108 – Scott Harkey – Advertising & Marketing

HARKEY final

Scott Harkey: [00:00:00] Hey, great to be here, Larry. Excited for the show.

Larry Gordon: [00:00:03] Well thank you. So let's start off with you telling us a little bit about your company and how you service your clients.

Scott Harkey: [00:00:10] Yeah. So we have an independently held group of advertising agencies based in the southwest, mostly in Phoenix and Las Vegas. We represent, you know, fortune 1000 clients such as Wynn Resorts, Virgin Hotels, many brands from the Walt Disney Corporation and others. Walmart, Amazon. We have four independently owned advertising agencies within our holding company of agencies at the Harkey Group, our biggest and most notable probably oh partners, which is a full service integrated advertising agency with, I don't know, probably about 125 ish people. Total employee count, probably close to 200. And I co-founded the agency 16 years ago today. Not today, but this month, actually. And yeah, it's fun to be in the business of of working with great brands and really creative and talented and strategic people and excited to be on the show. So hopefully that gives a little background on the agencies, but we have anything from a, you know, full service digital agency to a film company called Matter Films, a film and production company. And we're launching a new agency, actually, that focuses exclusively on the travel business, hotel, casinos, resorts and entertainment that will be mostly based out of our Las Vegas office with some of the capabilities there.

Larry Gordon: [00:01:39] That's terrific. One of the things I like to ask our guests is, what are you working on now or have you recently worked on that really excites you?

Scott Harkey: [00:01:47] Um, a couple of things come to mind. One is we just finished a commercial with a pretty famous rapper. His name is Lil Wayne. Uh, so we worked with a company out of Japan called Capcom, and they have a legacy entertainment property called Street Fighter, which is a pretty popular video game. So we helped Capcom launch Street Fighter six, and we convinced Capcom to hire this, you know, pretty bold rapper named Lil Wayne, who's been around for a while, but he actually likes playing Street Fighter and has been. So he's been a fan of the game. And so it was one of their biggest launches in their most recent history and received a ton of media attention. And it was a really fun commercial with Lil Wayne and this group of characters playing Street Fighter and kind of this augmented reality world, and we shot that in New Orleans, and it was just it was just a ton of fun just being a fan of a Lil Wayne kind of through high school and college and listened to his music that was that's probably the most recent work that comes to mind as being kind of fun.

Larry Gordon: [00:02:56] That's great. So when we think about growth companies and even large companies like you're dealing with when they have an advertising marketing program or they're trying to put something together, there's a lot of risks that can go on, whether they're investing too much or too little, right target audience, the decision makers and things like that. And so as we think through this and the audience, that ranges from entertainment to retail to services and manufacturing, I want to think about kind of what the risks are that people are going to face and the mitigation in their programs that they put this together, because there's a lot of kind of traps, if you will, if you're just trying to do it without a lot of thought and professional guidance.

Scott Harkey: [00:03:42] Yeah. Mean, mean you're talking to someone who just, you know, shot a commercial with Lil Wayne. And if you can imagine, you know, his persona and you know things that he likes to do while he's on set and and what you would have to plan for and even, you know, with athletes or celebrities or musicians, any sort of downfall as them, as their spokesperson, whether it could be something in their career or something that happens could be a DUI. It could be, you know, it could be a thousand things. You're dealing with human beings that are, you know, representing the brand. The pros are, of course, you know, human beings. As humans, we want to relate to other humans, and corporations don't really have human characteristics. So marketing people like me want to take corporations or companies and put more human like attributes to them to make them more beloved by people, so they sell more product. One major way in doing that, of course, in today's world, with the decline of traditional media channels like television and radio and newspaper and the rise of other channels like TikTok and Instagram and other platforms, YouTube, and you have these, you know, celebrities that are different from the celebrities that we're used to of ten and 15 and 20 years ago, but that have audience and that have, um, uh, you know, um. People that that. Adore them. And so brands are trying to, again, make themselves more likable and more human, and they're using the likes of influencers and celebrities in this, in this new world of media. And it's really helpful. But there are a ton of risks. And I'm not a risk person. I'm the marketing person. So people like you would probably have to help us, you know, figure out what the risks are.

Scott Harkey: [00:05:36] And, you know, the really great companies are are beating the big companies by actually cutting these celebrities into brands. Like if you look at Ryan Reynolds. Right? I mean, look at look at the success Ryan Reynolds has, has with all of his companies. The gin company over $1 billion, Casamigos tequila with George Clooney, over $1 billion with less than five years of existence of a company. I think now Casamigos is worth close to $3 billion. Look at look at the Mint Mobile and T mobile deal with Ryan Reynolds. Look at the soccer team that Ryan Reynolds has bought. You're going to see more and more celebrities be part of brands as owners because they have influence and they have relevancy, and that's what brands are fighting for. But you can imagine little things like being on TikTok, right? Most fortune 500 brands that I know, their legal department says no way in hell we're doing TikTok. But TikTok right now is the best e-commerce platform for conversion, in my opinion. The algorithms that good. So yeah, in a marketing world, there are constant kind of risk reward, I'm sure battles to be had and I'm going to be the one that is going to be pushing probably the most on the on the side of, of of doing big things and doing things to be relevant in a, in a, in a especially the US economy that is very difficult to stick out. I mean, there's 5 to 6000, in some cases 10,000 promotional messages a day at the average American consumer. So to create any sort of impact or relevancy is extremely difficult. And most people can't do it. And so I'm sure there's going to be a ton of risk that comes with that kind of competition.

Larry Gordon: [00:07:27] So as you talked about, there's so much noise out there kind of breaking through that barrier. So what do you how would you guide a smaller company that doesn't have the Disney budgets or doesn't have the winter resort budget to break through that noise? I mean, you guys are trying to be cutting edge with those bigger brands. How do you coach someone to break through? Is it really about kind of data mining and figuring out the target market and how to really rifle shot it?

Scott Harkey: [00:07:59] There's a there's a few things. So depending on the business category and the size, I think that that most small businesses or medium sized businesses, again depending on category and size, I think the biggest opportunity is, is really honing in on your product offering and making sure that your product offering is truly differentiated amongst your competitors. The second thing is, is your tone and voice and campaign and marketing materials. Is it differentiated in the marketplace or do you look like everybody else? And I'm talking colors, language, fonts. I mean, everything has to be truly differentiated. And then on the third part, are you really providing content and product that your consumer and your target consumer want, and really what makes your target consumers tick? I think for small businesses that strategy work to to, you know, align with the business plan is the easiest and most, you know, low hanging fruit. I would say before we start talking about tactics and percent of, you know, budget that goes to marketing and campaigns and all this other stuff. I really think once you have that really, really strategized, then you can start to put together tactics and campaign elements and marketing that that can start, that can be tracked and honed and optimized over time. But the biggest mistake is when that front end strategy work isn't really fleshed out, and it isn't aligned with the business plan, and your internal team isn't aligned on exactly what you're doing and what you provide for your customers.

Scott Harkey: [00:09:43] Then the marketing and advertising part gets really messy. It's like trying to build a house on crappy foundation. It just doesn't work and it's really expensive. And so that's what I probably would counsel. Most small businesses and, and a lot of marketing people call that like a branding exercise or even sometimes a rebrand exercise. And I really think it's so much deeper than that. I really think it's, you know, a business marketing strategy that allies to that aligns with a actual business strategy and a business plan. So certainly there are brand elements in it. There are logo elements in it, there are campaign elements and taglines and all that pieces of that in it. But it's it's certainly a it's really laying the foundation for success in a marketing world. Because if if you're not speaking to the right audience, with the right offer, with the right product, and if you're not differentiated, it doesn't matter what we put out in the marketplace, if it's if it's relevant, if it's cool, if it's, you know, breaking through the clutter, it won't matter if it if it doesn't meet some of those other elements first.

Larry Gordon: [00:10:53] Well very good. So you were talking about the trends of TikTok and other things that have come in where do you see other trends coming from? Being able to get to the customer and get them acquired to at least have interest in your products?

Scott Harkey: [00:11:10] Yeah. So a couple of trends that I think are interesting. I mean, one is right now, um, you know, we subscribe to all this. As you can imagine, quantitative and qualitative marketing information. We use a company that that helps provide a lot of these human insights and real time monthly I've been working with forever. And a couple of things that stick out to me. Right now, 52% of Americans are on a fixed shopping budget right now, which is pretty scary from an economy standpoint. And it really shows that I think consumers are looking for, in some cases, real value driven brands. So you're seeing a rise in private label brands like Safeway, select, Kirkland, and you're seeing a lot of people, you know, really looking for value on on a grocery shopping standpoint. But then you look at on the other side of things, experiential experiences and experiential activity is still at an all time high. 87 to 90% of people want more experiences than they're currently having, and they will spend above their budget around anything experiential. So things like, you see the sphere in Las Vegas and one of our markets, which I think is brilliant, and you're seeing a lot of other brands trying to package in and add anything they can, whether it's experience when you're buying something online or in store, or whether you're a hotel and you're packaging more of an experience than just the room, right? Like everything and truly, consumers that love the maybe 25 brands that they love are going to expect the brands to provide more of an experience at every level of touching that brand, whether it's buying, experiencing it, being with it, getting an email from them at a concert with them, like anything that that packages in more of an experience, that packages in some sort of feeling for a customer.

Scott Harkey: [00:13:17] That's what they're calling for, and they're calling for it more and more. And then the third piece and the third trend that I see like crazy is and Gen Z is driving this, but it goes all the way through the channel of demographics is that consumers want more personalized content for them. So I think brands and platforms like TikTok that basically, you know, know what you want to be seen from a content standpoint, and it's serving that up to you. Um, uh, people are going to continue to expect brands to, to make content and make ads and make things that really are pertain to them and them only. And that could be even when you're at checkout and buying something online. It could be an email, it could be whatever it is. So I think the need for more personalized content 1 to 1, and I think I will help get get the scale of that content that needs to get done, done. And it's not going to stop. There's just more and more people that don't want generic messages at them. They want personalized message. They want people to know who they are and how they want to be talked to.

Larry Gordon: [00:14:27] So it's really a create your own story on the receiver side is like, I want to have you tell me what I want to do and kind of attract me down the path.

Scott Harkey: [00:14:38] Yeah, yeah. Or I mean, it's simple stuff like, you know, like I think Instagram and Facebook. Well, Facebook was the first and meta I don't know what we should call them. We'll call them meta. But Facebook originally had these I think 28 different categories of attributes of their, of their users. And it was like goofy stuff like, this is someone who's in like a, you know, who likes Star Wars. And they kind of have like a Star Wars vibe to them. Or they had all these kind of different personas. Right. And marketers are pretty familiar with personas and people call personas old school. I still think personas are a great tool today where you help define your your optimal consumer and you help stereotype them. In some ways that and stereotypes are bad name, but I say that in a way to spur debate on on. When you're when you're crafting your ideal customer, I think you have to start to think in a story of somebody, not just age and where they live and quantitative kind of demographics. And, and and then when you're, when you're producing content, whether that's an email blast or a social post or a PR message, how are you? How are you influencing some of those attributes to that customer? And you should have first party data on them. So it shouldn't be hard. And that could be a nod to, hey, you know, we're the Diamondbacks. We're going to do a Star Wars night or hey, you know, we know you love travel and we know we you love to go to Cabo. And so, you know, here is a Cabo package we put together for you because, you know, Bill, we know you love Cabo. Um, those are the kind of just maybe little examples, but I think there are much bigger opportunities in that space.

Larry Gordon: [00:16:33] Well, terrific. So in order to go down that path with AI or whatever, what other resources, tools are out there that are going to help change your space and attracting customers?

Scott Harkey: [00:16:46] So to get into a little bit, first of all, nobody has the full answer to AI. And AI isn't going to solve your problems in marketing. And AI is not going to be a silver bullet to your marketing, which unfortunately, I've had a lot of conversations with people that, you know, think this holy grail of AI is coming. First of all, it's not fully fleshed out. It's getting there very, very fast. Um, you know, I can tell you at our agency of a couple hundred people, every single person at our agency, at every job function, has the ability to sign up for any service they want at 20 bucks a month, because most of them are about 20 bucks a month. Some are subscribing to seven, eight, nine different types of AI. Some are doing a couple, whether that's mid-journey. If you're a designer and you need scale of content, or if you're a copywriter or even an account person or a strategist that's using ChatGPT as a search engine and as a content producer, or even an idea generator or even an outline template kind of holder. What I think really AI is going to do is help scale marketing activities more than we've ever seen in our life. And so I would counsel anyone in marketing or any SEO, SEO the first step to, I think really having adoption of AI inside your companies is giving people the green light to green light to test, and giving them the budget to go sign up for all the services.

Scott Harkey: [00:18:20] I personally think Mid-journey and ChatGPT have the the biggest impact for marketing inside an organization or for agencies. That's probably the ones we're using the most. And again, what I think it's going to do short term, long term is I think it's going to make marketing scaled marketing efforts and scaled content more efficient and and basically cheaper. Again, we're not quite there yet, but that's where it's coming. So I think you can have smaller marketing departments, but as long as your departments understand prompt engineering and how to work with AI, and I think we're going to be able to get much more work done better, faster, cheaper, that's where that's where AI is really going. But it won't make you just a bad marketer to a great marketer because AI is here, that that's definitely not what it's going to do, but it will help a department of five people get double and triple the amount of content done eventually.

Larry Gordon: [00:19:24] Well that's great. And you were going to talk about other tools or resources that are out there.

Scott Harkey: [00:19:29] Yeah, certainly. Chatgpt Mid-journey the Adobe, the Adobe Suites I think are great. And again, sign up for the latest versions if you're using the free versions like come on, like give them the 20 bucks a month. So what I love about chat GPT two is they have basically a Microsoft Bing plugin. It's really it's not just, you know, AI and copywriting. It's actually plugged into a search engine, which I think is going to be a huge, huge benefit for Microsoft. Um, those would probably be where I would start. There's others like Firefly is another one that comes to mind. I'd probably stick with those top three for at least for marketing people. Um, I'm trying to think of other maybe tools. Um, but, you know, certainly just playing around with it, like giving people the permission to, to play. We do a lot of AI hacks where we'll like have like once a month, our whole team will come in and just play with AI and have fun with it. And then we do a quarterly presentation, all functional teams to our agency and our clients. Um, and I got to give our president, Megan Jackman, kudos. She's really adopted AI at a high level. Um, but truthfully, it's it's not it's not ready to be sold yet. It's still it's still tested and optimized right now, in my opinion. There's some cool things that can come out of it, and I will. I will say that even just using ChatGPT for other marketing adjacent departments for market research can be can be very effective as well.

Larry Gordon: [00:21:09] Very good. So when it comes to content marketing and you want to keep your customers intrigued through different content, can you talk about kind of trends in content marketing and how to keep that fresh?

Scott Harkey: [00:21:23] Yeah, absolutely. Um, I think podcasts are a great tool for content marketing. And I think one one mistake I see often and one I've made often as well, is I think we think about content marketing as something that needs to be this highly produced, big event kind of thing. Um, and it's actually the opposite. I think people just want authentic, um, uh, uh, relevant talking points. Um, and I think there's a way to be more efficient with your content because so many different channels can use that content if it's just maybe tweaked at a different way. Right. So if you're doing a podcast as an example, the podcast can also have video clips that can be broken up on Instagram and TikTok and Facebook and LinkedIn and Twitter or X. And if you're doing a sports marketing program and there's a speaking engagement, well, while you're getting that speaking engagement, you can be filming that and that can be broken up into bite sized pieces. So I think there are so many efficient ways to take long form content that's being done, whether that's a podcast, a speaking engagement, television appearance, um, whatever it is, um, I think you can take that content again and you can splice it up and make all these little smaller vignettes that can be placed on different channels at different times. And I think people at times, unfortunately, like a lot of things in marketing, overthink it.

Scott Harkey: [00:23:01] Um, and the biggest thing in today's day and age, it's it's it's actually. It's hard for us to grasp because today's social content is about quantity, not quantity, not quality, which for marketers and for business people and perfectionists is really hard to grasp. It's about putting out content and learning and tweaking the content. It's not about putting the perfect content out at the perfect time all the time, because that won't happen, and the people that are just producing more of it are going to learn faster and, and going to are going to hone it in. So I think it's more about providing a budget, starting small, finding different ways to put content in different places, test and learn. It's a one to 2 to 3 year process of getting your ass kicked, like getting hammered and failing before you're going to start to get the insights that you need to really be a great content marketer. And that is really hard for people to understand, especially smart business people, that it's about more about getting started and learning and optimizing than it is providing the perfect plan with the with the real high polished content. Of course, have a strategy and of course, hone in on that strategy. I'm not saying that, but I'm also saying get started, make mistakes, try different things.

Larry Gordon: [00:24:18] Well, terrific. So as your as companies go after the customers and the acquisition, what are some KPIs that you should be looking at? What performance metrics should be measured so that people know they're being effective?

Scott Harkey: [00:24:36] I mean ultimately, you know, revenue, sales, market share? I think I like to look at because here's the thing with, with with marketing that that CFOs and board members and non marketing people have a problem with. And it's there's going to be a percentage of marketing spend that is not going to be trackable. As great as analytic tools and data that we have individual tactical efforts on marketing channel by channel, thing by thing, will not have the perfect, um, multi point attribution tracking. It just won't. And the best marketers out there, um, do more brand marketing and their companies grow faster and they're more loved. Um, the, the companies who are really good with analytics and do really great performance marketing, um, can feel great about where that spend is going. And they can have the right KPIs. And they know if they put, you know, 100 bucks into the performance marketing machine, 300 bucks comes out and everyone feels great. And I do believe that performance marketing should be a big part of the marketing mix. But I also think that a large part of the marketing percentage should be brand marketing activities that are going to make performance marketing work better, and it's also going to protect the brand over time. It's going to build a moat around your category of expertise, around your product, around your differentiated brand to make it very expensive for other people to come compete with you in that, in that lane.

Scott Harkey: [00:26:12] And so depending on the business plan, I think the KPIs should look different. I mean, when someone says, what are the key KPIs? It's like, well, what is your goal? Is your goal to sell the company in two years? Is your goal to scale the company? Is your goal to keep the company? Is your goal to keep, you know, market share over this competitor? Like what ultimately is the goal? Is it to grow revenue by 10% or 20%? Then the marketing KPIs fit into that. I think the big mistake in marketing is where people say, well, conversions our goal or, you know, revenues our goal. And it's really broad based kind of things. But marketing is really tough. Um, and I think I like to personally look at marketing as kind of a 3 to 5 year play in terms of if you're doing more brand initiatives, you're not going to see return on that at sometimes two, three, four, five years down the line. Um, and so if you're going to sell the company in two years, then, you know, our KPIs are going to look a lot different.

Larry Gordon: [00:27:12] Really great insights. So I want to transition a bit to understanding kind of where companies typically run into trouble. When we think about the risks that they experience and kind of problems. Where do companies run into trouble when they're doing a marketing or advertising plan?

Scott Harkey: [00:27:32] So you're probably going to hate my answer. But I think as a as again, the marketing voice in the room, which at times the marketing voice in, in the boardroom is going to be outgunned by other people and other smart people. Whether it's a C-suite or it's more of a startup company with with a, with a sophisticated board. And I think companies run into trouble in this day and age, in this hypergrowth world, in this global economy, and by being too conservative. And if you're not playing all out in terms of marketing, there's somebody else who is going to be. And I think companies today are are either growing super fast or are declining super fast. There's no in between, which can be very scary. I mean, you can be, you know, Kmart one minute and out of business the next. Like it happens very fast. Um, and so how do companies get in trouble? I think two things. It's, it's not having alignment within the company around what you're doing and what your brand stands for and who you are and what the personality is. It's it's basically finding, you know, journey people, CMOs that bounce around job after job come in and they convince the board and they convince the company that this newest, greatest campaign is going to be the thing.

Scott Harkey: [00:28:55] And then they they, they spend a bunch of money and tell all the customers and potential new customers that this new greatest thing is the thing, and the board doesn't really believe it. The people inside haven't really believed it. There's been no buy in or roll in of this idea in this campaign, and then in 18 months again, then that CMO is fired and then they start over again. And that's most of the companies that you see. I mean, the average ten year of a CMO for corporate companies is half of any other job in the C-suite, maybe even less. I think it's between 18 months and like 30 months is the average tenure of a CMO at a fortune 5000 company. That's insane. Cfos are, what, seven years CEOs? Probably 5 to 6 years, I mean, even CEOs. So there are people get fired the most. Um, and it's really hard to get alignment. That takes a lot of work, that takes negotiation, that takes time on people's calendar to really get people to buy in on what the company is doing and where it's going and how you're going to. How can you convince consumers that that's what you're doing and where you're going if you can't even convince people inside the company? Um, I think that's the biggest mistake is, is moving towards a campaign that's really risky.

Scott Harkey: [00:30:09] Without the proper internal buy in, you have to get internal buy in, and that's difficult. And getting internal buy in isn't isn't adding things to the campaign that makes everybody happy. That's what's called frankensteining creative. And you may hear agencies or creative people say this a lot where they present 3 or 4 different ideas, and then everybody likes different pieces of the ideas and they want to Frankenstein them together and put them all together. And what you're doing is you're watering down the campaign. It's not going to be as cool or as beloved by people. It's going to make you happy because the engineering and tech person and the product development person all got a little piece of the campaign that that they care about, but ultimately the consumer is going to be confused. It's not going to hit them as emotionally as hard and it's going to be watered down. So I think the biggest risk and missed opportunity is finding a way to be a convincing sales person in organizations to get internal buy in, into the campaigns. You're eventually going to run externally.

Larry Gordon: [00:31:12] Now we're moving on to the Blind Spot Insider segment of the show. This is where our guests answer questions that have been submitted by our listeners. This allows the listeners to submit questions, get different insights specifically to questions that they had that may not otherwise be covered in our episode. If you're not a blind spot insider, please go and register at risk blindspots.com plural because we all have them risk blind spots.com to be able to submit questions for our guests, to listen to the responses, and to get exclusive content. So with that, here's our first question. Scott, this has been really great information you've provided today. I think that the people that are listening to the Blind Spot segment, the regular segments, are really going to pull a lot away from this. So thank you so much for your insights from your side of the desk. So where can our audience find you if they want to look you up or connect with you?

Scott Harkey: [00:32:13] Yeah, probably the easiest place for business people to find me is on LinkedIn and I produce content there, but also Instagram as well. It's just at Scott Harkey pretty much pretty much anywhere. Okay. But probably for most business people, LinkedIn is probably the most comfortable format.

Larry Gordon: [00:32:30] Well, terrific. So I want to recap for our listeners what our key takeaways were for today. They were about customer acquisition strategies, trends, and so much more to be able to manage your programs and build your companies. And then the thoughtful responses to the questions from our Blind Spot insiders. So, Scott, I want to thank you for all the time you spent today. And this information will really help those who are trying to avoid the what the risk moments and expose their business blind spots. Absolutely.

Scott Harkey: [00:33:00] Thanks. Thanks again for having me on. It's been fun.