Colin Gillespie is the Chief Strategy Officer and co-founder of All Response Media based in London with clients throughout the UK, Europe and the USA. They spend around £200 million per year on customer acquisition on TV, digital and offline.
Andrew Veitch: Thank you for joining me on the first ever Joy of Marketing podcast. We’ve got some great guests lined up. And we’re starting with one of the best. Colin Gillespie is the Chief Strategy Officer and co-founder of All Response Media based in London but with customers throughout the UK, Europe and the US. It’s an agency that focuses on customer acquisition and measurement, rather than just spending as much of the client’s money as possible.
AV: In my marketing career, I recruited more than 1 million ecommerce customers, and Colin was a really big part of that. So thank you, Colin, helping me with TV, but also with some offline. So I think it’s pretty appropriate that he is guest number one. So welcome to the podcast.
Colin Gillespie: Thanks very much, Andrew. And yeah, no pressure on the billing. Having helped you achieve the success you have thus far, hopefully, there’s going to be a couple or three nuggets that I can share with your engaged audience. So yeah, many thanks and honored to be here. Thank you.
AV: Thanks. So let’s, let’s start by talking about cash. So I mean, how much money do you spend on customer acquisition for your clients?
CG: Yeah, good question. So first of all, obviously, I always position the money spent as a money that we’re investing on behalf of our clients. So talking about our investment portfolio, using that as the analogy, I guess our three year rolling average, billings is around £200 million, which is a lot and of which circa 50% is TV, around 40% of our investment portfolio is digital media. And it’s everything from search all the way through to Facebook, social, etc. And we also still invest in the old fashioned stuff, called press, radio and out of home, which makes up the rest, but there’s no doubt that TV and digital as is the way certainly for ecommerce businesses, and certainly those in the performance space, that is the thrust of what we do.
CG: And you talked about clients. I think the thing that binds without a doubt the modus operandi of the clients that we work with, but the ones that we work best with, are those who enjoy counting stuff. Because if you can stuff then it means that you’re quite happy to be accountable. And you can also optimize as well. But um, yeah, I mean, you know, going back to that trading, investment portfolio analogy, it really is a light portfolio of investments that were that were trading and looking to optimize, on a near time real time basis.
AV: Yeah, I would say as a purchaser of marketing, the thing that I think I find helpful is I obviously started out as most people do online. So I was, you know, doing my Google pay per click. And then I began to move to TV and offline. And I think that was one of the areas where you actually really helped, because, obviously, when you’re doing online, you can just log in and see exactly how things are going. Whereas when you move on to some of these other media, that just gets a little bit trickier.
CG: Yeah, absolutely. Yeah. I mean, and certainly, it’s a good interesting point, you raise I the point at which one jumps off from a marketing perspective, when you move from Digital to other channels. And I mean, I guess there’s a number of 101’s or a checklist, I should say that you might want to want to look at. And I’d always say the points at which you believe clearly that the first KPI being the cost per visit, if you’re familiar with, you know, the digital sphere, the minute you believe your cost per visit, can be positively enhanced by above the line activity, one because it actually rises the tide and the intense signals that digital obviously is very good at harvesting. If by doing more above the line drives a lower digital marketing return or a higher digital marketing return but a lower cost, then that’s great. But equally, if above the line in isolation can be even cheaper than your digital, then you should do it.
AV: And actually just to interrupt briefly. So just for the benefit of listeners that maybe aren’t familiar with the terms above the line and below the line, I guess above the line would refer to more traditional brand style advertising where there’s maybe not an immediately obvious return.
CG: Correct. Yeah. So I mean, above the line, in typical speak would be everything from press through to TV, radio, ads of home, even the sensors to degree whereas below the line, actually, as well as digital one could also include direct mail as well actually thinking out loud, but but just talking about that test, the first sniff test as I guess one should always be thinking about re how you move digital or digital marketing through to a more omni channel. approach. The sniff test some is, is where I say to if, if you’re in a space where you rely heavily on generic traffic, but you’d rather get more brand traffic, because brand traffic, by definition should be cheaper. Certainly, when you’re working with Google anyway, then that should be the point at which you really start to consider what a bumper line could do for you, if you find that the cost of generic traffic and buying generic clicks, or generic audiences, is such that it makes your business to scale efficiently anyway, and makes it quite restrictive. So we find and the thing that I often talk to clients about, which gets a wry smile, or a frown, if I’m talking to Google, I always talk about helping advertisers avoid the Google tax. And I could also broaden that to say, avoid the Amazon tax as well. And when I talk about that, really, what I’m saying is all your above the line activity is trying to achieve is more direct traffic straight via the browser or the contact center, and but straight into your business and not via one of the intermediary platforms who ultimately charge you for it
AV: And I have to do that that price has also rocketed. I mean, if I think back to I guess, when I started with Google, which would be I don’t know what that must be 14 years ago, or something like that? I mean, Google at that time was incredibly cheap. And I mean, the main thing that has happened is that the price has inflated, like, where am I going to go with this? Similarly, inflated, like, Tesla’s stock price. And so while in fact, funnily enough, when I originally started with Google, I started because it was so cheap, compared to offline media. Whereas I see that has undoubtedly flipped around dramatically over the past decade.
CG: And definitely bucketing Amazon with that. Albeit, the nuance with Amazon is that ultimately, they own the customer relationship, as opposed to you owning it direct if the traffic is landing within your ecosystem. So disintermediating, Amazon, actually, from a lifetime value perspective, is super important. You want the customer landed with you so that you can monetize them, over the duration of that commercial life, and not Amazon. The other reality is certainly in the e-commerce space is that Amazon is probably an even better search engine for consumers than Google. So de facto search for products actually is increasingly Amazon, and less Google. So you do need to do different media.
AV: But absolutely, as a consumer myself, when I’m looking to buy, I would definitely say I use Amazon a multiple more times than I use Google.
CG: Yeah, yeah. So So I mean, back to your your question, you know, re understanding the point at which above the line becomes interesting is interesting when one can measure and be in the weeds as much as you are in digital. And certainly, we’re one of a few agencies, I’d like to think we do pretty well. And where we can effectively count, above the line ROI, to the same degree of accuracy as we can do and for digital, and obviously, within that as well, just to throw another complication in there. Or at least something that one should be aware of, is then the increasingly difficult space. When you’re thinking about attribution between channels as well.
AV: Yeah, I remember speaking to a customer at Diet Chef and asking her “Where did you hear about my company?” And she said, “Well, I saw an advert in a magazine, then a friend mentioned it, then I saw something on TV, then I put it into Google.” And you know, where do you actually attribute a journey like that.
CG: Yeah and that that I think, actually is, I mean, it’s one of life’s or marketing’s greater mysteries. But actually, sometimes I think it can be overplayed, certainly for businesses who are thinking about scaling and scaling quickly. And I think it’s overplayed because you’re always looking for last click attribution. consumers don’t think in the way that marketers would like us or would like consumers to think, can we bucket consumers in a way that makes it easy for us to contact tribution? Well, that’s not a consumer’s job. Their job is to, as you say, see a TV ad which might prompt some desire, they might see something in print, which reinforces that desire and might be actually closer to the points that they’re in market, they may actually hear a radio ad, we’re actually at the point at which they are in market and then they go and do a Google search, which ultimately harnesses that intent. And all of these things, it’s fine for them all to work together. So again, I’d always say when you’re thinking about how you lay these channels on, do not forget the aggregate effect of the cost per that you’re looking to achieve for sure understand what the micro slices are delivering. So if you can make a fairly accurate attribution as to what TV is driving, or print or digital, etc. But more than anything, just understand the math To menu spending in aggregate, and the amount of sales you’re making in aggregate, and as long as that number first of all lines up, then you’re in the right place.
AV: And I spent years trying to work out exactly what was driving what. And I think ultimately I said, Well, I’m spending money on advertising, my sales are going up dramatically. So it must be working. And, and that’s maybe…
CG: That’s the first sniff test. I mean, we’re also gets interesting though, is, and this will depend on how contested your market is from a competition points of view. Because clearly, if you’re in the motor insurance space, then your your requirement to spend a bucketload of money above the line, because it’s such a highly contested market. And from advertising perspective, is very different to a market where actually you’re the only guy in town selling that product or that service. And which ultimately, as I said, plays into you know, how contested is your generic space versus your brand space. And that’s where you can be smart, and we’re creative. And equally what you can do with Google and how you run your PPC strategies. That’s how you get started to get the smarter thing. Which is ultimately outfoxing your competition.
AV: I mean, tell me about it. One of my competitors at Machine Labs has raised $150 million. And it’s spending a lot of it on on marketing. So trying to go into Google auction, head to head with $10 billion companies, I think it’s fairly easy to see who’s going to be the winner of that contest. It’s not going to be me as the little guy is it?
AV: So tell me, do you think there’s a I don’t know, you have a lot of e commerce and direct to consumer clients, well actually it is probably the bulk of your business isn’t? Would you say there’s a particular category that is doing well at the moment?
CG: Yeah, I mean, everything subscription based, I need to couch this carefully and subscription based businesses do well, because ultimately, you get to understand lifetime value, which means that you understand what you can afford to pay to recruit that customer in the first instance. So a subscription based model definitely gives the agency if you like, or the marketing team on the client side, a few more levers to play with because you understand lifetime value, and therefore you understand what the cost of acquisition should be. You’re so more instinctively tuned to what churn metrics, what good churn metrics look like, and strike retention, average revenue, and all that sort of good stuff. So subscription as a platform, I would say is definitely one that’s easier, I’d say to get to work above the line, in terms of verticals, in particular, though, and sort of trying to think of it not purely through a COVID filter, but the COVID filter probably wins out. Definitely. I mean, from what we’ve seen and not in our business anyway. Those who are leaning more into spend rather than leaning out to spend we’ve got a few in the in the pet food space with Bella and Duke, that’s doing really well and food delivery.
AV: Mark from Bella and Duke is actually going to be a guest on this podcast later in the series.
CG: Perfect. Well, I hope he’s got something good to say. So yeah, so it’s a free delivery, pet’s health care. I mean, essentially, you know, things that can be delivered to the home and door that which differentiate disintermediate the need to actually go out and mix with lots of other people. That’s all working really well right now. But definitely from a from a business mechanics point of view. And subscription based models and app download models are still working pretty well.
AV: Sure, just as you’re on subscriptions. I’ve tried, I think three separate products, selling them as one off and selling exactly the same products as subscriptions. And I think in each case, I found that the cost of acquiring a customer when it was a subscription was roughly double the cost of acquiring when it was one off. On the positive side though, although it was twice the cost to get the customer with a subscription customer once you have them. They do spend more.
CG: Yeah, exactly. So so so there I mean, you could be talking about and this definitely is the genius in marketing, I guess is I mean, you can still have you know that that one off purchase as your friends your first proposition, but clearly upselling to a subscription. subscription doesn’t necessarily have to be front and center but definitely something with recurring revenue. However that’s baked in, whether that’s baked in after they’ve landed on the first sale or actually to generate the first sale. But you’re right I mean, there’s definitely more room from a customer acquisition perspective, if that’s actually baked in at the start, because then you understand what the value is.
AV: Yeah. And also, one of the great things about your role is you see a lot of different companies. So what would you say? What would you say? Are some of the successful strategies that you’ve seen them use at moments?
CG: Yeah. Okay, so I’ll answer that by telling you what my my normal pictures when I want to wind up Google in a friendly way. And I always talk about the opportunity to run TV as if it were Google. And if you were able to run TV as if it were Google, then surely we should be buying more TV. And if I can control TV in the way that I buy Google, then surely I should be buying more TV because I have that level of insight. I have the accountability, I have the control. I have scale. And obviously, there’s limitations within how easily it is to optimize. But there is an opportunity to optimize in campaign. So what I would say is this, where we are seeing increasing success actually is the medium of TV, amongst ecommerce clients. And that’s ecommerce clients, not necessarily all of those who who believe they’ve maximized digital, and therefore, what is the next thing for some of the brands that we’re working with? There is still an awful lot of room to maximize opportunity across the full ecosystem, if you like the digital ecosystem, and we’re helping them to do that. Because that again, there you know, there are a number of interesting ways that one can enhance your return via the Google stack, particularly, which we’re massively invested in as a business anyway. So I mean, Google is a friend of me, just to put it out there that they’re not an enemy. It’s definitely a frenemy. And, but certainly the opportunity that TV and the advances that TV allows lots of categories to compete in a way that they perhaps didn’t think was possible, because there may well have been a myth around the cost of accessing TV, the lack of ability to control and, you know, visibility of what ROI looks like, That’s not true. We can we can mythbuster that. And then the other thing is obviously, creative as well, you know, the idea that the cost of creating assets for TV requires a Ridley Scott esque type production that needs to be in the Caribbean for at least a month into when that’s not true.
AV: And that is something that has plummeted. I mean, when I started out, in fact, I can tell you my very first TV advert, and they spent, I think, 15,000 pounds on the creative, and then 5000 pounds in the media, so you wouldn’t have done very well. But I think now, you wouldn’t even need to spend 15,000.
CG: Yeah, on creative. I mean, we work with a number of really good agencies, whose raison d’etre is getting brands onto TV and using very much the sort of that, okay, the answer perfect, but I mean, there’s definitely more of a momentum around done is better than perfect, safe, it’s about testing the efficacy of the channel, which allows you to scale which then hopefully, you’re getting positive ROI, or at least a story that can show where positive ROI, when it will land, then you can reinvest more, we work with a lot of these guys. And they’re making ads typically Now, depending on whether it’s animation, or you know, live action, but you get a really good ad for between five and 10k. And that’s, and that’s really good production value.
AV: And some of the best adverts can maybe just be a customer talking about the product, or a description of the product. I mean that and that is something that is fairly inexpensive to do.
CG: Yeah, and actually, so one of the 101’s I always look out for when I’m reviewing, creating, by the way, my disclaimer on this is that I don’t pretend to be good with the crayons, or the words when it comes to reviewing creative. But certainly from a performance perspective, there’s a few things that you do need to look out for. And one of the things that that I do look out for and I have been for the last couple of three years now is ensuring that clients are adding funnily enough a trustpilot logo to there and because that begin to do Andrew, some of the things that you’ve just mentioned, ie testimonial, and trustpilot is a really easy, easy visual way of saying, This is what our NPS looks like our NPS score looks like. And so for me, that’s that’s a one on one, but testimonials,
AV: And if I can just get a sales pitch in here briefly, if you want to measure NPS, please do install the Machine Labs app. There you go. This is why I work in marketing!
CG: But you’re right. So it’s a creative, creative and medium proposition or have to work together but none of those things, you know, to your question as to where am I seeing opportunity and growth COVID has definitely made TV even more viable for even more brands, actually. I mean, just put into context we had in 2020, our agency had the best year ever since we started for onboarding new TV advertisers, we had over 30 new TV, advertisers come on board during COVID, many of which are still on. And many will go on to actually survive and thrive outside of COVID, as well. But in terms of just that point to where points of entry, and now’s a good time, and TV offers a number of economies of scale that you just can’t get from Digital.
AV: And I’ll say the other thing I like about TV is just, it’s quite incredible the way your company is viewed. I mean, if you spent $100 on an online ad, or $100 on a TV ad, I knew immediately which one generates more trust. Yeah. Okay, so just moving on, then. This is one of the questions I love asking, do you have a controversial opinion on marketing?
CG: Oh, good question. Okay. It’s not controversial, but um, it’s a challenge that I hear from a number of our brands and outside of our agency cohorts quite a lot, which is, what is the point at which you move from maximum performance through to brand awareness. And, and why jars have me slightly is that there’s always this conflation, that they’re talking about brand building. And they they sort of conflate that with meaning that one will follow the other if we build brand awareness, then actually the sales will follow. And my my hypothesis is, that definitely is not the case, you can build awareness around something, but it doesn’t actually mean that you can sell more of it. So the idea that brands are built from this top down approach, rather than bottom up, for me is the thing that I have probably the most conversations around with, with senior marketing professionals most of the time, because the feeling is no one needs to come top down. And I’m saying no, you need to go bottom up because brands are built the most of the brands that have the most longevity, certainly from a customer point of view of brands, where you have a number of advocates. So back to what you’re saying about NPS, Andrew and you know, I mentioned earlier about trust, find lasting brands are built from the bottom up, not from the top down, you don’t need to throw out your dr playbook if you like your performance playbook in order to pursue brand. So it’s not controversial, other than when you read all the marketing handbooks that are out there, they say the opposite, they say brands are built top down. Whereas I’m my my hypothesis is that brands are built bottom up, not top down.
AV: And I agree completely. And I mean, and the sort of the rule of thumb that I’ve always followed is spending 10% to 20% of my marketing budget on sort of brand activities that I think are good things to do, but I can’t really measure and then spend the remaining 80% to 90% of the budget on just really proper acquisition of customers. Yeah, and probably, you know, maybe start at that 90% and 10%. And then as the business gets more successful…
CG: But there’s definitely a balance, there’s definitely a balance, because again, you know, if your business is one which has a high street presence, or a bricks and mortar type presence, then you have omni channel exposure anyway, as opposed to being a pure play brand. I mean, one of the things you said, made me smile when you’re talking about, as you know, if you’re spending as consumer, what seems to have more credibility, and if you think of the amount of dropshippers that exists in the digital sphere, in Facebook, particularly that you just never see them above the line. And you know, you they would stick another badge on their on their proposition the week after, and it would be no different. You just can’t do that with brands that are built on TV. So there’s definitely a sense of, of trust. But you do need to acquire customers, because acquiring customers gives you advocates and advocates bring more customers, basically.
AV: And also, more importantly, if you don’t acquire customers, your business is probably going to come to quite a sticky end anyway, isn’t it?
CG: Absolutely. Absolutely. Yeah.
AV: So is there anything that you’ve always wanted to be able to do, but weren’t able to?
CG: Not really, other than I would like I’d like actually our relationship with and marketers, I think we’d all probably like our relationship with Amazon to be even more partnership based and less of that closed ecosystem. So just to put that into context, if there were more data available from Amazon, that they were prepared to share with their advertisers. Would that allow us to spend even more money above the line driving even more money to the Amazon ecosystem? To which the answer is yes. Because consumers are fed you know, we can’t dictate where consumers go, we can give them a steer, but we can’t dictate exactly where they go. And at the moment, Amazon, I would say, of big econ platforms, they’re the guys who share the least amount of data with their paying customers.
AV: And they’ve suddenly been closing it down. I mean, when I started, you could you could put inserts into Amazon deliveries, which was fantastic. And then that has been closed down. Inserts I know are now only from Amazon, you’re not allowed to go in as a third party. And I also used to advertise Pay Per Click on Amazon that took that took the visitor out of Amazon to my site. And I think that has also been pretty much closed down now too.
CG: I think so.
AV: They seem to be moving in the other direction.
CG: So I think yes, I think I think with them just because they are, they’re as big as Google, or bigger, depending on the type of search, you’re thinking about. If there was just more open log level sort of files being shared, then I actually think there’s more that marketers could do, to the point where actually, if you had an Amazon inside sticker, you know, so we talked about Trustpilot being a sticker, but with the equivalent Amazon sticker be, if one way were to put put put it in an advert. I think that could be quite interesting. But at the moment, there’s just not enough data being shared by them, for us to want to double down on driving more traffic into their ecosystem, because we just don’t know quite what the efficacy is, other than they hoover it all up.
AV: Okay, I will say as someone that has put some of my savings into Amazon and I’ve actually been quite happy.
CG: All the benefit?
AV: Yes. Okay. So the question I am ending up my podcasts with is: tell me the best advice you’ve ever been given.
CG: So it’s probably more soundbites, the pictures picked up rather than advice per se. That my main one, and it’s one that Unfortunately, most of my staff hear me rattle on at them about a lot of the time. But I was talking about this concept of speed winds, and the speed winds thing is something Andrew, you’ll be very, very comfortable and familiar with any way, which is, speed wins means it’s okay to fail fast. But we need to do really quickly. So you know, that I’m better than perfect swing, speed, genuinely no matter time speed normally wins out. So I would say adequate, quickly, as long as you can measure equally, don’t act quickly if you can’t measure because then you can’t actually see what the outcome of those actions are. But there’s definitely speeds when thing I think one should be very cognizant of the other thing as well, I really do believe in actually is this idea that you can’t have a goal without a plan. Because if you have a goal without a plan, and ultimately must be dreaming, what that what that forces you to do then is to think about what the KPIs are, if you were to ladder them on top of each other, that come together to actually hit ultimately, that that goal, basically, how do you do write the plan, each have number KPIs, those KPIs are ones that you can then start to tick off. But quite often, you know, you’ll see you’ll see things come through, and or a brief and you know, the brief and the goal of the brief is, wow, okay, and then, you know, for me, I might impart what it is the marketing side or the advertising side, that we control, what that could contribute to the goal. But you also understand that there’s a whole ton of stuff that we just don’t have an impact over the agency, which advertiser needs to be cognizant of i.e. journey, usability, or that sort of thing, accessibility, etc. So yeah, those were the two things for me, I think speed wins goal without a plan. And then the last thing actually, it’s something that you said also earlier, which is marketing wins, and I’m a genuine believer that markets it you can market anything to anybody. I really do believe that marketing wins. So there’s, there’s there’s nothing that you can’t move if you don’t have the right people around you from a marketing perspective.
AV: Okay, well, that’s fantastic note to end on. So thank you very much. I’ve really enjoyed that conversation. And for listeners that want to get in touch with you, what’s the best way for them to connect?
CG: So my LinkedIn profile will just be under my name, obviously, Collin Gillespie. Yeah, find me there. And I’ll be delighted to have a conversation with you.
AV: Well, fantastic. Thank you very much for joining us. And as Colin mentioned, NPS or Net Promoter Score is a valuable thing to track. It’s kind of almost a bit like, you know, your BMI. If you’re, if you’re it’s just one of these things. It tells you a lot about your general health as a business. And the Machine Labs app is a great way to do that.
AV: So search “Machine Labs” for more details. See you next time.