Igor Beuker is an in-demand speaker in the area of marketing. The award-winning marketing visionary states “Advertising may win quarters, innovations win decades”. We are in the era of the Fourth Industrial Revolution, which has completely transformed every industry. This revolution has had more impact than the three previous Industrial Revolutions combined. In this era of digital Darwinism, it is change or die. The established order of traditional brands still depends too much on advertising. The speed of innovation and ability to monetise trends give the required competitive strength and acceleration. How can traditional brands best make this transformation? This is why Beuker has created a Mad Men vs. Math Men theory.
According to Beuker, digital Darwinism is a phenomenon “where trends, technology, the consumer and society change quicker than companies can keep up with. It is a fate that is a threat to governments and other major corporates. (..) Large, strong brands and ‘Fortune 500’ companies, that still spend 5 to 6 billion euros a year on advertisements are not good at innovating and struggle to monetise opportunities from the 21st century.” (Tuk, 2018)
Beuker’s claims do not come out of thin air. Behind the scenes, he is an award-winning strategist for brands such as Nike, Amazon, L’Oréal and Unilever. He is a business trendwatcher for various Fortune 500 companies, a serial entrepreneur with multiple exits, angel investor and columnist and reporter for Business Insider.
These companies face a number of problems, says Beuker. They do not only spend much on advertising, but also on ‘retrospective market research, research & development and consultants such as IBM and McKinsey.’ Beuker calls these Fortune 500 companies ‘Mad Men’.
This term refers to the iconic series Mad Men, which was about the advertisement industry in the 1960s. Back then the advertisement industry was still controlled by cowboys and opportunists. In this series, only rarely, if ever, is anyone asked if a campaign pays off, nobody is evaluated based on performance and creativity seems to trump effectiveness. The series cultivates the image of the artist and creative advertisement professional.
Despite their significant marketing expenditure, these major companies collapse. There are also some examples of this in the Netherlands. The parties that are still in business, states Beuker, invest too little in innovation: “Target and Walmart claim to spend two billion dollars a year on innovation. But people forget that Amazon invests 13 billion dollars. Catching up is therefore an illusion, not a reality. This will have painful consequences.”
To counter the Mad Men, Beuker presents the Math Men. Let’s introduce this group with a statement: “The ‘Math Men’ do not wait five years to complete a business case. They are the business case. The losers try to follow. The winners invest in platforms, technology, talent and start-ups. The losers do not have a vision and lean on IBM and McKinsey. The winners draw on the radical vision of the founders (such as Jeff Bezos, Jack Ma and Elon Musk).”
“The Nikes and L’Oréal’s of this world seem to be able to make the shift from Mad Men to Math Men. There have proven to be able to cash in on the trends of the 21st century thanks to corporate innovation”, states Beuker. Winners distinguish themselves from the losers thanks to a different mindset, DNA and culture. “The losers (Blockbuster, Kodak, Nokia, Toys “R” Us, etc.) spent billions on advertising, R&D, retrospective market research and consultants. But they still went under. Innovation is not a department, but a culture which runs through the entire company. The losers are arrogant, averse to risk and say: this is how we have been doing this for 20 years. Winners conquer every industry with the mentality: it was never like this, but it should have been like this for a long time, let’s do it.”
There are a number of specific, striking differences between Math Men and Mad Men. Math Men do not believe in advertising, realise that you can only survive with trend-driven innovation and moreover have a different mindset: something is not impossible, it’s just never been done before.
The other mentality is expressed in the media for example. Google and Facebook get the majority of the advertisement budgets, leaving the traditional media behind. “Disguised as tech companies, these media companies have taken over the market. Everyone just stood by and watched. (…) We talk a lot in media, create business cases for a few more years, only to lag behind. I also do not understand where this arrogance comes from in the world of television channels and publishers. Pride always comes before the fall. Everyone tries to cover themselves with McKinseys, but ‘Math Men’ do not need McKinsey. They themselves have a radical vision and courage.”
What does Beuker recommend us to do? First, we should focus on the digital transformation — something which still too few companies do. “Almost no Fortune 500 company has a CDO, CIO and CTO. How do you then expect to make and survive a digital transformation? That is needing to score four times in an away match against Real Madrid, but without your three best strikers. IBM and McKinsey cannot help you with that. Moreover: With Watson, IBM has to go at it full tilt to show growth again after 19 quarters.”
In addition, you need to invest in innovation, platforms, talent and smart acquisitions. Advertising and media are worthless investments — papering over the cracks. There are also some markets that cannot be missed: “if as a company you do not capitalise on the BRIC countries, it will be shrinkage, not growth. Look for instance at De Bijenkorf that is doing this perfectly.”
Primacy no longer with traditional marketers
The abovementioned tips actually only illustrate one thing: the primacy is no longer with the marketer, but with the innovation department. Beuker therefore has the following motto: “Advertising may win quarters, innovation wins decades.”
Characteristic is the Blokker example, which focuses on a campaign with Sarah Jessica Parker — something Beuker does not believe will suffice. “Blokker practices pretence innovation with all these new stores and an advertising campaign, it’s putting lipstick on a pig. Trying to be hip with an American star, but they also ask themselves the question: are there still discounters in the Internet era? The key is that companies such as Blokker started far too late and do not understand that the modern consumer is not king, not an emperor, but a dictator.” (Hakker, 2016). Not a good omen for the Blokker company: Beuker previously predicted the bankruptcy of V&D.
The Beuker ideology results in radical decisions. His father and brother owned three jewellery stores in Amsterdam. They asked him to give tips how to survive this digital Darwinism without having the innovation budgets Alibaba has available. “I said: sell that expensive store on the Leidsestraat and invest 30% of that budget into a super website with a web store and mobile site. Target Americans and Chinese people visiting Amsterdam. The digital Ace (the name of the jewellery brand, editor) has a higher turnover than the other two stores combined. That is modern retail: not regional or national, but global, thanks to the internet. Gone are the borders.”
Opportunities for smart marketers
Do marketers have no role to play? That does not appear to be the case. First, it is time to ensure that you collect more data on (potential) customers and approach them in a personalised way. “Nike completely personalises 100.000 videos for runners, based on their profile. That is modern marketing. That is what a consumer expects from all brands and media.”
Above all, it is time for a data-driven approach based on facts. “Only reach? Stop it. See, Like and Buy is what I want to see for social media. Not just reach and likes. When you have genuine fans as a brand or DJ, it’s primarily about ARPU (average revenue per user, editor) and whether they buy your shit.” (Beuker, 2017). Investments have to pay off.
In addition, it is important to respond to trends, which is completely in line with the Math Men ideology: “Content goes from social, to mobile and then wearable. And TV becomes like the internet: targetable, programmatic and addressable. If you can’t beat the movement, join it. And that also applies to the fighting the duopoly of Facebook and Google. You have very deep pockets and make acquisitions, or you are smart and aggregate and curate, or you collaborate if needed. With a collective of publishers. Or with Facebook and Google. All of them is also fine. Because a Math Man doesn’t complain about how it always used to be. He does not only look at trends, but monetises them. Survival and growth, that’s his game.”
Technological innovations also have far-reaching consequences for marketers. “Marketing used to be an art, now it’s a science too”, says Beuker. “The internet, the Fourth Industrial Revolution and the Digital Darwinism phenomenon have turned every industry upside down. The same applies to marketing. In the era of marketing innovation, marketing automation and Martech, the CMO is still in control, but really needs the assistance of, for example, the Chief Digital Officer and the Chief Technology Officer. The CMO is no longer able to do it on his own in this day and age.”
Beuker: “Over the last 25 years I have noticed that major brands are intrinsically not able to innovate. They are addicted to advertising and a trend driven, opportunity seizing innovation culture is missing. Innovation is often confused with technology. I have learned that innovation is actually about culture and customer centricity. At Amazon you will never hear “this is how we have been doing this for 20 years”, as that will kill innovation. At Amazon it is always ‘Day One’.”
According to Beuker, in this era, innovation is about survival and growing and monetising the trends of the 21st century, before your competitors do and your market share is snatched away. “Digital transformation therefore starts with having a strategic vision on changing business models and disruptive trends. Traditional companies who wish to compete with the new crop (Google, Facebook, Tesla, Uber, Airbnb, Alibaba etc.) will need to come up with a new game plan. To win you need to score and you need three top strikers for this: a modern CMO, a CDO and a CTO. The digital transformation says it already: it’s data driven and digital.”
That is why Beuker no longer wants to witness misplaced arrogance, haughty behaviour and the traditional, strong brands being underestimated. “Pride always comes before the fall. Look at RTL Nederland. Look at other strong brands that are struggling, shrinking or collapse. This era is about the prompt monetising of trends. It will not blow over. This is Noah’s ark, not the ferry across the river. This sense of urgency should have landed by now.”
Open your eyes
The assignment Beuker gives is clear: open your eyes for the innovations which are gaining ground all around us. An approach that is based on intuition, random purchasing reach through social influencers and a wait-and-see attitude are damaging. This calls for radical decisions. Beuker has a specific tip for the doubters: “The problem is that we all look at the ROI of innovation and then conclude that we don’t know. I flip it around and say: Also look at the Risk of Inaction of innovation. Where will your company be in 1, 3 or 5 years if you fail to innovate now? Will your company even exist?”