical, Gareth. This is as an agency. Agency, see hundreds of clients. CMOs see inside one brand. They'll have moved around, but they're in that brand at that time doing that job. They want insights from other brands, anonymized. To your point to say, we've seen this a lot before, the strategy that you've got logically makes sense in your category.
What we've found is X, Y, and Z, and what we recommend is we adapt that strategy a bit. 'cause we think there's a way of getting a, uh, a march on the competition. That's what you want, isn't it?
[00:08:32] Gareth: Yeah. And, and to keep it commercial, but course for me, not for you. So commercial for me is the cmo. So
[00:08:39] Mike: yeah.
[00:08:40] Gareth: In the last episode, I think I, I use an example of sort of diminishing returns and this idea that, yep.
That in media, for example, actually, Gavin, have you thought about actually taking some money out of TV back in the day and putting it on outdoor or digital display or now into. Making yourself, um, influencer for, for Claude, et cetera. And, and what, but that is what they're selling me there is within their, within their guardrails, what's the most effective and efficient way of using the money to deliver The thing that I'm trying to, trying to do, which in most brands case would be, uh, a growth in penetration.
And for a media agency, I'll be looking at how am I driving, how are you helping me to drive mental availability? That so straight away it comes, comes. Write down
[00:09:25] Mike: and to play into that, the, let's call, I think the agency name will change, by the way. I don't think agency as a name should exist.
[00:09:33] Gareth: Okay. Yeah.
[00:09:33] Mike: Agency implies freedom of choice and the agency as a human being. It's a bit an odd word, but, and you've got to be able to articulate the value as an agency that you are gonna create for that brand. You've gotta convince Gareth that you are the best partner to choose to help Gareth grow the brand.
Increase penetration. And create economic value for Gareth's business.
[00:09:57] Gareth: Yeah.
[00:09:58] Mike: And a lot of agencies completely struggle with the articulation of what value will this create, especially creative agencies.
[00:10:08] Gareth: It's not about being cheapest, it's about
[00:10:11] Mike: Absolutely not
[00:10:12] Gareth: his return.
[00:10:13] Mike: Correct. It's a marketing investment return.
It's not just the roas.
[00:10:17] Gareth: Yeah, yeah, yeah.
[00:10:18] Mike: It's, I've got the entire budget. How do you maximize the return on the entire budget?
[00:10:23] Gareth: Yeah, because we use media as, as an example here, but a media agency will probably be the biggest spending agency that most big FMCG brands have. And they're, they're always top of, of my.
Vendor list, but they, how can they help me to be more effective and efficient? And you know that any agency who can give me a broad perspective, who can put their own commercial model to one side and help me as a CMO Exactly. My, my commercials and, and so then I'm, I believe you're agnostic, but there's always that.
You know, back in the day, I would, I would regularly get people that you, uh, cinema advertising, Gareth Cinema. That's where you need to be. Go. Really, really, the, my job is to try and generate reach. I, I'm trying to maximize reach you. Sure. But cinema has done You sure? You sure about that?
[00:11:18] Mike: As it happens, we've got an amazing cinema advertising business inside our business.
[00:11:25] Gareth: And
[00:11:25] Mike: then you're like, yeah, or,
[00:11:26] Gareth: or maybe there's a big kickback on it, or who
[00:11:28] Mike: exactly,
[00:11:29] Gareth: or who knows, right. But I didn't feel I was getting agnostic advice at that point. I felt I was getting something that they wanted to sell me.
[00:11:34] Mike: Biased advice, self-interested
[00:11:36] Gareth: advice, and that, that then makes me question the whole thing.
So I, you know, and I know this is self-serving, again, whether it's me or someone like me who, who sat there, who's had to justify these decisions to the board, who, who's got no service to sell other than the thinking and the, the, the growth strategy. That then compounds over time, you're all putting in the same direction.
Well, I think that's, I think that's money well spent.
[00:12:00] Mike: Exactly right. I completely agree. Let's just touch on a particular topic that's, again, very topical about in-housing. I think the research is something like 85% of brands have an in-house capability. Now, if you were back in your role as CMO, what would you be in housing and what would you be using agencies for in today's market?
[00:12:21] Gareth: It depends on the size of the brand and it depends on the quality of the people you can attract. Because I think as there's a, a cachet that goes with working agency side, there's a breadth of work that goes with that which attracts a. Great caliber of individual. Yep. So that's to be considered. There are certain things like if you've got the right scale, some, some media buying, perhaps some sort of social media buying stuff that can be automated.
There's versioning of assets. There's, I guess I'd be, I'm looking back to that phrase of will it make the boat go faster? Where does every pound I have have the biggest impact? And so for example, we're doing some work with a, a client at the moment where I'm subcontracting some work. So we, we've done that upstream thinking and they then said, well actually, can you now help us to manage a roster of agencies to deliver the thinking you've done?
But we, the first thing was, let's get to the thing. Can you now execute? Yes we can. And we are using ai. We just got media, um, creative. We've got some, uh, digital freelance. We created this, this group of people.
Heavy hitting creative team. They're not best used on versioning a six sheet into a 48 sheet,
[00:13:44] Mike: right? No.
[00:13:44] Gareth: Not the best use of their time. The best use of time is coming up with the key visual, but if you had enough scale in your business, you could then be in housing that versioning, and you could be using AI to do some of the heavy lifting for you.
[00:13:57] Mike: With the in-house people overseeing. That's what we said before. I think what AI has enabled is the role of the individuals in the in-house team may no longer be to crank out lots of different versions of a, of a master creative. It may be to oversee. The engine that's generating the 150 different varieties and ensure that it's on brand and that actually it's gonna cut through and the, it should be within brown guidelines anyway, because that's what the AI should be.
Yeah, yeah. Set up to do. But it's more the judgment layer. Yeah. And the orchestration as well.
[00:14:36] Gareth: Yeah.
[00:14:36] Mike: You know, this thing about orchestrating, well, does Gareth need to see this one that's in German? Because it's a slightly different version. We think it's okay. The AI's done what we asked it to, but let's just, let's just send it to Gareth and let's see what he says.
Yeah.
[00:14:51] Gareth: But if
[00:14:51] Mike: that, that, that layer,
[00:14:52] Gareth: if it's in German, I wouldn't send it to me, but
[00:14:54] Mike: if it's in German, don't send it to Gareth.
[00:14:56] Gareth: Yeah.
[00:14:56] Mike: But
[00:14:57] Gareth: yeah.
[00:14:58] Mike: But that's my point is
[00:14:59] Gareth: yes,
[00:14:59] Mike: some humans got to go. Where should this go? Just to get another set of eyes.
[00:15:04] Gareth: Yeah. But in the very, very early days of ai, somebody told me that.
AI was like a, a, you know, a very good, hardworking intern.
[00:15:13] Mike: Yes.
[00:15:14] Gareth: Now they, they can, they can do some amazing work, right? They churn out a lot of work. But would you let the intern present to the board without checking their work first?
[00:15:20] Mike: Unlikely.
[00:15:21] Gareth: Yeah. So it's a same thing.
[00:15:24] Mike: It's,
[00:15:25] Gareth: there is a human oversight and whether your agency side or client side, that for me is at the moment where ai.
Can't do that. And actually there's no, there's no substitute for experience there. So, you know, I fear more for the, you know, people of my ancient age are okay. Right. 'cause I, I can see, so we, we use AI for some stuff to, to try and get to things quickly. I use it, get it comes out with this thing. I go, that's just wrong.
I know it's wrong.
Yeah,
[00:15:53] Mike: exactly. Yeah. Instinctively I know it's wrong.
[00:15:56] Gareth: Yeah. Yeah. And because I've been around the block so many times, it just feels intuitive. The fear is that for people who aren't exposed to that, with a combination of AI taking away that sort of junior research jobs, and also the moving away from being in office together, those two things combined I think are gonna be.
Hard work for, for the next generation.
[00:16:18] Mike: So let's just talk about that for a second. Again, um, it was unprompted. It's not one of the questions. There's one more to go and then we'll finish Gareth, but I really am quite concerned about the, what I call the pyramid collapse.
[00:16:28] Gareth: Yes.
[00:16:29] Mike: Based on what you've said. Then just the shortcut is, well, there's no junior jobs, so if there's no junior jobs within 20 years, those organizations either won't exist or we will be completely run by machines because.
People like you and me will have moved on and will have retired or retired. The planet one of, one of the one or the other. Exactly. 20 years I've been dead, but there's no one coming through.
[00:16:54] Gareth: Yeah,
[00:16:54] Mike: because there's no junior talent that came through and no junior talent that learn from you and they don't become the seniors.
So what happens bluntly, what happens to junior talent? People that are now in their, you know, arsons 13. What happens to their generation? What does that look like in the marketing world? This isn't clearly a prediction, listeners, this is just, what do you think, Gareth? Where do you think it's gonna go?
[00:17:20] Gareth: Geez, I got, well, I got, I got no idea. I guess the, for me it'll be, it'll just be there. There'll be different jobs. So
[00:17:29] Mike: what kinds do we think? What kind of jobs do we think there might be?
[00:17:32] Gareth: Prompt engineer. Right. Someone who's learning how, yeah. There'll be like a marketing prompt engineer. They'll be, as you know, who knows?
Yeah. Yeah. But I, you look at TV shows now. Every show has got a, what is a drone shot? Right. Of sort of swooping down. But back 10 years ago, that would've been a helicopter shot. And
[00:17:52] Mike: yes,
[00:17:52] Gareth: it would've, it'd been, it'd a crew. Every single, every single production right. Apart from James Bonds. So, but it's open to everyone now.
But so who, who would've known that there's a job called Drone Pilot that it's a new job?
[00:18:03] Mike: Good
[00:18:04] Gareth: point. There'll be stuff like that, that, that comes up that we don't know about. And
[00:18:08] Mike: that's a good analogy, Gareth, that's a very good, because if we, if we were sat here. 20 years ago, we wouldn't, uh, drones wouldn't have existed.
I
[00:18:17] Gareth: wouldn't be thinking
[00:18:17] Mike: about this. So you couldn't say what? There'll be drone pilots? 'cause I'd be going,
[00:18:21] Gareth: yeah,
[00:18:21] Mike: what on earth are you talking about? What's a drone?
[00:18:23] Gareth: But I, I guess that, and maybe I'm naive, naively optimistic, but I just, I'm worried. But I, I just think it's gonna be okay. I, I would, I, would I choose to, to interpret this as excitement for the future?
Not, not terror,
[00:18:38] Mike: not Armageddon.
[00:18:39] Gareth: Yeah. I dunno. We'll, we'll,
[00:18:40] Mike: exactly right. So let's just move on to the kind of final question, which is, based upon all this, what do you see as the future for marketing agencies and do you think the model needs to change fundamentally in the next three years?
[00:18:56] Gareth: Well, I, I guess I've sort of touched on this.
I think that that evolution has always been the case. Whether it's going from media and creative together to separate, to full service, to in-house, to what have it, I guess the, the marketing agency industry. Is home to some of the biggest, best brains and also some of the most restless individuals, I guess.
Right? That's the nature of this entrepreneurial spirit. So it's gonna evolve. I've got no idea what it's gonna evolve to, but I guess it was always gonna evolve anyway because it always has evolved. And AI's just another thing to, a catalyst to, to change. So I think if execution is being commoditized, we're gonna see, um, more value placed on that strategy.
Again, I acknowledge it's self-serving, but you know, I, I hope that that actually there's, it might be that that strategy kind gets hived off to be agnostic and focus on the client's needs rather than the agency's sales structure. And then we'll be, so
[00:19:55] Mike: we'll see the emergence of, I mean there are some already, but we'll see the emerge the reemergence of like growth strategy agencies.
[00:20:02] Gareth: Yep.
[00:20:02] Mike: That are just small number of people, very high levels of judgment and experience.
[00:20:07] Gareth: Yes.
[00:20:07] Mike: Advising senior people.
[00:20:09] Gareth: Maybe that's where, yeah, back to that, the, the conversation we just had about where the, the junior. Talents come going. Maybe that's where they go. Right. So I've, I've worked, I've employed some junior people.
I think that we get to work across five or 10 brands in our business at a time. Actually, that's a great experience for a somebody who's got brand marketing. Ambitions to get a fast track into, into five or six brand positioning projects in a six month period that you do once every five years if you're elsewhere.
So maybe that's the solution. I dunno. But I think that the, you have this sort of commoditized high volume. Yeah. We've seen stuff in the past being farmed out to,
[00:20:50] Mike: it was offshore at one point.
[00:20:51] Gareth: Offshore at students in bedrooms in different countries. Well, you know, that could be just AI now, right? If stuffs a churn, high volume just to bang out, then that will be, there's a business there, but it's a low margin, high volume business.
Volume, higher margin stuff will be in the thinking, but, and there's money to be made in, in each of those places.
[00:21:15] Mike: I think that completely reinforces the kind of, the pyramid will collapse, so the paranormal collapse, because we don't need lots of junior people doing that work. It'll, it'll be done by. AI engines, so that is a problem for the industry.
It's a problem for young people, but it, I, I can't see any other way that that's gonna happen. I would've thought. I think what you've also said, the, the whole value conversation and the agnostic conversation, I think's critical. You've got to understand where you're gonna add real value to the CMO. You've gotta be agnostic with your recommendations.
Otherwise it just introduces bias. It's a problem. Um, we haven't talked about pricing models. I think that's a separate conversation, probably maybe for another time. Gareth. I think that will change. No, I think anything. No, exactly episode three. But I think anything, if you are basing your, if your agency's based upon labor-based, time-based pricing.
That model is going to die because with AI being utilized in your work, even in the thinking layer, you cannot price based upon hours. It doesn't make sense. It never made sense. It hasn't made sense for 70 years, but finally it's been broken, I think would be my summary. Gareth, what's your kind of big takeaway if you were a, an agency or a CMO listening to this?
What would be the kind of thing that you'd go away and think about as you drove back home or drove to work?
[00:22:38] Gareth: Well, if you're driving, maybe it's that, that sat nav analogy that if you dunno where you're going, doing more stuff and things just gonna get you the wrong place faster. So, you know, just investing.
Getting your thinking straight first and then, and then move to execution.
[00:22:53] Mike: Exactly right. Gareth, it's been amazing. It's been real, real pleasure. I knew it would be. You're always great fun to be with. Where can people find out more about you?
[00:23:00] Gareth: LinkedIn is where I'm hideously prolific, Gareth Turner on there, and you can see my.
Pontifications.
[00:23:06] Mike: And by the way, audience, they're great Pontifications. You should definitely follow Gareth. Gareth, thank you. It's been amazing. Thanks a lot. Thank
[00:23:12] Gareth: you, mate.
[00:23:13] Mike: Thanks for listening to Higgle, the B2B Sales Club podcast series with your host Mike Lander. Please subscribe so that you'll catch all the next episodes.