A History of Marketing

A History of Marketing / Episode 15

This is not a current events podcast, but this episode is more timely than usual.

I’m joined by Gabriele Carboni, a marketer, author, consultant based in Italy. I met Carboni through Philip Kotler. Together they co-authored the book, “Enlightened Management” which is about how Impact Marketing can have a positive impact for people and the planet.

Gabriele Carboni is probably the only marketer to have a book endorsed by the late Pope Francis. The Vatican issued this comment on Carboni’s book, “Civil Economy.” (Translated from Italian)

“His Holiness encourages every reader, every business leader and every person of good will to take inspiration from this work, to transform every professional environment into a place of growth, not only economic but human and spiritual.“

I'm publishing this episode just a few days since we learned of the passing of Pope Francis. But I recorded this conversation with Gabriele Carboni in February, when Pope Francis was alive but had been in the news due to health issues.

Carboni shares some great stories about meeting Pope Francis and earning an endorsement from the Pope. He also shares about what it’s like to write a book with Phil Kotler, and speaks to the rich legacy of the Italian Renaissance, Enlightenment, and Italian Humanism.

We discuss how the ideas from these eras and schools of thought influenced marketing as a field and inspired Carboni to focus on impact marketing.

A Marketing Collaboration with Philip Kotler

Andrew Mitrak: Gabriele Carboni, welcome to A History of Marketing.

Gabriele Carboni: Hi Andrew, thank you for having me.

Andrew Mitrak: So we connected via an introduction from Philip Kotler and you recently co-authored a book with Phil. So let's start the conversation there. How did you first learn about Philip Kotler and when did you first meet him?

Gabriele Carboni: I was already beginning my company, which is a marketing company, obviously, digital marketing company. Digital marketing was my hobby and then we started a company with two business partners.

Because, of course, I was good at building websites, I was good at creating graphics, so the operational part I had. But I needed to understand the strategy better, so I bought a copy of Marketing Management. And then I read it. And then since I'm also a journalist, I was invited to Milan in 2017. Philip Kotler was speaking there. And this is a fun story because in Italy you need to be part of an association to be a journalist. It's not just you write and you are a journalist, you need to get trained and then to be part of an order, there is the order of the journalists. So you have your press badge.

So I went to the event with my badge and I said, "I am a journalist, this is my badge." Of course, I was not known as a journalist, it's not even my job. But I was there with my badge and I said, "Look, I'm a journalist, I have the badge. Can I interview Philip Kotler?" And of course they said, "Of course you cannot, because you are we don't know you, you're not in our list. So go and listen to the speech, but you're not going to meet him."

Then I said, "Okay, at least I get a free event with Philip Kotler, I'm going to listen." After the event, the event was very small, it was in a university in Milan. And I saw that there was a press room. Then I went to where there was a person on the door and I said, "Look, I'm a journalist, this is my badge. I want to interview Philip Kotler." And he said, "No, you're not on the list."

I took a look inside the room and I saw a pregnant woman who happened to be the press manager, and I told her that my wife, which was true, was pregnant too. So they were both at the seventh month of pregnancy. And we started talking, I tried to be nice with her and since, I don't know, we connected somehow. She said, "Okay, after everyone, if we have like 30 seconds, you can have a picture with him and this is the max I can do."

It happened that at the end of everything, he was drinking a coffee, eating something. I had my occasion, I had my photo with him and then we had half an hour to speak. So I happened to be the last, but I got all the time in the world and it was very nice because I gifted him my first book, which was in Italian, but he liked the approach.

I tried to explain to him an idea I had at that time which then became this card deck which actually was awarded one of the three best marketing innovations in the world in 2019 and he gave me a lot of advice. And then I asked him to write the book together and he said, "No," because, of course, he didn't know me.

Andrew Mitrak: Yeah, you're pushing your luck a little bit there. You've already gotten in, you've gotten to meet him, you've gotten a half hour and right in the first meeting you've asked him to co-author a book.

Gabriele Carboni: Exactly.

So a year later, 2018, he came to Bologna, which is near where I live, so it was easier. Still with the journalist badge. At that time I was already known by the organization, so I got an interview and I asked him again to write a book together and he said, "No."

Then in 2019, I made the card deck and again I went to visit him in Rome. It was the last time he went to Italy because after that there was COVID. And he said, "Oh, this card deck is very nice, we can do something together." And so we started to have an email exchange and we started to write something, he wrote a forward for a book on digital marketing I released. And then I went to Sarasota to visit him. And at last he said, "Okay, we are going to write a book together."

Actually, in your interview with him, he was talking about a small and medium enterprises book and that is the book we have written together, which is this one, Enlightened Management. And now it's available in English since December last year and it's going to be translated into Italian in a few months. So it was pushing my luck as you say.

Andrew Mitrak: I'm going to ask you about Enlightened Management and your work on small and mid-sized businesses. I want to ask, what is co-authoring a book with Philip Kotler like?

Gabriele Carboni: I write very fast, so in three months I wrote the first part of the book. In like three hours he replied with all the modifications. So the problem with him is he's very active, also Saturdays and Sundays, even nights. He's super fast, so I had difficulty keeping up to his timing.

Andrew Mitrak: It is amazing. At the time that you met him he must have been into his mid-80s and at the time I interviewed him he's in his early 90s and he's remarkably fast, remarkably sharp and smart and you have to keep up with him.

Getting a Book Endorsement from Pope Francis

I want to shift gears and ask about another very influential world leader that you met. Pope Francis. And we're recording this in late February of 2025 and there's been a lot of news about Pope Francis's health and we certainly wish his holiness a speedy recovery.

You are the first person I've ever met who had his book endorsed by the Pope. And I want to read this quote:

"His Holiness encourages every reader, every business leader and every person of goodwill to take inspiration from this work to transform every professional environment into a place of growth, not only economic, but human and spiritual."

And first off, congratulations on earning an endorsement from the Pope. I'm sure that's very meaningful to you.

Can you tell me the story of meeting Pope Francis and how you came to earn an endorsement from his holiness?

Gabriele Carboni: Yeah, I was invited after COVID to a very big event they had organized in Assisi, which is the city of San Francesco. There were like 1,000 young economists and marketers from all over the world, so it was very lucky to be invited. And I saw the Pope from afar. And that was the first time, but it was very exciting because it was with 1,000 people all together waiting for the Pope, it was very emotional.

And then I visited him for a private meeting the year later, so it was two years ago. And I asked him to write a forward for my book. The book was not already written and of course they replied by his office, not him in person, they replied that they were not interested.

Actually, part of that book is now Enlightened Management. So some of that content was presented to Pope Francis before Philip Kotler. It happened that I wrote a book with other very famous professors in Italy about the civil economy. And that was published by a Catholic Association. So I wrote to the Pope's offices because they said no, but they gave me their email address. Again, pushing my luck, I wrote them and said, "Hey, I have another book. It's already done, it's published by a Christian Association. Can you please write something?" And they replied with a full letter and it was crazy. It's really nice to have a comment by the Pope.

Then I met him again last year. I gave him a butterfly as a gift. And actually, Philip already knows this, but no one else knows it. I sent a copy of Enlightened Management and I asked for another comment. So I'm a lucky guy and I push it.

Andrew Mitrak: Being politely pushy, that's definitely a lesson for marketers. Just shoot your shot, right? You got to give it a try.

Can you set the scene of what it is like to meet the Pope? What are you feeling? What is the environment? Because I never will in my life, very few of us are lucky enough to meet the Pope and you're the first person I've met who met him. So what is that like?

Gabriele Carboni: Well, you are usually not alone because they are private meetings but with I don't know, 30 people, 100 people, 200 people. And he is very kind, he shakes hands with everyone. So we were 300 and everyone got a handshake and a picture with the Pope. It's like three seconds, of course. But everyone. And also he gives you a small gift, very emotional and then he always gives a lecture. Last year it was about AI, so it was very interesting.

And then you have, if you want, you can say something, like again, two or three seconds. But he's very kind, nice, and of course… holy, we can say.

Italian Humanism's Influence on Business and Marketing

Andrew Mitrak: So I want to talk about some of your philosophical background into how you became a marketer. And in our email exchange prior to this interview, you mentioned that you began your journey with exploring Italian humanism. And can you share more about what Italian humanism is and how you went from this philosophical pursuit to becoming a digital marketer and a marketing author?

Gabriele Carboni: It's about humanism. Also Philip wrote his second autobiography, My Life as a Humanist. Italians have in their background the Renaissance and humanism, which helped us a lot to think business in a different way.

One thing I've learned is that in the past, more or less where we have humanism, which was before Renaissance, companies had God as a shareholder. Meaning part of the profits were given to the community, because, of course, they didn't fire the money to God, they just gave to the community. And which is now something we do to benefit corporations or companies that have a purpose. So that intrigued me very much and I bought some books, one I have here for you, it's a book, an original book from the 1800s. And it discusses the economies of the 1700s. It was before the industrial revolution and everything was about people.

Andrew Mitrak: What was the name of this book?

Gabriele Carboni: Yeah, of course it's Italian, Economics Ideas of economists around 1848, about Augusto Graziani. I think one copy may be available in the world.

Andrew Mitrak: And for listeners, it's not some reprint. This looks like an original physical copy… very withered.

Gabriele Carboni: And I really appreciate the fact that as Italians, we always put people at the center of our business. Before the Industrial Revolution, of course, agriculture was the main business and it was a business between man and environment, which is something we are looking for now, maybe without a good success.

The Renaissance and the Ideas of Patronage and Branding

Andrew Mitrak: In our exchange, you also mentioned that Italian humanism has a direct lineage to the Italian Renaissance and that a lot of modern branding practices could be traced back to the Renaissance and Italian humanism. And if you think of things like the Medici family, which is a name that you just hold in such high regard today, centuries later, that clearly there's some branding element there. And I'm curious if you have any other examples or of branding practices that have roots in the Renaissance.

Gabriele Carboni: Well, everything in the Renaissance was related to the arts, not only paintings or statues, also music. The point was to give emotion to people and to give a sense of beauty in the cities, in the houses, the castles, even churches, of course, also the church was a very important player of the Renaissance. Everything in Rome, basically, you can see now, aside from the ancient Romans, they are from the Renaissance.

I think art is one of those elements you can use to touch the heart of people and when you do that, then people attach to your brand. In that case, the brand was the name of the family or the church itself. And that was a great branding for Medicis, for example, so great that everyone knows who they are even now. If this is not marketing, I don't know what it is.

“The Book of the Art of Trade” by Benedetto Cotrugli

Andrew Mitrak: And from this era, you introduced me to a book called The Book of the Art of Trade by Benedetto Cotrugli.

He wrote this book in 1458. And this was a fascinating book to dive into. And it's not a marketing book per se, but it covers business practices that tie into marketing. It talks about accounting, running an ethical business, and professionalizing business practices.

He even talks about the importance of merchants to have proper attire and to be well-informed about areas like cosmography, geology, philosophy, astrology, theology, and the law.

So the idea of personal branding in a way, if you're a merchant selling something, know things and just be an erudite individual, be well learned, present yourself because you want to come off as trustworthy to your potential customers and then they'll buy your products. So, not exactly marketing per se, but definitely personal branding and certainly salesmanship.

I'm curious how you came across the book The Art of the Trade and what takeaways you had from it.

Gabriele Carboni: Well, let me say that it's available also in English, so The Book of the Art of Trade, it's actually the title, the English title, so it is available on Amazon or I don't know, anywhere.

Andrew Mitrak: It's published long enough ago, it's all in the public domain too, so you can find it free online as a PDF of it, yes.

Gabriele Carboni: Good. Yes.

Gabriele Carboni: Well, it's good because again, it puts people and environment at the center. I found it because I was studying civil economy, so the economy before the industrial revolution, which is now fancy in Italy, and there are some universities teaching civil economy and one of the books they suggest is exactly this one. It also teaches you how to relate to what we now call stakeholders.

So, marketing and business in general is all about relationships. Of course, with customers or potential customers, but also with employees, talents and everything that we now call stakeholders.

The Italian Enlightenment

Andrew Mitrak: Moving on from the Italian Renaissance and some of this area, I want to also touch on the Enlightenment, or the Italian Enlightenment. And Enlightenment is very important to you, it's part of the title of your book. You know, we talked in our exchange on email about the Italian Enlightenment and when I as a somebody growing up in the United States, when I learn about the history of the Renaissance Enlightenment, the Renaissance was focused on Italy, and a lot of the Enlightenment tends to focus on the northern countries and if you even if I look at the English Wikipedia page of the Enlightenment today, you see France and Germany and England and Scotland, they're referenced a lot more and Italy's mentioned but it's not quite as prominent there.

So can you tell me about the Italian Enlightenment and what differentiates some of the Italian Enlightenment thinking of this period versus some of the other countries I mentioned?

Gabriele Carboni: Well, maybe someone will be mad about this, but we didn't have so much of enlightenment because we had humanism way before that. So Enlightenment is kind of a humanism after a few hundred years.

Andrew Mitrak: So the Italians were so far ahead of the curve, it's like you had your enlightenment centuries earlier.

Gabriele Carboni: Exactly, exactly what I mean, it's my fault if someone is mad I said that. (Laughs)

But during humanism people started to read because at that time not a lot of people could read and not a lot of people could have access to books because books were handwritten and mainly people of the church could read and could have those books, aside from some very rich noble people. And then they started to spread ahead some books about also ancient philosophy and that, of course, created a movement that then brought us to the Renaissance and then spread around the world and at one point, they invented the printed books and that helped to spread the word and I think Enlightenment it's something came before the printed books.

Andrew Mitrak: The Enlightenment and the Renaissance era might have been captured by some of the handwritten stuff, but the printing press and that changes everything as far as what's available to people and who gets the privilege of owning books and who gets to learn these ideas.

Gabriele Carboni: Principles of the Enlightenment are the same that we are reading now in civil economy. Actually, the civil economy was invented by enlightened economists in Italy. And also Adam Smith was a reader of civil economy, but then the industrial revolution pushed everything to profit and product. So we kind of forgot the person, the people and decided to go for the product and the profit.

Civil Economy Pioneers: Genovesi and Paradisi

Andrew Mitrak: And so this idea of civil economy, which you've brought up a few times, the people most associated with this are Antonio Genovesi and Agostino Paradisi. They wrote and are kind of the thinkers that are most associated with the Italian Civil Economy.

Gabriele Carboni: Exactly. Antonio Genovesi was the first in Europe, meaning maybe the first in the world, to have a course at the university about economics. So the first university course in economics was in Naples with Antonio Genovesi. And then Agostino Paradisi, who was born here where I live, it's called Vignola, it's a city called Vignola in Northern Italy, he was born right here and he had the first course about civil economy at the university of Modena.

And mainly they put people at the center again, but they gave us something that is now you can now reuse for sustainability, which is the relationship between companies, the government and the community and third sectors. So they already knew that the market it's going to be rich and prosper if companies work with the government and with the community together. They didn't have the environmental problem, of course. That is the main point.

The Arrival of “Impact Marketing”

Andrew Mitrak: Yeah. So all this tour through history of Italian humanism, the Italian Renaissance, the Enlightenment, all of this, I hope listeners have come along with us on this journey through philosophy and history and thinking, how does this tie to marketing? Well, it all sets the stage for impact marketing. you know, you've spoken about these ideas of business not just being for commerce, but being for people, that everything is kind of all connected and marketing has an impact on everything. So, this area of impact marketing is a specialization of yours. And so in your own words, could you define what impact marketing is and how it differs from traditional marketing?

Gabriele Carboni: Yeah, you can define traditional marketing as the profitable satisfaction of needs. It's the short definition, which is the one I always remember, but it is correct. So the profitable satisfaction of needs, meaning marketing cares about profit and customers. Which is kind of a small definition in today's environment.

So impact marketing instead is the strategic approach of the company, which relates to the community and the environment to create a positive impact. In this definition, profit is just a result of the positive impact of the company. So this is marketing, impact marketing. So while marketing just cares about profits and clients, impact marketing cares about all stakeholders, including the environment, to create a positive impact, which results in profits.

The Evolution of Impact Marketing

Andrew Mitrak: Thanks for that definition. And how has impact marketing evolved as a field over the years? Or when do you feel like impact marketing first entered the lexicon of marketing and how is it moved over time?

Gabriele Carboni: I defined impact marketing when I was reading civil economy, studying civil economy. Since economics is a big field, I wanted to bring some of the ideas to marketing, which is maybe more modern than economics, at least in my industry. And then I brought those concepts to marketing and it was just a few years ago. More or less during COVID, which was also in some ways the better environment to start an idea like that where we have seen people care more about other people, about the environment and so on.

Andrew Mitrak: The reason I'm kind of asking about how it's evolved is these ideas of companies doing good not just for their shareholders, but also for the environment. It's something that I feel like has probably ebbed and flowed over time. And Phil Kotler himself wrote the book Broadening the Concept of Marketing and has social marketing ideas and economists have also pushed back on this over time. There was somebody in America named Milton Friedman and he would argue that the social responsibility of business is to increase its profits and almost like nothing else. And so then there's also ESG is kind of being part of companies as well and there's been almost a push and pull, I think, between companies purely focusing on their bottom line and returns to shareholders and then these ideas of, well, what else can a company be doing as well? And then not just what the company could be doing, but could marketers within that company be doing? And so it just seems like there's always been kind of a push and pull, at least for the last several decades or so, between the social responsibilities and impacts marketing and businesses should have.

Gabriele Carboni: I always use this analogy of the butterfly. Companies are like caterpillars: they go from leaf to leaf to find new customers, new profit and to evolve themselves. But they don't know they will evolve into a butterfly. And that's good because caterpillars need to live, to sustain themselves. Of course, the first sustainability is the financial one.

And then they evolve. They create the chrysalis, we can say they start recognizing their values and they create this chrysalis with values. And at a later stage, they evolve into a butterfly and they start flying around and they see there is not only that tree with only leaves, they see they are part of an environment and then they discover they can relate to that environment. So this is mainly the concept of impact marketing and enlightened management.

Real-World Examples of Impact Marketing

Andrew Mitrak: I love that analogy because if we if you think of yourself as a small business, of course, you want to do good for the world, but to do that you have to sustain yourself and earn some profit, so you need to evolve over time to be able to have the full positive impact on the world that you'd like.

I'm wondering if you have any examples of either impact marketing in action or businesses that have kind of gone this caterpillar to butterfly journey and started one way but evolved to really embrace impact marketing as they grew. What are some of your examples of impact marketing in action?

Gabriele Carboni: Well, of course, benefit corporations. In the US and some other countries like Italy, you can have a benefit corporation. My company is a benefit corporation, meaning as a company it is written that we aim for profit, but also we have some sustainable goals and we need to achieve that year by year and they have the same value as the profit goals. So, for example, my company gives 20% of the net profits to community projects. And that's an example.

And we have the B Corps, so those companies, mainly big companies, that are B Corp certified. And many companies, and this is one point, many companies already do a lot of good, they generate a positive impact, but they do not communicate it. And this is very true for small and medium enterprises. They always donate something, they support some community local causes and they do not share the good they do, which can be good. But if you share what you do, then other companies can bring your example and do the same.

Andrew Mitrak: Yeah, I think of examples of companies that have done that successfully like there was this shoe brand called Tom's Shoes and they were very popular, probably especially 15 years ago, they were really at their peak or that was around the time they launched and they really brought attention to the importance of shoes for the poor or specifically for shoes in regions of Africa. And there was this idea of buy a pair, give a pair. And that their relatively low cost made shoes but they were sold at a premium price and the premium that you're paying is as a consumer is understanding I'm supporting a good cause, I'm supporting shoes for the world, I'm willing to pay for these and it almost became a social status symbol in a way. Like I'm wearing these Tom's shoes, I'm not wearing some big fancy other designer shoes, I'm showing that I care about a cause and it made, Tom's a more popular brand, it also brought more attention to this issue, and consumers benefited in that they got to wear shoes and signal to others that they care about causes like this.

Gabriele Carboni: Yeah. Another example could be Patagonia, which is very well known around the world, maybe the first B Corp. Yes, many big brands like Danone even are B Corp certified and you can read everywhere what they do. I know Danone very well in Italy and they do a lot of great projects for the positive impact.

Obstacles to Implementing Impact Marketing

Andrew Mitrak: When it comes to other companies adopting impact marketing, what are some of the biggest challenges or obstacles that need to be addressed for impact marketing to be more widely adopted?

Gabriele Carboni: Well, it's the mindset. For those who already do charity or are already active in their community, it's to start communicating. Also because customers care more and more about products. Even if it's B2B, they're starting to care about suppliers that care about sustainability. This is also forced somehow in Europe because big companies need to share their sustainable report, for example. But also many companies ask for the ESG rating for their suppliers. And customers prefer to buy sustainable products. So that is one point.

Another point is that many companies think that sustainability is a cost instead of an investment. Now we already have a lot of studies saying that sustainability is not a cost, it is an investment and there is a return of investment even shorter than we thought before.

Enlightened Management: Impact Marketing for SMBs

Andrew Mitrak: I want to come back to your book Enlightened Management and how marketers, especially small business marketers and entrepreneurs can really apply impact marketing from the start. And this book is all about how to take these ideas of impact marketing and apply them for small and mid-sized businesses. I love this area because I've been a small business owner myself, I came from a family of small businesses, my professional work today is about marketing products to small businesses. And I just think that this is a really cool idea of how do you build a business that has social good and thinks about long-term impacts beyond just your profitability right from the start as you're building and founding and growing your business. So why did you focus on small businesses and what are some of the top lessons and takeaways that you have for small businesses and entrepreneurs?

Gabriele Carboni: Well, big companies, they have more money and they are somehow forced or anyway invited by governments to do something. So they are already on the path of sustainability at least. And you can also think about Unilever with Paul Polman that brought the purpose at the center of every product. Small companies as said, they usually don't have the mindset or the money to start this kind of new way of marketing and of business. So we tried to give practical advice in the book. There is a whole chapter, a whole part about tools that small and medium enterprises can use.

One concept I want to bring you is the concept of the new P's of marketing. So we have redefined the four P's, which are product, price, place, and promotion, of course, thinking about just one P, which is people, to the third power. So it's going to be People X Purpose X Planet, which equals prosperity. It works very well, it's also on the cover of the book. “People, purpose, planet” and P cubed. It works even better in Italian because people to the third power, we say people elevated to the third. I don't know if you say it also in English, but we say elevated. So meaning that people is the person is elevated if they work with purpose and it works for the planet.

Andrew Mitrak: I see what you're saying because it's people and to the third power, the three would be elevated on top of it. We don't use that term, but I can visualize exactly what you're describing. Like just another example of the Italian language being much more poetic and pretty than English.

The Importance of Purpose and Action

Andrew Mitrak: Are there any other takeaways for marketers and entrepreneurs into really applying this into practice or if somebody is a marketer who's listening to this today and they're inspired by some ideas of enlightened management, what could they do as a daily activity or is there planning their next marketing campaign to bring some of these ideas into their work?

Gabriele Carboni: Well, something that was very difficult for me was to find my purpose. And it took me a lot of time. I explained it in another book, but there are those nights you cannot sleep because your brain still works. And I understood that my purpose was to help companies to function differently, to do business differently. This is because my father had a small company and he was one of those who focused on the product. It was a car repair garage and he was always focusing on the car. And the car was perfect, everything was great and you could trust that company that your car was perfect every time. But they forgot about the people who drive that car. So they were always late, they were not treating employees very well. And so I wanted to explain to companies that you can do business differently. So one thing is if you can find your purpose, you wake up every morning knowing what you are doing and why you are doing that. I think everything will be easier.

Andrew Mitrak: I can relate, and I think everybody can relate, to those nights as you're thinking, “Am I doing the right thing with my life?” Even when you feel like you're successful, or you had what you thought you wanted, that time passes and you kind of get restless or you think of second guess things. I found that becoming a father and having kids also changed my perspective on a lot of things too. I think about the planet they'll inherit, the types of companies they'll work at, the types of jobs they'll have, and how you want them to spend their time. So it is something that. Thanks for sharing that was part of it because I certainly relate to it and I think listeners relate to that as well.

Gabriele Carboni: Yeah. And I always follow Yoda's quote, which is, “Do or do not, there is no try.”

Andrew Mitrak: You're totally right and you've exemplified it by asking Philip Kotler to co-author a book the first time you met him, asking the Pope for your endorsement. I think also even for me I relate to it somewhat on this podcast. You think about the things you want to do, the projects you want to do, and you're like, I can think about it, but how about I just do it? How about I just send Philip Kotler an email and see if he wants to talk? And then sometimes he will say yes and the universe pulls you in a direction or gives you a signal that you should keep kind of pulling on that thread and exploring those ideas.

We've gotten very philosophical here…

I've really enjoyed speaking with you. It's been so much fun going back from Italian humanism, the Renaissance, the Enlightenment. How all of these ideas from 500 plus years ago can impact how we think about marketing, what we choose to prioritize. And also I just loved hearing your stories both about meeting Phil Kotler and Pope Francis and it's just been a really fun conversation.

Where can listeners find you online and how can they learn more and support your work?

Gabriele Carboni: Well, LinkedIn is the best way to reach me. I always respond also to direct messages, so if you have any questions, just write to me and I'll reply.

Andrew Mitrak: Thanks so much for your time, I've really enjoyed the conversation and I look forward to staying in touch.

Gabriele Carboni: Thank you very much.

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A History of Marketing / Episode 14

If you listened to my first podcast with Philip Kotler, you heard Phil discuss marketing emerging in the early 1900s as a form of “applied economics.”

This week, my guest Mark Tadajewski shares research that casts doubt on that version of events, revealing a narrative of early marketing history that is much more complex than the traditional story and veers into surprising, supernatural territory.

Mark Tadajewski is Professor of Marketing at The Open University and Editor-In-Chief of the Journal of Marketing Management. He’s a marketing historian that I admire for two reasons:

First, there’s his dedication to his research. For the past two decades he’s pored over seemingly every artifact related to marketing history. When you listen to this conversation you can hear how he has an encyclopedic knowledge of the evolution of marketing thought and practice. I’m only a few months into exploring marketing history on this podcast, so speaking with Mark Tadajewski was a humbling experience.

Second, there’s his bravery. Tadajewski’s research pokes holes in a narrative that’s endorsed by giants in the field of marketing. There’s considerable professional risk in second-guessing the likes of Philip Kotler. But Tadajewski is unafraid of surfacing what his research reveals, even when it links marketing’s development to fringe topics like telepathy, hypnosis, spiritualism, and other forms of psychical thinking.

This podcast is called, “A History of Marketing” not “The History of Marketing.” There isn’t one single definitive story of history, so I enjoy presenting multiple perspectives of marketing’s development alongside each other through conversation.

Here’s my conversation with Tadajweski:

Myth Busting Conventional Marketing History

Andrew Mitrak: Mark Tadajewski, welcome to A History of Marketing.

Mark Tadajewski: Andrew, it's nice to be here. Thank you for asking me.

Andrew Mitrak: Yes, it's so great to meet with you. When I started this podcast, you were the exact type of scholar I was hoping to meet with, so I'm so glad we had this opportunity to connect. You've thought deeply about marketing's history and evolution and early beginnings and you published a great deal of research around this.

Your LinkedIn profile states quote, "I challenge conventional perspectives to encourage a critical examination of marketing thought in the broader political economic environment.” And you've also been described as quote, "the foremost myth buster of marketing thought."

What are some of the top myths you've busted or the non-consensus ideas you put forth? How have you sort of earned this reputation for challenging conventional perspectives?

Mark Tadajewski: The myth busting thing, I think it's a result of somebody else's paper; [D.G. Brian Jones] a colleague that I worked with a lot actually in the last 20 years wrote a paper called "The Myth of the Marketing Revolution." And you see lots of similar titles to that. And so what I've done basically, whether it's the marketing concept, relationship marketing, service dominant logic, the history of motivation research, the history of marketing education generally, with all of those, I've generally looked at the literature and gone, okay, this is great.

But I know from being a bit of a sad character who sat in offices at midnight, looking through the Harvard Business Review from the very first issue and going through everything, this doesn't seem quite correct. And so if I get a sense that there's an argument that I think is problematic, then I tend to start digging a little bit more.

Rethinking "The Marketing Revolution": Did the Marketing Concept really start in the 1950s?

There's a paper by a guy called Robert J. Keith, published in 1960 in the Journal of Marketing. It's called "The Marketing Revolution." Now Keith's core argument basically is that throughout the history of marketing, what we see is a progression. We've gone from—he's talking about the Pillsbury Company in particular, but he's generalizing his argument to business generally—So he says we've moved through a number of stages. He talks about a production era, which is roughly 1869 to about 1930. Then it's a sales era, 1930 to 1950. Then the marketing era in 1950. And that's where people usually stop. But he also mentions a couple more. He talks about marketing control, about 1958, and he talks about something later called “change.”

Now, a lot of people, you know, if you open an introduction to marketing textbook, any of them pretty much, they'll say the marketing concept—this idea that the organizations should be orienting all their activities around the consumer—appears about 1950. I was like, really? You really survived in business, if you're a production-oriented company, just by producing whatever you could and hoping everybody buys it? Or through hard selling? You just sell people as many things as possible. You don't worry about overloading them? You don't worry about telling them fibs because you're never gonna see them again? It's a transactional orientation. You don't expect to see them again in the future, so you can get away with it now.

And so what? In the 1950s people suddenly saw this light and went, "Oh, you know what we should be doing? Actually, we should be making things people want." And I thought that just doesn't sound really true.

I started reading again some of the other historical papers that have been written in that area and people were contesting it; the textbooks were never picking it up. It was like, okay, this is really interesting.

John Wanamaker: A 19th Century Relationship Marketer

So I started writing my own papers on how you should think about this differently. I found earlier examples like, you look at the merchant princes from the 1850s onwards basically.

John Wanamaker for example, a really famous retailer, would walk around his store with customers and he would be offering them, you know, whatever sweets or nuts or whatever he was eating and chatting to them really nicely and kindly. And he was really smart because he would give gifts to the children. You know, so immediately you're impressing the parents, the kid loves it massively. And the kid goes away with a really positive impression and when it comes their turn to buy, they come back to you. And Wanamaker's there selling them the things that they actually want.

Andrew Mitrak: Wanamaker also has one of the most famous quotes in marketing, which is something along the lines of, "I know that half my advertising is wasted, the problem is I just don't know which half."

I gotta do a full episode on Wanamaker because he seems like a really fascinating guy.

Mark Tadajewski: His stores are fantastic. But I used Wanamaker to say... I'm dipping about a little bit, but you get the marketing concept, and then you get later developments called relationship marketing that people say appear in 1970. That's complete fiction as well. You know, people have always been interested in long-term relationships.

You read Henry Sidgwick, who was somebody that Harlow Gale used to read. He would talk about how people like to find organizations, you know, even in like 1850, that they actually like to deal with because if you could deal with them once and they sold you something great, you could go back and it meant you didn't have to think or worry about who you're buying from. So this, again, none of this was new.

But when I was looking at the Robert J. Keith paper, I was like, okay, he says Pillsbury are orienting themselves all around the consumer, that's great, but I know that argument also appears in Percival White's work from 1927, where—and this is a pretty much near verbatim quote—it says, "the thesis of this book is that the beginning and end of all marketing is the consumer." It's like, oh, okay, that sounds very much like Robert J. Keith. So okay, we can critique it on simple grounds. People have mentioned this before.

When you look at some of the citations of people mentioning Keith's work, they usually cite a guy called [JB] McKitterick, who actually says in one of his papers—and it's a really interesting thing that should have been the giveaway—you know, [paraphrasing], “People that take their time to read earlier business periodicals will usually find out that most of the ideas that we think are original to us have usually been articulated way before.”

Not So “Customer-Centric”: Pillsbury’s Price Fixing Cartel

Mark Tadajewski: So I go and read this material and I knew the history was really flawed. We're trusting Robert J. Keith quite a lot here. His narrative sounds a little bit self-serving. Pillsbury's gone from ignoring the consumer in 1870 to orienting everything that they do around them.

I said, well, how can I find out what they were really doing? So I read the histories, that didn't tell me much more.

I thought, oh, I know what I can do. I wasn't sure whether this would work, but I knew that the Freedom of Information Act in the United States—there are loads of reasons why you might not want to do this, but I did it anyway. So you basically write to the FBI. And you say, can you send me any information you have on this company, these people? And as long as they're dead or it's a company, they'll generally, depending on whether the information needs to be redacted or kept back, they'll send it to you. And they sent me the file on the Pillsbury Company.

And so I was reading this. And as I'm reading this one Saturday morning, I'm sitting there and I've got, you know, bits of an idea for this paper and I'm reading it going, wait a minute. The period when he's saying we're now revolving everything we do around the consumer? Pillsbury was involved with a price fixing cartel, which is about the least customer friendly thing you could be doing, and the FBI were investigating them. And so it traces how they were doing this. Basically they were flying into, I think it was the Twin Cities. They were flying in there.

The FBI were monitoring who was traveling, what they were—you know, they were finding out from hotels who had stayed where, what people had talked about. And it seems like they had people that were feeding them information, informants, saying there's price fixing going on amongst these 12 companies. And interestingly, when they confronted senior executives at Pillsbury with this information, they went, "No, no, no, no, no, no. We haven't done this," you know.

I probably wouldn't do that with the FBI. Because they're going to find out. And so the FBI keep digging and they do find out substantial evidence that price fixing—basically people have been meeting. You can technically talk about past prices, yeah, that doesn't violate the Sherman Act, which is basically an act that deals with restraint of trade. But what you can't do is talk about even speculatively what prices might look like in 12 months. And that's where they really landed in a horrible bind.

Andrew Mitrak: By the way, this is Pillsbury, the company that in America is best known for the Pillsbury Doughboy that goes "tee hee." Behind it are these people who are engaged in a price fixing cartel to undermine consumers.

And what year are we in by the way? What year are these meetings happening?

Mark Tadajewski: They say—the FBI seem to think it was happening before the period that they managed to investigate it, but they say at least since 1958 and up to the mid-1960s. And the company actually did say, well, this won't have impacted the consumer because even though we control this massive market for—it was flour, the product they were controlling the price of—they said, well, we're only dealing with business buyers basically, flour millers that will buy from us. So we're not actually dealing with the consumer. Which is hugely disingenuous because companies don't often go, "Oh, I'm paying more for this, we'll just deal with that and not pass it to the consumer." Prices, you know, get passed on to the consumer.

So eventually, after the evidence was passed to them, in this period that would effectively be where Robert J. Keith is talking about marketing control. Now marketing control in Keith's article, or in later speeches, was basically the idea that the whole of the organization will revolve around marketing and marketing is in charge of all decision making effectively. At this point when Keith's talking about marketing control, they're actually engaged in trying to control the market in a far more nefarious and insidious way that has negative consequences for the consumer.

So not only can you contest the history of the marketing concept by saying, well, it appears much earlier than lots of people think it does, and here are all the examples... but also, when Pillsbury were mentally orienting all their activities around the consumer—and they put it like this, "the consumer should be the center of the business universe"—they were actually doing what they could in this particular case to ensure that they maximize their profits rather than delivering, you know, more competitive prices to consumers. And again, you know, you can only study this using methods like asking for information from the federal government.

Beyond “Applied Economics”: Psychology's Forgotten Role in Early Marketing

Andrew Mitrak: There's an amazing use of the Freedom of Information Act. So I'm starting thinking about all the historical characters I'd like to do a FOIA request on. My first interview on this podcast was with Philip Kotler. I asked him about the origins of marketing and Kotler described it as emerging as a field of applied economics.

Mark Tadajewski: Yeah.

Andrew Mitrak: And this framing of marketing as applied economics, this is one of those conventional perspectives that you challenge. So what's your take on this description of marketing's origins?

Mark Tadajewski: You see, it sounds really plausible. I mean really, really plausible. And again, when you've got people like Philip Kotler or Jag Sheth or Professor Kumar as well actually, in a paper in the Journal of Marketing, saying—Kumar said something like, "until 1945, it was generally accepted that marketing was developing out of economics," and I was like, okay, this is really good.

So I started to look and see, well what are the connections here? And people didn't really explain it. And so that was where I was going, well this doesn't—right, so people assert it but they don't really tell me what happened. And when you start to look at what might have been the case, you read Bartels's History of Marketing Thought. And the chapter where Bartels is talking about marketing's connections to economics—something that was explored by a guy called Don Dixon in much more detail—Bartels actually goes, here's what marketing theorists and thinkers could have taken from economics, not what they did, what they could have taken. So it's speculative. And there's about three references at the end of the chapter, so it's like, you know, he's guessing a little bit, it seems.

Now that some people have looked at what marketing has taken, Dixon does it really well, and it's been a long time since I've read it. But so I was looking at that and going, okay, the links seem to be a lot weaker. So, okay, maybe we need to be a bit more tempered. You know, we can't just assert marketing developed out of economics. Perhaps there are lots of different intellectual trajectories there. And so that's where I was thinking.

And what Bartels actually does seem to suggest more clearly is that if anything, marketing was basically springboarding off economics. In the sense that, here's this fairly abstract science, yeah? Okay, but the marketplace is much more complex. So when you read a lot of the papers around the subject in the early history, what you find are early people that were trained in economics going out to the marketplace because they were aware that their abstractions didn't map onto what people were doing in the marketplace very well. So they do stuff like going into the shops, literally following goods as they were moving from production through to the ultimate consumer to see which intermediaries were adding value, who was important, who was not, where was cost being wasted effectively.

So the picture was more complicated. And as I started to dip into this a lot more, it was like, well, okay Bartels suggests economics could have been important, but he also suggests that economics certainly wasn't the only major strand of thought that was influencing marketing thought. And he says psychology clearly is really important because, you know, if you're trying to understand the consumer, then you need to be getting into their mind in some way shape or form through appropriate research, even through introspection.

But what I found really interesting about Bartels the more I looked at it, I was sitting there just trying to make sense of this. And he says, what's really, really, really important that psychology's told us a lot about? It's about the power of thought. I was like, okay, that's an interesting angle. And Bartels seems to imply that, you know, there's something there to be looked at.

I started exploring, “Well, how's psychology influenced marketing thought generally?” And so that led me to people like Arthur Frederick Sheldon, Katherine Blackford who was a psychologist character analyst, and people at Harlow Gale. A lot of these figures aren't really written about very much in marketing, or if they are, it's very partially explored.

And so I started exploring the different connections between psychology and marketing and that took me along, yeah, some really interesting pathways.

Arthur Frederick Sheldon: The Correspondence School

The more I looked at people like Arthur Frederick Sheldon and his correspondence course for example, which I wanted to explore particularly the early parts of marketing thought, how psychology and economics were vying for engagement there. And Sheldon in his textbooks basically that he would give to students, was talking about again the importance of studying the consumer and providing them with goods and services that they really want. And he made the really important point that people don't really buy products. They buy the services that the products provide, and people buy services that are useful. But to understand what useful actually means, you need to study the consumer and you need to understand how they might be thinking about a product, what types of goods might be really applicable to them.

And you see multiple strands of psychological thought appearing at this time. Now, one of the most problematic, but she published with Sheldon in his correspondence course, was Katherine Blackford, and she was one of the earlier writers on psychology and marketing basically. And she called him—you know, she had a very high opinion of Sheldon and she called him like the equivalent of Shakespeare and he was called the philosopher of selling. He was a really prominent figure.

But she was using something called character analysis, and this is never written about in textbooks for a very, very, very obvious reason. It was basically based on physiognomy—so the way people look, making judgments about their intellect by virtue of the slope of their forehead and how far back it goes, that thing—but also phrenology.

Now that might be a little bit familiar. It was basically this idea that the brain is this cluster of localized organs effectively. And the more active they are, the more you can feel them, you know, through somebody's scalp basically. Really, really quasi scientific, but it was really powerful at that time. So this whole idea of making judgments about people and their psychology on the basis of the way that they look or the bumps on their head was being explored.

Andrew Mitrak: You've talked about Arthur Frederick Sheldon and let's just ground listeners into it. Where are we in history? So who was Arthur Frederick Sheldon? I'm just looking him up here. He was born in 1868, lived through 1935 and within that period, when did he make most of his contributions to marketing thought or why consumers buy things?

Mark Tadajewski: Right. Well, he started correspondence school in 1902.

Andrew Mitrak: What exactly is a correspondence school?

Mark Tadajewski: It's basically like distance learning, but 100 years ago, 100 plus years ago. So people would write to him, they'd subscribe to his school and he would offer discounts for cash, all this stuff to get people to subscribe. And you'd get a course basically, and you get all of these little manuals. In fact I might have one. So yeah, this is what you would get.

Andrew Mitrak: So yeah, you're holding up a pamphlet. I see you have your post-it notes in it. How many pages is that?

Mark Tadajewski: So the pamphlets, it's quite a small pamphlet, but this is 112 pages. They would be up to like 32 in each curriculum, okay? Again, these are nightmarish to get hold of now.

But students would write to him. He would send them these booklets. And they'd have exercises in for people to do. But his whole philosophy of selling as I'd mentioned, it links very much with what Vargo and Lusch have more recently called service dominant logic, and it's this idea that people don't buy the goods, they buy the service that the good provides. And he said to his students, the people that employ you, that you work for, the people that you serve, they're interested in buying the service that you can provide. All everybody ever does is provide service, which is usefulness. So the more you train, the more useful you can be to an employer.

Andrew Mitrak: So the students in this school, what are they hoping to get at the end of this program? I've signed up. Am I looking to have a career in sales, am I looking to have a career in advertising, am I hoping to become an early type of marketer? Like what is it that they hope to get out of it?

Mark Tadajewski: All of the above. So the people taking these courses are the people that couldn't afford to go to university because obviously universities, you know, it's still the preserve of pretty affluent people or people that are willing to get into a lot of debt to get through it. Now, at this point, you've got universities full of relatively wealthy people and you've got a vast amount of people that are moving into sales oriented trades, working in shops, that thing. So this was like, okay, how can I improve my prospects going forward? Oh, I can take these and I can read them at night, I can upskill that way.

And Sheldon would issue a certificate. I think it was—this was really intelligent—it was valid for three years or thereabouts. And every three years if you came back and did the course again, you would be regiven the certificate. So you could train in—you know, it covered salesmanship basically, but it would give all the students basically all the cutting edge buzzwords that they needed. It would give them insights into some of the most advanced thinking of the time, and character analysis and stuff like that was pretty advanced at that point.

But he was, Sheldon was a very, very, very savvy marketer and this is something that we can all take from these people. Sheldon was connected to the Rotary Club. You know, these huge amounts of business people that start forming service clubs in the early 1900s or thereabouts, 1908, 1910 onwards. And so his students basically would do these courses, they would generally then get their certificate, they could then say to their employer "this is what I've done," and for a lot of people at that time, that would demonstrate the progression their employers wanted to see. They wanted to see students that were actually engaged and were willing to go home at the end of a day, read these booklets.

Now, what was good about the booklets, I mean this is really smart. They not only gave you all the business, sales, marketing knowledge that you needed in a really succinct form and they're really clearly written by and large, but they also gave people advice about health, wellbeing, the types of exercise they should be doing. You know, encourage people to drink a lot more water, avoid alcohol, avoid cigarettes. You know, recommendations like, before a job interview, maybe don't stop at a saloon for a glass of whiskey because that's not gonna look great. You know that thing. But it was basically like a university course in miniature.

But universities were incredibly jealous of this material when it started to appear because these courses were selling for relatively limited amounts of money to lots of people. And I mean Sheldon's school went pretty quickly from, you know, a couple of thousand students to 15,000, and then by the time Sheldon dies, it's estimated that he's taught at least 250,000 students across the world.

So he was an influential guy.

Andrew Mitrak: It's this early distance learning, hundreds of thousands of students have purchased and signed up for these pamphlets, they've read about that and this is years before the MBA program emerges. This is the certificate you can get if you want to be in sales and show to your employer that you have the knowledge, that you're eager, that you're learning about it in your own time and this can help you stand out from other candidates. Was the word marketing used in these books or is it more that it had a lot of the fingerprints of marketing? It just wasn't sort of rolled up into marketing. Or how did marketing sort of fit into the Sheldon school?

Mark Tadajewski: A lot of the time they're talking about salesmanship rather than marketing. But marketing as a word has been around since like the 16th century, 17th century maybe, but it's been around for a long time. At this point they're talking a lot about salesmanship, but in a lot of ways that have contemporary resonance.

Sheldon's Ideas: Business Building, Relationship Marketing, and Customer Lifetime Value

Mark Tadajewski: I mentioned relationship marketing. That's shorthand basically for forming relationships with consumers. Sheldon's whole business philosophy was oriented around what he called business building, which is this idea that once you've got a customer, you want to hold onto them. And so he talks about the permanency of patronage.

Now there's a really cool example and this is all information that he's giving to students, you know, who haven't maybe got mentors or anything like this. So this is all really valuable. He talks about basically every interaction that you have with a customer can build and build and build and you can sell them more and more. And so he talks about a young couple who come into a store and they're after a parasol for their baby carrier basically. And he goes, you may or may not make the sale at that moment, but what you've got is information. You've got information that at this house live a young couple who are relatively affluent, who have a young child. And the child's going to grow through these years and you can probably every couple of years sell them something different that's right for their child at that point of development. And the ideal he said—and again this is pretty heavily gendered—is you want to keep the customer until the point when the mother of the family is buying a tombstone for the father. So, you know, when people talk about customer lifetime value, this is...

Andrew Mitrak: That's literally customer lifetime value.

Mark Tadajewski: Yeah, you've got them from the beginning till the end.

Andrew Mitrak: The other thing that you bring up with these Sheldon books is that it's not just about salesmanship, but it's about lifestyle. It's about how you present yourself, how you're healthy.

Mark Tadajewski: Well you've got to remember that, you know, it's an early professionalization move because you've got traveling salesmen at that point who are quite well known for living, you know, fairly alcohol infused lives and socializing with people to get them to buy. And Sheldon's point is, no, no, no, no, no. If you want to have a long career and if you want to be the professional individual that you are, this is how you should live your life. You know, you shouldn't tell rude jokes. You should drink in moderation if at all. And he provides exercises that people should be doing as well. And he says, you know, if you do all of the things that I recommend—now, this is a bit dark—you could live till you're 100 years old. Now Sheldon didn't. He lived till he was like 67. So, you know, there's a mixed message there.

This has been happening for a long time. And you can understand why because it's great for employers. If you've got somebody that's been through this course, you're going to get employees that know how to take care of themselves. They know about relevant business practices, and you're probably going to get quite a lot of mileage out of them because if they're young and they're healthy and they're engaged and they're not drinking heavily, they're going to stay in your employment for a lot longer. It's not coercive. You know, it's power relations in a really positive way. In other words, I become a great employee by doing all of these things. I live a long, happy, fruitful life that works well for my employer, it works well for the banks that fund my employer's expansion of his business. Everybody benefits effectively. So it's a really seductive discourse.

Weird “Science”: Phrenology, Hypnosis, Telepathy, and Psychic Influences

Andrew Mitrak: There's that seductive discourse that is, you know, overall towards health if you're encouraging people to exercise, not drink or reduce smoking and things like that. But there is also sort of this thread of the weird ideas of psychology. Phrenology you mentioned. What was his relationship to Katherine Blackford? Do they collaborate with each other?

Mark Tadajewski: Yeah, it's a complex one. Sheldon basically sought out people that were at the cutting edge of whatever discipline they were at or involved with. And he saw Katherine Blackford—she was apparently a trained medical doctor, there's some uncertainty on this front. But whatever she was, she was extremely well versed in then popular-ish ways of looking and understanding people: phrenology, physiognomy. These were not massively obscure at this point and marketing did a lot to try and beat it out of its early practices.

But so he's looking at people like that. But when you read his books, you get a lot of very up to date perspectives, you know, business building, service, all these kinds of things, the importance of market research in different ways. But then there's also really what strikes the contemporary reader as a bit of a shocker, because he's there going, "Oh, and now I'm going to talk about hypnosis and its role in sales." You're like, okay, that's unusual. And then it moves on fairly quickly to telepathy, which in case people aren't familiar with it, it's mind-to-mind communication without the mediation of the ordinary senses. So thought transfer effectively.

Andrew Mitrak: Telepathy is having a comeback. There's a very popular podcast right now...

Mark Tadajewski: The Telepathy Tapes. Yeah, yeah.

And again, what people need to always remember when you look at this material and even in the contemporary present—because there's telepathy being brought back into business through materialist telepathy and you've got brain-to-computer interfaces and a whole bunch of things—it's not dismissing these things outright, but looking at this literature and going, well what were they really talking about?

Now Sheldon in terms of hypnotism, he's dead against it, because he's very much of the mind that marketing and sales education or engagement basically with the customer should always be about educating them. It's not about deadening their will, which is how he viewed hypnosis. You know, imagine let's go a bit extreme, the people on the stage that you've seen being hypnotized where they're suddenly, you know, dancing like a duck or quacking or all this stuff.

So that's what he's reacting to. It's like the hypnotist is seen to be somebody, like Demare's work, you know, somebody that's got immense power over the person that they're hypnotizing and it deadens the will entirely. Now Sheldon was very savvy because he realized that wasn't a good look, you know, then you don't want to be doing that. So he's very critical of hypnosis, but very positive about telepathy. Right?

And so this makes a lot of sense when you start looking at the intellectual foundations underpinning it. So he's using a lot of the material from a guy called Prentice Mulford, who talks about mind-to-mind communication in his own way. And also a guy called Thompson J. Hudson who wrote a book where it was all about psychic development basically, but he talked about the self as divided into the objective self and the subjective self. Now what this should be telling a lot of people is the idea that the conception of how Sheldon and people at that period were understanding who we are and how we act and how we think is way more complicated than a lot of the early literature tells you. It just tells you if you read EK Strong's work from the 1920s, it just talks about consciousness. It doesn't talk about the strata of the mind or anything like this.

And Sheldon's drawing upon this literature. He says actually there's effectively a subconscious and a superliminal consciousness. And that material feeds into the discussion on telepathy in the sense that the subjective self that Sheldon's actually referring to were seen to be the conduit for where our memories are stored, is the facility that enables telepathy effectively. And it will eventually become—you know, the subjective self is also defined as like the most suggestible part of who we are. They often split the self into two brothers. The objective self being the smart logical one who doesn't take other people's opinions without extensive critique, the rational part of our mind. And the subjective self is the brother that's been left in charge of the business that's not really that skilled at it and is ripped off by sales and other people who can tell them basically whatever they want.

So Sheldon's there using all of this material and he says, well, the literature on telepathy suggests that this is actually very productive. So he explains how you can think about using it in your own business practice and he basically encourages the neophyte salesman to be as sensitive as possible, so that you can sense when the psychological moment in terms of making the sale is there before the consumer themselves is actually aware of the moment. And he says, and you can do this through telepathy. And this is going to, you know, 250,000 students.

"Telepathy" in Sales: Literal Mind Control or Enhanced Sensitivity?

Andrew Mitrak: And if I was to steelman telepathy or try to take it as seriously as I could. Obviously there's reasons to be skeptical of telepathy, but if I also think of all of the sort of unconscious communications and there's what's spoken but then there's—if I'm a salesperson, there's how I present myself, how I dress, how I greet you, all of the things that are like non-verbal communication that can influence somebody. How products are packaged, how they're presented, the idea of desires and keeping up with your neighbors and all of the irrational thoughts that we have.

All of that to an early thinker who's trying to find new words for it could think of that as telepathy in a way? Or it's something that's magical that's hard to quantify. Was that what was influencing this word of telepathy or do they literally mean like, I'm going to use brain to brain transmission of thoughts and stuff? Was it sort of that first sense or more of like that literal sense of how we think of it today?

Mark Tadajewski: Both. Yeah, so in other words, all the things that you mentioned about appearance, your knowledge of the products, your ability to engage with people, a lot of that was associated with being personally magnetic. You know, having some charisma that would engage people, being interested in their interests and trying to discern what would most appeal to them.

But they go beyond this, quite considerably beyond it in some cases where it's very much not only do you need to know about the consumer, but in an ideal sense, the person interested in telepathy should—or the salesman that's thinking about using it—you know, wants to find themselves a nice quiet location where they can visualize the consumer they're trying to target and try to imagine them in their life and what they're doing at that moment and send, you know, whatever messages you're trying to convey, literally project them. One of the examples is, try and imagine the person that you're seeing like they're at the end of a long tube and that will help you funnel your thoughts towards this person. I know, I know how this sounds. But they took it deadly seriously.

Now, when you read William Walker Atkinson's work, who's similar in orientation to Sheldon. Atkinson's there going, well, you know, we might not be successful the first few times we try telepathy, but you've got to practice this and there are lots of ways you can practice it. And he basically gives people exercises to do. So you know, there's a phenomenon called the sense of being stared at basically, and you may or may not have experienced it yourself.

Andrew Mitrak: So this is the idea of if I'm at a restaurant and somebody across the restaurant is looking at me – or if I'm observing somebody else, there's some sense that you know you're being watched. Is that sort of the idea?

Mark Tadajewski: Yeah, and that was one of the exercises that he recommended to try and enhance your psychic sensitivity. You know, to see whether you can make people turn around when you stare at them from the back. And there's a lot of this. You know, like trying to justify telepathy by going, it's a bit like wireless telegraphy. So you see people like Mark Twain talking about this, Samuel Clemens. So they give them lots of examples about how to do it.

But what you seem to find is that there's a date often given for when there's a shift away from these arguments. And it's 1912, it seems to be. And so William Walker Atkinson in particular, who's similar in orientation to Sheldon, in his work in particular, in the early literature you see him very occult oriented. You know, "Here's hidden knowledge that I'm imparting to you as a student," that thing. But later on he suddenly reverses. He suddenly says, actually no, people aren't taking psychology seriously because we've tied it too closely to the occult, to telepathy, to all of these kinds of unusually esoteric knowledge that people, particularly business people aren't seen to take too seriously. So he reverses and moves away from those perspectives. But, you know, irrespective of where you look, again, I got tons of this stuff lying around.

[Holds up booklet] So for people that can't see that, that's a booklet on Practical Mind Reading by William Walker Atkinson.

Mind Reading and Sales Management: The Impact of “New Thought”

Andrew Mitrak: What year was Practical Mind Reading published?

Mark Tadajewski: This was… 1906.

Andrew Mitrak: And so what's the relationship between this and early marketing? Practical mind reading and early marketing? What is the connection between the two?

Mark Tadajewski: Well William Walker Atkinson, who was a very astute promoter of this literature, so he would write on really occult subjects and also really sales managerial stuff, because his background—he worked in his dad's retail store at a greengrocer as a child and then later became a lawyer, when that career didn't flourish in the way that it was intended, turned to a lot of this material.

And they're all—all of these people basically at this time, they're all very much immersed in a literature that's called New Thought, okay? This is not sales or psychology that's necessarily underwriting a lot of what they're thinking, it's New Thought, which is the idea that thought, the way we think generally, has an ontologically powerful role in the world. In other words, our thoughts can shape reality. That to some people may sound a bit like, you know, the book The Secret or the Netflix film.

Where it's like, "Oh, you know, if I treat the universe like it's a vending machine, I can manifest whatever I want." You hear this stuff everywhere. Now they cite a lot of the New Thought literature, but what they do not tell you in The Secret in other places, which William Walker Atkinson and Sheldon do is, yeah, you know, have your subjective dreams, have your wishes, mobilize them to actually get out and do something in the world. It's basically a way of encouraging people to be optimistic and, you know, people that didn't have the financial backing that other people had to go, "Well I can do something with my life," and it was meant to encourage them.

But they said, okay, your practice as a marketer or a salesperson or whatever hinges on subjective realization—having those dreams, having those wishes and mobilizing them—but then objective realization. In other words, your subjective wishes will come to absolutely nothing if you don't go out into the marketplace and work really, really, really hard. The “work really hard” stuff's forgotten from The Secret. Everything just appears for people in The Secret, money and parking spots and all this stuff.

But so that's what they're all working with. And so that literature gets very occult. They start talking about how the unseen world—and by the unseen world, I mean dead people—can help you and can give you energy and can help you generate your ideas and get them out into the marketplace. And it seems very, very occult, but it's—and a lot of it is quite esoteric, but it has a really optimistic undertone, which is, okay, life may have dealt you a really nasty deck of cards, but let's go into the world with our best foot forward and here's how we can make a success of ourselves. Positive thinking, being enthusiastic, being engaged with people, reading this literature that was meant to improve you, enhance your sales presentations and skills and engagement and healthy living. In other words how you can actually do something really successful with your life. So that's where a lot of them are coming from. And they'll take any scientific perspective that they think will advance their interests to do so and it was, you know, hence the number of students, very successful.

Harlow Gale and Psychical Advertising Experiments

Andrew Mitrak: So continuing down this sort of unusual branch of marketing, one name that you brought up earlier is Harlow Gale. He's a relatively little known person today, but he lived from 1862 to 1945 and you wrote about him in a paper called "Rethinking Harlow Gale: the psychical influences on his contributions to advertising and their enduring reverberations." So can you share with listeners who was Harlow Gale and what were his contributions?

Mark Tadajewski: Gale, really challenging figure. I mean really challenging in the sense that he was supremely smart and also very forthright in terms of pursuing views that he felt were correct. So he had a very short academic career effectively. He was basically forced out of his institution. I think it was a really short span of time; people can find it in the article. But Gale's an interesting character because he was a member of the Society for Psychical Research. Now the Society for Psychical Research study things like telepathy, clairvoyance, apparitions of the dead, all of these kinds of things.

Now Gale becomes interesting in the sense that he's known as an experimentalist in advertising, one of the earliest. What people don't get from previous studies on Harlow Gale is the fact that before he becomes the experimentalist in advertising, he was actually going to seances and all these kinds of things where he's looking at people that are trying to make other groups think in certain ways and he's very interested in what they're saying, what they're understanding.

But when somebody's there saying "I can see, you know, God or Jesus or the saints in front of me," Gale was noticing how these dynamics operated in the seance context. And Gale goes, "What's the unifying thread here?" It's suggestion. These people are all being encouraged to see the saint, to see—in one case it was a floating vegetable above somebody's head—you know, all of these kinds of things. And so Gale's there going, okay, this tells me something about human nature effectively, that people can be very suggestible.

Gale's immersed in the Society for Psychical Research, their literature, especially F.W.H. Myers's work on the subliminal consciousness, and what Gale will call the multiplex self. Now that just basically means as intelligent human beings, we're both intelligent, we're also suggestible, but we also have a superliminal consciousness and a subliminal consciousness. Note the term. I'm not saying unconscious because even your subliminal consciousness was believed to be processing data constantly, okay?

So it's a really sophisticated view. Think: if I go to sleep and I dream about a work task, the dream can sometimes provide the solution if your brain's relaxed and it's thinking in different ways.

Now Gale's bringing all those ideas to his advertising work as well. So he's studying his students. And he goes, okay, I'm going to mail practitioners, see what advertising media they use, how they promote their goods. And I'm also going to get my students to look at some of these adverts as well because I'm interested in, you know, what gets their attention effectively when they look at an advert. Is it the text, is it the imagery?

Now, what he's trying to identify there is, right, not everybody will be affected by advertising in the same way. Some people will be much more critical and uninfluenced than others. There will be some people that can't articulate why an advert or why a particular brand or why a product influences them at all.

That was his cleavage point for trying to theorize how the subconscious plays a role in advertising interpretation. His argument—and this is where we have to give him loads of credit because it's really early on—was if somebody can't really explain why they bought a product, maybe they've been influenced at a subliminal level, and that's the influence that's going on there. Now subliminal and subliminal self, this isn't framed as a negative thing. It's not Hidden Persuaders. Gale's just going, there are other ways for us to be absorbing information and making sense of it.

Now, Gale's work really can only be understood if you combine the background in the Society for Psychical Research with his studies in advertising. That in short is what he did. But when you read earlier studies, they would just mention, "Here's Harlow Gale, published on advertising, did this, did this," and published in a journal called the Journal of the Society for Psychical Research.

But nobody decided for whatever reason—and I'm not judging anybody—nobody went, "Well, that's an interesting journal." And when you do start to dig into the background you go, okay, he's making sense of human suggestibility in these contexts and he's studying people in seances, he's studying people that are claiming clairvoyance, seeing distant sights way beyond what you can see literally in front of you. And so he's trying to explore whether some of these things exist or whether there are other dynamics in play. And the dynamics that they come together on is some degree of suggestibility that gets in below our conscious analysis basically.

Walter Dill Scott vs. Harlow Gale: Reframing Subconscious Influence as “Suggestion”

Now, the difference between him and Walter Dill Scott: Walter Dill Scott really doesn't like psychical research at all. He thinks it's something that is making psychology look ludicrous, in other words. Now Scott was publishing a lot on psychology and was well connected to the business community. And so he was explicitly trying to demarket psychology as he understands it away from earlier psychical perspectives. Now the turning point for him seems to be, he goes home to visit his family and a friend of his goes, "Wait a minute, why are you studying psychology? Why would you be interested in all these occult weirdnesses?" And he seems to take that really to heart because when you read his books, he's there going, "You know, this is all medieval superstition." Doesn't engage with the literature like Harlow Gale who has been a member of the Society for Psychical Research, read all of the literature, undertaken experiments himself, been really involved with all the key figures in it.

Walter Dill Scott, 1869 –1955

And so this seems very odd. And my point when I was looking at Walter Dill Scott's work was, okay, this is interesting. What you get here is you go from a multiplex interpretation of the consumer—this consumer who is stratified, so you've got subliminal, subconscious, it's a multifaceted consumer—to Walter Dill Scott who just goes, no, the consumer's not—he doesn't say multiplex, he just goes they're duplex. In other words, they can be rational and they can be suggestible. But most people are—and this is where we're problematizing the notion of economic man in a really big way—most people aren't rational at all. We like to think we are, but most of us are really the creature of suggestion, he argues. Now that's a perspective that's really common at the time.

But Scott is there, so Scott's there going, psychology is not psychical research. People are influenced by suggestion much more. And he dismisses psychical research as superstition, doesn't engage with the work. And for me, my point in looking at the transition between the two was, Scott's there claiming he's a scientist and yet he completely voids any engagement with the scientific method. He doesn't read the literature, he doesn't make a rational reasoned interpretation of it and critique of it.

He just goes "this is medieval superstition" and dismisses it. So the idea is that psychology as it's imported and incorporated into marketing isn't necessarily stretching our critical faculties, in other words. When it's introduced at that point, it's introduced in a really, really unscientific, uncritical way. That's why I wasn't a big fan of Walter Dill Scott's work. He had a huge impact, but Gale was more interesting.

Andrew Mitrak: On Walter Dill Scott's biography—so born 1869, lived until 1955. He was the president of Northwestern University, wrote a book called The Psychology of Advertising in Theory and Practice in 1903, and continued to write about the psychology of advertising. He was a professor of advertising and psychology. So an academic clearly held in high regard as president of Northwestern, early thinker in psychology and advertising.

But the quibble with him is not so much whether telepathy and other sort of weird parts of advertising were wrong or not, it's more that he dismissed them just because of all of the baggage that they carry, or that there wasn't a critical analysis of it. He was more, "Hey, just call all that stuff suggestion instead." Is that sort of the right way to think about it?

Mark Tadajewski: That's pretty much it. But you know what the really hilarious thing was? Walter Dill Scott—remember I already said to you that Sheldon was very critical of hypnosis because he saw it as deadening the will—Walter Dill Scott taught suggestion by hypnotizing his students because he was a trained hypnotist, who was really highly skilled. So the way that he would teach them would be to say, "What do you think of this product?" and it would be like, you know, some soap or something. And it would smell horrible, or perfume. And he would say "It smells—you think it smells really sweet," and they would say it smells really sweet. And he would say to their students, "You see, this is what suggestion is. Of course, of course though, business people don't hypnotize like this, but they do engage in suggestion," which of course is meant to limit the way the consumer's critical of your offerings.

But you know, he's an interesting character but he's full of contradictions. But he was really smart in the sense that he went, spoke to practitioners, wrote really easy accessible books for them. And then every time he rewrote material he would introduce case studies where people had applied his ideas from his earlier books and he would summarize them. So in other words, you got theory, you got people that have used the ideas and here's how they benefited from it. So he was super astute. And again, I'm not dismissing his contributions, I'm just saying if you're going to claim to be scientific, then it would be nice to see you actually apply the scientific method when you critique something.

Fom AIDA to the AIDAS Model: Sheldon's Lasting Impact on Advertising

Andrew Mitrak: Just to recap. We've talked about A.F. Sheldon who had a massive influence on marketing especially because of the sheer volume of people that he educated through his correspondence schools in the first half of the 20th century.

Mark Tadajewski: His impact was huge in the sense people that you've spoken to have mentioned the AIDA framework: Awareness, Interest, Desire, Action. Well Sheldon said, yeah, that's great, but remember we're trying to create the permanency of patronage. You don't just get people to buy your product, they've got to be satisfied because if they're satisfied they then become confident in your offerings and come back. So the AIDA model was transformed into the AIDAS model with Satisfaction being on the end. So he actually impacted advertising theory in a really substantive way as well.

Why Was This History Lost? An Accidental Omission or a Deliberate Burial?

Andrew Mitrak: That's right. So Sheldon is impacting advertising theory. Gale has this sort of unusual strand of thinking where his work has touched on clairvoyance, telepathy, spiritualism, and he's also one of the first experimenters in marketing and advertising. There's this whole body of work in the early 1900s that is these weirder things that are sort of lost to history. The question is, why was all of this lost to history? How did it sort of get buried in the history of marketing?

Mark Tadajewski: You know, history's written by the winners by and large. And people like to tell really progressive narratives about themselves. You know, when I refer to the Pillsbury narrative earlier, it's a really progressive narrative that suggests marketers have gone from this point to now being much more enlightened. And it doesn't look great to be looking back on your history and go, okay, we talked about phrenology, we talked about telepathy, we talked about hypnosis, and there's a lot of occult material embedded in all of this. That's not a great look in an introductory textbook.

So I think a lot of this material disappears because one, the material's really fragile, that disappears. It's not saved, it's not scanned by a lot of people. And then, you know, as these narratives like "marketing's applied economics" get repeated, they just become a—you know, I don't mean this in a rude way—but they become a shortcut to thinking. You know, so it's like, well that's that history and that's what I've got to teach. I don't need to think about it anymore than that. And it can become, you know, it smothers critical thinking effectively. But we're all guilty of it, you know, in lots of areas of our lives. We have to just assume that what we're being told is correct.

And that's really it. History's written by the winners and a lot of this stuff is written by people who have been written out of history in lots of different ways.

Finding Marketing History Through Foucault and the Cold War

Andrew Mitrak: I want to ask you what initially drew you to marketing as a field?

Mark Tadajewski: The honest answer is, it was really the only first subject, you know, that I really enjoyed. I really didn't like school full stop and then I got to college. Not college in the American sense, college in—I was 16 and I'd failed most of my exams, so I went to the local college where they helped me a lot. And I took a business studies course and it was the first time things seemed to drop into place, you know, and it was just fluid for me. So the minute we got to marketing in that course, I was kind of—it was just really interesting. I really enjoyed it. And of course, the minute you enjoy something, you just immerse yourself in it, so you improve much more rapidly anyway. And it was off the back of that really.

And then I very luckily went to a great university where I did political economy and politics, but then as a master's degree, I went to the University of Leicester and did an MSc in marketing. And there were some amazing scholars there. And again, this probably makes me look really shallow, but I went to see the professor of economics who was the head of the school at that point. And I walked into his room and it was just—it looked like an Amazon depot. It was just crazy books everywhere. And I just thought this is so cool. This guy just sits and reads and thinks and lectures and writes papers. I mean, what an amazing job. And I was like, okay, this is interesting.

And he was really good. He'd recommend readings to us every week and I was that student—I always get to lectures and stuff really early because I always dread walking in late. And I'd be there like an hour or two before the school opened because I'd go on the train. And I used to sit and read all the material he'd recommended, which I didn't think was unusual. I just thought I was doing the right thing. And he used to say, "Oh, what do you think about Coca-Cola's valuation?" or something like that. And I'd have all the figures because I've been reading Kellogg on Marketing that he'd been flashing up the week before. And so, you know, we'd developed a bit of rapport and he said, "Well, we've got, you know, a PhD program." And I went, "Well I'm broke," which has been the story of my life at least up to that point. And he said, "Well we can figure something out," and he got me onto the program and I was surrounded by really, really talented people who basically gave me a lot of freedom to do what I wanted. And that's really unusual. So I was just incredibly fortunate in so many different ways.

And when I got to the PhD program, they said, "Well, what are you interested in doing?" One of the people that supervised me was an organization studies theorist. No, I wasn't supervised by marketing scholars. And they said, "Well, do you like history? What do you like?" you know, thing. I said, yeah, that sounds good. And they recommended certain readings. They told me to go and look at Michel Foucault's work in particular. Really prominent French theorist who writes books that scare everybody to death. My supervisor, he was a really smart guy, his name is Campbell Jones, and he said, "Well here's a book called The Order of Things and it's about all these transitions between different disciplines and how they change. Oh it's the scariest book you'll ever read." And he said, "Could you do something like that?" And I went—because you don't want to say no—I went, "Yeah, yeah, sure, sure. I'll give it a go." And that was my introduction to it. We didn't have any formal training in terms of studying the history of marketing. Didn't know anybody that had really done it. So I just started reading and reading and reading and it started from there basically.

Andrew Mitrak: You found marketing when you were around 16 years old then. Yeah. And it was this Foucault example that sort of led you to dive deeper into marketing history. Yeah. Where did you start? You have this assignment, you have this big ambitious goal. What do you look for first?

Mark Tadajewski: I was really interested in how people come to think in the way that they do. How does our world become taken for granted? And so I knew that there've been lots of studies on the development of marketing, but very few of them had actually really linked them to the political, economical, social changes going on. There'd been a few papers but very, very, very few. And the reason is because it's really hard to do and it requires a lot of leg work. So I went, okay, that's something I could do.

So I started to dip into, you know, looking at the history of the business school, looking at the development of marketing and then going, okay, what important turning points have we maybe not paid much attention to? And one that hadn't at that point really been noticed particularly—because I'm talking about 2002 at this point—was the Cold War. I was like, okay, this clearly had massive ramifications, you know, 1947 to 1990. How did this impact on marketing and the business school?

And so I started reading around it generally and I chanced upon a—it was a book review and it was in the Journal of Marketing and it was a book called Philosophical and Radical Thought in Marketing that was being reviewed. And the person reviewing it was a guy called Hal Kazanjian. Could be pronouncing that very badly wrong. Sorry Hal. And in it he talks about how, you know, philosophical and radical approaches to marketing, this is really cool, this is really different. But he goes, you know, previously we wouldn't have done it. He doesn't really explain in a huge amount of detail why not. So because I've never really had a filter where this stuff is concerned, I just emailed him and said, "Why? What does this mean? Can you tell me?"

And he went, yeah, yeah. He goes, "Well, you know, at this point in time, of course there's a really virulent anti-communist movement." And he said being called liberal was bad enough. But if you so much as looked a little bit, you know, much further left leaning, then it became a real issue. What was scary enough when you started to dive into this in a bit more detail, it was enough for somebody to point at you and say "This is this guy's political economic orientation. He's a fellow traveler or he's interested in reading left leaning newspapers," and it could get you into a world of trouble. And Hal said his doctoral chair, the person on his committee, hadn't been very quick to sign a loyalty oath, you know, basically saying "I'm not a communist, there are no weird views being espoused here," and that was enough to get him basically, I believe, fired, ruined his career, had severe implications for his life.

The Cold War's Chilling Effect: How Politics and Funding Shaped Marketing Academia

Mark Tadajewski: What I started finding the more I dug around this, this wasn't unusual. So you'd see people turn up at lectures that you were doing, you know, at that point and you wouldn't know who they were. There were just two or three people stood at the back. It was external monitors evaluating what people were saying. And did you—in other words, were you being critical of the United States and its stance and its political economic system? Were you mentioning Russia too frequently? Were you mentioning it in a positive way? And if you did, there'd be serious consequences for you.

Now, at an individual level that sounds scary enough, but this was a fairly widespread phenomenon at this point in time as I started to find. And so I was there going, okay, there are lots of individuals that are being affected quite negatively by this. You hear about McCarthyism and you know, everybody gets the image, you know, it's real red scare terror and going after people in Hollywood, but also really badly in the university. And so I was like, okay, here are individuals being affected, but where are the institutional shifts? Are there bigger factors in play?

And I noticed that the business school was being criticized for producing overly descriptive research. The staff were being criticized because they didn't have PhDs generally. The students weren't seen to be very good. And so at this point it's like, okay, they suddenly start to get a lot of funding from the Ford Foundation in particular, which is a big philanthropic organization. That's an interesting link.

And what I noticed was that the Ford Foundation and the Carnegie Foundation and the Rockefeller—the big three they're called—they were focused upon by a number of really prominent government committees, you know, in the mid to late, I think it was the 1950s, but in a big way. And what the committees were focusing upon—so there was a report in 1952 and I think another one in 1953—they said, okay, we're looking at the philanthropic foundations and their funding and they seem to have been supporting social science in quite a big way. And so they'd been looking at racism, inequality, how they can handle some of those issues basically. Now the big problem was that the label social science, for a scary number of people, was conflated with socialism or some form of social philosophy.

And so you've got these foundations who are very powerful, very affluent being targeted by the government effectively. And they're there going, "Oh no, no, no, no. No, we're not. This isn't a social philosophy. In fact, what we've been doing if you look carefully is by studying some of these issues, we've basically been looking for ways to relieve the pressure in the system." You can get a sense of the desperation. And so they thought it very appropriate to suddenly twist their funding a little bit, to start funding something that would be perceived to be ideologically neutral or preferably a big support for the US political economic system. The business school was an ideal candidate.

Ford Foundation's Role in Promoting "Behavioral Science"

Mark Tadajewski: [The Ford Foundation] poured a lot of money into this, into the business school generally in an effort to upgrade it. In other words to make the business school, the research that was being funded, the people that were being trained, as scholarly, scientific, as objective, as neutral, as behavioral scientific as they possibly could. Now you'll hear a lot of people toss about the label behavioral science. That wasn't developed off the back of academics coming together and deciding that that was the label that fit what they did. That was a label that the Ford Foundation actually coined and then said "This is what we're funding. Do you fit into this specialism?"

Now they funded lots of business schools, but lots of individual professors in particular. One name that I'm sure you've heard before, in fact I know you have: Wroe Alderson was given a visiting professorship because his research was very interested in improving marketing management and in improving executive decision making, a lot of his work in that area. But also people like Philip Kotler.

Philip Kotler received money for computer simulation. Again think: computer technology enhancing executives and their decision making ability, very ideologically neutral, very positive in other words. And then, thinking about Jag Sheth. Jag Sheth mentioned in his discussion with you that he'd been connected—well he was obviously connected to John Howard. John Howard was funded in multiple different ways by the Ford Foundation because not only did they fund institutions, training programs, individual scholars, but they wanted to fund textbooks because how do you get this vision of what marketing and business research should look like out to as many people as possible? You produce textbooks.

Now Howard—the first book he did, it was something like, I can't remember the title of it off the top of my head, but the first book that he produced, Marketing and Executive Behavior or something like that, was funded by the Ford Foundation. The second one was a book called Marketing Theory which was a general version of the first book that he produced. And then the third, that material fed into the Howard and Sheth book that Jag was talking about. So the Ford Foundation's fingerprints were on a lot of this material. And a lot of the mathematical specialization that you see growing in the 1960s developed off the back of the Ford Foundation and their training programs in advanced mathematics and statistics.

Now, pretty much any big name from the 1950s, 1960s, 1970s either came in contact with the seminars themselves. Kotler was at one for example. Kotler's a very skilled mathematician, and the first edition of his textbook was much more mathematically oriented but he was told to revise it because it didn't have enough pictures, quote unquote, which I thought was cool.

But so you see then, they funded these really prolific researchers and you had to be, you know, somebody that they thought was super talented, highly likely to be very research productive. And people like Kotler, Perry Bliss, John Howard, they all fit that mold, and they did end up making huge contributions. So Ford's money went a long way to turning marketing into the positivistic, managerial, quantitatively oriented discipline that it is by and large in lots of countries. And that's really a result of the Ford Foundation's funding. And that you can trace back to the Cold War. And so the way the discipline looks isn't just a natural occurrence of scholars coming together. It's tied firmly to political and economic factors and the need for scholars at that point in time to be pledging that they were in the fight against communism effectively, which, you know, it's understandable, isn't it?

Risks of Researching Marketing's Past

Andrew Mitrak: Researching the history of marketing, it requires a lot of legwork. And I think that's for a couple of reasons. One, you're researching the history of ideas and there are certainly physical outputs like advertising or public relations things or textbooks where you have a physical record that's written and captured in some way, but a lot of those things, they can be ephemeral. They sort of disappear. Also you're studying the idea of thought, which is an organizational structure which may not be captured in the same way. So are those the reasons why it requires a lot of legwork to study marketing history or are there other factors at play that make it a particularly difficult or labor intensive field to study?

Mark Tadajewski: Well it's high risk, you know? Because when you've got a lot of people saying, here's the way the discipline developed or here are the core theoretical traditions and this is how they've developed. You've got to go, well, that seems reasonable, but I think there's something more there. And you have to, to some extent trust your gut and then start to go digging around. And you can go down lots of blind alleyways and that kind of, you know, if you're going to do that as a PhD student, you could run up to the time that you're actually allowed to do research for and you could get nowhere, so it's really risky.

But you're right, getting hold of a lot of this material. In fact I've got—I'll show you this—getting hold of stuff like this is really tricky. This is from 1906 I think this one.

Andrew Mitrak: And for listeners who are listening and not viewing, can you describe what you're holding there?

Mark Tadajewski: Yeah this is The Business Philosopher which is the journal that Arthur Frederick Sheldon published. So if you were subscribed to Sheldon's correspondence school you would get a collection of these where you get an annual subscription to The Business Philosopher, you get all of his other books as well. But material like this, you know, you can see it's very flimsy. It's over a hundred and something years old now and to get hold of it's hard enough. But to get even earlier versions of the course is tricky because there are earlier versions.

And again, to find this material you've basically got to go, okay, here is all this received wisdom. I don't think this is correct. I don't think this is correct. I don't think this is correct—which could make you sound extremely egotistical. Right. But it's also incredibly dangerous as a researcher because if I'm saying, "No, I think everything all of these really established professors have said before me is wrong," and you're this newly minted PhD student or new lecturer or new assistant professor. I mean you're on really risky territory. So it's really tough. So you've got to be in an environment that encourages it, which is rare in itself. You've got to be very lucky in terms of actually getting to the end point with this project as well. And you've got to find journals that will publish it, which is really tricky because a lot of the very high profile journals don't tend to engage with a lot of historical research. They'll say things like, "Okay, this is great, but how can we operationalize this to improve management decision making this, this or this?" So there are a lot of factors that can discourage you basically.

Andrew Mitrak: History can be debated, history is political, history's all sorts of things. That's why I used a hedge. I called my podcast A History of Marketing—not The History because I always felt like the definitive article "the" puts a lot of weight on it. I'm like, you know what? “A” history, I have no skin in this game. I just want to hear everybody's ideas, learn everything I can and so this is “A History of Marketing.”

Mark Tadajewski: You know on that point, I think it was my external examiner for my PhD who told me—he was a reviewer on a paper I'd submitted to a journal and I think I'd called the paper at that point, "The Something, Something, Something." And he said you really need to change it to "A" or—because I was running out of how many times you could use "A," I was putting "Towards a History," you know, like everywhere you could.

Learn More from Mark Tadajewski

Andrew Mitrak: Mark, I'm sure a lot of listeners are interested to learn more of your work and dive deeper into these strands of marketing history. Where would you point listeners to? How could they learn more about your work and what of your published articles would you point listeners to?

Mark Tadajewski: I would probably go to LinkedIn and then look at my academia.edu page. That's where I can upload a lot of the material that I've written. Start with whatever grabs your attention. That's the best way to approach any of this material because if you're not interested in it, it's not going to stick or resonate with you. So, yeah, find what you like and I hope you enjoy it.

Andrew Mitrak: I certainly enjoyed it. Well, Mark, thanks so much for your time. I really enjoyed this conversation.

Mark Tadajewski: My pleasure. It's been really, really nice to talk to you.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 13

"Place" might be the most often overlooked of the four P’s in the marketing mix, but it encompasses channels and distribution. Power dynamics and conflicts between companies (and sometimes within them) shape how products reach their customers. Few have influenced our understanding of marketing channels more than Louis Stern. Lou is the John D. Gray Distinguished Professor Emeritus at Northwestern's Kellogg School and the namesake of the American Marketing Association's Louis W. Stern Award, which recognizes contributions to marketing and channels of distribution.

Lou is also the author of books including Marketing Channels, Management in Marketing Channels, and Marketing Channel Strategy.

Lou drove renewed interest in channels by bringing a fresh perspective. Where prior researchers saw channels as logistics and warehousing, Lou viewed them as dynamic systems governed by power and conflict. Lou brought these insights to clients of his consulting practice which included IBM, Ford, and Johnson & Johnson.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

This conversation explores the evolution and strategic management of marketing channels, covering:

- How channels evolved from analysis of physical places to corporate strategy

- IBM’s consumer PC launch and its failed attempt at operating retail stores

- Whether sales or marketing should own distribution

- And much more

Now here’s my conversation with Professor Lou Stern.

The Two Critical Issues of Channels: The Amassing of Power and Resolution of Conflict

Andrew Mitrak: Dr. Stern, thanks so much for joining us.

Lou Stern: You're welcome. Good to be here.

Andrew Mitrak: Is it okay if I call you Lou?

Lou Stern: You sure can.

Andrew Mitrak: So, Lou, how would you describe your career in marketing to somebody you're meeting for just the first time?

Lou Stern: Well, I followed a path that not a lot of people do follow. I focused on a subject called marketing channels, but I did it in a very unique way.

Andrew Mitrak: Before we get to marketing channels, how did you get into marketing as a general field to begin with?

Lou Stern: When I was an undergraduate, I took a course in industrial organization economics. Part of that course had two particular readings in it. One was by a professor at Harvard by the name of Joseph Palamountain, and it was called The Politics of Distribution. And it was fascinating. It dealt with the battle between automobile manufacturers and automobile dealers, and how the dealers coalesced in order to make sure that the manufacturers didn't overwhelm them.

The manufacturers were in the mode of overwhelming dealers, and so the dealers felt they had to protect themselves. It also dealt with other industries in which similar battles were taking place. So that was one thing that really sparked interest.

The other was by Kenneth Galbraith, a very famous economist. He wrote a book on countervailing power. The focus was on how retailers square off against manufacturers in order to be able to protect their rights, their properties, and their way of doing business. So those things combined to spark the fire.

As I became interested in marketing channels and got deeper and deeper into the subject, it became obvious to me that the field was really dismal. It was dismal because it was descriptive. It was telling stories of how retailers did things, how wholesalers did things.

And it was focusing on such wonderful topics as, "What's the difference between a one and two-story warehouse?" That has to spark all sorts of fervor in the hearts of men!

I kept saying to myself, how can I make this field much more interesting, particularly for myself? I had no interest in going out and describing the functions of warehouses. I had an interest in having an intellectual pursuit that was something that would stimulate me, but also stimulate all kinds of young scholars coming along behind me.

I discovered that two critical issues in channels were the amassing of power, which I already looked at in industrial organization economics, and the resolution of conflict because there's all sorts of conflict in channels of distribution.

So that led me to all sorts of doctoral students who became interested in the subject, and the rest is kind of history.

Elevating Marketing Channel Strategy

Andrew Mitrak: It sounds like when you were in school, it was almost approached from a mathematical sense, but what you found was that there are all these interesting power struggles.

If you look at a company, how those companies interact with other companies, there are different points in a value chain and distribution where somebody's trying to take more.

Companies face all these decisions: do I work with this partner or that partner? Do I build it myself? And these are all strategic questions that companies make when it comes to their marketing channels and distribution.

Lou Stern: Absolutely. And I would talk to executives about my perspective of channels – how to look at them, how to manage them, how to figure out how to go to the marketplace, how to work with different kinds of distributors. I developed a kind of a framework for that, and I found that they really loved it. They were really enthusiastic about it. The business world ate it up.

They said, "That's where we live, that's what happens to us." We need to be able to understand how to work with these strange people, whether they're suppliers or shippers, or retailers, or manufacturer's reps, or whoever they were.

They needed more schooling on how to look at it, and they needed more schooling from about 30,000 feet. They get so wrapped up in the minutia of channels – and believe me, anybody that's worked in that area in a company understands that – they needed to be able to stand up on high.

Inside IBM's PC Launch and Brief Retail Foray

Lou Stern: So, for example, I got a call from an executive with IBM, and they said, "Professor Stern, we've got an issue that we'd like to discuss with you. We are bringing out something called a personal computer in a very short period of time, and we don't know quite what to do with it."

They knew what to do with it from the point of view of how it functioned, technologically, what it was, but they had very little concept of how to bring it to market.

So they asked me, would I work with them and a consulting firm in Chicago to answer the question? My response to them was, "I wouldn't know a personal computer if I fell on one!”

Right? I have no concept. I surely don't know how to use anything like that.

And they said, "We'll teach you. We'll come up to your place. We'll spend three days with you and teach you how to use the personal computer, we'll give you one, as long as you're willing to spend some time with us and help us think through this issue."

And that was real fun. That was a magnificent time, and we worked together so that they learned how to work with dealers – ComputerLand, Businessland, all those guys sitting out there.

They at one time said, "Should we open our own stores? Should we have IBM stores?" And I said, "If you do, I'm going to throw the computer out the window." I said, "Don't touch it. You guys don't have the mindset to be able to work at a retail level."

IBM did open some stores, but then they closed them almost immediately. So at any rate, that's the kind of fun stuff that I got involved with.

Andrew Mitrak: What an iconic company for such an important time in history.

Who Should Own the Distribution Channel: Marketing or Sales?

Andrew Mitrak: I want to ask you about this example because your books and literature are on marketing channels. Were you working with a marketer at IBM, or was it more of an operations executive or a finance executive? Sometimes these companies didn't even have marketing teams yet. So I'm curious, who was your sort of main point of contact and who were you working with?

Lou Stern: That's a great question, Andrew, because most people don't realize what the answer is. Marketing channels is probably... I don't think an advertising executive in a corporation would know a marketing channel if he fell on one, okay?

Marketing in most corporations – it may have changed some since I was involved – has to do with advertising, product design, all the other Ps, promotion. It doesn't have to do with place or distribution.

The salesforce owns distribution. It's a selling function. I don't agree with it. I believe it's a marketing function. I believe that marketers have to be the people to determine what happens, because all of these things have to be coordinated. You don't just have a marketing channel for the sake of marketing channels; you have one because there's a product that has to be developed and thought about to some extent as you think about what channels it's going to go through.

So the issue is, sales owns it. They shouldn't own it, but they do. And because a salesforce orientation is focused strictly on making sales, they don't think strategically, because they don't get it. And IBM at that time was a salesforce. The salesforce dominated the whole corporation.

Andrew Mitrak: Yeah, if I was to think of IBM up to that point, they were probably selling mainframes, which at that time took up a whole room in an office building. It's a very one-to-one salesperson meeting with an individual company or individual buyer. Maybe they're buying one, maybe they're buying a set for a number of their offices, and it's a very manual install.

When you're launching a PC, it's a personal computer, that's a mass-market product, or supposed to be a mass-market product, and you're dealing with a larger scale.

I think of one way to split marketing and sales: sales is usually more of a one-to-one process, marketing's more of a one-to-many process. If you're IBM going through a retailer like ComputerLand or precursors to Best Buy, you're finding the right channel, the right retailer to reach scale, which is very different than selling a mainframe to a company.

Lou Stern: That's exactly correct. They had a mainframe mental set, and of course, I was not involved with the mainframe end of the business. But figuring out how to use this kind of new consumer product was a real shakeup for them, and they tried very hard to learn what it would take to be much more marketing-focused than they had been in the past. It wasn't that they were at all a bad company; they were terrific. It was just that they were not used to this new world of marketing channels run the right way, so to speak.

Marketing Beyond Promotion: Channel Focus on How Customers Shop

Andrew Mitrak: If I had a job description for a channel marketer today, the assumption would be that this person's a digital marketing channel manager. They do our emails, they do our website, they do our search engine optimization. Maybe they're doing our paid media. And it's all very focused on the promotion of those four Ps, and it's not thinking about product or thinking about place.

Do you know when that happened? Was there a time when marketing was a little more holistic and less focused on promotion? That doesn't sound like it was the case as much when you were developing marketing channels?

Lou Stern: I suspect that the emergence of Amazon was a hammer that smashed into the heads of many, many folks. The key to getting this focus, to incorporating marketing channels as a mainstream marketing issue that you must take into account just as you take into account products, promotion, and price – the key to it is something that you do all the time in advertising. And that is focusing on the customer, focusing on the end-user.

You have to define your end-user, and you have to then do research to determine how the end-user – whether it's a corporation, or an individual, or some other entity – how that corporation or person likes to shop.

Everybody shops.

And so the question becomes, how do they like to shop? Do they like to shop online? Do they like to shop by going into stores? And it isn't where they want to shop, it's how they want to shop.

There are attributes of shopping. That is, some people need rapid delivery, some people want to see variety. Some people have other issues that are of concern to them as they think about purchasing something. And that focus – the focus of how your customers want to shop – is the key to the kingdom.

And what you know from everything else you learned about marketing is that there isn't one customer. There are lots of customers, and there are lots of customers that fit into segments. So you've got all sorts of different segments out there who like to shop differently.

Oh, wow, hello, right? So eureka! You've found it!

So then the question becomes, how do I deliver those shopping attributes? We call them shopping behaviors. How do I deliver on those? What kind of folk can I employ that will allow these people to shop the way they want to shop? And that's a marketing thing. It takes segmentation-type research.

And then once you've determined how people want to shop and how you'd like to reach them, then you have to manage the thing. Once you set a channel up, you got to manage it, just like you would manage a corporation. Only you may not have the power. Someone downstream may have the power.

You want to try to tell Amazon how to operate? Good luck! Right?!

You won't be able to. But you'll be able to go to Amazon and say to Amazon, "I have found out how customers of yours like to shop for my products. And I want to work with you to enable you to be able to give them what they need." It's a total different mindset. Okay, and that's marketing.

How Lou’s Textbook Sparked Marketing Channel Theory & Research

Andrew Mitrak: You wrote the book, Marketing Channels. I think the first edition was in 1977. What change in thinking did that present, and how did companies and academics respond to it?

Lou Stern: What that book did was it gave people who were interested in the subject a vehicle to use in teaching. There was nothing before that, really.

I shouldn't say nothing, there was one book I think, but it wasn't exceedingly popular. But this gave them a kind of a research vehicle. And what I mean by that is it laid out an approach to the subject, which they could then use in their research in attempting to write articles that would be published in learned journals.

So it evolved a whole area – for a while it was relatively hot – called inter-organizational relations and relationships between companies, and then eventually it evolved into something called relationship marketing. Relationship marketing is how do you deal with people – both your customers, your suppliers, your middlemen, whatever, salesforce – how do you deal with them and work with them so that the relationship can be effective? All of this came spawned out of that book. It gave them something as a framework.

And what has to happen is that you have to have theory in academia in order to be able to test it. So if you have a theory about make or buy, that's a big issue. Do you do it yourself or do you get somebody to help you? And there is a wonderful theory called transaction cost economics. It was developed by Ronald Coase at the University of Chicago, Nobel Prize winner, and Oliver Williamson at Berkeley, Nobel Prize winner. They were different eras. Coase started it, Williamson advanced it.

And what transaction cost economics basically says is that it is the transaction costs that make you decide whether you ought to buy or make, whether you ought to vertically integrate your channel of distribution, own the outlets – that IBM question, right? Should we go into the business of retailing or not? And Coase and Williamson argued it's determined by the level of transaction costs, and transaction costs are influenced by the state of opportunism in a channel.

Put bluntly, how much are they going to screw you when you deal with them?

How opportunistic are they? Do they simply look for their own interests and are they willing to take steps to promote their own interests against yours?

That's a very key point because the more opportunism there is, the more transaction costs elevate. So that said that the book, the textbook and the issues that I was trying to address to the whole field – power, conflict, relationships, all of that stuff, trust, you can think of all the issues that go with it – they became fodder for academics.

Breaking Silos: Why Channel Strategy Requires System Thinking

Andrew Mitrak: As I was reading your book, a few things came up for me. I realized I, as a marketer, have such a bias towards thinking about one company or my own company or my own product or my own brands.

When you're on a marketing team, whether you're leading it or a cog in the machine, it's so hard to get even a team aligned around the brand, the growth strategy, the messaging. And when you introduce another company or another partner or another organization, it gets even more complicated.

I have this bias towards thinking single-company. If you ask me to describe a marketing job, I'd probably describe somebody working for a single brand or a single product.

When you wrote this, did other marketers also have that bias, or did this change that for people to think a little more not just about a single company, but about how multiple companies interact with each other to bring something to market? Did that shift thinking in some way?

Lou Stern: Well, anybody that certainly came to my class walked out of the room with that perspective, right? But the idea of relationship and thinking in that term is a pretty difficult one to swallow. It's hard to put it into effect.

You often have to go through the salesforce, and the salesforce is not generally intellectually oriented. It is difficult to make that case when they feel that the distributors are simply sitting in yachts, smoking cigars and living a life of Riley. They have a terrible bias against downstream people.

So, in many cases, it's the great salesman that understands that they're dealing with the system. And in order to be able to deal with the system, the parts have to fit together, and the more they fit together, the better.

Look at Walmart, who's changed their perspective a lot over the years. Their first perspective was to beat the hell out of suppliers, and that's what they did. And I think that what they've learned, especially in their relationship with Procter & Gamble, is that they've learned how to make a system out of their relationship, and they made it a win-win situation for both of them.

Further Reading on Modern Marketing Channels

Andrew Mitrak: Lou, this conversation's been a lot of fun. I'm so glad we were able to do this. If somebody is learning about marketing channels for the first time or has listened to this and wants to learn more about your work, where would you point them? What would you suggest?

Lou Stern: I suggest they get a hold of the ninth edition of my textbook. I'm no longer writing it, but my name is on it. The lead author is a guy by the name of Rob Palmatier. He's at the University of Washington. He is a brilliant guy. It's something that you can read and enjoy parts of it. Just skim around and read what you want.

But don't forget, it's power and conflict that's going to determine whether you're going to win or lose.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 12

“My philosophy about the marketing function is that it's the interface between the organization and its markets.” - George Day

This week, we’re joined by Professor George Day, a renowned author, educator, and researcher. Day is the Geoffrey T. Boise Emeritus Professor at the Wharton School of the University of Pennsylvania, where he founded the Mack Institute for Innovation Management.

Day co-authored Marketing Research with David Aaker and V. Kumar, who were previous podcast guests.

However, Day perhaps best known for his work on strategy. We spend most of this interview on his 1990 book, Market Driven Strategy: Processes for Creating Value.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

Market Driven Strategy was a breakthrough because it shifted the focus from a company’s internal capabilities towards an outside-in, customer-centric approach. While newer strategic frameworks have emerged, you can trace many of them back to the ideas popularized by Day in this book.

Now here’s my conversation with Professor George Day.

Foundational Work in "Market Development"

Andrew Mitrak: George, thanks so much for joining us.

George Day: I'm delighted to be able to share my story and reflect on the history of marketing strategy—or what I would call strategy from a marketing perspective.

Andrew Mitrak: Sounds great. Well, let's start with the early days of your story. You started as a mechanical engineer at the University of British Columbia. And in less than a decade, you were teaching MBA students at Stanford's Graduate School of Business about marketing. So how did you go from engineering to marketing?

George Day: It began when I started as a junior engineer in a chemical plant, as an operating engineer. I decided that was arduous and painful, so I talked my way into the Market Development Group. I joined the Market Development Group as part of the R&D Group. They were trying to find applications for the products they were developing. We had a lot of capacity to produce hundreds of products, so my job was to find markets for them.

Andrew Mitrak: A product in search of a market. That sounds like a fun, challenging line of work.

George Day: I transferred to headquarters, and the day I arrived, they fired my boss. So there was a two-person Market Development Group, and I was the lead person. I had to learn a lot very fast.

Talk about the blind leading the halt. I was thrust into an environment and a job which I really didn't understand, was certainly not prepared for. Because with an engineering degree, I was focused and rigorous.

I think a lot of my perspectives came from the questions I asked and the inability of the senior executives of the chemical company to answer them. I decided then, to understand better the situation I was in, I'd get an MBA, and that was a really transformative experience.

Andrew Mitrak: Were there any professors or mentors during that time that shaped your early views of marketing?

Early Influences: David Leighton and John Howard

George Day: Yes, I encountered an enormously influential figure in my life, who I consider a mentor: David Leighton, who subsequently became chair of the American Marketing Association. To illustrate his capacity, he also was asked to be brought in to run the Canadian Winter Olympics, and then became the chairman and managing director of the Canadian government library, symphony, and museum.

So Dave influenced me and encouraged me to go on and get a doctorate. That's when I went to Columbia. I had a Ford Foundation fellowship that I could use to pretty much talk my way into most schools. I went around and interviewed three or four schools and selected Columbia, largely because of John Howard, who was a rigorous, leading-edge scholar. He had an enormous influence on Jagdish Sheth and also on me.

Andrew Mitrak: I talked to Jagdish Sheth a few weeks ago, and he spoke about his collaboration with John Howard on developing the theory of buyer behavior. What was your relationship with John Howard, and did you have a chance to collaborate with him on any of your research works?

George Day: Jagdish at that time was a research assistant or associate of John Howard's, had gone to work with him, and I came in as a doctoral student into the doctoral program. It happened that I worked very closely with him and ran a big research project which we called the buyer behavior project. It was a major research collaboration with the General Foods company.

So I spent a lot of time on that, and that's where I learned a lot of my research skills.

The Analytical Edge: Engineering Meets Marketing

Andrew Mitrak: And did you find that having this engineering background gave you a unique perspective on marketing? Were you sort of an odd person out with an engineering background, or was that more common?

George Day: I think the engineering background certainly helped me because in the PhD program at that time at Columbia, there was a real emphasis on rigor and statistics. So that was pretty easy for me. My dissertation was on continuous time, discrete state stochastic models in marketing. If you can follow that, don't ask me any questions.

Defining Market-Driven Strategy: Where to Play, How to Win

Andrew Mitrak: I want to jump ahead to 1990. This is when you published Market Driven Strategy: Processes for Creating Value. When we were emailing in advance of this show, you mentioned Market Driven Strategy is a good place to start because that book represents your views on the scope of marketing strategy. So, can you share with us, what is the scope of marketing strategy?

George Day: Marketing strategy— there are various ways to define it. I take an expansive view as the answer to the two classic strategy questions: where to play and how to win. Those have been the bedrock questions for all companies throughout time.

But market-driven strategies advocate starting from the market and your previous commitments—that's the nature of your capabilities and culture that shape both the choice of customer value proposition and choice of service market. I think ultimately the core of marketing strategy is how to achieve customer value leadership and continuously innovate new value that customers will pay for.

The other side of it is the companies that win—and I take a strong competitive advantage approach to it—but a lot of my subsequent work over the last 20 or 30 years has dealt with the ability of companies to foresee trends, events, and opportunities. These often come about as weak signals that are flickering out there on the periphery of the organization, and the winners detect and act on those weak signals faster than anybody else.

A selection of books by Day: Market Driven Strategy (1990), Advanced Introduction to Marketing Strategy (2022), Market Driven Organization (1999)

At the core of an innovation discipline is the ability to foresee trends and events that create great opportunities or possible great threats and position yourself to capture them ahead of any of your rivals.

Bridging Academia and Practice Through Consulting

Andrew Mitrak: I love how you frame it as "where to play and how to win." As I was researching this book and your work, unlike a lot of books on marketing strategy that can feel kind of esoteric and abstract, this one feels really grounded in real-world business applications. How much of this was sparked by your academic research versus being informed by your experience hands-on consulting for companies?

George Day: That's a very insightful question, and the answer is both. I am a product of a case background; I use a lot of cases. At the time I got my degree at the University of Western Ontario, that was strongly influenced by the Harvard Business School emphasis on cases. I love cases. I love teaching cases, and the cut and thrust of the dialogue debate in the classroom is really energizing.

I take a little detour there so that you can understand how I came about and developed my consulting practice, which was largely as a leadership facilitator.

I had probably maybe a hundred engagements where a company would come in, and I would only work with the division general manager or the CEO. That was my client, but we would agree that it was my meeting. And so I treated them as live cases.

My job was to identify the critical issues and get everybody on the leadership team to agree these were the top five issues, and then come up with an action plan.

We would not disband—stop the meeting—until there was a detailed action plan assigned to individuals with dates and times when they would deliver it. I made myself extremely unpopular by dragging meetings out until I was satisfied and the CEO was satisfied—you're not going anywhere. But more importantly, Andrew, these were ultimately live cases.

Marketing: The Interface Between a Business and its Markets

Andrew Mitrak: So these live cases you were consulting with—these are some of the best-known companies in the world: AT&T, Ford, Nike, IBM, Cisco, Coca-Cola, Best Buy, JCPenney, Wells Fargo, dozens of others, I could go on. You mentioned that you were often working with the full executive team, not just a marketing department, but your main client was the CEO.

Even though you're known as a marketing professor at Wharton, and 'marketing' was in your title or focus, this market-driven strategy was much beyond the scope of just the marketing department in an organization. You were working with the whole leadership team?

George Day: Oh, absolutely, the whole leadership team. No, I take a comprehensive, integrated view of the organization and how it can compete in the future.

Andrew Mitrak: So back to market-driven strategies, you write about some of the common misconceptions. The first that you cite is that some people misinterpret it as being reactive to the market. I'm going to quote your book here:

"The real gains from being market-driven come from anticipating market opportunities and getting to them ahead of rivals."

So to be market-driven, companies can drive the market and even create new markets where they didn't exist?

George Day: You mentioned the distinction between market-driven and market-driving. To me, that's a distinction without a difference. A market-driven organization is constantly looking over the horizon—maybe out as far as three to four years—and trying to anticipate from the market back what the big threats and potential opportunities are.

My philosophy about the marketing function is that it's the interface function between the organization and its markets—defined by collaborators, competitors, customers, and consumers.

One of my jobs as a facilitator, going back, was to force them into looking at their company through the eyes of their customers and competitors. I would get them to role-play their major competitor.

I would flip the script and have, for example, the chief operating officer take the role of his counterpart, ditto the operations manager and the marketing director and the CEO. They all got into their roles, and then I would get them to play out a role as though they were the leadership team of their major rival and think about the moves they would make. That's an example of outside-in thinking.

Andrew Mitrak: That sounds like a lot of fun. Often on a marketing team, I take a somewhat similar approach of trying to role-play being a customer that uses a competitor's product.

George Day: That's precisely it.

Andrew: One of the other misconceptions that you write about regarding market-driven strategies is around adopting a customer focus. You describe customer focus as a necessary but not sufficient condition. It doesn't mean giving all of your potential customers everything they could potentially want. You write, and I quote,

"Market-driven firms achieve superior profits by selectively nurturing the customers with the highest profit potential."

George Day: Exactly. So there are two aspects to what I consider to be a market-driven strategy: that is, think like a customer and always benchmark yourself against your major competitor. I consider customer value to be a relative concept.

Andrew Mitrak: Right, exactly.

George Day: The customer picks the one that delivers the most value, whether it's price value, relationship value, quality.

Understanding Customer Needs: Beyond the "Faster Horse"

Andrew Mitrak: Right. I'm reminded of that Henry Ford quote that might be apocryphal about, "If I had asked customers what they wanted, they would have said a faster horse." Somebody could read the title of Market-Driven Strategy without reading the substance and taking the message, "Oh, you have to think of the horse market or think of how to build the fastest one." We're not realizing—well, truly being customer-centric is understanding the job to be done, understanding what it is they really want at the end of the day, and building products that satisfy their needs, even if it means going to a new market or building a new product.

George Day: Exactly. Yes, it's adopting the customer's perspective.

The Role of Path Dependency in Strategy

Andrew Mitrak: One of the themes of the book and your work more broadly is this idea of path dependency. Can you elaborate on this notion of path dependency and what it means for marketing strategy?

George Day: We are dependent on our past choices.

There's the old saying, "past is prologue."

We are constrained by our past choices—our culture, our capabilities, where we've been, and the market positions. But those are also strengths that we can leverage and adapt. So the ultimate question for all organizations is, what's coming next? And how do we position ourselves with our capabilities and our culture to capture the value that's created?

Case Study: Sonoma County Winegrowers

Andrew Mitrak: When it comes to market-driven strategy, and when you first released and published this book, did you have any favorite stories of companies that adopted this mindset and successfully implemented market-driven strategies to turn their product lines or their business around?

George Day: I have lots of those stories, but I'm going to jump to my favorite long-term client. I have been running a think tank for Sonoma County Winegrowers.

Sonoma County Winegrowers was my laboratory to put all these ideas into play.

Sonoma is the second largest wine-growing region in the world after Bordeaux, and it's enormously complex. So I'm looking at all the strategic issues that affect them: regulations, the changing political climate, changing markets, distribution methods. Obviously, immigration and worker policies are huge. Now we're working with the president, who's a real visionary, in designing the farm of the future.

I'll frame this aspiration as part of the overall perspective on strategy.

Strategy is about the choices of markets and directions, but it's also about your level of aspiration and ambition.

Their ambition is to be the Silicon Valley of farming, using advanced technology, mechanical pickers, on and on. We have a lot of advancements in generative AI because if you put a sensor in every square meter, that's an enormous amount of data. So I love looking over the horizon and saying, "Okay, what's coming next? And how are we going to prepare for that?"

Andrew Mitrak: By the way, I love that example because you're taking wine, which is one of the oldest consumables ever, but you're talking about applying generative AI to it, applying robotics to picking. The innovation story in the market strategy portion of it just never ends.

George Day: Yes. You absolutely hit the nail on the head there.

“Market-Driven Strategy” in the Evolution of Business Strategy

Andrew Mitrak: So when you look back on Market Driven Strategy, where do you think it sits within the evolution of business strategy overall? Because as I was researching it, for me, it felt like a direct predecessor of The Innovator's Dilemma by Clayton Christensen. You talk about the idea of market leaders and their “advantage erosion” from new entrants, which sounds a lot like disruptive innovation. So I guess where do you think of it sitting within the overarching arc of how business strategy has evolved?

George Day: I see market-driven strategy or strategy from the outside in as interchangeable terms that reflect on the progress of the organization in satisfying its multiple stakeholders, including anticipating technology changes. I knew Clay [Christensen] pretty well, and it was a tragic loss when he passed away.

But I think market-driven strategy is a much broader concept than disruptive innovation because it certainly feeds it and is a valuable perspective, but technology trends and developments are only one factor in the evolution of a strategy.

See Sooner, Act Faster (2019)

Further Reading: See Sooner, Act Faster

Andrew Mitrak: Well, Professor George Day, thank you so much for sharing your experiences and wisdom with us today. The time just flew by. I wish we had more time together. Where would you direct listeners who want to learn more about your work?

George Day: I wrote a subsequent book with a colleague of mine, Paul Schoemaker, called See Sooner, Act Faster that is really literally a manifestation of outside-in thinking. Not only does it require you to take the perspective of competitors of various kinds, but also to understand market evolution and position the organization. Ultimately, it's all about leadership.

That's perhaps the defining message of my experience.

Andrew Mitrak: George, thanks so much for speaking with us. I had a lot of fun.

George Day: Well, I hope we can continue this conversation. Thank you, Andrew. I really appreciate you taking the initiative to do this and bring us all together.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 11

When and where did modern branding really begin? The usual narrative suggests it started during the Industrial Revolution, when the UK and the US began mass producing goods.

This week, we’re challenging that story with my guest Giana Eckhardt, Professor of Marketing at King's College London, whose research reveals sophisticated branding practices thrived in Imperial China centuries before the Industrial Revolution.

Early examples of Chinese brands like the "White Rabbit" show how sophisticated targeted marketing and brand symbolism are much older than originally thought.

We also explore Eckhardt’s work on The Rise of Inconspicuous Consumption and analyze how conspicuous and inconspicuous consumption have trended over the 20th and 21st centuries, with cameos from Marty McFly and Larry David.

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Challenging the Traditional History of Branding

Andrew Mitrak: Giana Eckhardt, welcome to A History of Marketing.

Giana Eckhardt: Thank you for having me, Andrew.

Andrew Mitrak: So the typical narrative is that modern branding originates from the Industrial Revolution. But you have research that shows that branding practices date way back further than that, all the way back to imperial era China, more than a thousand years ago. Before we dive into this research, could you give a high-level overview of what the traditional version of this story is?

Giana Eckhardt: What you'll read in every branding textbook that's used with MBA students, for example, is that yes, there are examples of the place origin of where something was from that exists in antiquity. So in other words, if you look at a vase or something that's been found in an archaeological site, it may say the name of the country or even the region from which it was from.

But in terms of modern branding practices, which basically refers to the symbolic uses of brands to say something about who you are as a person and being much more identity focused, that first came into being around the Industrial Revolution. So in the 1800s and typically the UK and the US are the places that are referred to where modern branding practices originated. So this is things like brand mascots, for example. The first brand mascot is Bibendum, who represents Michelin tires.

Andrew Mitrak: I didn't know he had a name.

Giana Eckhardt: He does. Bibendum, yeah. So things like elements where the brand starts to become anthropomorphized. Consumers are willing to pay more for something because it has a particular name on it. All of those types of things originated around the Industrial Revolution and are typically tied to capitalism.

Discovering Branding's Ancient Roots in China

Andrew Mitrak: So if the traditional story is that brands emerged out of the Industrial Revolution tied to capitalism, when did you start to second guess this version of events?

Giana Eckhardt: I did my PhD research in China and what I was doing it on was the symbolic uses of brands in China at the time. And so I have some really, really great stories, which we can talk about some other time about how brands, which were brand new in the 90s in China like McDonald's, what they came to mean in a culture that was so different. But during the process of being over there and doing the research for my PhD in the late 90s, I started to realize that there were all of these brands that were way, way older than that. Meaning like millennia older than that. Using very sophisticated and symbolic uses of visual images or textual words that you can see in brands from basically the Song Dynasty, which is around 900 BC onwards.

Andrew Mitrak: When you say you saw these and found them, how literally did you see them? Did you see them in books? Did you see them at museums? And like what was that aha moment where like, hey, this actually, this looks like branding and this predates the Industrial Revolution by millennia. What was that “aha” moment like?

Giana Eckhardt: Yes, there are brands in museums actually, which you don't really see in a lot of countries outside of China. So that is definitely one place that I saw them. There have been books written on this, although in Chinese only. So we worked with some different people to help us translate a lot of what these ancient brands actually said. And also, some of the brands from that time are still around. So Tong Ren Tang, which is a pharmaceutical brand, for example, still exists now. And the white rabbit, which although not for needles, it's used for candies now, but in terms of a branding symbol from then is still used now as well. So they're still around.

Early Branding Practices in Imperial China

Andrew Mitrak: As you came across this research, what led you to dive in and start to publish literature to correct the narrative and change the story? What drove you to this as an area of interest to keep pursuing?

Giana Eckhardt: I've always been interested in Chinese culture and philosophy in general. And so I think when I realized that all of this had existed, and although it had been written about in Mandarin, it hadn't been written about in English, I really wanted to bring that knowledge to the canon of what people read in the West.

Andrew Mitrak: Let's talk about bringing it to the canon in your article, A Brief History of Branding in China. What were the earliest traces of branding practices that you came across and shared in this article?

Place Branding: The Changzhou Comb and Maotai Liquor

Giana Eckhardt: Yeah, so place branding, so in other words, calling a product by the region in which it's from, is one of the oldest branding practices in general. And in China, we can see this as well. The Changzhou comb is a particular style of comb that was made in the region of Changzhou. And so when people wanted combs that looked like that, they just started calling it the Changzhou. Which one do you want? Oh, the Changzhou comb. And eventually, it became a brand in terms of like a legally protected brand, etc. But at the beginning it was not. So early branding practices of the place brands evolving into more symbolic brands is definitely one.

Andrew Mitrak: This is so interesting because today we see place brands all the time. There's Kentucky Fried Chicken, there's Fiji Water, there's Philadelphia Cream Cheese. Almost every sports team is a place brand as well because it's tied to a city or an area. And how did a region become associated with Combs?

Giana Eckhardt: Well, that's where they were made. That style of really brightly colored and having a person on the comb. Again, things that aren't necessary from a utilitarian standpoint, that was only happening within that one region. And there are a lot of other products that are similar to that too. It was very organic. We tend to think of branding as something that is very intentional, right? That it's something a company is doing or maybe a country is doing, branding itself or whatever. But it's very intentional and actually, if you look at a lot of these older brands, they just evolved into the brand rather than having it be a managerial decision.

Andrew Mitrak: Yeah, and another place name example that you cite is Maotai liquor. And I thought it was so interesting to see a liquor example given that we associate alcoholic beverages with the region so much, whether it's breweries and microbreweries or macro breweries like the Rocky Mountain Coors lights and the macro beers of Michigan or the scotches of Scotland and the wines of France and of Napa. But here you have Maotai liquor as being associated more than a thousand years or so before modern day liquor brands evolved and it's a region known for its liquor. So I just think that's really fascinating that this seems like an organic way for a brand to emerge.

Giana Eckhardt: Exactly, and you have to support it as it grows. You can't just leave it there to continue that way organically. For Maotai liquor, the key moment was when Richard Nixon went to China in the 70s. That was the first time that a US president visited since the Communist Party had come in charge. It was the first time that a US president had been invited. And when Nixon arrived to China, he was served Maotai. And all of a sudden the brand became so famous. Oh, what is he drinking? What is that? It's still very difficult to get Maotai outside of China now. So it's not like it had a huge boom in terms of sales after that outside of China, but it definitely had a boom in terms of brand recognition.

Andrew Mitrak: Let’s go back to Imperial-Era China, well before Nixon’s visit. Let’s say we’re in 960 AD or some time like that, and I'm looking for a product. What is my experience of branding in these early days? If I'm or if I'm a merchant selling a product, what are the forms of branding? What are the primary functions that it's serving? Because this is outside of capitalism as well. So like who is involved in creating brands and who is involved in purchasing and identifying brands? What does that look like?

Giana Eckhardt: It often stemmed from consumers themselves wanting to have a way to be able to find the same thing of the same quality that they wanted the next time. That's the Changzhou combs, right? How do I know that this is going to be made in the way that I'm looking for? You need some sort of language in which to explain that, right? So consumers would oftentimes come up with their own names, like which sometimes were place brands, but some sometimes weren't.

The government also as well. The government realized that this was a way to help regional development. And also, in the same way that in the UK, the royal family will still endorse particular products, the emperors always endorsed particular products. And they realized that that was very strategic also. And so it was their way of helping saying, “Oh, why don't you call yourself this and we'll give you a seal that says that the emperor has endorsed this.” And so these are some of the ways outside of, we have a company and a brand manager who makes these decisions. These were some of the ways that were happening then.

The White Rabbit: A Case Study in Early Brand Symbols

Andrew Mitrak: One of my favorite examples in your paper from this era is the white rabbit, which we referenced earlier. And can you tell listeners what the white rabbit is and what the brand of the white rabbit is?

Giana Eckhardt: The white rabbit is widely considered to be the first modern brand. So in other words, a brand that just goes beyond identifying where it's from or something like this, but has more symbolic aspects to it.

Andrew Mitrak: And it was for needles, right?

Giana Eckhardt: Exactly. So it was needles that typically women back then would be using to sew. And it's important to say that the women who were the target segment for this were largely illiterate. So there is text on the brand. So there are the characters for a white rabbit. But people would recognize it, just who couldn't read that. And the reason why they would recognize the white rabbit is because that is a key character in a Chinese myth that everyone would know. And it's a character that represents females because the white rabbit is an empress ascended to the moon in a particular story that is very long to tell. But she ended up on the moon and the only thing she brought with her from Earth was her white rabbit. And so it's a symbol that's associated with women who were the target segment.

And where you would see these images of a white rabbit is in the wrapping paper. So when you would buy your sewing needles, they would wrap them up in a brown paper and it would have the symbol of the white rabbit on it. It was also outside of the store, the first store, to show people where it is you could go to buy it. So it really served so many functions that current brands serve, in terms of making people feel seen and feel like this is for them because they can understand and relate to the different images and messages that are associated with the brand.

Andrew Mitrak: So the artifact that's preserved with the white rabbit and is an image that's copied in your article is an etched metal stamp that would be used to imprint on a piece of paper. And in this image, you have it all. You have an image of the white rabbit. You have text around it and the text, the translation that I read is quote, we buy high quality steel rods and make fine quality needles to be ready for use at no time, unquote. And it sounds like it has all the hallmarks of a very modern advertisement. The image of the rabbit, of course, is on something that could be stamped and repeated and be consistent and you have positioning that emphasizes the quality and the speed of use. And it just seems remarkably contemporary, even though it's from close to a thousand years ago.

Giana Eckhardt: Yeah, I 100% agree. And I would just highlight that in addition to everything that you said that leads it to sound remarkably modern, it's also speaking to a specific target segment, which brands that just identified things they did not do. And this is something that I think is really important to emphasize because it's one of the keystones of modern brand management now, right?

Early Chinese Celebrity Endorsements and Target Audiences

Andrew Mitrak: So we've talked a lot about some of these keystones. We've talked about branding places. Are there any other favorite examples of early branding practices in China that you want to highlight?

Giana Eckhardt: Celebrity endorsements. This was during the 1900s, but there is a cigarette brand that's featured on their packaging, the different generals that had fought in the war and been successful. And so you can have this idea of hero worshipping and promoting nationalism, using people who were well known and widely admired. Especially in the age of social media, a lot of people think this is something that is so new. And yeah, maybe the medium in which it's being disseminated is new as compared to cigarette packaging or something like that. But what they're trying to do is remarkably similar.

The Spread (or Lack Thereof) of Branding Beyond China

Andrew Mitrak: Let's look at how this might have influenced branding outside of China. Do you see these early branding practices as a unique offshoot that developed within China and didn't influence the outside world or do you feel like these early beginnings of brand development influenced how areas outside of the Chinese region also practice brand development?

Giana Eckhardt: China was remarkably insular for thousands of years. And this was because China was never a colonizing power over other areas. If you think about like as when we were talking before about modern day branding practices and those stem from the Industrial Revolution. Well, think about the UK at that time, for example, like and how many colonies they had. So that way of doing things, it's easy to see how it spread. With China, it wasn't until others went to China that even that this was even that these practices were realized. Of course, there was the Silk Road. So, products from China had been going to Europe for a long time. But the branding practices that went along with them because you need a level of cultural understanding to get what these brands mean and why they would be important. And so they didn't travel. And this is why we don't know about a lot of these brands and these types of practices even now in the branding literature. It's something that has been under the radar. And of course, now some Chinese brands are starting to become more prominent globally. Now, we can of course see this with Byte dance and TikTok, for example. It's been something that's been insular to China for a long time.

Independent Development of Eastern and Western Branding Practices

Andrew Mitrak: The idea of branding and consistency and stamping sounds like within China it was identified and developed first and then almost independent of that years later, then the Industrial Revolution also adopted these practices, not necessarily influenced by what happened early in China, but they just came to a lot of the same ideas independently at a later time. Is that the right way to think about it?

Giana Eckhardt: Yes, I think so. In terms of the symbolism attached to branding, that's something that yes, I think that definitely developed during the Industrial Revolution, but also in China, as we've seen and been discussing. So I think it's yeah, similar practices that developed from different cultural milieus that didn't, yeah, so they developed independently even though as you said, they can be so similar now.

Conspicuous and Inconspicuous Consumption

Andrew Mitrak: Let's just segue into a separate topic. There’s another area of your research that I wanted to cover with you, which is this idea of conspicuous consumption and inconspicuous consumption. And by the way, these words are a mouthful and I'm gonna probably get tongue tied. But I think that this idea of conspicuous consumption, it was an idea I've heard this phrase before, but admittedly I had to look it up and catch up on who Thorstein Veblen was and where these ideas came from. But could you define what conspicuous consumption is for listeners and how it relates to ideas of luxury and branding?

Veblen and Defining ‘Conspicuous Consumption’

Giana Eckhardt: Veblen is the first person and still who people look to when they think about conspicuous consumption. He was writing at the turn of not this past century, but the one before. So in 1899. And this was the era of the robber baron. If we think about the Rockefellers of the world and those types of people.

He defined conspicuous consumption as the purchase of expensive goods to wastefully display wealth rather than to attempt to satisfy the more utilitarian needs of the consumer. For the sole objective of gaining or maintaining higher social status. So it's the idea that consumers buy things, expensive things, not because they need to, but because they want to signal something to others and it has to do with social status.

So we can think about contemporary brands now, like people are always asking, why would someone pay $1,000 for a t-shirt when you can buy a t-shirt in Walmart for $10. And so it's about what you're signaling to others. And I think this notion that Veblen had about wastefully displaying wealth, it's this idea that this isn't something, yeah, that I need in any way and because it is wasteful, that's what makes it valuable to me because it tells other people that I can afford to be wasteful and they can't.

And back in Veblen's day, the symbols of what was called conspicuous was for example, having a tan because if you at that time, if you had a tan, you were either a laborer who was working outside and so getting tanned from the sun, not because you wanted to, but because you had to. But if you were a person of leisure who was outside playing tennis, you would get a tan from that. And so it morphed from a symbol of not having high social status to having high social status. So those are just, yeah, that's how Veblen was thinking and writing about it at the turn of the last century.

Andrew Mitrak: So Veblen coined this term in 1899. That's not to say that it didn't exist before then of course, you think of Pharaohs in Egypt being buried in extravagant tombs with all sorts of things that their dead body probably doesn't need. Of course, there's always been displays of wealth that are extravagant, but for the first time we had this in economic words, a phrase conspicuous consumption to identify it.

Inconspicuous Consumption: IYKYK

Andrew Mitrak: And that if this extravagance and luxury and perceived wastefulness of spend is conspicuous consumption, then inconspicuous consumption must be the opposite of that, right? It's consumed in a more subtle, less flashy way.

Giana Eckhardt: So inconspicuous consumption is when you consume not because others will be able to recognize these symbols, but so that they won't be able to recognize the symbols of what a brand is saying. There's a term that's used, if you know, you know. (IYKYK) And inconspicuous consumption is embodied by that, right? And we can think about more modern terms like quiet luxury, which you hear a lot as well now, which is that no one would be able to know because there isn't anything that people can immediately recognize that says, this is the brand that this is. So along with that, this is the strata of society that I am from. It's keeping that more quiet and more hidden. And so there's a lot of talk now that inconspicuous consumption is more desirable than conspicuous consumption. I think it depends on who the people are and what the context is. But that's the contrast between the two.

Andrew Mitrak: So they can of course coexist with each other and it's not to say everybody's conspicuous or inconspicuous, but there are cultural trends where one seems to dominate more than the other.

Trends of Conspicuous vs. Inconspicuous Consumption

Andrew Mitrak: If you think of how conspicuous and inconspicuous consumption have trended over time since since Veblen introduced this concept in at the turn of the last century, how would you describe the ebbs and flows or the pendulum swinging between one and the other?

Giana Eckhardt: Yeah, it's really interesting. I mean, you can look at some of the most expensive brands at the moment and I would definitely categorize them as an inconspicuous brand. There's a new luxury brand in China that's partially owned by Hermes, but it's called Shang Xia and it is extremely expensive, but you would never ever know that it was a Shang Xia from, you really have to be in the know to even. So in terms of luxury, the highest levels of luxury have switched almost in a complete 360 from Veblen's Day when it was very obvious, if someone was a laborer versus a robber baron. Whereas now you really can't necessarily tell that immediately anymore. So think about one of the most expensive bags from the past few years, one that looks like an IKEA plastic bag that they give out at IKEA for you to put your purchases in. And IKEA sells them for like $3, right? But so this idea that something is inconspicuous, it actually has more social cache now, flipping Veblen's theory on his head.

Economic Cycles and Consumption Patterns

Andrew Mitrak: I think of the roaring 20s and flapper dresses and extravagance. Then the great depression happens and it's probably you probably don't want to be seen wearing the fanciest things and it doesn't quite strike the right tone to be flashing your wealth when a lot of folks are in poverty. And how much do the trends in this tie to how the macroeconomy is doing in the culture?

Giana Eckhardt: It definitely does tie into that. So when we started to see a rise in inconspicuous consumption was after the 2008, I don't know what exactly we're calling it, but...

Andrew Mitrak: The great financial crisis of 2008 to 2011, 2012-ish….

Giana Eckhardt: Exactly. So during that 2008 to 2012-ish period, we may not have seen a lot of inconspicuous consumption immediately, but from 2000, yeah, kind of, well, actually 10, I would say onward, it was very evident to see. So I think that connection is definitely still there.

Cultural Examples: Marty McFly & Larry David

Andrew Mitrak: An illustration you give in one of your lectures is Back to the Future where Marty McFly, of course, is from the 1980s and wearing 1980s clothes and he's transplanted back to the 1950s. Could you tell the story of the branding example in particular of what this tells us about conspicuous consumption and how the 1980s contrasts with the 1950s?

Giana Eckhardt: So there is one scene where Marty McFly, the main character in Back to the Future, has his pants off so you can see his underwear. And his underwear says Calvin Klein on it because that's what he was wearing when he left the 1980s.

And so the 1950s folks, when they see him think it's his name and start calling him Calvin. When he has to explain like, no, this is the name of who made this underwear and not my name. They don't get it. Well, why would you have the name of someone else, of some other person on your own underwear? And hearing him try to explain that is quite humorous.

Andrew Mitrak: One of the examples that I wanted to share with you is from a favorite show of mine. It's called Curb Your Enthusiasm. Have you ever seen the show at all?

Giana Eckhardt: I have. Yeah.

Andrew Mitrak: There's this episode called the Anonymous Donor and Larry, he sponsors a hospital wing and it's called the Larry David Wing.

But then somebody else at the same time gets another wing at the hospital and it's the anonymous hospital wing. And Larry looks like a jerk because he put his name on it, the inconspicuous. Somebody else and it turns out to be his friend Ted Danson, gets the anonymous wing. and he gets all the cache of being anonymous, but people know that it's Ted Danson and Ted Danson looks like a hero because he's doing something but not getting credit, but everybody he is getting credit even though because everybody knows he's the one behind anonymous.

It's a funny interplay of how the elites who have all the wealth to sponsor a hospital wing, they want to show off their wealth, but they don't want to be perceived as showing off their wealth. It also ties into how there's psychological mind games, and reverse psychology to how conspicuous and inconspicuous consumption can interact with each other.

Giana Eckhardt: I love that example. I love that TV show too, although I haven't seen this episode, but I love this example because it shows that there's always a tension between wanting people to know what it is, what status you have in society, etc, but also, yeah, wanting to be thought of as a good person, right?

So a lot of people, the critiques of brands for super expensive brands, for example, are like, well, you could take all the money that you just spent on that and why haven't you donated it to people who need it in other parts of the world or something like this. So this idea that you can be a good person but not necessarily reap the social rewards for it. That's directly against Veblenism, right? So not that a lot of people even know what that is anymore, but really it's a great example of showing that there are still downsides to publicly consuming in this way and I'm going to go and watch the episode now to see how this one humorously plays out.

Luxury Brands Shift to Inconspicuous

Andrew Mitrak: I'm wondering if you have any favorite examples of how how marketers or companies and their brands have tapped into the cultural zeitgeist when it comes to conspicuous versus inconspicuous consumption, either adapting their brand or launching new product lines that embrace the the tone that's in vogue at the moment. Do you have any favorite examples of that?

Giana Eckhardt: One of my favorite examples is Louis Vuitton, and their famous LV brand. In terms of the iconography and the way that it visually looks, the brand visually looks. And they will go from having the word Louis Vuitton printed as large as it could possibly exist on a handbag to a handbag where you can't even tell it's a Louis Vuitton. There may be an LV inside of it somewhere, but that's it. And so some brands will try and play in and have both of these in their product line, right? So think about the Ralph Lauren pony. Yeah. It can be very small on a shirt or it can be very large and that can be changed and you can see the changes over time when this conspicuous versus inconspicuous, when either one is more in vogue and you can see that. So yes, I think that brands adapt to the zeitgeist, absolutely. But they don't necessarily have to embrace one versus the other. That can change over time or even to target different audiences at the same time.

Read Giana’s article: Luxury Branding Below the Radar

Giana Eckhardt: Further Reading and Resources

Andrew Mitrak: Giana Eckhardt, this has been such a fascinating conversation. I've really enjoyed getting this new look into the well both what we were just talking about the history and the ebbs and flows of conspicuous versus inconspicuous consumption, especially over the last century. But then even dating back further the origins of branding in China. I think this is really fascinating and this is just exactly the type of stories I'm hoping to uncover in this podcast. The things that listeners may not be aware of and that might change how we think about the history of marketing, of branding. So I think this has just been such a fascinating talk. Thanks so much for your time. Where can listeners find more of your work online?

Giana Eckhardt: I've been doing some work recently on digital nomads and the fact that when people don't have a permanent place to live, it really changes how they consume as a consumer. That's a Harvard Business Review piece. I've also been doing work on the rise of analog consumption as compared to digital. And why consumers want to go back to analog. And I have a book that's coming out with Princeton University Press. It's called In Praise of Inconvenience. So it's about why consumers are seeking out the inconvenient rather than the convenient and what benefits that brings them. So keep your eyes open for that when it comes out as well.

Andrew Mitrak: That's great. Thanks so much for your time. We might have to do a follow-up conversation at some point because I feel like we just have scratched the surface of these fascinating histories of brands and all the great research and work you've done.

Giana Eckhardt: Sounds good.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 10 (Part 2)

“Some critics will say Coca-Cola has made a marketing mistake, and some cynics say that we planned the whole thing. The truth is we're not that dumb, and we're not that smart.” - Don Keough, Former President of Coca-Cola in 1985

We go beyond the headlines of New Coke and hear Zyman’s first-hand account of:

The Internal Battles: How resistance to changing Coca-Cola's iconic (but stale) advertising led to the fateful decision to change the product itself.

The Research Blind Spot: Why focusing solely on taste preference, without considering purchase intent, led Coca-Cola astray.

The "Kamikaze" Strategy: The audacious plan to kill Crystal Pepsi by launching the intentionally ill-fated Tab Clear.

The “best feature of Excel is Word”: How Sergio influenced Microsoft to elevate its narrative of Excel and market the full Microsoft Office bundle.

The transcript below and it features amazing vintage ads and helpful links. I recommend watching the video or listening to the audio to hear Sergio Zyman tell the story in his own voice.

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Coke vs. Pepsi: The Cola Wars in the 1980s

Andrew Mitrak: Sergio Zyman, welcome back to A History of Marketing.

Sergio Zyman: Hey, how are you?

Andrew Mitrak: Good. Congratulations. You're the first two-part guest. And so, at this time in the mid-1980s, what was the dynamic between Coca-Cola and Pepsi? Was Coca-Cola very obsessed with what Pepsi was going to do next? Was Pepsi gaining market share? What was the sort of dynamic at this time between the two?

Sergio Zyman: “The Cola wars” which have been documented 200 ways to Sunday… The media, and everybody else was basically figuring out how we were doing. And I think we were going to Wall Street, and so was Pepsi, saying, "Hey, we just gained a tenth of a share point," or whatever it was.

Pepsi had become the marketing director for Coke because Coke was so passive. Coke believed in imagery and branding, and all that. They weren't forced to understand how to spend money to make money.

At one point, we were in a conference in Naples, Florida, and I went for a run with my boss, Brian Dyson. He told me that we had just gotten wind that Pepsi was about to buy Seven-Up. And that was huge, right? Because we didn't want them to get any more leverage.

One of the issues was that when Pepsi went to fountain customers like McDonald's, we always allowed for one valve on a six or eight-valve machine to be for a competitor, to be fair, because we're allowing for Dr. Pepper or Seven-Up to come in.

I said to Brian, while we were running that day, "Well, what we have to do is we have to go buy Dr. Pepper." He said, "It'll never happen. Anti-trust is not going to allow us." I said, "Exactly." So we made an offer for Dr. Pepper, knowing that that was going to kill the Pepsi/Seven-Up acquisition, which it did. But to me, that was an honest, competitive environment.

The Genesis of New Coke: Answering the Pepsi Challenge

Andrew Mitrak: That's very clever. Does this competitive environment plant the seeds for the origins of New Coke?

Sergio Zyman: No. The New Coke thing was, as I told you before, McCann-Erickson had a dominance on the management of Coke that was unbelievable.

The company liked to be able to go to the country club or to church and have people come over and say, "Oh my God, I love your commercial, I'd Like to Buy the World a Coke or Mean Joe Greene."

So that social currency, that was enabling bottlers and company management, and all that, that's something that McCann exploited incredibly well. The top brass never went to see the marketing guys; they went to see the CEO of the companies. They were always kind of paying homage to the management of the company.

And we had the Pepsi Challenge. My argument at the time to management was we have to change the positioning of the brand. We keep on basically saying we are the original brand. We have to come out with something; we have to change. Have a Coke and a smile, it's not selling us anything. We have to stop doing Mean Joe Greene commercials and Buy the World a Coke, which was blasphemy, okay? Because the company loved that stuff.

Then, a project was created to try to figure out how to stop the Pepsi Challenge.

Then everybody said, "Well, it's the product. People are going in, and they're choosing Pepsi. So we're going to change the product." And I got into the whole project, but there were absolutely deaf ears in changing the position.

When I proposed that we actually use Cosby to be the guy that introduced New Coke, this guy, Ike Herbert, almost had me fired, right? Because they wanted to have these big songs with jingles.

And the problem was the position of the brand was wrong. Yeah, we were the original, but we were old. We didn't have any value to the consumer, and the whole thing started going in that direction.

The New Coke Launch: 77 Days of Infamy

Sergio Zyman: I remember perfectly; we were in the last meeting before deciding to go on New Coke, and there was the New York bottler and a couple of other bottlers that were the kind of advisory board. Brian Dyson went around the room and said, "Do you agree this is the right thing to do?" And then he got to me, and he said, "Do you agree that is the right thing to do?" I said, "No, I don't. I think we should change the position of the brand, but I think that we've gotten to the point in which we relaunch New Coke." And we did.

And we launched it with a big black-tie dinner, with Ray Charles singing.

The next day, we had a press conference. And I was manning the Atlanta press conference, and Goizueta and Keough were in New York, doing the big press conference. And one reporter turned around to Goizueta and said, "So what if it doesn't work?" And Roberto said, "You don't understand. It will work." And this guy just went on a rampage, basically saying, "These guys are crazy. They don't know what they're doing."

And then we launched New Coke. Then we got all kinds of consumer backlash.

There was a group from Seattle that was flying planes around the company saying, "You guys are a bunch of jerks." We had to take our tags off our baggage when we were traveling. People would start harassing you, a hard time.

The Psychology of Coca-Cola’s Taste

And after four weeks, 80% of people in America had tried New Coke, and they hated it. And we only had 6% distribution. So, it was all in the head.

77 days later, we brought Classic back. When we brought Classic back, 75% of the people had tasted it and said they loved it. We didn't have any distribution. They were drinking New Coke. So then we found out that Coke's taste was in the brain, not in the mouth.

Andrew Mitrak: Right.

Sergio Zyman: Do you drink Coke? You drink Coke sometimes?

Andrew Mitrak: Yeah, of course. I've had a Coke. I don't drink it every day.

Sergio Zyman: What does it taste like?

Andrew Mitrak: If I was to describe it, well, first you feel the bubbliness of it.

Sergio Zyman: What's the taste?

Andrew Mitrak: The sweetness to it, and then there's a bite to it.

Sergio Zyman: No, no, no. I didn't ask you how it feels. I asked you, what does it taste like?

Andrew Mitrak: It's hard to say other than it tastes like Coke.

Sergio Zyman: It has no taste memory.

Andrew Mitrak: Yeah.

Sergio Zyman: And by not having taste memory, if you go and you say, "What does Pepsi taste like?" People will say, “Sweeter than Coke”

Andrew Mitrak: Right. Coca-Cola is your baseline for comparing everything else.

Sergio Zyman: And look, you go and you say to people who drink wine once in a while, and you have all these crazy people like me who go and said, "Oh yeah, it has a leather smell, and it has berries." There's no memory. There's no taste memory. Coke didn't have it, and that was one of the big findings that we had. It was all in the brain, not in the mouth. It's how you felt is what you said. It's not what you tasted. And that was a big finding.

But everybody talks about New Coke ad infinitum. Nobody talks about the fact that we brought Coke back in 77 days. Oh, by the way, in 77 days, the price of the stock doubled. It was unbelievable. It was a huge success.

Andrew Mitrak: Yeah. There's so much to unpack with the story, and I'm so grateful that I get to hear it directly from you.

The Role of Marketing vs. Advertising at Coke

Andrew Mitrak: I want to go back to the influence of McCann and the reluctance to change the advertising and positioning. And this is from an interview that you did with Ad Age some years ago, and I want to quote,

"The only thing left was to change the product or change the advertising. I think we were lazy in recognizing that we needed to reactivate or reposition the brand. If we had done that through an advertising process, I don't think New Coke would have ever happened. But there was such resistance to any kind of change in advertising position of the brand that we introduced to change the taste."

It seems, as an outsider, that it would be easier to change the advertising than to change the product. But as you tell it, there was such an affinity for the smiles with a bottle of Coke and McCann-Erickson's influence at the company that it was actually easier to change the whole product than it was to change the advertising. Is that kind of the right way to think about it?

Sergio Zyman: Well, there is a kind of bigger macro issue, which goes at the core of my life and my success, which was, what is marketing? And at the Coca-Cola company, marketing was nice commercials. That's all it was. It wasn't about positioning; it wasn't about understanding the consumer and consumption. It was about how much the consumers like our ads. And that was marketing.

And I just thought that it was nuts because it didn't serve us well. Now, it served us well for many years in getting the brand to be viable, but it didn't serve us well in growing the business. And that's why Coke was struggling for so long.

Diagnosing the Research Flaws Behind New Coke

Andrew Mitrak: Something that you bring to marketing is research. You've highlighted how you look at research to make your decisions. And you have a quote about the research and New Coke. And you said,

"We'd done taste tests and found that consumers seem to prefer Pepsi's sweeter taste to [the original] Coke's more biting taste. So we stopped right there and decided that if we made Coke taste like Pepsi, more people would drink it. But you know what happened? We came up with New Coke, and consumers weren't interested. The problem was that we didn't follow up that question with, ‘If we made Coke taste like this, would you buy it?’"

It seems like there were some flaws with the research. I'm curious, how does a flaw like that happen in the research, or what's the takeaway from New Coke?

Sergio Zyman: It wasn't only Coke. Every company in the world basically had this awareness disease, which was, is the consumer aware of your brand?

Probably the best model of marketing is politics. Because in politics, if you don't get elected, if people don't vote for you more than the other guy on the second Tuesday of November, you don't get [elected] – look at Al Gore, okay? I mean, he ended up instead of being in the big plane and the big house, he went to teach school in Tennessee, right? Because he lost the election by a few votes, but it didn't make any difference.

What you do in politics is you try to convince consumers to buy your candidate. Why doesn't that happen in consumer products? That's what we want to do.

Consumer democracy is the right to choose. That's what democracy is. Everybody talks about democracy. And you say, "Oh, the democratic process." Democracy is the right to choose. But you also get the right to not choose. So, purchase intent, intent to buy, intent to consume is the only criteria that should drive marketing. Not how much people like you, but are they going to buy you? Are they going to vote for you?

In reality, in 1985, we didn't know much about the consumer. I know it's kind of blasphemy to talk about the fact that a company like Coke would not know enough about the consumer, but in the research process, we used to track 13 image items, which was great, tasty, delicious, good with friends. That stuff did not drive consumption. What was driving consumption was price discounts, larger sizes, and plastic bottles.

Announcing The Return of “Coca-Cola Classic”

Andrew Mitrak: So, just tying a bow on the New Coke story, in 1985, you mentioned Don Keough, he was then the president of Coca-Cola, and he came to the stage of a hotel to announce that the original taste of Coca-Cola was back. And he finished his speech by saying, quote,

"Some critics will say we've made a marketing mistake. Some cynics will say we have planned all this. The truth is that we are not that dumb, and we are not that smart."

And some people are still conspiracy theorists that think, "Oh, this is all some intentional flop to make Coca-Cola more popular." What's your take on that, and is there any truth to that at all?

Sergio Zyman: There was a research guy that was listening to the consumer center, the call center, and we were getting consumers calling, just screaming on the phone. We had this guy, Goldman, who was sitting there; he was a researcher. He came to give me the day's report. I used to get a report every day.

And I said, "How'd it go?"

He says, "You know, I got to give you an example of what is going to happen here. You've seen a lot of people who have been freed from Vietnam jails, and they've been found."

Remember in those days, they were finding a lot of POWs. "And then you get the family of John Smith that's told that," this, by the way, is a true story. "The family of John Smith, we found him, he's been freed. He's going to arrive tomorrow in Minneapolis on the flight Northwest from wherever."

And the family all gets dressed up, goes to the airport, and they're at the gate, waiting for John Smith to come out, and they don't see John Smith.

This guy Goldman is telling me, and I said, "So what happened?"

He said, "They made a mistake. The guy that they found was not John Smith."

He said, "When you bring Coca-Cola Classic back, it needs to look exactly like the one that left. You cannot make it look different, be odd, be anything else. You can add 'Classic' to it, but it needs to be a red can." And that's what drove the whole thing.

One day I get a call, literally, 6:00 in the morning and says, by the way, there's a rumor that you guys are going to bring back Coke and kill New Coke, and Wall Street stops trading on Coke, right? Because it was material, and we get stopped trading.

So, we had a creative guy at McCann, very smart guy, John Bergen, very political, but very good guy. He was a copywriter. And he wrote that commercial. We didn't have any strategy or anything like that. That was kind of, we were writing as we went. We got Keough into a studio, and we recorded the commercial.

And then, anytime you actually have a commercial, I don't know how it is today, but you have to actually fly it to New Jersey. In New Jersey is where you actually integrated the commercials into the pods.

So Peter Jennings comes out on ABC. He interrupts General Hospital, right? And he basically says, by the way, we have a rumor Coke is going to bring back Coca-Cola. And so we had helicopters flying this commercial from New York to New Jersey in order to put it into rotation for the 7:00 news, and we basically opened up the 7:00 news with a commercial that says, "We're not that smart and we're not that dumb."

And it was really well done, and it was so much in the personality of Keough. He was kind of the Santa Claus-like guy, and he had great credibility, and that's how that thing came about.

Strategic Sabotage: Tab Clear’s “Kamikaze” takeout of Crystal Pepsi

Andrew Mitrak: To prep for this interview, I watched clips of your speeches on YouTube, and there's a quote from General Patton that you like to use. Do you know the quote that I'm talking about?

Sergio Zyman: Yes.

Video of Sergio Zyman: “He said, ‘The idea is not to die for your country, is to have the other SOB die for his.’ Don't die for your company. Have the other guy die for his. Let them lose share. Let them lose relevance."

Andrew Mitrak: This quote reminds me of a story in your book about how you launched Tab Clear to take out Crystal Pepsi. Can you tell the story of Tab Clear and Crystal Pepsi?

Sergio Zyman: One day, I was sitting in a meeting at Coke, and they said that they had gotten wind that Pepsi was going to launch a product called Crystal Pepsi because Pepsi was fixated on having a lemon-lime or a clear product to compete against Seven-Up.

And Coke had Sprite, but it wasn't really doing great. So I said to the guy, "Send me the research. Let me see what the research says." So they sent me the research. It was a guy called Jerry Payne, who was the research guy, and we sat down.

I was looking at the research, and I said, "You know, all of the characteristics of this product are the characteristics of diet products." And I knew a lot about it because I had done Diet Coke. So, I said, "I think we can position this product as a diet drink." He said, "Well, but it's not a diet drink." I said, "I know. Let me think about it."

So I came back, and I proposed that we launch a product called Tab Clear. Tab was already kind of on the outs because Diet Coke was doing so well. They bought into it. I got the project as a consultant.

And then we went out to work, we developed a product, which was nothing more than a diet product with all the characteristics of the same thing.

We launched it in advance of Pepsi launching Crystal Pepsi at the Super Bowl. They spent a lot of money. And what happened was that we were so aggressive with it that the whole category collapsed, which was our idea.

The idea was to launch Tab Clear and make it just a kamikaze product that basically just killed the category, and it did.

Andrew Mitrak: That's right. I'm going to quote from your book, The End of Marketing as We Know It.

"From my perspective, Crystal Pepsi was just screaming for someone to reposition it. We decided to take the liberty of moving Crystal Pepsi into the diet segment, where it was bound to fail because it contains sugar. By meeting a sugared drink with a non-sugar drink, we only confused customers about what the category stood for."

This is just not something they would teach you at any marketing school. What was the business value of this for Coca-Cola?

Sergio Zyman: Well, I think that you touched on a very important point. You said, "Well, this is not something that they teach you in marketing school." Well, what do they teach you in marketing school? Do they teach you to actually be somebody who does stuff to drive top-line and bottom-line? They don't. They teach you about positioning, and they teach you about all kinds of stuff, but there's really no financial element in marketing.

One of the things that I always drove for was, if it doesn't make any money, why do you want to do it? My riff with the ad agencies was that they said that you couldn't measure advertising. All advertising was image building for the long term.

I'm saying, if I can't measure it, I don't want to spend it. So, there was a project that was coming into the market, and we were a competitor in the soft drink business, and we needed to define where the volume was going to be. So if Pepsi was going to get consumption from consumers that were going to pay money to buy a six-pack of Crystal Pepsi, by us killing the category, we eliminate one more competitor. I think that, to me, that's marketing.

Inventing the Chief Marketing Officer Role at Coca-Cola

Andrew Mitrak: You left Coca-Cola in 1988, and you returned in 1993, this time as chief marketing officer. And this was a newly created C-level role. What did it mean for marketing to be in the C-suite for the first time?

Sergio Zyman: When I got called to go back to Coke, I didn't want to. I was doing great. I was skiing 50 days a year. I had great gigs in consulting with Miller Brewing, with all kinds of other companies. I had built this company called Core Strategy Group. I went through a year-long interview with Ivester because I was actually, quote-unquote, teaching him marketing.

But when I went to meet with Goizueta, I said, "What do you want me to do, sir?" He said, "I want you to do the marketing thing." And I said, "I don't understand what you mean. What do you want me to do?" He said, "You know, the marketing thing." And he couldn't articulate what marketing was.

So I said, "Sir, I'll tell you what I'd like to do. I'd like to go away and put together a deck about what I think marketing should do at the Coca-Cola company. Come back, I'll show it to you. If it makes sense to you and if you buy it, then I'll come back to the company."

I went away with a couple of guys, one inside the company, and we wrote a 40-page deck. And I came back, and I presented to him and Ivester and a couple of other people. He said, "Wow, that's what we need to do." It was about positioning brands, about spending money to make money.

I said, "By the way, I need to be part of the C-suite because I want to make sure that marketing is about making money. Marketing is not about spending money." And that's how we came about with naming me chief marketing officer. I was the first ever, by the way. I invented the title. If you go check it out on NexisLexis, there had never been a chief marketing officer before.

Andrew Mitrak: I heard you say this, and not that I don't believe you, but I just wanted to verify it because it's a big claim that you're the first-ever chief marketing officer.

And the search engines and the AI tools, they say, "Oh, that can't possibly be true. Sergio's misrepresenting." But they never point me to one that existed before you, either.

I'm trying to find a person who's actually had the title of Chief Marketing Officer.

Sure, there were presidents and CEOs who had marketing-type functions, and there were other people who were senior marketing leaders, but I haven't yet found another chief marketing officer out there that predates you at Coca-Cola.

By the way, if anybody's [reading] and can find one, I’m happy to be proven wrong, but you do seem to be the first as far as I can tell. But it is a very surprising claim.

Sergio Zyman: Remember, the C-suite at the time was Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, stop. Then, the head lawyer evolved to Chief Legal Officer. The head of HR evolved to Chief People Officer. And now, everything. I mean, you have the chief banana officer, right?

But my objective at the time was I wanted to be part of the C-suite. I didn't want to be the advertising guy. I had a bunch of friends in the consulting business, and I remember I went to Wimbledon before I agreed to take the job, and I was with this guy, Rob Smith, who's another political guy. I had a lot of political consulting friends, and I was trying to help them find a way to not take the job.

That's how we came up with the idea of being the chief marketing officer.

Marketing's Role in the C-Suite

Andrew Mitrak: So, what was different about being chief marketing officer at Coca-Cola in the 1990s versus being a very senior marketing leader in the 1980s?

Sergio Zyman: Senior marketing leader had no function in the company except be sideways to the advertising process. There was no marketing. We were at the time in which when Pepsi started, the trade, the supermarkets figured out that Coke was a loss leader, and then we engaged in – there was a company called Majors, who was measuring trade activity.

And a big marketing effort was discounting. We used to go on the big holidays and have big displays and put displays in parking lots. But that was pretty much the only marketing thing that was going on. And then you had the commercials that were actually doing the thing to make people feel good.

But there was no scientific way about going and getting volume.

Microsoft: Elevating Excel and the Office Bundle

Andrew Mitrak: After Coca-Cola, you found the Zyman Group, and you have a long, successful career also as a consultant, as a speaker. One of my mentors and friends, his name is Mark Kroese, and he worked at Microsoft in the 1990s.

He was somebody who reached out to me saying (paraphrasing), “If you're doing this podcast, you have to speak to Sergio Zyman.”

And he has some great stories of you supporting Microsoft Office and the launch of Excel. It's hard to believe, but Excel at the time only had 10% market share, and they were a massive underdog to Lotus 1-2-3. And here's Mark's recollection.

"Excel was trying to go feature for feature against Lotus 1-2-3, and that you, Sergio, famously said, 'The best feature of Excel is Word.' And soon after, Microsoft started selling the bundle instead of selling Excel standalone.”

They were in this low-level feature war, and you helped elevate the narrative. And that you also said,

“Microsoft is creating the tools that are driving the productivity gains, and the productivity gains are what is responsible for creating the booming economy of the 1990s."

I'm curious if you have any stories of your role supporting Microsoft?

Sergio Zyman: Sure. They hired us, kind of the oddballs, to come in and work on all kinds of stuff. And it was incredibly disjointed. Microsoft was fighting the FTC because they were doing both applications. There was a guy that just died, Mike Maples, who got hired by Gates from IBM, and then Ballmer was doing the other side, okay? So you had two guys; you had Steve and Mike Maples.

And the way Microsoft would launch products is they go into these developer things, and they had what's called the keynote, right? And Gates would come in and do a keynote, talking about how the future was going to be. And they'll demo the product.

So one of the things that I said is that the DNA – I believe very much in brand DNA – the DNA of Microsoft was no product is ever finished. And the consumer is okay with that. The consumer doesn't expect a Microsoft product to be [finished]. So we used to have the meetings in Boston, in the cafeteria of the Lotus 1-2-3 building, for Excel. That's how competitive the Microsoft guys were in those days. It was unbelievable. And we were working on all kinds of stuff, and then we had Harvard Graphics (PowerPoint competitor), which was one of the products that was competing in the space, and there was Lotus 1-2-3, which was Excel. The comparative to Word was WordPerfect.

And you know, I had all these disjointed things, and one day in a meeting, we said, "Why don't we just put it together? Just as an office thing." And that – I don't know who actually ran with it, but there were fantastic meetings. One day I went into Gates's office, and Gates was laying on his couch. Gates was just brilliant; he was unbelievable. And Ballmer used to call me “the soda guy.” And Gates is sitting there, and we're talking to him about something, and he turns around to me, points his finger and said, "Did you ever go to camp?"

And I go, "Huh?" I said, "Listen, I'm Jewish, I'm from Mexico. We didn't go to camp."

He said, "Well, I went to camp, to math camp for many years. I know what I'm talking about."

It was an incredible culture being over there. Later on, I did a strategy for Xbox with some other guy [who] hired me for Xbox. That was after I had my company, and I turned around and says, "Why are you guys going to launch Xbox versus PlayStation?" I said, "Because Bill is going to do a keynote, and we're going to talk about it."

And I got the project, and I went to actually look, and when I checked with gamers, gamers hated Microsoft. They thought it was the deep state. We came up with a different position, and we had some issues with the name with Xbox. We came out with alternative names. Working with Microsoft was an incredibly learning experience because those guys were true warriors. In those days, it was 24/7; it was great times.

Product Naming: “It’s Cup-a-Soup!”

Andrew Mitrak: Another friend of mine, who I talked to in advance of this interview, Joe Michaels, he's the person who actually put us in touch. And Joe was a leader at a startup in the Dot-com era, and he mentioned that you did some consulting for them at the time. And he was presenting a product branding idea to you, and then he said you interrupted him as he was presenting his idea, and here's him quoting you.

"Let me tell you how to name a new product. The best product I ever marketed was Cup-a-Soup. No one ever wonders why they buy it. The name says it all, Cup-a-Soup."

I'm wondering, do you remember this? Did you ever work on Cup-a-Soup?

Sergio Zyman: Well, no. But what happened, when those guys used to come with all these ideas. There was a company in Atlanta called E-Hatchery. You had all these brilliant guys who were innovators, and they'll come in. We got hired for $30,000 to do the initial analysis for these guys, venture capital firms.

And I would turn around to the guy and I would say, "So, who's your oldest family member?"

And they'll say, "My grandmother."

I said, "How old is she?"

"79."

I said, "Okay. So I'm your grandmother, explain to me what your product is. You're going to explain it to a 79-year-old person. I don't understand anything you're doing."

And I was forcing them to come up with a way to actually explain the value proposition of the product, which is critical to marketing.

And as part of that, they'll come up with these whacky names.

And I would say, "Look, it's Cup-a-Soup. So tell me, how are you going to name your product? It's what you call it. I Can't Believe It's Not Butter – those are great names. You don't have to spend $20 million explaining to people what it is. Come up with a simple name." A lot of those were like that.

Andrew Mitrak: Yeah.

“The End of Marketing as We Know It”

Sergio Zyman: The problem with that, if I might, is, look, I failed at changing the world of marketing. I failed because we're back at which commercial is going to be in the halftime at the Super Bowl, right?

I used to do a piece of research every year about the Super Bowl, and they won the Super Bowl commercial, but their volume went to hell. I didn't succeed in changing the face of what marketing was. It worked good for me, right? But companies are back doing the other thing. They're back doing commercials that they can go brag about at the golf course or in church, really not focused on selling more to more people for more money.

Andrew Mitrak: Yeah. Sergio, I just want to thank you so much for speaking with me and sharing all these insights. Like I said, you're the first person who I've interviewed twice – maybe someday we can do a part three or four. I just think that you have so many amazing stories and so many amazing insights, and we've just scratched the surface of it. So I just want to thank you so much for your time.

Sergio Zyman: Thank you.

Andrew Mitrak: You've written a couple of books. Do you feel like you're fully out of the marketing game now and are done with it at this point, or just enjoying life, or would you point listeners to any place where they can read your work?

Sergio Zyman: I've published four books. The first one was The End of Marketing as We Know It, which became a bestseller. It's still taught around schools and universities. And then I wrote after that Building Brand Width, which was the whole thing about putting brand into the thing. And then I wrote The End of Advertising as We Know It, and I wrote Renovate Before You Innovate. And then I've written three more books, which I never published.

We are at a very interesting time. Companies in general, like humans, develop plaque in their arteries over time. And if you don't take care of it through exercise and eating better, eventually, you need a bypass, right? I did a lot of consulting after I sold my company, and recently, I got involved in boards.

People are still looking for… I don't know what the hell they're looking for.

But they're not really interested in understanding the dynamics of – if you have somebody who's an entrepreneur who comes up with a brilliant idea, like… I evolved with a company, a couple of Israeli guys who worked in the military in Israel on voice recognition. And then one of these guys, and by the way, this guy was the wackiest guy you ever seen in your life. And one day he turned around to the other guy, he said, "By the way, voice recognition is noise recognition. What else can we do with noise recognition?"

And they developed a company that actually developed a modem that was put in machines that run 24 hours a day, [that] will be able to predict the noises that were going to happen when a piece of the machinery started breaking three years ahead of breaking. And they use AI to put it into a model to try to actually predict what the thing was going to do.

I developed a strategy for the guy, and all he wanted to do… was to hire an advertising agency. By the way, where is the company today? Nowhere.

Andrew Mitrak: Smartest people in the world, but they don't see it.

Sergio Zyman: They don't. They don't see it.

Andrew Mitrak: Yeah, thank you so much for your time, Sergio. It's really been an honor.

Sergio Zyman: All right, take care. Thanks so much. Bye-bye.

A Special Thanks

I want to extend a very special thank you to two people who were instrumental in making this interview happen: Mark Kroese and Joe Michaels. Their insights were invaluable as I researched and prepared for this interview. And it was Joe who put me in touch with Sergio, making this conversation possible. Thank you for your support, Mark and Joe!

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 10 (Part 1)

“Marketing is about selling more stuff to more people more often for more money more efficiently. That's what marketing is.” - Sergio ZymanThis week, I’m joined by a marketing iconoclast: Sergio Zyman. Wikipedia describes Zyman as being “best known as the marketer behind the failed launch of New Coke and the success of Diet Coke, Fruitopia, Surge, and ad campaigns such as "Coke Is It."

Zyman rarely gives interviews, and the few that are available tend to focus on the New Coke saga, which is frequently described as one of the biggest marketing blunders of all time. But New Coke is only a brief, and frankly misleading, snapshot of Zyman’s career full of marketing milestones.

This is the first of my two-part interview with Zyman. This conversation explores his unlikely journey from Mexico City to the C-Suite of the Fortune 100, with stops at Procter & Gamble, McCann Erickson, assignments in Japan (working on Nescafe and General Motors), and even becoming president of Pepsi in Brazil by age 30.

Ultimately, Zyman's path led him to Coca-Cola, where he launched iconic brands like Diet Coke and Cherry Coke...and yes, New Coke.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

He was eventually named Coca-Cola's first Chief Marketing Officer – and, according to Zyman himself, the first CMO in history, period. I've tried to verify this claim, and so far, I haven't found anyone holding that title before him. (Listeners, if you have evidence to the contrary, please reach out!)

In part one, we focus on Zyman's incredible rise. I’ve included the transcript below, but I recommend listening if you can to hear it in Zyman’s own voice. He's brimming with personality – too much to contain in a single episode.

Joining P&G’s "Cult-Like" Brand Management

Andrew Mitrak: Sergio Zyman, welcome to A History of Marketing.

Sergio Zyman: Hey, how are you?

Andrew Mitrak: Great. So, you've had a legendary career in marketing, but I want to start at the very beginning. You were born in Mexico City. I'm curious, what are your earliest memories of marketing and advertising when you grew up in Mexico City?

Sergio Zyman: You know, I wanted to get out of Mexico. Pretty much my family was in the clothing business and stuff like that, and I had no interest. I went to school in Europe. I traveled around the world a lot. And then I joined Proctor, you know, through a variety of coincidences.

And then I worked for Proctor in marketing, which at the time was kind of almost like a cult. And then from there, I went into the ad agency, and then on and on – I traveled around the world, lived in Japan, lived in Brazil, and so forth.

Andrew Mitrak: Procter & Gamble is legendary for implementing the principles of modern brand management. What was joining Procter & Gamble in their marketing department like? You said it was almost like a cult. What was it that made it cult-like?

Sergio Zyman: Well, most of the people that worked at Proctor in Mexico were either sons or daughters of expats, and primarily sons. They were primarily guys. And, you know, we joined as a staff assistant. There was a very orderly progression. Then, after a while, they sent you to sales training, which everybody hated.

It was a locked wing of the company. It was basically housed across the street from the agency. And marketing was about managing products – well, not managing products, but managing brands or launching brands. It was a lot of advertising and, you know, a lot of promotions and stuff like that.

Marketing Ariel to Transform Laundry in Mexico

Sergio Zyman: I was part of the team that actually introduced a brand called Ariel, which eventually became the largest brand in the world for Proctor. It was an enzyme detergent. I'm going to date myself many times here through this interview, but in Mexico at the time, people used to wash clothes on a stone with a bar of soap.

Then, after that, there was a product that Proctor introduced in Mexico called Rapido. The whole premise was that you could actually speed up – rapido means "quick" – you could actually speed up the process of washing your clothes. From then on, we wanted to launch a product like Gain in the US. And, I can't remember who came up with it, but the idea was that Ariel made every bucket a washing machine. We had this visual where you put the detergent into the bucket and the bucket would start moving like a washing machine. It was a huge success.

Andrew Mitrak: I want to quote from your book about Ariel and Procter & Gamble.

"So P&G had just introduced a detergent called Ariel, and the challenge was to convince skeptical Mexican housewives, most of whom did their washing by hand and didn't own a washing machine, that a packaged detergent could get the family's clothes as clean as whatever product they were currently using."

So, you're a young man, earlier in your career. How do you research skeptical Mexican housewives? How do you know what will persuade them, or what the real challenge is to be solved with this?

Sergio Zyman: Well, I think it was more about barriers than anything else. Research was very rudimentary. I don't even think that we used – I mean, we probably used some form of focus group at the time or something – but it was observational. You'd actually go look at the market, and every building on top had a place where it has a stone with little indentations in it.

All you needed to know was how the product was being used, right? And I think that was the genesis of a lot of the products at Proctor at the time. The positioning of Safeguard was that it eliminated bacteria, right? But there was really no big piece of research. We just hit onto something that was – I mean, it was probably when we asked people, "Why don't you buy a packaged detergent?" they would tell you that. And I think that's how we ended up getting into that. But it was very rudimentary.

Andrew Mitrak: Now, Procter and Gamble was your first job in marketing. Did you know that you wanted to be a marketer before you joined them, or did you kind of just fall into it once you came to this job at Procter & Gamble?

Sergio Zyman: My number one objective was to get an American Express card. And you needed to have an X amount of money, which was $200 less per year than what Proctor was paying. So, when I was looking around trying to get a job – I had actually, before that, become the major coordinator for the Miss Mexico contest. And that's how I met some of the Proctor guys.

So, I didn't have a real career vision. I wanted to make some money. I knew I wanted to get out of Mexico. I wanted to work for an American company because, usually, American companies worked Monday to Friday, not Monday to Saturday, which is what Mexican companies did. So, there were a lot of criteria there that were kind of dumb, if you wish.

And I met with a guy called Al Frost. My English was broken, even worse than today. And he asked me at one point during the interview, "What do you want to do when you grow up?" And I said, "I don't know. I just want to have the power of knowledge to be able to make the decisions that I have to make down the road." And he fell in love with that thought and hired me.

And that's how I got into Proctor. I really did not fit the Proctor criteria for being hired. I didn't go to school in the US at the time, didn't have parents that were expats in Mexico, my English was so-so – but that's how I got in.

When I got hired by McCann Erickson to go work on the Coke business, I remember sitting in my very first meeting at McCann and they were doing media planning, and I sat there in panic and I said, "I don't know anything about marketing. I don't even know what marketing is. These people are talking about something totally different."

Marketing became advertising. That's what marketing was. And I guess for a lot of companies today, still, marketing is advertising. It's not real marketing. It's not linked to the bottom line.

McCann Erickson & the Coca-Cola Account

Andrew Mitrak: You mentioned you moved from Procter & Gamble to McCann Erickson. And for listeners who aren't familiar with McCann, they're a major advertising agency. I think they had been the agency of record for Coca-Cola since the 1950s. And for those who've seen the show Mad Men, this is the agency that swallows and absorbs Sterling Cooper at the end of the series. So what led you to McCann Erickson? Why did you join after Procter and Gamble?

Sergio Zyman: Money.

The natural progression – I mean, I know it was more romantic – but the natural progression at Proctor is you were at Proctor, and then after about seven or eight months of just basically sitting around doing shipment analysis, they sent you to sales. They gave you the worst car that the sales department had and they sent you over to sell soap into public markets and little mom-and-pop shops.

And, I did that, and everybody hated it, and I figured I was going to do a good job. I ended up winning the contest, the three and a half months that I was there. And I ended up getting hated by all the Proctor guys, the marketing guys, because everybody didn't want to do well in sales.

I came back and then I became an assistant brand manager. And then I started getting offers. The natural progression was that we were the source of, quote-unquote, "marketing people." So I got a job from Kimberly Clark, and then McCann – I had met the guy at McCann during the Miss Mexico thing. And I liked them a lot, and I went to be an account executive on the Coke business, which was sexy. And that's why – and it paid me double my salary.

Andrew Mitrak: That's a good reason to move on and move upward.

Sergio Zyman: It is.

Andrew Mitrak: So what was the culture of McCann like – this is probably the mid-70s or so, right? So what was their company culture like?

Sergio Zyman: The Coke relationship was very difficult because it was imposed by Atlanta. So, pretty much, you couldn't go and choose your own ad agency. It was McCann or else. And the guys at Coke had come from sales. Most of the guys that were in “marketing” – VP of Marketing or Marketing Director role at Coke was a sales guy.

It was about dealing with bottlers and stuff like that, and there was always an antagonistic relationship.

"Pattern Advertising" and Challenging the Status Quo of Marketing at Coca-Cola

Sergio Zyman: We adapted advertising that was created in Atlanta. It was called "pattern advertising." And we did a good job with it, but there was always tension between us and the Coke guys. It was not a happy relationship. It was just to do what you needed to do.

Andrew Mitrak: Yeah.

Sergio Zyman: I was thinking about this interview. And, you know, when did marketing come to these companies? If you go back and you look at fast food, Wendy's head of marketing was a guy called Bill Welter. The marketing guy at McDonald's was Paul Schrage. I don't know who the marketing guy at Burger King was, but pretty much what happened to these companies as they started opening up more stores, they realized that they needed to communicate with the consumer and explain to them why they should go and buy their stuff, right?

There was not a lot of competition. And the powers that be in these companies, whenever they wanted a marketing guy, they said, "Wow, I think that we better get it out of the agency." So it was the ad agency guy. Welter was the ad agency guy. And so was the guy at Burger King.

So that's where the guy at Coke who was the head of marketing at the time, Ike Herbert, was a McCann guy. So it was all about advertising. Advertising actually dominated the marketing function in a lot of companies. It wasn't about truly doing marketing the way we knew it. And I always felt very uncomfortable about it. I didn't want to be an ad guy. I thought that it was not a great label for me. I was not a businessman. So that's kind of where my formation as the challenger of the marketing function began.

Coca-Cola’s “Hilltop” Ad: An Accidental Classic

Andrew Mitrak: I want to ask you about your impression of the ads that were created for Coca-Cola because McCann, of course, they had created the famous Coca-Cola hilltop commercial with the jingle "Buy the World a Coke," and it really is an incredible commercial and it's one of the most famous advertisements in history.

But Coca-Cola almost became kind of a victim of this ad's success, and ads like it, where they internalized this – happy, smiley people with a Coca-Cola bottle in their hand – and this was the formula for them. And it sounds like you were questioning, "Was this actually driving sales? Was this actually working at the end of the day?"

Sergio Zyman: Well, look, I think that there is a lot of mythology about advertising, and about advertising for Coke. So, there was a guy at McCann called Bill Backer, who eventually left and went and built Backer Spielvogel. And he was a really creative, artistic guy. And there was a music guy there called Billy – my God, I just forgot his last name. And Billy had actually sung with the Four Tops before he became the music director for McCann.

They were going to do a radio spot called "I'd Like to Buy the World a Coke" and they wanted to do it – they went to record it in London, because that's how you did buyouts. And the commercial became an accident. It had no strategy behind it. And then everybody fell in love with it. And Coke sales kept on going south for a long time because Pepsi was really the marketing director for Coke. Pepsi was determining the dialogue; Coke wasn't.

Andrew Mitrak: Yeah. I just looked it up, by the way – it must be Billy Davis.

Sergio Zyman: Billy Davis, exactly.

Andrew Mitrak: That's it. Okay.

Sergio Zyman: Billy. Yeah. Good guy.

Pepsi: “The marketing director for Coke”

Andrew Mitrak: You mentioned that Pepsi was really the marketing director for Coca-Cola. And I'm going to quote from your book again:

"This was the 1970s and Pepsi had just started with their 'new generation' approach. McCann's philosophy, which was the same as the rest of the industry, including Coke's, was 'grab their hearts and their wallets will follow.' So we kept coming up with ads that made people feel good, made them cry and won us awards."

It goes on to say that these ads didn't really seem to be working as far as new business and sales were going.

Sergio Zyman: Well, they were not.

Remember, in the old days, Pepsi was not a viable choice for people who drank soft drinks. By the way, we didn't have 10,000 different options. Okay, you had Coke and you had Pepsi, and then it was all done by manufacturing. Sprite was created in the UK in order to be able to actually fill the bottling lines because they weren't selling enough – there was no strategy behind it.

And Pepsi then decided, in order to – they said to get out of the kitchen and into the living room – that they needed to become a viable option to Coke. And they had a very good strategy because they started discounting in supermarkets, they started multi-packing. Coke just didn't believe in that. They believed that all they needed to be was this – "grab your hearts and their wallets will follow."

But Pepsi basically said – and they never said, "Coke sucks." What they said was, "Pepsi's for the new generation." And the implication was that Coke was for the old folks. So they called it the Pepsi Generation. There was a guy at Pepsi that was very smart about that, Alan Pottasch.

And then, after that, they did the Pepsi Challenge, where basically they said – by the way, they never said Pepsi tasted better. They just showed that people chose it. So they were always doing that stuff. And then when I became marketing director – and by the way, you can look at the quotes out there – I became, you know, Pepsi basically said that I snuck up on them because I said, "Enough!"

I hired Bill Cosby at the time to do a bunch of advertising to basically say, "There wouldn't be a challenger if there was not a number one." We launched Coke Is It, which was a very successful ad campaign. That, by the way, McCann took credit for, but it was developed in Canada for the Canadian market. So there are a lot of secrets along the way about how these things came about.

Andrew Mitrak: Yeah, we'll get to all of those stories, but I want to come back to while you were still at McCann – you said you're an account executive on the Coca-Cola account. And over time, I've become less impressed when someone comes up with a good idea and more impressed when someone can convince their client to get behind the good idea. And that's kind of the role of the account executive in a lot of ways, right?

Sergio Zyman: Well, Coke had this thing, as I mentioned before, called "pattern advertising." So they developed a series of commercials. They did "Have a Coke and a Smile." They did, at the time, "It's the Real Thing," right? The advertising is the real thing. I mean, it was shot down to everybody around the world. Our job at the agency was to translate it and adapt it. And then we had to go and sell it to the client.

But we were not coming up with a lot of original marketing ideas to grow volume. It was all about – we were implementing whatever was coming down from the north. And even at headquarters, and later on when I was at headquarters, it was kind of – the agency drove and dominated the whole communication or marketing thing. The Coke marketing folks were ex-salesmen. There was no strategy.

Coke was a distribution company. They had a great product and a great idea, and then they developed a distribution network around the world. There were a lot of people that wanted a franchise, and that's how they ended up growing for a long time. At one point, they actually needed to go vertical, and that's when the company started changing. But it was all about launching bigger bottles, or different sizes, or plastic bottles, or stuff like that. You didn't really have a real marketing strategy coming out of the company.

There was a group at McCann who went off into this quiet lab, and they'd come in and they'd make a presentation about how we're going to go to the next level. And we had this stupid piece of research, which was "13 elements of imagery." And it was about, "How much do the consumers love us?" Not how much do the consumers buy us, but how much they love us. And, you know, it was very frustrating.

International Marketing: From Japan to New York to Brazil

Andrew Mitrak: You were at McCann and eventually, of course, you went to have a very successful career at Coca-Cola. But before that, you actually joined Pepsi, their top competitor, in Brazil, right?

Sergio Zyman: No, so I went to McCann in Mexico, and I saw Gene Kummel, who was the president of McCann, came to visit in Mexico. And I got a call – the president of the Mexican company called me up at McCann and said, "By the way, Jean is here. Would you like to see him?" And I said, "Yeah, great." Or, "He'd like to see you."

So I went down to meet Jean. And he said, "What do you want to do?" And I said, "I want to go international. I want to get out of Mexico." I told him all the reasons, and three months later I got a call that said I was transferring to Japan. And I said, "Japan? Why Japan?" And they said, "Because if you can make it in Japan, you can make it anywhere."

So I went to Japan as an account executive again, to work on the GM business. They had bought Isuzu in Japan, and they were trying to create a pattern model for advertising around the world. And I also worked on Nestlé.

And in Japan, the Japanese are very methodical, as you know. And they were selling Nescafé, which was the number one brand for Nestlé around the world. But then when it came to the spring, the Japanese went and got a haircut, switched their suits from winter to summer, and stopped drinking coffee – just stopped. So we came up with a cold drink out there, and I worked on that. I was there for a year and a half – an incredible experience, living in Japan.

So then I got a call saying that they wanted me to go back to the States. I went to New York, and they offered me a job as account supervisor on the Coke New York – the bottler in New York. And I said, "You know what? I need to get the New York experience. I got to check that thing." So I took the job, and it was a nothing job. All we did was take the client to dinner. We didn't do anything meaningful.

Becoming President of Pepsi in Brazil at Age 30

And then Pepsi started asking me to join them, and they offered me like five or six jobs. They were all kind of ad jobs, and I didn't want to be in that. And then eventually, McCann – I went to Central America to be general manager of the Central American company. And then when I was there, they asked me whether I wanted to interview for a marketing job in Brazil.

And I had just gotten married, my wife was pregnant. And I said, "You know what? Take a free trip to Brazil. What the hell? I don't think anything is going to come out of it." I went to Brazil, and the job actually was to develop an advertising campaign, even though I was a marketing guy. And I said, "Well, I can do that. I know how to do that."

So I took the job as head of marketing for Pepsi Brazil, and we moved to Brazil, which was a great experience. My daughter was born there. We lived there for three and a half years. About two years in, my boss gets transferred to Venezuela, and I get promoted, at age 30, to be President of the company. And I was over my head – beyond anything. I didn't know what I was doing.

The Pepsi Challenge: Growing Pepsi’s Marketshare vs. Coke

Andrew Mitrak: In your book, you write,

"When I got there, I found out that Pepsi Brazil had the same advertising philosophy as Coke, but to make things worse, Coke was outselling us there 10 to one. Not good. I knew that with the odds so heavily against us, and with comparatively no penetration in the market, the only way we could dig ourselves out would be an ad campaign that provided a contrast between us and Coke. So we came up with the Pepsi Challenge."

And I'm wondering, what were the origins of the Pepsi Challenge? You were at Pepsi when the Pepsi Challenge was launched. What did the rollout of that look like? How did that start?

Sergio Zyman: Pepsi was doing some spectacular advertising with the puppies and the "Pepsi Generation" – great jingles and all that. And there was an agency in Dallas, Texas, that came up with the Pepsi Challenge. And in the old days, you didn't go negative, right? I mean, you basically came out and told people why you were the right candidate or the right product, but you never went negative. The only time you went negative is when you had nothing to say.

And Pepsi had tried everything to get out of the kitchen and into the living room. And all they were trying to find was a way to be equally considered by consumers. In Brazil, I had no money. I had no budget. And, you know, I didn't come up with the Pepsi Challenge. It came out of Dallas. But then we started doing it in Brazil. It didn't go as well as it went in the States because, in Brazil, people frowned at negative advertising. But all that changed over the years.

Andrew Mitrak: At a tactical level in Brazil, when you're doing this, was it pop-ups in supermarkets and public areas where people could try them both? Were you filming these and putting them on TV? What were the mechanics of the advertising campaign rollout look like there?

Sergio Zyman: We basically did taste tests, right? Blind taste tests. And you did a not-blind taste test until you won. The moment you won, you stopped. You didn't have to do any more. So you kept on filming these very rudimentary spots. And then once you got to the number where you could claim that more people prefer the taste of Pepsi to the taste of Coke, you didn't have to do any more.

Andrew Mitrak: If you ever lose, you can just stop that ad and not run that one.

Sergio Zyman: No, no, you don't. You never – you won't lose because the chances of a sweeter product, which is what Pepsi was... Eventually, you didn't have to win by a large margin. You could win. All you needed to do is have 51%. "More people prefer the taste…" – all you needed to say. "In taste tests in Rio, more people prefer the taste of Pepsi to the taste of Coke." That's it.

Andrew Mitrak: Yeah.

Sergio Zyman: And I would do things like, when we would launch a new flavor or something, I would take all the trucks and I would do a parade through the cities of Rio or São Paulo, as a way to do that. I didn't have any money. And I learned a lot.

And then they decided to restructure Pepsi down in South America. They put together a group with Bolivia, Argentina, and everything else, and they brought in a guy called Roger Enrico. And Roger arrived in Brazil, and – the flight arrived at 5 o'clock in the morning. I sent a car and a driver and a letter saying, "Welcome to Brazil. I'm at your service. Let me know – I'm sure you want to rest." He got all offended about it. Hated me from day one. He came into the office; he wanted to take my office because he was now the guy for South America.

Anyway, so he fired me a year later. So now I am in Brazil with my wife. She's pregnant with my second kid, and I'm fired. So I said to my wife, "We're going back to Mexico." She said, "I don't want to go back to Mexico." I said, "Guess what? That's the place that I can actually retool and figure out what I'm going to do."

But then John Sculley, who was president of Pepsi North America, heard what happened, and he said, "We're not losing Sergio." So they moved me to New York against Roger's desires, and then I went to be director of marketing for Brand Pepsi in New York. But it was a nothing job, too, because it was all about advertising.

Andrew Mitrak: I've got to ask you about – you mentioned John Sculley, of course, later became CEO of Apple. Did you work with John Sculley, and what were your impressions of him?

Sergio Zyman: John was an incredibly cerebral guy. Very introverted. And I worked with him, and I worked with “Ted” Glover, who had then moved to New York as well.

And then I got a call from Brian Dyson, who I had competed against in Brazil, and he said, "By the way, I'm back in the States. I'm running Coke North America. Do you want to have lunch next time I'm in New York?" I said, "Sure." And we went to have lunch at the Bar Americain at the Waldorf. And then as we were sitting having lunch, suddenly Don Keough, who was the president of North America, by accident, shows up at the window and waves at Brian. He comes in, sits down, and pretty much starts grilling me about what I thought about Coke.

And I said, "I think you guys are screwed up. I think you've had so many advantages, and you're just giving more up." And I gave him a bunch of examples. And he said, "Well, we're not that bad." I said, "By the way, I'm not here – I'm just having lunch with Brian." I didn't even think that they were interviewing me. And then later on, Brian offered me a job to go down to Atlanta, and I went down to Atlanta. I got an offer – a very good job – and then from then on, lots of stories.

Andrew Mitrak: Lots of stories. So, you joined Coca-Cola in 1979. To quote your book, you say,

"That's when I found out exactly what happened after those ads I'd worked on at McCann were sent off to the media and aired 20,000 gazillion times, and I was shocked. Nothing happened. All those beautiful, heart-grabbing, award-winning ads that were supposed to be getting people to buy Coke weren't having much of an effect."

So, was this really the time when you learned that the advertising wasn't really working at all, once you had moved in-house at Coca-Cola?

Sergio Zyman: Yes. I mean, there was – Coke was really – I found out when I got hired, the reason they hired me was to pick up the secrets from Pepsi. And they really didn't treat me well when I got there. It was kind of almost like a joke. I was the token Pepsi guy and kind of a spy. And Coke was such a fraternal, "belonging-only," non-performing company.

And all of a sudden, I started doing things which were so bad – like, I went down to lunch one day, and I'm an avid runner, and I was running a lot. And the only thing they had in the cafeteria was chili dogs and really fat stuff. So I convinced them to put in a salad bar. And I became like this terrible person. They'd scratch my car in the parking lot. It was awful.

Andrew Mitrak: Do you think that you being from Mexico had something to do with that? Do you think it was prejudice?

Sergio Zyman: No question. For sure. But, for me, being Mexican was kind of – I knew that I was in the minority. I knew that people didn't see me correctly. Even at McCann in New York, my own friends in New York were always kind of saying, "Why do we need a Mexican guy to be in New York?" There was always discrimination, but I just took it as part of the course. I had to work through it.

But the advertising was very garbage at Coke, and it was managed by a whole different group, kind of corporately. You were not allowed to touch anything, do anything. I remember when, after a while, there were all kinds of people who left, and I was named director of marketing for the US. And I tried to hire people, and I had a couple of marketing people from Procter and other places.

I remember there was a guy called Richard Ternowski, and he came to see me one day and he said, "Look, I tried to talk to the product guys about what's going on with the product, and they said I'm not allowed because that's a corporate thing. I tried to talk to advertising, to this guy John Gillen, who is kind of a protégé of the president and the son of a cousin, and I'm not allowed to talk about advertising. The packaging is done by corporate, and I'm not – what am I doing here?"

That was the issue. So, the thing that – I started then becoming the guy that would come up with challenges. "How do we break this? What do we do in order to do something totally different?" We wanted to sponsor Hands Across America, and we did all kinds of things that were stupid in today's world.

But then the thing kept on growing that way. Eventually, I became the head of marketing for North America. I ended up being the project manager on Diet Coke. It got canceled twice. And I did New Coke and Diet Coke and things like that, but it was so hard. It was really hard. It was counter-cultural.

Launching Diet Coke: “Just for the taste of it”

Andrew Mitrak: I want to ask you a little bit about some of these launches during this period. Can you share the story of Diet Coke? You kind of take it for granted that Diet Coke is one of the options today, but it didn't exist until you were there and really oversaw some of the launch of that. So how did that go?

Sergio Zyman: Remember, I was Attila the Hun. I was there to destroy the status quo. So anytime Brian would call me up and say, "What do we do now?" I would come in with these cannonball things. Tab had a 3% share. Pepsi had two brands, Pepsi Light and Diet Pepsi. Together they had 4.1%. Anything that we did to grow Tab was just tough because Tab had been positioned as a diet drink. And the number one benefit of Tab was that it tasted sh****. Because of – I mean, it had saccharin, right? So people saw it as a way to punish themselves so they could go in and have three hamburgers.

When I started the project initially, I started doing a lot of work on it with only two guys. I was actually semi-being the executive assistant to the president of the company as well. We went to Brazil – we were in Brazil. That's the time that Paul Austin, who was the chairman at the time, they discovered he had Alzheimer's, and there was a change in management. And then we got an email saying, "Stop all work on Diet Coke." And then the project got canceled.

They had agreed with me that I was going to go to Harvard for the 13-week post-grad. And then I was leaving. So I was going to go to Harvard. Then Roberto Goizueta gets named CEO of the company. The project gets reinstated, becomes "Project Harvard," and I said, "I want to have a different ad agency." And they said, "Okay." Literally, after that meeting, I went to the airport, I went to New York, and I hired Lintas before McCann had a chance to react. And of course, that made me persona non grata. Remember, at the time, Madison Avenue saw me as destructive. I mean, they named me the “Aya-Cola.”

Andrew Mitrak: So, Aya-Cola being a pun on Ayatollah, right?

Sergio Zyman: Right. Exactly. And my view about it at the time was advertising needs to sell product. And they're saying, "No, no, no, no. Advertising needs to do these great commercials and entertain people. Look at the success of “Mean Joe Greene” and 'I'd Like to Buy the World a Coke,' and blah, blah, blah." And I just – I mean, we got into a massive fight for years about it. And I still believe today that the thing is all broken.

But I just kept on going about it. And then, I got introduced to Goizueta, and I said, "Sir, I'm going to go away. And if I come back with a proposition to you, you're going to have no choice but to approve it. Because it's going to be an unassailable proposition." We walked out of the meeting, and Keough says, "You almost got fired there by talking like that to the chairman." I said, "What did I do? All I said was I wasn't going to just go play with this thing, that if I found out that there was no viability for the project…"

So we went and we hired a design company – a very – I mean, I went non-traditional on everything. And we hired this guy, Alvin Schechter, who was really smart. He had done a lot of industrial stuff. I wanted somebody that had not done consumer products. That was – every time I tried to kind of do it sideways.

And in one of the meetings, he was talking about the fact that the thinness of the lines on the Diet Coke can had to be enough to have the equity of brand Coke on it. And I was kind of rolling my eyes, and suddenly I said, "Wait a minute. We cannot launch a diet drink. We need to launch a regular drink with no calories." And everybody looked at me like an idiot.

"Wait a minute. We cannot launch a diet drink… We need to launch a regular drink with no calories."

And I said, "It has to have all the imagery" because a brand is made up of five components of imagery: product imagery, user imagery, brand imagery, usage imagery, and trademark imagery. So eventually, making a long story short, we ended up with a product that was sweetened with saccharin initially. But basically, we launched it on a platform of taste, with a big jingle. Say, "You want to drink it just for the taste of it." And we launched it in Radio City Music Hall with the Rockettes.

So that's how we got around the thing. And that's – I left. I went to Harvard, and then they, kind of corporate, took over the product. They tried to launch it around the world, and it failed miserably everywhere around the world. And the reason for that is because they were launching it as a diet drink. When I came back to the company, I just changed the nomenclature from Diet Coke to Coke Light, and volume went through the roof. And that's – I mean, Diet Coke, there's a lot of stories behind Diet Coke and a lot of insight about it. Same story with New Coke.

Sergio Zyman: “I was the first-ever Chief Marketing Officer…”

Andrew Mitrak: Yeah, there's a lot of stories, and we're at time for our interview today. We're going to do a follow-up because we've covered a lot of your career – from Mexico to Japan to the US, to Brazil, back to New York and Atlanta. But we're still… there's decades and decades of the rest of your career. I want to talk about Tab Clear and the takedown of Crystal Pepsi, of course, New Coke, the founding of the Zyman Group, your advising to politicians on political campaigns, also some of your consulting work with Microsoft. Just so many stories to keep going through your career. So I'm going to follow up with you and we'll schedule part two of this conversation.

Sergio Zyman: Well, let me finish with one comment only. Remember, my philosophy is marketing. And I learned it over the years. Marketing is about selling more stuff to more people, more often, for more money, more efficiently. That's what marketing is, right?

Marketing is about selling more stuff to more people, more often, for more money, more efficiently.

And it's not just a moniker. It's selling more stuff, which is volume, or more money, which is profit, more efficiently, which is spending as little as you can. And then it's about penetration and usage. And I think that when we talk again, we've got to talk about those philosophies, which are still not embedded in companies today.

I was the first-ever Chief Marketing Officer, and the reason I became the Chief Marketing Officer – and we can talk about it as well – is because I wanted to have a seat at the table. Now, everybody's a Chief Marketing Officer. They're not. They don't have any responsibility for the bottom line. So we'll talk some more.

Andrew Mitrak: Absolutely. Well, I'm really looking forward to it, Sergio. Thanks so much for your time. This has been an absolute blast. I really enjoyed this conversation so much. So thank you again, and we'll talk again soon.

Sergio Zyman: All right. Take care.**End of Interview — Tune in Next week for Part 2.**

A Special Thanks

I want to extend a very special thank you to two people who were instrumental in making this interview happen: Mark Kroese and Joe Michaels. I'm incredibly fortunate to count them as mentors and as friends. They both independently recommended I speak with Sergio Zyman for the podcast, and their insights were invaluable as I researched and prepared for this interview. And it was Joe who actually put me in touch with Sergio, making this conversation possible. Thank you for your support, Mark and Joe!

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 9

This week, I sit down with Dr. Robert Cialdini, a NYT bestselling author and Regents Professor Emeritus of Psychology and Marketing at Arizona State University. Cialdini is regarded as “The Godfather of Influence” and The Harvard Business Review describes him as “the foremost expert on effective persuasion.”

This is a special conversation for me. Cialdini’s 1984 book “Influence: Science and Practice” is a book I’ve revisited over my career, and I’ve recommended it to several marketing colleagues.

Speaking directly with Cialdini was a true honor. He’s given a handful of podcast interviews in the past, but I haven’t come across one that’s specifically focused on the marketing applications of his research.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

We'll also explore Cialdini’s 2016 bestseller Pre-Suasion, which is all about how to prime audiences to be persuaded before a marketing message is delivered.

Along the way, we’ll ground these principles in case studies, with examples of McDonald’s, Coca-Cola and the New Coke launch, Bose, Norwegian Cruise Lines, and Berkshire Hathaway. We’ll hear how Cialdini’s principles helped Warren Buffett and the late Charlie Munger — and had reciprocal benefits for Cialdini himself.

Now here it is, my conversation with Dr. Robert Cialdini.

Bringing the psychology of persuasion to marketing

Andrew Mitrak: Dr. Robert Cialdini, welcome to A History of Marketing.

Dr. Robert Cialdini: Well, thank you, Andrew. I'm looking forward to our conversation.

Andrew Mitrak: So, you are the Regents Professor Emeritus of Psychology and Marketing at Arizona State University. That word “Marketing” is officially in your professor title. That stood out to me because I think of a lot of your work as primarily psychology. So, I'm curious about what your relationship has been to the field of marketing over the years.

Dr. Robert Cialdini: Well, it's always been an interest of mine because of my larger, broader interest in the psychology of influence, and of course, marketers are influencers in many situations and ways. So, I've always had an eye toward what marketers are doing, what's been successful, and what isn't successful in the marketing arena.

But my role as an academic with a marketing title comes from the fact that on a sabbatical leave, I went to Stanford. I was going to write a book, a new book, the book called Pre-Suasion, and I was asked by the Associate Dean if I could teach a marketing class. I was in the business school, the GBS, because I wanted to get the advice of various professors there about my ideas. And so, they gave me an office in the business school, and they asked me to teach a course to MBAs on effective business communications. So, inside that is, of course, the marketing element, and I began teaching that course, and it was very well received.

When I came back to ASU, my marketing colleagues said, "Hey, Bob, how about if you join us, get a joint appointment, not just in psychology, but also in marketing, where you can teach that course, this time sharpened to effective marketing communications?" So, that's how the joint appointment developed, and I was very glad for it because the marketing students that I would teach would give me a side of the influence process that psychologists just didn't have a deep experience in. And so they were great sources of information for me.

Andrew Mitrak: I would have loved to have taken that course at some time. I'm sure that marketers brought a new lens onto it that you weren't getting in psychology, but on the other foot, I'm sure you were bringing concepts that aren't really taught in marketing programs usually. Were there any notable reactions to some of the ideas that you recall from this time?

Dr. Robert Cialdini: One of the things that was especially riveting for the marketing students was the idea that I was claiming that although we live in what is known as the Information Age, it's never been known as the Knowledge Age.

Information has to be processed. It has to be structured. It has to be prioritized. And then, people will take it in, resonate with it, and then employ it in ways that lend themselves to assent if you're interested in influence. And so, that idea that information, no, we have to really think about how we construct it for marketing purposes rather than just sending it out there and expecting it to land in a favorable way. That's just naive, so the course was really reimagined in terms of that difference. We have information. We have a case to make. We have the merits of our offer and so on. That's not enough. We have to arrange it in psychologically strategic ways to make it knowledge that people will take with them and employ.

Early Influences: Coke, McDonald's, and "The Hidden Persuaders"

Andrew Mitrak: Let's go back to the beginning. You grew up in the Midwest. I think I have that right. And I'm curious about what your first encounters were with marketing as a young person.

Dr. Robert Cialdini: Well, what I remember is Coca-Cola ads. I remember McDonald's ads and so on that had an emotional component to them that employed some of the things that I talk about in the universal principles of influence.

The idea of unity that we're a community, we're a Coca-Cola community, a McDonald's community. Then information like we're the widest selling brand, McDonald's, ex-millions sold, and all those kinds of things that they were allowing us to recognize about their product that didn't have to do specifically with the features of it, just the response to it, the emotional response that people would have to knowing those, those facets of it. And that struck me as very interesting.

I remember being interested in a couple of books back in those days. One was The Hidden Persuaders by Vance Packard. Back in 57. I was just 12 years old, so I didn't read it then, but a few years later, that whole idea of elements that you could put into an ad or a marketing appeal that would resonate with fundamental motives that people had, but they didn't even recognize them. You didn't have to be explicit about it. You could lay them into the background of the ad, for example, there was this great example of a set of ice cubes in a glass, a whiskey glass, and if you look close, you could see kind of racy images within the ice cubes that they laid in there and generating this desire for the product because there was desire that was coming into consciousness, although under the radar.

And, Ernest Dichter, too, with The Strategy of Desire. I think it was his idea of underlying consumer motivations that weren't just about the product, but were about the things that people are looking for, striving for attainment and recognition and affection and so on. Those kinds of factors when aligned into the messaging were very effective, even though they were outside of the particular features of the ad, they were connected to it in terms of those fundamental drivers of human conduct.

Going undercover to find the secrets of persuasion

Andrew Mitrak: So you were really interested in the science and psychology behind persuasion from a very young age. And I'm going to read an excerpt from the introduction of Influence that speaks to a pivotal moment in your career as a researcher. I'm going to quote.

"For nearly three years, I combined my experimental studies with a decidedly more entertaining program. I systematically immersed myself in the world of compliance professionals, sales people, fundraisers, marketers, recruiters, and others."

So, this period of being undercover in this immersion with these compliance professionals, I'm sure you have a lot of stories from this period. It sounds like a lot of fun. Do you recall any of your favorite interactions with marketers or public relations people while you were undercover for a few years?

Dr. Robert Cialdini: Well, you know, I'm going to give you an example that I think is important, not because it took place in a marketing or PR setting, but because of its implications for the way as marketers and marketing professionals, we need to take this lesson into account.

It has to do with the importance of establishing trust in our audience before we launch into trying to convince them to come in our direction. And in modern communication technology, we are separating ourselves in terms of human connection from our audience. We're using technology that allows people to buy or learn about our products and so on with no human connection, where you have experience with people, you've come to like them, you've come to trust them. And so, here was an example.

So I was taking training in a sales program for very expensive heat activated fire alarm systems in the home. And I was undercover. I was incognito. I would just enter their training programs. I would learn what they were telling me was most effective in getting people to say yes. And I did this across a whole range of industries and programs and so on.

In this particular one, there was one salesperson who, after you would get an invitation on the phone, you would recruit people to allow a salesperson to come into their home, and it was usually a couple, and tell them about this new fire alarm system that was superior to all the smoke based systems. And there was one guy who was always at the top of the sales lists. Every month he sold more than anybody else.

In their sales training program, we were allowed to accompany the old pros on sales trips, and sales visits, to learn what they were doing. And I was especially interested in this one guy. Let's call him Jim. It wasn't his name, but let's call him Jim. And to see what he was doing. And it turns out he was only doing one thing different and it was designed to establish trust before he ever said a word about the products.

Because if we, if we have that human connection with someone we trust, our defenses come down and we're more open to that person. There’s less skepticism and so on.

So, what we would do with all the other sales people, there would be a big ringed folder of information about the product and all the benefits. And everybody would bring it in with them, introduce themselves and then start walking through this bit.

This guy, Jim, left that binder in the car and would introduce himself and then everybody was all the sales people were asked to give the customers a little test of their home fire danger knowledge. So, and they would have, it would be a time test. They would only have five minutes. Okay, and so you give that to them and they're taking the test.

And Jim would say, “Oh, wait a minute. I forgot some important information. Do you mind if I let myself out and back into your home while you're taking the test? I don't want to interrupt your test.”

That often involved giving him a key to the front door of their home or to say, sure, let me unlock it for you and go ahead and leave and come back at your discretion. We did three separate calls that night and he did the same thing on all three calls.

“Oh, I forgot the, do you mind if I get it and get access to your home?”

And I asked him about it on the drive back to the office and first of all, he wouldn't ask, he wouldn't answer me. He said, he didn't want to reveal his secret.

Finally, at the third time, he said, "Listen, Bob, what kind of person do you allow into and out of your house on their own with a key that you've given them? Only somebody you trust, right? I wanted to establish myself as a trustworthy individual before I began my pitch."

It's the only thing he did differently. And he was at the top of the sales team. So, the importance of establishing trust before you launch in, right? How do you do that?

Bose case study: Establishing trust with testimonials

Dr. Robert Cialdini: Well, one piece of evidence that I have recognized from a marketing campaign from Bose. Bose Acoustics: you give them testimonials of experts on this topic on, it was the Bose wave music system. So, experts in acoustics and audio technology and so on.

They used to have those expert testimonials buried in the message down below or you have to press a button to get to the to the testimonials to another page and so on. And we asked them to put the testimonials first. So they had the power, the trust that came from expertise of not, not the, not the marketer, but people outside of Bose who were recommending it. They now were able to get that trust in what was being said before they said a word, right? And it increased purchases by 16%.

Now, the other thing about it is to optimize that trust from expertise, we didn't just put one testimonial. There will be a lot of advertising agencies that will tell you, no, no, just put your best testimonial first because the only, put that in there first. The others will just dilute its impact. That's not what the research shows.

The research shows that subsequent testimonials, as long as the best one is in there, don't dilute it. They reinforce it. They reinforce what the best one said. They validate it. So that you can be you can trust that this wasn't just a cherry picked testimonial. They say that it's the only one that really raves about. No, there are several. So they put three up there, right? First thing. And that's what got them 16%. And the thing is it was the same material. It's where it went. It went in a place that established trust first, then led to compliance.

Andrew Mitrak: There's so much to unpack with that. That example of Bose and the one best rating versus the multiple testimonials. I think today also of Google reviews and Yelp reviews where, which one do you trust? Do you trust the restaurant that has one single five-star review or do you trust the one that has 200 reviews that are 4.9?

Dr. Robert Cialdini: Well, you're exactly right. Well, that 4.9 actually seems more authentic and it's better. And there's research to show it. The best conversion is not all five stars. It's a range between 4.3 and 4.7. Because you don't trust that person who's giving you just blanket positivity.

Andrew Mitrak: You don't trust it, exactly.

Dr. Robert Cialdini: No. Oh, and by the way, one of the things I'm going to recommend, because I think it's so important to build human connection back into our marketing even though technology is separating us. When you say there are “200 reviews,” right? Say “200 reviewers.”

Those are people. We want people, not words on a page. We want people these days because we're, again, we're we're being drained of human connection through technology where we are just interacting with people separately from them, just pressing buttons.

Influence: unpacking the seven principles of persuasion

Andrew Mitrak: Let's, let's jump into your book Influence to ground some of this conversation, these ideas in the principles you lay out in the book. And when I first read Influence, there were six principles of persuasion you outlined. But this interview spurred me to purchase the new and expanded edition, which is not just a light, you know, rewrite with a new chapter here or there. It is a beefy, 400, 500 page book with a lot of material.

Dr. Robert Cialdini: No, we added 215 pages. Yeah.

Andrew Mitrak: Oh my gosh. Yeah. Well, knowing I was going to interview led me to purchase and read this new copy, which is just a delight in itself. And so, highly recommended to listeners. And so there were six principles initially. In this new book, you added a seventh principle, unity. Can, can you briefly walk through what the six principles are and why you added unity as a seventh principle?

Dr. Robert Cialdini: Sure. Let's do that briefly.

The first is reciprocation. People say yes to those people who have first given to them when they get a request from that person. We say yes to those we owe. So, we ought to be giving first, information. We should be giving various kinds of benefits, advantages and so on before people sign or or buy. Because they then feel appreciative. They feel grateful. And one of the things is to just, for example, there's research to show if you, if you just show people the amount of effort that you went through to provide this information to them, they're more receptive to it. They give effort back for having received that effort. That's the essence of the rule of reciprocity. What you give first, so you give benefits, advantages, information, evidence of your efforts and goodwill and so on. So that's one.

Next is liking, the liking principle. Nobody would be surprised that we prefer to say yes to those people we like. Well, how do you get liking online, for example? How can you possibly do that? You don't know those people. They don't know you. They have no familiarity, no history with you. Well, there's a study of 6,700 online commercial sites, right? And they looked at AB tests to see which were the things that cause people to be more likely to go from visitor to purchaser, right? They convert. And the, the, fortunately, the principles of influence that we talk about are at the top of the list, but how do you get “liking” in there, right? Turns out that if you include on your landing page a welcoming statement, you get more conversion. You just establish, like, you approve of those people. You welcome them the way you would welcome somebody into your home. So on my, you know, we have a startup called the Cialdini Institute, where we teach ethical influence, and we have on the landing page, a welcoming statement, where it's said, well, welcome to our site. We're so glad that you're there. And then to make sure that it's personalized, I don't just have my name typed out in machine font, I sign it with my, I want a, I want them to see a person there. And there's a photograph of me. So, again, a person. So, those are the kind of things that bring, again, human connection in, increase liking and lend themselves to yes.

Andrew Mitrak: It's not the “Institute of Influence” or “Institute of Compliance.” It is “The Cialdini Institute” and it's you–and you're a likable guy! So it's personalized.

Dr. Robert Cialdini: And there's a, there's a photograph there, and. And you know how in, well, I'll give you an example, in marketing, two of the things that have shown the greatest increase over the last decade, influencer marketing. There's a person there. Somebody you know, somebody you were com- you're comfortable with, somebody you're familiar with, right? Big increase. And the other is handmade products. 37% increase. Why? Because there's a person there at a time when we're being separated from human connection, right? So, that kind of thing, anything you can do like that is gold. Yeah, so that's the liking principle.

And how about social proof. The idea that if a lot of people are doing this, it must be the right thing to do. In our information overloaded world there are so many choices, so many options, so many challenges that we're dealing with, we're uncertain of what we should do. And people are looking for ways to reduce their uncertainty.

We've already talked about one of them: authority. You give them evidence before you give them anything else, that of testimonials from genuine experts or, and here's the principle of social proof, which says people want to follow the lead of multiple comparable others. If a lot of other people like me are doing this thing or have done this thing, then it's probably the right thing for me too. Again testimonials or star ratings or quotes of one sort or another from others, a lot of others, multiple others will lend themselves to success. And we've already covered authority.

Another is commitment and consistency. People want to be consistent with what they have already said or done. Okay? So, commitment and consistency.

We've talked about scarcity. That people want more of those things they can have less of. So, the more we can give them evidence that what we have is unique, uncommon, rare, that Yeah. you can't get this from anybody else, not in combination. A lot of times it's not one thing that distinguishes us from all our rivals. It's a suite of things that together nobody else can match. That would be the thing to make very clear to people at the outset.

Then finally, there is the new principle of unity, which says that people want to say yes, not just to those who are similar to them, but to those who are one of them, who share an identity or share a set of values or goals or or or category memberships. So I'm one of them. And how do you do that? Well, you, you can let people know if you know what their identities are, and you happen to share them, let them know that. But the way that works for me, we remember we were talking about getting people to feel connected. One of the great marketing advances of the last couple of decades, I think, is co-creation, where you ask your existing customer base to create with you the next generation of products or services. And the research shows that that not only increases favorability toward your brand, it increases loyalty. They're more likely to stay with you, even after there's been a stumble of some sort or another, right? If they've co-created something with you, they feel of you, part of you, of your brand.

Now here's the latest research: One of the things we are doing with the Cialdini Institute is focusing on what we call small bigs. What are the smallest changes we can make to an appeal, an influence appeal, that will have the biggest impact on its persuasive success. Like, can you change one word and have that. Here's an example:

Suppose you want to get your, you want to get co-creation and you're going to ask your customer base or your most important clients or customers to help you in this regard, and you will ask them for their opinion, can you give us your opinion on what we can do? Or you'll give them an outline or a summary or a blueprint of a new thing, can you give us your opinion on this? It's exactly the right thing to ask for that unity there.

Right? Be, be one of us in this. Join us with this. Be our partner. It's a mistake to ask for their opinion. Because when you ask for an opinion, you get a critic. You get someone who does the opposite of unifying with you. They step back from you and they go inside themselves to provide a critique of your idea or your new initiative, let's say. Instead, if you substitute the word advice for opinion, you get significantly more favorable responses to your idea, right? Yeah. Because they're part of it. And here's the evidence that really sells the case for me. They give you better input into how to improve it, to change it or to emphasize features within your idea, right? Because they're one of you now. Yeah. The word advice asks for collaboration, partnership, unity, right?

A small big for how you generate unity is not to ask for an opinion. And the newest research shows that's exactly the same thing for asking for feedback, which is the other thing we typically say. No, ask for advice and you get a better outcome.

Andrew Mitrak: That's super interesting. There's this concept of the net promoter score and it's a question that's always asked by either product managers or marketers always using the same, the same text. It's it's, it's something to the effect of, “How likely are you to recommend this service to a friend?”

And it's always that way. I think they always want to be consistent. In fact, I don't think they want to change it too much because they want to track it over time.

Does that speak to unity in that you're bringing in friendship or do you the net promoter score could be improved upon?

Dr. Robert Cialdini: Yeah, I think I would change it a little bit and say, what would be the single most positive feature of our product or service? Yeah. That you would tell a friend about. Now, they imagine themselves advising a friend, right? About this positive feature, that would be, I think, the most streamlined way.

Andrew Mitrak: Yeah.

Dr. Robert Cialdini: To get to the unity that we want. But I think that your point is very well taken that that general kind of questioning does that. It's an attempt at that.

Andrew Mitrak: Right. Yeah. Well, you're inspiring my next listener survey for this podcast. So, just to recap, we've talked about:

* Reciprocation

* Liking

* Social proof

* Authority

* Commitment and consistency

* Scarcity

* Unity

Influence through the ages

Andrew Mitrak: This podcast is called A History of Marketing and so I'm very curious about how concepts and tactics and strategies have evolved over time.

When you think about these principles, do you see them all as something that's innately human that's existed as long as humans have communicated and had something to sell to each other or or do you think of them as something that have culturally developed over time and that and that they've that they've changed over the years?

Dr. Robert Cialdini: I think the majority of them have evolved over eons of human development. These are the things that if we, if they're truly in the situation, authority, social proof, we should want to move toward them, right? They will have evolved.

There are a couple that have a very strong socialization component. Commitment and consistency, for example, the idea that you want to be consistent with what you have already said or done. Well, that's really about a reputation that you're spreading to people. That's the sort of thing you learn how to do. You don't get commitment and consistency effects in small children until they're maybe in fifth or sixth grade that they recognize that. So it's probably not innate. It has to be socialized into them. The other is reciprocity.

All of these other principles, like scarcity and liking and what other similar others are doing, social proof and what, you'll see those even in non-human animals, that but reciprocity, especially a particular kind of reciprocity where the receipt of a gift or favor or service, piece of information, beneficial information, lends itself to future compliance with that gift giver. Animals don't have that. They don't have the ability to hold that sense of gratitude in their minds or obligation in their minds. I think this is something that is socialized into us.

It's true in every human society. There's not a single human culture that fails to train its members in the rule for reciprocity. You must not take without giving in return. Because if you do, you're isolated, you're shunted off to the side. You're not somebody who will do well in that culture. The society benefits from people who receive to give back, which increases the likelihood that somebody will want to give in the first place, which increases human interaction and cooperation. I think those two, commitment and consistency and reciprocity are heavily socialized. The others are there already.

Persuasion in marketing vs. sales

Andrew Mitrak: You highlighted earlier the examples of the salesperson selling fire detection systems and then Bose, the audio system. And I think you were highlighting the differences between how salespeople can apply these and marketers and brands can apply these. And I think of marketers as they're influencing usually through the voice of a company or they're a voice of a product or a brand. They're kind of representing an entity that's like a non-human entity.

This is different from a salesperson who's usually being more direct and personable and one-to-one with the person they're trying to persuade.

How do you see these principles as being different? Or do you see them as being different for someone who's a marketer speaking on behalf of a brand or a sales person who's more taking an individual one-to-one approach?

Dr. Robert Cialdini: Yeah, I think you're exactly right that they're different in that respect, but marketers would be well advised to bring those principles like liking, unity, reciprocity, that that produce a favorable connection, bring that into their marketing efforts, right? Let people know what you've already done for them or the effort that you've gone to present this information and so on.

There was a study done in England where they were trying to get people to attend a particular meeting. And a lot of people just, it wasn't in their best interest. But if they were told how much trouble had been undertaken to set the meeting, find the location and get the schedules of everybody. They got a significant increase. Since, simply using reciprocity in terms of what we've already done might be something to do.

The other thing about reciprocity, I think that's new over the years is not just material gifts, favors or services, but information, valuable information that's not designed to sell them your product because then it's a sales device. It's not really seen as a gift. Information in general about how to best proceed in this general area that you're working in, or just information about safety or whatever it is, that's the sort of thing that we can provide first and in a marketing context, we don't have to have a face-to-face interaction with people that can develop and has developed over the years. It's not just, you know, free samples.

Coca-Cola: Comparing case studies of “Hilltop” and “New Coke”

Andrew Mitrak: I want to ask about examples of companies and brands that have where their principles of influence have gone right and they've done it really successfully, then an example about where it's gone wrong or where maybe the lessons of influence weren't successful. And I think Coca-Cola could be a fun example to kind of compare and contrast.

You mentioned Coca-Cola as one of the advertisements that made a big impression when you were a young person and of course, when I think of the concept of unity, I think of commercials like “I'd like to buy the world a Coke” and people holding holding hands. What did Coca-Cola do well with with these advertisements?

Dr. Robert Cialdini: Yeah, they did exactly that. They made their product part of your upbringing, part of your youth, part of your history, part of your family experience. Even notice their ads for Christmas. There's a Christmas ad and Santa is drinking. I mean, just making it part of something that you've experienced that's a positive aspect of who you are. And that brand gets blended into that, right? They did a terrific job. Now, they also did a mistaken job on one thing, New Coke.

Andrew Mitrak: Yeah.

Dr. Robert Cialdini: Remember New Coke?

Andrew Mitrak: Yeah, I wanted to ask you about this because I actually just last week I interviewed a man named Sergio Zyman for this podcast. He's the former Chief Marketing Officer of Coca-Cola and he's the marketer who's most associated with the New Coke launch. He did a lot of great things in his career, like involving the launch of Diet Coke, but we talked a lot about New Coke. So I want to hear you have a few pages on New Coke in Influence. What are your impressions of it?

Dr. Robert Cialdini: So what they failed to recognize is the consequence of taking the old Coke away. So people couldn't have it anymore. And they produced what's called reactants where people reacted against the loss of this valued thing. It wasn't just that they introduced New Coke as another brand version or flavor with a little sweeter. No, they took it away. It produced a fire storm of protest. I mean, there were marches in the street. There were communities that developed with people raging against it. There were suits filed in court to bring back the old Coke because of loss aversion. That's part of scarcity. We want more of those things we can't have.

Coke did this great job of establishing itself in the sense of self of their customers. And then they took that thing away that had been associated, that flavor, that taste, you can't have it anymore. And it produced this massive counter reaction to it. And actually Coca-Cola had the evidence in their testing data that this would happen, but they interpreted it wrong.

New Coke: A lesson in loss aversion

Dr. Robert Cialdini: For three years they did taste tests, blind taste tests, the New Coke versus the old Coke. And the New Coke was rated more favorably by about 55% to 45%. They like the sweeter taste. Okay. And they thought, okay, well then people are and then they took away the thing they had established for decades and decades and decades and people and produced this fire storing. Okay, what was in their data that could have told them that this was going to happen? Some of the taste tests were not blind. They said, this is your usual Coke and this is the New Coke that's not yet on the market, right? And preference for the New Coke went up by 6%. And Coca-Cola said, this is great. This means that when we bring them something new, they will choose it. What it really said is when you give them the choice between something they can have, the classic Coke, the regular Coke, and something they can't have because it's not on the market yet, they liked it even more.

In both cases, it was loss aversion. The thing that you couldn't have was the one that was elevated in preference. And then Coke went ahead and said you can't have our product anymore. The one that's, you know, embedded in yourself, we're going to give you this and that produced the reaction.

So, in both cases, I think we can find evidence of a good marketing strategy and a poor marketing strategy in the history of Coca-Cola.

Andrew Mitrak: That's right. The word you brought up a couple times is loss aversion. I think it's this idea that if I was to take something away from you and give something to you, the pain you would feel about your loss is actually greater than any positive feeling you'd have about what you gained.

And people really felt that pain with Coca-Cola Classic that was now gone. What's more scarce than, “You can't have it”?

Dr. Robert Cialdini: You're exactly right. Loss is the ultimate form of scarcity. You can't have it anymore.

Andrew Mitrak: Yeah. To Coca-Cola's credit, when they brought back the classic Coca-Cola, they made sure that everything was exactly the same, that there were no changes to it. This is the same packaging, the same color, the same brand, everything that was there before. It's just the way it was.

Dr. Robert Cialdini: So what's the implication for marketers, right? Here's one. Don't just tell people what they will gain, what they will receive from choosing your product. Tell them what they don't want to lose. Loss aversion is stronger than desire for the very same thing.

Daniel Kahneman (and Amos Tversky) won the Nobel Prize in economics for his prospect theory that showed that the prospects of gaining something are significantly less motivating than the prospects of losing that very same thing. So, in that Bose ad I was telling you about where we added multiple testimonials of it, so that was the authority principle. We also had the scarcity principle when we changed the title of the ad from "New," the new Bose wave music system to "Hear what you've been missing in the new Bose wave music system." That produced a significant increase in sales. So tell people not just what they will gain, but what they will forgo. It's more powerful.

Andrew Mitrak: That's a great line: “Hear what you've been missing.”

Pre-Suasion: Setting the Stage for "Yes"

Andrew Mitrak: Another book of yours that's a favorite of mine is Pre-Suasion. And speaking of great lines, I love this word, "Pre-Suasion." And did you coin this word yourself? and do you remember the moment you came up with it?

Dr. Robert Cialdini: Yes, I did coin it, “Pre-Suasion.” The initial title of the book was “Moments of Power.” I was looking for moments when people were especially susceptible to a marketing or influence-based appeal. And they were always first. Almost always first.

It's what you did first that changed the mindset of people to be more receptive to the message they haven't yet received. So, it was possible to increase people's agreement with a message that hadn't been sent to them yet. How could that be? Well, it's because if you put people in mind of a concept that is central inside your message, they have been readied for it when they do encounter it. Here's a great example, the Norwegian Cruise Line, one holiday season, had a marketing campaign where they were sending emails to all of their former customers that there was a great bargain for cruises during the holiday season of that year, right? But it was a limited time offer. So inside the email, there was a ticking down digital clock of how many hours and minutes you had to do it. Everybody got that. But half of them got that message with two ticking clock emojis in the subject line. So they were primed for scarcity. They were primed for potential loss, dwindling opportunity, before they encountered dwindling opportunity, which, according to the Norwegian Cruise Line, significantly increased purchases of cruises as a result. Yeah. So what do you do first? And how do you find those opportunities for mentioning something? We already provided one. Put, for example, a welcoming statement on your landing page before they get any information. You've established liking for them.

Andrew Mitrak: That's exactly right. Recalling our conversation, almost everything you've mentioned is all about Pre-Suasion or or that's that initial moment, whether it's the welcome message on your your website, the salesperson who's selling the fire safety system, you know, he doesn't ask to leave at the end as he's signing the paperwork. He does it right at the beginning to build trust.

Bose elevating those testimonials right to the top. It's both taking all of these principles of influence and persuasion and recognizing that, hey, often these happen right at, right at the beginning of an interaction and enter Pre-Suasion.

Dr. Robert Cialdini: You're well advised to structure them for the beginning.

Warren Buffett's Masterclass in Pre-Suasion

Dr. Robert Cialdini: You know who's the best at this is Warren Buffett. Okay. Maybe the greatest financial investor of our time. I get his annual letter to shareholders every year. Here's what he does on the first or second page of that letter. He mentions a weakness, something that went wrong that year and says, you know, we're human. We make mistakes, but this won't happen again because we've learned. We've made changes now.

Every time he leads with a mistake, I say to myself, “Wow, this guy's being straight with us. What's the next thing he's going to say?” I'm especially interested. I'm focused now. I'm primed for trust. Then he mentions the strengths of Berkshire Hathaway. And why you should hold your shares and buy new shares because, and I am diving into that new. But it's not, he's waited until he's established his trust before he presents the strengths. Wow. What a brilliant guy.

Andrew Mitrak: Very brilliant guy. And if I was to go down the principles of influence, the principles of persuasion and think of Warren Buffett, commitment and consistency. Is there anybody more consistent than him and the late Charlie Munger? Scarcity, they still have the class A stock and there's it class B? So there's like two stocks. There's one that I could probably afford and there's one that's like several hundreds of thousands of dollars and there's -

Dr. Robert Cialdini: It's between six and $700,000 a share.

Charlie Munger and the rewards of reciprocity

Dr. Robert Cialdini: Now, I'm going to tell you a story.

I got one of those A shares 25 years ago in an envelope that had Charlie Munger's name on it. Charlie was Warren's long standing partner. It was worth $75,000.

And he said, "Your book has made us so much money by understanding human behavior because we know that the markets are not made up of econometric models, they're made up of people. By the principle of reciprocity, you are entitled to this share."

And I was sitting in a chair that had rollers on the back and I read this and it knocked me back and the chair hit the wall behind me. I was so shocked by this.

Okay, so I've kept that share and it's recently, it reached $700,000 for that single share. That's how good these guys were not just at financial investing, but telling people about financial investing and how they did it and how and by establishing trust first. I mean, it's just brilliant.

Andrew Mitrak: That's amazing.

Will marketing internalize the lessons of Influence?

Andrew Mitrak: So, your books have had so many answers to how marketers should position products and persuade audiences, and why do you think there's still so many marketing campaigns that fall flat and aren't persuasive? Is it just that more people need to read your books and sign up for the Cialdini Institute? Or why is it not fully known? Because the answers are there.

Dr. Robert Cialdini: Yeah, I think it is that they think that my book is, well, “That was developed before the internet. Well so why would I pay attention to it?”

And so actually, the book has been called the Bible of online marketing. It was written before there was online marketing and people have asked me, “How did you see ahead? How did you look ahead to see that it would be so successful in this new platform?”

I said, "I never looked ahead. I looked in us.”

I looked in us. What are the drivers of yes that have always existed across platforms, across populations, across situations. Those are the ones we need to.

You have to think about not just the latest technology or approach. Look to the factors that have always driven. There's a Chinese saying, "The years tell what the days can't say.”

Look to what has always worked. Don't get swept away by what happens to be the most novel or the newest. Go to the most primal features. Those are the ones that are going to drive behavior.

Andrew Mitrak: I, of course, couldn't agree more. That's part of this whole podcast. I feel like everybody is is looking to the future of marketing or the latest tips and tricks today and I think a lot of the lessons are in history and they're they're from experts like you, like Dr. Kotler, like so many others who have gone through all this before and I couldn't recommend enough for listeners if they're in marketing to, you know, pick up a copy of Influence.

It made Charlie Munger and Warren Buffett a lot of money, so definitely recommended. And Pre-Suasion as well, which is also just a delightful read. So, Dr. Cialdini, thanks so much for your, for your stories, your time, your wisdom. I've really enjoyed it.

Where can listeners find you and learn more about you beyond purchasing these books to learn more about your work and to and to support you?

Dr. Robert Cialdini: I think the easiest way would be to go to cialdini.com and then there's an array of possible options that they might want to partake of.

Andrew Mitrak: Yeah. Well, Bob, thanks again for being on the show. It's been a lot of fun.

Dr. Robert Cialdini: I've enjoyed it.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 8

“Anytime there was a budget cut, marketing was cut first. So I took it personally to make executives believe marketing is an investment, not an expense. The only way you can prove that is to show the ROI of marketing.” - V. Kumar

This week, we have a marketing titan joining us: Dr. V. Kumar, also known as “VK.” He's among the most cited and influential scholars in the field of marketing. He has published over 300 scholarly articles and 35 books.

VK’s has been recognized with over 20 Lifetime Achievement Awards, including being inducted into the Analytics Hall of Fame and being named a Marketing Legend as part of the "Legends in Marketing" series, alongside the Philip Kotler and Jag Sheth. He was Editor-in-Chief of the Journal of Marketing and is the Goodman Academic-Industry Partnership Professor, Goodman School of Business, Brock University.

In our conversation, we trace VK's journey from his engineering roots to how a talk by Philip Kotler sparked his passion for marketing.

We also dive deep into the evolution of marketing research and analytics, from surveys and diaries to scanner panel data and the rise of database marketing and CRM. VK shares a behind-the-scenes look at his work measuring the Customer Lifetime Value of Coca-Cola consumers, revealing insights about Coke vs. Pepsi.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

We'll also explore VK’s paper, "Evolution of Marketing as a Discipline," charting how marketing organizations have adapted, using Coca-Cola as a case study.

Finally, we'll discuss the relationship between marketing academia and practice, highlighting VK's extensive collaborations with companies like UPS, IBM, P&G, Comcast, Home Depot, Wells Fargo, and Pitney Bowes, and how this work has helped demonstrate marketing's value as an investment, not just an expense.

Now here it is, my conversation with V. Kumar.

Early Influences: Philip Kotler and the Journey into Marketing

Andrew Mitrak: Welcome, Dr. Kumar. It's an honor to have you here.

Dr. V. Kumar (VK): My pleasure, Andrew. Thank you.

Andrew: So, before we get into some of marketing's history with you, I wanted to talk about your history. Before you were a marketer, you studied at the Indian Institute of Technology, and you earned your master's in engineering and industrial management. So, I'm curious, how did you make the jump from engineering into marketing?

VK: Both my undergraduate bachelor's in technology as well as my master's were from IIT. In the master's program, there was a segue. I majored in industrial engineering and industrial management, whereby we still continued with some engineering classes, but predominantly focused on the management of the engineering function. That was the time that Phil Kotler had come to India to give a few talks and meet with a few people. And I was blown away by the influence of him in the business field in general, particularly in marketing.

And so, I started reading about what it is, and it was his textbook that we used in marketing in the master's program. So, when he came, and as well as I heard his talk, and I followed his book, I said marketing is what I'm going to do. And I reached out to him and he said to join Northwestern, but then I chose the University of Texas at Austin because they gave me a full scholarship, and it's a warmer place. I grew up in Southern India, Chennai, and, Texas being warm, it was a natural liking for me to join the University of Texas at Austin. There, I did both marketing and a minor in statistics. So, I brought in the engineering expertise throughout my life, even majoring as a minor in statistics. That's the segue that happened.

Andrew: So, you came to the US to start studying marketing. What were your initial impressions of marketing as a consumer, versus an academic? Were there advertisements that made an impression on you when you were young? Were there specific brands or examples that stood out to you?

VK: The first thing is, when you land in the US and start watching television, you see a plethora of advertisements. You get glued to that as to how colorful it is, how beautiful it is, and what the message is. We have this AIDA model: awareness, interest, desire, and action. So, I used to evaluate each of these ads as to where they stop. Are they just creating awareness, or are they going through the process till the end to make me go and buy that product?

So, that was very fascinating. But the one ad growing up that really caught my attention, which for many people and the whole ad world talks about it, is the renaissance of advertising, the Apple 1984 Macintosh ad in the Super Bowl. That transformed Super Bowl ads from then on, and also the ad industry in terms of how to be creative and catch the attention of the consumers. So, that was there. Then after that, a series of Coke ads and Budweiser ads all followed through, but this was like a moment to reflect, and that still stands in the mind.

Andrew: Yes, I think we can all envision that ad, almost frame for frame in our heads. It made quite an impression.

VK: Definitely.

Andrew: And so, you mentioned Philip Kotler, of course. Who were some of the other individuals that first shaped your understanding of marketing as you were first entering the field?

VK: So, I was admitted to the University of Texas at Austin, and my advisor throughout my stay was Bob Leon, Professor Bob Leon. He was a significant influence then, and till now. He's the best friend, he's the mentor, guide, everything. So, he prepared me for life saying that there's only one thing you need to remember. You just put in your hard work, and if the expected outcome doesn't come, don't give up the hard work, keep persisting, putting it in.

That was great advice because as an academic professional, you would see that when we submit manuscripts, rejection is the norm. So, every paper we write, we keep rejecting it. So, we cannot give up. So, he prepared me well. And then also in terms of quantitative marketing, he is a great quantitative marketer. So, he taught me some of the basic statistical techniques as well as advanced. I was his research assistant.

But I was the one who was fortunate upon graduation, and then even before I got promoted to associate in the '90s, Dave Aaker and George Day adopted me and said, "V. K., we want to write this marketing research book with you. We have done something so far, but we want you to take over from here."

I was like, is this a dream? And then I took it over and wrote the book, as the fourth edition or so was the first one that we co-authored together. And now, it's the 13th edition, and we'll release the 14th edition very soon. It is the standard. And then in the middle, somewhere, Jag Sheth also influenced me significantly, adopted me and said that the work that you do, make sure you also give back.

You know, I was adopted by many people at different stages. So, what do I do? And now, fast forward to today, I've had 40 doctoral students I could mentor. And it was the most rewarding experience I have seen, and probably one of the largest numbers among the academics, to mentor, and they are all doing very well in the academic field. Most of them in the academic field, some in the practitioner world. They keep switching back and forth.

The Evolution of Marketing Research: From Surveys to Scanner Data and Beyond

Andrew: You've clearly taken these early lessons of hard work to heart because you've had a very prolific career. Of course, you've contributed to virtually every field of marketing in some capacity, but one area that stands out is marketing research, and you mentioned the book, Marketing Research, which is now in its 13th edition and the 14th edition's on its way. Can we dive into marketing research as a category? What was the evolution of marketing research, and how did it change and what was your role in shaping it?

VK: This is a great point to reflect. So, when I came to the US in the '80s, we had one of the companies of marketing research was Marketing Research Corporation of America, MRCA. And they, prior to them, marketing research was survey research. Semore Sudman who was the pioneer of survey sampling and how to sample correctly and do the survey. So, surveys were the most common thing.

From there, the evolution came with MRCA into giving diaries to people. You write what you buy and then mail the diaries on a weekly basis so that they don't forget. In the survey, there could be telescopic bias. I forgot what I bought, and so there could be errors, so diaries minimize those errors. And then, from there, we had A.C. Nielsen and IRI Information Resources Inc. introducing the scanner data, scanner panel data in the '80s, in a few test market cities. Port Washington was one of them.

And one of my first jobs was after graduating, although it was short-lived, I was at the University of Iowa, and I joined there because the co-founder of IRI, Information Resources Inc, Jerry Eskin, was a marketing professor at the University of Iowa. He said, "If you join, I'll give you all the scanner panel data. You can build the models, whatever you want, and we will share it with the companies."

I did that. He took me from Iowa City to Chicago over the weekends. We got a lot of data, built a lot of models for P&G and Kimberly Clark and published them in Journal of Marketing Research and JMR subsequently. But that is the revolution, from survey research to diary panel to scanner panel data. Then the revolution came in the '90s of database marketing, that we could really have databases of customers. The scanner panel is one part, the retailers collect, but also, manufacturers also started collecting data, buying data from the retailers, as well as with the credit card, they were also registering us. The loyalty programs emerged in a big way.

So, they had not only what you buy, but who you are, and also through the models, we were able to generate why you are buying. So, that part came in the database marketing, and then, of course, the birth of 2000, the CRM came into the revolution, that is, which customer is buying what. So, what should I be showcasing to this customer in terms of ads, in terms of customization and personalization, that was the goal, but the goal was materialized later on in the 2011 to 2020 time period.

And today, with the advent of new-age technologies, we are able to easily do that, the personalization, customization. But the question is, is every company venturing into this path or are some of them lagging behind? Still, if you take P&G, the majority of their products are all mass marketing. They are in many categories and multiple brands all over the world, and it's mass marketing. World of Coke, the same thing, Coca-Cola is mass marketing.

Unlocking Customer Lifetime Value: Insights from the Coca-Cola Case Study

VK: Having said that, even Coke came to us and said, "can you tell me what is the lifetime value of a Coke consumer?" You know, never thought of it, because to measure the lifetime value, you need customer transaction data, exactly what it is, but then, who tracks it? A.C. Nielsen tracks how much you buy over a weekly period, but also the competition. So, we had to come up with a very new model. Me and one of my former doctoral students, Saran Sundar, we came up with measuring CLV of Coke, Pepsi, all soft beverages and published in JMR, which won the best research in JMR and the Donald Lehmann award as well as the best doctoral dissertation award for my doctoral student.

So, this marketing research is the one that you can clearly see the barriers and then how we overcome these barriers.

Andrew: Can we dive into that Coca-Cola example, just in a little more detail, because this is far before the age of really digital advertising as we know it today, as well. So, how did you approach that?

VK: The data comes from A.C. Nielsen scanner panel. So, they had 20,000 people in the panel. They track over a six to seven year period as to, you know, what soft drinks that they buy. And so, we have like, if Andrew bought Coke in week two, three, four, and then switched to Pepsi in week seven, eight, then came back to Coke. So, we have all these switching as well as sticking to the brand.

And some people are variety seekers, some people are die-hard brand loyal, some people are promotion sensitive, we call them deal-prone customers, and some customers are rational customers. They look for a coupon, cut the coupon, and go to the store and take it. So, we look at the buying pattern of a Coke, and then among these 20,000 panel members, you have a wide range of age.

Then you segment also by, if you're a 20-year-old versus a 30, 40, 50, 60, how is the consumption pattern varying? And in this process of this data, we use something called a structural model. People often confuse with structural equation model. No, this is structural model, which facilitates what is the utility for consuming Coke at this instant by an individual. And so, we model the functional utility, and then see that at what time interval, because they buy and how often they switch.

And if you can model this steadily, in the observation period, then you can project it across age group, so that what will be the lifetime value of Coke. The interesting thing in the study is, if I ask you this question, which would Pepsi have a higher customer lifetime value, or Coke will have a higher customer lifetime value?

Andrew: My best guess would be Coca-Cola.

VK: If you look at how much as a consumer, a Pepsi consumer consumes more Pepsi than a Coke consumer is consuming more Coke. So, the customer lifetime value was higher for Pepsi. But the overall consumption and profitability and the share was higher for Coke.

Andrew: Right.

VK: So, after this study, the plan was how to increase the customer lifetime value of Coke. How can we make a customer drink more Coke?

And one of the ways that you do that is to introduce a lot of variations, of Coke, diet Coke, caffeine-free, zero, cherry Coke, zero, Coke, and all those things. So, that's the way you keep them in the family. So, overall, if you look at the family structure, then Coke manages that very well.

The Evolution of Marketing as a Discipline

Andrew: I want to turn attention to a paper you published called "Evolution of Marketing as a Discipline." This is a long, dense paper, but if you were to take the 30,000 foot high-level view of marketing, say over the last hundred years or so, how would you describe its evolution from the highest level?

VK: So, if you go back to 1936, and then, I will go like a decade, one decade, marketing was viewed as applied economics. Then from there, it became marketing as a managerial activity. And then the third decade, it became marketing as a quantitative science. Then after this, something happened that we started looking at consumer behavior. It became a behavioral science.

And then how do they make decisions? And so, decision science followed. And then after decision science, it became an integrative science. And this is a very interesting period that integrative science between 1986 and 1995. Why? Because we borrowed a lot of theories from psychology, sociology, anthropology, to better understand the consumer's behavior. Why do they behave in a certain way?

We were able to explain much better. So, and also the economics field was always infused, but then, statistics became very dominant. Prior to that period, prior to 1996, most of the research done, when you have multiple customers data on buying behavior, you would just run a regression model and get one coefficient for price, across all customers.

And what is the assumption behind it? Is basically saying that every Andrew or V. K. or Phil Kotler or Jag Sheth, they all have the same price elasticity. But you and I know that's not true. So, in the mid '90s, where prominent modeling, unobserved heterogeneity, that's a technical term, in layman's term, all that means is that there are groups of customers who behave similarly.

And so, all these latent class segmentation became so prominent, how to model that at the segment level, and at the individual level, we have advances in statistical models, through random effects model. So, we were able to really understand each customer at the individual level, what is their elasticity. And then market to them. So, that was a revolutionary period as to why my elasticity is different from yours. That's because maybe I belong to some socioeconomic class different from yours, or my lifestyle is very different from yours. So, we were able to explain all those things with the borrowed theories from psychology, social psychology, and sociology.

Then marketing became a scarce resource, like people anytime there is a budget cut, marketing was cut first. The notion was that it's an expense. And so, I took it personally from 1999, 2000 onwards, for the last 24 years, to make executives believe marketing is an investment, not an expense. But how do we prove that? The only way you can prove that is to show the ROI of marketing expense. Whenever anybody invests, so, I invested, I give you $30 million, the CEO might tell the CMO, "Show me the return."

So, when you do mass marketing, the famous saying, "Half of it goes wasted," I don't know which one. So, but when you do it individual-level marketing, who's buying, who's not buying, based on the marketing that you're doing, we are able to directly link the spend to the outcome. And so, that is what we did from 2000 onwards to measure the birth of customer lifetime value, came in terms of measurement, concept, definition, and implementation.

IBM and Wells Fargo were the two companies that were the initial companies that we started working with. And then, I had students from Europe, so they also, roped in a Spiegel catalog company, and then, through marketing science Institute here, we got many member companies of marketing Science Institute, also share data and built a lot of models, fast forward today over 150 companies, implemented some of the models we have done, and they're all showcased as either practice price in inform society, and they're also available as practice price videos on my website.

So, that is the investment part of it. To complete the story of this evolution, then, marketing became an integral part of the organization, that no decision can be made in isolation. They have to be even if it's an information systems or finance or operations, we'd say how we are going to market it, if you're going to change the operations.

Example, rather than delivering the product from warehouse, you are now going to deliver it directly through mail. So, how will you market it? Because there could be a lot of delays in the mail system. So, what do you do? Or the vice versa from mail to warehouse, what can you do that? A famous example is Amazon also touted two-hour delivery window, but that didn't go far because that was impossible to implement.

So, marketing promise has to collaborate with the operations. And then, in the late part of 2015 to 2020, we had the engagement marketing, and today, we are standing as transformative marketing.

How Marketing Organizations Evolve

Andrew: I want to come back to this early period, though. You started by citing the year 1936, and at the time, it was a field of applied economics, and you went from there to today. I'm curious how this would have impacted, say, a marketing organization. Take a company like Coca-Cola or Proctor & Gamble, or a company that existed from 1936 to the present. How did their marketing organization develop? What are the key changes or milestones? If I was a CMO and I was hiring a team, what did my team look like in 1936, and then what does it look like today, or what are the major changes in between?

VK: This question is the right question because just four days ago, I was at the World of Coca-Cola in Atlanta, seeing the evolution of ads that they showed in the 15 minutes cinema that they screened.

You know, that is one part. Just the evolution of Coke itself, the product formulation pretty much remained the same, in terms of selling it, they were in a situation where the more bottling plants, the more places they were present, they could sell more. So, the distribution era was the 1920s, '30s, '40s, and all, '50s. So, as they increased the distribution, then became the product era. So, they had variations of the product. Then they had like Fanta, Coca-Cola, Sprite, and a few other lime-based drinks all started evolving, the product era. Then the selling era, then they had competition.

So, the salesperson went and said that why should they go through the selling era. But the commercials, if you look at it in parallel with this, they were showing colorful ads, colorful people, good-looking, attractive, and all those things they were showcasing that. Two benefits-based advertising in the '70s and '80s. That was a good shift that they followed through. Like what is the benefit of drinking Coca-Cola?

And how often you should drink, and when you should drink, occasion-based drinking. So, all these expanded the scope for Coca-Cola in terms of advertising. And then with us tag teaming with A.C. Nielsen and IRI, using the scanner panel data, they found out which type of customers are buying more and less over as they age through, is the consumption dropping or increasing? And we find the consumption dropping.

It's maximum when you're a teenager, 20s and 30s, and then it drops. So, what can we offer as a substitute drink to keep them in the family at that age, then they brought all these SmartWater and tonic water, all these water-based things came about. So, they were very clever in keeping a member of the household within the Coke family, Coca-Cola family with this understanding.

And today, the biggest talk is about the AI-generated Coca-Cola advertisement, all over the world that we are seeing. And die-hard Coca-Cola fans, love it and saying that, oh, what, how colorful it is. And the critics are saying, "Oh, they've gotten down to this low level of using AI, they don't want to spend money, just AI." But if you focus on the ad itself, it is just combining the benefits, the occasions, and people all over the world.

They are one company that throughout from 1896 have steadily done very well.

Andrew: Yeah, it's such an iconic brand, of course, but you were mentioning how you tie it to a time. And we're entering, at the time of we're recording, we're starting to enter the Christmas time, and they're a brand that somehow is associated with things like Santa Claus and polar bears, but then their classic "I'd Like to Buy the World a Coke" ad, it's very summery, and it's part of the hippie movement. I'm sure that that was controversial to some extent at the time. And now, they are doing it again with AI.

VK: But that's the objective, Andrew. That is everybody is talking about it. Good or bad, the awareness and what it is. So, it makes people curious to go and see.

From Mass Marketing to Personalization

Andrew: Another paper you wrote, along these lines is called "Conceptualizing the Evolution and Future of Advertising." And the paper describes how advertising has evolved from a one-way broadcast to a two-way conversation between brands and consumers. And advertising was focused on selling, but now it's more focused on engaging. And so, stepping back on this, what were some of the major milestones in how advertising has changed over the last century? And if you want to continue with Coca-Cola as an example of how their advertising has changed, that might be a useful framing for us too.

VK: Yeah, Coca-Cola is one, but this study was done with Professor Shefali Gupta from India. A lot of thoughts went into this in terms of culturally how it has evolved, in an individualistic culture versus collectivistic culture, like India and China, or Singapore versus Europe versus America, North America, and so on. So, that was the thing. If you look at the traditional way of persuasion, advertising has got three objectives, inform, persuade, and remind.

So, every ad focused on measuring it. Did I inform, how many people are aware, how many people intend to buy, and then how many people recollect the ad. So, those three objectives still, they would say that. But what the evolution has seen in advertising is that there was a mass advertising in television or radio, broadcast advertising was all there. Then came this beautiful media convergence, where you could have the confluence of the technology, multiple proliferation of media, and the ability to understand each customer's preferences.

So, because of this media conversion, we had this split cable. Meaning like, if I and Andrew are neighbors in a city, in a zip code, we both are watching Jeopardy, and I will be seeing one ad, and you will be seeing another ad. And that was the media convergence, the technology allowed. Because I like to eat, say, Lays chips, or some chips, I don't eat that much chips at all, but some product that I'm eating, or maybe drinking Coca-Cola, the ad would be for Coke, and you consume Pepsi, then the ad would be for Pepsi for you.

So, that is the way with the scanner panel data giving insights to the manufacturers and ad agencies that they buy this data, they can customize it.

Andrew: So, if I was to go back to our Coca-Cola example, for instance, if I was in 1896 or so, I'm somewhat limited to print, or maybe out of home. And then radio comes along, and television comes along, and as a marketer or as a brand manager, how do these changing technologies change how I'm approaching advertising my products.

VK: That's where advertising was always viewed as a creative component. And it was a mass marketing component. So, how can we infuse science into advertising? It is the messaging. So, advertising is nothing but creating a message to the audience, the relevant audience that they are targeting. Now, from mass marketing, general message, creating awareness or either to create an interest in that category, or the product, and to desire the product, I want to consume it, to actually buying it.

The general-purpose advertising is to create awareness. So, what is the next step that they can do to induce interest? Then they focus on the benefits of consuming the product, the interest. Then what what can they do to make them consume, go to the desire, this is the one that I want to consume. I'm interested in this category, but I want to consume Coke, desire.

So, for that, they'll say, "It is easily available and an attractive price, affordable." Affordability and availability became the message in the advertisements to create the desire. And the action is, there is a store next door to you. So, that is the completion of the circle or the cycle of advertising in terms of what it is. The reason I said circle is it has come back now to the beginning with the new technology again, they do the digital advertising, starting with like, how many people click, so that they become aware of it.

Then how many people are now asking for more information, like not only seeing the ad, but clicking it to get additional information. And then, from additional information, what are, where is it available? So, which, so put your zip code and see where all it is available. So, then, you go to the desirability part of it, where affordability and availability is done in the digital world, and finally, you order from your home base. product gets delivered.

So, the same cycle has repeated in the digital world, through the click through and conversion rate and so on.

Applying Marketing Research to Inform Messaging

Andrew: You brought up this relationship between marketing as a creative act, and marketing and advertising as a science. And it feels like there is, of course, a little bit of a natural tension here between being data-driven and being creative, but of course, marketing is, as you mentioned, it's strongest when measurement and creativity work together. And I'm curious if you have any thoughts on how the relationship between data and creativity and marketing has evolved over the years.

VK: I can give you, explain this with one very nice example that we did with UPS. What happened there is that they have almost 4 million small businesses that they cater to, shipping packages. And they were communicating with them, sending them messages. So, they know they have to send them messages at some intervals. And the messages they varied are one is a relationship-oriented message, meaning like we can help you grow your business. If we come and spend a day with you, we can customize like what kind of shipping is good for you, for your business to grow. So, they, there's a relationship message.

There is another message called economic message, which is, says that if you ship 10 packages, you get 20% discount, or 10 packages, pure economic discount. So, the creative part was done there. That is what what should be the creative economic message, what should be the creative relationship message. Now, the measurement part comes in where, who should get the economic message, who should get the relationship message, that's first question.

Then for how long they should be getting that message, and when should it flip back to a relationship to economic. Or, they should bring both to some other group of customers. And that's where using the historical data for each of the 4 million small businesses, what messages they received in the last three, four years, how did they respond to each of those messages?

And for how long they were responding. So, we built something called a time-varying parameter model, a dynamic model. Each time they get an ad at different times, the effect of that ad varies over time. We capture that. Using this historical data of measurement, we have the insight which small business should get economic message for how long, and then what should happen after that.

We did this for them, and it was implemented very successfully, and we were able to also report. And some of the things that at that time, the CMO was Mr. Kevin Warren, and we also did a Harvard Business Review article of a variation of this, and he came and commented that how CMOs are when they are given strategic discretion, operational discretion, and financial discretion, that they can take decisions like this to move forward, that creativity and accountability or measurement part can go together, and they are very successful.

Marketing Academia and Practice: Building a Bridge

Andrew: Through this interview, you've cited several examples of how your academic research has closely collaborated with businesses. You mentioned Proctor & Gamble, you just mentioned UPS, Coca-Cola. I'm curious if you have any thoughts on how the relationship between marketing as an area of academics and scholarship and research has collaborated with marketing practitioners and CMOs. How has that relationship evolved over your career? And do you think that relationship could be even tighter than it is today?

VK: Yeah, this is something very close to my heart. As I said to you, around about 2000, around that time period, marketing was relegated as an expense, it's not an investment. So, we went on a crusade, me and my team of doctoral students over the next 20 years to prove marketing is an investment. And we have done that. So, there is an organization called MASB, Marketing Accountability Standards Board, like FASB, MASB, which the focus of that board is to show marketing as an investment. We were all founding members, founding directors, and we did that.

Now, what happened simultaneously at that time, because marketing was not able to prove its worth, CMOs were the most frequently fired executives in the organization. Their stint was less than two years, less than 24 months. So, how to reverse this? So, from then on, we took up the role of what should we give to the CMOs as ammunition for them to use?

One of the questions that was asked by a company like Pitney Bowes was that if I give $10 million to my marketing CMO, they had, I think, director marketing or so. Should it be spent on building customer relationships, or should it be spent on building the brand?

How do you answer that question, like, should you build the brand, or should you build customer relationships? It's like a chicken and egg problem. And so, to answer that, we started this journey of linking brand perception to actual customer lifetime value at the individual level. What Andrew as an individual thinks of Coca-Cola's brand awareness, brand trust, how much emotional attachment he has got, and how much he's willing to pay for that.

And if the store next door closes, would, are you willing to go to the next street and buy it, and are you willing to advocate this, are you willing to repeat buy this? So, we came up with eight attributes to link it, and then showcase this branding, all these attributes to customer lifetime value. What you think of the brand today, link it to the customer lifetime value, which is the next three years value that you're likely to give to this brand.

So, when we connect all these dots together and work with, here is where we work with the marketing practitioners, give it to them and say, "You have a tool here, and you can showcase to them, if you give me money, I can do both. Build the brand as well as build customer relationship." And that blossomed into working. And then down the line, we did another study which was published in Sloan Management Review as well as Journal of Marketing, is that if a CMO focuses on maximizing customer lifetime value, would that increase the stock price, share price.

We did a field experiment with a B2B company and a B2C company, and Wall Street analysts observed it, and we showcased that maximizing CLV, customer lifetime value, results in increasing stock price or the value of the firm.

And then Sloan Management Review immediately published this in saying, "This is great news for the marketers, the marketing field." So, that happened. Then, another five years later, we took a 10-year data, longitudinal data to study, help the marketing practitioners that if the marketing practitioners are given what decisions to make strategically, and which markets to enter, and how to enter the foreign markets, like operational discretion, and then how much to spend, doing the financial discretion, if you give strategic operations and financial discretion, then they can show global growth for the companies.

So, 10-year data, and that was published in, it was an international study, so Journal of International Business Studies, but most importantly, it was published in Harvard Business Review again, repeatedly. So, everything we do, we get coverage from either Harvard Business Review or Sloan or California Management Review, because they have direct relevance to the practice. So, I feel that the close tie-ups that I have with the marketing field and the marketing practitioners to help them grow, this has worked out magically for us.

Learn More and Connect with Dr. V. Kumar

Andrew: Dr. Kumar, I've really enjoyed this conversation. Your insights have been so valuable. So, thanks for sharing your experiences and your wisdom with us. And for listeners, what's the best way for them to learn more about your work and connect or follow your work online?

VK: It's all documented in my website, drvkumar.com, and for all the the engagement work and the customer lifetime value work is all in vkclv.com is all there. But most importantly, they can Google search me and write to me directly. I'm a public figure, like everybody can find me easily.

Andrew: Dr. Kumar, thank you so much. It's been so great meeting you on this podcast, and look forward to staying in touch.

VK: My pleasure.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 7

“Consumers don't make choices. They reduce choices.” - Jag Sheth

This week my guest is a marketing legend, Dr. Jagdish Sheth. Dr. Sheth is a renowned scholar and has published more than 300 research papers and over 30 books. He’s the namesake of the Jagdish Sheth School of Management and recipient of the Padma Bhushan—the third-highest civilian honor awarded by the Government of India.

In our conversation, we dive into the influence of psychology on marketing, Jag’s contributions to consumer behavior, and Sheth’s incredible life and career.

Dr. Sheth co-authored a landmark 1969 book called The Theory of Buyer Behavior with one of his mentors, John Howard. This laid the foundational framework for what became known as The Howard-Sheth Model of Consumer Behavior.

We also cover Sheth’s book, Marketing Theory: Evolution and Evaluation which chronicles the evolution of marketing theories and the rationales behind them.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

Read the interview transcript, enhanced with links and images:

Dr. Jagdish Sheth’s Early Biography

Andrew: Dr. Jagdish Sheth, welcome to A History of Marketing. Thank you so much for joining me.

Jag Sheth: Thank you, Andrew.

Andrew: You've lived a remarkable life. You were born in Burma, now known as Myanmar, and your family immigrated to India when you were a child. You moved to the United States in your early 20s to enter business school at the University of Pittsburgh. What were your initial impressions of Western advertising and marketing?

Jag Sheth: Quite a shock, because I came from a country where branded products were not as popular yet. For example, you had to make your shirts by buying the cloth and taking it to a tailor. Nothing was really branded except a few shampoos or Western company products, like Unilever products. I came to America, and everything was branded.

Andrew: Everything was branded. Were there any other differences that you noticed in marketing or advertising?

Jag Sheth: My first major encounter was that in India, in a tropical climate, you don't wear white shirts; you wear more colored shirts. So you could buy cloth material. All my shirts were in color – blue, yellow, and so on. There was a dress code at my university that said you have to have a white shirt and a tie, and wear a suit. But I needed to buy a white shirt.

So, I went to a store and said, "I need a white shirt." The sales clerk was a young man. He showed me the white shirt, and I said, "How much?" He said, "$5." My immediate reaction was, "How about $2.50?" I said, "Look, $3, take it or leave it," because my friend was waiting in the car to go back to class. Then my friend educated me that in the consumer market, especially, prices are fixed. He said, "No negotiating." That was my first major encounter with a cultural difference.

Andrew: That's right. We don't haggle too often here in the United States. I've been on the other side of that. When I've grown up here and then traveled internationally, haggling is part of the culture. It's something that's totally unfamiliar to me, and I need to get better at.

Becoming an "Accidental Scholar" and Marketer

Andrew: Your 2014 autobiography is called The Accidental Scholar. So, I take it that your career in academia and your specialization in marketing was not part of your original plan. Can you share what initially drew you to marketing as a field of research?

Jag Sheth: It came by accident. My original intention was to learn production management because my brother had a factory that needed to be mechanized more and more, with a shortage of labor, especially skilled labor. So I said, "I'll go to America, get my MBA, learn the practical side for one year, and then come back and join the family business." That was my intent.

But I got turned on by psychology. The most influential professor, by reading his material, was Maslow and his hierarchy of needs. I resonated with it. Because of that, I said I would like to go and do my doctorate in Behavioral Sciences, not in marketing. Behavioral Sciences. My minor was in social psychology, and then my applied field was marketing, which is understanding the psychology of customers rather than marketing a product.

I needed money to bring my family. I was earning $287 as a monthly stipend; we needed $400. So I looked around, and by accident, John Howard, who was a marketing professor, had funding, and he gave me the extra assistantship. That's how I went into marketing. Otherwise, I would have been in management.

Andrew: I suppose extra money is as good a reason as any to get into marketing.

The Intersection of Psychology and Marketing

Andrew: When it came to researching marketing, do you think that your status as an outsider, somebody coming from India, gave you any advantages compared to your peers who were born and raised in America?

Jag Sheth: Absolutely. Having a different perspective, coming from a different culture and context, became an asset for me. I could see things in a way that others did not see. It's very much as if there's a galaxy out there, but you look at it, and some discover things, and some don't. The same thing happened to me. That has been an advantage, plus traveling all over the world as part of the academic career, consulting, and advising gives you multiple perspectives. So that has been an advantage.

Andrew: You were studying psychology and marketing at the same time. When I spoke to your friend Philip Kotler, he told me about how marketing emerged from economics, but of course, psychology also played a major role. Can you share who the leading thinkers were in marketing when you were a student and describe how psychology came to play a bigger part in marketing?

Jag Sheth: There was a whole body of writing by one single author called Wroe Alderson. He was a brilliant theorist, and he came out with a theory which he called functionalist. I still don't understand it; he used very complex language, even for academics. Pretty much like reading Greek or Sanskrit. But I had an expert who knew Alderson. There are brilliant theories that came out where they talked about sorting things, warehousing, in his own language.

Andrew: I've come across Wroe Alderson in some of my research, and at some point, I'll have to do a full episode on his biography because he seems like a really fascinating person. Can you ground us – what time frame are we talking about here?

Jag Sheth: This is all in the late '50s. Up to this time, then in the late '50s to early '60s, marketing began to shift toward a behavioral perspective, a non-economic perspective. Economics itself embraced behavioral economics much later; in marketing, we did it very early. That led to buyer behavior – let's understand the psychology of customers, not the offering of the market, essentially. That was a key aspect.

And so that led to the buyer behavior school, that led to the whole consumerism movement. Ralph Nader was the world-class activist. The school of thought about the role of marketing with society began much more. Society and marketing – how can they coexist as true institutions?

The Theory of Buyer Behavior and John Howard

Andrew: You mentioned buyer behavior, and you and John Howard co-authored the 1969 book called The Theory of Buyer Behavior. Before I ask you about buyer behavior, can you share more about who John Howard was and what influence he had on you and your career?

Jag Sheth: John Howard was an economist. He got his doctorate from Harvard University, and his professor was Joseph Schumpeter, who was a very well-known economist – "creative destruction" or "constructive destruction." John was heavily influenced by his own professor's writings, mostly about innovation creating competition.

The main reason Howard became very important in the discipline is that he got a Ford Foundation grant to study the evolution of marketing. He published a book on this called Marketing Theory. And John was actually creating a theory of buyer behavior before I joined him. I joined him in '62, and he had a chapter on loyalty in his own textbook. He was very serious about loyalty.

Then I began to work with him. A great human being, because all great scholars are great learners; they absorb knowledge from their own students. He became a very good listener. We would debate all the time, but he was a good listener. He said, "Do you have a cultural perspective that I don't? You have a psychology background," because my minor was social psychology, my major was economics, and I'm applying it to marketing. So we became very good partners in balancing economic perspectives versus non-economic perspectives.

The fundamental message was that consumers don't make choices; they reduce choices. Think about economics: the trade-off between what's positive and what's negative, the money sacrifice you make – a typical managerial or economic perspective, the "rational economic man". Reducing choices requires a learning theory, a totally different theory. So we anchored to learning theory, and through learning and experience, you reduce the choices.

We came out with three phases of learning. The first time you are buying anything, it's extensive problem-solving. You don't even know what criteria to use to evaluate a brand or a product, or the selection of the brands themselves.

But with one-time learning and reinforcement, you reduce the choice from extensive problem-solving to limited problem-solving, and then ultimately routinized response behavior.

John wanted to call it "habit," which is the right word, actually. I said, "No, don't do it, because 'habit' was criticized at that time." I said, "You will get into the trap of negative criticism because of the word you're using." So we called it "routinized response behavior," but habit is ultimately what we ended up doing.

Andrew: That seems very academic – to take a simple word like "habit" and turn it into "routinized response behavior" so it's harder for lay people like me to understand.

Jag Sheth: The second thing we added: I said, "There's a point of learning where you get satiated." I was studying psychology – novelty-seeking, variety-seeking. Dan Berlyne is a giant of the University of Toronto. So I borrowed his idea, and I told John that there is a psychology of simplification, to habit and learning, but then afterward, you have a psychology of complication from habit.

That you have been using the same toothpaste, using the same shampoo, so you say, "I'll search for new brands, new experiences." I created a psychology of complication, which means don't take loyalty for granted. People may shift because they're just bored, satiated, looking for a change of pace. "We drink coffee; let me drink tea once in a while." It's a cyclical time.

The Howard-Sheth Model of Consumer Behavior

Andrew: So what exactly was the conventional wisdom at the time you wrote this paper? You mentioned the idea of people reducing choices versus making choices. Was that the primary new contribution you made with this paper?

Jag Sheth: One was clearly the economic trade-offs between what you are getting and what you are paying. But the second thing was that each decision a consumer made was ad hoc. We make it again and again – repeated consumable products, grocery products. We go and buy every week – milk is one of them, meat is another one, vegetables are there, shampoo is there. So economics never thought about repeated purchase behavior, which means there's a previous choice which has a huge influence in guiding the next time. Virtually, the previous choice will be the most predictive way of forecasting what choice you will make today. We call it consumer data mining, consumer insights. So in a Bayesian approach in statistics, conditional probability would be what you purchased last is what you will purchase again.

Andrew: This has become known as the Howard-Sheth Model of Consumer Behavior. What was the reaction from businesses and marketing departments at the time? Did this have an impact on how companies performed their market research and marketed their products?

Jag Sheth: What happened is that for the book that we were writing, he was able to get great publicity, which began to influence companies. At that time, there were several industry leaders, mostly from consumer packaged goods, who came out with the idea that we should take a consumer perspective, not a marketer perspective – from a product to a customer. Since this is repeated purchase, there was interesting panel data – longitudinal panels. And one large corporation at that time was called Market Research Corporation of America (MRCA). General Electric then started their own consumer durables panel, with a frequency more than every week; it's about three months, six months – dishwashers. So the market began to shift to having panel data. So that was a key change.

Marketing Theory: 12 Schools of Thought

Andrew: The Theory of Buyer Behavior was published in 1969. I want to flash forward nearly 20 years to your book Marketing Theory: Evolution and Evaluation. And in this book, you take a look at marketing history, and you identify 12 schools of marketing, buyer behavior being one of these 12 schools. What inspired you to take on this project?

Jag Sheth: It was again by accident. At the University of Illinois, my department head was Kenneth L. He was a brilliant guy. He taught a marketing theory Ph.D. seminar, and unfortunately, he died suddenly. I was on vacation, and I got this call in December saying that Ken is gone. So they said, "Can you come back sooner than what you are planning to?" So I came back immediately.

So I had to teach marketing theory. I like theory. I loved Robert Bartels' writings – a brilliant writer about the history of marketing thought, and I really enjoyed that. So given that interest, I said the best way to learn is to teach. So I designed this evolution…

Andrew: So you designed this evolution of marketing theory, and it's a lens of viewing marketing history, which is what this podcast is all about. So I'm curious if there were any misconceptions of marketing history, or if there were parts of marketing history that seemed overlooked or underrated as you were writing your book?

Jag Sheth: Three different areas are overlooked. The classical literature – many people did not even know that marketing began in the '50s with the managerial school, not realizing there were world-class thinkers before, mostly coming from either agricultural areas because marketing began in agricultural marketing, selling commodities. So going back, that literature was ignored by scholars and practitioners. It was a lot the functional school. Eventually, Michael Porter, through the value chain that he created, became more popular. So the old literature was missing. That was one, in practice. And there was also a pricing literature on psychological pricing – at what price, 79 cents versus 99 cents, makes a difference. Elasticity – very practical.

The second thing that was missing, surprisingly, was taking multiple perspectives. In other words, there's a dealer perspective, there's an economic perspective, there may be a sociological perspective, an anthropological perspective, from the same entity called "consumer" or "customer." That was missing in the literature quite a lot.

The literature had, in general, literature of industrial marketing, but industrial marketing was becoming more and more account management. Relationship marketing came later on. So, early history about how do you manage your sales organization in a B2B or industrial marketing area? There are journals for that one, but they were not in the mainstream. So that literature was generally not known.

But most important, the conspicuous lack of understanding was the rise of consumerism. President Kennedy actually had a Bill of Rights for consumers. I was advocating consumerism, organizing social marketing as an area.

Philip Kotler and Sid Levy began to write about the generic concept of marketing – marketing can equally be important for nonprofit organizations, not just for-profit organizations. That began to change as a new area came in. So those are the areas that were neglected in the mainstream literature.

The Rise of the Consumer Movement

Andrew: When it comes to the consumer movement, you mentioned President Kennedy's Consumer Bill of Rights, and earlier you mentioned Ralph Nader and his book Unsafe at Any Speed. So it really seems like the consumer movement had its renaissance in the 1960s. I'm wondering why the 1960s? Why didn't this start earlier? I'm thinking of figures like Upton Sinclair and his book The Jungle, and I think that's from back in the 1920s (Note - Andrew was wrong here. The Jungle was published in 1906). So it seems it took several decades for the consumer movement to emerge.

Jag Sheth: Very true. If you look at the movement toward consumerism, it goes back to the days of mass production, the way you treated your employees, who had no life. Agriculture is the hardest work, but factory work is supposed to be more humanistic. So that whole area – a reaction by critics or thought leaders saying, "This is not acceptable. You can't treat humans like animals" – that literature began.

Similarly, it happened with the consumer side. "We are offering products which are not qualified; adulteration is possible. We don't care about what happens to the consumer in the process; they're exploiting them." So that literature was coming back. By Kennedy, for example, J.K. Galbraith was a very influential economist at Harvard that President Kennedy relied on. He began to write in this area. So even the economists were questioning the traditional price theory, marginal utility theory, for example. Alfred Marshall was a giant writer at one time for consumer surplus in economics. Marshall was a deep person; we all studied Marshall. The other side was more macro – Keynes' foundational books in economics.

Some of that thinking of consumer surplus began to spill over into the marketing area. And that all led to, basically, talking about: the consumer is defenseless, the marketer is so powerful, there's an asymmetry of power. How can you create consumer protection agencies, law that protects the consumer? Which led to – truth in lending, for example, came out. Truth in advertising came out. Eventually, legislation…you had the FCC, in communication, but the FTC became a very, very important agency.

Four New Schools of Marketing Thought

Andrew: You published this first edition in 1989, and that version had 12 schools of marketing thought. And you just recently published the second edition, and you added four new schools of marketing thought that have emerged over the last 35 years or so. Can you share more about these new schools or speak more broadly about the changes in marketing since 1989?

Jag Sheth: One of the key new schools that came in, with its own perspective, is a focus on services industries. Everything was organized around manufactured products – its branding, its distribution, warehousing. And lots of consumer services, because America was becoming a service-driven economy. And that led to a whole start of services marketing being different than product marketing.

For example, services are perishable. Services cannot be stored. Services are co-produced between the consumer and the provider. In healthcare, the patient has to cooperate, for example. In airlines, the passenger has to cooperate along with the flight attendants. So experiential marketing came eventually as the dominant force that we are experiencing now.

Services marketing became a very large body of knowledge, and there was a journal that came out, Journal of Service Research, because traditional journals didn't think about services. It really took off when telecommunications became an interesting industry, from a regulated monopoly to a competitive one, especially wireless technology. So services marketing became one major school of thought, with hundreds of articles. So that's what we identified as one.

Our second one had to do with relationship marketing, which I led. Back in that '89 book, I mentioned that what's more important in advanced economies is retention of customers. 90% of the consumers are the same as who were there yesterday. A new customer is... so market the acquisition. It's... consumers, you convert them into consumers from unbranded consumption or home-making things. So I said, in the advanced economies, we need to focus on relationship more – key account management, or in consumer banking, having a relationship manager. That was a second school of thought.

The third school of thought that came in in the '90s was actually marketing strategy, or strategic marketing, as they call it. Michael Porter was coming in a big way. His Competitive Strategy book in 1984 launched a whole new discipline altogether.

All of that led to strategic marketing, but marketing is an asset; brand is an asset. There's a value of the asset. Think about the future; do the SWOT analysis – strengths, weaknesses, opportunities, threats. For example, the Boston Consulting Group framework of cash cows, dogs, became very popular in marketing, because each brand could be positioned into one of those categories. So there's a whole new literature that arose around strategic marketing or marketing strategy. So we have a new chapter on that.

And the last one is international marketing. International marketing was always there, but not in an organized way. In the '90s, when trade became the driver of economic growth, not GDP… so we abolished the GATT agreement – General Agreement on Tariffs and Trade – we instead created a WTO. Trade blocs and groups like NAFTA were created, where the EU… the EU started out with common market countries. ASEAN block was created. So trade became the dominant factor, and because of that, international marketing took a new approach to, basically, international business. So we have a separate chapter on international marketing.

Learn more about Dr. Jagdish Sheth

Andrew: Wrapping up, I see on your virtual background you have a bookshelf that's full of your books. For listeners or viewers who have not read your work yet, where would you point them? What is the best way for listeners to find out more about you and your work?

Jag Sheth: The best place is to go to my own website, jagdishsheth.com. Most of my articles and books are listed there, and I update it pretty regularly. This has been my bumper year in terms of publications. Several books have come together.

One that just came out is Purpose-Driven Pricing. How Can You Use Pricing to Serve Societal Problems While Making Money? Pricing is the most powerful weapon; very immediately, I can do it. I can manipulate or change it instantly if I want – dynamic pricing. So I have a colleague, a young colleague, she's a pricing expert, and we worked together on this book – about three years to find case studies, interview executives. It has resonated very well with the nonprofit sector – their pricing mechanism, subsidizing, supporting – corporations, and also policymakers. So that just came out.

My second book that came out is very different. It is India's Road to Transformation. In India, what matters is leadership. People talk about resource advantages, location advantages, historically, about the rise of a nation. This is what matters is leadership – managing a country as an enterprise. So we did transformative leaders historically, about all of them, from Genghis Khan to Kemal Atatürk, Also FDR, Lincoln. We found a common denominator: it takes 15 years of political continuity, a minimum requirement, to bring about a transformative change. It takes the same political leadership – not a leader, necessarily, like a party. And then you need a leader who knows how to execute as well as imagine. They have to be both a visionary, aspiring people about the future of the nation – positive view, ambition, aspiration – but executing on that. And then we compared, in India, three leaders historically among 14 prime ministers: Jawaharlal Nehru, the first Prime Minister; his daughter, Indira Gandhi, in the '70s; and now, Narendra Modi. And Narendra Modi scores very high on several dimensions. That's the second book.

The third book that is coming out – it's a book that I'm writing with Can (John) Uslay called Navigating Brand Activism. We had a book out called Firms of Endearment with Raj Sisodia, which led to conscious capitalism, where John Mackey, from Whole Foods, embraced the idea. His company said, "I'll do the same thing." So that conscious capitalism… same idea we have taken to: Brands can serve society, but get active. But there is a double-edged sword. So we have stories after stories about how brand activism actually destroyed the brand because it was managed so badly, or how it actually enhanced the brand. Called Navigating Brand Activism.

Andrew: Dr. Sheth, thank you so much for joining me for this conversation. I've really enjoyed it a lot, and I appreciate you sharing your wisdom, your insights, and your stories with me today.

Jag: Thank you.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 6

This week we are joined by Shelley Spector, founder and director of the Museum of Public Relations. Shelley's journey into PR history began with an unlikely friendship with the legendary Edward Bernays, the "father of public relations" and nephew of Sigmund Freud.

In our conversation, Shelley shares personal stories of Bernays in his later years, and we use the Museum of Public Relations as a lens to explore PR's early history.

I'm releasing this episode right after last week’s conversation with Larry Tye on the historic life of Eddie Bernays. If you haven't heard that one yet, I suggest listening to that one first, as it will give you richer context for Shelley Spector's personal stories about Eddie Bernays later in his life.

But this conversation isn't just about Bernays. Shelley also highlights the often-overlooked contributions of women to PR, such as Doris Fleischman, Barbara Hunter, Inez Kaiser, and more.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

Read the interview transcript, enhanced with links, images, and videos:

Note: This text is from a recorded conversation transcribed with AI. I have read it to check for mistakes, but it is possible that there are errors that I missed.

Andrew Mitrak: Shelley Spector, thanks so much for joining me.

Shelley Spector: Thank you for having me, Andrew.

Edward Bernays and Founding the Museum of Public Relations

Andrew: To start, what inspired you to found a museum dedicated to public relations?

Shelley: It's kind of a long story, but it grew out of our friendship with Eddie Bernays. He lived until 103 and a half, in a mansion outside of Boston, a mile from Harvard. One day, I happened to ask, "What are you going to do with all this stuff when you need to leave?"

He immediately said, "I want to turn it into a museum. I want to turn my house into a museum." He was picturing what Freud's family had done in London. When Freud passed away, his children made his entire house into a Freud Museum. We've been there, and it's wonderful.

I said to Eddie, "I understand where you're coming from, but, no offense, PR is not recognized as broadly as psychology is. Your uncle Freud was a little more famous than you were." He looked really sad when I said this. So I said, "How about we build a museum of public relations in New York?"

He said, "Will you?" And I said, "Yes. It's not going to be an Eddie Bernays Museum; it will be a museum for the whole field."

When Eddie died, the family called us. We came up and walked around from room to room to select those items and papers that we thought were important to have in the museum. We loaded up the truck and drove home, without having a home for the museum yet.

Andrew: We released an episode where I interviewed Larry Tye about his book, The Father of Spin, which was all about Eddie Bernays. For listeners who haven't heard that episode yet, he's just this fascinating person who had all this impact on the world. It sounds like he inspired your Museum. The reason we have bacon for breakfast, bookshelves built into homes, UPS trucks being painted brown, and calling multiple sclerosis "MS"—all these things, including your museum, originate from Eddie Bernays' brain.

You mentioned his being inspired by his uncle, Sigmund Freud. He had a very interesting relationship with Freud, and he was also Freud's nephew in two ways: his mother was Freud's sister, and his father's sister was Freud's wife.

Shelley: Exactly.

Andrew: Can you share more about what inspired him about Freud's museum? Had he visited it before?

Shelley: No, he never went to the museum because he only visited with Freud while Freud was alive. The Freud Museum was built in 1938, after Freud had died. But while Eddie was still a child, his parents would go on vacation in the Austrian Alps. We have pictures of Eddie at age nine with Freud, who had a brown beard, which you don't really get to see.

You can imagine growing up in a household where all they're talking about is Freud and his crazy theories of psychoanalysis. Psychoanalysis wasn't yet adopted in the US. Eddie and Freud were very close; they wrote letters back and forth. Those letters are now preserved at the Library of Congress.

At some point in the 20s, after World War I, Freud wrote to Eddie, "I need a way to make some money. I don't have any money" because of the hyperinflation. He wanted Eddie to perhaps send him some money. Eddie did manage to send him cigars from Cuba, brought over by another PR pioneer named Carl Byoir.

But Eddie proposed to Freud, "Why don't I get your book, Introductory Lectures on Psycho-Analysis, translated? And have you come over here? We'll do a media tour." It's a classic response from a PR person. It was very much Eddie's work that got Freud to be known as much as he is known now.

So, he had the book translated by a disciple of Freud named A.A. Brill. The book was very popular. Eddie wanted Freud to write byline articles that Eddie would help him write for the popular press, but Freud was saying, "Americans are not going to get it. They're not going to get psychoanalysis. We're talking to an audience of people that are really not that smart and cultured." He really looked down on the US.

Eddie could not get him to come here and sit for interviews with the Times or with Life magazine or Fortune. However, the ideas, because they were so big and relevant at the time, those ideas of Freud spread. And behind the scenes, you have the nephew, always behind the scenes.

Befriending Eddie Bernays: A Personal Connection to PR's Past

Andrew: Eddie is this fascinating character, not just in PR, but in history in general, in the 20th century. You met him and knew him before you founded the museum. What was it like first meeting him? What was his personality? Any stories or anecdotes about meeting Eddie Bernays?

Shelley: You have to remember that during that time—this was the mid-80s—there were trade publications in PR that frequently covered Eddie and his gallivanting around the city with various women. This is how everybody got to know who he was, besides knowing his campaigns. On one side, you had all these campaigns that were being taught in the schools, and on the other side, you had this 90-something-year-old man who was said to be quite an adventurer with women in Cambridge.

The series of events were that I was asked to give a seminar at the Doral Hotel, where there were a bunch of PR seminars being given on that day. One of them, right next door, was Eddie's. He had been giving these seminars called "Two Days with Edward L. Bernays."

After the first day of the seminar, I went, stood outside his class, and I introduced myself. One of the first questions he asked me was, "Do you want to have dinner at the Waldorf?"

Of course, I would love to have dinner, but I also don't want to wind up in the trade publication, being seen by paparazzi.

Andrew: Just to remind, Eddie at this point is probably in his 90s, right?

Shelley: He's 94.

Andrew: 94, wow. Okay.

Shelley: And so I said, "Can I call somebody to join us for dinner?" And he said, "By all means."

The previous Sunday, I was on a bike trip, and I met this guy that I kind of liked. I had his phone number, and I called him from a pay phone. The fellow that I called was a graphic designer, knew nothing about Bernays. I said, "But he's very interesting. He's very historical. He's 94. He's worked with every president of the century. Please come to dinner at the Waldorf."

So he was intrigued. Well, that guy turned out to be my husband and business partner all these years, Barry. Barry just could not—his mouth was agape while listening to Eddie talking about working with Calvin Coolidge's reelection campaign and bringing Al Jolson down to the White House. Stuff that made somebody who didn't know him question, "Is this guy senile?"

Barry and I said, "No, all this stuff is true." And so Barry then said to me, "If this stuff is true, then we've got to go up to his house and do an oral history." So I said, "Yes."

So it all worked out. We went that April to his house and started doing these oral histories. He had never seen a video camera before. We were using VHS—this is antique equipment; it was brand new, but look at it now—and it was really not anything that was sophisticated compared to what we have now.

But it was fascinating. I remember that conversation was about Eddie's role in World War I with the Committee on Public Information and George Creel, and going over and working on the press release for the Treaty of Versailles. You're sitting next to somebody who's talking about something that happened...He wasn't just PR; he was a part of history.

He was a part of history, and he was also an influencer in historical events.

Andrew: Seeing footage of Eddie from this time period is strange because there's a clip of him on the David Letterman show from the mid-80s around this time, and it is this funny, uncanny feeling of almost seeing a time traveler or some sort of anachronism, telling stories from growing up with Freud and his family in pre-World War I, doing PR in World War I, and here he is talking to Letterman, who's still a person who does interviews today. It's just wild, his longevity and how early he got a start in his career and his impact.

I also didn't realize how intertwined your life was with Eddie Bernays. I'd seen, based on some research, that he was a figure that influenced the museum, but not only your marriage and lifelong partner, your dedication to the museum, your career in public relations—all influenced by Eddie Bernays. That's really remarkable.

Shelley: It was very fateful. We found him to be absolutely charming and brilliant. And you're right, it was time travel. To him, he's talking about events in the early 20th century, the teens, pre-World War I and post, and the whole period in the 20s, and he's talking about it like it was yesterday. It was like you and I just talking about maybe the financial crisis of 2008. The memory was spectacular, and he was so charming in the way he told these stories.

So Barry and I ended up going up there three, four times a year until his last birthday at 103. Barry and I always had him sitting in front of the camera or just having the camera roll. Some of the footage that you see in documentaries is from Eddie just sitting at the table with food, not planned with questions. We would just plant the camera on a tripod and capture whatever we would capture.

Andrew: He seems like somebody who kind of had his greatest hits and had his stories and told them so much, he really had them down, just every PR professional should.

Inside the Museum of Public Relations

Now, we could spend hours just talking about Eddie Bernays, but I want to go back to the museum and cover more of it, use that as a lens to cover more of PR history. Just to ground listeners, can you describe what the Museum of Public Relations is in detail? Is it a building they can visit? Is it an online catalog? What exactly is the museum?

Shelley: The museum, from its first day, was online. In fact, it was noted by USA Today to be the first museum to be online, which we had no idea. We just put it online because we knew that people would not necessarily come to see it, but the material we had was so important that we put it online in the 90s.

Andrew: In '97?

Shelley: Yes. So it's pretty old.

So the museum today is in a large space at the PRSA, which is the Public Relations Society of America. They invited us in because we were outgrowing the space we had been in. At some point, we were at Baruch College for four years, and then we had to leave because of renovations they were doing. And so we were at various offices. Then we moved to, which we hope is our forever home, at 120 Wall Street.

We have frequent visits from students, classes, educators, scholars. And it's amazing. At the beginning, most of the people who would contact us would be people who I've heard of or who I know. And now the people really are from all over the world, asking questions about the past and some of the early pioneers.

Andrew: Listeners might also be thinking, what actually is in a museum of public relations? Is it just a big wall of press releases? I know it's not that. (Laughs) Can you describe what makes up the museum and some of your favorite artifacts?

Shelley: When I think about the walls we have and what we've hung up, we only hung up one press release, but it was a very historic press release. It was written in 1952 by Harold Burson about the beginning of the firm Burson-Marsteller, which became the largest firm in the world. Harold Burson himself was a noted pioneer who started, several others, after World War II. They got trained in news writing, etc., during World War II, came out, started working in PR, and then eventually built their own agencies.

So we do have this press release that was written by Harold, and we have the carbon copy of it, which we think is significant because nobody knows what "cc" means anymore. But this was the original press release that Harold typed himself.

Andrew: And just for listeners, also for those who don't know, "carbon copy"—when you see "CC" on an email today, it's "carbon copy." And if I understand, you type something on a sheet of paper, there'd be a sheet behind it, and that would imprint with carbon, and that would be kind of the backup or the additional one, and that would be the “carbon copy” of it, which, 70-plus years later, we still use today in our emails every day. And that's what it is, right?

Shelley: I'm glad you explained that because kids today have no idea. I do ask them about, you know, what is a CC? What is an inbox, for instance?

And so I'll segue over to something else. They have no idea what an inbox is—a physical inbox. They only know the inbox on their email. But we have Eddie's inbox from when he died, and we have in there everything that he had. Because when you used to look at people's physical inboxes, it was papers that were important to them. And he kept the papers that were important to him in this inbox, on his desk. We've since put plastic around them, but I think it's fascinating to look at what he had in there. He had in there articles about himself, yes, but he had a lot of articles about Freud, and he had a lot of articles written about and written by his wife, Doris.

Andrew: It's so fascinating how, when computers developed, they sort of used the analogies of the past, of the physical world. And I think there's a term for it in computer graphic design called skeuomorphism, where you take something from the real world and you put it in the digital... If you see, on my desktop, I still have a trash can, and it looks like a wastebasket. And the "save" might look like a floppy disk, even though floppy disks haven't been used in 30 years or so. And you kind of take things from the past, and you have them preserved in your museum, that are now still part of the digital world. It's just we think about them so differently.

Shelley: You're absolutely right. When kids come to the museum, I go through things —I don't remember the word you just said...

Andrew: Skeuomorphism. (Laughs)

Shelley: ...and show them things that they had no idea existed, Edison's original phonograph, the cylinder phonograph. We have that there. Music didn't always come from a computer; it wasn't always MP3. Sometimes it was a scratchy cylinder.

Ivy Lee: The Other “Father of Public Relations”

Andrew: We've talked about Eddie Bernays. One of the other founding figures of public relations is Ivy Lee. Can you share a little bit about his impact? I'm curious if the museum has any artifacts from Ivy Lee.

Shelley: We have plenty. We have also republished his original official biography from 1966. So we have a biography of Ivy Lee.

He's a fascinating character. Both he and Bernays are noted as fathers of PR, and there are some countries that look at Ivy Lee and not Bernays; there are some countries that look at Bernays and not Ivy Lee.

It was fascinating to study Ivy. He worked with the Rockefellers, and he also represented railroads. He eventually represented the introduction of the IRT subway. Now, imagine, at the beginning, subways were competitive. So one of the things that he did, which was masterful—remember, this is the time of the flu and tuberculosis—so he would put up customer posters where you see advertisements now: "Don't cough too closely," "Don't sit too closely," "Wear a mask." It was the first customer communications of its kind.

But more importantly, he was counseling the Pennsylvania Railroad. One day, they had a derailment around Atlantic City. You can see pictures of this, with cars literally hanging off of this bridge, and people were jumping out of the windows.

So the CEO of Penn Railroad said to Ivy Lee, "You've got to keep this quiet." Because that's what was done during the day, during the Gilded Age. Vanderbilt said, "The public means nothing," right? "The public be damned" is what Vanderbilt said. And the CEOs of the time would disregard what the public would think. "The best thing is, they're too dumb to understand it anyway. Don't let them know."

Ivy Lee said, "You cannot do that. The press is going to find out about it eventually. If you don't talk to them, they're going to write a very negative story." So he wrote the first—what was not yet called a press release—it was called a "Statement from the Road," about what had just happened.

He wanted to get the company's position out there. He wanted to look open. That was a very important concept back then; people just hid the news. But Ivy Lee said the best way for you to come off looking trustworthy, as a company that deals with your customers all the time, is to take preemptive action. And this became a founding principle of crisis communications.

Andrew: There are so many firsts to unpack in that story: the first example of crisis communications, the first press release itself. Folks who aren't intimately familiar with PR might think of PR as, "They're just spinning things on behalf of companies. They're just trying to tell the best version of the story." And, of course, to some extent, you have to represent your clients in the best way possible. But also, this is a founding example of, "No, compared to what was before, this is actually a lot better." Before, they'd sweep it under the rug, try to hide an awful tragedy with a train derailment, and instead, they're bringing it to light. They're kind of understanding that this is a new age in communication, and you need to not sweep it under the rug but actually tell people about it.

Shelley: Exactly. You've got to preempt the reporter. So the reporters are taking the information from your release, and they're going and interviewing the CEOs. And Ivy probably trained them beforehand to be honest and forthcoming. So it was a whole different way of looking at the relationship of what was then known as a publicist with the press.

Doris Fleischman Bernays: The Unsung Partner in PR's Early Evolution

Andrew: I want to move on to somebody you brought up briefly, which is Doris Fleischman Bernays. You mentioned that when you looked at Eddie's inbox, he had letters and communications from Doris, who had passed away 15 years or so before Eddie. So he preserved these for years. And Doris was not just Eddie's wife; she was also a really important contributor to PR in her own right. I understand she was sort of more behind the scenes than Eddie, but they were equal partners. Can you describe more about who Doris was and what her contributions to PR were?

Shelley: I'm very sorry I never got to meet Doris. And I think that PR history would be very different if Doris were able to be more visible at the time. She was not the first professional public relations person who was a woman—it was actually a woman two years before, who we only just discovered; her name was Zelda Popkin.

And there were probably many others in the teens. But she did some very sophisticated work and writing. She was a tremendously good writer. She had ideas, but back then, women were not allowed to share those ideas. If Eddie had clients in the room, the only woman allowed in that meeting would be a stenographer.

Doris stayed away from the main stage; she was behind the scenes. Now, a lot of people have asked me, did she have any impact on his big campaigns? I don't know. I have asked the family about this, and they say no. I've asked Bernays about this, but I think that for two of the campaigns, he had to have been influenced by her, even if it wasn't so obvious.

So Doris was part of the Lucy Stone Society, which are a group of feminists of the time, suffragettes, former suffragettes, who believed that women should be independent and use their maiden names. Which is something that is a legendary story—that she insisted on keeping her maiden name on her passport.

And on the first night after they got married, on their honeymoon, which started out at the Waldorf, here she is signing in as Doris Fleischman, with a fellow named Edward Bernays, and it doesn't look very kosher to these people in 1919.

Andrew: And you mentioned her passport—she was the first married woman to have her maiden name on her passport in the US, right?

Shelley: That’s right.

Andrew: It's a lot of firsts in this group.

Shelley: And Eddie instinctively knew that that would make news. As much as Doris herself really wanted to do this, Eddie also knew that that would be news-making. But he wouldn't send out a press release about it; he would just let the press find out themselves.

So that the press feels that they were uncovering a piece of news.

Andrew: And I think you were stating that there were certain major campaigns that she may have influenced behind the scenes. And, of course, there's the Torches of Freedom campaign.

Shelley: That's the one.

Andrew: That's the one that very prominently used women and turned lighting a cigarette into a statement about women's empowerment. Do you think she was sort of behind the scenes in that one, potentially?

Shelley: Yes, I do. I have felt, even if she didn't work on the campaign directly, just who she was—she was a liberated woman. She smoked very heavily. And I guess when she smoked, she felt liberated. Now, at the time, it wasn't about making more women into smokers. Women were not allowed to smoke in certain theaters and restaurants, concert halls, all over the country. That's a crazy thing, that there would be signs and posters inside restaurants: "Women cannot smoke here." That's nuts.

And so it was encroaching on women's freedom. And so that's why there was an appetite at that time for the Torches of Freedom, part of the Easter Parade. And it wasn't just these women in a separate parade; it was part of the Easter Parade, where everybody's already dressed up. And there's some marvelous pictures of debutantes and these men, these high-class men wearing these top hats, walking in the Easter Parade.

But the brilliance of Eddie was that, again, he didn't announce it. He didn't send out a media alert and say, "If you get to the parade in time, you're going to see these women with cigarettes out in the open." That didn't happen. He knew that there would be photographers there shooting the Easter Parade, but when they started seeing women smoking out in the open, in public, that made news. But nobody knew who was behind it.

Andrew: So he was kind of a magician in the background.

Shelley: Absolutely.

Andrew: That sense of showmanship and how to create a spectacle and a scene. And you suspect that... Doris was an equal partner at his firm, she was a smoker herself, they used the guise of women's liberation to break barriers, let them smoke more, and, of course, if they can smoke in more places, they can smoke more products for their client, Lucky Strike or American Tobacco. So it all kind of came together that way.

Researching Doris, I saw she edited and published a book in 1928 called An Outline of Careers for Women: A Practical Guide to Achievement. And this, in itself, just that she edited and published a book all about women's careers, says a lot about her. And in it... It's all available online at this point; I think it must be in the public domain or something. And in it, she wrote a chapter herself on public relations. And I want to just quote the introduction:

"The profession of counsel on public relations is so new that all who are engaged in it, men as well as women, are pioneers. No traditions have grown against women's participation in it, and women will share the responsibility of developing and shaping this new profession. It is so new that its ultimate possibilities for women lie in the future."

I just think this is so prescient, that now PR today, I think, has—depending on what you read—it's 65 or 75% women who are in it and who lead it. Do you have a reaction to this quote? What's your take on it?

Shelley: It's very prescient. I wish that Doris was alive in the 80s, 90s, to see women rising to the top of agencies. Because back then, she's talking about women who are doing the work of PR. She's not talking about women who are leaders of PR agencies. In her mind, she could not imagine how big agencies would be one day and how women would have a role in those agencies, and running those agencies, being CEOs. She could not imagine this because it was unheard of, just unheard of.

But she was offering up her own experience as a public relations counselor. Now, one of the important things here is that it was Bernays and his wife who came up with the phrase "counsel on public relations." Before then, it was just "publicity."

When Ivy Lee would just call it "publicity"—even though he could be talking about crisis management—"publicity" did not become a kind of low-class word until much later. But "counsel on public relations" sounded like a lawyer.

Andrew: Exactly.

Shelley: So, but she was pretty much saying, women can and should be part of this growing profession. But back then, there were no professional women. And the only professional woman that I know of during that very time, in the 20s, was a woman named Belle Moskowitz, who was a political consultant to Al Smith when he was running for presidency. And you can see in some of the old documentaries of Al Smith, there is Belle, a rather big woman with a hat and a feather in it.

But yeah, it's really something that she would be so prescient, and she would be such a fan of women. And she wrote a book—I don't know if you've researched this—called A Wife Is Many Women, which says it all. A wife is a mother, a wife entertains in the home, a wife is a wife to her husband. We play so many roles. And this all came out, I think, in the 80s, when women—they were called "super moms"— when there was a front page of Newsweek with a working mom carrying a briefcase on one hand, in her business suit, and her baby on the other hand. That's what Doris was envisioning.

Of course, Doris had the means to hire a lot of help raising her children. Most people don't. And we still have to juggle, as women, we still have to juggle, but we're doing it.

Barbara Hunter and the Fight for Female Leadership in PR

Andrew: So Doris Fleischman was the first woman to be a 50/50 partner at a firm, and I want to also ask you about Barbara Hunter, the first woman to own and lead a major PR firm. And before I ask, I also want to acknowledge an unfortunate coincidence in timing. We're recording this in December of 2024, and just yesterday, we learned the sad news that Barbara Hunter passed away at the age of 97. And in her obituary, the last line reads,

"Donations and tributes in Mrs. Hunter's name could be made to the PRSA Foundation or to the Museum of Public Relations."

First, amazing that Barbara Hunter had such a close relationship with you and the Museum of Public Relations; clearly, it meant a lot to her. And if you're able to, just share who Barbara was, what impact she had on the industry, and what your relationship was personally with Barbara Hunter.

Shelley: Well, yes, I'll take the last question first. She was very active. She sold the agency, Hunter PR, which she created after working at another agency called Dudley-Anderson-Yutzy, and she had sold that off and created Hunter PR.

So the founder of Hunter PR—or the person she passed the torch to—is named Grace Leong, current CEO, marvelous CEO. And we had worked with Grace for years—"Let's get Barbara on the panel," because... There were a few women who are of an age where, you know, you want to get them while they're still very sharp. Barbara continued to be sharp until the very last day. Amazing.

But she would tell stories about what it was like to work in a very anti-feminist world. The business world was... If you look at Mad Men, that's what the world was.

Even though Mad Men was set in an advertising agency, it's the same kind of interactions between men and women, and how men saw women, and what was allowed in the office, right? So despite all that, Barbara Hunter and her sister, Jean Schoonover, managed to work with the respect of men and actually bought an agency, renamed it Hunter PR, and managed a thriving business—thriving. It's amazing.

Andrew: Yeah. Well, you mentioned how Barbara was sharp right up to the end. I listened to an interview that must have been recorded within the last year or so, where she tells this story. And she tells the story of how she and her sister bought the PR firm that was then known as D-A-Y, right? And the amount of sexism they were up against was just shocking to listen to. Of course, you've seen it portrayed in things Mad Men, but hearing it firsthand from somebody...

And she said that when she bought this firm that she had been working at, and she purchased it, the men who worked at the firm, they all left. They didn't want to work for a woman. They took their clients with them. And then sometimes they'd get meetings with clients, but they just wanted to listen to them almost as a novelty, where they just said, " We just wanted to say we listened to the first women-led PR firm pitch." And they didn't really give them serious consideration, which just seems so rude and a waste of time.

What she was up against then, it's kind of gross to hear about. It makes you sad. But then seeing what she kind of overcame and what she accomplished and what she built it into is so remarkable.

Shelley: I think we have people like Barbara to thank for the industry allowing women to do the same job as men and for allowing them to rise to the heights, as far as they can go. As you mentioned, it transformed sometime in the 80s and 90s to a dominantly woman field. But, unfortunately, the top of the industry are all men, still—the CEOs of the holding companies who have bought a lot of the agencies.

But Barbara was out there. She just didn't give a damn. If she had the best idea, that's the... If you look at all her ideas, they came up from her brain. During agency selections for new clients, you'd have to come up with a unique idea. And it wasn't good if the client prospect would hear an idea and then go to another agency. I'm sure that did happen. But with her, they came up with brilliant ideas, mostly about food. She introduced the idea of food product PR.

And some of those products... Tabasco was with the agency—currently with the agency. And the last time I saw Barbara, on Founders Day, I got a whole souvenir bag of different kinds of Tabasco, which I still have. But yeah, it forced them to come up with unusual ideas and not just the standard way of doing things. I think it made women work harder and stand out and realize the value of big ideas. When I came into the business, there were no women professionals. I didn't know how to even find them.

Andrew: Wow.

Shelley: Because we didn't have an internet back then. So I'd see an occasional woman at an industry conference or a lunch, but usually, I was the only woman in the room. Like Peggy…

Andrew: Like Peggy in Mad Men. Right.

Did Barbara Hunter... Did she run her firm differently than other firms of the day? Did she lean into the fact that it was woman-led and as a sort of competitive advantage, or attracting brands that marketed to women as their clients? What was her approach to that?

Shelley: Well, considering that she was handling food PR, she knew the consumer much better than the men did.

And that was really what set her apart. That was her USP. She was... It wasn't like she was running oil... She was handling oil and gas companies or electric utilities or steamship firms. She really knew the consumer, because she was a woman herself. She was a mother. She ran a house, so she got it. And it was very smart for them to pick this category of client—of food—that they knew much better than the men did. It wasn't until years later that women started handling things that were not fashion and all this kind of stuff, which I personally hated, which is why I went into a niche part of PR, in financial PR, because there weren't many women doing it. And that, to me, was a very serious subfield of public relations—the financial services industry.

Inez Kaiser: Breaking Barriers in Public Relations

Andrew: There are a lot of women to cover in the history of PR that are leaders, but one that I wanted to specifically highlight was Inez Kaiser. Can you share the story of Inez Kaiser with listeners?

Shelley: Let me, just take a step back, because I think this is an interesting story. We had, as I mentioned before, we had the whole museum set up on the library floor of Baruch College and hosted a lot of student classes. And so one of the classes comes in one day, and they're a diverse class, and one of the young women was walking around and looking at the exhibits and shaking her head. And usually, people like this stuff; I didn't understand why she didn't like it. And she sat down and raised her hand, and she says, "How come no one here looks like me?"

And so this was October of 2016, and I was just dumbstruck because she brought up such an important point, and I didn't know what to tell her exactly then, except that I was going to fix it. And I told her and the whole class... I made a promise to her class and the professor: we were going to change things. So from October to Black History Month, February of 2017, we started researching Black and other people of color and their role in public relations history. So that now, half of the museum is about diverse people in PR history, because that is one way to bring more diverse people into the industry.

So Inez is one of those people. But she was the first woman, as far as we know, the first Black woman to open a PR firm. Now, it wasn't she opened it in New York or LA; she opened it in Kansas City, Kansas, where it was tough to be a woman, and it was tough to be a Black person. But one day, she decides she needs her own office to open up this firm, and none of the landlords of commercial property in downtown Kansas City wanted to rent to her, not only because she was Black, but because she was a woman.

And so she said, "I'll tell you who's going to be interested in this story: ABC, CBS, and NBC. And if you want, I can go give them a call later this afternoon." Next thing she knows, all the brokers are coming in, giving her tours of various offices in downtown. To her, it made no difference if she was a woman or she was Black. "Give me an office."

And this is during the Jim Crow era, 1957. That's what's most spectacular about this story, is that she just didn't care. She just didn't care. But for consumer product companies, she was a great bridge to the newly affluent post-war country, and the affluence also was part of the Black communities around the country. So they took advantage of that. Various consumer brands hired her to find a way to communicate with them, and she did that. She was also a Republican and worked for the Reagan administration as far as promoting the idea of Black people starting up their businesses, and this became part of the Small Business Administration.

So the day I found out about her, somebody had called me, was writing a paper about her, wanted to know if she was still alive. I had no idea; I never heard of her.

So a person in my office decided to Google her and found out that her son, Rick Kaiser, was living—and living in Kansas City. And so she just picked up the phone and called him.

And she says, "How is your mother doing?" And he said, "Mama is doing just great. She's in the next town over, in the assisted living place, and she's 96. And would you like to talk to her?" And we said, "Are you kidding?" And so we have this two-hour phone interview with her that's on our website that, to my knowledge, is the only recording of her telling her life story.

Andrew: Wow, it's amazing that you have that oral history from Inez. It seems like a treasure. I think that that kind of work is exactly what's inspiring me to do this podcast as well... so many marketers don't know the history of marketing. I myself am still just learning, at the beginning of this journey, and I think it's such cool work to capture voices, capture these stories, so they're not lost to history, and that listeners can find them, and that those who are curious can learn about this.

Supporting The Museum of Public Relations

I've just really enjoyed this conversation, Shelley. How can listeners support the museum, follow it online? Where would you point them to?

Shelley: I would say go to PRMuseum.org. There's a donation page there, there's listings of our events that are coming up, or events we've done in the past. We've done 37 events, programs, panels, mostly regarding DEI and history, and there's a lot of videotape up there, and oral histories. And I encourage everybody, whether you're a student or not a student, or whether you're a PR person or not a PR person, it's interesting in history regardless.

Andrew: Yeah, absolutely. Well, I'll post a link to that in the show notes with this podcast. So, Shelley, thanks so much for your time. I really enjoyed the conversation.

Shelley: Thank you, Andrew.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 5

This week, my guest is author Larry Tye, who is best known for his biographies of iconic figures of American history. Tye's book "The Father of Spin" is the definitive biography of Edward L. Bernays, who is often called "The Father of Public Relations."

This excerpt from The Father of Spin provides a glimpse at the historic life of Bernays:

”Edward Bernays almost single-handedly fashioned the craft that has come to be called public relations. Bernays was the man who, more than any other, got women to smoke cigarettes, put bacon and eggs on the breakfast table, Ivory in soap dishes, books in bookshelves, and Calvin Coolidge back in the White House. Although most Americans have never heard of Edward Bernays, he nevertheless had a profound impact on everything from the products they purchased to the places they visited and the foods they ate for breakfast.”

Larry Tye is a New York Times best-selling author who penned biographies of Bobby Kennedy, Joe McCarthy, Satchel Paige, and Superman. His latest book, The Jazzmen: How Duke Ellington, Louis Armstrong, and Count Basie Transformed America, was published in 2024 to great reviews.

Larry joined me for a deep dive into his book, The Father of Spin, which is an excellent biography of Edward Bernays.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

In this conversation, we explore the amazing life of Bernays, including:

* Eddie’s close relationship with his uncle, Sigmund Freud and how psychoanalysis influenced his PR campaigns

* Marketing cigarettes to women under the guise of a feminist movement

* His propaganda campaign against the government of Guatemala on behalf of his client, the United Fruit Company, leading to a military coup backed by the CIA

* And much more!

Read the interview transcript, enhanced with links, images, and videos:

Note: This text is from a recorded conversation transcribed with AI. I have read it to check for mistakes, but it is possible that there are errors that I missed. I’ve also added images and helpful links in the transcript.

Introduction to Edward L. Bernays

Andrew Mitrak: Larry, thank you so much for joining us.

Larry Tye: Great to be with you, Andrew.

Andrew Mitrak: Today, we're going to travel back in time to your first book, The Father of Spin, which you published in 1998. It's the definitive biography of Edward L. Bernays, a truly fascinating man who's often called the father of public relations. I knew a little bit about the story of Bernays prior to reading your book and prior to doing this podcast. He's one of the reasons why I actually wanted to start this because this is a story that is not very well known today. So, how would you describe Bernays to someone who's never heard of him before?

Larry Tye: He was a guy who took his uncle Sigmund Freud's ideas on why people behave the way they do and used it to try to transform that behavior on behalf of clients who ranged from American Presidents to the biggest corporations in the world to foreign leaders. He was somebody who developed all the skills of the art and the science of public relations in a way that reflected the best and the worst of that profession.

Andrew Mitrak: That's right. You really packed a lot in there. So we'll, of course, talk about his uncle Sigmund Freud and some of the best and the worst of his career as well. And so for you personally, prior to writing this book, you were a reporter working for the Boston Globe, and this was your first full-length book. Why Bernays? Of all the things you could have chosen to spend, I'm sure, years on to write your first book, why did you choose Eddie Bernays?

Larry Tye: So, I could give you the high-minded answer, which was that as a journalist, I was always fascinated by public relations. At times in my life as a journalist, I would depend on PR people on a deadline to get me to the right sources and to get my story completed, and at times I spent running away from PR people. So I was trying to understand the two ends of that profession. That would be the high-minded answer.

The truthful answer is that I was doing this incredible year-long fellowship called the Nieman, which is where 12 American and 12 overseas journalists are invited to spend a year at Harvard doing essentially anything they want. And at the end of that year, we were all in panic mode. And the panic was because we had been told for a year that we were Cinderella, and we were about to be going back to work and becoming char ladies again. And so we all wanted to try to figure out a way of making that magical year go on.

I was at one of the things that we learned to do pretty well during that Nieman year, which was go to cocktail parties. And I was at a cocktail party at my creative writing teacher's home. And the creative writing teacher was a woman named Anne Bernays, and her husband was a Pulitzer Prize-winning biographer named Justin Kaplan. A couple beers into that evening, I heard Justin say if his father-in-law wasn't his father-in-law, he would be writing his biography. And I wanted to know something about who his father-in-law was. And the next morning, I was at the doorstep of 102-year-old Edward Bernays.

He was taking me on a tour of his house, and I was contemplating the notion of being his biographer, only partly because I thought he was a fascinating character, but more because I thought writing a book would be a way of my getting to take another special year off doing what I wanted to do. And about three months after that visit to Edward Bernays, I had signed up a book agent, and my book agent was in the process of signing up a publisher, and I was on my way to getting another year off.

Meeting 102-year-old Edward Bernays

Andrew Mitrak: Well, let's jump to this about your encounter with Bernays. As I was researching Edward Bernays and in your book, I was looking at YouTube videos of him, which are amazing. They're preserved, recorded in the late '80s, so not quite at 102 years old, but pretty close. And you can even watch him on the David Letterman show, which is just wild. It feels like an anachronism. Eddie Bernays started his career before World War I. He worked with Thomas Edison and Calvin Coolidge, and here he is with David Letterman, a TV personality that I know and enjoy today. You met Edward Bernays at the end of his life. What was that like? What were your takeaways of him? What impression did he leave on you?

Larry Tye: There are two things I was struck by. One was how we went into his study, what his grandchildren called his ego room, and he showed me pictures of him, as you say, with Thomas Alva Edison, with Henry Ford, with President Calvin Coolidge. It was Eddie Bernays and everybody famous that he had known and worked for and helped influence. And I thought that was unusual. I thought that PR people were supposed to stay in the background, and the idea that the pictures were all with Eddie Bernays in them suggested the unusual kind of PR guy that he was, who was somebody who believed, and maybe rightfully believed, that his story was as important as these titans of industry and American Presidents.

The other thing that struck me about him was that age 102, knowing that his potential biographer was coming to visit him, he had put on his best suit and his tie and was looking absolutely perfect, except when I looked down at his feet, and he hadn't quite at age 102 been able to pull it all together, and he had two different color socks on. And I thought that was a reflection of the fact that he was showing a little bit of vulnerability to the fact that he was that old, but that he also had been waiting his entire life, had been waiting 102 years essentially, for somebody to come along and tell his story, and he wanted to make sure that he got it right, or that I got it right, and that I saw all the things that made him special. And he told me amazing stories, but I realized partway through the interview that it was like I was clicking button number three, and that was Eddie Bernays and Thomas Edison. He had told these stories so many times that it dawned on me that I was getting a partly rote version of the story, and I tried my hardest during that time with him to get him off message and relaxing a bit and telling a story in a way that seemed original rather than version number 75 of the same story.

Andrew Mitrak: I suppose that speaks both to his discipline as a PR person, sticking to the same story, but also his habit of being a self-promoter, of having spent, you know, decades telling these stories and using these to promote himself.

The "Professional Nephew": How Bernays Applied Freud's Theories to Public Relations

Andrew Mitrak: You already brought up his uncle, Sigmund Freud, and I think that's probably a good place to start as we get into his biography. You write, and I quote,

"Bernays had strong familial ties to the venerated psychologist. His mother was Freud's sister, and his father's sister was Freud's wife."

And I had to reread this a few times to make sure that there was nothing incestuous going on here, but it is totally fine. It's thinking of him as being sort of Freud's nephew in two different ways. Can you share more about his relationship with Freud?

Larry Tye: He was, as you point out, a double nephew, either through his mother or through his father, whichever he was choosing to point to. He had an especially close relationship to Sigmund Freud, and when he was a kid, he loved going to Vienna and doing long walks in the mountains with Uncle Siggy, as he called him. But it was a special relationship in a number of ways. One was that Sigmund Freud was partly in Eddie Bernays' debt, that when the Nazis were closing in on Sigmund Freud in the era of Adolf Hitler, it was Eddie Bernays who got his works translated into English and earned enough money through that translation from the publisher that he could help Freud escape the Germans' closing vice and make his way to England.

But Bernays also shocked his uncle. His uncle was a very buttoned-down, Viennese, old-world character, and Eddie Bernays wanted to translate Freud's ideas, his complicated ideas on psychotherapy, into little ditties that he could sell to American men and women in a way that would make him a mass-marketed commodity, and Freud was shocked by that. So he was grateful, he was shocked. It was a classic reaction to Eddie Bernays. It was a reaction to the good and the bad of who Eddie Bernays was, and in the end, what mattered was Bernays helped Freud stay alive, and everybody appreciated that.

Andrew Mitrak: Well, one of the things you write is that Bernays dropped Sigmund Freud's name so much that Variety dubbed him a "professional nephew" and that Eddie borrowed his uncle's insights into symbols and other forces that motivate people, using them as building blocks for the art and science of public relations. So what were some of the top lessons from psychology that Bernays brought to his work?

Larry Tye: Bernays was essentially a professional nephew. In the first five minutes that you met him, he would manage to drop Sigmund Freud's name and lots of other names. He really did study more than anybody had ever done the psychology of people's behaviors in a way of trying to understand how to shift them. Let me give you a concrete example.

Torches of Freedom: How Bernays Got Women to Smoke Cigarettes by Exploiting Feminism

Larry Tye: When he, in one of his most famous campaigns, he was representing the biggest manufacturer of cigarettes in America, the American Tobacco Company. And American Tobacco had done a great job through its publicity of addicting a generation of American men to smoking cigarettes, but there was the other half of the American population, women, and it was considered a social taboo. It was unladylike for women to pick up a cigarette. And Eddie Bernays wanted to change that.

So he went to a disciple of Uncle Sigmund's, a guy named Dr. A.A. Brill, and he said, "What do cigarettes represent to women in America?" And Brill talked about this taboo, the idea that that women weren't considered elegant and ladylike if they picked up a cigarette. So Eddie Bernays set off to change that, and he did that by orchestrating a march down Fifth Avenue, America's premier boulevard, on Easter Sunday, a holiday that represented religious freedom.

And he had these very elegant debutantes pull out cigarettes as they were marching, and he had ensured that photographers would be there waiting, knowing something magnificent was about to happen. And so in newspapers all across the world the day after Easter Sunday, there were pictures of these elegant women elegantly lighting up their cigarettes. And he wanted in one quick, staged event to transform the image of what cigarettes were. Instead of being something that was unladylike, he wanted it to be the symbol of elegance, and it worked. It worked enough that women slowly started coming around and buying American Tobacco products, and especially their number one selling cigarette, Lucky Strike. And lighting up cigarettes became, instead of a taboo for women, it became a sign of liberation. And there was actually a whole brand of cigarettes, Virginia Slims, that developed this theme of women being liberated by lighting up their slim cigarettes and looking elegant the way Bernays wanted them to.

“Big Think” & Horizontal Thinking: Bernays' Indirect Approach to Public Relations

Andrew Mitrak: This is a really great example of what you call the "big think" and the indirect approach that Bernays takes, and that he's hitching private interests to public ones. Instead of at the start just saying these cigarettes taste great or they're relaxing and they look good for women, he starts with a more indirect approach of tying it to women's liberation and women's rights, and it's a torch of freedom. Can you speak to this strategy of “big think” and this indirect approach that Bernays took to his work?

Larry Tye: So you're exactly right, first of all, about cigarettes, and it became known as the Torches of Freedom Campaign. But there was another element to it that also became classic Eddie Bernays, which is nobody was supposed to know that those women were recruited by Bernays, that it was supposed to be seen as an ad hoc, an ad-libbed, a spontaneous lighting up of cigarettes, and instead, it was all concocted by Eddie Bernays. He was a hidden hand, and he wanted to keep his hands hidden in this case.

But it was an approach that I call horizontal thinking. Let's take another example. When he went to work for the biggest book publishers in America, it was everybody from Random House to Simon & Schuster, to all the big publishers. And Eddie Bernays said, "You have to get out of your conventional thinking of how to sell more books." Conventional thinking would have been you lower the price a bit, and you have a bunch of ads, and that's a way to get Americans to buy more books. And that was what I call vertical thinking. One step leads logically to the next. Horizontal thinking, of the way that Eddie Bernays looked at a campaign like that, was to get people to re-envision the product itself.

And so what he did was he went to the leading home builders and designers in America with a very simple question. He said, "Are books important to American civilization?" Now, I'm not sure what American civilization even means, but the idea of books being important to something as high-minded as civilization was a no-brainer, and all these architects and home builders said, "Of course, books are important to American civilization." And Eddie Bernays took the results of his survey and went around to builders and designers who hadn't been part of his survey and said, "You can strike a blow for American civilization if the next home that you build or apartment that you design, you include built-in bookshelves."

It was something that hadn't been standard in any homes, and now we know that homes of a certain era all included built-in bookshelves, and that became part of what was in people's homes. And you're not going to fill a bookshelf with cereal boxes or with cigarettes. You're going to put books into a bookshelf.

Bernays figured if he could have books as part of the decoration, as part of the fabric of houses, you were going to sell more books because people wanted to buy the books to put in the bookshelves to show the world how literate they were. And when you go to people's homes, one of the standard things that I do when I go into somebody's home is I look at the books that are in their living room bookshelf, and I'm intrigued by what they're reading, and Eddie Bernays understood that that would happen.

And it worked brilliantly for publishers. Suddenly, they were not just selling books with the conventional and the old-hat method of putting them on a discount because that discount at some point would have to go away, or they wouldn't make money, that it became part of American homes to sell more books. And that was horizontal thinking, and it was big-think thinking, and it was Eddie Bernays' thinking that transformed the profession of public relations. He called himself the father, but if father means the first, he wasn't the first, but he was the most artful and the most scientific and the most successful.

Andrew Mitrak: I have a home that was built back then, and I have built-in bookshelves. So I wonder, “Was that some of Eddie's influence there?”

Larry Tye: So you have bookshelves, and what do you have in your bookshelves?

Andrew Mitrak: Well, at a time, I had books. But now I have toddlers, so now it's a random collection of some of their toys and things that we have. We've kind of given up on having a nice, presentable home. But yes – before kids, it was books.

For Better and For Worse: Addressing the Morality Behind Bernays PR Campaigns

Andrew Mitrak: Comparing, contrasting this versus the Torches of Freedom example – there was sort of using his powers for good – reading – and bad – cigarettes. These are just so illustrative of how he's using some of the same techniques for his clients regardless of the morality behind it.

Larry Tye: That is true. Eddie Bernays was value-neutral, the same way public relations as a profession is. It can be used to promote the best causes in the world or the most insidious causes in the world. And one of the things that happened as a result of his campaign to addict women to the same vice that men had been addicted to, of cigarettes, what happened was that women's lung cancer rates caught up to men's rates. And he knew the health risk in a way that very few people in America did back then. He had access to the biggest cigarette company in America and to all of their health studies. And at home, he was telling his daughters to take their mother's cigarettes and break them, as he said, "like brittle bones," and flush them down the toilet. And he was doing that at the same time he was trying to sell this bad habit to women all across the world.

Andrew Mitrak: Yeah, this is where it's hard to overlook Bernays' cynicism or maybe hypocrisy. So he knew as early as 1930 that what he was promoting as a form of women's liberation had this horrible health effect. Did Bernays in his life ever acknowledge this hypocrisy?

Larry Tye: He said later in life that he hadn't known. If he had known how dangerous cigarettes were to women and men, he would never have promoted them. But we now know, because of the papers that Eddie Bernays left behind, his own papers, that he absolutely knew about the health risks. And what he tried to do as a mea culpa later in life is this guy who had represented American Tobacco Company was suddenly representing the American Lung Association in trying to wean people off the very habit that he had created for them. And so the good news is that he did good in later life in trying to end the addiction. The bad news is that he created it in the first place, and he later lied about it.

The All-American Breakfast: How Bernays Made Bacon and Eggs a Staple

Andrew Mitrak: Before we kind of get to some of his later-in-life work, there are so many other examples of his indirect approach and some of his other greatest hits. One of the things you write is that when he was, quote,

"Hired to sell a product or service, he instead sold new ways of behaving, which appeared obscure but over time reaped huge rewards for his clients and redefined the very texture of American life."

And we've talked about bookshelves as texture, of course, smoking, kind of bad texture. Are there some of the other examples of his applications of this that come to mind?

Larry Tye: One of my favorites is when he went to work for the Beech-Nut Packing Company, and that was the big bacon maker. And he wanted to change the way people thought not just about bacon but about eating. And so what he did was he again took his technique of going out with a very simple question to a lot of eminent people. And the simple question was, "Is a hearty breakfast a good thing for people to eat?" Now, who knew what a hearty breakfast meant? But the very word "hearty" suggests that it's healthy, it's a robust meal to start your day. And he went out to leading health authorities, and he asked them, "Do you endorse a hearty breakfast?" And they all said yes. And he took that back and said, "A hearty breakfast is a bacon and eggs breakfast." And he gave the definition to what "hearty" was, which was a definition he had never told the doctors who he was surveying.

And the ultimate, as we know now, artery-clogging breakfast of a bacon and eggs breakfast had not been an all-American breakfast. In fact, much of America was dashing off to work, even in those days in the '30s and '40s and '50s, dashing off to work, downing a cup of coffee and maybe a slice of bread and a glass of orange juice if they had a little bit of extra time.

But Eddie Bernays said, "No, we want to have an all-American breakfast, the ultimate hearty breakfast." And now we know when you go into, when you're with your kids and you're taking them out for breakfast, everybody goes in and orders at their favorite diner or wherever their breakfast joint is, a bacon and eggs breakfast when they have time to do it. And we don't look at the fact that it's unhealthy.

We look at the fact that that somehow has a certain symbolism. It's a warmth, it's comfort food. Instead of again taking the conventional, the vertical approach of just trying to have publicity around people buying bacon, he changed the whole way we looked at what bacon was all about. And it was not just Beech-Nut, but all the bacon makers were selling more bacon because that was part of what Americans were eating more of for their all-American breakfast.

Andrew Mitrak: So instead of saying Beech-Nut bacon is the best, he never even attached his client's name to the promotion. It was more about growing the entire category or inventing this new category of a hearty breakfast, which, by the way, my client defines or meets the definition in the way that I define it, and that leads to their success.

Larry Tye: Yes, exactly that.

Marketing to Children: The Ivory Soap Campaign

Andrew Mitrak: We've talked about bookshelves, bacon. There's another B for Bernays, which is bath soap, which I thought was also a really clever use for that. Could you tell a story of how he managed to market and change opinions about bath soap?

Larry Tye: He was working for Procter & Gamble, which made the number one selling soap in the country. I don't know if it is anymore, but it was then, and it was Ivory Soap. And he decided that he looked at the behavior of American women, who were the ultimate shoppers back then, and he said, "How do they decide what soap to buy?" And one way was they took their kids often to the grocery store with them, and if kids picked out a particular kind of soap, that was the soap that they bought. He started thinking, "What is the way that I can get kids, who never think about the brand of product they're buying, how can I get them interested in something as prosaic as the kind of soap that their mothers buy?"

And he created this series of contests that became this thing, it was the ultimate fad in America, where there was a soap carving contest, and kids could win prizes, and it was sponsored by the biggest manufacturer in the country of household products, Procter & Gamble. And kids were rewarded with prizes that became a big thing in their school and in their after-school programs if they could carve Ivory Soap into the best-looking sculptures. And he didn't care about kids carving soap. He cared about kids wanting Ivory Soap because that was the soap that became the standard of eligibility for that contest. And suddenly, kids were going to the grocery store with their moms and saying, "We want Ivory Soap because that's what we can carve into something that can win us a prize." And Eddie Bernays again realized it wasn't just going to the women who were paying for the soap. It was going to the kids. If a mother saw that their kid wanted a particular kind of soap and might stay clean because of that, they were willing to buy any soap that the kid suggested, and the kid suggested Ivory.

Andrew Mitrak: At first, I thought this was an example of one of the more positive impacts of Bernays' work. You know, what's better than using soap? But as you mentioned that, I thought about it, and maybe this introduced an idea of marketing to children, which opens its own set of moral quandaries. And now we see toys that families don't need or high-sugar breakfast cereals being marketed towards kids, and them asking their parents for that. So maybe he has his fingerprints on that as well.

Larry Tye: He does. He has his fingerprints on just about everything that we are sold, on whether it is good or bad.

Behind the Scenes and in the Spotlight: Bernays' Passion for Self-Promotion

Andrew Mitrak: One of the many things that makes Bernays unique is that while most publicity people worked behind the scenes, he actively boosted his reputation. He wrote, quote, "In an era of mass communication, modesty is a private virtue and a public fault," end quote. And he wrote books around this. He wrote Crystallizing Public Opinion. He wrote a book called Propaganda. And while most people in his field were called press agents or publicity men. It sounds like he coined the term "public relations" and gave himself this title of "public relations counselor." So how did Eddie's peers or others in the industry or even his clients react to his habit of injecting himself into the story and being such a self-promoter?

Larry Tye: They thought he was shameless, and he was shameless. He actually wrote a book called Biography of an Idea, and what that was, it was probably the worst-selling book in the history of publishing. It was an entire book devoted to everywhere that Eddie Bernays had been quoted. He wanted to make sure that the world didn't miss a single smart thing or unsmart thing that he had ever said. So parts of the book were just about him being quoted in newspapers and in books and in magazines. And what he was really writing it for was an audience of one, and the one was the person that had ended up being me, as the first case who was going to write his biography. So he didn't want to trust that I was going to realize all the brilliant things he had said. He wanted to make sure that they were there and handed to me on this platter.

And the way his fellow practitioners back then, and there weren't many of them back then, and the way practitioners today look at him is, on the one hand, he's the most studied PR guy in courses on PR or marketing or advertising. And on the other hand, he's the one that everybody has a smile on their face when they talk about because they all realize that he is the one who convinced us that he was the father of public relations. Anytime you saw him quoted, including in his New York Times full-page obituary, he was referred to as the father. But as we were discussing, if father means first, there were people, including the famous Ivy Lee, who was hired by J.D. Rockefeller, there were people who came before him. But nobody wrote as much about the profession. Nobody mixed as artfully as Bernays did the art and the science of the profession. And nobody ensured that their name was out there in as many public forums as Eddie Bernays did.

And it was exactly the kind of thing. One of my best guides when I was writing the book was a man named Harold Burson, and he was one of the named people on what was at the time the biggest PR firm in the world, called Burson-Marsteller. And Harold Burson thought that Eddie Bernays was brilliant, but he thought that he was doing exactly the wrong thing. Burson believed, like most PR people, that their hand, they were being well-paid to be in the background, and it was the clients who wanted to be on center stage. And Eddie Bernays thought that he could have it both ways. He could be there alongside his client, and he could be seen as a genius. And Eddie Bernays also did something that public relations people are grateful to him for, which was he said, "The only way that you will get people like the President or like the heads of big companies to take us seriously is if we charge a fee that is equal to the salary that they're making." And so he ensured that PR people, nobody knew what they should be paying them, and he ensured that they made fat paychecks.

Doris Fleischman’s Role in the Bernays PR Empire

Andrew Mitrak: I'm sure his peers and colleagues appreciated that. One of the people, as he was self-promoting, somebody who he overlooked was his wife, Doris Fleischman, who sounds like she was really a big contributor behind the scenes to his work and was really a remarkable figure in her own right. Can you share who Doris was and what her role was in building the Bernays public relations empire?

Larry Tye: Her role was absolutely essential. The more eloquent that something that Bernays said was, the more likely it had been coined by Doris because she was at least as smart as he was. She was more articulate than he was, and she was more realistic on what could actually work. But it was partly the era, and that was an era where women weren't as involved in the professional world, and there was incredible gender bias back then.

And so Eddie Bernays did a whole lot to promote Doris's ideas but not to promote Doris. And we see when she left her papers to a library at Harvard University, we can see her genius, and there's been a wonderful biography written about Doris. And her daughters, their daughters were big on telling me just the very important role that Doris played, and they were always upset that their father never gave her the credit that she deserved.

But when they were married, he booked a room at the Waldorf-Astoria, this elegant old hotel in New York, and he promised her that he would be low-key about the wedding, and they were married at City Hall. But when they signed in on their wedding night at the Waldorf, he knew, because he had worked for the Waldorf, that if he had an unusual way of signing in, that this could become a news event. And the unusual way was signing in with his name and with her maiden name, and nobody did that in those days. Women changed their name, and she kept her name of Doris Fleischman. And having created that policy for the Waldorf, he knew that it would become a headline in the next day's papers, that a man and woman signed in with their names before they were married as their names after they were married, and their wedding became big news.

Andrew Mitrak: He never misses an opportunity. One of the other amazing facts about Doris, or just a really quirky fact, is that she was the first woman issued an American passport who was married but had her maiden name on it, which seems like just a family full of firsts and milestones there.

United Fruit Company vs. the Government of Guatemala: the Ultimate Public Relations Coup

Andrew Mitrak: The final story we'll cover of Bernays' career is maybe even a wilder and potentially darker story than his work with American Tobacco, and it's all about bananas. Could you just share what this story in this chapter of Bernays' career is about?

Larry Tye: This goes back to an era in American foreign policy where there were things that we knew, we referred to in that time as banana republics, and they were called banana republics, they were in Latin America, and they were called banana republics because the big fruit companies, like United Fruit that Eddie Bernays worked for, actually seemed to almost own these countries. They owned a huge chunk of the land. They were the biggest employer, and they could dictate the policy, the domestic and foreign policy of many of these countries. But something happened in one of these banana republics in Guatemala in the 1950s, and that is they elected a leftist as their leader. And United Fruit Company worried that he would expropriate their lands, and so they hired, they brought in their PR guy, Eddie Bernays, to try to do something about it.

And Eddie Bernays, who showed that he could affect people's behavior and what they bought, also showed through this campaign that he could elect, he could affect the behavior of America's foreign policy. He put out all kinds of propaganda suggesting this was a threat to American values by having this leftist government there. He encouraged the American government to go in quietly and try to undermine, in a way that nobody would know was the American government doing this, this leftist government.

And it was essentially testing out a policy that we would use later in Cuba when we went in and staged the Bay of Pigs invasion and tried to depose Fidel Castro, only in this case, it worked, and the leftist leader was tossed out of office in a totally undemocratic way. He had been elected democratically, and the free will of the people of Guatemala was undermined by Eddie Bernays, by the United Fruit Company, and by the Eisenhower administration. And it showed that there were no limits. Borders were no limit to what Eddie Bernays could do on behalf of whatever client he happened to represent. And in this case, it was fruit companies who exerted the kind of power that we disparaged by inventing this term "banana republics," but was actually what happened in these countries, not just in Latin America, but all across the world.

Andrew Mitrak: We have limited time together, but we could spend probably hours just talking about this story alone with United Fruit Company, which is, of course, now known as Chiquita Banana, and Samuel Zemurray, who's known as Sam the Banana Man, and this fascinating array of characters.

Bernays: The Unreliable Narrator and Verifying the Facts

As we wrap up on some of our look back on Bernays' work and his contributions to public relations, I kind of want to talk about Bernays as the unreliable narrator. Your book is The Father of Spin, and of course, he stretched the truth about his, for his clients, but he also embellished his own story. And in your book, you often tell the story from Bernays' perspective, but then you find accounts from others that typically cast some reasons to doubt some of the more self-aggrandizing claims. And we're sort of led to think that the truth is a little blurry. It's maybe directionally right, but in Bernays' case, a little less, "Hey, we did this parade, and suddenly women start smoking," or, "I do a propaganda campaign, and soon a democratically elected government in Guatemala is overthrown the next day." What he actually did is just a little unclear. How much do you really trust Bernays, or what sort of doubts do you have about his own biography?

Larry Tye: That's a great question, and I would compare my answer to an answer that I give about Satchel Paige. I wrote a biography on this extraordinary pitcher, maybe the greatest pitcher in the history of baseball, Satchel Paige, only back when he was pitching, he was, it was in the era of Jim Crow segregation, racial segregation in America, and he was pitching for teams in what was known as the Negro Leagues. And there were no journalists or statisticians out there for every game to record the stats. And so Satchel gave us what he said was the likely statistic on everything from how many shutouts and no-hitters to how many games he played, and they seemed totally inconceivable. And I thought, " this guy is inventing things." But the closer I looked at his stats, while I'm convinced that he embellished a lot of his life stories, the closer I looked, I thought he actually may have understated because he pitched for so long, you know, a career that lasted 40 years, and he pitched probably in front of more people than anybody has ever played baseball in the history of the world.

And I came away with the same impression about Eddie Bernays. I knew he embellished. He left out things like his hidden hand with things like the Torches of Freedom Campaign. He left out what he knew about the health effects of smoking in those early days, and he gave himself a more central role in things than he might have deserved in lots of his campaigns. But on the other hand, when I started looking at other things Eddie Bernays said, we all know about the UPS, the United Parcel Service delivery trucks that are in our neighborhoods, and those trucks are painted brown.

Eddie Bernays told us that he was the one who had convinced UPS to paint those trucks brown because they were a neighbor, the color of trees and a friendly color, and it made just the UPS trucks feel more part of our neighborhood. And I went to the people at UPS and said, "Did Eddie Bernays do this? I can't believe that he's the one who did this." And they said, "He absolutely did it."

I went to the woman who was the key figure behind the Multiple Sclerosis Society, this horrible disease of multiple sclerosis, and I said, "Eddie Bernays is the one who said that multiple sclerosis was too much of a mouthful, and he said you want to call it MS. Did Eddie Bernays, couldn't have been the one who shortened it to MS?" And she said, "He absolutely was the one." So at the moment that I started doubting whether he could have done all he claimed he did, I found that he did more than I had thought that he had done and every bit of what he claimed on some things.

And that was the perfect way of seeding just the right amount of doubt. The doubt was no longer in my mind whether he did it. The doubt was he must have done it because he did all these other things. And Eddie Bernays knew that if we knew that he had done big things in some arenas, we would start believing that he had done all the big things he had claimed in every arena, and that wasn't true.

Andrew Mitrak: His fingerprints really are everywhere, from UPS to MS and a whole bunch of other places.

Spin in Politics and Media: Bernays' Influence Today

Well, I want to talk about Bernays' relevance today. At the time you published this book, you cited that there were 125,000 PR professionals, and I checked LinkedIn before this interview, and if I looked at public people with public relations or media relations titles, it's close to 400,000 people, and that grows to well into the millions if you include people with more broad but related titles like communications or social media. And it seems like Bernays is more relevant than ever. And I guess my question for you is, why don't you think he's better known? Is it time for a movie or a miniseries to be made or an updated version of your book or anything that could get this story out there even more?

Larry Tye: Eddie Bernays, while he was very much tuned in with whatever the cutting-edge forms of communication were, in this era of social media and when we have all the kinds of marketing and sales approaches via social media, Eddie Bernays would be dazzled and delighted. And I think while I wouldn't be self-serving enough to say that people ought to go out and buy my book, I think that what they ought to do is Eddie Bernays left behind a cache of papers that nobody in the field had ever dreamed of leaving behind because people didn't want us to see their fingerprints all over the campaigns that they had orchestrated. And he left behind these papers in a way that we can unspin not just Eddie Bernays' life but the way the profession works by looking at him.

Whether or not he was the father, he was the most dazzling figure in the history of public relations, and he lets us see its influence. And I think the only way we're going to unspin our world, and the only way that you as a young father can go to the store and be sure that you're getting products not because somebody has some insidious way convinced you you ought to be buying these but because these are the products that make sense, is by unspinning our world of PR and of influencers. And one way to do that is to go back to the beginning and use Eddie Bernays' career as a way of doing that.

Andrew Mitrak: Well, I know you said you weren't self-serving enough to promote your book, but I'll do it for you. It is a really delightful read. I think anybody working in public relations or marketing, or just wants to be aware of the media and some of the influences behind it, or just wants a good story. I read through it and just completely enjoyed it.

And you were speaking to some of the spin we see today, and one of my last questions for you as we wrap up is, are there any specific examples of publicity campaigns or media spin that you've seen recently or within the last few years that feel especially Bernaysian to you?

Larry Tye: Yes, so we're having this conversation just weeks after the last presidential election, and I saw both sides trying to spin the heck out of us in that campaign. And the scary thing to me is not that PR people and the spinmeisters that the campaigns hired were doing that, but when the conventional media starts doing that and starts, it used to be that we could turn on a Walter Cronkite and know that that was an objective look at the news. And now, whatever channel we turn on is giving us a particular angle on it. And I'm not sure who's going to do the unspinning today, but we used to depend on journalists to do that, and they're not as dependable as they were, or when they are dependable, we don't trust them and assume that they're undependable.

Andrew Mitrak: One of Bernays' quotes, I might get this slightly off, but it's in the book, is that “the best way to fight propaganda is more propaganda” which feels very self-serving for a propagandist to say, and I hope there's a solution other than that.

Larry Tye: I think that the “propaganda,” to him, was not a dirty word. More of the kind of propaganda or the kind of half-truths is not the way we get to the truth. We get to the truth by having something called the truth that we can trust rather than propaganda.

Andrew Mitrak: On a lighter note, one of the things that came to my mind of something that seems Bernaysian is this idea of superfoods, that I find myself eating foods like kale or quinoa, and I'm like, "Superfoods, that feels like a Bernaysian spin." And I looked this up, and it wasn't Bernays, but it did originate from the United Fruit Company.

Larry Tye: That’s wonderful.

Andrew Mitrak: It's a small world. These folks, they planted these seeds that are still having these impacts on us today. Well, I want to thank you so much for your time, Larry. This is such a delightful interview. What's the best way for listeners to learn more about you and support your work?

Larry Tye: So the easy way is to go to larrytye.com. My website has the nine books I've done, the tenth that I'm working on. And Andrew, it was a blast being on with you today. Thank you.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A History of Marketing / Episode 4 This week, my guest is David Aaker, the "Father of Modern Branding," a renowned marketing professor, author, and consultant who has revolutionized the way we think about brands. Aaker's work on brand equity helped elevate the role of marketing to serve a more strategic function in organizations.

Aaker is the author of several seminal books, including "Managing Brand Equity" (1991) and "Building Strong Brands" (1996), which introduced the influential Aaker Model. He's also Vice Chairman of Prophet, a global brand consultancy, where he's advised some of the world's most recognizable brands.

Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts

In this conversation, we explore the history of branding, from the early days of brand management at Procter & Gamble to the emergence of brand equity as a central concept in the late 1980s. Dr. Aaker shares his insights on the evolution of marketing, the challenges of building strong brands in today's world, and the enduring power of a strategic brand strategy. We also touch on the disappearance of taglines, the rise of the CMO, and even get some perspective from one of Dr. Aaker's former students, the marketing professor and commentator Scott Galloway.

Now, without further ado, here is my conversation with David Aaker.

David Aaker’s Early Research: From Quantitative Modeling to Brand Strategy

Andrew Mitrak: Well, I'm looking forward to having a conversation about the history and evolution of branding, but before we do that, I want to learn about your background. You earned your Masters in Statistics and you earned a PhD in Business Administration. So how did you go from there to a decades-long career in marketing?

David Aaker: Well, as an undergraduate, I had a course in advertising that was really fascinating to me, to try to understand, “How are you going to change opinions?” And that got me started on marketing. After I graduated from Stanford as a PhD student, I went to Berkeley and started as a kind of a quantitative modeler, a statistician, and then I drifted into advertising and market research and business strategy, and then finally into branding.

Andrew: When did branding become your area of focus professionally?

David: It happened in the late 1980s, actually. Now that's over 30 years ago. All the stars were aligned. For one thing, there was a strategy model, the growth-share matrix by BCG, that was dominating people's strategy, and they thought that they saw empirically that if you increase market share, you'll increase profitability. And they believed that because large market share companies made more money than small ones did. Well, it turns out that if you are a small company and you increase market share, you don't increase profitability. In fact, you make it go down because you've bought market share, you've hurt your brands, and so on. But managers also realized it because they could see the facts: they weren't growing, they weren't making money, and so they needed an alternative.

And at the same time, scanner data came into being. For the first time, you could give people a card, you know exactly what they bought the next day, and so you could go in and attach to their TV sets and manipulate what ads they were seeing, if they saw it once, twice, three times, four times, this kind of content or that kind of content. What they found was the only thing that affected sales was price-off promotions. So that's what everybody rushed to do, and as a result, they destroyed brands. And by the way, they did not increase share, they didn't increase sales, they didn't do anything. Well, what they did is taught the customer price is the most important, and if it's not on sale, wait two weeks. So they really destroyed brands.

And at the same time, I had reached a point where I was kind of all over the map. I was a quantitative researcher on advertising and effects on stock markets, and I had done work on experimental work on warmth and advertising. I had done work on social issues, and I'd written a book on advertising, market research, and business strategy. I'd gotten into business strategy, and when I was there, I got to believe that people weren't managing for the long term. They were so short-term oriented, the short-term financials were so dominant, and I thought that's not right. And I did a study that showed — I asked people, what are your sustainable competitive advantages? I got a list of 44, and number one on the list was perceived quality, number three on the list was brand awareness, and number 10 on the list was customer base. So three out of the top 10 were branding. And I had a background that I could draw on market research, advertising; they all helped me attack the issue, namely, what is brand equity and how do you build it? And so I kind of at that point decided to devote my career to that.

Neil McElroy and the P&G Brand Man

Andrew: I want to go back in history and to kind of plant the seeds of how we eventually got to these ideas of brand equity in the late 1980s, as you mentioned. I watched one of your lectures on YouTube. You were speaking to the Haas School at Berkeley, and you told a story of a pivotal moment that occurred in May of 1931, and this is when a Procter and Gamble employee named Neil McElroy wrote a memo. Could you share the story of who Neil McElroy was and what was so significant about his memo?

David: Marketing burst onto the scene with mass media in the 1920s, and so on. You had Lucky Strike, "Reach for a Lucky instead of a sweet." You know, it was sort of there, and so they needed to manage it. And Procter & Gamble — Neil McElroy was 28 years old, he was a junior manager, he managed Camay soap, and the big soap was Lifebuoy, but he managed Camay soap. And he said, "I would like to hire three" — we called them brand men — "brand men." And he wrote a three-page memo in response to pushback on why he should do that, and that three-page memo that he wrote one Friday in 1931 became the basis of the brand management model for Procter & Gamble. It was very tactical. What they did was they looked at data across grocery stores, and they found how each brand was doing in each store, and they identified areas in which there was weakness. And the brand job of the brand manager was to correct the weakness by adjusting price, by making the distribution more efficient, by doing some special promotions, maybe some in-store displays, but they would find a problem and address the problem.

Everybody that wanted to be in branding, in marketing, wanted to work at Procter & Gamble because then they would take that, and they'd move that system elsewhere. And that went on for really 50 years until brand equity took over in the late '80s. And that Neil McElroy went on to be a CEO of Procter & Gamble and later the Secretary of Defense. I mean, he was really a capable guy.

Andrew: That's amazing. And what's funny is you could actually visit Neil McElroy's Wikipedia page, and you can read the original memo. And of course, part of it's this innovative brand management strategy. Part of it, as you say, is really tactical. It's him asking for assistant brand men to kind of do the grunt work so the more senior brand men could do this. And it was just striking me that it almost reads like one of my end-of-year emails asking the boss for more resources or interns or something like that. It was just remarkable.

How Colley, Levy, and Kotler Shaped Marketing and Brand

David: Oh, I would mention three other things that really elevated branding, and they occurred around 1950 or 1960. In 1959, a guy named Russell HColley was writing for a think tank, and he wrote something called "Defining Advertising Goals for Measured Advertising Results." It was an ANA publication, and what he did was to say, if you want to measure advertising, you need to measure the things that are driving sales, not just sales. You measure awareness, you measure image, you measure intentions. And so after that, people started doing tracking studies, market research where they did that. So that was really a step up for management of branding, indeed marketing.

And then two years later, a guy named Sid Levy, who was then a professor of marketing with Phil Kotler at Northwestern, and he wrote an article called "Symbols for Sale," and it was all about how a product can become a symbol of yourself. And that was really a step up, and it really introduced the whole concept of self-expressive benefits, which had been seen, but nobody had codified it.

And then about nine years later, he and Phil Kotler wrote a famous article called "Broadening the Concept of Marketing," and that meant that marketing is not just for packaged goods, marketing is for the US Army, it's for nonprofits, it's for cities, it's for states and countries. Now, all those kind of entities are really interested in branding today because they understand that their objectives really require communication, and it's hard to communicate without a brand that's working.

Andrew: I spoke with Phil about that. I think it was 1968 or '69 that was written.

The Evolution of Brand Management: From Tactical to Strategic

Andrew: If you went back, there was Procter & Gamble, early '30s, Neil McElroy introduced brand management at that company. Then Phil Kotler, 30 to 40 years later, expands the concepts of marketing. In between that phase, who owned branding at a company? Was branding usually owned by an internal brand manager at most companies? Was it an external marketing agency or advertising agency that managed it? How did most companies handle it at that time?

David: It was handled by the head of marketing or the marketing department, and they'd have some people that would be responsible for advertising, for promotions, for different elements of a Salesforce if it was a B2B company. So there was no entity called branding. Well, there still isn't. I mean, it's not real common. I mean, it's not universal, for sure, that they have somebody in charge of branding because it's so intermixed into marketing. In fact, branding is sort of intermixed with the whole business strategy or organizational strategy.

Andrew: Procter & Gamble, a consumer packaged goods company — was it primarily companies like that that had brand managers or brand men, as they were called back then, or did other companies and other industries adopt this Procter & Gamble model as well?

David: The packaged goods were the first, and that's because P&G were training all these people that were spreading out. But then came the durables, like the cars — the car companies — and appliances, and then came services, like banks and so on. And the slower ones were B2B companies who are, you know, the Salesforce, you know, "We don't need any help, thank you very much. We're going to, we're going to convince people to go our way." The last ones to come on were things like hospitals, and they kind of discovered branding and patient behavior and so on just a few decades ago. So it has been a progression through the system.

Andrew: When I look at some of the early academic teaching of marketing, its roots as applied economics, the marketing mix, the four P's. Branding isn't one of the words, or brand is maybe there but it was in the background. When did brand become a more prominent part?

Defining and Managing Brand Equity

David: The concept of brand equity really came on the scene in the late '80s. I wrote my first book trying to define brand equity, called "Managing Brand Equity," and that was really when brand equity became a thing.

The concept of brand is not, in my view, you can't take that too far. It's brand equity that is the more important construct. I don't really think about brands very much because it's kind of just a nominal product. Brand means that that represents who did it or who's responsible for the product. So if you brand cattle, then you know whose cattle that is. But I'm more interested in brand equity — that is, what's the value of a brand?

That, I concluded, was three things. It was not just brand awareness, but brand elements. So you have to be aware, you have to be credible, and if you could, you know, make a great hybrid car, it didn't matter if they were looking for electronic vehicles, EVs. And so you had to be credible in that space, you had to be relevant in that space, not just generally visible.

The second thing, you had to have a right image, which really involved not only functional benefits but emotional, self-expressive, and social benefits as well. And finally, you had to develop a loyal customer base.

When I developed this model of brand equity, it was different than anybody else at the time because for everybody else, brands was awareness and image, that was it. And so you got visible and you tried to create an interesting image — that was branding, and then that would cause brand loyalty to occur. But I said that brand loyalty was part of it, and that turned out to be really significant because when you put brand equity on the table as part of brand, that really changes everything. I mean, it changes, you know, who runs brands, it changes what you do, it gets you involved in strategy, not just tactics. Because image and awareness, you can delegate to an agency, but brand loyalty, you can't. It gets you involved in developing new offerings and so on. So that was really a key step.

Andrew: This gets you to your book, "Managing Brand Equity." I think it was published in 1991. How was it adopted by the industry? Was this book an immediate hit? Did it have — was it adopted by companies as well, or what was the impact of this book?

David: Well, the contribution of the book was really to elevate brand as an asset concept, that it's not a tactical thing you delegate to an agency, it's an asset, it's one of your assets, and you got to build the asset, you got to manage the asset, you have to protect the asset, you have to leverage the asset like any other asset. In fact, you can argue that business strategy is all about leveraging assets, that's what it is. So this becomes really an important asset, and that was a contribution of the book.

And it came out in two ways. One was, as I said, the structure of brand equity — relevance, image, and loyalty. But the other thing was, for each of those areas, I pointed out the six or seven ways that this contributes to an organization's success. So the net result was 20 or so bullet points that showed different ways that this works. You know, like, for example, if you gain visibility, you get credit for being successful or credit for being good enough to buy, because otherwise, why would you have heard of it? So if you multiply that insight by 20, you see that all this brand stuff really pays off. And so it helped people think through why a brand is worth doing.

Building Strong Brands

David: Then I got a lot of response to that book, and a lot of people said, "Okay, I buy into that. How do you build brands?" And so I wrote a book called "Building Strong Brands," and in that book, I developed a framework for how you do that. It was very juxtaposed against the advertising agency's point of view. They were always looking for the big idea, the three-word phrase and so on, because they'd build up a campaign around that. And so my idea was that, no, it's not a three-word phrase, it's multi-dimensional. It's — especially for B2B or service companies — that's eight or 10 or 12 dimensions, and three or four of these would be the most important. And you know how to figure out what those are and what they really mean and then how you advance it. So that was kind of my model. I also said that it involves things like personality, like organizational characteristics, not just offering characteristics. That turned out to be really pivotal. I'm not saying I replaced Procter & Gamble, but a lot of organizations around the world started using that model.

The Rise of the CMO: Marketing Enters the C-Suite

Andrew: So this late '80s, early '90s period — was this also around the time that CMOs started to emerge as an executive function and marketing got a seat at the table with executives? What was the emergence of this?

David: Yeah, this idea that brand is an asset and there's brand equity and you can build it changed everything. It changed what marketing did. Instead of being a tactical arm, it's now a strategic arm, it's part of strategy, and it brings to the strategy table a knowledge of the customer, a knowledge of the segmentation. And the second thing it did was to change who does marketing. Instead of being a middle management function, it's now at the C-suite, there's a CMO or Vice President of Marketing. That just changes everything. So and people begin to realize that, you know, brand loyalty is something we have to all worry about, and we have to figure out offerings that'll make it happen, we have to figure out how the customer journey is and so on. That makes everybody in the organization kind of part of the marketing team.

Andrew: As a professional marketer, I should thank you for that, because it's good to roll up to a CMO who has a seat at the table.

The Evolution of the Aaker Model

Andrew: You mentioned your book, "Building Strong Brands," and you introduced a brand identity model here. This later evolved into a brand vision model. Sometimes these are collectively known as the Aaker Model. Can you share about how you developed these brand frameworks and how they're different?

David: I think that the overriding motivator of me is that, you know, we're talking about a long-term asset that's going to be built and managed and leveraged, and it's not a three-word phrase. I was really obsessed with the idea that we didn't want a three-word phrase. The other thing I was — the other thing that a lot of people did that had brand models, they'd have a set of boxes, and they'd have six or eight boxes. And so if you, at the end, when you're developing your strategy for your brand, you have to fill in each box. There was a personality box, so you got to say what your personal — there was a benefit box, there was a, you know, organizational value box, there was all — there would be really six or 10 boxes, and it did not matter if that box was relevant to you, and it did not matter if there was some box they needed that wasn't there.

And so I was also obsessed with that. So the second principle of my approach was no boxes. You create the boxes that work for you at your time. You say, what I want to stand for, what are the six things I want to stand for? And you — there's no predetermined boxes, and you're not out of luck if you miss a box because you're going to create your own box. So those are the two premises of my model. It's multi-dimensional, it's not a three-word phrase, and the dimensions are not preset.

Andrew: I love this. It is such a pet peeve of mine, I guess, when somebody sends over some boxes to be filled out for something that's strategic and a little more personalized. And it seems so reductionist to just say, "Hey, my job is to check some box here about, oh, here's the tagline and here's this segmentation." I mean, useful to some degree, probably better than nothing, but also just so constraining for something —

Branding and Disruptive Innovation

David: I've now turned to applying brand in different areas. In one of my books, I talk about branding and disruptive innovation, and the fact that in disruptive innovation, you have a lot of thought leaders, a lot of books and so on, but nobody mentions branding. So I point out that in branding, you need to become the exemplar, you got to define the disruptive innovation, you got to scale it, and you got to build barriers, and that's all branding. So what I've tried to do is to take branding and apply it to different areas, strategic areas that are adjacent to branding.

David Aaker’s Mentorship and Partnership with Scott Galloway

Andrew: So in addition to applying branding to areas that are adjacent to branding and your number of books and models and ideas you put forth, you've also spent decades as an educator in marketing. One of your students was Scott Galloway, whom you worked with at Prophet, and of course, he's one of the top marketing professors and recognizable thought leaders. And while researching your work, I came across a YouTube video of Scott, and he was talking about the impact you had on his life.

Scott Galloway (Video Clip Courtesy of The Brainwaves Video Anthology): The teacher that had the greatest influence on my life was David Aaker, who's a professor of marketing at the Haas School of Business. And David taught a class called brand strategy, and at the time in the early '90s, it was a fairly novel idea that you could manage brands as an asset and that potentially the most valuable assets of a company were its intangibles, whether it's Coke in America, whether it's Louis Vuitton and European elegance. But this notion of managing these intangibles that led to irrational behavior, which led to irrational margins and above-market return on investment and shareholder value, was a fairly novel thought. And I remember about halfway through the course thinking for the first time in my life knowing this is what I want to do with my life.

Andrew: I'll share this YouTube video link. If you haven't seen it — he speaks not only about this but about what an important impact you had on him as a person and as a role model. And I'm just curious about your initial interactions with Scott Galloway and if you knew immediately that he was a bright student or just what your initial collaboration with him was like.

David: Well, I'm a big fan of Scott's. I listen to his Pivot and Prof G. I think he's really so insightful and so knowledgeable, it's very impressive. He just again and again seems to have the right answers, and I wish people like him were running our government. He enticed me to join Prophet in 2000, and when I did that, I could see him in action. He started a company that was supposed to be a market research company, and he found out that people didn't pay for market research, but they did pay for having him come down and come into their office and tell them how dumb they were and they needed to change strategy. He was so good at that. He was — I mean, still is. I mean, he's got this ability to be very critical but at the same time be very helpful to companies that will listen to him. And then when I joined him, I told him he was trying to do brand work, and I said, "Scott, you need to have a brand model. You don't need mine, but you need a model." And that's when he got me to join, so he could have a model.

Brand Consultation and The Decline of the Tagline

Andrew: So in your decades as a brand consultant at Prophet, you worked with some of the world's most recognizable brands. And when it comes to companies and the branding challenges they face, and when they come to you for advice, what have you seen change over the years with them, and what's stayed the same?

David: You want to find out what you stand for, and you want to get these pillars, I now call them, that differentiate, that resonate, and that are doable. And then you want to get them done. But I get involved in tactics. I've been really patient with the inability of the Democratic Party to communicate its ideas. And when I looked out there, I see just a lot of ad hoc, sort of short-term messaging. There's no taglines that anybody remembers, there are no visual symbols that people remember. And I tried to encourage some to move in that direction, but it's hard to — it's hard to get in front of people.

Andrew: Taglines are really interesting. You mentioned how brand and brand equity is more than just two or three words, but it seems like taglines have sort of disappeared. And if you ask me, even from the last five years or more, I couldn't think of a major brand that has a tagline or a new tagline that's been introduced and had the impact the way something like "Just Do It" or "I'm Lovin' It" or "Think Different" or —

David: "The Ultimate Driving Machine" is probably the best tagline of all time.

Andrew: Yes, absolutely.

David: And that tagline tells you something about, what that car is made of, but also tells you that it's about sort of exhilaration, race driver exhilaration, and the word "driver." What an umbrella it's been for them to do so much. It's one of the things that's allowed them to do, really, is to move down, and they make small cars, they even make a Mini BMW, and it's okay because it still fits under the umbrella.

Andrew: Yeah, so I mean, BMW aside, why do you think taglines don't seem to have — they don't seem to be as prominent as they used to be? What would you attribute that to?

David: They're not easy to come up with. It's not easy to come up with the right umbrella. So you might need an umbrella for a campaign and then an umbrella for a bunch of campaigns, and it's not easy to come up with the right one. And if you don't come up with the right one, it's better not to even have one, although sometimes a tagline just for a single ad can be worthwhile. But anyway, that's one reason — it's not easy to come up with. I think the other reason is these creatives are so focused on the experience of the video or the article or the ad or the print ad, and they're really so focused on the content of the print or the characters in the video, and they just want to get that right, and they — and this tagline is kind of the strategic thing, it doesn't get as much attention, I think.

Andrew: Well, David, your insights and your stories have been incredibly valuable. Thanks so much for sharing your wisdom with us today. How can our listeners learn more about your work and follow you online?

David: You can just go to davidaaker.com. My biggest — my blog output comes on LinkedIn, so you can connect to me on LinkedIn, and if you go to davidaaker.com, you'll get the blogs, too.

Andrew: I will share a link to davidaaker.com and to your LinkedIn page where listeners can follow you in the show notes. So David, thanks so much for your time.

David: Oh, thanks for having me.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

Today, my guest is journalist and author Mark Tungate. Mark has spent over 30 years covering the advertising, branding, and luxury industries.

Mark’s book Adland: A Global History of Advertising tells the story of the most influential people and iconic advertising campaigns from around the world. Mark is also the editorial director of the Epica Awards, a global creative competition judged by journalists.

Listen to the Podcast: Spotify / Apple Podcasts / YouTube Podcasts

In this episode, we cover the ancient origins of advertising, the emergence of ad agencies, the creative revolution of the 1950s and 60s, and much more.

You can find more of Mark’s writing on LinkedIn and his photography on Instagram.

Now here it is: my conversation with Mark Tungate.

The Origins of "Adland": Approaching the Global History of Advertising

Andrew: Adland is an incredibly ambitious book. It covers the history of advertising, but it's not a picture book or an encyclopedia. It weaves several narratives of the people and the campaigns that define the industry, and it covers every continent, save for Antarctica. So what inspired you to take this on?

Mark: Simply because nobody else had done it, I think. I'd been writing about advertising for years at that point, and I was interested in advertising history because you want to know the background of the subject you're writing about. But it seemed to me that all the books on the subject were in silos, almost, or other country silos. It was like the history of British advertising, the history of US advertising, and then there were a whole bunch of places that nobody had ever really written about. So I thought, maybe I can take this thing on. Maybe it's me that should do this, rather arrogantly perhaps. But I thought, okay, let's give it a try. Let's see if we can do it.

Researching and Interviewing Industry Legends

Andrew: In our emails prior to this, you mentioned that you had a blast writing the book, and it certainly comes through on the page. It's a very, very fun read. So what was your approach to researching it, and what made it so fun?

Mark: Researching it was basic journalism in a way: existing sources, texts, articles, doing the background research, and then getting out there and interviewing people. Many of the people who'd made the interesting parts of advertising, or the most iconic parts of advertising, were still around. So I got to speak to them, which was absolutely amazing and probably the most fun part of writing the book. John Hegarty from BBH, George Lois—an absolute legend, really funny guy—Phil Dusenberry, the late, great Phil Dusenberry from BBDO. These people were living legends and really good fun to talk to.

Andrew: There are so many tremendous characters in this book. Did you ever find that advertisers, sort of being salespeople themselves, that they maybe talk up their own history or embellish? And as a journalist, did you have to validate things, or what was that process?

Mark: I guess that happened a lot. But what made it easy for me is that these people are storytellers. So you just sit there, and you turn on your tape recorder or your recording device, and they do the job for you. So that's great. Obviously, like with any interview you do, people exaggerate or they maybe misremember things. So you have to take everything with a dose of salt, and being skeptical is part of the job of being a journalist, I think. But by and large, I took them at their word.

Andrew: One of the lines in the introduction of your book resonated with me. It's from—you're quoting Colin Jones's book, Paris: A Biography of a City—and the quote goes, "No history of anything will ever include more than it leaves out." So it's impossible to include every ad from every campaign, from every product, from every company. So how did you approach what to include versus what was on the cutting room floor?

Mark: It's a good point. It sorted itself out in a way. I had a list of people, absolutely, and campaigns and characters, if you like, that I absolutely had to include—figures like Bernbach and Ogilvy and Mary Wells, or people I admired and wanted to interview. Others came up along the way. Like, I'd meet somebody who'd say, "Oh, you have to interview this guy, he's amazing," or, "You have to interview this person." That happened a lot.

But I didn't want it to be too much like an encyclopedia. I didn't want it to be like a series of Wikipedia entries. And it was in danger of getting that way at one point. So I wanted to tell the story of advertising. I wanted people to be able to read it as a story. I've always said I don't actually read many books about marketing, and I always want to write books about marketing that people could read on the beach.

So it became almost like a casting process where I would say to myself, okay, who's going to move the story forward, and who are the most interesting and fascinating people who are going to be great fun to read about? And that was how I made those decisions.

The First Signs of Advertising: Brothels in Pompeii, Posters, and Early Newspapers

Andrew: We only have so much time together, and this book captures centuries of history and multiple continents, so we'll only get to capture a small fraction of it. But I thought we could just start at the beginning. What were some of the earliest records of advertising you came across while researching the book?

Mark: It's quite controversial that. Some people say cave paintings were a form of advertising, which, okay. It's said that there are forms of advertising in Pompeii. Somebody told me that there was, apparently among the ruins of Pompeii, there was an ad for a brothel, which I joked about, the two oldest professions working together, which is a nice anecdote. I guess you have to take it slightly with a dose of salt—but advertising has been around forever. Ever since people have been selling stuff, there's been advertising. The word "poster," for example, comes from the word "post," so you're talking about posts driven into the ground with people sticking information to them. So that's been around forever. So, I think almost as long as there have been sort of speaking, intelligent human beings, there's probably been a form of advertising.

Andrew: I would say it gets a little bit to, what is the definition of it, somewhat. Because a sign outside of a shop that says "Goat for Sale" is sort of an advertisement, but it's not really the way that we think of it today. One of the early milestones happened in Paris, France. Can you tell the story of the first French newspaper and how it led to the first personal ads?

Mark: This was a guy with a name that's quite difficult to pronounce called Théophraste Renaudot. And he was a physician to Louis XIII, and he was also a philanthropist as well. So he wanted to help the poor, and he set up this—I guess the best way to describe it is a kiosk where people who had jobs could come and place advertisements, basically job ads, and say, "I need someone to chop wood or milk the cow or whatever." And unemployed people could come and look at these ads and basically get in touch with the people and apply for the jobs.

Théophraste decided that this wasn't enough. He wanted to circulate his job ads more widely, so he created this pamphlet, which became the first newspaper in France, although it only had job ads, it didn't have editorials at the time. But it was essentially what we think of today as being a newspaper. It was a folded sheet with information, and that information was jobs, people looking for hired help.

Andrew: It's amazing. One of the things about advertising today is it sort of subsidizes all of our free media, television and radio, and we get content in exchange for ads. And it strikes me, this is intertwined right from the beginning. I think this was 1631, so the first newspapers, intertwined—it's just remarkable that it happened.

Mark: As a journalist, that's why I've always quite enjoyed writing about advertising. And as a journalist, I felt that it was almost incumbent upon me to do that because, ads, if you're a journalist, ads basically pay your wages. There's no really getting around that. So I don't feel bad about writing about advertising.

Advertising Evolves: From Personal Ads to Ad Agencies

Andrew: So back then, these are personal ads, so it wasn't an ad agency doing that. Can you tell me about when the first advertising agencies started to emerge?

Mark: We're probably talking the 19th century when there was a lot more printed material around, particularly newspapers were really coming into their own at that point. So the first agencies were really what we might think of as media buying and selling agencies today. So they would be middlemen between the newspapers who had space to sell and the clients who wanted to buy that space. So those were the first agencies. They weren't creative agencies; they were representatives of the media.

Andrew: So these were people where, instead of going to—if I want to market a product, I don't want to go to every newspaper individually, I'd go to a middle person, a middleman who would sell the space, and they'd take a margin for it. And so when did creativity start entering the picture?

Mark: It's difficult to put a finger on, but I have the feeling that the clients basically started hiring copywriters to make their ads more interesting and more persuasive. So creativity began then. A lot of those people were also journalists, actually. And you find throughout advertising history that people flip between the two, as I've done actually. So I think that's really the start of creativity, but it was very much in its infancy at that point.

John E. Powers: “The Father of Creative Advertising”

Andrew: Your book cites that John E. Powers is known as the father of creative advertising. And whenever I see "the father of” anything, you have to think, “Okay, there are probably a lot of fathers.”

Mark: There's probably not just one.

Andrew: I think Ad Age cited him as the father of creative advertising. He worked primarily from the 1870s to the 1890s. And what's funny is today, I did look up some of his advertisements. You can see them on his Wikipedia page, and they're all pretty well preserved, and they don't seem very creative by today's standards. They're just walls of text. What do you think he did to earn this designation of "father of creative advertising"?

Mark: My feeling is that he was more thoughtful about it than anyone who had been before. He would experiment. He really wanted to try and form and craft the most persuasive sentence that he possibly could. So I think that, okay, maybe or maybe not he was the father of creative advertising, but I think he was the father of the real craft of copywriting in a very applied way.

So for me, that's his real contribution. He was almost a forerunner to somebody like David Ogilvy much later, who was also a great wordsmith. So I think that's where—that was his contribution, the craft of advertising, absolutely.

Andrew: I copied down an excerpt from your book. I'm going to read it out loud because I think it does capture some of that wordsmith. So Powers once claimed that, quote, "Fine writing is offensive. He concentrated on facts and regarded hyperbole as an anathema.”

And you tell the story of how he was hired by a Pittsburgh clothing company that was on the verge of bankruptcy, and he said, "There's only one way out," he told his client, "to tell the truth."

And the ad that he created read,

"We are bankrupt. This announcement will bring our creditors down on our necks, but if you come and buy tomorrow, we shall have the money to meet them. If not, we will go to the wall."

I just thought this is so funny. Like, imagine—it is sort of like the "Everything Must Go" liquidation-type sale. It just—do you have any reaction to this little excerpt here?

Mark: It's funny because he is telling the truth, but there's also a slightly emotional blackmail aspect to it as well. "You can do some good here, come and come and save us, come and come and buy some clothing and save us from bankruptcy, folks. This is a good thing that you're going to do here." So there is a, although he says, okay, no hyperbole or anything, there is a sneaky element of persuasion in there.

Andrew: I think the bluntness of "We are bankrupt," that is something that will catch your attention as well.

Mark: That's true. I don't think anybody's going to say that now, are they? They exactly couch it in more subtle, discreet terms these days, I suspect.

Albert Lasker: The Father of Modern Advertising

Andrew: So the next major figure I wanted to ask you about is Albert Lasker. And you write, "There were other contenders for the title, but few historians would disagree that Albert Lasker was the true father of modern advertising."

Mark: And there are too many fathers in my book, aren’t there?

Andrew: Every chapter has a father. (Laughs) So can you share a bit about who Albert Lasker was and what he contributed?

Mark: Lasker was another wannabe journalist, actually. And I think originally he wanted to go into journalism, but one way or another, he found himself working in this agency in Chicago called Lord & Thomas. And with a colleague of his, he developed, within the agency, a sort of copywriting school. So, they tried all sorts of tricks to try and capture people's attention, like using overusing capitals and overusing italics, which must have looked awful to today's eyes. But his idea was literally to grab eyeballs. And he ended up running the agency.

And the interesting thing about it was that he actually had a stable of 10 copywriters, which was unheard of because most agencies had like one or two. So I think what he did was that he turned advertising into something that was considered slightly dodgy and a bit sort of piratical and swashbuckling into a serious business. He made advertising respectable. I believe that was his contribution.

Andrew: A lot of advertising was for things called "patent medicines," which today we'd think of like snake oil salesman or something like that, where it's like, this is a very dubious medical product, and people are making claims. And that was a—how do you sell that to the masses? Well, advertising is one way. And it sounds like around this time, more established companies and reputable companies were working with agencies and embracing advertising as well.

Mark: That's exactly right. It went from the Wild West to a more modern America. And America was, certainly, I would say, the birthplace of modern advertising, for sure.

Andrew: We aren't going to have time to capture every biography of every person in this, but I'd be remiss not to mention—I'm just going to rattle off a bunch of names—J.C. Leyendecker, John E. Kennedy, Claude Hopkins, who I think was hired by Albert Lasker, absolutely, Harry McCann, Rosser Reeves, J. Walter Thompson, Stanley Resor, Bruce Barton, Leo Burnett, Raymond Rubicam, George Gallup, Ernest Dichter, and David Ogilvy. They're giants in advertising. I'm sure I hope to record podcasts someday on each of these figures.

Something that struck me is that they're all either Americans or they're immigrants who built their careers in America. They helped form this Chicago and Madison Avenue scenes of advertising. What was it that led modern advertising, the modern advertising industry, to take shape in America during this time, and specifically, what led to Chicago and Madison Avenue emerging as the main areas for advertising?

Mark: I think it was simply because the US was technologically and economically more advanced than Europe at the time. I mean, Europe was stuck in the 19th century until quite a long time after the First World War, indeed. I grew up in London in the 1970s, and sometimes London in the '70s still felt like it was stuck in the 19th century compared to New York. So, the US was forward-looking, it was inventive, it was the first with commercial radio, it was the first with the motor car, at least on a mass-produced basis. So there was stuff going on in America that made—there was stuff to sell. And when there's stuff to sell, advertising emerges to support it. So, that's my feeling about it. And of course, it attracted people, a bit like Hollywood in a way, which I guess was growing up around the same sort of time. It attracted people with sharp minds, business minds, a love of words, a lot of imagination, and they all congealed around these figures in Madison Avenue and in Chicago. That would be Leo Burnett, for example, and to create this nascent industry, which was full of smart, imaginative people working in a technological revolution, in a way.

The Creative Revolution: The “Mad Men” Era of Ads

Andrew: Let's jump ahead to the 1950s and the creative revolution. Up until this time, the art department and the copywriting departments were mostly kept separate. There were some ads that were really beautiful—beautiful artwork—but they weren't necessarily married in the same way to typography or to the words. And there were fantastic wordsmith ads, but they were sometimes walls of text that didn't really embrace visuals.

But all of a sudden, these things started getting intertwined. When this changed, advertising got a lot more exciting. If you look at some of the ads from now, they feel very contemporary, very modern, persuasive. They just look cool. So how did the creative revolution emerge, and who were the people responsible for ushering it in?

Mark: The creative revolution is probably my favorite era of advertising. And funny, just as an aside, when I was working on the book and I was already deep into it, I remember meeting a friend of mine, another journalist, in Cannes, where the big advertising festival takes place every year.

And he said, "Yeah, I was just thinking about you and your book because there's this new TV show that's coming out soon called Mad Men." He said, "You should get into it. I think you'd really like that." And so my book—I was actually in Madison Avenue researching the whole Mad Men era around the time that the series was just about to come out. It came out slightly after my book was published.

To answer your question, you can't talk about the creative revolution without talking about Bill Bernbach, who was the co-founder of DDB. And Bernbach had worked at another agency with a graphic designer called Paul Rand, who's incredibly famous. The IBM logo is his, basically. And they had always worked together, so they would build a concept up from the beginning with the art and the copy working together, which was insanely—hadn't really been done before.

So that was the idea and the magic that Bill took with him to DDB, which became the spark for the creative revolution. He also had—he also was a guy who was a wise cracker. He had a good sense of humor. He thought that people should be treated intelligently. He believed in irony and sarcasm, which had never really been used in advertising before. And to use your word, I think he thought that advertising should be intellectual and funny and cool at the same time. He was doing what jazz musicians were doing, I think, but with advertising. So he was trying to create something that was a bit more hip.

Andrew: I'm going to read a couple of quotes from your book related to this collaboration between Bernbach and Rand and let you react to them. So first, you quote, "Bernbach worked in tandem with Rand, his lively copy rendering the art director's images doubly effective. This was the birth of the creative team." I'm going to flash forward a bit. "When Bernbach opened his own agency, it was on this basis: copywriters and art directors working side by side." So it really was this that art directors and copywriters together were creating things from the beginning. Once Bernbach implemented this, this sort of became the standard for agencies. This was adopted more widely.

Mark: That's right. The creative revolution isn't just one agency. Other agencies began to say, okay, we should be doing this as well. And of course, what happens in any country, in any form of advertising, is you'll have a bunch of people who start this thing, and then they'll break off and form their own agencies, and it creates this ecosystem. That, in my book, I discovered that happened all the time. There was always one guy, or maybe a couple of guys, and they'd train the next generation who would go off. And sometimes you'd have these little explosions, these sort of constellations of creativity in different countries, started at one place. Interesting. So that's what happened there.

Andrew: And so what were some of the most iconic ads from this period of the creative revolution?

Mark: Well, the one that everybody talks about, and you can't get around, is "Think Small" for the VW Beetle. So basically—and I'm sure you've seen it—tiny VW Beetle in the midst of a vast blank, more or less, page.

The art director was Helmut Krone. And, this was in an era when cars were big and flashy, and advertising for cars was big and flashy. And here's this little tiny Beetle with a very short, sharp sentence, "Think Small." There was a bit of copy as well, of course, written by Julian Koenig, who was also part of the team.

And then there was another one in the same series called "Lemon," where it talked about how they would scrap certain Beetles because they weren't up to scratch, they weren't perfect enough. And so they were very eye-grabbing headlines, and the copy was very well-written and funny.

Another one I like from that era is—is for—I think it was a Christmas ad, actually, for Chivas Regal whiskey, and the line is, "Give Dad an expensive belt." And I think you've got the creative revolution right there. It's funny. It's managing to convey a sort of status on the drink by saying, by admitting it's expensive, but also in a very witty and almost like a throwaway line. I just think that's wonderful.

And then the third one I could probably talk about is the one for Avis, which was the second most popular car hire firm at the time, and the line was, "We Try Harder" because they're the second, so they have to try harder to get it. Again, telling the truth, but turning it around and making it funny and interesting.

Andrew: It's so brilliant. It's like embracing their positioning as second, which is very contrarian… To pitch that to a client, like, "Hey, don't try to hide this fact, you're second: embrace it." It's very bold as well.

Mark: That's the other thing as well. Not only did they have to come up with all this stuff, they had to sell it to the client. So there's talent right there. So, it's not just the creative, the account team are doing a great job here as well.

Andrew: We've cited a number of print advertisements, but the creative revolution also coincided with the emergence of television, of course. And television predates it a little bit, but it's around this time that it became—started to see some color. You started to see televisions in everybody's home, and television had a mass, much larger impact in the culture in the late '50s and '60s. Do you have any favorite television ads from this period?

Mark: The VW did one where, "How does the snowplow driver get to the snowplow?" So you see a little VW driving through the snow. That was a classic. And George Lois cites one—he worked at DDB, but I think he was already working at another agency at that time—where he was working on an ad for Xerox, and he made a film of a whole bunch of monkeys xeroxing, photocopying stuff to prove how easy it was to use the photocopier.

And that was apparently a bit of a breakthrough in TV advertising because it was controversial and fun. Once the creative revolution got going, TV advertising suddenly became entertaining.

Andrew: You mentioned the show Mad Men and how that was part of the creative revolution era of advertising. And in the show's name, it's Mad Men, and most of the names we've mentioned up to this point have been men. And it was, like a lot of industries, especially at this time, a very male-dominated field. One of the women advertising leaders of the creative revolution was Mary Wells. Can you tell me about who Mary Wells was and what her contributions were?

Mark: Mary Wells is one of my absolute heroes, or heroines, if you prefer, of advertising. Unfortunately, I never got to meet her. A fascinating person. She originally wanted to go into theater, she says, in her biography. And I think that's what, in a way, made her stand out because she realized that advertising could be about creating a theatrical experience, a dreamlike experience, in a way, by having this slight touch of magic about her. She became one of the biggest names in '60s advertising.

You may have seen, this is a famous one, it's a French tourism image she commissioned from the photographer Elliott Erwitt. And it's basically a father and son riding a bicycle. So the little boy is on the back of the bike, and it's shot from behind, and they're riding down this typical tree-lined road in the south of France somewhere. They're both wearing berets. I think the little boy is carrying a baguette. And it's like the whole of France is in this picture. It's irresistible. And so that was commissioned by Mary, and I think it captures her way of seeing the world as a kind of dreamlike place. And also, in the '70s, she was given the brief of making New York a more desirable place for tourists because you'd had the Son of Sam killings. New York was, in cinema, was portrayed as a downright violent place, and tourists didn't want to come.

Andrew: If you've seen Taxi Driver…

Mark: Exactly, yeah. So, she was given this brief, and so she worked with a designer, another famous designer called Milton Glaser. And Milton came up with "I Love New York," with the heart, "I heart New York."

And that was, under Mary's brief. So those two came up with this thing, which is still an icon today. It hasn't aged at all. So, even if that was her only contribution to advertising, and it wasn't, she would still deserve the legendary status that I think that she should have bestowed upon her.

Andrew: It's amazing how certain things, they just become such cultural icons, they almost feel like they're above advertising, in a way, where that—at the end of the day, "I heart New York," it's a tourism slogan. But it's been elevated to such a high stature in popular culture that it's on mugs and shirts and bumper stickers and everything. And it all ties back to an advertising campaign, too.

Mark: Absolutely, yeah.

Andrew: Well, all of my questions so far have been very American-biased. I'm showing my bias here.

Mark: Oh, don't worry, that's okay.

Andrew: And, Great Britain, around the time we're in, the 1970s, late '60s, '70s, this was a really booming era, and especially for television advertising. Filmmakers like Sir Alan Parker and Sir Ridley Scott, they started their careers in directing commercials. Can you share more about how the British pioneered television advertising?

Mark: I think a couple of things happened. I think that the Brits, people like Alan Parker, were jealous of the creative revolution and wanted to recreate it in London. And also, advertising in London was a quite freewheeling, dynamic industry. And so there was a lot of experimentation going on. And Alan Parker actually started making ads in the basement of the ad agency where he was working at the time. And don't forget that the Brits are all about the theater, right? Shakespeare, drama. And so, they were quite skilled, I think, at writing fairly decent scripts, ads that were—TV ads that had a story, a bit of a narrative arc, that were funny and sometimes even quite beautiful. And of course, because of all that, they stood out. And creativity and impact are never far apart. So if they stood out, they were successful. So, hey, let's have more. So I think that's how that began.

Andrew: It's cool that advertising, it's this confined medium. You only have 30 seconds usually, maybe a minute sometimes, to tell a very compelling story, grab somebody's attention, take some risks, stand out. And it becomes a sort of training ground for—you know, they're not Sir Alan Parker and Sir Ridley Scott because they're commercials. They reached that knighthood status because of how they took what they've learned in commercials and brought it to the cinema and brought it to storytelling. And absolutely, it is one of the cool benefits of advertising is that you see it as sort of a training ground for people who can go on to tell amazing stories and really influence the culture.

Mark: Oh yeah, there are many. David Fincher also worked in advertising, and there are others, you could—but yeah, that's that's true. It's a good training ground because I think you have to be economical, you have to tell a story in a short period of time, and you have to—it has to be action-packed. So yeah, all the elements that you see in films by Ridley and others.

Andrew: Britain in the '70s and '80s, this is a part—so I can tell by your accent you're British. What do you personally remember about British ads growing up? Are there anything that sets them apart, any things that come to mind?

Mark: I was born in '67, so, by the time I was 10, we're in the mid-'70s, and stuff is going on. And my dad always used to say, "The commercials are the best thing on the telly." And the thing is, at that point in time, he was right, because we had reruns of American shows. The own—the sort of own-brand British shows were made on a very small budget and were normally not that great.

And so when you had an amazing ad—I remember one particular one, it was from Saatchi & Saatchi, and it was for British Airways. And basically, the scene is, they land the entire island of Manhattan at Heathrow Airport using special effects. And it looked like something from a Spielberg movie. It looked like something from Close Encounters. It was amazing. I was blown away by this thing. And even now when you watch it, it's pretty impressive. And it was all about—I think the end line was like, "Every year, British Airways flies the entire population of Manhattan," or "the equivalent of the entire population of Manhattan from America to the UK." And I just thought, wow, this is—and I think that was the point, that ad was probably the point where I thought, actually, this advertising stuff's pretty cool. I didn't know I'd end up writing about it one day, but I think there was a point when I realized there was something interesting going on. So I remember that one in particular.

Andrew: So you mentioned Saatchi & Saatchi, and that's one of those iconic advertising firms that you still hold in high regard today. Can you tell me a bit about who Saatchi & Saatchi were and that origin story?

Mark: That was Maurice and Charles Saatchi, were brothers, of course. And I think one of them had been a journalist, but they certainly, like Charles was an art director and was interested in art, and of course went on to start the Saatchi Gallery and to work in the art business. So, they wanted to—again, I think that what happened there was they were ambitious to create a new advertising, which was perhaps more glamorous and more dynamic than some of the advertising that had been going on. So in that respect, I guess Saatchi & Saatchi were, in a way, our version of DDB in the United States, along with a couple of others. I mean, BBH, Bartle Bogle Hegarty, were very influential with their Levi's advertising as well in the '80s. So those are the two that, when you think about British advertising in that period, crop up quite a lot.

Andrew: We've talked about North America, we've talked about Britain, but one thing that I think, an ad that's very iconic that brings these together, is Apple's "1984" ad. It's widely considered as the greatest advertisement of all time, and it was developed by an American agency, Chiat/Day, but it was filmed in England, and it was directed by Sir Ridley Scott. Can you tell the story of this ad and describe the impact it had and its significance?

Mark: I think it marked the launch of a new era, in a way. It was the launch of the Apple Mac, which was cleverly positioned not as just a computer, but as a creative tool, which basically underpins the whole of Apple's image, ever since, "tools for creative people." And it was going against IBM, which is very much, "International Business Machines."

This is like the alternative. So that was clever. The ad itself is extremely atmospheric and imaginative. It seemed to be shot on a huge budget. I don't know whether it was, but it seemed to be. It looked like there was money on the screen. It was first shown on the Super Bowl, which also heralded that event as the annual showcase for the best advertising, which of course, it has now become. And when I think about it, it was the first time real life had caught up with science fiction.

Suddenly, we were living in the future with this ad because the end line is, "And that's why 1984 won't be like 1984." So these two worlds had collided: the world of literature and the world of computing, and also, on top of that, the world of advertising. So it was a magic potion, in a way. Total genius, actually.

Andrew: And it's one where it shows a few things. One, it shows Steve Jobs' timing, or Apple's timing. It's one—you couldn't do that in 1983, you couldn't do that in 1985. You had to do it in 1984 and have it be the ad that ties to this iconic book, a major event like the Super Bowl. It came at the beginning of 1984 as well, so they're able to use it for the rest of the year. And then it's also one where you don't see the product at all. You don't see computers in use. It sort of just is all about an emotion, a time, a feeling, and somehow it works, and it captures a lot of attention.

Mark: It's almost an anti-computer ad, bizarrely, but so yeah, it's—I believe Lee Clow was one of the people behind that, at TBWA.

Andrew: So we've covered ancient advertising up to 1984, and I've only covered a small portion of Adland. And I want to ask a few more questions, and I want to read one of your quotes that comes near the conclusion of the book.

"If the history of advertising has one overriding theme, it is this constant tug of war between two schools: the creatives, who believe art inspires consumers to buy, and the pragmatists, who sell based on facts and come armed with reams of research."

If you were to look at the past few decades, or if you looked over the history of advertising, who would you say is winning the tug of war? Has it shifted over time from these creatives and the pragmatists? Who's winning today? What are your thoughts on this idea?

Mark: It's funny how you change because I wrote that book a while back, and I was definitely on the side of the creatives because I guess I saw myself as a—I was a writer, so I saw myself as this creative person, not interested in, and I hate math, I'm terrible at maths, and the data guys represented math, like the math teacher. But, I've grown perhaps a bit more mature since then, I hope so anyway. And to be fair, now I think it's—I think the ideal is a mixture of both. So creativity inspired by solid research, inspired by data. But I would say I still think that creativity is the key to a message you remember, which is the goal of all advertising. And creativity is a very intangible human thing. So I don't think creativity will ever be replaced by AI, for example, which is a whole other conversation we could get into. So for me, creativity is—I mean, Bill Bernbach, talking about him, he said creativity was perhaps the last unfair advantage that business people had. And I like that idea of creativity being an unfair advantage because it's not easy to do, and if you have it, you're good.

Andrew: If I was to think of this tug of war, clearly during the creative revolution, the creative part was winning the tug of war. If I think of the post-internet era of advertising, I think that the pragmatists, or that has become much more data science-oriented. What's our cost per click, what's the very measurable ROI? And there are moments where creativity shines through, and of course, they work together. But if I was to really be forced to pick one today, or since the launch of the internet, really, I'd probably lean towards the pragmatists sort of starting to win more of the battle or shape more of the industry. Is that—does that align with you, or what's your reaction to that?

Mark: It's interesting. What I find is that the creatives who, I think, resisted big data, or some of them did, have now accepted that it can make their work better because it's made it easier to talk to a smaller bunch of people. So, to target your advertising, to know who you're dealing with, rather than just throwing it out there. Because, with a TV commercial in the old days, you really didn't know who you were getting. I mean, there were ways of, there were focus groups and stuff like that.

But, a TV ad would go out into masses and masses of households, and only a certain amount of those people were in the market for a car. Whereas now, you can probably find out exactly who's in the market for a car and fire the ad at them. So I think the creatives have learned to deal with that world and to work within it. But I think they're still allowed, and indeed encouraged, to come up with these ideas that are quite magical. I mean, you mentioned earlier that I'm involved in the Epica Awards, which is a creative prize given by journalists. And every year, I'm staggered by the amount of creativity and innovation and wonderful ideas that emerge. So yes, data is important, yes, there are more facts to inspire creativity, but creativity, really, it'll never die. It's still there, and I think it's still holding its head more than holding its head above water, that's for sure.

Andrew: Yeah, and it is, in some ways, it's presented as opposing forces. I think there are plenty of examples of them working best together, and not just recently. Like, one ad that comes from David Ogilvy, who we mentioned earlier, is he was always doing a lot of research on his clients.

He had this ad for Rolls-Royce in which he said, "At 60 miles an hour, the loudest noise in this new Rolls-Royce comes from the electric clock." And it's very creative. You wouldn't think to—all the things of a Rolls-Royce, you wouldn't think that the ad would showcase the electric clock. And it's very surprising, but it's very—you just imagine him reading every little thing he could about this car and this coming out and using that research and the data and all the stats about it and highlighting the one that could capture somebody's imagination and their attention.

Mark: Yeah, that's very Ogilvy, that would—that he believed in research. He worked with George Gallup for a while, and so Ogilvy was quite a rational person, but he was capable of turning facts into gold with his pen. He was a terrific writer, so that's what made him one of the creative revolutionaries as well, I think.

Andrew: So you published the first updated second edition in 2013, so we're probably 12 years on by the time this is published. Do you have any plans for a third edition of this book?

Mark: I would love to say yes, but right now—writing a book is a lot of fun, but it's also extremely time-consuming, and it's really hard work. So although there's a lot to say, particularly about the digital era—I scratched the beginnings of the digital era, particularly in the second edition of the book—so there's a lot more to say, but right now I prefer to say it in the articles I write and in the interviews I'm doing on a more or less day-to-day basis than to tackle another book. But hey, never say never. Maybe I'll just get inspired one day and say, okay, let's do this. Maybe I'll get frustrated and say, no, we need to do a third edition. So never say never, but there's not one cooking at the moment, no.

Andrew: And you mentioned your work today and the Epica Awards. Can you tell me about what the Epica Awards are and what your role in it is?

Mark: I work for—my day job, if you like, is I'm a journalist for a site called AdForum, which is a B2B site for people who work in the ad industry. And we have an awards, the Epica Awards, which started out as the Editors and Publishers International Creative Awards, but people just call it Epica now. And so the idea is that once a year, we invite agencies—not just advertising agencies, but design agencies, production agencies—to send us their best work. And we get around a table with a whole bunch of leading journalists, and we decide which is the most interesting and the most creative and innovative out of all that work, and we give some prizes and make a few people happy. So it's kind of a great job, writing and writing about and rewarding creativity. There are worse jobs to have than that, so I enjoy it very much.

Andrew: And yeah, seeing and thinking about some of the best campaigns in the world, it just sounds like a fun job in general.

Mark: Yeah, no, I got—and I get my, my boy is 13 now, so I get him embroiled. So when I'm watching something really cool, I say, "Come look at this, this is cool." So now he wants to work in advertising, too.

Andrew: That's amazing. Well, Mark, I've truly enjoyed this conversation, and I had an absolute blast reading Adland. I recommend it to everybody who's listening. How can listeners learn more about your work, can follow you online?

Mark: I'm on LinkedIn, where I publish quite a few of my articles, or I link to quite a few of my articles, so you can find me there. If you want to find out about my more domestic life, life in France, and also my own attempts at creativity because I'm interested in photography, I'm pretty active on Instagram as well. So you can come and stalk me there. So those are the best two places, I guess, right now.

Andrew: Thank you so much, Mark. I truly enjoyed this conversation.

Mark: Well, thank you so much for inviting me. It was a real honor, and I'm very happy to have been on the show.

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Welcome to episode two of A History of Marketing. I'm Andrew Mitrak, and today my guest is Guy Kawasaki. Guy shaped the field of marketing by popularizing the idea of evangelism marketing. Today, there are more than 10,000 technology, brand, and product evangelists on LinkedIn, and that wouldn't have happened without Guy.

Guy worked at Apple during some of their most iconic marketing moments, so he shares an insider's perspective on the launch of the Macintosh, the 1984 Super Bowl ad, and the "Think Different" campaign. Guy is also a teacher; he's written many books about marketing and entrepreneurship, and I talk in the episode about how his books influenced me personally as a marketer. If you like this conversation, definitely check out Guy's Remarkable People podcast, where he interviews the likes of Steve Wozniak, Arianna Huffington, Seth Godin, and hundreds of others. Now, here it is: my conversation with Guy Kawasaki.

Read the full transcript:Note: This text is from a recorded conversation transcribed with AI. I have read it to check for mistakes, but it is possible that there are errors that I missed. I’ve also added images and helpful links in the transcript.

Andrew Mitrak: Guy Kawasaki, welcome to A History of Marketing.

Guy Kawasaki: Yeah, thank you. I think that's a great name for a podcast, A History of Marketing. You've got a lot of material to cover there, Andrew.

Andrew Mitrak: There's a whole lot of history. I don't know if we'll get to every single campaign and every brand, but we'll try. I want to start by saying what an honor it is to speak with you. When I was a marketer for startups, your book The Art of the Start 2.0—it was the 2.0 version—was one of those books that I just referenced over and over.

Guy Kawasaki: Wow.

Andrew Mitrak: And I feel like I'm speaking to my teacher, so it's amazing.

Guy Kawasaki: Well, I hope you, as a student, got value out of the book.

From Law School Dropout to MBA

Andrew Mitrak: Got a lot of value out of it. So, I want to start this conversation way back before you even started your career. In your book Wise Guy, you write about the time you went to law school. And then you dropped out after a week and changed paths to get your MBA, and you majored in marketing.

Guy Kawasaki: Yeah.

Andrew Mitrak: What was it that drove you to an MBA in marketing?

Guy Kawasaki: I wanted to be an entrepreneur as opposed to a lawyer. This is back in the mid-70s. And back then, if you're Asian-American, your parents want you to be a doctor, dentist, or lawyer. So, I tried the doctor route, and I fainted in the hospital, so I knew doctor was out. And then I read some article about dentists having the highest rate of suicide, so dentistry was out. So, all that was left was lawyer. And my father was a legislator in the state of Hawaii; he had never gone to college. So, it was kind of his dream that his son would go to college, go to law school, and all that kind of stuff. And I hated law school. I hated it so much I quit after a week.

Andrew Mitrak: After you quit law school, what was it that drove you to pursue an MBA and focus on marketing, of all things?

Guy Kawasaki: The interesting thing is that back then, an MBA was some kind of dues that you paid. And if you wanted to get ahead in business, you had an MBA. And so, back then, in that 1970-1980 timeframe, we had to get an MBA to get good positions in business.

The Value of an MBA for Entrepreneurs

Guy Kawasaki: Now, of course, the interesting thing is, if someone were to ask me today, "Do I need to get an MBA to be an entrepreneur?" I would tell you absolutely not. That it is neither necessary nor sufficient. And what you should do is, if you're the geek, find the marketer; if you're the marketer, find the geek, and get rolling. You shouldn't go get an MBA.

Andrew Mitrak: Your LinkedIn profile says this: "Education: UCLA MBA." And your quote on it is, "I've come to believe that an MBA is a hindrance to entrepreneurship, but I do have one from UCLA.”

Guy Kawasaki: At least I'm honest.

Andrew Mitrak: Do you think that there was any value from your marketing courses, or were you taught things that were able to apply?

Guy Kawasaki: I can't exactly condemn the whole MBA program. It's not exactly the MBA's fault; you get out of a degree what you put into the degree. And the funniest thing is, I became very good friends with my marketing professor. To this day, we're friends. And yes, I learned the classical marketing things from Philip Kotler, like the five P's or the four P's or the three P's, or whatever those P's are. I got a bunch of P's: price, promotion, place, and—

Andrew Mitrak: Product.

Guy Kawasaki: Product! Product, price, place, promotion. So, I learned that, and I learned classical marketing lingo. So, when a consulting firm comes into your company and tries to BS you with marketing terms, it'd be nice to know the marketing terms they're trying to BS you with.

Learning Sales and Marketing in the Jewelry Business

Andrew Mitrak: A lot of people who get MBAs join those consulting firms, but you didn't do this. While you were in business school, you worked part-time at a jewelry company.

Guy Kawasaki: Yeah.

Andrew Mitrak: And to quote your book, "I started out by counting diamonds and left five years later as the vice president of sales and marketing." So, what does sales and marketing look like for a jewelry company in the 1970s?

Guy Kawasaki: The jewelry business is hand-to-hand combat. You have to learn how to sell. Now, when people hear in 2024 "learning to sell," you're thinking, "Oh, it's a Google A/B test," or "You're testing various forms of ChatGPT text." That's not what I'm talking about. I'm talking about hand-to-hand combat sales. In jewelry, it means you make an appointment with a fine jewelry retailer, you fly to Kansas City, the appointment is at 10:00, they finally come out and say hello to you at 11:00, then they keep you waiting another hour, and then they give you 15 minutes for you to show them your line. And in that 15 minutes, they're telling you your stuff is too expensive, and "We can get this anywhere cheaper," and blah blah blah. So, you learn patience, you learn rejection, you learn a lot of things that are very useful for the rest of your life.

Andrew Mitrak: Totally. So, it sounds like this job was a little more sales than marketing, is that fair?

Guy Kawasaki: Well, let me put it to you this way, Andrew: I believe that all of life is sales. People think sales is just this act of taking these orders down or having people click through and put something in a shopping basket and then use Apple Pay to pay. But I'm telling you, life is sales. You sell to get a date, you sell to get a job, you sell to get an upgrade to first class on United even though you got a coach fare, you're selling the front desk clerk to give you a corner room because you need more space to have meetings in the morning. You're selling the clerk to say, "Checkout is at 11:00, but I got a meeting at 12:00. Can I get a late checkout?" I hate to tell you, but life is sales.

How a Love of Cars Led to a Career at Apple

Andrew Mitrak: So, moving on past the jewelry company, you joined Apple in 1983, which seems like a really exciting time to join Apple. And it was Mike Boich, who was the first software evangelist, who hired you.

Guy Kawasaki: Yeah.

Andrew Mitrak: And you write in your book that Steve Jobs told Mike, "You can hire Guy, but you're betting your job on him." And so, do you know why Mike was willing to bet his job on you? What was it that got you this role?

Guy Kawasaki: Well, it was 100% pure, honestly, nepotism. We were very good friends at Stanford. I'm going to take you down a little bit of a rat hole. When I was a young kid in Hawaii, somebody gave me a ride in his Porsche 911. And when I rode in that 911, I said, "Oh my God, this is why you gotta study, Guy. This is why you gotta work hard because you don't want to buy a used Toyota Corona for the rest of your life. You want to drive a German or Italian car." And I fell in love with cars, and I was obsessed with cars.

Then I get to Stanford, and I meet this guy named Mike Boich. He too was obsessed with cars. The difference between me and him is that I wanted to have cars, and he was from a wealthy family; he had nice cars.

He had a Ford GT40, which is probably worth $5 million today, although he doesn't have it because he made one of the worst deals in the history of automotive trades. He traded a Ford GT40 for a 1976 911 Turbo. That 911 Turbo might be worth, I don't know, $150,000 today, but it would be much better to have the Ford GT40.

So, anyway, we get to Stanford, somehow we meet, and we forge this friendship over cars, not over computer science, not over Apple I, not over programming BASIC or FORTRAN, anything like that. Our friendship was based on a love of cars. And then we graduated, and he went to Hewlett-Packard, and from Hewlett-Packard, he got a promotion and went to Apple's Mac division. And then he called me up, and he said, "We need somebody to be an evangelist." And I'm telling you, 90% of my qualifications was that I was his friend.

The Origins of the Term "Software Evangelism"

Andrew Mitrak: So, he calls you up and says, "We want an evangelist." And evangelist was kind of a new word; it was unique to Apple. I think you write that Mike Murray, the director of marketing for Macintosh, he's the one who coined this term "software evangelism."

Guy Kawasaki: Well, there was Jesus before Mike Murray.

Andrew Mitrak: Right. But that's exactly right. That evangelism is this term that's really associated, up to that point, with religion. And what was your reaction to, "Is my job title going to be 'evangelist'?" Was there any explaining you had to do when your business card said "evangelist"?

Guy Kawasaki: There were people who looked askance at that concept. Particularly if you were a hardcore Christian, you're thinking, "What are these punks from Silicon Valley? They're appropriating our word. Jesus and John, and now Mike and Guy—not quite the same category there, bro." So yeah, there was some of that. There was some pushback in the sense of, "What the hell does an evangelist do? They're the guys who tell me to come down during the Sunday service and give witness to Christ. Is that what you're asking me to do?" Well, in a sense, we were asking them to come down and embrace Macintosh, but that's not exactly evangelism in their minds. And I want people listening to this to understand that evangelism comes from a Greek word meaning "bringing the good news." And so, what I did was I brought the good news. I brought the good news that Macintosh would make you more creative and more productive because of its graphical user interface and its WYSIWYG printing. I brought the good news to developers that this is a product that—you're no longer just dependent on the IBM PC. We have much, much richer ROMs, so you can program the software you always dreamed of creating. And this easy-to-use, fun, cool computer will open up a market to people who would have never bought a computer. So, that was the Macintosh religion. And so, my job was to bring the good news of Macintosh evangelism to developers so that they would create Macintosh products.

Guy Kawasaki: ‘The Father of Evangelism Marketing’

Andrew Mitrak: Now, you weren't the first evangelist, and you didn't come up with evangelism, but if you think of who in the world is most associated with evangelism for a product or for technology, or in the secular sense, it'd be Guy Kawasaki.

Guy Kawasaki: I think that's a good thing.

Andrew Mitrak: I think it's a good thing. I looked around, and sometimes you've been referred to as the "father of evangelism marketing," and—

Guy Kawasaki: Well, to be quite honest, Mike Boich was the first evangelist, the first secular tech evangelist. I was the second one, but I get all the credit.

Andrew Mitrak: I think we'll go on to later, as we get further forward in your career, you did evangelize this concept of evangelism. And so, what did the daily work of an evangelist look like at that time?

Guy Kawasaki: The big picture is we bring the good news. So, the concept is, how do you bring the good news? And what we did is basically, we did a lot of demos. We showed people MacWrite and MacPaint. And basically, if you saw MacPaint or MacWrite in the mid-80s, having used the Apple II's DOS and character operating system, or the IBM PC's MS-DOS operating system, and you saw MacPaint and MacWrite in the Macintosh Finder, it was a religious experience. And so, we would show them the good news and ask them to believe in Macintosh as much as we did.

Secrecy and the Macintosh Launch

Andrew Mitrak: You joined in '83 as an evangelist for the Macintosh, and the Macintosh hadn't launched yet, right? So, did you have to have people sign NDAs or carry it in a secret suitcase, or what was that like?

Guy Kawasaki: Yeah, to get a Macintosh demo, you had to sign an NDA. And if you wanted to get a Macintosh prototype, you had to give us your firstborn child. But yeah, there was a lot of secrecy. And, I actually think that the secrecy added to the mystery and the romance of this computer. I'm not telling you we were paranoid in doing this because we were such sly marketers, we said, "We don't care if everybody knows about it, but let's make it really hard to find out just for marketing purposes." No, we really wanted it to be a secret and make a big splash on January 24th, 1984.

Inside Apple's Iconic 1984 Super Bowl Ad

Andrew Mitrak: I think I know what you're referring to. This is like a natural segue to what's often referred to as the best advertisement of all time: Apple's 1984 ad that aired at the Super Bowl. When did you first see the ad? What was your initial reaction to it?

Guy Kawasaki: I saw it on January 24th, 1984, on TV. There was a very small group of people who had seen that ad. It was Mike Murray because he was in charge of marketing, Steve Jobs obviously, probably Steve Jobs' direct reports. But, I don't want to give you the impression that I was BFFs with Steve Jobs. I was, like—let's see, I was—it was Steve Jobs to Mike Murray to Mike Boich to Guy.

Andrew Mitrak: What was the reaction among other Apple employees or other folks in the sales and marketing team when they saw this ad for the first time?

Guy Kawasaki: That's a mixed bag because, at that time, the Apple II was the shipping computer. The Apple II was 100% of the revenue, right? And yet, there was this small collection in the Macintosh division who thought that our product was so much better, even though your product is paying for our product, and your product is paying for our salaries, and your product is paying for our building and everything. But we were the handpicked, spoiled brats of Steve Jobs. So, there was some resentment, honestly, and I can't say I blamed them. And then, in a sense, there was always a battle for developers, right? So, for developers making Apple II software, and then Guy and Mike Boich show up and say, "We want you to do Macintosh software." Well, guess what? The Apple II people weren't exactly thrilled that we were trying to convince people to do Macintosh software. But eventually, Macintosh, honestly, killed the Apple II. But it was walking a tightrope there because you don't want to kill the Apple II, you don't want to kill the cash cow before the calf is born, to use a totally farming metaphor.

Andrew Mitrak: Did this ad make your job easier? Did people want to buy and develop for the Macintosh because of this ad, or what did it do?

Guy Kawasaki: It made it much easier because people were so intrigued by, "What could this Macintosh be? And it's so revolutionary, and it's so different, and it's so mysterious, and it's so cool, and it had this great ad." That nobody had ever seen an ad like that before. And that ad, which was almost killed by the board of directors, but that ad was a tremendous marketing tool. Tremendous.

Evangelizing Evangelism: Guy’s Books and Influence

Andrew Mitrak: So, from 1983 to 1987, you were on the evangelist team for the Mac, and then you left Apple in 1987. You write books like The Macintosh Way and Selling the Dream, and this is when you kind of became something of an evangelist for the concept of evangelism. You start writing publicly about evangelism. What drew you to do this, first off? And then also, did you see other companies start to also hire evangelists around this time?

Guy Kawasaki: I will say that the creation of the secular evangelist career didn't take off that fast because there are not a lot of companies like Apple. And it's not so important semantically that you use the word "evangelist." What's important is the concept that you are marketing something that is good news, and the good news is not for your benefit; it's for the benefit of the customer, right? So, the difference between evangelism and most sales is that most sales is about the salesperson. "This is my quota, this is my bonus, this is my salary, please buy my widget so I can make my bonus." With Macintosh—and I tell you, this is—I absolutely, 100% promise you this was true—that when we were evangelizing Macintosh, we believed in our heads, "Yes, it's good for us as Apple employees, but it's also very good for you because you will become more creative and productive." So, it's not just about me making my quota; it's about you improving your life.

Returning to Apple as Chief Evangelist

Andrew Mitrak: Absolutely. Now, you returned to Apple in the mid-90s, this time as Chief Evangelist.

Guy Kawasaki: Yes.

Andrew Mitrak: How had evangelism at Apple evolved between the time you left and when you returned?

Guy Kawasaki: Well, I left in '87, and I returned in '95. And those were a few difficult years. John Sculley was fired, Steve Jobs was fired, layoffs, everybody thought Apple was gonna die. So really, I was brought back to maintain the Macintosh cult and maintain the macOS developer community, as a chief evangelist, chief cheerleader, all that kind of good stuff. It was a glorious time. It was the most satisfying work to—it sounds immodest, but I kind of helped Apple survive that period.

Andrew Mitrak: Yeah, it was really in a bad spot. This is the time where, I think it was—what was—Michael Dell saying they should just sell the company and return it to shareholders?

Which is probably the worst call of all time, maybe. But anyway, it turns around at this time. And it does seem like, in that late '90s, mid-late '90s period, and when you returned, Apple does really turn around.

Guy Kawasaki: Well, I could actually make the case, if you really knew, whenever I left, Apple turned around. Because I left in '97, and then it started really doing well. And I am no Steve Jobs, I am no Steve Wozniak, I'm no Tim Cook. Don't give me too much credit.

Behind the Scenes of Apple's "Think Different" Campaign

Andrew Mitrak: One of the things during this turnaround is another top Apple campaign: the "Think Different" campaign. And you were in the room when Lee Clow from Chiat\Day presented this campaign for the first time. Can you describe what this presentation was like?

Guy Kawasaki: Yeah, so this is just as Steve is about to return, having been purged from Apple. So, he was coming back after the purge. And back then, it was kind of really almost a negative to use a Macintosh because this is a tarnished company, and it was going to die, and blah blah blah. Although the Macintosh believers never really bought into that, I'll tell you that. The faithful were faithful all through that. And so, we couldn't exactly make a credible case that, "This is the safe purchase," that "This is mainstream," that "This is conservative," and "This is logical," and all that. So, the people at Chiat, they came up with this genius ad campaign about, "If you want to be like Pablo Picasso or Richard Branson or Jim Henson or Amelia Earhart or Gandhi." So, basically, the campaign was, "These are the kinds of people who think different, and if you want to think different and be remarkable like them, you would use a Macintosh." And that ad, that whole sentiment, just so fit in with the mentality of the Macintosh employee, Macintosh believer.

Andrew Mitrak: So the words "Think Different," I recalled in Walter Isaacson's Steve Jobs biography, and he wrote, quote, "They debated the grammatical issue. If 'different' was supposed to modify the verb 'think,' it should be an adverb, as in 'think differently.' But Jobs insisted 1 he wanted it to be 'different.'" I'm like, "Oh my gosh, how could they have ever considered 'think differently?'" Were you present for this debate at all, and do you recall this happening?

Guy Kawasaki: Nope, nope, nope. I was just a little peon. No, I cannot take any credit for that. I was just in the room, and it was unveiled. So, no, that was the genius of Lee Clow and the team at Chiat\Day. I had nothing to do with it. And anyway, I'm very glad they didn't use the adverb.

Andrew Mitrak: I don't think we'd be talking about it today if it was "Think Differently."

Standing up to Steve Jobs

Andrew Mitrak: So, would you be open to sharing the story of what happened after this presentation?

Guy Kawasaki: Of course. So, Lee Clow gives this presentation of "Think Different" to the marketing department. There had to be, I don't know, 15, 20 marketing people there. At the end, Lee Clow says, "I have two copies of the videotape, Steve, of all the ads. I'm going to give you one copy and one copy to Guy." And Steve says, "Don't give it to Guy." So, I said to Steve, "What's the matter, Steve? Don't you trust me?" And Steve, as only Steve would, he says, "Yes, Guy, I do not trust you." And this is one of those moments in your life where, if you look back and say, "Why was I such a wimp? Why did I just back down and say, 'Oh, it's okay, Steve. Yeah, you're Steve Jobs. I'm just a little pimple on the face of this earth.'" So, that was a man or mouse moment. And so, when he said that, I said, "It's okay, Steve, I don't trust you either." And it probably cost me $250 million, but it was worth it.

Andrew Mitrak: For me, the story, it really strikes a nerve. I think we've all been in some situation where somebody who's higher up, they're being somewhat of a bully or just flexing their power or diminishing their team or something.

Guy Kawasaki: Me—well, but the funny thing is, a few years later, Steve offered me another job, but like a jack**s, I turned that down.

Guy Kawasaki on Evangelizing Canva

Andrew Mitrak: Moving on to one that seems to be a very good call to work with is Canva. You're now the chief evangelist at Canva. They make a great product; I use it for this podcast. What does your role as an evangelist look like today?

Guy Kawasaki: Well, it's just like before. I'm telling the good news of Canva. So, what Canva does is it empowers people to be better communicators because it empowers you to create your own graphics. And that wasn't something people could do before. If you've ever tried Illustrator or Photoshop, you know that you don't just whip those things out and start creating great graphics. So, Canva democratized design just like Macintosh democratized computers. So, I like to democratize things.

Andrew Mitrak: Being an evangelist in this day and age, there's social media today; there wasn't back in the '80s. Canva is a software product that's online, and the Macintosh was before the internet as we know it today, and it was a hardware product. Is your role as an evangelist strikingly different with Canva now versus Mac back then?

Guy Kawasaki: Well, obviously, in evangelizing Canva, you had more technology than a fax machine and a cell phone in the trunk of your car. So, that helps. There's all these online services, these social media platforms. There's where to send graphics. In fact, the ability for people to send graphics is kind of like the inflection point that made Canva so useful, right? If there was no need to send graphics with Twitter, well, guess what? People wouldn't be making graphics, and if they wouldn't be making graphics, they didn't need Canva. So, it all kind of worked out. And yes, Canva is online, software as a service, and Macintosh is plastic and silicon and glass and steel. But I think it's more similar than different, that it's good news. Good news is good news.

The Impact of Social Media on Evangelism

Andrew Mitrak: Outside of evangelism—I could probably spend hours asking you questions about social media—how has social media impacted evangelism?

Guy Kawasaki: Well, social media has impacted evangelism because it gives you a way to spread the good news better than anything ever before. I don't know how much it cost to make the 1984 commercial—land, let's say it's a million. Let's say the spot was 5 million. So, 6 million to run a 1984 commercial. You can buy a lot of ads on social media for $6 million, especially $6 million in 1984, what it would be today. So, the technology has made spreading the good news much easier. Of course, the technology has also made spreading bad news and the incorrect news and the conspiracy news easier, too.

Andrew Mitrak: So there's more noise.

Guy Kawasaki: That's right. I bet if anybody spent $6 million on a social media ad today, though, we wouldn't be talking about it 40 years from now in 2065, the way we're talking about the Apple 1984 ad, though. So, there's something about that.

Guy Kawasaki's Unique Method for Collecting Quotes

Andrew Mitrak: As we start to wrap up, one kind of random question for you, or a fun one, is that in all of the books of yours that I read, you start each chapter with a quote. And I was writing down these quotes because they're all so great. And you seem to collect and find the perfect quote for the perfect chapter. How do you go about collecting and keeping track of your favorite quotes?

Guy Kawasaki: Yeah, I don't know where I started that practice. I must have read somebody else's book who did that, and I thought, this is like—I would say, when you have that at the start of a chapter, it's kind of like when you have a banana split, and the first thing you eat is the cherry, right? So, that's the cherry on top. And so, in the old days, when I had to find these quotes, I had all these—I had literally, I don't know, a dozen books of quotes. It was—God—oh, Bartlett's, I think it was, like, Bartlett's Book of Quotations.

Andrew Mitrak: Yeah.

Guy Kawasaki: So, there was Bartlett's and all that. So, literally, I would just go—it was just brute force. And then the next generation of Guy finding good quotes was Goodreads because Goodreads has these favorite Goodreads quotes where you can just put in the word "innovation," and it'll give you every quote about innovation. But now, in my latest book—because I just finished another book. It's called Wiser Guy. I did a book five years ago called Wise Guy, and now I just completed a book called Wiser Guy. God forbid, maybe someday I'll write Wisest Guy, but right now, we're gonna stick with Wiser Guy. And I gotta tell you, you just go to ChatGPT or any AI model, and you say, "Give me 20 quotes about innovation." And two seconds later, you have 20 quotes about innovation from Tom Peters or Steve Jobs or, God forbid, Bill Gates or Elon or whatever. You got these 20 quotes, and then you pick the one that you like. And then you ask Madison—Madison, please make sure that ChatGPT didn't hallucinate that Isaac Asimov said this. Make sure that Isaac Asimov really did say this about innovation because I don't want to make an ass of myself and put in my book an Isaac Asimov quote that ChatGPT hallucinated. So, now finding those quotes is very easy.

Well, it's very easy to get a bunch of quotes to pick from. I would say it's still somewhat of an art to figure out which one of those 20 you pick.

Andrew Mitrak: Absolutely. I'm glad that fact-checking was part of the process there.

I copied down a lot of quotes, but one that I feel like a fitting place to part with, "What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others." And that's from Pericles. And I just thought that one was—

Guy Kawasaki: Was that Wise Guy?

Andrew Mitrak: That was in Wise Guy. That was a very good one, yeah.

Guy Kawasaki: Yeah. Well, I hope Pericles really said that.

Andrew Mitrak: Yeah, it was in Greek, I'm sure it was translated.

Guy Kawasaki: I've never had anybody send me a message that says, "You know what? You said Aristotle said that? It wasn't Aristotle; it was Karl Marx or something."

Guy Kawasaki's Advice for Aspiring Marketers

Andrew Mitrak: As we wrap up, you've had a long career in marketing. What are some words of wisdom that you would share with marketers who are listening to this podcast who want to become better marketers themselves?

Guy Kawasaki: I've had a wonderful life being an evangelist and a marketer. And so, this is advice from an old evangelist and marketer to, I hope, young evangelists and marketers.

The first thing you need to understand is that it is not about you; it is about them. So, if you think that you're going to use this sales technique or this marketing technique or this evangelism technique to get your quota and bonus, and it's all about you, you're going to fail. Well, actually, you might succeed, but you won't be an evangelist. So, you gotta be thinking—you gotta work backwards from the customer, not forward from what you want to do. That's number one.

Number two piece of advice is, you have got to learn how to demo your product because the demo is the most important part of evangelism. It's not the pitch, it's not the baloney text, even that ChatGPT generated. It's, how good can you demo your Macintosh or your Canva or your motorcycle or your electric car or your software service, whatever it is. You gotta do good demos. If you cannot do a good demo, you're gonna suck as an evangelist. So, get that through your thick skull.

And the third thing is that, as an evangelist, just remember, always think, "Good news, good news, good news. It's not about me; it's good news. What is the good news I'm bringing?" And that's about all I can tell you about evangelism.

Andrew Mitrak: Well, Guy, thanks so much for this conversation. It's been an absolute blast. I've really enjoyed it.

Guy Kawasaki: Thank you very much.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

Welcome to the first episode of A History of Marketing. This podcast is a quest to understand how marketing evolved and today, we kick off this quest with an absolute legend: Dr. Philip Kotler, also known as the 'father of modern marketing.'

When I originally had the idea for this podcast, Phil was the very first person I reached out to, and meeting him has already made this project worthwhile.

Phil Kotler has authored over 90 books, including Marketing Management, which was my textbook when I studied marketing in school. To prep for this interview I watched his lectures on YouTube and read his autobiography, My Adventures in Marketing which is a lot of fun.

Phil Kotler’s career has spanned over six decades and his work has fundamentally shaped how we understand and practice marketing, so we cover a lot of territory in our 30 minutes together. Now here it is, my conversation with Dr. Philip Kotler.

Read the full transcript: Note: This text is from a recorded conversation transcribed with AI. I have read it to check for mistakes, but it is possible that there are errors that I missed. I’ve also added images and helpful links in the transcript.

Andrew Mitrak: Dr. Kotler, thanks for joining us!

Philip Kotler: Oh, thank you for inviting me. I'm always excited to talk about the history of marketing and where it's going.

The Emergence of the Word "Marketing"

Andrew Mitrak: I want to start at the beginning of where the word "marketing" originated. In one of your lectures, you give a fascinating illustration. You mentioned that if you looked in a Webster's dictionary, you wouldn't find the word "marketing," but then if you picked up a dictionary in 1910, you would find the word "marketing" in it. So I'm just curious what happened around the turn of the century with the emergence of "marketing?"

Philip Kotler: I would guess it wasn't used so much, maybe in conversation but not in print. Some people might say, "Hey, you're going to sell it or market it," I don't know, but there was no textbook on marketing. The first ones came around 1910. Why were they written? Well, because economists really wrote these new books called "marketing." They felt that economists didn't discuss enough of the factors that influence the level of demand. The main factor economists would talk about influencing demand was price: raise the price, less demand; lower the price, more demand. Well, these guys started to say, "But what about the whole advertising world? Doesn't that affect purchase rates? What about salespeople who knock on doors and show you new things and get your purchase order?" And then distribution, the whole system is quite complicated. So we needed a book, said economists, most of them were economists, that described things that economic theory didn't discuss or had no theory about, or fuzzy theories about. What is advertising and sales, and is that of any importance to mention when you're talking about macroeconomics or microeconomics? So that's how the book came about.

Andrew Mitrak: Absolutely. So these economists, these are sort of pre-Keynesian era economists, pre-Austrian School, very early economics. And marketing sort of originated as an academic pursuit from economists. I'm curious about when professional marketers, when you see a marketing job title in a company, would that also occur at the same time or was that later?

Philip Kotler: Well, that was later too. Actually, marketing was not looked upon as an important function. They called it really "advertising." And there was a separate group that was running the sales force. The two big things were, somehow we've got to incorporate in our thinking at that time something to say about a whole industry called "advertising" and a whole industry called the "sales force." The early books described these two areas in familiar terms, in common sense terms, but without much research. In other words, you'd find in one of the early books on marketing, "Here are the five traits of a successful salesperson." Well, you couldn't argue against those, but there was no evidence, no empiricism applied to figuring out why did IBM have a superior sales force and someone else did, and so on. And the same with advertising, it was common sense ideas of what make ads work well, print ads of course, this was maybe before we got to radio ads and television ads.

Philip Kotler's Journey: From Economics to Marketing

Andrew Mitrak: We talk about marketing as a form of applied economics and marketing originating from economics, and you yourself got your Masters and your PhD both in economics. I'm wondering if you could talk about how you jumped from economics to marketing and, I guess more broadly, what that relationship between economics and marketing is.

Philip Kotler: Those are two good questions. My economics degree at the Master's level was from the University of Chicago. I was a student of Milton Friedman.

Andrew Mitrak: Wow.

Philip Kotler: Therefore, I was learning Friedman economics in the sense, which is free market, and not only free market economics, but where the government is the problem, not the economy. But then, nothing about marketing. Then I moved for my PhD to MIT, and Professor Samuelson, Paul Samuelson, is the leader and he's a Keynesian economist. He believes that the government plays an important role, especially in recessions and depressions, of learning how to pump in more money so consumers will have more to spend and businesses could pick up on that demand. Now, that meant, how will consumers use the money that they're going to get? I got interested in the marketing question of how consumers use their money and how companies try to get consumers to use the money to buy the things that the companies are making. So marketing strategy became very interesting to me. And when I was hired at Northwestern University, the dean there said, "Do you want to teach economics or do you want to teach marketing?" But he made a statement, he says, "You know, economics is a pretty settled field. It's hard to become Paul Samuelson or Milton Freedman again. Marketing is ready for development." He was right. I was tempted to and see, more curious about the everyday world of people buying goods and services and companies trying to sell those goods and services.

Andrew Mitrak: Yeah, that's actually probably some broader career advice of looking at what's the emerging category and the frontier versus what's been more saturated and played out. I'm curious, beyond academia, your first encounters with marketing just as a young person. Were there advertisements that you encountered that you felt were specifically memorable or campaigns, or just as a consumer, what were your interactions or observations about marketing at the time?

Philip Kotler: I was very interested in advertising campaigns and whether they were a good use of the money of the company to get more demand coming about. For example, I would watch the Coca-Cola campaign, and I would say to myself, "Something's strange because there's no information that's new in the campaign." Everyone knows what Coke is, many people love it. So what's its purpose? Why tell us nothing? Well, they, that's not really what happened. It was showing the consumers in a happy state. It was an emotional response that was being, not a cognitive response. But the aim of the campaign was going to be to get people to feel happier connected with drinking Coke. But I wasn't just interested in advertising. I became interested in the whole idea of how to manage the marketing function in the company. Because frankly, the marketing function did not, was not in on the inner circle of the company. There's always the head of finance, we call the Chief Financial Officer, and their chief and product managers and all that. Marketing was there to help after all the other decisions were made. I'll give you an illustration. Often, the company has developed an innovation without any marketing people being part of the development of the innovation. And then when it was ready and tested in some ways, they call on the marketing people, "It's your turn to advertise it." Marketing people say, "Well, why did you price it that high? What was, who's the target market exactly? And why didn't you add these features? How did you even know that this was the best offer you could make?" So I was impressed with the companies that failed to include market-oriented thinking and customer-oriented thinking in making new products.

Figures who Influenced Marketing: Peter Drucker, Dale Carnegie, Ralph Nader, Abraham Maslow

Andrew Mitrak: Who are some of the leaders that most influenced you or who are the most influential people in the field of marketing that preceded your expertise in marketing?

Philip Kotler: Peter Drucker was not only the father of management, but he had a great appreciation of marketing in his voluminous writings. He was the one who said, "The aim of marketing is to make selling unnecessary." Because if you knew a lot about a customer, you will know that whether that person is going to even care about what you make. And if you know he will or she will care about it a lot, you have a right away to make it available and expose to them that they would get excited and they'd stand in line to buy it. In other words, his idea was to come out with a product that makes people just join the line to buy it as soon as possible. And we've seen products like that. Peter Drucker, here were some of his statements, and he's writing about management, but he loved marketing too. One of his statements, "The business enterprise has two and only two basic functions: marketing and innovation." Marketing and innovation produce results, all the rest are costs. Now, that was a put out to the people in production, people in finance, and so on. But if so, a company that is not good at marketing and innovation will slow down and die eventually. He says, "The purpose of a company is to create customers, not to make products." You know, in the old days, we say, "That's a car company, they make cars," right? No, they make customers for cars.

Andrew Mitrak: Okay, just want to pause on that. That's such a flip where I feel like sometimes today, marketing is seen as a cost center or the a cost of doing business and this is so contrary to that. And this is coming from somebody who is really an expert in business management stating this. So it is, it is just surprising to hear that it's so contrarian to sometimes what's the perception of marketing today.

Philip Kotler: Yeah.

Andrew Mitrak: In one of your talks as well, I saw you describing characters who influenced marketing and you mentioned Dale Carnegie, of course, from How to Win Friends and Influence People, the famous book.

Philip Kotler: Of course, the idea of the book How to Win Friends and Influence People was a testament about the kind of behavior someone who's selling something should have toward the buyer. It wasn't a book about applying high pressure or hard selling. It was soft selling, soft, engaging. It was valuing the consumer and the purpose, and probing what actually is operating in his or her mind. So that was good work. There were other people. You know, we had attacks on marketing too. We had people who said, "Our cars are unsafe." General Motors is making unsafe cars.

Andrew Mitrak: Ralph Nader.

Philip Kotler: Then we had Hidden Persuaders, Vance Packard, saying that even when you're in a theater, you may have to get up and get the popcorn because the movies have behind them a little thing that is suggesting that you're having a hunger for some popcorn. Never proven, of course, but the Hidden Persuaders, right? So, you know, I always said marketers deserve criticism and need to figure out how to respond.

Andrew Mitrak: What did the curriculum for marketing look like as you were becoming a student and a, and then a professor of marketing?

Philip Kotler: We found out that as a faculty member of a very good marketing group at Northwestern University, we divided our skill set into those marketing teachers who were going to be very quantitative, use methods of cluster analysis, regression analysis, sophisticated things, and those who were behaviorally oriented. They were going to get deeply into motivations of consumers and benefit formulations.

Brand building became very much, some people thought that the point was reached where maybe the field should be called "branding" rather than "marketing." But I argued against that because while branding is the most important, one of the most important things about marketing, the work, marketing is more about what products should we be making, and who do we want to go after. The brand comes up as part answers, but it's not a full enough question. Marketing is a holistic area. Now, I had a lot of influence from a fellow named John Howard, who didn't have much public presence, but he wrote wonderful stuff. He really took, helped create a framework for thinking about marketing.

But of course, the main framework that came about was what Jerome McCarthy did, the 4 P's thing. A little story about that. McCarthy went to Northwestern University for his training and took the class of Dick Clewett, who was a very good marketer and Clewett always talked about the three P's and the 1 D. He said, "Marketing is about product, price, and place, and distribution."

What is, what was Jerome's, what was Jerome's contribution? Instead of using the word "distribution," he used the word "promotion" instead. And so, product, price, place, and promotion, those were the four P's. Now, that's called the "marketing mix." Do you realize that historically there was a man named Neil Borden at Harvard who, in the maybe '40s, had a marketing mix of 12 tools that marketers can use? Interest, the interest rate is a tool. If you lower interest, more people will buy homes and all that. Great. Well, things, and so the interesting thing is that we went to four P's. Clewett was the inspiration that gave it to our friend who did it. But the interesting thing is strategy, well absolutely. Actually, those tools are tactics. Strategy is above that. Marketing mix elements are the tactics of marketing, but they have to be informed by a strategy that has figured out a need that isn't being met.

Andrew Mitrak: I want to talk about Marketing Management, which is the most widely used textbook today for marketers. And in your autobiography, you mentioned that as you were writing this, you weren't happy with any of the existing marketing textbooks. And this was partially what inspired you to write the first edition of Marketing Management. I suppose what was missing from these marketing textbooks at the time, and what did you want to do differently?

Philip Kotler: I wanted to have more theory about how can consumers actually behave. What we had, simple theories of people having needs. In fact, we had that famous one where there's needs going all the way from just to exist, your hunger being satisfied. But what is that triangle called?

Andrew Mitrak: Maslow's hierarchy of needs.

Philip Kotler: Yeah, so that scheme was there, but the behavior of sciences were growing and getting more sophisticated. We began to know much more about how the consumer side. So, all right, I felt Marketing Management offers a more comprehensive theory of consumer behavior and a more comprehensive theory of company behavior, management behavior, than we had really seen. I did a lot of work about strategy, differentiating between tactical marketing and strategic marketing. I also thought that some of the sophisticated tools for measuring demand and forecasting demand that I learned in the one-year Harvard program have to get explained to the students through the professor's learning roughly more about market segmentation theory. And then I quoted something, I think I developed it myself, STP. That marketing is about segmentation, targeting, and positioning.

Andrew Mitrak: I didn't realize that segmentation, targeting, positioning was something that you coined or came up with and popularized in your books. It's something that I come back to over and over. Do you recall the stroke of insight that led you to come up with that?

Philip Kotler: Well, it has to do with segmentation, which I was not the inventor of, the idea of doing more segmentation. I'm trying to remember the professor who wrote the most interesting article on it. But once you get into knowing there's even mathematics for segmentation, for optimizing on segmentation, that you now have segments, but you can't sell to all the segments. So targeting, figuring out the ones for whom you have the best product, and then communicating that it's the best for them is called positioning. Now, if that doesn't lead to branding, I don't know what does. So STP is the tool set for getting to build a strong brand.

Andrew Mitrak: Just coming back to Marketing Management, which is now in its 16th edition, I'm just curious about how it was first received. What was the initial reception of it like?

Philip Kotler: Well, I was delighted with the response, and I figured out the answer to why it was successful. It was successful because the marketing group always felt inferior to the finance group in a company. Marketing was common sense, but finance was science, right? Along comes a book, my 1967 book, that says marketing also has science to it. In other words, my book gave prestige to marketing. It gave a vocabulary and a mental framework where marketers are saying that they can add a lot of value. There was a whole group that thought marketing should stay centered on commercial activities, and I and Sid Levy, my colleague, said, "No, marketing is much broader than that because, first of all, you have the nonprofit organizations, and they're marketing a cause."

Social Marketing: Applying Marketing to Social Causes

Andrew Mitrak: Yeah, well this kind of leads into social marketing in a way. You mentioned your colleague, Sid Levy, and you published a 1969 article entitled "Broadening the Concept of Marketing," and then in '71, you published an article in which you coined the term "social marketing." What inspired you to look at broadening marketing, and what inspired you to help create social marketing as a field?

Philip Kotler: The broadening, I mentioned, is coming about because we found out that all organizations want to use some advertising, and they have a pricing problem, and so on. But as far as social marketing, it came about because of cigarettes. We were all upset about how many people smoke and want to stop smoking. Can marketing help them stop smoking or smoke less? Yes, what we could do is the four P's: make the product taste poor or find a cigarette that is at least less harmful since they still want to smoke, or make it harder to find where you can buy cigarettes. Don't put them right in the front of the retail situation, put it in the closet. And then the guy selling to you has to go into the closet and get your Marlboro package or something. And then raise the price of cigarettes, so it's harder to smoke five a day at that price. And then do a promotion that makes it look ugly to be a smoker, that you're, show how your health, you're coughing all the time now, and so on. So the four P's work beautifully on that. Today, they're not working for companies to sell more product, but they are there to use a set of tools to help people get off of something that they themselves don't want to be on.

Pushback Against Broadening the Concept of Marketing

Andrew Mitrak: Oh, wow. I want to come back to this idea of broadening the concept of marketing. From what I understand, there was maybe even some pushback of people saying, "Hey, we want marketing to be more of a narrow field focused on products and services," while clearly, marketing is much broader than that. I'm curious what the first reception to this idea was.

Philip Kotler: Well, I think people were hostile, but I would say that there was a group that wanted to stay with commercial business only. And we took a vote. We asked the AMA, American Marketing Association, to run a vote on this question of, "Do you, as a professor and member of the AMA, feel we should not stray from commercial marketing or that we should also allow that to happen?"

And the vote was overwhelmingly in favor of broadening marketing. That's the best way to settle something is to just take a vote.

Marketing may undergo another revolution. I'm waiting for it to happen. I want to be in on it too.

Andrew Mitrak: I want to ask about your six decades or more into a career in marketing, that you're continuously researching the cutting edge. Any tips or what's your secret to doing this?

Philip Kotler: Well, some of it must be genes. Everyone has a set of genes. I was lucky to have good health. I've always been interested in learning everything there is to learn in the world. I've had an Aristotelian appetite because Aristotle, in my mind, knew everything at that time. He wrote on poetics, he wrote on drama, he wrote on science, and so on. But different people come along, and some stay with one passion and do so well, and they move the whole area upward. But I've been interested in broad questions and what's happening in the world as well as what's happening in business at large.

The Marketing Lessons of Dale Chihuly and Studio Art Glass

Andrew Mitrak: And as far as your interest in a breadth and a wide range of topics, I know one of your interests is collecting contemporary studio art glass. I'm on this call from Seattle, and Dale Chihuly is a local icon. Just a fun question, I'm curious if there are any marketing lessons we could draw from the life and work and brand of Dale Chihuly?

Philip Kotler: Dale Chihuly put glass in the minds of everyone by not making more of the same. He was selling whatever he made of the same, but he wasn't going to stay making the same. He wanted to see how far you could push glass into being more than it is. So we go to a garden, and we see glass flowers growing. Or we look at a ceiling, and the ceiling is a piece of glass plane, but behind it are all kinds of beautiful things. This is in Las Vegas. Sometimes you're walking on a floor, and underneath it, there are some beautiful objects. There are many great glassmakers now, but he was the one who started it all.

And there's nothing quite like it. It's so vibrant and colorful, and it seems distinctive and highly imitated but never as good.

Andrew Mitrak: Dr. Kotler, thanks so much for your time. Are there any things that you'd like to promote or that listeners can look up, anything you'd like to plug?

Philip Kotler: Well, Andrew, I thank you. I'm coming out with a few new books because I get excited about other areas. For one, for example, has to do with small and medium-sized firms. Whenever I and others try to teach marketing, we always use Coca-Cola and McDonald's and big companies. So small companies are sitting in the audience and saying, "Yeah, but I'm a small company, can I use that? Do I have the amount of money that a big company, I don't have that amount of money." And we always get off of it by saying, "Oh, everything we said you could use in your business, however, whatever size it is." But the truth is that we don't have any book on marketing for small and medium-sized enterprises, for family businesses. We have some books, but they don't seem to, there isn't a standard yet for that. So one of the books we're coming out with will be on marketing for small and medium-sized businesses. And once we have the title start with family businesses because managing in the small, you see all the issues pop up.

Andrew Mitrak: Oh, gosh, and I am looking forward to that one. That's a personal passion area of mine. I look forward to reading that.

Andrew Mitrak: Yeah, absolutely. Dr. Kotler, thanks so much for your time. I really appreciate it. This has just been a wonderful conversation.

Philip Kotler: Thank you for starting your interest in the history of marketing because there's so much that we do know, but so much we still don't know. And absolutely, your explorations will be watched, I hope, very much by many, many people. And I want the professors to broadly know about the work you're going to prepare for their use in classrooms too.

Andrew Mitrak: Thanks so much.

Philip Kotler: So do successful marketing of your work.

*****

Recent Books Authored By Philip Kotler:

Philip Kotler and V. Kumar, Transformative Marketing, Macmillan, 2024.

Philip Kotler, Waldermar Pfoertsch, Fabio Guido Ulderico Ancorani, and Ivan Ureta Vanquero, Humanism in Marketing – Responsible Leadership and the Human-to-Human Approach, Springer 2024

Philip Kotler, Hooi Den Huan, and Iwan Setiawan, Marketing 6.0. The Future is Immersive, Wiley, 2024.

Philip Kotler, Hermawan Kartajaya, and Jacky Mussry, Reimagining Operational Excellence: Inspirations from Asia, Wiley 2024.

Gabriele Carboni and Philip Kotler, Enlightened Management, Amazon, 2024.

Waldemar Pfoertsch and Philip Kotler, B2B Brand Marketing, 2nd edition, 2025. (coming soon)

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org

A podcast exploring the untold stories of how marketing evolved through conversations with marketing leaders, professors, authors, and historians - including Philip Kotler, David Aaker, Guy Kawasaki, Jagdish Sheth, V. Kumar, Shelley Spector, and more.

Hosted by Andrew Mitrak

marketinghistory.org

Transcript:

Imagine this. The year is 1900. You pick up a copy of the Webster’s English dictionary. You search for the word "marketing."

You don’t find it. That’s because it’s not there yet.

Flash forward to 2025 and you log in to LinkedIn. You search for "marketing." You’ll find more than 9 million marketers on the platform.

What happened? When did Marketing become a job people do every day?

Why is Marketing History Overlooked?

My name is Andrew Mitrak, and I’m one of those 9 million marketers. I've led marketing for a few startups. I founded and sold a marketing agency, and now I work as a marketer at one of the biggest companies on the planet.

But I have a confession to make.

I know shockingly little about the history of marketing. And my guess is I’m not alone.

Think about it. If you study economics, you learn about Adam Smith.

Study computer programming and you’ll hear about Ada Lovelace.

Physics? Isaac Newton.

Biology? Darwin.

In most disciplines you learn about the people, the theories, and the milestones that shape the field over time.

But not so much in marketing. When I was in school, we jumped straight to the strategies and tactics used today

But who were the pioneers? What were the big breakthroughs? And when did people start calling themselves thought leaders?

I have lots of questions. So I looked for answers.

First I looked for a book about the history of marketing. But I didn’t find what I was looking for.

There are books for academics, biographies of advertising professionals, and a lot of books about marketing strategy today, and marketing in the future, but there’s little about marketing’s past.

Phil Kotler: “The Father of Modern Marketing”

I started my adventure into marketing history and I emailed Dr. Philip Kotler.

Phil is a living legend. He literally wrote the book on marketing management.

Philip Kotler: Thank you for inviting me. I'm always excited to talk about the history of marketing and it where it's going.

Marketing was common sense, but finance was science.

Along comes my 1967 book that says marketing also has science to it.

My book gave prestige to marketing.

And after we talked, Phil introduced me to his colleagues.

Connecting with Marketing Legends

George Day: “I'm delighted to be able to share my story.”

Jagdish Sheth: “Having a different perspective became an asset for me.”

David Aaker: “The idea that brand is an asset, and there's brand equity and you can build it, changed everything.”

Over the past few months, I’ve spoken with historians, biographers, museum founders, agency leaders, and former CEOs and CMOs. I’ve learned a bunch and felt super inspired.

V. Kumar: “Advertising has got three objectives: inform, persuade, and remind.”

Guy Kawasaki: “It is not about you. It is about them… You gotta work backward from the customer, not forward from what you want to do.”

Marketers are great storytellers. So these conversations are a lot of fun.

Larry Tye: “He was the most dazzling figure in the history of public relations.”

Shelley Spector: “It wasn't just PR that he did. I mean he was a part of history.”

Mark Tungate: “I was interested in advertising history, so I thought, ‘Maybe it's me that should do this.’"

And now, I want to share these conversations with you.

Introducing "A History of Marketing" Podcast

Introducing A History of Marketing, a podcast that explores the untold story of how marketing evolved.

Join me as we uncover the hidden history of the brands, the campaigns, and the brilliant minds that shaped the way we buy, sell, and market today.

Philip Kotler: “Marketing may undergo another revolution. I'm waiting for it to happen. I want to be in on it, too.”

Guy Kawasaki: “The very fact that I'm mentioned in a podcast with Philip Kotler with someone like Philip Kotler... I've arrived.”

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This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketinghistory.org