Ladies and gentlemen, welcome back to the uncensored CMO. Now, did you know that this week happens to be 70 years since the very first advert went on TV? So, my next guest could not be more perfect. Dame Carolyn Mccall is the CEO of the nation's number one broadcaster and we caught up to find out what impact TV advertising has had on business over those many years and what are some of the lessons we can learn from the all-time greats of advertising that you can apply to your brand today. It's a great conversation. Here it is. This is such an honor to have you on the show. Thank you so much for joining us.
And it is 70 years which is amazing. And I know ITV you're doing lots to mark the occasion and celebrate it. How does it feel at ITV at the moment to reach this mark?
I think everyone's extremely proud but not for the most obvious reasons about being able to be 70 years old. It's more about what has been done over the 70 years. So there's a lot of respect for the past for Granada for Yorkshire for all the amazing creative forces that have made ITV today because so many, I always say we were born in the regions so we've never had to work hard to be in the regions. We are a regional player that has become national. Very proud of that and I think also a lot of people are very proud of the transformation that ITV has been on particularly in the last eight years where we've had to work really hard to kind of read what's going on and then stay as much abreast of that if not ahead of that but it's changing so fast in our world. If you just think 10 years ago, streaming wars no one was really talking about it very much, it was here but it wasn't the way it is today. So we've had to do so much from technology, data, advertising. Advertising has changed beyond belief. And that has kept us very much on our toes. So I think people are very proud of that. So I think people feel that we're fit for the future as much as being very happy about where we've come from.
You're right about the amount of change, isn't it, with the rise of social media, technology, now with AI that there's a lot happening. We'll get into a little bit more about that. I'd love to find out and pick your brains on that. This is another year as well of change because you've become the president of the marketing society. I have which I'm delighted to hear. I'd love to know what your vision might be for the marketing industry as a whole as you become president.
Well look, Sophie Devonshire is very much the driving force of the marketing society and I enjoy very much working with her and with Craig who as you know is chair but they're a fantastic team. I think the key thing there is to get marketers at the center of conversations in organizations because I think they should be consulted on virtually everything whether it's product, communication, consumer insight. They really are where it's at. And so when I hear that marketers are often not consulted or they're not on boards or they're doing a lot of the work, it's not just about the ad, it's not just about coming in and saying sign this off, which in many companies that can be the case. It starts with the consumer and marketers are really at the sharp end of that. They're the ones who can see what's happening with consumers, how things are changing, working with agencies, working with others, it's such an amazing place to be. And so I think the marketing society very much wants to get that recognized but also give marketers the confidence and the skills and the network in order for them to be able to be at the center of that. So some marketers want to be on boards, some marketers want to be CEOs. Well, I think the marketing society can help you do that. Some marketers just want to be brilliant at their jobs and want to continue to be marketers. That's great too. And I think the marketing society does all of those things really well. It's global, so it puts you in touch with lots of different ways of marketing. So I think it's a very powerful force actually if harnessed well.
It really is and I think the statistics are something like less than 4% of people on boards have got any marketing experience. So the opportunity is right. Yeah. I know I had a guy Chris Bergrave he was a CMO of AB InBev and he did some research on this and found I think it was three and a half percent of board members today have got any marketing experience which is incredibly low. The opportunities are incredible.
Yeah, that is so low. I mean I was lucky I was brought up really I started my career properly at the Guardian and we did a lot of product development in my early years. We did the guide and weekend guardian when it first became magazine and we launched a whole series of magazines with the observer and so on. And so product development and marketing just went hand in hand. It worked with editorial to create those things. And so I always I guess I grew up with marketing being quite a powerful force. And so I've never really ever thought any differently. So when I then became a CEO at EasyJet, for me, I stayed very close to marketing because I felt that that's how I would understand how to reposition the company, not just the brand.
That makes complete sense, doesn't it? You've been CEO of some very high-profile companies. And I'd love your advice on if anyone's listening and they want to make the jump into the CEO position, what advice would you give to being a successful CEO?
I look I think if you're going into a CEO role, research, research, research. Really find out what you're going into. I mean I went into I had already been a CEO at the Guardian Media Group but I hadn't really been in a publicly listed company and I certainly hadn't had a 36% shareholder ever before. So I went in with my eyes wide open knowing it was going to be extremely difficult. And I also didn't know how bad it was operationally, but I did know it was having significant issues. And that equips you better. At least you're armed when you go in. And then I think early on, you've got to kind of set your stall out, but also you got to listen a lot. And the biggest tip I think for me is don't sit in an office listening to people present to you when you're a CEO because that's what everyone wants to do. They all want their time with you to tell you how they're doing and what they're doing. Actually go out and talk to people right around the company in all the markets and listen, listen, and then act quickly. Once you know and you've given it three or four months then act quickly.
I remember meeting the founder of Specsavers and she's absolutely amazing. Amazing.
Absolutely delight. And I remember she still takes the bus to work. And I'm like, why take the bus to work? But of course, she takes the bus to work because she can overhear conversations about problems people having ordering their glasses and of course she starts conversations with everyone else on the bus. I just thought what a brilliant way. They've got to, you know, people say this quite a lot and I didn't realize that it was a thing, but I just instinctively on my first flight as CEO went up to talk to the crew and they started doing what we call the gash, which is the rubbish and I just grabbed one end of the bag and I did it with them and I was just listening to them. They chat, chat, chat. They're talking to the customers and passengers as we go and it was amazing and then I never stopped doing it. So there was not one flight even as a normal passenger when I worked there that I didn't do the gash with the crew and I loved it because I learned a lot. Passengers really liked it because they could stop me and say, 'Oh, by the way, you're doing that really well' or 'Listen, you've really got to change this. That system doesn't work or whatever.' So I just felt it was a fantastic learning opportunity for me and it stood me in very good stead because I would then go back and say by the way we need to look at this or whatever. So it's these little things sometimes that are quite transformational in an organization.
And in terms of listening to the customer you now oversee the nation's biggest commercial broadcaster and I think something people may not realize of course is the public service element. Yeah, because you're providing news, you're covering live sport as well as bringing entertainment. It's a massive responsibility, isn't it, to serve the nation in that kind of way.
I think it's a massive responsibility both to the viewers and to society actually and also to your people because they have high expectations. A lot of people work here because they have a sense of purpose and I think they do really want to work for a purpose-driven organization and yet we are very commercial. So that being proudly creative and proudly commercial is a word I use and it's so true because we are owned by shareholders actually and yet we're a public service broadcaster but we're a commercial one so we have to fund ourselves. We're all ad-funded and that's where everything we do in media and entertainment which is ITV channels and streaming is funded by advertising and that's a big thing because you've got news and regional news which we're extremely proud of. We do regional news I think better than anybody because we're very much part of communities. That's very much part of the public service remit. And then on the other end of the spectrum we do Love Island and I'm a Celebrity and sometimes when I'm talking to people they forget how much we do on this side. So a lot of the entertainment shows and reality shows fund news and they also fund things like Mr. Bates and the Post Office or I Fought the Law which is on at the moment which Sheridan Smith is just amazing, incredible, change the law, double jeopardy, and also now The Hack which has been sold to 50 countries. But when we commissioned that, Kevin did not know and Polly didn't know that was going to sell at all and Mr. Bates is the same. I think they thought well actually we have to make this because it's a very powerful drama about Britain and it's a British story and actually it had been running for 20 years and until we showed that it did not get the traction with the government to change the law. So TV, I know I work for TV and so I'm bound to say this, but it's unbelievably powerful at storytelling. And I think the reason it had that impact is because it told human stories. It didn't take it from this is the post office doing a terrible thing, it went into these are people that are affected. These are real people affected by this scandal and the impact has been phenomenal.
I remember that moment after watching Mr. Bates when you then saw it debated in parliament and just to sort of cross over from watching entertainment to actually seeing something change significantly and the bit I didn't realize is that most of them are still waiting for compensation. You know however many years later and you think well would that have happened if it hadn't been for the drama? I doubt that a lot.
I doubt it because honestly there were brilliant journalists covering this story for 20 years. It actually broke in a computer trade press. That's where the story started and then Sunday Times picked it up but actually didn't. This is what I'm saying, I think the impact is an emotional impact where people are like how could this happen to ordinary people just trying to do their jobs. So it shows the power of TV better than most things actually.
It really does. How do you now because some of your competitors now are global streaming giants aren't they? Something I love watching is the Tour de France and I'm gutted that Tour de France won't be free to air next year. I know.
And think the following year. I think the Tour de France actually starts in the UK as well. So we've got this moment where it's coming to our doorstep. We won't be able to see it. How do you compete with really big global streaming giants that are paying a lot of money?
Yeah. I mean, look, it's harder and harder. I think that's why we have to make sure that every penny we have is well spent. We have rebased completely our cost base. It's been very painful. It's been very difficult, but that's part of the transformation. We've invested where we think we're really going to get the return, which is ITVX. Shareholders were really unhappy when we launched ITVX and spent 160 million quid a year for three years, but now it's just a no-brainer. You can't imagine not having a strong streaming service and it's doing very, very well. But I think the way we've had to do it is to be very focused on what we're really good at. We can't do everything. So entertainment, reality, live sport, news, drama. We focus on those things. That's what we do. And the Tour de France is unfortunately not a listed event. So we really focus our energy on getting the World Cup, getting all of those big national moments. That's what we focus our attention on. Now it doesn't mean that we don't do a lot on racing which is not listed horse racing. We do it really well but we will always focus on those listed events. Make sure we try and get those because the streamers can't go for them.
And we collaborate well with BBC when we do that. Well, the collaboration is something that I think people on the outside don't necessarily realize because one of your biggest advertisers is Sky. One of the biggest Netflix dramas is one that you've made, isn't it? So there's an incredible ecosystem of entertainment.
It's an interesting one because actually you have to take that Netflix buying drama from us that's from our studios business and so that's quite interesting. So with Rivals for instance which is on Disney Plus which was a breakout show last year and series 2 is coming up now, people were saying to me why didn't you get it or lots of people internally were saying why didn't we get Rivals, why isn't Rivals on ITV? Well bluntly we can't afford that. We have to be really careful about the number of dramas we do and if we'd have done Rivals we would have probably not done two others right. So it was a big blockbuster show and was probably double the price that we would normally pay for a drama. That doesn't mean the dramas are not really good. Just means they're a different kind of drama with different kind of sets if you like. And also that's what ITV Studios is there for. ITV Studios is there really as a diversification of revenue for ITV so that it makes money selling to other broadcasters around the world. The BBC is a good client, Netflix, Amazon, Disney, you name it. Everyone buys from ITV Studios and so there's that interesting thing where we are often partners with people and then we're also competing with them. Google's a great example of that. We're on YouTube because we know that we need to reach that under 25 audience and we've really changed our strategy on that because we recognize they might not come back to ITVX but they are watching it and we're able to sell the advertising and yet we're competing with them for advertising. So it's a very complicated world.
It is, isn't it? Fascinating. I find it absolutely fascinating how that all works. Now, one thing you're really famous for is some big blockbuster series like I'm a Celebrity, Love Island. I had to check my notes on this, but I'm a Celebrity over 20 years.
I know. Aren't they amazing?
I had to go and look at that again. I think Ant and Dec have done a great job of not looking like they've aged at all.
They don't look like they've aged and their sense of humor is never far away. They keep this kind of brilliance and this fantastically funny way of working and they just have fantastic chemistry to this day. So yeah, I'm a Celebrity is one of our most successful shows still.
It is, isn't it? What are the secrets to having that kind of longevity of a hit running for so many years?
Well that's a really interesting question. I think you have to be careful not to do too much with it. So you can do spin-off shows. We do a spin-off show with I'm a Celebrity. We do that with Love Island, All Stars, for instance. You got to be careful not to overdo that. I think you have to nurture your flagship shows. And you got to keep them fresh. It depends on who's doing them and how they're being done. And also, it's not easy getting a hit. So once you've had a hit, you want to keep it.
It's really hard getting a hit. We did this research actually last year at System One called Compound Creativity and it was fascinating. It was a three or five year period we looked at the data but we found that the more consistent a campaign was the more people actually liked it. So familiarity breeds contentment in this case.
Contentment not the reverse.
Exactly. So actually we laugh at jokes that are familiar. We have a stronger emotional bond with celebrities that we see more often. So I can see why that works. And we sort of landed this 80/20 rule that you want to keep it 80% the same and about 20% new. So you kind of freshen it up every year but not change the reason why everyone loves watching it. Well, the big thing is recurring drama is like that too. So it's not just on the entertainment side. People love seeing something like Unforgotten. So where we'd get a, we'd be worried is if we're changing the lead character in something, you have to work quite hard at making sure that audiences are going to respond well to the lead character who's not the same as before. So it's complicated. Everything's complicated. Life in media and creativity is quite an interesting complicated world really.
Now we talked at the beginning about how much has changed in the last 10 years. With the advent of streaming, we've got social media taking a lot more share of ad spend. How relevant is TV advertising today compared to, I mean because we love to look back at the classics from 10, 20 years ago. How relevant is it today?
Look, when I joined eight years ago, I remember I'd been a client at EasyJet, so I was buying quite a lot of advertising. But what I found when I got to EasyJet, because it's digital, it was digital already. No paper tickets, etc., was that they were spending a huge amount of money on digital advertising at that time. That was 16 years ago when I started at EasyJet and I just remember going I don't understand this, the dial wasn't shifting, we weren't selling more seats, the branding was terrible. It was like a camel go to Egypt 30 quid, it was really quite shocking some of the advertising, funny but shocking. And there was no marketing director actually which says quite a lot. So I brought in Peter Duffy and we really together with his team and with the agency VCCP we revolutionized how we did marketing including how we, we were still doing digital but we reapportioned, for the first time ever we used TV. I don't think they'd ever used TV before that not properly and it really worked. So we got the emotional message across so it was not just transactional, here's a camel, here's a price, here's a clog, here's Holland. It was much more kind of come and fly with us, it's going to be great value but you're going to get some fun. The crew are great. It had that emotional resonance. It was a very successful campaign and to this day I think they do a lot of that. I got here and I just thought, as I can talk as a client rather than just as a marketer from the past, and started talking about really being proactive and front foot and not being cowed, not being overwhelmed by all this overwhelming kind of programmatic, calling programmatic performance, that's an adjective, right? It's not always performance. It's a certain kind of advertising. It has a place, but it's not the only thing you should be doing. So I feel we've really got on the front foot for TV. And I also think the pendulum has swung back a bit.
I think it really has. I really do.
I think performance marketing is the biggest branding stunt in history, isn't it? Amazing stunt.
Somehow making everything else look like it's not performing. Like, come on everyone.
Yeah. I don't use that terminology here because everything should be performing and that's why we put a lot of money into outcomes, into effectiveness. TV is proven to be the most effective advertising channel and it also has the best return on investment. So when I say it's the most effective people say yeah but it's really expensive. I say no actually it will give you the best return on investment. We're never going to say only use TV. Some advertisers should only use TV actually but we would always say use it with other media. We've done some internal research which shows very clearly that it drives web traffic by about an incremental 20%, it drives sales by about an additional 10%, and it really resonates for the brand, brand enhancement is increased by something like 25%. So there's ample evidence. I just think if you're in an agency and you're young and you're not watching as much telly as you were and you're doing a lot of social, that is something that we have to address. We've got to make sure that young planners, young buyers understand how powerful a medium it is.
Yeah. The data that absolutely hit me through the eyes was last year Lumen did this study looking at the amount of attention different platforms get and then they took the CPM and adjusted it for attention weighted it. They were looking at TV typically 8 CPM versus social media advertising at say 220, huge difference. You look at that and go wow TV is almost four times the price of digital. They then adjusted it for attention, actual attentive seconds. They were measuring how much of the ad was actually viewed and then suddenly the TV went down to 1.19 and the social advertising went up to 320. So the exact conclusion got flipped based on measuring for attention. So as soon as you realize that and then it takes a few seconds.
That shouldn't be surprising should it given the context how you're watching. I mean that shouldn't be surprising but it's a great ubiquity did.
Well the kick in the data I remember I saw Peter Field was presenting at Thinkbox last year and he said well of course we're looking at the national population so everyone's nodding along going oh yeah yeah yeah but what about Gen Z? Even for Gen Z they were consuming more TV advertising when you just look at attention than any other channel even for Gen Z going back to your young buyers.
Because of course Gen Z, you say Gen Z, oh yeah it is Gen Z, I was going to say Gen Zed, that's not right. They come in. So 28% of our celebrity viewers are Gen Z, right? Love Island maybe 50%. Live sport, huge numbers, huge proportion of our audiences on football will be them. So it's not like we don't get Gen Z. We actually get them, but we don't get them all the time. And that's what we have to adjust to. And we took a really important strategic decision which is we're not going to create content to chase them because we felt that was putting money down a black hole because very difficult to know what kind of content they're going to come to. So it was a big content decision. I think my favorite bit of research I've ever seen on this was three or four years ago I think you commissioned it. It was like a Gogglebox experiment filming people watching adverts. And there was this funny bit where you got this couple on the sofa and they're joking with each other going no one watches TV ads anymore and then the Just Eat ad comes on and the guy literally sings to his girlfriend like 'Did somebody say' and then they go on their phone and they order Just Eat and they continue going no one watches adverts anymore.
They're big TV fans, Just Eat. Yeah.
