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Why we spent a lot on ads: the anti-CFO’s guide to better margins forever
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Why we spent a lot on ads: the anti-CFO’s guide to better margins forever

October 16, 2023
-
Posted by Ian Whitworth

Sorry no audio version this week, it’s a visual story.

Back on the tools

I love almost everything about my business life, but I really miss being on the tools. I don’t mean literal tools, as I am Australia’s un-handiest man.

I mean my old job of making ads, which I had to abandon so as not to become the nightmarish Grey Ponytail (if that means nothing to you, it means you haven’t bought my book, a situation you should sort out ASAP).

I’ve been in my happy place lately, making an ambitious new series of ads for our business, way beyond anything we’ve ever done before.

So this week, giving you the low-down on why we spent close to six figures making those ads, plus whatever we end up spending on media. Spoiler alert they will make us many times that back, but also: in ways you might not expect.

The happy place

A sea of garbage

Marketing has never had a great reputation, but it’s absolute trash at the moment. Campaigns are mostly sad little JPEG tiles with a literal picture of the product on them. And internally-focused video ads that open with “At Brand Name, we …”.

Swarms of self-crowned marketing kings on LinkedIn spruik the growth hacker mentality of cranking out non-stop content, and pestering the shit out of your customers every day.

Post 8x daily! Here’s my content generation matrix! Use AI to come up with a hundred new ideas a day! That’s one approach. I don’t think it’s one that gets you long-term customers that like you. It does not make you look confident.

It makes you a fucking nuisance.

Another common approach is the CFO-driven strategy, where marketing is turned on and off like a tap. The slightest downturn and they’ll be slashing the marketing budget, right when it really helps.

The brands that keep marketing in downturns get to stand out because their budget goes further, and countless studies show they win in the long-term.

The profit advantage of no CFO

Building a profitable brand is a long game of consistency against all the urging of others.

The budget you cut today will kill your margins five years from now, long after that CFO has earned some fat cost-cutter bonuses and moved elsewhere.

I just checked and it appears we have no CFO. Just nice business partners who have always been comfortable letting brand guy do these experiments without any interference. Though it helps that I was once an AV technician so I’m not totally flying blind.

Since the dawn of our business we’ve done marketing campaigns way beyond what you normally spend in a business that size. It’s always been brand marketing. Rather than needy-looking sales promotional ads and lead magnets. That stuff gets you clicks, but also makes you look small-time.

Every business is different. Many businesses need those sales promo ads to survive. I’d recommend you keep some money aside to do more than just growth hacker ads.

The simpler brand ad approach made us look much bigger, and that became self-fulfilling.

Now we are that much bigger business, and we are confident going into sales situations knowing we don’t have to be lowest quote.

How are the margins? Let’s just say we’re profitable enough to have financed all our growth through retained earnings, with close to zero debt and never a thought of diluting our equity. While drawing decent dividends at the same time.

But now is not the time to coast. The fun has only just begun.

So why did we spend all that money? I’ve ranked the reasons, and it’s not what you think.

Aim 1: Make our staff proud

First some context. Making epic videos is not what we do. We are a purely technical business, providing technology and technicians to help others deliver ideas and media that they’ve created.

For us this is a bigger picture than trying to bring in some new business.

What really brings in new business for us is word-of-mouth from doing a good job.

That comes from having a large group of skilled, likeable people who clients trust.

There’s always been a shortage of those people, but never more than now. It’s taken a long time to assemble this team. We wanted to do something that looks professional enough to makes them think: I’m proud to work here.

We toured around all the businesses last week, doing video premieres over a few refreshments, and explaining the thinking behind showing them as technical superheroes. It was really worthwhile. I know this sounds so obvious but: staff really like it when you tell them what’s going on. And we do value their input.

There’s nothing worse than marketing that’s just a thin layer of gloss over a product that doesn’t deliver on the promise. It’s a lot worse than no marketing.

Marketing that your frontline people are behind is much more effective than just doing what your marketing department creates in its own vacuum.

At this point I’d better show you one of the ads:

Aim 2: Recruitment

We’re always looking for more good people.

This is an industry where most people are in it because they like playing with really expensive shit.

We want good people who currently don’t work for us to think:

Maybe I should work there, there’s some really expensive shit in those videos, I want to play with it.

Aim 3: A coded signal to high-value clients

This is about understanding the top few percent of our client base. The standard approach, which we did last time, is to shoot these things on TV cameras with our own gear. This time we brought in a cinematic production team. Shot with a cinema camera, and a proper movie lighting team.

At the most, one in hundred people who see this video will notice. But those are the clients who will spend six figures on an event with us, because they know we understand production values.

And care enough about the details to spend the extra money.

That reflective floor cost us $8000. We’d planned to paint the warehouse floor gloss black, then restore it. Landlady said no a few days out, so we had to hire the floor in.

The ads would have been perfectly good if we’d just gone with carpet. But not great.

These signals are only for a tiny audience, but it’s enough.

Aim 4: bring in some new customers

Finally we get to what everyone thinks is the #1 goal.

For the other 99% of potential clients, it’s just designed to make them think: that looks really good, cool graphics. And hopefully remember our name.

You can try to engineer in all sorts of multi-attribute brand claims into your message there but nobody cares. And no ad is going to make them go out and buy right away.

If we’re really lucky, at some point in the future, when they’re buying, they’ll think: Scene Change. I’ve heard of them.

That’s all it needs.

This is how big brands work. If you do something expensive-looking, customers find it reassuring. Because clearly you have lots of customers to be able to afford it. So nervous customers feel like they’re joining a big, safe herd.

That’s what brings you better margins. Because the alternative — using a brand they’ve not heard of — lights up the risk warning lights in their minds.

I wrote it to speak to both sides of the client brain. Their conscious brain writing the brief says: we want this to look awesome, get the wow-factor and so on. The look of the ads shows them that’s what they get.

But deep down, what they really want is for it not to fuck up. And our industry offers tremendous scope for that to happen. So all the words are about risk and reassurance.

Not the standard “we’re a leading provider of premium solutions”.

Speak the language of the budget signoff

A question to ask yourself selling any B2B product is: how will your client go selling you to the people upstairs when you’re not there?

You can do a spellbinding presentation and leave them with a superb pitch document. Which they must take to someone else for approval.

On average, your client will do a diabolical job of selling it internally to the people who approve the budget.

Try telling your CFO that she needs to invest a large chunk of money in “wow factor”.

CFO says GTFO with your frivolous nonsense.

Tell her you need to deliver “business-critical engagement for key stakeholders” where you only have one chance to get it right, and that you need a “robust risk management strategy”. You’re much more likely to get that purchase order approved.

Hence the tagline, Low risk for high-profile events, which we will be hammering for at least the next couple of years. Because another mistake marketers make is getting bored of their material long before the customer does. This is just not the case.

Find something that works and use it for years. Decades. Kit Kat’s Have A Break was written in 1957 and it’s still perfect.

I like that we can just publish our whole marketing strategy here. It’s a free world. If our competitors want to do the same, we’re cool with it.

<

Creativity isn’t so hard

Sometimes I’ll have all-new ideas, but on this occasion, I lifted it from elsewhere. Into a new context where it looks new.

I’m a massive F1 fan, as are many people who work here. I’d been watching their broadcast intro sequence and thinking: we have the LED walls to do that. And our people are kinda stars of their field. So let’s borrow the overall design and graphic vibe of this clip that F1 has blocked the embed function on.

Add the human firmware graphics of Sky F1’s opening sequence, and away we go.

Do we have our own Daniel Ricciardo? Meet Mr Brock Thompson of Scene Change Melbourne.

Anyway it was so great to make some ads. I love working with people who are very good at what they do. The banter on set. The tension of knowing that any one of a hundred wrong choices that day could make the finished product terrible.

When you become managerial you tend to lose the chance to hands-on make stuff. I’m glad I got out of advertising, and I haven’t the time or energy to do it for other people. But getting back to your roots every so often is good for the soul.

With genius director/graphics boss Olga Kuzovina

For industry folk who are interested:

Director/Graphics: Olga Kuzovina

Producer: Aaron Bush / Buff Productions

DOP: Jake Blackman

Editor/Colourist: Miles Selwyn

Graphics Designer: Fredrik Persson / Pines and Palms

Scene Change LED Design and Production Management: Anthony Pellizzari

Heroic Replacement For Mr Pellizzari When He Got Struck Down By A Nightmare Illness On Shoot Eve: Eliot Simpson

Writer: Alan Smithee

Got a comment?

I’ve stopped moderating the blog comments because I get like 50 Russian bot comments a day. But why not drop your comment over on this story on LinkedIn? Keen to hear from you, a real human, on your AI thoughts.

Also, if this story was useful or entertaining for you, why not help me out by sharing it? It’s a ton of work getting these stories out, and more readers really helps me justify the insane effort each week. Bless you.

Why not buy this nice book?

Want a book on how to break free of a job that sucks and set up your own business that you don’t even have to work in? We did that, and here’s the story: Undisruptable: Timeless Business Truths For Thriving In A World Of Nonstop Change.

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Every week since it came out, it’s the #1 Review-Rated biz book on all of Booktopia. On paper, electronic or audio book with me reading it. Get it here:

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October 16, 2023

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Ian Whitworth is a reformed advertising creative director turned entrepreneur with a successful national group of businesses that he doesn’t work in day to day. Read more

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Why we spent a lot on ads: the anti-CFO’s guide to better margins forever - Undisruptable