When Adam Morgan started out in advertising agencies, there were no challenger brands. “They were just called number two, three or four brands,” he tells Dentsu’s Dave Winterlich.
They were the brands that were outspent, outdistributed and basically outgunned, often launching, or relaunching, several years too late.
They all wanted something that would help them break through, but he soon tired of simply presenting them with advertising solutions. “It seemed to me they must do other stuff, strategically, than just great ads that popped out,” he explains.
It preoccupied him so much that he took time out to write a book about it. Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders was first published in 1999 and became an international bestseller.
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Chief among its teachings was the mindset you show up in, he tells Winterlich on podcast Inside Marketing.
Historically we think of challenger brands in terms of big and little, David versus Goliath. In fact, “if you look at the iconic challengers of the last 15 years, they haven’t challenged somebody, they have challenged some thing”, he explains.
“It’s not that I’m going to be challenging the biggest player in the marketplace. It’s that I’m challenging something about the culture of the category, or something about the criteria for choice in the category.”
Being a challenger is a mindset, not a position in your category, which explains why Morgan’s agency, Eatbigfish, has worked with many of the world’s number one brands, including luxury goods specialist LVMH, soft drinks firm Coca-Cola and HSBC, a bank.
“It’s not just about `notice me, pick me’. It’s about ‘I represent a better set of choices for the modern world’,” he says.
Ironically, the more successful you are, the harder such a mindset can be to maintain.
He points to Netflix co-founder and executive chairman Reed Hastings as an example. A Financial Times interview with Reed in 2020 featured the headline, Netflix still in challenger mode, even though it was the dominant player in the US, worth US$20 billion.
That turned out to be good, because little did Reed know that Disney+ was on its way, “putting on as many subscribers in one year as Netflix put on in 10. So actually, it was really smart of him to still think like a challenger, because you never know where your competition is going to come from,” says Morgan.
Disruptive advertising can help
Developing a challenger culture takes time. Disruptive advertising can help.
Morgan points to Persil’s Dirt is Good campaign as a case in point. “It was a fantastic example of a challenger mindset. Basically laundry detergent as a category had spent its life telling us that dirt is a bad thing. Suddenly they flipped it and celebrated the fact that actually, dirt is good, because it helps children get out and explore and understand the world. Merely flipping that expectation was enormously disruptive,” he explains.
Similarly, plant-based drink brand Oatly scored a coup by positioning its product as next generation milk, he adds. “It becomes just a completely different way of thinking about it. Both are examples of products that are not fundamentally different from anybody else’s, but marketing made them into challengers by being really clear on their narrative.”
With digital advertising, the barriers to disruptive advertising are low. That makes it both easier for brands to position themselves as challengers, but also more difficult.
“There are so many people doing so many different things, about so many different parts of the category, offering so many different reasons to choose. It’s much harder now and requires you to have an even greater clarity about what your point of difference is, how you’re going to tell that story, and how you are going to be consistent.”
Coping with constraint
But an even bigger challenge is bearing down on businesses, one which Morgan outlines in his latest book, with Mark Barden, A Beautiful Constraint: How To Transform Your Limitations Into Advantages.
It addresses the fact that we live in a world that is increasingly constraints-driven, he argues, as much by an overabundance of choices and connections as by a scarcity of time and resources.
Morgan believes how we respond to these constraints is of critical importance to people, the planet and business.
Again it’s a question of mindset. Covid lockdowns were a constraint that led to unexpected benefits, such as working from home. Yet leadership books rarely address constraints. “It’s as if leadership did not involve any understanding or management of constraints at all,” he says.
“Constraints are an integral part of how we succeed in business, in life, and frankly, as citizens of the planet,” he says. It’s a fact the drive towards sustainability makes clear. The key to success in a world of constraints is to find the benefits within them, and figure out how to turn it into a positive, he says.
Protecting the environment requires all of us to put voluntary constraints around ourselves. That is already giving rise to new business and growth opportunities, he says, pointing to Paul Polman’s tenure as CEO of Unilever, which owns the brand Persil, at a time when the board decided to both double growth and reduce its environmental impact at the same time, by way of example.
“There are ways in which you can impose constraints to help yourself develop capabilities that you otherwise didn’t know you had,” says Morgan.
The first step to coping with a constraint is not to feel like a victim in the face of it, because the natural response to feeling like a victim is to reduce your ambition to fit it, he cautions.
Much better to reframe the constraint as an opportunity, and then lean into it, he says.
He points to one business leader who won’t allow anyone in his team to start a sentence with “We can’t because”. They must instead start with “We can, if”. “It seems like a really small thing, but it’s huge,” he says.
Why dull advertising is too expensive to make
Morgan has also been working with marketing expert Peter Field and marketing research and effectiveness company System1 on a new project entitled, The Cost of Dull.
While industry accolades celebrate creativity and effectiveness, Morgan was most interested in work that is dull and ineffective, to assess its true cost. He found that for a dull campaign to achieve the same impact as an interesting one, media spend has to be much greater. Taken as a whole, he estimates the cost to US businesses to $189 billion (over €176 billion) greater, he reckons.
“That’s more or less the GDP of Greece,” says Morgan. “As an industry, that’s a large cost,” says Morgan.
While nobody goes into advertising to make dull adverts, part of the problem is that brands too often focus on people who are already in their category, whereas brand building means also capturing the attention of those who aren’t, he explains.
He also says that we’re setting the bar for what is interesting too low, and that the industry isn’t holding itself to account.
Why? “Because we’re living in a kind of bubble that’s not really related to the busy, distracted, noisy, fun, tedious lives that our customers are in. We’re just not close enough to them,” he says.
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