Paul Ruscoe on Having the Difficult Discussions About Growth

[MUSIC] This is marketing over coffee with Christopher Penn and John Wall. [MUSIC] >> Good morning. Welcome to Marketing Over Coffee. I'm John Wall. Today, our guest is Paul Rusco. He's with Incubeda. We've been working with them for a couple of weeks now and a bunch of things. But I'm really excited to have him in here so he can tell us about what they've got going on. Give us a little bit more insight and they have some upcoming research too, which we're going to be teasing but not getting into. Paul, thanks for joining us today. >> Yeah, and I thank you, John. I really appreciate that. It's a pleasure to be with you this morning and looking forward to the conversation. >> All right. So you have a resume that's just amazing. Over 20 years in the space, you've hit all the major big players as far as Ogle V publicists. How did you get started on this? I mean, were you somebody that was even as a young person? Were you like, I'm going to be into ads or how did this start? >> No, no, not at all. I've got a confess, actually. My childhood dream was to be an astronaut. Then when I realized that that was highly implausible, then I wanted to be a spy, actually took the exam to join in my five and I failed miserably. So that probably tells you how good my ability to become a spy was. And as a result, I decided to form another analytical career for myself, which was in advertising. And that was over 20 years ago now. I feel like an eternity ago. The world seems to be changing rapidly. But it's a pathway I've not regretted and I enjoy it very much to this day. And I've had the great pleasure to work with the likes of Ogle V and have us within the WPP coast system, if you'd like, and spend most of my career on the common and publicists. And as you mentioned here today, Inkebyte, and continued to have what I hope, I really constructive conversations with our clients and of course the industry at large. So yeah, far away enjoyable journey so far, a few more years left in the tank, I think. >> Right. And how long have you been with Inkebyte? When did you start there? How long has that been? >> Yeah, I joined about three years ago now. So I've been back in the United States for about four and a bit years. And then joining Inkebyte from from from J.Fish. There's been an interesting journey for us, right? So we started as a business couple of decades ago, I believe. Largely as a kind of a Google partner. We've had that relationship for many, many years. And we've evolved there, that kind of structure our business really to meet the needs in the market. And where once we might have described ourselves as a performance media agency, I think today we're far broader than that. I guess the common language would say we're full service if you like. But for me, really it's just about deconstructing the complexity of marketing and advertising to separate things but intrinsically linked off and mistaken for each other. Managing that complexity, managing the fact that marketing investments are difficult to defend and the difficult to make accountable. The way Inkebyte faces that the modern marketing challenge is to say, hey, you know what? We want to reduce the complexity of the challenge is market's face. We want to make it more defensible and we want to make it more accountable. And that has to go beyond just the kind of the classic form of performance marketing if you like. Right. And so I get the impression that this is you guys come in for, you've got full marketing teams, you know, you're probably dealing with a CMO. And there's a whole bunch of stuff going on. Like you said, complexity is a core problem that they have to get out of the way. Have I got that right as far as this is just like major agency, you know, you talk about larger corporate clients that do have everything going across the board? Yeah, not quite. We work with big brands. We work with challenger brands. We work with many in between. The strength that we have across the globe is the ability to play in the nuanced space in between. The playbook for one brand is not necessarily the same for another. And I think that's where the challenge really lies within within the market ecosystem is understanding that nuance. From a personal standpoint, let me be clear, I spent several years working with Apple in the UK years and years ago. The playbook for Apple is very different to the playbook for challenger brands in a scale up phase. You know, and that's the real art. The real art is in is in understanding the nuance and where we are today in Quebec, I think we're trying to make sure that we show clients that there is nuance. And that's how we unlock better outcomes for our clients. Right. And then tell us more about your take on the world as VP marketing intelligence. You're bridging that gap between creative and data and results. So tell us more about how you put that stuff together and how your days are filled. Yeah, absolutely. You know, candidly the way most of our days are filled, actually, in having really challenging unconventional conversations with clients to try and unpack the things that maybe having a significant effect on their business, the performance of their campaigns, but that actually are often overlooked. I'll give you one example. Well, works with an advertiser who absolutely obsessed with looking at the dashboard, wanting to understand where they can make micro optimizations to improve the performance of their campaign. Sometimes being incredibly successful and thinking, hey, aren't the things we do really wonderful and then you kind of probe the question, well, hold on a minute, is this down to the things that we're doing or is this down to an underlying shift in category demand? Because it's important that we understand the things, the factors that actually influence performance. And sometimes it isn't an advertiser pulling a specific lever or, you know, making a micro-optimization, the effectiveness of your channels doesn't change day by day. What might change day by day is the random number of people that might be in market for a specific category. And that has massive downstream effects. The point I'm trying to make here is I'm spending a lot of my time looking for things that are slightly less obvious, but actually might be slightly more impactful, significantly more impactful than the things that we think are driving effects. All right. Yeah, I want to dive in more to that because there's a whole bunch of things we can drill into further. We just have to take a second. We want to thank scribe for their support of marketing over coffee and marketing. We obsess over channels and attribution, but a lot of teams still run on undocumented knowledge. The real reason so many marketing orgs struggle to scale isn't just head counter budget. It's that critical process knowledge lives in people's heads or scattered docs that never stay updated. Manual documentation is tedious, so it doesn't happen. And you end up with inconsistent execution tools that don't get fully adopted and institutional knowledge disappearing when someone leaves. That's exactly the problem today's sponsor scribe was built to fix. Scribe is a workflow AI platform that captures any workflow in real time and turns it into documentation automatically. No manual writing, no manual screenshots, no starting from scratch every time you hire a new marketing op-stri analytics person. It's trusted by more than 80,000 enterprises, including nearly half of the Fortune 500. I used scribe to document how we onboard a new marketing op-sire, getting meant to the ad platforms analytics dashboards and the reporting templates we use every week. I just turned on the extension and did the onboarding flow the way I normally would and scribe built the guys I want capturing every click step and screenshot automatically. What would have taken hours of writing recording and cleanup was done in under a minute and it was already ready to share. Scribe automatically redacts sensitive information names, account numbers, emails from every screenshot. And as an admin, you can enforce that across your whole team so nothing slips through the cracks. And when following that onboarding can also launch real time on screen guidance that shows them exactly where to click step by step inside the actual tools so those critical workflows get done correctly from day one. And scribe doesn't just document what you're doing and helps you improve it. Once you see how the process is actually being done, scribe will suggest improvements, point out redundant steps, show you where people get stuck and highlight what could be automated or simplified. It's not just capturing how work gets done, it's helping you do it better. To book a personalized enterprise demo, visit scribe.house/moc. That's a CRIBE.HOW/MOC. Again scribe.house/moc. Check it out and we thank them for their support at the show. Yeah, I wanted to talk more about that. This idea that clients get wrapped up in just tweaking the ads, but the reality is they're missing the data on the backend and really having that strong economic argument that this is working across the board. So can you flesh that out for us a little bit more? Yeah, I mean, the simplest way to kind of think about this and podcast like this, the risk is that we become quite slightly reductive right because we've got a limited amount of time and it's a go for everything. But let me just frame it in this way. Growth is not something that you can magically press a few buttons and just kind of manifest. A lot of growth actually comes from underlying shifts within how people are buying a category. This has been described to me in the past as putting your proverbial ship on the rising lake on the rising seas. And being able to capture your fair share of the market. Now most markets are generally quite stable and they don't move. And brands are pretty strong over time. Most revenue growth however is literally a product of how people are purchasing the category. And that can create a kind of dangerous, a dangerous lens for which to view advertising efforts in because you may well be doing lots of things and you may well have this perception that the things that you're doing. you're doing a succeeding, but really it's just the case of, "You're just taking your fair share of a category that's growing." The flip reverse is also true, right? So, you know, I recently had a conversation with someone outside of the incubator realm, and they were just saying, they're saying, "You've got a problem, you know, things aren't performing as well, and we're seeing the volume of certain specific behaviors on site, not carrying fruit to purchase." So there must be something wrong we're by the media, the site itself, the tagging, the tracking, all these different things. And actually, what it was was like, you know, there's this thing called macroeconomics. And what it means is there's a bit of pressure in your category. That means fewer people are actively searching for your brand. There's fewer people are searching for your competitors. And the downstream effect of that is the fewer people are going to your site and fewer people are filling your retargeting pools and fewer people are filtering through at the bottom end. And often it might not necessarily have anything to do with marketing and everything to do with just the natural fluctuation of external factors that are influencing the things that you're reporting your balance sheet. That answers your question. I feel like that was maybe a, I went around the hat around the houses a little bit there, but those are the types of conversations that I feel are slightly less obvious. Yeah, well, and that goes right to the core of, you know, we see so many discussions like this, the team is doing some campaigns and then they have to answer to the sea level as far as like, okay, why is this working? You know, we've spent more and we're not getting more for this like what's going on. There's a related point you had to in some of the stats you had thrown as far as saying half of the decisions are driven by CPA or return on spend, but only 22% prioritized reach. Like that, that seems insane to me. That's that low. But I guess is that just the way corporate bureaucracy's work and they're just, you know, reach is not on the list of concerns. Yeah, it's an interesting, it's an interesting point. And I think the, I think the challenge there is, has kind of several core factors. One, I think a lot of marketers, people in the advertising space struggle to quantify the value of reach number one. Number two is people will assume that when you start talking about reach, it is solely about the reach of your campaigns, but it could just be the the level of accessibility and availability that your brand has holistically, right? So you can, you can have significant reach actually by just increasing your distribution, right? To keep increasing the number of stores, the footprint that you have, you know, it gives you more access to more people just by the virtue of being more present. So this is kind of weird thing that, you know, reach is a word is generally become quite unfashionable, but the truth be told, look, you know, if you want to find that new customer, well, you need to introduce your brand to that new customer and one way or another. And often, you know, winning that new customer is actually the core source of your future growth. So, so there's that component, you know, we missed, we missed, I'd know, reach. And then it's this other layer that when, you know, you mentioned that we focus on the cost per acquisition or the ROI or or row S there is certainly a spin. And it's kind of the kind of third area I want to focus on is that the definition of all those three things is often wrong because we assume that the investment, the I and ROI was the investment we did yesterday and the R is the revenue that we drove today. Well, that can't possibly be, be true, it's too simplistic, it's too one dimensional in its output because the, you know, the the I is often, if you, if you can't answer the question like when did the I occur then the whole structure of that that ratio falls over, right? Because the returns could be the product of the I, the investment that happened last week, last month, last quarter, last year, in fact, but unless you can identify when the I occurred, then all your calculations of ROI or CPI or all these, all these ever fancy efficiency acronyms, they could be fundamentally flawed. And if you're making a decision off the back of them, you're probably really making a flawed decision. And so that's what we try, we want to try on earth, you know, how can we narrow that uncertainty so we can make better decisions as a result? And then how about just the state of the CMO today when thing also came out was 30% of CMOs have limited or no authority over their budgets? How does that make things more difficult and how do you work around that kind of stuff? Yeah, that's a good question. It's a real challenge, right? And, you know, if you look at some popular discourse in the industry today, you see that we often go back to the four P's of marketing. Yet largely most CMOs now are only accountable for one of those P's, the promotional P. And so that's a challenge because ultimately, whether your brand grows, stabilizes, shrinks, wherever direction you move in, a lot of it actually, the biggest determinant factor is your budget. If it's a CMO, you've got no influence on your budget, you're going to be hamstrung in how you deliver the outcomes. There's a common scenario that I've faced over the past. I'll probably say the last sort of 10 years in my career is kind of occurred more often than than maybe in the first half of my career. Is this idea that we want to drive 15, 20, 30% growth, 50% growth in terms of top line revenue? Okay, that's fantastic. Well, the second one is how we budgeting for that? Well, you know, budgets are flat here and here. Okay, well, you do realize that we live in an inflationary marketplace. So that means your budgets are probably 5% short this year, but you want to drive that growth? Okay, yeah. All right. Well, what's happening in your category? What's the current growth rate in your category? I'm 3%. All right. Okay. Well, in that case, like your 10, 15, 20% growth targets are really anchored in fantasy, not reality. And if you have no control over your budget and no influence on those budgets or how do you expect to achieve that growth rate? My argument would be, hey, let's go back to the drawing board and understand what success really would look like for us in within the constraints that the market will permit. And we're in the constraints that your budget will permit. But that conversation very rarely happens. Right. And so as I mean, eventually it will happen sooner or later, do you try and do all that work up front to get, you know, kind of agreement on where things are going to go and how it's going to work? Or is it more that you just, you know, you've got to get in there and just start figuring out how it works and, you know, kind of clean it up. And once the results start coming in and just deal with it, like how does that usually go? Yeah, it's a good question. So the ideal states, you do that work up front. The reality is, in most cases, you're chasing your proverbial tail. Right. So you're trying to make the best of the scenario and the situation you're in, which is why we get obsessed with what we see in the dashboard is why we get obsessed with microoptimization on a day-to-day basis, most of which has a kind of candidly like a negligible effect. Look, the success of any campaign of any brand is all done upstream in those kind of budgetary decision decisions. The strategic choices that you make and the choices that you choose not to make. Everything else that occurs downstream of that is ultimately hamstrung and attached to the decisions you make upstream. So if you don't get that right, if you don't get that early, those early conversations right, if you don't understand the impact of the other three P's before you get to the fourth, which is promotion, if you don't understand how that can affect everything else, then you're really just destined to kind of fail. The best you might be trading water at worst, you might be setting fire to your own market share by making an in-advised decision. So yes, really important you get the upfront stuff right. Too often that we kind of bypass that completely and go straight into Magic Boxer tactics to find a solution, but that solution often often won't be there. Okay, so one of the great things about in computer is global reach for these Challenger brands that are coming in that probably haven't dug into global. Do you see the huge kind of growth stats there? Is it something where they can come in and you guys can open up new doorways and get them into new places? Or are the Challenger brands already trying to do stuff in that space and you're able to improve it? What does that normally look like? Yeah, it's an interesting question and there are multiple answers and there's a lot of nuance there. There's a great quote I think that came from one of Dave Ogeri's works. I love because it's something that I've encountered throughout my career and it goes along like Sangha Longas. I might be completely embathodised in this, so forgive me a bit. From memory, it's something like what tends to work in one market, more often than not actually works in another, but we assume that there's such a broad range of nuance that surely that can't possibly be true. In most cases, it is true. That's not to say there isn't nuance, but the way I think about this is if you go to one market and dissect someone's brain, it would probably be gray and green and look kind of fleshy and not very pleasant. If you go to another market and do exactly the same thing and you look at the brain and it's probably gray and mushy and not very pleasant. The way that the way the human mind works is actually pretty similar. The nuance really is in how the channel ecosystems are set up. At one level, you can say comfortably. We've seen this film before in other markets and we can apply our learnings judiciously. Then there's the other side to it, right? The way the market's structure can be different. Certain categories might have different purchase behaviours and we can help our clients navigate those nuances quite well. So there's an advantage for us there to have that. But there's another kind of play out, I kind of want to sort of emphasize here that if you're challenging, challenging brand, you need to pick the battles that you take on very, very carefully, right? Because it's very easy to exhaust your budget, spread it to thin if you want to use that old analogy and achieve very little. You know, it's easy for us to say, hey, challenging brands, I wish to spend all of our money in performance media because it's super efficient and it's where we can get the most measurable outcome. My position, and I think the sensible position would be like, hey, hold on a minute, we know we can't compete $1 for dollar. We also know we can't win at the end of the journey because if we could, we could disrupt markets by being at the end of the journey. The markets will be way more volatile than they really are, but they're quite stable. If we want to gain a foothold, we need to find the parts of the market irrespective of a market we're in that give us our own structural advantage. So what specific category entry points that are underserved by an incumbent or by a bigger advertiser that we can, what are segments within that within the market that are underserved by incumbent where we can earn a right to play. And then we expand as and how we can prove that we've done that profitably. And there's good examples, right? And I know I'm being slightly verbose here, so forgive me. But Lulu Leman is a great example because it's been, it was raised to me a few months ago about, I have it surely like, you know, Lulu Leman, they just had this wonderful loyalty strategy and that's how they grew. It's not strictly true. You know, if you look at observe what happens to them in the late 90s, they understood that they couldn't tackle a big and tumble within their category. So they anchored themselves in this niche around Vancouver's female yoga reviews, yes. And they built their brand within that niche. And then what they were doing simultaneously was effectively building their physical footprint, their number of stores, they expanded their reach through the physical accessibility of the brand. And over time, they were able to expand, the true explosion fat brand was this underlying growth in at leisure as a kind of new category, which they were then able to expand their entry points out towards to drive that massive growth. And it had nothing to do with being reliant on a loyalty strategy. It had nothing to do with anchoring themselves in performance meetings at the beginning with. And they've everything to do with the upstream decisions they decided to take about what that defensible niche was. And so as a challenger brand, if they just went, while we're going to go toe to toe with the incumbents, they would have lost them. They would have probably not grown as well as what they've done. But they made some smart decisions of what to do and what not to do. And that's what fuels success for advertisers. OK, so along with this interview in the show notes, we've got links to the latest in QB to report, the marketers confidence paradox, which goes over some of the latest insights, covers a lot of stuff that's going on. But from that report and other things, we got kind of like, what are you looking at for the next year? What are the things in front of you that you, you know, clients are going to have to respond to and other challenges that are coming? Yeah, absolutely. So I think the report is going to unearth some some interesting truths and some of which we've talked about, how this disconnects in ROI, you know, the fact that advertisers are somewhat confident in their measurement. But then the tools that they use for measurement are actually tools that we know to be fundamentally flawed, which is, you know, somewhat of a paradox that we'll talk about in the report. The most important thing for us throughout the rest of the year is continuing to have these conversations. It's difficult. These are difficult conversations to have. And they're not something that you can, hey, click our fingers and we can start work. It involves working with our clients and the broader industry to understand how to work with their stakeholders to get by and to doing things and setting objectives in a way that's more tangible. It's not something that you just immediately switch focus to. It's something that requires ongoing practice, ongoing conversations. And so for me, the answer to the question, what's our focus is to continue having these articulate conversations back to evidence to support both our clients. And again, the wider industry in having a more articulate conversation about the outcomes we can expect and the outcomes we want to drive and how to manage and take over stakeholders on that journey. That sounds good. How about is there anything over the past couple of months that you've watched Red Scene Listen to that you can recommend for our audience as far as things that have impressed you or giving you a different view of things? In the last few months, yeah, I'm quite active on LinkedIn. I love the LinkedIn discourse. It's very good. It's very bad. I kind of there's a really interesting discussion going on at the moment. I've noticed around some work that's come out of a gentleman called Andrew Tyndall and the creative dividend, the impact that creative media can have collectively on the commercial outcomes. In some cases, it's been absolutely ripped of shreds because it's using a very selective data base in principle that the outcomes of that report are strong. But for me, I would be encouraging clients to look at this discourse, not just with that, but all the market effectiveness discourse, understand what it really means, how it can practically apply to your brand and your unique circumstances. Question the evidence and find your own evidence. People say it's important to be data driven. I think it's actually really important to be selective about that. Just make sure you're using a good data, good data and help you make a decision and use evidence, trial things out in the market, see what you can learn from your peers and evidence that for yourself and make your own judgments. And I think that's the kind of the best advice I would give today, certainly from what I'm reading at the moment, is, yes, take this on, but test it out for yourself. Learn it for yourself. Don't take it blindly and really interrogate it. There's a whole host, hundreds of years of evidence here about how brands have survived and thrived. The risk we take is we fold that in the trash can and then like a big torch tip because we've become obsessed with what the latest vendor can sell us. We shouldn't do that. We should use that evidence and use it judiciously. And for right or wrong, that's what the likes of Andrew Tyndall and Mark Ritz and Les Benet are doing. So get involved in their work and read it, understand it and apply it judiciously. That sounds good. Yeah, I'll have links to your LinkedIn stuff. People will definitely want to check that out. There's a bunch of content you've got up there and we'll have a link to your profile to how about if folks want to learn more about incubator, what's the best way to learn more? Yeah, I think one of the strengths of incubator is we're all with pretty open, open bunch. So my best advice they want to learn about is just reach out. I've had some myself, one of my colleagues, we're easy to find on LinkedIn and just ask a question. We're actually quite a pleasant bunch of people believe it or not. And so just reach out and I'm more than happy to take the time to do that. We obviously have a website. So that's a very face interaction with most brands. Just reach out. It's my recommendation. That sounds good. As usual, I have everything over in the show notes so people can check that out over there if you want to find links. You can also sign up for the marketing over a coffee text line at 617-812-5494. But otherwise, that's going to do it for us for today. Paul, thanks for joining us. You're very welcome. It's been a pleasure to spend some time in this morning, so thank you. You're welcome and thank you. We appreciate it. That's going to do it for this week. So until next week, enjoy the coffee. You've been listening to Marketing Over Coffee. Christopher Penn blogs at ChristopherSpan.com. Read more from John J. Wall at jw5150.com. The Marketing Over Coffee theme song is called MeloG by Funk Masters. And you can find it at Music Alley from Mevio or follow the link in our show notes.