'Mastering Marketing's Five Senses' | MASTERCARD | TOP CMO | Episode 22

You see, marketing typically follows people's lives and how people are interacting with each other, with their environment. And as they change, marketing has to evolve based on that. People's lives have been completely transformed between social media and connected, ubiquitous mobile devices. Social media is where they're conversing and interacting in ways completely different than before the launch of the social media platforms. That is an opportunity for marketing to be able to leverage those trends and those technologies to connect better with the consumers. We haven't even scratched the surface of data, and if you make sense of it, you can get powerful insights that they can truly leverage to differentiate their brand, be even more relevant to the consumer needs, and be even more effective in their marketing campaigns.

Right. See, marketing typically follows people's lives and how people are interacting with each other, with their environment. And as they change, marketing has to evolve based on that. And what I mean by that is, for example, in 2007, when there were two technologies that came about — one was called social media platforms, when Facebook scaled big time, and then there was the launch of the digital media devices through iPhone at the time, that was the year of the launch of iPhone — people's lives have been completely transformed between social media and connected, ubiquitous mobile devices. Now what happens is, when this is happening, you know that consumers are now always on, they are reachable anytime around the day, and you know where they are at any given point in time based on their location analysis and so on. So you understand consumer context better. And social media is where they're conversing and interacting in ways completely different than before the launch of the social media platforms. When this happens, marketing actually shifted. It was a paradigm shift from the third paradigm of marketing to the fourth paradigm of marketing. All the previous major shifts in how marketing was being done were driven by two technologies. So for example, in this fourth paradigm, because of the mobile devices and because of the social media platforms, new forms of marketing were born: mobile media marketing or mobile marketing, influencer marketing, social media marketing, location-based marketing. These things did not exist prior to these two platforms being available. So when new technologies are available, or new technologies are driving consumer behavior and even corporate behavior, that is an opportunity for marketing to be able to leverage those trends and those technologies to connect better with the consumers. Today, unlike in the previous paradigm shifts which were enabled by two technologies at a time, we are going to be disrupted by 24 different technologies: from artificial intelligence, augmented reality, virtual reality, NFTs, blockchains, the whole metaverse, then you talk of autonomous driving vehicles, 5G telecommunications, Internet of Things, variables — the list goes on and on. And each one of these is substantially capable of changing consumers' lives in a significant way, or changing and transforming corporates and how they behave or how they perform and how they operate pretty significantly. The combination of these is going to have an unprecedented level of disruptive effect in the field of marketing. And that's what I say: marketing is at the verge of entering the fifth paradigm. And in this fifth paradigm, the traditional frameworks, the traditional theories of marketing, the traditional ways of doing marketing are all breaking down, and we need to reinvent and reimagine marketing. And that new way of doing marketing is what I call Quantum Marketing.

Absolutely right. You're absolutely right. But there are also two other dimensions beyond technology that are also ushering in this fifth paradigm of marketing. Technology is by far the biggest. The second one is data. Now, the ability for us to now look at data — we feel already we are being saturated with too much data, and consumers are already feeling creeped out or spooked out that there is so much data about them that they are concerned about their privacy, and there is a concern from the regulators about how companies are using data. But we haven't even scratched the surface of data, because when the Internet of Things comes in and when every device is actually a connected device — if you look at the most recent CES, you've got connected toilets, you've got connected coffee makers, connected refrigerators, everything is connected. What does that mean? These connected devices are collecting data and they're putting them somewhere in the cloud. Now marketers have to figure out what do they collect even, and that which is connected, how do they connect the disparate sources of data or the types of data that comes at them, and how do they make sense out of it. And if you make sense out of it, you can get to powerful insights that they can truly leverage to differentiate their brand, be even more relevant to the consumer needs, and be even more effective in their marketing campaigns. So this is the second one, a data deluge as they call it. The third one is there are significant cultural shifts which are happening. We're actually in this phase seeing some dramatic shifts around the world culturally speaking. Either there is a rise of nationalism across multiple countries, so citizens of countries are more concerned and getting a little bit more insulated, saying 'this is my country and my country is better than your country' or 'why are you coming to my country' kind of thing. Then there is the other extreme of it, which is inclusion. If you talked about LGBTQ a few years back, you would really be looked upon as a strange person and you are like out of the ordinary and an extremity kind of a person. But now LGBTQ is being mainstream, which is brilliant. Or whether it is Black Lives Matter, which did not exist even 10, 15 years back, the way it has pervaded into corporations and into marketing campaigns and marketing activities. The kind of cultural changes are actually going to be dramatically impactful because at the end of the day, marketing is all about connecting with consumers through their hearts and minds. And where they themselves are transforming either individually or collectively as communities, we have to adapt. So it's the three dimensions: a tsunami of technology, a deluge of data, and tectonic shifts in culture. These are the three things which will usher us into the world of Quantum Marketing.

Yes. In fact, what is beautiful is that Quantum Marketing and quarterly results are not mutually exclusive. In fact, Quantum Marketing will drive you both the current results for performance marketing as well as for the future robustness of your brand, of your business, and of your competitive advantage. So typically, when you look at purely performance marketing, you are trying to win every single week, every single day new business, and you're running on a treadmill constantly, but you are still in the same room, in the same place, running on the treadmill furiously. When you look at Quantum Marketing, what you are trying to do is, even as you are accomplishing your day-to-day goals and objectives and measuring your ROIs, etc., you are also planning for the future in a profound fashion that is going to distinguish you and separate you from your competition on the one hand, and number two, it advantages you through better efficiencies and efficacies because basically you are connecting with the consumers the most appropriate way. Let me just make it a little bit more tangible. Take Mastercard example itself. So at Mastercard, first thing we started off as one of the elements of Quantum Marketing is what we call multi-sensorial marketing. Most of the people are typically blessed with five senses: the sense of sight, sound, touch, taste, and smell. However, when you look at consumers absorbing this data from the five senses and making sense out of it, marketers are only focused on two senses typically: the sense of sight and the sense of sound. And both of these also they do not get into the science behind sound, but they say, 'Hmm, does it sound good? Let me put the background music in this particular fashion. I need to get more energy for my advertisement, maybe this is the kind of energy that this music has to generate, let's make it fast-paced or the beats or whatever else it is.' You do it, that is very rudimentary. If you start understanding the science behind sound, the science behind sight, and also behind the other three senses, you will be able to get to the hearts and minds of consumers in extremely unique fashion. What does it mean? So when you look at visual, the science of vision, sense of vision. So we used to have a logo which has got the red and yellow circles with Mastercard written in between it. Now that is one of the most universally recognized logos around the world. But then when we started understanding what happens in consumers' psychology and consumers' perception of the brand, they felt that it was probably a little obsolete, a little outdated. In other words, it was not really aspirational but very unexciting, uninspiring kind of a thing. So we said, 'High recognition but low quality of perception. How do we change this?' And what we started doing is to study the science behind how people perceive different shades of color. Now I cannot get rid of the two circles of Mastercard, not the red and yellow colors, not the name Mastercard. Keeping all these three constraints — and that's all there is in my logo — I still need to make my logo be more contemporary, more futuristic, more aspirational, and more youthful. So when we started trying to play with the colors, what we found is slight changes in colors or in the shades of a given color can have a profound impact in the perception. And this is not a qualitative statement, but actually it is quantitatively measured on different dimensions. So we actually do something called neuromarketing in this, which is we keep some headsets on people's heads literally to see what kind of which aspects of the brain are actually lighting up when different stimuli are given, for example colors in this case. So we really launched our entire logo with big things. Number one, we retained the red and yellow circle, but we changed the level of overlap between the two circles, and that had a profound impact. Number two, we changed the shades of the red and the yellow that we were using ever so slightly, but very meaningful difference in perception. Number three, we completely dropped the word 'Mastercard' altogether and just have the symbol as our logo. And the reason for that is symbols are processed through a different part of the brain, a different mechanism, than compared to words. So when you take the words away, you just have a symbol, your brand actually gets more deeply into people's minds and hearts. Now what is the proof for this? Other than the research that is done through the regular methods, what we actually find is our brand has started gaining in strength year over year over year. So when I took over, the brand was number 87 — it was still a top 100 brand that I inherited. Today it is at number 12 as rated by multiple studies, whether it is BrandZ which is done by Kantar, or Interbrand has rated us as one of the fastest growing brands, as the top riser over the last three years since we started getting into this whole methodology. So it is something which is giving tangible results as well, as far as branding is concerned.

Absolutely. So the first thing is, one of the fallacies that prevails widely, or misconception, is that if you are to leverage these three senses, you have to be in those categories where those dimensions are relevant. So if you are creating, for example, a toilet soap, the sense of smell is very critical, or a toothpaste, the sense of taste is very critical. So there's a natural and an obvious fit there. What do you do for a company like Mastercard, which has nothing to do with any of this? We're not going to create edible cards from the point of taste, right. So what we said therefore is, the idea is people love eating. People love the experience around eating, both the food and the experience around the food. If your brand can be juxtaposed in a meaningful way to those eating experiences, you will actually enter the brain through this sense of taste. There is an association between that great experience which is founded on taste and the brand that has made it happen. So we started our first initial experimentation with curating what we call as Priceless Tables by Mastercard. So we put up our very first table on top of a billboard in Times Square in Manhattan. And on the billboard on the table, we were serving a five-course meal for about 20 people with a Michelin-star chef. People would actually run to be able to get those experiences, to the computers and then book seats on that, and we just got sold out in a few minutes literally for one full week program. And then we did post-test on these people. Do they remember the experience? Yes. Do they associate it with Mastercard? Because I might have a great experience, but that's it, I don't associate it with any brand, it doesn't matter. And do they recognize in this specific situation that Mastercard is a purveyor of experiences that are outstanding and extraordinary, which we call Priceless, in the culinary space? So we started going with that. And to date, we run at any point in time around a thousand Priceless Tables around the world at any given point in time. Number one. Number two, we took it to the next level. We went and started launching restaurants. These restaurants are Priceless by Mastercard. And the restaurant, for example the most recent one we launched was in São Paulo in Brazil, and that has been rated as the best restaurant in Brazil. We have launched one in Mexico City, launched it was rated as the best restaurant in Mexico, the country, not just the city. So what happens is now people are saying, 'Oh, I need to get into this restaurant because it's a happening place, the experiences are exotic, and I know that I'll have an unexpectedly delightful experience out there.' So there's a lot of element of surprise and delight, etc. And then they would want, and they know that the only way they can get these experiences is through Mastercard, so they have to use their Mastercard, they have to book through Mastercard, etc. And that has started actually increasing the association between the sense of taste and Mastercard in a significant way as one example. We also went and started creating some specific items. We partnered with Ladurée in — and now you happen to be in France right now, and Ladurée is phenomenal, and now they make macarons and all that. It's also available in many of their stores. We partnered with them and they created two flavors exclusively for Mastercard: one red-colored macaron and one yellow-colored macaron. And then we make those available as part of the experience for our consumers and for our customers at our various events, and from time to time during the year we also put it up for sale on priceless.com. So this is how we got into taste, though intuitively speaking there is nothing that Mastercard has got directly to do with taste, but we got into the taste in this way. Likewise, the fragrances. We launched two fragrances. Our first fragrances have been launched, and these have been developed by two world-class female fragrance developers using sustainable material, and the proceeds from the fragrances go back to the communities from which we were sourcing these materials. And these are called again Priceless, and the two variants are Passion, which is red color, and Optimism, which is yellow, and they're outstanding fragrances. And we sell them on priceless.com. And when we launched it in Italy in Milan pre-Christmas, it just got sold out. Now we don't have experience as a company managing fragrances and how do you transport from one place to another, how do you get the manufacturing and all that stuff, which is very unusual for us. But in my previous life I worked with Unilever and I was handling fragrances at the time as part of my portfolio, that came in partly handy. The technologies have advanced quite a lot since I was working there, but we got into fragrances now, and we are getting into room diffusers now. So when you go to a Mastercard experience center or the technology hub where we invite our customers, they get an immersive holistic experience which is in an ambiance of very positive scent. Your feelings are much more positive, your receptivity to messages is much better. So we're really getting into the science of it quite deeply.

You hit the nail on the head. I couldn't have said it better. You're absolutely spot on. We pivoted away from advertising-led marketing to experience, experiential marketing. And experiences are where we try to engage all the five senses of the consumers in those experiences which are truly immersive, and we try to surround them with that positive experience and to various senses that creates the right kind of association, positive association between my brand and these experiences. And the consumers are actually clearly telling us that they like our brand more. The brand likability score has gone up, the brand relevance score to their lifestyle has gone up. Because today, if you look at it one way, when you go to your bank and applying for your credit card for example, you don't say 'Give me a Mastercard.' You say 'Give me a credit card of that particular bank,' and the bank will give you and you just take it whatever the card it is, whether it is Mastercard or not, you really don't even probably notice. But that's something which we are trying to change, where we want to create a pull from the consumer side for our brand, and that we are beginning to notice happening pretty nicely.

Right. So the fundamental premise that we start off in our digital marketing is that if there is a conversation that is happening and you present yourself in a fashion that is relevant to the ongoing conversation of that particular context, you'll be more effective than just slapping up your advertisement out there irrespective of or even not knowing what the conversation is. When the conversation is on the ascent, meaning it's increasing, it's trending up, if you catch the wave with your communication at the time, you are actually getting better results than when it is trending down. So these are the two very basic principles that we have started with. So we created a complete AI-based engine with literally 100% automation. So what this does is, firstly it looks at all the chatter that's happening in the social media and the mainstream media, and then identifies here are the three trends which are most likely to be trending in the next three days, because it's only for three days — we call them micro-trends. So it starts, goes up, and at the end of the second day it starts dropping, third day it is gone, a new micro-trend has then taken over. So we try to ride each one of these micro-trends. So AI predicts these micro-trends. Once we identify a trend, then we have a repository of offerings, products, services, messages, etc. that we created a library of it. Then the AI engine tries to see what is the right thing that we can offer — whether it is an offer, product, message, whatever — to that particular conversation to be placed into that conversation in a relevant fashion. So there is a relevancy mapping that happens. And once it decides this is the message for example, that's what it decides to go, or this is the offer, then it immediately creates in real time a static advertisement. Right now it is static, hopefully in future it'll be video, but right now it creates a static ad. So this static ad is then put in the media, so the media buying happens automatically in real time. And when the responses start coming or not, the creative keeps getting modified and there is a constant A/B testing that happens. And all this is done by the AI, and then it optimizes, it settles down on the optimized design for that particular static ad and it goes with it. And in parallel, now it starts tracking what is the overall response that we are getting and starts measuring ROI. And by the end of the three days, you already have got your ROI established, and it's a constant process of improvement from there. So very straightforward, we call it the Mastercard Digital Marketing Engine. So it's end to end. What we were absolutely astounded by is that in the previous times, for example in an optimized digital campaign, we get X as the result outcome. Here what we are seeing is it's anywhere between 4X to 8X depending on what kind of campaign it is. 4X to 8X, which is a huge efficiency building for us. And so this is now what we are doing is to take it to our clients, which are the banks and the large merchants like the airlines and the tourism departments and so on, and offering them this platform that they can use as a service.

So true. You know, this is one of the things which unfortunately is not getting enough attention within the marketing community. The world around us is changing so much and we are impacted by it directly. We have to invest time and effort to learn at this stage and age. I spend five and a half hours approximately every single weekend trying to learn something new. Like for example, I have taken a course on AI, I have done a course on blockchains at Wharton. I'm trying to really do things both on Coursera or I'm reaching out to people, taking sessions where they're teaching me. I put myself in a humble position of 'Hey, I'm a student, teach me.' For example, what's the difference between self-learning versus artificial intelligence versus machine learning? Because I don't want to be sort of derailed by this jargon. I want to understand the concepts clearly. And then moreover, saying that okay, are other companies using it? Can I use it in my context? And then try to evolve our own strategies. I think the single biggest thing which CMOs will be doing themselves a big service is by investing time and effort to genuinely learn. Because if you don't learn these things today, you really become obsolete very quickly. And you know, many of the things, for example when ChatGPT has been announced and there's so much excitement and euphoria and fear depending on how you feel, whether it is going to aid your job or take your job away, the fact of the matter is I look at it as a fantastic tool where many of the tasks that you are probably relying on a significant system or a bureaucracy or whatever the ecosystem is, you're now delegating it to a very efficient machine, which means your thinking can be focused on higher order level activities or strategies or thoughts or whatever it is. And then you should figure out in what ways can you leverage it. Now I was actually surprised yesterday I was meeting with a group of CMOs and less than 50% of them have actually played with ChatGPT. Now that's not good. Hearing about it in the news release is one thing, but then you want to get hands-on and play. So yesterday then I said, 'Okay, why don't we all just try to get on it, then try to play with it?' But then the message came saying that we are already at capacity right now, give us your email and we will get back to you when the capacity is there. Right. The point is, these are developing so rapidly, you have to stay at the cutting edge by learning, by investing time and effort for that learning. And that I think is the single biggest thing that CMOs have to really think about.

Yeah, see, at the end of the day, if you are experimenting, you should expect a certain amount of failure. And you have to have a reading on what level of failure is acceptable in your company. Now for example, in our case, I said 5% of everything that we do, I'm prepared to write off completely. So my total budget, if I take $100, $5 I reserve for these kind of experimentations. And I condition my CEO, my CFO, and my C-suite peers in advance, saying that 'Hey, this is an experiment, it may fail. Do you want to join? They want to contribute.' I co-opt them very early on so that it doesn't become that 'Raja has gone off with his harebrained schemes and we have failed on something.' Instead, it is our collective thing that we are doing. And plus, everyone is mentally prepared that there could be a possibility that despite fail. So when it fails, it's not like all hell breaks loose and then your job security is at risk. That's not how it works, right. So there is one part of it: identify a limited pool of money that you can afford to say that this I will diligently protect for experimentation. Number two, you need to have a clear experimental design and what the outcomes would be. If it is successful, what will you do with it? If it is a failure, what will your learnings do with it? You need to have those parameters upfront. Then third, socialize it. Make sure that you co-opt your CEO, CFO. To me, I find these are the two most critical folks that you need to have as your partner, otherwise you'll be a lone wolf fighting in a strange land. You don't want to do that. And number four, encourage your team. Because at the end of the day, if the team feels that 'Oh, failure is not tolerated here,' they will just not take the risk. Why would they take the risk? But you tell them, 'It's okay, guys and girls, let's go ahead and do it.' And we then have sharing. If it's success, transfer it, or it is learning from failures. So we have got, for example, these regular webcasts and periodic meetings, etc. You share these things, you document them so that you don't do the same experiment with the same result happening for the second time. Then you have not learned anything, you just wasted money. So you got to be thoughtful about that. So this is how I would go about it, and I have been so far, you know, reasonably successful to be adhering within my tolerance limit as far as failure is concerned. But yes, we had our quota of failures, we had our quota of successes.