Subscribe on

Enjoy this episode? Leave us a review.

All Episodes

Episode 121

Selling in Marketing Effectiveness with Simon Peel

Getting marketing effectiveness principles to stick at major companies is harder than proving they work. Even when the data shows brand activity drives 65% of sales, internal structures and human psychology work against long-term thinking.

This week, Elena and Rob are joined by Simon Peel, managing partner at The Other Lot and former Global Head of Media at Adidas. Simon shares how Adidas discovered that brand activity was driving 65% of sales across all channels, not the digital performance marketing in which they were heavily invested. He reveals the internal battles, years of education, and structural changes needed to make effectiveness principles stick at large organizations.

Topics Covered

• [01:00] Why Adidas publicly admitted their digital advertising mistakes

• [10:00] The marshmallow effect and why humans default to short-term thinking

• [16:00] Differences between US and European adoption of effectiveness principles

• [20:00] Why measurement needs econometrics, randomized tests, and attribution

• [26:00] How light buyers drove 80-90% of revenue at both Adidas and Haleon

• [30:00] Why AI will perpetuate bad media buying practices

Resources:

2019 MarketingWeek Article

2019 Institute of Practitioners in Advertising Video

Simon Peel’s LinkedIn

Today's Hosts

Elena Jasper

Chief Marketing Officer

Rob DeMars

Chief Product Architect

Simon Peel

Managing Partner at The Other Lot

Transcript

Simon: You can see that there's a change that's happening in the US but it's the biggest advertising market in the world, and it's also one that's more reluctant to change. I think it's happening now, but in the rest of the world, particularly Europe and Australia, it happened like 10 years ago.

Elena: Hello and welcome to the Marketing Architects, a research-first podcast dedicated to answering your toughest marketing questions.

Elena: I'm Elena Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co-host, Rob DeMars, who is the chief product architect of Misfits and Machines, and we're joined by a special guest today, Simon Peel. Simon is now managing partner at The Other Lot, a media consultancy that believes in doing media differently. Before that, he was VP and Global Head of Media at Haleon. And famously led global media at Adidas during one of their most transformative marketing eras. He's a vocal advocate for effectiveness, a skeptic of shiny objects, and a believer in many of the principles we hold dear. So thanks for joining us, Simon.

Simon: Thank you for having me. It's nice to be here.

Rob: Great to have you. Now, Head of Media, Global Media at Adidas. I got a question for you regarding brand loyalty. All right. Do you still wear Adidas? Are you rocking them right now?

Simon: I've actually got a pair of socks on that have two stripes on them. Like you can see there's two stripes, not three. Um, yeah. I do still wear Adidas, so it is. It's only the Americans and the Australians that call it Adidas, by the way. Yeah, I do still wear them and I wear them to go running in primarily. So I'm not as hip and trendy as I used to be, so I can't get away with them around the house.

Rob: You have to say that again? I've grown my whole life calling it Adidas, which is probably wrong even in the English version. So what, how did you say that again?

Simon: It's Adidas.

Rob: Adidas.

Simon: I think all American, not all Americans obviously, but Americans and the Australians as well also say Adidas.

Rob: What do they say in Canada?

Simon: They say Adidas, apparently.

Rob: They do, really?

Simon: We would need to ask them.

Elena: Some countries call Nike, Nike.

Simon: Yeah. The Brits used to do that for years. Yeah.

Rob: Wow.

Elena: Yeah. The first time I heard it

Rob: I wanna go to the Mall of America into the shoe store and ask for Adidas and see what they do.

Elena: They would look at you like you're crazy.

Rob: I'm excited now because I can be like snooty. That's how it's said now. I know.

Elena: I was overthinking how we should pronounce Adidas on the podcast because I've listened to your talk a few times and I was going back and forth on it in my head, but it's too easy to call it Adidas.

Simon: Let's go with Adidas, so I think that's fine.

Rob: All right.

Elena: All right. Well, we're back with our thoughts on some recent marketing news, always trying to root our opinions in data, research, and what drives business results. And we're excited to have Simon here today to talk about all things marketing effectiveness and more. But first, I wanted to open with an article. Simon, you probably won't be surprised by this. I hope you're not too tired of talking about this by now. But this is from Marketing Week and it's titled "Adidas: We Overinvested in Digital Advertising."

This is by Sarah Ward. Back in 2019, Simon revealed that Adidas had been overinvesting in digital and performance marketing. Due to a flawed focus on efficiency and short-term ROI, the brand lacked proper measurement tools. They relied heavily on last-click data and their investment was skewed towards channels like paid search. After introducing econometric modeling, Adidas discovered that brand activity was actually driving 65% of sales across all channels, and the company began rebalancing its media mix, embracing long-term brand building and light buyers. And Simon stood on stage at the IPA's Effectiveness Week and openly shared this journey, urging marketers to focus on effectiveness over efficiency.

And Simon, not to be creepy, but I have watched that talk several times, even before preparing for this interview. And that story is how I know of you. We've loved sharing it out in the agency. It's had an impact on marketers globally, and I still find it really relevant even a couple years later. Would you mind talking a little bit more about what you discovered there and why you decided to share this sort of marketing effectiveness experience publicly?

Simon: Sure. So maybe I'll start with the second question, like why we decided to do it, or talk about it. So IPA is the Institute of Practitioners of Advertising. So it's like a very established body in the UK. And when I was a graduate after university and I was training in my profession, in advertising, we all had to do IPA courses. It was kind of the standard entry into advertising. So when the IPA asks you to do something, you feel quite compelled to do it, at least I did. And I was absolutely shitting myself. We had not that long previously appointed a new agency. And one of the guys at the agency, a guy called Chris Bins, was like, "What are you gonna say? You can't tell the truth." And I was like, "Well, that's what I'm gonna do, you know, I can't go on there and just lie." So that was part of the reason why we decided to talk about it. The other was because internally, it was really hard with the structures and with the CEO at the time to get people to listen. So the CEO at the time was a guy called Kasper Rørsted. And he was very focused on digital as part of the strategy and e-commerce because it was highly profitable. Obviously, his reputation and also his shares were dependent on profitability. So it is understandable that he wanted to push that agenda.

But he and a number of teams in turn, including the digital team that had a vested interest in this, were very sure that it was digital advertising and primarily search and retargeting that was responsible for that e-commerce profitability. We knew that not to be true, so Adidas had gone through this sort of transformation in 2014 led by a guy called Eric Liedtke, who was the CMO at the time, or Chief Brand Officer. He's now at Under Armour. And Eric basically said, "You know, we have been too focused on lots and lots of products. We are not talking to the right audience, we're not focused on our brand." And he basically put the brand back at the center.

And then as we did that, we realized that our sales were shooting up. It's kind of like Adidas has just had this resurgence over the last two years, again, because the new CEO has realized it's not about e-commerce, it's about wholesale retail. It's about having that physical availability everywhere. But it's about brand desire. Ultimately, if you want to sell these products, you've gotta be cool and retargeting people and annoying them on the internet might not be the coolest thing in the world. There was this kind of problem that we had internally, which was, we were trying to convince these teams that actually if you want to drive profitability, that's not the right way to do it. So the IPA talk was discussing some of the findings that we had, which was basically we had a number of attribution models because we had Google Analytics 360 at the time on our website. We had Adobe Analytics on our website. We had what was called Facebook - I think it's still called Facebook, right? There's Meta, but Facebook had a people-based attribution model as well. And then we had built bespoke attributions within the ad server, which looked at different dimensions. There's basically, I think there's eight, it might be six standardized attribution models that you can build in ad servers.

And we looked at various ones and then we built custom ones and we built data-driven ones. So we were quite advanced in it. And we had econometrics running at the same time. And basically econometrics was just saying something completely different. It was saying, "Well, you know, a lot of this paid search and retargeting stuff isn't actually driving your sales." And I had spent two years from probably 2015 to 2017 running incrementality tests and randomized tests looking at retargeting and whether it was driving incremental sales. It wasn't just me. There was a group of us doing it, but I was like the provocateur saying, "I don't believe this." So we ran these tests for two years and basically it showed no incrementality from retargeting, like none.

But at the time, we were investing more and more into these digital channels. So what was happening is we were sort of eroding the brand because we weren't investing enough behind it, and we were putting more and more money into channels that weren't actually effective. So we were going kind of mad. We were like, "What the fuck are we gonna do?" So that's why we stood up. Well, I stood up on the stage on the IPA stage to talk about it, to say, "Look, we're making mistakes. We're trying to be better. We're trying to learn these things, but like, it's not just us, you know, I'm sure lots of other people were feeling something similar," which I think at the time it resonated because a lot of people were in that situation as well. And I think that's now beginning to happen with CPG, particularly in the US where retail media is doing the same thing. It's basically performance media 2.0. And like you've got these stupid attribution models. So I can see why it's still relevant in some ways.

Elena: That's really interesting. I remember in 2020, Adidas signed Anthony Edwards. He was like one of the biggest deals. And it's funny that that's off the heels of refocusing on brand. It's like, oh, that was probably a good decision to invest in athletes and other ways to show the brand in different ways.

Simon: And that's Björn Gulden, you know, that's the new CEO who came in from Puma and he basically said, "That's where we're gonna focus. We're gonna focus on the brand, gonna focus on wholesale retail. We understand that's where we need to be." That's him having a very different perspective to the previous CEO.

Elena: Well, I think talking about it, like you said, was helpful for other marketers who are in the same position. You mentioned that it's hard to convince leadership to move away from some of these models. I think you mentioned using like incrementality tests. Was that the main way that you sort of convinced stakeholders, or how would you recommend other marketers go about this because that sometimes feels like the bigger hurdle is just how do you convince people internally to test something different?

Simon: Yeah, it's really hard because there's a vested interest. Particularly at clients, often they have built structures and headcount around these ideas. So back then, I mean, we're talking like 2015 or what have you. It was all about digital and like having a digital team, everything's digital. So it seems really silly to have a specific digital team. I'm sure the same thing will happen with AI. You know, we'll have AI teams and everyone will be like, "Oh yeah, my AI works better than yours."

But because of those vested interests, because people were like, "I've gotta prove this value of my team and to grow and to get promoted, I need to get bigger teams," it's really hard for clients to make this type of argument. So the way that we did it, I mean, we were banging this drum for years and years. We did internal trainings. So every month we would do a training session. We'd have typically about five or 600 people join those training sessions to learn more about effectiveness. We ran annual strategy sessions. We put people on training courses. So a lot of people went on to Mark Ritson's training course.

They did the IPA training course as well. I think we put like a couple of hundred people on that. We sent round the Binet and Field books to everyone. I think we brought like six or 700 books and sent them round to like senior leadership and down. If you think about Byron Sharp stuff, most of the people aren't in market most of the time and it's all about reach. That's essentially what we were doing. We realized that no one cared what we were saying, so eventually we sprayed enough of it out there someone would be in market for that message, and they would start paying attention. We also sent out like weekly newsletters. We did this thing where we were trying to be provocative and joking and stuff like that. So we had like these people wanting to sign up to our internal newsletters, and it just bubbled up like, because there were so many people feeling the same way that we did as well, we were bubbling it up from the bottom and getting people from the bottom talking upwards and saying, "What the fuck are we doing? This is crazy." And at the same time we were like presenting to the board, like, not swearing so much, but we were kind of saying, "These are the financial numbers and these are the financial implications. Like, we can go one way and we can get less money, or we can go another and we can get more money. So which one do you want?" The problem at these big companies is often the boards are risk-averse and they're short-termist. Like big publicly listed companies have to disclose their earnings on a quarterly basis. Their remuneration is tethered to that. So often they don't want to take a risk that is about delayed gratification or delayed revenue. They want the revenue now. So there's this horrible cycle that you have to go through. And honestly, we were banging the drum for years. I believe my friends that are still there are still banging the drum.

You know, like other companies, people are banging the drum as well, so it is not like we were successful. We made a dent and we convinced some people, but we didn't change the way that the company operated. We didn't like - that was done by people much more senior than us, that had the same point of view as us, but were just like, "Fuck it. We're gonna change stuff." So yeah, we went top-down, bottom-up.

Rob: Yeah. Speaking of banging the drum around the theories of Binet and Field, Byron Sharp, you mentioned in 2019 a lot of people were starting to talk the talk, but fewer actually walking the walk. Do you think that's changing now? Are you starting to see a tipping point happen?

Simon: I think in America it is certainly changing. So when we were discussing this back in, I mean, we've been talking about this at Adidas since 2015. And initially some markets were really bought into it. So Europe was really bought into it. I mean, Binet and Field are British and the IPA's British and the studies initially were based primarily in the UK. They're now global. So there was a high propensity for the Europeans to buy into it. There was a lot of supporting work by the ASS in Germany at the time as well.

And despite there being evidence in the US as well, the US was much more reluctant because of this fashion that was happening at the time. Arguably still happening, coming to an end, related to first-party data and personalization at scale. So because the market, the marketing market is very different to the rest of the world and there's a belief in precision advertising, the US was very slow to come on board with the long and short of it. I believe that's changed. Adidas now, and certainly I can see it from an outsider, you know, like Les Binet I think is quite famous in the US now. Peter Field probably as well. And Mark Ritson is obviously, he just sold his company. He's gonna do a big splash in the US and really go after it.

So you can see that there's a change that's happening in the US but it's the biggest advertising market in the world, and it's also one that's more reluctant to change. So in many ways, I think it's happening now, but in the rest of the world, particularly Europe and Australia, it happened like 10 years ago.

Rob: Do you think that's why the default still tends to be efficiency over effectiveness, just how hard it is, or you also mentioned the boards needing that ROI quarterly versus long-term?

Simon: Well, it's multifaceted. It'd be wonderful if it was just one answer and it's like, "Oh no, it's just because people are focused on cost savings and ROI. That's why we'll figure that out and then everything will be okay," which we kind of thought for a while, but it's not, it's just not that simple. I was presenting in Brussels this week to a company called EGTA. They're the European trade body for TV and audio in Europe. I was talking to them about the long and short of it and like, these are like TV sellers. They're selling advertising space for TV and radio.

And I was talking to them about the long and short of it and they were like, "Yeah, I know all of this. We've been saying this for years and people just don't care." And I was explaining that there's this thing that biologically humans are naturally short-termist, so there's experiments. You may be aware of them from like 1972 in Berkeley University where they took like, I think it was 300 kids, but I might have the number wrong. But they had a load of kids and they did something called the marshmallow experiment or the marshmallow study, and it was basically, "You can have one marshmallow now or you can have two marshmallows in 15 minutes." I hope I'm saying marshmallows right?

Rob: You said it perfectly. Absolutely.

Simon: You can have one marshmallow now, you can have two in 15 minutes, and 70% of the kids chose one marshmallow now. These studies, the ones they undertook at Berkeley University, they also did across rats and chimpanzees and adults. And all of these studies have recurred over and over again throughout the years, and they all show the same thing, like naturally humans focus more on the short-term. That heuristic is called the hyperbolic discounting bias, which basically means you discount future value even though it's greater for something that's available now.

And so I don't think it's just like, oh, it's ROI, it's risk aversity, it's focus on personalization at scale or retargeting. It's a natural inclination that we all have to focus on the short-term now. And when our financial regulators also push that agenda, for instance, in the US if you're a publicly listed company, it's been an obligation to report on a quarterly basis since 1934. It's implemented in law more in the 1970s. In Europe, they realized that this was having an impact on short-term prioritization, like CEOs were suddenly cutting everyone's jobs.

But they were focused on short-term profitability, understandably so. The European Union in 2013 realized this and brought into law that companies didn't have to report on a quarterly basis. They could do it on an annual basis and therefore erode some of the business focus on short-termism, but because the global financial market is kind of run by the US, it hasn't made such a big impact as I think they would've liked. And I'm not trying to blame the US here, I'm just trying to say like naturally, biologically we're set up to think short-termist. And financially and commercially we're set up to think short-termist. So it is natural that marketers would think short-termist as well. It's in our inclination.

Rob: Ironically, I'm old enough. I was actually one of those kids in the marshmallow study and I ate them all. Give me the whole bag.

Elena: A true American, you are Rob. Well Simon, I think from our perspective in the US, I think you're right that there is a greater move towards this stuff and it's becoming better known. But what we found with clients is I think you need two things to be successful with these points of view. One is having just an understanding throughout the company, but then two, our clients that have been most successful in thinking long-term, it comes from the top.

I think that's difficult sometimes. If you don't have the CEO bought in, if you don't have those high-level decision makers, I think it can be hard. And then of course it varies by company because marketing's responsibilities and respect varies so greatly by company. And I know that after Adidas, you led media at Haleon and now you're managing partner at The Other Lot. Has your thinking changed over time at all as you've worked in different companies?

Simon: I think it's mellowed. Like with Adidas, the brand meant so much to me personally. Like my identity was linked to it, it was so meaningful to me and a number of others there. It's something that you're proud to say that you work for or with, because it has so many memories from childhood and like it's just a cool brand. But as I've sort of gone on to other companies, I went to Haleon, which was GSK's Consumer Healthcare company. It's basically the largest consumer healthcare company in the world. The brands are less personally meaningful. Like I don't identify with a toothpaste or a paracetamol as much as I would love to be, you know, like an Advil person, but it doesn't resonate with me so much. So with that brought about a more mature approach, I think, which was okay, it is not just about the personal identity or the identity that it has within other people at Adidas or the consumers as well. It's not about that tribalism. It's about the right business structure and the right business approach. We implemented a very similar strategy at Haleon to the one that we did at Adidas. The long and short of it was a factor of it. Like, it's not, you can't just go in and you can't just say, "Okay, let's do the long and short of it," because there's so many different facets that you need to fix.

So, as an example at Haleon, I went in and presented it and people were like, "Yeah, we believe in that. Let's do it." But then it was like, "Okay, but you need to prove it, Simon. If we're gonna change our investments, you need to prove it." Which then meant, "Okay, can we prove it?" Because the taxonomies that allow us to measure in a certain way that looks at brand and activation or long and short aren't in place. So I can change the investment, but I'm not able to measure the efficacy of it.

That's just one example. Like we needed to change the taxonomy globally across a hundred plus brands across 90 markets across all of our media spend, which was huge. Still is huge. They're one of the largest advertisers in the world. That was just one factor of it, and there's so many different factors that you need to address. You need to address the contract with the agencies, the agency incentives. Are the agencies incentivized to do the long and short of it. Are they incentivized to put brand over performance? Have you got the measurement structures correct? Have you got the KPI framework correct? There's so many different things. So yeah, I did the same thing and the team there did the same or similar, but it was done in a more mature, less sweary way and with a greater sense of "Look, this is a journey that we need to go on together." Adidas is much more tribal because it's about two clans bashing up against each other, because that tends to happen in D2C. FMCG or CPG is more about like, "How do we go on this journey together over a period of time?"

Rob: So how does a marketer, I mean, everybody's looking for that single source of truth. How do you tackle measurement when you're trying to balance both the short and the long?

Simon: Well, it, so it depends. There's always the answer and there's always the horrible answer that no one wants to hear. But it depends. So for instance, one very simple measurement framework is okay, you have to have econometric modeling. Like it doesn't matter really what size you are. If you are spending over a million dollars a year, you should have econometric modeling.

And if you can't afford to work with the best econometric agencies in the US, like the likes of Analytic Partners or Ipsos MMA, there are free choices out there. Like Meta has Robyn, which is an open source option. Google has Meridian, which again is an open source option. They're not as good as working with Ipsos MMA or Analytic Partners, but they're free.

So you can do it. You still need econometricians to help you run them. But you need to run econometrics because it looks at multi-variable regression modeling, which sounds fancy, it's the same thing that predicts the weather reports. It's the same modeling that predicts the gross domestic product of a country.

So it's got real credibility. But at the same time, you need to run randomized testing. So the US has a very privileged position of having DMAs. You've got, I think, 210 DMAs, designated marketing areas in the US. So you can run some activity in one DMA, do a holdout group in another, and run something else in another to prove that TV works as an example.

And then you can look at the incremental uplift over the short period to see whether that DMA of extra TV has worked versus no TV or whatever it might be. So you need to run these randomized tests. And then to be fair, despite attribution's huge problems, it helps with optimization. So as long as you've got econometrics as the base of where your investment should be in your base of measurement and you are running your randomized tests, you can use attribution to understand whether this type of creative is working or whether this type of format is working or whether this digital channel is right. So having those three together is really important. Brand equity, you've gotta have that, campaign lift, you should really have that. But if I was to break down the key components of how to measure effectiveness of advertising, it would, for me at least, would be econometrics, randomized control tests, and attribution modeling.

Elena: Yeah. I think we'd be aligned there. As a TV agency, we love a holdout test, and it sounds simple when you first start talking about it, but we found that our most sophisticated clients, it's something that they've got down. It's just typically how they test new marketing channels. Simon, when we talked, you said a phrase that always lights up my marketing antenna, which is light buyers, because we've seen firsthand that reaching light buyers is key to growth for the brands that we work with, but how have you thought about taking that belief and actually translating it into a marketing strategy?

Simon: Yeah. Well, it was fundamental at Adidas. I mean, it is part of a strategy. It's an insight into a strategy, right? It's not, the strategy isn't go after light buyers. It's the same with Haleon as well. So with Adidas, because we had D2C channels, people would go onto the website and they would buy shoes.

We were able to ascertain whether they were new buyers or they were repeat buyers. And we were able to do that over a long period of time as well, over a three-year period. Because a lot of the company was focused on lifetime value, right? And like the repeat buyers and increasing loyalty. But again and again, we always saw that light buyers made up 80 to 90%, not just of the buyers in total, but of the revenue as well. Always it was light buyers because Rob might buy a pair of Adidas this year, but Elena, you might not buy them for another couple of years. Right? Despite us having your email and your phone number and data, like, you may not just buy it. And this is the thing, it's like people come in and out of buying. We all think we're really loyal to brands. Like, I think everyone's loyal to Apple because I've had two Apple phones in a row. But the truth is, like my wife changes hers all the time, and like my daughter changes hers. So because my orientation, I'm sure Byron Sharp talked about market orientation, but like, because my focus is this, I believe everyone else is the same. It's just not true. Mathematically, it doesn't prove to be true.

And at Adidas, there was so much data to disprove loyalty, like it's just not a big thing at all. And if you focus your business on loyalty, and this is true of brands above a certain size, right? Like if you're a small brand, loyalty is much more important. Same if you're a very niche brand, right? If you are luxury or very high net worth individuals, then it becomes more important. But most things, most of the time, aren't like that. And it's totally the same at CPG as well. So one of the first things that I did when I went there is to have a look at loyalty versus light buyers, right?

And we had, because we had the data from retailers, we saw exactly the same thing. It's like 70 to 80% of all of our revenue came from light buyers. 70 to 80% of purchase also came from light buyers, people that have bought the product for the first time that year. So it is, you know, Ehrenberg-Bass Institute, Marketing Science, talk about it in their books. And you think it's theoretical, but you can go and test it. Like it is true pretty much everywhere apart from these very niche areas.

Elena: That's really interesting.

Rob: I feel like this whole episode has really been about your new tagline, right? Which at The Other Lot is "Media Done Differently." And because so much of what you're talking about is contrarian to what traditional beliefs have been. What does it mean for you?

Simon: So The Other Lot is basically a media consultancy to help advertisers, agencies, ad tech and publishers get more out of media, like to get a competitive advantage because there are so many people and companies out there that don't really understand these principles and then don't know how to apply them. So the idea with the consultancy is that actually, if you come and work with us, we'll help you do that, right? We'll help you prove out these numbers and if required, we'll help with your infrastructure, your technology.

But it kind of goes against the grain a little bit. You know, like it goes against what some institutions or companies have been pushing for a number of years because it's financially beneficial to them to push that agenda. And we're just saying, "Look, that's not actually true." And there is, as long as you know where to get the information, you can see that the story is actually very different. If you want to go on a different journey, if you want to get more money, if you want to grow your brand, then maybe think about a different type of consultancy and come and talk to us because we'd be happy to help.

Rob: What's gonna make people most nervous when they talk to you? What's your most kind of contrarian viewpoint, where they're gonna be like, "Oh my God, buckle up"?

Simon: Well, it really depends. Some things that I think aren't contrarian at all, other people think are. One of the big ones for me is AI. Like it is coming. It is scary and it is ubiquitous. It's not like the metaverse where it was like Zuckerberg talking bullshit and trying to convince us all to buy into this nonsense.

This is happening and it's gonna be very transformative. My concern with it is that because particularly in the media industry, there is so much opacity and there is so much middlemen involved or middle people involved, and everyone is taking a cut. And because people don't understand law and how contracts work and how the agent and principle works in law and how you can get around that to create margins, because they don't understand that it's happening anyway. And it means that everywhere around the world, but in media, we are buying a lot of very bad inventory, very poor inventory, like made-for-advertising inventory fraud, really bad stuff because parties in the middle have vested interest in arbitraging at a higher rate and they can arbitrage at a higher rate because the inventory is so crap.

Right? Buy really cheap stuff. Put really high margin on it and sell it to a client. Brilliant. And you can still sell it at a lower cost per thousand than they wanted to pay. So that's going on in our industry. And then you've got AI coming in over the top, typically owned by agencies that do principal media that sometimes have high margins in this obfuscated area. And it's just gonna keep on perpetuating it because if I'm an agency, I'm gonna be saying, "Okay, like I want a higher margin on my buys. But obviously I don't want the client to know that." It's just gonna perpetuate some of these things. So I don't know if it's contrarian, because a lot of people know that this stuff is going on, but I guess it's slightly contrarian because I'm saying AI's brilliant, right? It is really powerful. It's fun, it's scary. But if we don't understand what's going on behind it, behind some of the pipes that make our media industry or our advertising industry work, we are fucked, like properly in real trouble because we are gonna be encouraged to buy absolute dog shit, really. And it's going to affect journalism. It's gonna affect proper creation of beautiful production. It's gonna affect the consumer experience, and it's gonna affect the advertisers' investments. They're gonna get less money, it's gonna become more ineffective, inefficient, then it's gonna affect the agencies in the middle. So I guess it's contrarian in that sense, but I'm saying, "Look, there are parties out there. Marketing Architects are one of those. I believe that our group, The Other Lot, are one of those which can help advertisers and clients get around these problems." So yeah, I dunno if it's contrarian, but that's the point of view certainly.

Elena: I think it is, Simon. I think it's really important because we've seen firsthand, we just, again, we just buy television media, but when we started to move into connected TV, moving from linear, adding CTV, we started working with some of the more traditional big players to buy media for our clients, and we couldn't believe the cost. It was just like, it was so expensive, it doesn't make any sense. And we realized it was all the fees, it was the middlemen, like there's all these hands in the cookie jar.

So we ended up spending millions to build our own DSP and go direct because we're thinking there's just no way a performance marketer can make this work. But our clients are very performance-driven. I imagine these big brands to them, you can spend all this money, but you're right. I think it's really important, and I don't think marketers broadly are aware of it, of just how many fees and how sketchy it can get with middlemen. So I think it's great to call it out.

Simon: Yeah, I totally agree. I mean, just to add a little anecdote on this, like I was saying, I was talking to the TV industry in Europe this week and the TV sellers who are using these SSPs and going through these programmatic pipes, they don't even know this stuff is happening. It's crazy. So, Elena, when you told me about you building your own DSP, I was like, "That's amazing." Because that's exactly what clients need as long as it's transparent and you provide that transparency to the client. Whatever your margins are, they need to be fair and you need to be profitable, but you're not incentivized by the rubbish. The thing that you guys have done so well. So I think it's a really important step that you've taken.

Elena: Alright, Simon, if you could change just one thing about how brands approach advertising today, what would it be?

Simon: I think I would try to think a bit longer-term, but I would do that by using measurement to help reinforce it. Actually, numbers are really important, so just think a bit longer-term and then justify it with long-term econometrics.

Elena: Love it. Alright, let's wrap up with something a little more fun. So Simon, you've stood up for long-term brand building, even when it went against the grain at some of the companies you've worked at. What's something in your personal life that you'd go to bat for just as hard, even if nobody else agreed with you?

Simon: This is really rubbish, really, but I'm a big fan of lime pickle. Do you know what lime pickle is? No. You don't really get it in the US actually, you don't really get it outside of India or the UK. So you know, the Brits, bunch of bastards that we are, colonized India many years ago, and then luckily India took it back. But with that, we have become very big fans of curry. And part of Indian curry, you get like a load of condiments and one of them is lime pickle, which is like pickled limes that have been pickled for a couple of years in spices. And honestly, most people think it is disgusting. Like it's absolutely revolting.

It makes people's stomachs churn. I think it's one of the most delicious foods there is in the world, and I'm convinced, you know, there's all this stuff at the moment about microbiomes and its effect on your brain and longevity. I think Andrew Huberman and his group of friends should eat lime pickle because I think that's the biggest benefit to your microbiome. And I'm not sure I could back it up, but I would be prepared to go into bat for it. And I fight for it at home. You know, my wife hates the smell of it, we've always gotta have a jar of it.

Rob: So Simon, we must be brothers from another mother because I obviously knew about this question ahead of time and I was thinking about it and last weekend I was at an event where they were serving carbonated pickle juice. And everyone around me was like, "This is horrible." And I'm like, "I love this. It's delicious." You know, it was cold. And my wife and I, we bought a 12-pack of it because we were like, "Carbonated pickle juice. We're never gonna find this again." And it was wonderful. So I'm with you on the pickle front.

Simon: Yeah, I think you and I Rob are gonna live to 200 years old.

Elena: That's funny. It's funny you both, did you, is that the one you chose Rob?

Rob: No, it was, I swear, like, I was thinking of last weekend. I'm like, "I really love this carbonated pickle juice. I thought it was a genius idea."

Elena: Oh, that's crazy.

Rob: What would you go to bat for in your personal life? Because me and Robert are pickle-mad. What about you?

Elena: Yeah. Now I wanna say something like pickles. I did have pickle pizza at the Minnesota State Fair last year. And it was so good. Pickles belong on pizza. Maybe that could be something, but I was gonna say, my husband and I got a dog about a year ago and we did all the dog training classes and they were like, "Don't let the dog sleep on the bed because it messes up the hierarchy." I disagree with that. I think all dogs should sleep on your bed because it's one of the joys in life to have a dog sleep on your bed.

Rob: I agree. And the further they sleep towards your head, the more dominant they are apparently. So our golden doodle literally sleeps right on my head.

Elena: Awesome. Well, Simon, where can people follow you? Where can they learn more about what you're doing at The Other Lot?

Simon: Yeah, so we're online at theotherlot.com. You can find us on LinkedIn as well. We've just started on there. But yeah, the website's probably the best place to start.

Elena: Thanks so much for joining us.

Simon: Thank you for having me.