Marketing Beyond ROAS: Building Brands in an AI-Driven World (Tom Goodwin: Co-Founder, Digital & AI Transformation Agency at All We Have Is Now)

Welcome to this week's episode of the CPG View, the number one CPG information source for global omni-channel leaders. Tom, good to see you, my friend. I'm so happy that we could finally get you on. I know you're a busy man, also a man with, I think, 400 times the followers that we have on social media, which I just realized that before you joined.

So if I wasn't intimidated before, now I am. But before we get started, would you mind introducing yourself and the company you're with? Yeah, so my name is Tom Goodwin. I'm a founder of a consultancy called All We Have Is Now, which tries to understand how technology is changing the world and gives company advice on what to do about it.

Awesome. Awesome. You and I have been in the same types of circles for, I would say, maybe five to 10 years now. Your kind of career in areas you were, I think we had adjacent pockets.

But with that being said, excited to kind of dig in here with you now. I wanted to get your thoughts. To what degree is advertising slowly turning into short-term, more performance-driven marketing? And do you think brands are sacrificing long-term equity for that immediate ROI?

Wow. I've got a lot to say on this. The short answer is absolutely. I'm quite old.

I'm surprisingly old. So I remember coming into the industry in about 2002. And back then advertising basically was above the line. I think you could basically claim that about 90% of all sort of marketing funds were above the line and therefore brand.

And then what happened is since the internet came on during our patch, slowly companies would embrace the performance playbook because they didn't have enough money to do it properly. So companies that had to be thoughtful about their audiences, who had to micro target, who had to measure everything, who had to optimize, who had primarily digitally transacted products, they all doubled down on the performance playbook. And it worked amazingly for them. But I think what's happening, which is quite strange, is the performance playbook, because it's new and because it's contemporary and because it's full of numbers, that's become like best practice.

And therefore, we're now in an environment where people, when they talk about advertising, can be talking about entirely different things. Even brand advertising for a kind of an app or a software as a service company is still performance advertising. And now we're creating an environment where effectively, unless you can show the return on ad spend, unless you can claim everything towards seven significant figures, unless you can measure everything immediately and cheaply and objectively, it's almost difficult to get anything done.

And I think to some extent, we've forgotten the kind of magic of advertising. We've forgotten how it actually works. And we've forgotten that the goal of ads is not to get someone to buy something then, it's to get them to feel something, which means they pay more later. Yeah, that last piece is really interesting.

I agree with you. I feel like that's a missed component in this. And it's almost become more mechanical and less human as opposed to what it really the magic of what it makes it work, to your point. And that feeling that bit of the kind of the art and science negating the fact that there is art involved.

And it's not just purely science. It's not just purely numbers. Don't get me wrong. I'm not saying that the numbers are relevant.

I'm not saying there's no room for science. I'm just saying that both of those professions are multiple. And it's how we combine the two of them together. Yeah, totally agree.

Totally agree. As an old friend used to tell me, it's a little bit of pedal and clutch. Both you and I are longer on our journey, so we probably have driven a manual stick shift. But I wanted to ask you, retail media has brought advertising directly to the point of purchase.

Like 10 years ago, this conversation, you and I, retail media was not really the thing that it is now. Do you think this represents the ultimate evolution of marketing efficiency? Or do you think it's more so the narrowing of brand building into kind of more so pure conversion mechanics like we were discussing before? It's basically the kind of the obvious thing that happens when we follow the route that we were just talking about.

So if you assume that advertising is about immediate impact, if you assume that something that isn't measured doesn't matter, like if you assume that an ad that doesn't get clicked on is a waste of time, if you assume that you need to be able to show return on ad spend within the next fortnight, if you make those assumptions, the next logical thing is that money gets closer and closer to the point of purchase. And it gets closer and closer to the point of purchase, not because it's necessarily more effective there, but because there's less opportunity for the attribution to be lost.

There's less opportunity to do something wonderful that you can't take credit for. And therefore, what we see is all the money moving to the point of purchase. We see people celebrating campaigns because they appear to do very well without actually taking a step back and realizing that all we're doing is claiming success for something that probably would have happened anyway. for me it's a bit like putting an advert for beer in the toilet of a pub and then saying we did an amazing job guys we got people to drink beer without realizing that's why they're in the fucking pub in the first place yeah i think our whole industry has got attribution obsessed to the degree that we're not taking a step back and thinking about it again this doesn't mean it's a bad tactic it just means a lot of the celebration behind it is actually celebrating the degree to which we can show it worked, the degree to which we can have an immediate impact.

And it's taking, it's meaning that we're kind of losing track of things. It's a bit like search in a way. If you bought your keywords that are your company's name, it appears to be some of the most effective marketing we've ever done without realizing that all we're doing is converting people that were already converted in a pixel in that way. Retail media is amazing because it's quite hard to know to what extent is this now trade media money and effectively we doing trade marketing but on the internet To what extent is this kind of like a listing fee To what extent is this almost a shakedown Because retailers now have the ability to use this for leverage.

How incremental is it? And I know a lot of companies, especially in the CPG space, will use a lot of data to show it is incremental. But sometimes I'm not that sure. If you're going into Amazon and typing in Tide Pods and you buy a sponsored listing, were you ever going to buy shampoo instead?

Yeah, you can see me, you know, I'm never buying shampoo. I agree with you. And this is a very real dilemma, right? You've got my background, I spent 15 years at the CPG durable space and five years at private equity.

And in the last 10 years, this conversation has gotten, the volume has gotten louder and louder to your point of, is this, are these slotting fees set out of the way? Are these, is this trade money that we're now doing online? Is this leverage we've, we're creating for us to drive incremental growth for our brand, or is this actually leverage the retailer can actually then turn and maybe not the best choice of words, but put the screws to us on, you need to increase your investment in our retail agenda, A, B, or C, or you're not partnering.

So yeah, it's, I certainly agree with you. And what's also made it a little less artistic, again, to your point, it's not art. It's not just science. It's both.

But it's like as the screws are getting turned and the volume is getting turned up, you've got noise from the retailers. Then you also have this noise internally. I think you've worked at large companies in your journey before, before you did what you're doing now. That's a whole degree of political thing that's occurring as well.

So it's quite interesting. There's a fascinating kind of balance, I think. I talk to a lot of senior marketers, and they're marketers that can talk to the kind of the contemporary language as well as the old. And often they're doing the contemporary playbook because it allows them to create the data trail to show that they are having an impact and it's a media.

And they're doing a lot of the stuff where they can't see the success and it happens over a long period of time. And their job is to basically balance the two. And I think those are the best marketers out there that understand they need to grow the apples so that the person who takes their job afterwards can harvest the apples. It's not their job to pick as many apples as quickly as possible.

It's to do both at the same time. Yeah, totally agree with you. That's a great point. Today's episode is brought to you by TopSort, a leading retail media infrastructure platform helping retailers and marketplaces launch and scale sponsored product, sponsored brand, and display advertising programs.

As retail media continues to become a larger part of the commerce landscape, TopSort is helping organizations build high-performing ad businesses with technology, transparency, and flexibility they need to grow. If you're looking to accelerate your retail media strategy, learn more at topsort.com. I wanted to ask you, e-commerce and large language model-driven discovery.

So LLMs are really beginning to reshape how consumers find and buy products. Our college son actually did his research on where to go to college using an LLM. So it's real, right? But how fundamentally do you think, you don't have a crystal ball, But what do you think these technologies will change with regards to the structure of commerce?

I'm glad you're asking me about this because this is a kind of a bugbear of mine at the moment. Those two things are unbelievably different and they're being talked about in the same kind of breath often. To be clear, people using LLMs to do research and people using LLMs to make decisions, I think, is going to be vast. It's effectively the kind of the new SEO, whether it's going to college, whether it's which health care plan is good, whether it's a nice destination to go on holiday, a good boutique hotel to stay in Chicago, they are significant.

They are going to change people's behavior. They are going to influence a lot of decisions. I think when you look into the tactics that you need to embrace in order to rank highly on GEO or AIEO, depending on what people are calling it now, they're often the same tactics you needed to use for kind of SEO. I think that agentic commerce is a complete waste of time.

I think it's a classic example to me of really unusual people who are doing something which no one normal is ever going to do because it can be done, even though it's a demonstrably bad way to do things. It reminds me a bit of voice, really. Yes, you could buy fabric softener using your voice. Yes, you could reorder Duracell AAA batteries using your voice.

It's a really stupid way to do it. And I think agents are the same. This idea that we're just going to let robots buy stuff for us and hope for the best that they make good decisions. It's completely absurd.

It annoys me in our industry that we end up having quite clumsy conversations because people conflate things. And then all of a sudden people think you're against AI when in fact you're just saying that sort of authentic commerce is a waste of time. I think it's a little bit different in P2B. I can imagine procurement departments using bots to negotiate against each other.

I can imagine some sort of very regularly purchased items in niche scenarios. but I think especially within the framework of business to consumer, I think especially within the framework of CPG, we're actually talking about products that people quite like buying. People go shopping because they're bored. People try on jeans because it's fun.

And I think a lot of the technology people skew the conversations in the space because they don't realize what it is to be a normal human. What do you think? Yeah, no, I agree with you. It was interesting.

So I held a dinner a month ago or so in New York and we had probably 25 folks in the room and all kind of folks that you and I would engage with probably in our day to day. And and the topic the questions at dinner revolved around AI and LLMs And I tell you Tom to be totally honest I was pretty surprised Half of the room was fully you could tell they were bought in they understood it They just I don't know, they got it for lack of a better term. The other half of the room, and these are all very smart people, very smart, smarter than me, for sure.

And it was an entirely doom and gloom almost to be honest it's over it's over and to your point at one point in time a friend of mine were hosting this dinner and i reached over to him like hey i don't want to call the baby ugly here but i feel like we should call this out guys it let's be honest you you sound cooler when you say it because of your accent but yeah it's come on it's somewhere here in the middle and probably more so to this side than this side for me almost every answer when it comes to technology has this very boring answer, which it depends the degree to which this is going to evaporate people's futures, the degree to which this is going to do people's jobs, the degree to which people are going to learn it, use it to learn new things.

Very much depends on the context and the person and the time and the thing. Yeah, totally. Yeah, I totally agree. And yeah, and the hype cycles and the kind of the media waves, even today, I saw something about the number of jobs lost last month, at least in the US and all this kind of attribution to AI.

And I don't know, I think there's just a lot of concentrated maybe confusion about what's happening and where it's going and but anyway so yeah long long way of saying i'm definitely not the doom and gloom type and i'm also more the common sense type of to your camp i think and honestly too the more we can use common sense the things we learned when we were in eighth grade yes 12th grade yeah i think there's a weird thing where we get too close to everything you know people are working from an office they take off their human being head and they go into the office and they put on their brand markets ahead and they talk about brand pyramids and brand onions and awareness and storytelling and then you get home and you just you drink a beer because it's the one in your fridge because you always drunk that one yeah yeah i totally agree because it's cheaper yeah i wanted to ask you as systems start to increasingly mediate discovery and decision making a little bit of what we were talking about earlier.

Will brands need to optimize, in your opinion, more for algorithms than for human emotion? Or what are your thoughts there? I don't actually think this is going to change much. The interesting thing is that I have been using LLMs to help me make decisions about a lot of things.

I particularly use it when I know it's quite complex and when I don't really care that much. So pet healthcare would be a good example. And what I realized is that while I'm going through a different funnel, a lot of the criteria that are important to me remain the same. And I'm sorry just to dwell on that particular example, but the reality is that three or four of the companies that were suggested as part of this were companies I'd never heard of.

Two of them had crappy sounding names, so I didn't even bother to look into them. Two of them I'd never heard of, but they sounded sexy. So I went to their websites and their websites were a bit shitty so I didn't go there and then I ended up just choosing a pet insurance policy with a company that I'd heard of before I don't know why I've heard of it maybe it was a radio ad maybe it was outdoor maybe it was print maybe it was PR I don't know and I think we need to be comfortable in the idea that while we may be going through this period of enormous change we're still going to make decisions because of taglines we've heard we're still going to buy things that give us a sense of nostalgia we're still going to ask our friends what they think is good so while many of the kind of tactics will be different while many of the context will be different while many of the operational software will be different ultimately i don't see that much changing you can look back at the best practice for advertising from 1900 and it will be the michelin guide and the ridge and furrow magazine for jcb it's content marketing you can look at smoking and you can see influencer marketing.

You can look at the world's first TV ad and you can see short form storytelling. We're obsessed with this idea that everything that's been done before doesn't work anymore. And it does. And we're obsessed with the idea that everything's different now.

It's not. Human nature is different. We're choosing brands as a way to circumvent complexity and feel better about the decisions that we're making. We're faced with more abundance of choices than ever before.

We're faced with brains that are more overwhelmed. So we're just looking for a reason is my pet insurance going to be crap is my airline going to crash is that hotel going to have bed bugs this flavor of cornflakes going to be weird we're doing what we can to sort of use brands as an insurance policy and i don't really think that i think we're way too we're way too outlandish in how we talk about ads we talk about films we talk about storytelling we talk about emotion i think we try to make our job seem much more magical than they really are like our job is really just to make people think that mac and cheese is going to be okay.

People pick something off the shelf because the packaging looks quite nice. People try something because that flavor of crisps sounded exciting. I really think a lot of the 95% of our jobs will be exactly the same. Yeah, I don't disagree with you.

And I think it's sometimes in my circles of co-workers and professionals. I tend to be more of a minority in this perspective, but I agree with you. I think more of what we've done, we will continue to do. All of what is being discussed that will fundamentally change, I believe will not.

And technology and AI and LLMs will expedite, accelerate, enhance our normal skills and behaviors that we've always exhibited and traits we've always had, but I think that is where it will stop. Now could I be wrong in 25 years and everything totally different Yes But with what I seen now and what we all experienced you and I in the last 15 20 years in this space of doing what we're doing, I don't know about you, but I feel like I heard this before with the internet when it came online.

I don't know. Maybe you were there. Maybe you weren't. I feel like we then heard it before when social commerce came on and it was a whole thing.

Retail media, again, was like a whole thing. brands should just stop selling and just channel all their money into real just forget everything you're doing and now it's ai and to your point yes we've gotten better it's maybe changed 10 degrees or 20 degrees but it was never a 360 degree which so i yeah long way of saying i tend to agree with you and i'm typically in the minority camp in this yeah and that doesn't mean that nothing's going to change it doesn't mean that people should rest on their laurels it doesn't mean they shouldn't be experimenting with this stuff it doesn't mean they shouldn't be running experiments with this stuff, but we should be comfortable with the idea that maybe a lot of what we know is still valid.

Totally agree. I wanted to ask one last question to make sure we get you out of here on time on this Friday afternoon. Again, no crystal ball for you, but with what you know, do you think we're at an inflection point where technology is starting to redefine the balance of power between we've got brands, platforms, consumers, and who do you think stands to gain the most in this next phase of commerce? I can't help but sound quite boring here, where specifically when we're focused on CPG, because that's the nature of your audience here.

I think we need to accept that we're probably not a pivotal moment in time. I don't think my bot is going to buy your steak sauce. I don't think my marketplace is going to personalize pricing to me based on my recent search history. I don't think my Apple Watch is going to talk to my computer and then suggest that I have a Gatorade right now.

We love this idea of playing around with all the things that are changing and we love this sort of showboating. And don't get me wrong, in 2014, I was very quick to jump on Fitbits and I thought that Fitbits would be amazing for Pepsi because we could sell people drinks just after they finished a marathon. And then I realized it doesn't work like that. We buy Gatorade at Walmart at the weekend because we're thinking about doing to run that week.

We buy Gatorade because we're drunk in 7-Eleven. It doesn't work the way that technology people think it works. So I think a lot of this outlandishness is useful because they become thought experiments and they become new possibilities. And I think all of us should be sitting down going, what if?

And all of us should be playing around with all this technology thinking, what does this mean? And some of the things like automation in advertising, some of these ideas towards sequential storytelling, some of the opportunities within personalization, they could be quite profound and quite exciting. This idea of a kind of marketplace which is curated entirely around your needs could be good. But we should also remember that a lot of our job is to do block and tackling.

And a lot of the margin and a lot of the volume comes from just getting the basics right. And I think the danger is that we get so obsessed with every new thing that comes along, we forget to do the basics right. I've got this particular sort of bugbear of mine, which is technology is amazing. And all the ads that we make could be stunning.

And yet you go on the internet and every single form of ads that you're served on the internet is basically ugly and awful. And I wonder why is there not just a really beautiful image that sells me Heinz mayonnaise? Why is there not just a beautiful gif that comes to life that's so beautiful and shiny and maybe three-dimensional when my phone moves that sells me shampoo? Sorry to keep on talking about shampoo with you.

Why are we not just able to do brilliant little things that make people think, you know what, that beer looks nice. You know what, I feel like a burger. Like, why does everything have to be so complex and so algorithmic and so targeted and so personalized? Actually, our job really is to get a tiny fragment of brand memory in all of our heads to make us buy Diet Coke when we're in Japan and we can't read the labels properly.

And it makes that sound quite boring, but I actually think that's a really exciting challenge. How can we use all of this new technology to get tiny bits of fragments of memories into people's heads? Yeah, this was tremendous. I think from your perspective, I don't think this was I don't think you sounded boring at all.

I think you sounded pretty grounded in reality of likely where this thing will go. And the good news is in three to four years, there's going to be another thing that we're all going to be talking about. And guess what? I know the three to four years after that, there's going to be another thing.

It's going to be quantum next, by the way. You can be sure in two years' time, every single conference is going to be at quantum. People are going to talk about quantum multiplied by AI. Now we can target people's brain synapses.

It's going to be nuts. Tom, thank you so much for spending some time with us. Greatly appreciate it. And I did want to ask you, is there anything you'd like to leave the audience with in closing before we exit today?

Our jobs are really important. We're in this weird environment where people feel like they're beaten up, I think, by a lot of the stuff. Brands have always been vital. And for the last five years, smart people have been going around saying brands are pointless, brands are dead, voice kills brands, AI kills brands.

No, brands are more important than ever. And we have the best tools at our disposal to do amazing things. So it's not the easiest time to do our jobs, but it's probably the most exciting. Awesome.

Thank you so much, Tom. Thank you for listening to this week's episode of the CPG View, the number one CPG information source for global omni-channel leaders.