5.0 When Marketing works

Do you remember when scientists discovered a new type of water?

Ice, liquid, vapour – they’re all types of water. This was a new one.

In the early 1960s, Soviet chemist Nicolai Fedyakin of the Institute of Light Industry in Kostroma was conducting experiments with water. Building on the works of other scientists, Fedyakin made an unexpected discovery: by condensing water in a very specific way, he was able to separate pure water into its regular form and a mysterious new oily substance. This new form of water was ten times more viscous than normal water and 40 percent denser. It had a different freezing point and boiling point and, unlike normal water that expands slightly as it freezes, this form of water actually became denser. Fedyakin’s experiences had been conducted with sterilised quartz glass tubes and pure water vapour, so his logical conclusion was that this substance had to have come from the water itself and was thus a new form of water.

Fedyakin’s research was published (in Russian) in 1962 and was made broadly available to the world in 1966 in the English Faraday Society. After some initial scepticism by the scientific community, Fedyakin’s findings were repeated first by British researchers and then by American. In 1969, the United States Office of Naval Research, part of the Department of the Navy, hosted a symposium on this new type of water with the stated goal of ensuring that America did not fall behind in this new area of research. American Cold War paranoia meant that no one wanted another bomber gap or missile gap as had been the case a decade earlier.  A Democrat called John F. Kennedy had won an election the last time that happened. Getting ahead and staying ahead was the name of the game.

Further research into the mysterious substance yielded yet more curious properties. The limited numbers of samples that had been created didn’t match spectral analysis of molecular structures that scientists recognised. An article in the June 27th 1969 issue of Science magazine used the name ‘polywater’ for the first time to describe this new form of water, and within a few weeks articles on polywater appeared in the New York Times, the Washington Post and the Saturday Evening Post, among others. The US Advanced Research Projects Agency, which later became the Defence Advanced Research Projects Agency – or as it is sometimes better known today, DARPA – was soon awarded a grant to mass produce polywater. In 1970, nearly 100 research papers were published on the substance.

Coincidentally, in 1963 the author Kurt Vonnegut – most well-known for writing Slaugherhouse Five – penned the book Cat’s Cradle. In this novel a new form of crystalline water is discovered that is solid at room temperature. While not really explored as a weapon in the book, the premise was that a small amount of ice-nine – as the substance was named in his book – could act as seed crystal. Drop a small sample into regular water and it quickly converts it into ice-nine. The military benefits were obvious – why deploy troops to wade through a swampy marshland in a potential conflict when the water in the swamp could be converted into solid water? A swamp that was previously considered strongly defensible by an enemy could be quickly transformed into a sheet of ice-nine allowing for surprise rapid ground assaults. Fantastical, but still fiction, right? Not so– it appeared when polywater was discovered.

And so it’s time for the obvious question: you’ve heard of water ice, you’ve heard of liquid water and you’ve heard of water vapour (also called steam), but how come you’ve never heard of this amazing plastic water? The same chemical building blocks as the substance that covers over 70% of our planet’s surface and makes up over 70% of the human body, yet with significantly different thermodynamic properties and many potentially exciting new applications. Surely this changed the world? You’ve got one guess to work out why you haven’t heard of it.

That’s right: it didn’t really exist.

Further research into polywater showed that it wasn’t quite what it seemed. Polywater was supposed to be formed by converting pure water into a new molecular structure. How, then, did tests show up the presence of calcium, potassium, sodium and chlorine? Pure water should be pure water; you can’t magic other elements into it. Where had these contaminants come from? Well, remember the original spectral analysis that didn’t match any known molecular structures of water? It turns out that even though the source samples of water may have been pure, something else must have been introduced later. When further spectral analysis was completed, the contaminants seemed to be an almost perfectly matched for another substance: human sweat. On further review of the original Russian publication, it turned out that references to contamination were identified even at this early stage. Most likely, the literal and actual sweat of analysing what would go on to be known as polywater ended up being a direct contributor to polywater’s existence.

In retrospect, you might wonder how likely it was that a new form of one of planet Earth’s most common molecules had been missed by science. How likely is it that people missed something so obvious for so long? Not very, you might think, but ‘obvious’ is subjective. Before Leonardo Da Vinci proved it wasn’t the case, it was obvious that heavy objects fall faster than light ones. And even though elements like carbon may appear to be almost as common as water, in 1985 an entirely new molecular structure of pure carbon was discovered – buckminsterfullerene. This new type of carbon forms geodesic structures. It can be found in both in space within planetary nebulae and within common fireplace soot. But until it was discovered it was only theory.

So why did people believe polywater was a real thing of which it was worth investing in the acquisition? Countless research papers and research dollars were poured into something that proved to be a work of hope rather than science. What happened in the collective minds of intelligent people that made them pour millions of dollars into a fiction? The world of science and innovation is full of dreams and shattered hopes. Was this just part of that or was this an exception? Of the many outlandish ideas in circulation during the heady years of the 1960s, why did this one make it through from the background and secure investment where others went nowhere? Sure, it wasn’t the biggest false lead to come out of the 60s and it didn’t leave much of a mark on history, but compared to the many ideas that have been entirely forgotten and made no mark at all, it was at least a real, if temporary, thing. Polywater research was first published in 1962 and took years to be picked up. Why did it happen then? And why did it take nearly a decade to be recognised?

Perhaps today a surge in interest for a mis-identified new phase of water might appear quaint. ‘How little they knew’ we might think. ‘How easily fooled they were.’ Of course, hindsight has a way of making the unlikely seem inevitable and the alternative seem impossible, and the complex system of human psychology and group dynamics that produced polywater is nothing new and has not gone away. The polywater story plays out a thousand different ways every year. The zeitgeist catches on to an improbable idea that goes on to dominate, only to sooner or later be replaced by another idea. Tulips. Railways. Meme stocks. NFTs of pixel art. Ideas powering desires and ambitions that rise and fall. Some rise for longer. iPhone. Some burn brightly and are rarely seen again. Skype. The best are sustained by planned, intelligent strategy, storytelling, inception and marketing.

Polywater took years to gain recognition and when the idea was debunked it faded quickly away. But Polywater had no marketing team behind it. No media planning, no brand work, no social presence. How often has great product development been failed by lack of a solid go-to-market? How often has a great brand message fallen down by having nothing behind it? How often does demand get forgotten by brand or does brand fail to realise they’re actually trying to sell a product?

But Polywater still established itself in the mind of an audience. Ideas, when they take hold, grow to define people, organisations and nations. Marketing is idea creation. I need to. I want to. I feel. I like. Great marketing is about connecting ideas to each other in seamless engines of mindset-change to achieve a goal. The greatest marketing does this at scale, sustained over time and integrated with sales. Great marketing is a science. But to paraphrase the great Arthur C. Clarke, any sufficiently advanced science is indistinguishable from magic.

Brand and demand

Lego, as almost everyone knows, makes self-assembly models from plastic components. I loved Lego growing up. I know a few people who still love Lego as adults. It’s a product that can transcend age, social and cultural barriers. But since most people grow out of children’s toys at a certain point, how did they manage this? Lego nearly went under in the early 2000s, after all. How do you make a children’s toy brand relevant and resonant to a broad audience. Well, you have to make your audience buy into your brand. What does Lego mean to you? And how do you communicate that?

In 2014 The Lego Movie hit cinemas. It would be easy to be cynical about a toy company making a movie about its own toys. I mean, its pretty obvious that their goal is to sell you their stuff, right? But, probably against the odds The Lego Movie did something unexpected: it was good. Over 100-ish minutes it told a story with a simple, unexpected, tangible heart: you’re never too old to play. It took what the brand stood for on paper and did something to realise it. It make a connection with its audience that didn’t have to push product or pricing or features at all but simply showed how its products could be enjoyed by anyone and that imagination and play only stopped when we stopped imagining and playing. That film made over $470m. The Barbie movie similarly managed to take simple ideas about growing up and execute them as incredible brand movements, and through both of these, and whenever you see brands do this well, you get the sense it went well because the brand genuinely cared. The Barbie movie made nearly $1.5 billion.

And that’s before they got to turning on the demand engine to sell the actual product they produce. Putting aside the money the film made, given the choice of investing the film’s development budget in just running more product advertising or creating the film, which do you think netted the most new product Sales? Given the near ubiquity of Lego through film, video games, television and toy shops – even at a time when retain is struggling – lets just say they made the right decision going with the movie. Yes, it was a big investment, but sometimes more digital ads for products just won’t cut it.

It’s tempting when discussing great marketing to look at discrete marketing activity and call it great. But do your customers see your social media presence and applaud your social media team? Or the brand team that created the visual identity and then governed its use through that social media channel? Do they laud your Campaigns team for the ad that reminds you of the social post? Or the digital media team that ran it? Or the content team that developed the assets for it? Or that same brand team that did more governing on the brand identify. Do they idolise your promotions team, revere your events team, worship your field teams and venerate your global teams? Or, do they see your marketing and just think ‘cool, that looks good’?

The marketing experience that a customer receives is the product of a marketing function. A company brand. A social media presence. Digital advertising. Promotions. Events. Digital advertising from promotions. Social media for events. In the company brand. They are all the outputs of marketing teams. All elements are interconnected and all connections invoke dependencies. If the brand does not support effective digital advertising then promotions may not succeed. If social media does not drive engagement then the events may not succeed and brand equity may not grow. To understand how marketing works – that is, how to activate the disciplines of marketing – we have to understand how the value chain of the Marketing function works, and in many organisations it is the operational model of the Marketing function that actually empowers marketers for success or failure.

Whether you work for a global megacorp or you work as a sole trader, you exist for the same reason as everyone else: to create customer value and monetise it for your investors. Think your product, industry, service, solution, team, brand or model make you unique? Think again. You’re exactly as unique as everyone else. You operate as part of a value chain with your customers and suppliers. Your agencies and vendors are another part of your value chain much as your internal functions and sales people are. And customer value and investor returns are a product of those teams working together. When they’re optimised, profits are higher, there’s more money to reinvest and customers see more value. When they’re not, the opposite happens.

Which brings us to the key point behind the 8 Hows: marketing teams create outputs; the Marketing team creates value. The Marketing team is the reason for all of the mindshare, opportunity, preference, perception and experience a customer receives. The marketing team is responsible for the love of a brand and the marketing team accountable for the pipeline created. The marketing team can also be the reason for the limitations, waste, inefficiency, inaccuracy and confusion of that value.

Value and waste

Two measures underpin all of business measurement: what value did you generate and how much did it cost you to do that. How you measure value can be a complex calculation, however, and can influenced significantly by business strategy and broader C-suite perceptions of what Marketing’s role should be, regardless of whether that is a complete or informed perspective. Value could be calculated based upon brand awareness, net promoter score pipeline generated, a combination of these or other measures entirely. The principle is the same, though: marketing’s effectiveness is the measure of value to a measure of cost.

So what does an optimised marketing value chain look like? It looks like getting maximum value for minimum cost. Anything else is a drain on value. Except it’s not quite that black and white. Today’s cash cow solution is tomorrow’s legacy burden and today’s emergent opportunity is tomorrow’s growth driver. If you could make all of your revenue from one product you would radically reduce the costs of development, maintenance, sales and support. Of course, its unlikely that you can continue to grow sustainably and indefinitely when you only sell one product, so more products are introduced, more costs are established and at some point organisations have to look at whether these investments do drive greater customer and shareholder value, or whether they are growing the top line and not the bottom. In case you’ve ever wondered why organisations spin off parts of their operations into separate entities this is one of the reasons; the primary organisation can be more profitable without the drain of a business unit, so it splits it out. It is then evaluated against a more specific set of criteria and must go through its own value optimisation process.

Value optimisation is the key. Maximum value for minimum cost does may not necessarily mean maximum immediate revenue. Your objectives could be establishing your presence in a new market, increasing your renewal rates, winning some hero big-name customers or building brand reputation as well as creating a pipeline of new business revenue. Defining this is the purpose of strategy. Of all the value you could deliver, what will you focus on. For each strategic objective, Marketing functions then have to look at how they optimise performance. What is the maximum impact you can deliver against those objectives for the work that you put in? Or, to put it another way, what work doesn’t really add much value? Only by freeing up the resources from low- or no-impact activities can you invest in driving more from the areas that do create value.

Marketing is inception aligned to the customer’s purchase process and Sales’ selling methodology. But the sum is of a Marketing team is greater than its parts and a brand is not built from a single interaction; demand is not generated without brand – at least not effectively; pipeline is not accelerated in isolation; messages do not stick without repetition; and the impact of every activity is reduced when it doesn’t align, reflect, repeat and reinforce a wider movement. Marketing works when inception aligned to customers and sales is operationalised for scale. Great marketing impact is only achievable by great Marketing organisations. And great Marketing teams work the How.