Your compass in a changing world

In this edited version of The Marketing Society’s Annual Lecture 2008, James Murdoch argues that in an increasingly fragmented media world, marketers who are in tune with their customers’ values and their own can create an internal compass to steer their companies to rich rewards.

MARKETING TO TODAY’S consumer is a hard business. Audiences are fragmented. People have no time to listen. They’re cynical, media-savvy and more clued up than ever. Long gone are the days of Thomas Jefferson, who once observed that advertising was the only bit of a newspaper you could trust.

There is some basis to all of the pessimistic talk we hear about marketing and advertising. I’ve made more than my share of terrible decisions in marketing, and I’ve been talked into, or talked myself into, some truly awful work.

But amidst the accumulated flotsam of any large company’s marketing history, I do hope we’ve learned some things about what works at News Corporation and at Sky – and perhaps what might work for you. There are a number of ideas we wrestle with and problems we encounter. We are trying to understand some of the really fundamental – indeed revolutionary – changes in global society that are happening now, and how they relate to our business, and, possibly, yours.

Societies are more connected than ever before, which means that marketing and brand communications are more challenging. But my belief is that if you grapple with the big changes until you really get them and if you develop an internal compass to steer your marketing and communications, you will be working in a discipline that is more exciting, more intellectually rich, more delightfully complex and ultimately more rewarding than it has ever been.

The power shift

We all realise that marketing to today’s consumer is less transactional than it was even just a decade ago. It’s more based on understanding shared values. It’s about working with a truly empowered interlocutor.

We are in the middle of a transformational shift in power. And when everything around us looks different, we are going to need our compasses to steer a true path.

This shift in power has many dimensions. Some are obvious. Some are less so. There is a shift from elites to individuals and communities. A shift from content controlled by a few to that created, adapted or distributed by a multitude. A shift from passive consumers – the hapless victims of some Madison Avenue three-card trick – to connected, informed and proactive counterparties who are, by and large, well aware of what you are trying to do. We know why these changes have occurred – and we know they are irreversible, and accelerating.

Connectivity in action

Connectivity is becoming ubiquitous. The march towards it is self-evident. It is already empowering consumers in a way that would have been unthinkable to our predecessors. This kind of connectivity means fundamentally that the individual becomes the agent of everything. Moving from one community to another; consuming, freely, from a wide universe of sources; publishing, from each individual to any number and any size of audience – this is the consumer of the age we live in.

This is not just challenging for marketers. Look at broadcast journalism – for so long the preserve of the state or the wealthy. It is now an option open to anyone with technology costing less than £50. When the attempted carbomber was tackled at Glasgow Airport last year, coverage on Sky News was better and faster than its rivals because of our immediate access to material provided by eye-witnesses at the scene – almost instantaneously sent from their mobiles and hand-held video cameras, to our newsroom, and then back again to homes, computer screens and mobiles. This is connectivity in action.

These people are not customers of Sky News in the conventional sense. As well as an audience, they are partners in the fundamental act of creating our product. Sometimes they supply it to us or to others, sometimes they post it on YouTube. In fact, many probably do both. But if we decline to transmit their material, it will still gain exposure somewhere.

We are constantly confronted with an explosion in the plurality of information. Conventional news programmes can debate an issue like the ethics of water-boarding as an interrogation technique, but they would never dare to show the reality. Now a journalist like Kaj Larsen is willing to undergo it and post it on Current TV for everyone to watch it on the web, and on air, and make up their own minds.

Plurality taken to this degree, brought about by intense competition, is uncomfortable for those who have a vested interest in the status quo of the 20th-century information economy. It’s frightening to them; it prompts calls for endless intrusion by regulators and governments.

As an example, a sentence or two from the annual plan of Ofcom, our UK media regulator, caught my eye recently. It’s something we should all pay attention to. Discussing convergence, Ofcom said:

‘Convergence, alongside more intense competition, can lead to complexity and varying degrees of confusion and anxiety … there will continue to be a role for Ofcom to intervene decisively to protect people from actual or potential harm whenever this proves necessary.’

Let’s be clear. The confusion and anxiety referred to is in the minds only of elites who are terrified by people taking power from them. Is it the job of a regulator to invent sources of potential harm and forestall them? All the talk of protecting consumers is just a fig leaf: what they are really saying is that competition and innovation may result in an outcome different from the carefully constructed, central planner’s fantasy about how a market might work.

In reality, our customers are both sophisticated and demanding, and they understand the media. And they are not the exception to the rule. They are the rule. People aren’t stupid, even if regulation obliges us to treat them as if they are.

Here’s an example drawn from the rules on sponsorship and advertising in licensed broadcasts, enforced partly by Ofcom, partly by the European Union.

Star Plus – a Hindi language entertainment channel – has been banned from showing in the UK the Indian version of Are You Smarter than a 10 Year Old? because the logo of an Indian mobile phone company, which does not even operate in this country, appears on the set. The regulations that prohibit this seem to operate on the basis that viewers are not only not smarter than ten-year-olds but would struggle to compete in a nursery.

Is there some grave harm to our society if our Hindi-speaking customers are exposed to the fact that a mobile phone company not only exists in India, but sponsors a game show?

I think we can probably cope with this wholly imaginary threat to our way of life.

Aiming Sky high

But the heart of this is not petty rules about advertising. Those rules are simply a consequence of the establishment’s much deeper discontent with a free media.

And that is really just an old tune played by new musicians. The delight that British newspapers have taken in upsetting the governing elite has rankled with the powerful for decades. From the 19th-century Times, thundering against the mismanagement of the Crimean War, to today’s Sun, exposing the failures of bureaucrats to deliver safe streets and clean hospitals, the willingness of British newspapers to take on the authorities has been as characteristic as the elitist outrage it has always evoked.

It remains the proper job of the media, as a campaigning journalist once observed, ‘to comfort the afflicted and afflict the comfortable’. That’s wise, and it’s right, and it’s part of our compass.

The elites of course do learn from their mistakes. The advent of radio and television allowed them the opportunity to exert the kind of grip, through control of access to spectrum, that had never been possible with newspapers. They created a state system that both stifled innovation, but crucially institutionalized a collective groupthink in broadcast communications. So we had for many years a vibrant and diverse newspaper sector, but a stagnant television oligopoly that was bland, uncontroversial and deferential, if not to politicians, then certainly to the bureaucratic zeitgeist of the day.

So the response from the establishment when Sky launched was partly fear of what might happen now that more choice was available, and derision because no-one could possibly want anything other than four channels – three state-owned – all saying much the same thing.

As we know, the reality turned out to be rather different. And although others must judge, I would argue that a wholly commercial television company, entirely reliant on the choices made every day by its customers had to be much more innovative and in tune with the values of the nation from the very beginning. It was, and is, answerable to its customers in a far more direct sense than provided through a hypothecated tax, a board of trustees or some other abrogation of accountability.

That’s not the way some critics argue. They believe that the increase in the bandwidth and connectivity that enables huge choice for individuals is a process that does indeed transfer power. But they see this transfer as from elected politicians to various – they would say nefarious – media and communications firms, which have become the new powers in the lightspeed tumult of our contemporary information economy. This is their argument against consolidation and for greater regulation – largely of traditional media – in a hyper-competitive environment.

I think we can challenge this and show that it is not only wrong on the facts, but dangerous in its implications.

First, it ignores the absolute power of competition. What makes a media company successful is how it copes with competitive markets in which people have a choice. Competition today is at a more intense level than it has ever before been because the barriers to providing information in the virtual world are so low and the choice of provider nearly infinite.

Incumbent interests – private or state-sponsored – may not like it, but people remain thirsty for choice. New providers are constantly breaking through. But also because it ignores the bigger picture. Without a free, unmolested media there can be no genuine free society. A democracy can only be effective and judicious if its decisions are clear to the general public, debated, challenged and scrutinised. As the Romans established, the fundamental question to understand when examining any decision is ‘Who gains?’ A free media allows that question to be put.

This is the context in which I think it’s best to look at News Corporation. It was born from a struggle to make a success of a single newspaper in Adelaide in the face of an established, richer and aggressive incumbent. We grew through a mixture of risk, investment, and dedication that revived some once-great but ailing newspapers – like The Times or the Sun, for example – and gave them a future.

We recognised the complacency that infected broadcasting in the US, UK and other markets, and we shook them up.

Connecting with customers

The basis of our growth has never been the creation of a monolithic view of the world. Our compass has been about respect, empowerment and choice. We are restless, we are questioning and we are individualistic.

Our values spurred us to pitch Homer Simpson, against Bill Cosby, on Fox Broadcasting in primetime. To launch TG24 against RAI and Mediaset in Italy. To make the New York Post what it is today, and The Wall Street Journal what it will be tomorrow.

At every step of the way we’ve learned a little more about our customers and what they want – and now, increasingly, what they believe in. We’ve learned through experience what difference the new empowered world means for our relationship with customers. This is not a question of scale. It is a different way of existing.

At first we perhaps saw technology as a great opportunity for brands to talk to more people in the same old way. But that was wrong. Connectivity doesn’t just mean you get a lot more chances to deliver messages about customer service and pricing plans. This isn’t onesided. It enables people to talk back.

Etiquette queen Miss Manners once suggested that if we stopped communicating to each other we might be able to have a conversation. In fact, we can have an almost infinite series of conversations. This changes our whole idea of marketing.

That’s why complaints about the attention deficit of modern consumers are in reality admissions of something gone badly wrong: a listening deficit on the part of brands. Trouble cutting through might have more to do with the fact that one’s brand values aren’t in tune with those of the modern consumer.

Of course, the idea of values-based marketing and dialogue with the customer is not new. But we’re all guilty of talking about it, and then still falling into the familiar routines: the 30-second spot, the great poster, the PR stunt – the conventional tools of commercial sloganeering.

There are a handful of campaigns that are driven by real values – one example is Dove’s campaign for ‘Real Beauty’. They are famous because they are so unusual. Anyone who has seen the execution of ‘Onslaught’, the film that focuses on the pressures that a young girl faces from the beauty industry, can see that values-based, challenging marketing is extraordinarily powerful.

And the fact that this ad was made by Dove, a leading participant in the same industry, is not a weakness – it gets people talking and thinking. That level of engagement is great for any brand, because it creates the opportunity to learn things about how people think and about how people feel. And it creates trust with its customers.

Conclusions

Part of trust comes from good old-fashioned values like customer service, transparent pricing and treating customers fairly. These are fundamental. But people rightly expect more of companies these days, and we should be ready to respond. If we can consistently show how our values and our compass guide our businesses then we will stand out from the superficial corporate makeover or the cynical marketing slight of hand.

Customers may be concerned about education, or health, or the environment. So are we. They may worry about crime. So do we. And they expect their chosen brands to be aware of these concerns and respond to them. We should all want to work in places that hear that and do something about it.

When we take direct action we get a powerful customer response. On a Saturday in January, the Sun offered a free energy-efficient light bulb to every reader. Four and a half million light bulbs were distributed. And the paper sold over 400,000 extra copies that day. Readers recognise we are engaging with them on issues that matter deeply.

The future belongs to brands that do more than pay lip-service to real dialogue and recognise that their customers want them to believe in something.

It’s tough out there at the moment. But choppy waters are usually those times when innovation makes a difference and outstanding marketing has a real impact. And the way in which society is changing means that good marketing people are going to have a seat at the top table – they are the people that companies will need to succeed. People who respect and listen to their customers. People who see that they can create value by understanding values. People who get freedom and celebrate it as an opportunity for genuine dialogue. People who have a compass and steer by it, in good weather – and in bad. These are the people who understand that there has been no better time simply to do their business better.

I think we all realise that marketing to today’s consumer is less transactional than it was even just a decade ago. It’s more based on understanding shared values. It’s about working with a truly empowered interlocutor.

At first we saw technology as an opportunity for brands.