Hello, everyone, and welcome to the latest episode of What to Think VentureBeat's Weekly Technology Podcast. Today, we're doing a special segment called the CMO's Dilemma. This is part of a short series on the issues that chief marketing officers face, and it is brought to you by Viant.
I'm Dylan Tweeney, and I'm an editor-at-large at VentureBeat. I'm here with Stuart Rogers. Stuart, say, you can say hi. Hey, Dylan. How are you doing today?
Stuart is a researcher with VB Insight, our research arm. I'm doing great, Stuart. How are you? I am doing somewhere between awesome and epic today.
I'm in awe of that. That's incredible. This week, we're going to be talking to Michael Williams.
He is the Chief Marketing Officer for Grand Prix of America. They're trying to bring Formula One racing to the United States, and we're going to find out what that's all about and hear how marketing fits into that and how he thinks about experience and engagement, and in particular, personalization. This week's... topic on the CMO's Dilemma. Well, first, let's cover some tech news highlights from VentureBeat and from the world of online marketing technology.
So, Stuart, why don't you kick us off with this item about U.S. internet ad revenue? I thought ad revenue was kind of stagnant to flat. I thought everyone was moving. Well, I mean, obviously, people are moving online, but I thought that advertising rates were dropping, and yet it looks like we have an all-time high here.
It's interesting. Ad revenue has grown 60%. in quarter one of 2015, which makes it a $13.3 billion marketplace per quarter at the moment.
And what's really surprising about that, if you look at last year, first quarter last year, that was already a record-setting quarter in 2014, at $11.4 billion. They've absolutely blown that away with $13.3 billion in quarter one of 2015. And of course, this is just US internet ad revenue. You'll see that there are similar patterns elsewhere in the world too.
Now, there's an interesting thing happening, though, which is that even though the volume of advertising online is going up as people move out of billboards or TV ads or radio ads or what have you and move into online where things are more trackable, the rates that publishers and ad networks are getting seems to be, in general, across the board, dropping because you have all these programmatic ad networks, which are essentially auction marketplaces for ads, and that tends to drive down the cost per thousand. It's a volume game, for sure. And...
I think in the IAB's report, they probably missed out a few of the volumes. You know, when you look at when they launched the original report, they were saying that, you know, part of this is due to just the sheer amount of extra screens, extra screens that are available to people to use, you know, the smartphone growth, tablet growth, et cetera, et cetera. They also put a lot of it down to the fact that brand and media agencies are increasingly getting committed to digital marketing.
And I'm not surprised by that. I remember when we looked at... State of marketing technology back in the winter 2015 report, TV was really super low in terms of return on investment.
That's not necessarily because it has a very low return on investment. It's because it's really hard to measure return on investment from TV because it's effectively word of mouth measurement, whereas digital marketing is incredibly easy to measure, right? And so people like it a lot more. Brands and media agencies love digital marketing because... You can measure those clicks.
Well, that's very interesting. It's a nice segue to our second story, which actually comes out of a story that John Kutz here from BB Insight wrote about how in mobile advertising, brands are getting seven times more engagement and four times more customers than very targeted video ads on mobile. He notes in this that video ads already generate five times the engagement of static banner ads. There is, particularly in mobile, it seems like a movement towards more engaging, more media-rich. more creative types of content that are actually a lot more effective.
You're absolutely right. But at the moment, it's a few brands that are really leading the way. A lot of brands are lagging behind in terms of mobile advertising. And there's 2.1 billion mobile users downloaded over 350 billion apps, which is ridiculous.
The time on device grew 76% last year. Mary Meeker, she had her yearly look at the internet, and she's called it a 25%. billion dollar opportunity gap in mobile ads because brands by and large just aren't taking the opportunity to grab that revenue but people like disney as john pointed out are doing some really very cool stuff with some really super engaging content and using video ads and they're getting these incredible results so it kind of makes you think you know why isn't everybody on this bandwagon do you have any theories about that why everybody's not jumping on this if it's so successful and the results the roi is so clear i think when you look at the other companies in the report.
We're talking about big companies that have an opportunity to put some money behind some real brand content and get some supreme designers involved. I think When we look at marketing technologies available on the lower end, the cheaper technologies that are available, I do believe that more people could replicate these things at a very low cost. It's just that I don't think they're really understanding that at the moment.
Marketing technology is still incredibly low penetration when you get outside of the companies out there. So I think really people just need to take another look at it, dive in, and get to know what they can do at a lower budget. On the high end, it takes a lot of budget.
It takes a lot of creative. There it takes. a lot of talent with the right tools.
You can get some data about what's going on, and you don't necessarily need a super big budget to do really effective mobile advertising. I believe that's the case. I think it's open and more available to people than they would possibly imagine. Interesting.
So let's talk about our third item. This one is not marketing tech related, at least not directly. I just want to call attention to a story that VentureBeat writer Jordan Novett wrote recently titled, 10 Reasons to Start Using Google Photos.
This is interesting because I think... This is a case of Google doing something that actually is surprisingly useful and amazingly cool. I mean, Google does a lot of amazing stuff.
They're not known for necessarily being, you know, super delightful. But they revamped their Photos product recently. It used to be called Google Plus Photos, and it was sort of a sub-tab within their Google Plus social network. They've now broken it out as its own web product and associated mobile app.
It's a much better photo manager than it was before. They really nailed it this time, it appears. Do you use Google Photos, Stuart?
I'm an absolute power user of Google Photos, I would say. I think this is the third of Clark's three laws, where he said that any sufficiently advanced technology is indistinguishable from magic. There are things that Google Photos does that just seems like magic. I went away this weekend to Manchester to spend some time up there and go and see the Manchester United Legends versus Bayern Munich Legends charity match. I've arrived back this morning and there's a story sitting in my Google Photos that takes me across all two days and all the places I've visited and shows me a map of where I went and I think it's incredible.
We live in this age of the never satisfied customer, right? And I'm slightly dissatisfied in some ways with the new Google Photos. I know Jordan has put in 10 reasons here and they're really good reasons but I also miss some of the stuff that they've taken out. I do think Google need to stop doing that.
They have a habit of removing features without telling people, but making lots of noise about the new stuff. Yeah, or whole products like their newsreader. Yeah, that is the downside of trusting in a cloud-based service provider.
They can pull a plug-on feature that you like at any time. Not to nitpick on what's an otherwise great product, but what do you miss from it that they took out from Google Photos? I think it's a good move to rename Auto Awesome to Assistant because it's just a, you know, Auto Awesome was always a really bad name for it.
But someone else also. Auto-autism features are missing, right? So we used to have a feature called the eraser. And what you would do is you would take maybe, you know, 10 or 15 photos of the same place holding it in the same position as people walk around.
And then it would understand the moving objects and it would erase them all and leave you with just, you know, the place as if it was a 28 Days Later zombie movie, right? I never found that feature. That's fantastic, yeah. It used to do that, but... it does it no more.
And I do miss the smile feature as well, which is where you took, you know, maybe five or six photos of a group and you know what happens. Somebody grins, somebody else isn't smiling, you know, et cetera, et cetera. And what it did was it took all of the best smiles from each of the faces and put them into one picture so that everyone was smiling. They've removed that too and I really miss both of those features.
Well, that's a very useful feature. It sounds like that might be just a little bit... Creepy though, Google, you know, identifying all the smiles and pasting them together into one perfect family photo. Well, you know, you say that, but then smile shutters have been a feature of compact cameras for many years now. I don't think it's mega creepy.
I just think it's a different way of solving the problem. I was using it when it was still Google Plus Photos tab. It automatically stitches together photos into these little animated GIFs.
So if you took 10 or 12 photos of a birthday cake blowing out scene, it would... Stitch them together into one animated GIF, which was a really slick feature. I uploaded almost 25,000 photos to Google, and it just brought the most amazing treasures out of that whole mouse. It was really cool.
And that's the indistinguishable from magic bit. You know, the fact that I saw something the other day, which is it's a little bit grip, and it's a little bit anti-Apple, so don't shoot me. Obviously, I'm a balanced individual, but it was something that said, you know, six months after you buy a phone, and on the iPhone side, it said, you take lots of pictures, you've run out of crowd space and you need to buy some more. And on the Google site it says, you take lots of pictures, here, I made a movie of them for you. That is exactly the difference.
I think we've run through the time that we have for the news. We'll take a quick pause to thank our sponsor and then we'll move into our guest, Michael Williams from Grand Prix of America. So I'd like to thank our sponsor, Viant, for supporting this podcast.
Viant recently launched the first ever advertising cloud earlier this year, and it offers clients a comprehensive suite of people-based advertising applications, which are available on demand and in the cloud. And you can learn more at Viant Inc. That's V-I-A-N-T-I-N-C, Viantinc.com.
Now let's welcome Michael Williams. He's the Chief Marketing Officer at Grand Prix of America Formula One. He's widely known throughout the industry as a driven leader with a passion for marketing and storytelling. So, Michael, we're really glad to have you on the What to Think podcast. Thanks for joining us.
No, I appreciate the opportunity to speak with you guys today. I'm looking forward to it. You made a recent appearance on stage at VentureBeat's GrowthBeat Summit in Boston, so thank you for joining us there.
Yeah, it was a great experience. I enjoyed the content and the audience. I thought the whole thing was really top-notch.
That's fantastic. It was a big personal win for me. You know, I've been a Formula One fan since I was about knee-high, so a massive honor to meet you. It's good to catch up with you as well. Formula One, for those of us in America who maybe aren't growing up like Stuart as Formula One fans, is car racing but with a greater variety of cars and more interesting courses than the NASCAR, right, that most people are familiar with.
How are you pushing that message out to the U.S.? Not to be all U.S.-centric about it, but what's the marketing challenge here in getting Formula One recognized in the U.S.? Well, first of all, I'd back up a little bit. I'm sure Stuart would agree with this.
It's vastly different. It's about as far on the other end of the spectrum between NASCAR and Formula One as you could possibly be. While there is a certain audience and sort of interest that follows NASCAR, the inside joke is that Formula One drivers do more than just make left-hand turns.
So it's not just a bunch of guys that are driving around in circles. That's an unfair characterization, because NASCAR cars sometimes crash in addition to turning to the left, right? They do, but there is a similarity there where Formula One... crash as well, but the introspect of what happens within Formula One is that the racing itself, the actual act of the car race itself, it's really interesting because at the end of the day, it's a conduit that really brings everyone together. Formula One is really recognized as a lifestyle brand.
And when you stop and you think about the association with that brand holds, there are people that associate themselves with Formula One just as much as they would be for the finer things in life, be it food, be it wine, be it travel. They're usually extremely affluent, highly educated, and there's a certain sense of early adoption that they have from not only technology, but sort of digital and social space as well. And I think to answer your question about how you're going to really bring that to the states, now more than ever before, through the help of social media and really enlisting the help of those passionate fans of Formula One, you're really looking for them to help carry your message for you once you go into a new marketplace. On top of that, I would say that I think the challenges that we face...
trying to bring a race to the New York and New Jersey marketplace would be vastly different than if we were trying to bring it somewhere in the Midwest within the United States itself. I think the Northeast, in New York and New Jersey specifically, the demographic and the ethnic makeup of what this market holds, there's a large percentage of people that already have sort of an awareness, if you would, of value or an equity that's built and associated with the F1 brand. And in doing so, they already have an associated sort of likeness to it. So their familiarity with the sport. and sort of awareness of what we'd be trying to do here is already at a pretty heightened level.
It sounds like you're talking about a luxury brand almost. You absolutely are talking about a luxury brand. You're 100% talking about a luxury brand.
They're similar to what you might find in the event Super Bowl, where there is a large percentage of things that are happening up into the game itself where people who don't even have a ticket to the game, but they'll actually travel to the Super Bowl site or that city. Just to take part in some of the things that are happening even before the game. The celebrity chefs, the VIP or the philanthropic or charitable dinners, the music festival, the art festival, some of the other things that may take place and the parties that are happening even before the game themselves, in a lot of cases, draw a higher percentage of people than the game itself. And that's really not dissimilar to what you'd find with Formula One.
There's a social element to that, which is what you're trying to tap into online, right? There's a complete social element to it. There's a certain belief, and when you talk about personalization, which is one of the things I know we're going to talk about, but you have to create this buy-in internally.
And when I speak internally, it's those people that are most passionate and the largest brand advocates for your product or your brand itself. And social, in today's world, it makes it so much more attractive and ultimately so much more impactful when you can get those people who are really pushing your brand the furthest. for them to ultimately give them the ability to carry your message for you.
And when you think of Formula One brands, just as Stuart had mentioned a little ago, passion, enthusiasm, and vivacious sort of attitude that follows it is something that we are glad to have them and welcome aboard in helping them sort of push our message of what we're trying to do here, whether it's the race in Monaco. whether it's the race in Mons in Italy, Silverstone, or down in Sao Paulo, Brazil, you're going to have a certain percentage of people that travel the globe going from Formula One race to Formula One race. And when you're talking about a city like New York, where it's the cultural, the financial, and the media epicenter of the world, it's a familiar destination, and it's a favorable destination. So at this point, we'd be really looking to make sure that New York was put up on the highest stage for everyone to come and enjoy. You're right about the global race.
Which, I mean, Formula One... It's in, what, 19 countries, four different continents? Yes, and you're talking...
The differences between Formula One and NASCAR are pretty amazing as well. I mean, from the point of view of the fact that Formula One brings in, what, about $1.5 billion a year versus $700 million that NASCAR brings in on a typical year, you must feel that even though it's more popular outside of the United States, you've got a leg up and you've got an opportunity to really leverage that kind of presence, right? Absolutely.
And you didn't use the term you did a moment ago. Leverage is exactly what we'd look to do. It sort of capitalizes on the awareness and the excitement in which the brand carries. And those same people that enjoy and ultimately witness and experience the Formula One brand all throughout the world, for them to be able to come to a marketplace where more than likely they've already either A, visited, or B, they're doing business here in the New York and New Jersey marketplace, it becomes an opportunity for them to combine the two things they want, both the passion and the pleasure of watching an F1 event. and at the same time ultimately conduct business.
You mentioned personalization, and I know Stuart is working on a research report on personalization. Can you tell us how you think about personalization in the context of the marketing that Formula One does? One of the things I would tell you is because we actually haven't had the race yet, I would speak to you about the philosophy of personalization, and then I could speak to my experience with personalization and other brands and sort of properties I've been with, such as the NFL and the NHL and Disney and such. You know, personalization is a really fine line because it all stems from data.
And within that data itself, you want to make sure that you're delivering the most efficient and effective message at a timely manner to the end user to make sure that you're giving them what they want at a time that they want. It's no longer just good enough just to reach somebody. You need to make sure that you're reaching them in the manner, in the time, and in the subject matter that they want.
And that really is where the true beauty and the true genius of personalization is. personalization comes into play. So it allows you to be much more effective and efficient within your marketing dollars. But more importantly, on the operational side, it allows you to make smarter and more informed decisions, if you would.
So while we haven't had the race here in the New York and New Jersey marketplace yet, and we're still working towards that date with no specific time set in place at this point, it is absolutely 100% within our strategy that we will have an overarching positioning. of who we are and what the F1 race is going to mean to the marketplace. But our strategy for year one will be vastly different than years two through 15, having a 15-year contract.
Year one, it's going to be about creating awareness and delivering a great experience. Because of the novelty of what our F1 race will bring with it, every single person who has any opportunity to get a ticket or ultimately attend the race will. Just because it's something new and just because there's opportunity to do something new and unique in the marketplace, you will have...
massive amounts of people they're looking to try to attend. The difficulty and the real challenge will be making sure that after that first year has come and gone is that you've delivered experience and you've created a personalized opportunity to communicate with those people on an annual basis to make sure that they want to come back year after year after that. So that's where personalization for Formula One, the race, comes into play because you're going to want to make sure that you create to build, nurture, and maintain that relationship with everyone and anyone who's experienced and come to the event itself. Because as an annual event, unlike what you might find in other sports seasons, where you have repetitive games either A, every so many days, or in the instance of the NFL, every week, or what have you, this is an event that would only be happening one time a year. So communication and communicating in a manner where it's personalized for those folks.
It's going to be of the utmost importance to make sure that we maintain that sort of two-way dialogue so that when it comes time for them to come back again, we feel through that personalization that it's going to be even that more impactful. Are you collecting emails then primarily, or will you be when you start selling tickets? What does that boil down to?
Well, it depends on the group. Emails will, of course, be part of it, I mean, to build that database. But I think that there's understanding sort of what our fan base really values.
So there's some, if there will be an opportunity for us to do things outside the race at other points of the year. be it from philanthropic and charitable issues where we communicate and we have some sort of conversation that goes on with our folks who have other interests but fall within that lifestyle of Formula One for giving back within this marketplace. There's ways to communicate with them on that. And then there's opportunities for us to do it through merchandise, through media, through content creation, through content shareability, and then content distribution.
So there's ways that we'll be able to do that. Email is certainly one of them. But at the end of the day, through all the different social platforms, through all of our different web. platforms as well, you know, will have the ability to work and speak with them on an ongoing basis. And I think anytime you do that, it becomes much more of a personal relationship.
And it changes, in fact, doesn't it? The relationship changes depending upon which device you are talking to people on. Of course.
You know, if you're sending a message to a smartphone, that's a heck of a lot more personal than an email on a desktop device, isn't it? Absolutely, Stuart. And as you started to allude to a moment ago, when you're managing your relationship from cross-screen, from the TV. to their computer, to their desktop, to the tablet, to the phone. It also depends on which bracket of the audience you're speaking to.
Right now, there are over 7 billion people on the planet, and over 50% of those are under the age of 30. That's amazing. When you stop and you think about the way that you're going to reach and ultimately speak with those individuals that are growing up and coming up throughout the world today is vastly different than what our parents were. Now, the one thing about F1 is you need to make sure that you recognize and take into consideration the difference within the audience themselves because of the costs associated with F1 and because of the cost of the tickets and some of the different things themselves. In a lot of cases, these are going to be people on the older end of the target audience spectrum, if you would. But at the same time, you have this.
huge group of individuals, they're at a point where they aspire to be there at some point. Now, while they may be aspiring as far as where they want to be, they still have different ways that they communicate, different ways that they consume content, and different ways in which they get information. So there won't be a single sort of silver bullet in which is put in place across all of our group.
We will make sure that there's this umbrella sort of strategy to make sure it speaks to everybody. But back to the point of personalization, and depending on the audience, the personalization within the strategy will fall back to Which group are we talking to at which time? And what is the message we're trying to deliver? In a lot of cases, that will help determine what's tool or sort of which vehicle that we're going to be using to speak to them.
In fact, if you think about some of the website personalization that's possible, I know people that are understanding which demographic they're talking to, and their website will change depending upon that individual or that person that's visiting the website, so that if they're of a certain age, it might show them. an email address on the screen if they're of a different age than my telephone number. Yeah, and while we're not there yet, Stuart, you're absolutely right.
I mean, I think that's the conversation no matter where you are. That is the conversation that has to take place because people are going to demand it. And especially within the world of sports and especially within the world that we live in today, if you don't provide the information people are looking for, they'll find it somewhere else. Once they go somewhere else, the difficulty is trying to get them back. You know, it is really easy.
Isn't it to cross the line and come off as a little bit too personalized or even, you know, cross the uncanny valley and go into Creepyville? Yeah, Creepyville, as you say, is not a good destination. What's the old saying in one of those comic books? With great power comes great responsibility. I am very much in tune with that belief that you can't abuse this sort of position you're in.
You can't abuse the information or the power that you may have. simply because the power is actually still in the hands of the consumer, right? And once you cross that line, the ease of them ultimately to disconnect and for them to shun you and ultimately to put you somewhere else is a real possibility.
They want information. They want things that are relevant to them, and they want it in a timely and a topical manner. But they also want to make sure that you don't abuse that relationship. And I keep using that term because that's exactly what it is. It's no longer this one-way dialogue.
It is absolutely. a two-way dialogue that takes place within your consumer base or ultimately within the voice of the consumer. And in doing so, the same as you would have a relationship with anybody, with your spouse, with your family, or what have you, if you're only the one that's talking and you're the only one that's pretending or saying that you know everything, eventually that's going to become a very bad conversation and eventually that other person is going to leave.
So you need to make sure that you manage it in a manner where it's respectful. So as a marketer, you need to set up systems and structures, and you need tools to help you listen and to help you collect that feedback, right? Otherwise, you're just talking and not paying attention. Absolutely.
I think I mentioned it at the VentureBeat conference up in Boston, but I know for a fact I'm a huge proponent, and I've mentioned it before. This idea of chief marketing officer is really sort of going away, and here's why. It's so much more.
The responsibility that falls within that seat has grown so dramatically. to the point where it should actually be titled Chief Engagement Officer. Because within that engagement, within those responsibilities, of course you have marketing, and of course you have the brand hierarchy as far as creating and maintaining and policing the identity of the brand itself and making sure that that's communicated to everybody within the internal stakeholders and the external stakeholders. But it's really about listening.
And it's really about working off that what you're able to hear and what you're able to take away to create better experiences. That's truly what it's about. It's about delivering. a better customer experience. And once you do that, if you're able to use all the information at your disposal and you're able to use these opportunities to create a more personalized experience for that consumer, you're going to be better off for it at the end.
That's an interesting point for Formula One in America barely exists yet, right? You haven't yet had your first race. What are your customers telling you, Michael?
That's exactly the point. It's the future customers, but I would tell you because we haven't had the race, they're just saying that they want to make sure that we hear them. They want to make sure that we listen to them because for the amount of money that people are paying for these events, in a lot of cases, it's not just the money. It's not just the disposable income. It's actually the disposable time.
I'm actually giving you my valuable time. I'm giving up what I'm doing in order to create a relationship with you in which I experience something that you're delivering to me. Make sure you don't abuse.
Make sure you come through, and it's the oldest adage in the book, but make sure that you fulfill your brand promise. You know, I've had someone ask me before, which I told them, my definition of a brand is one part expression and two parts experience. And the reason for that is it's really easy to say what something is, but it's a whole hell of a lot more difficult to actually deliver on that. And you have two chances to deliver that experience.
First, when someone experiences firsthand, but then secondly, if you're so fortunate for them to share that information about your brand within their social communities. for you to make sure you deliver it on that second experience. And that is truly the fact of what brands are nowadays.
It's the expression, it's that brand promise, absolutely, but it's really to make sure that it ultimately funnels down to the point within those experiences because they correlate directly back to the brand. And actually, people that aren't even Formula 1 fans, but people that ultimately want to be associated with something at such a higher end than what Formula 1 would offer, they want to make sure you recognize, this is what I'm used to. And you need to make sure that when you're talking about an experience for me, Then ultimately you deliver on that.
Okay. Well, we are unfortunately running out of time here, Michael, but that's a great note to finish on, the importance of delivering a great experience. I know you can't tell us when the first Formula One race is going to happen in this country.
You mentioned earlier you're still working on it, but we will be looking very much forward to finding out more. If people want to follow along and get the heads up when you do announce dates, is there a Twitter account or something where people can? The best thing to do probably is follow my Twitter feed simply because I carry all the news of what's happening, which is at M underscore P underscore Williams, W-I-L-L-I-A-M-S.
So Michael Williams, the CMO of Formula One in the U.S., thank you very much for joining us on the What to Think podcast. It's my pleasure. Thank you guys for having me.
And thanks to you listeners for joining us on the What to Think VentureBeats Tech News podcast. And thanks to Viance for sponsoring this episode. As always, you can find us online at VentureBeats.com. If you haven't yet subscribed to our podcast on iTunes, please do so. Just search for What to Think, and we will look for you next week.
Until then, I'm Dylan Tweedy and Stuart Rogers. All right. We'll catch you next time.