Q&A with Sarah Robb O’Hagan – global CMO and North American president, Gatorade

Sarah Robb O’Hagan has been global CMO of Gatorade for four years, and was last year appointed North American president of the company. She will be speaking at Circus – The Festival of Commercial Creativity, running from 27-29 March in Sydney.

 

Can you give Marketing readers a preview of what you’ll be talking about at Circus?

What I’m going to be talking about is what I’d call the new rules of brand engagement, and how we, in our business, and in the US market, think about consumer engagement very, very differently now. And I’ll be talking a lot about expert examples of how you really need to think about creativity differently in a world that is so powered by the consumer and social media, etcetera, and the programs they use to engage them are different to what they were in the past.

As well as being global CMO of Gatorade for four years, you’re now also president of the company in North America. Is that a deliberate choice for the brand to be led by a marketer?

Yes, very definitely. I think it’s interesting when I slipped into the president role, it was because we knew that what had really driven the business forward – obviously we’ve reshaped how we’re thinking about Gatorade for the future – was a creative and marketing mindset. So, I think there was a real desire to take some of that thinking and use it throughout the rest of the business. It’s been a good exercise, I think, because it’s enabling us to think about the business across every facet as the brand, whereas in the past some companies think marketing people do marketing and then they’re done. Well, actually, creativity and consumer connection fuels every part of your business, your distribution, your retail programs, etcetera, so that’s really a key to how we’re thinking about it now.

 

For CMOs that aren’t fortunate enough to also be directing the company, how do they go about convincing those in charge to get on board an idea or vision?

I do accept that the role of the CMO, and corporations in general, has so dramatically changed in the last 15 years, because it used to be that the product team would come up with their ideas, the commercial team would decide where in the marketplace they’d go, and the CMO was effectively doing traditional advertising and communications. Now, the world is moving so very quickly that marketing is the product, it’s how it stops at retail, it’s how the consumer is engaging and tweeting about it, it is every single touch point that it possibly can be, which means the CMO, if they’re not figuring out how to bring all of the pieces of the business together under one creative vision, they’re almost falling behind in terms of what some of the competitors might be doing. They actually think of the role of what we used to call the CMO is almost the chief curator of the company now; they’re understanding the consumer more deeply than anyone else, and they’re figure out across all the levels, whether it’s product, sales, distribution and communicating to marketing how to activate and bring them together.

Paint the picture of the future in a very fact based way. Where in the past those that held the money might have looked at the marketplace opportunity in terms of FMCG, for example – the FMCG business has very distinct competitors and we look at market opportunities in terms of who the competitors are, what the profit pools are and that’s how we make our decisions. A smart marketer can actually completely change the conversation by saying, well, actually there’s an entire white space in consumer opportunity that no one’s going after, that I can see, because I know the consumer really deeply, and I can quantify it. And I can create concepts that I believe we can make as a company to go after that opportunity, and then of course, I can communicate and market it. So, the smart marketing person is the one that can paint that picture of the future in a very financially grounded and fact based way.

 

You’re a proponent of market research that’s very much ‘out-in-the-wild’, getting to know the consumer personally. What’s behind that philosophy?

You hear the great creative leaders of our society say that the consumer can’t tell you what they don’t know, and so in conducting physically quantitative research in the last 20 years we were often using quantitative tools to try and come up with the most mass sized consumer proposition that would meet the most people’s needs, and quantify it using very analytical tools. Unfortunately, that can only get you so far – it can’t help you understand what the future opportunity may be. The only way you can find that out is by deeply, empathetically, understanding the consumer and then identifying the problems that they have to solve, that they may not even be able to articulate themselves.

That’s how I look at creating the future, but you can also apply the same thing in reacting to initiatives you’ve just put in the marketplace. Whereas 10 years ago we might have used traditional tools by link testing to decide on ad concepts, is this going to be liked by the consumer? In this day and age we will put TV spots on the air and check the copy or the edits within 24 hours just based on what we can tell the consumer is getting out of it from social media, if it needs to be changed, that is.

I think of it more like surfing a wave, putting things out there, seeing how the consumer is reacting, iterating what doesn’t work to make sure the point you’re trying to get across, you get across. Now, I’m not suggesting that if a consumer doesn’t like something that you change it, because it may be that’s not a consumer you want it to appeal to anyway. But certainly you can understand very, very quickly if the consumer needs that you are trying to solve, and how you are trying to communicate it, isn’t getting across; you can quickly evolve on the spot just by listening.

 

Is there still a place for traditional market research?

Of course there is. We have a very nice balance on how we run our business of the quants and the qual: the quants can tell you what’s going on, the quals can tell you why, and I think it’s important to balance the two but what I would say is that getting too reliant on, and looking for models that will prove something will work, is flawed because consumers are changing and evolving, so it’s very, very quickly that you’ve coaxed yourself into a false sense of what can work, and by the time you’ve launched it, it might have changed anyway.

 

Can you give us an example of in-the-field qualitative research at Gatorade?

At Gatorade we spend an inordinate amount of time, either through social channels or real time, in locker rooms, talking to pro athletes and high school athletes. We have teams that are not just research teams, but anyone in the business who is out in the field, that we’re constantly asking to connect with the consumer, talk to the consumer, discuss what you heard, and I think we have a very good process of connecting those little insights that people might hear, a small insight on a field of  playing with an athlete, that we can then go back and say, “Are we hearing that theme chatted about in a much bigger way? And is there something bigger bubbling up that we should be aware of or not?” I think we do a good job with both real world and virtual, social channels, combining the two, to understand where the opportunities lie.

 

How did Gatorade’s ‘Mission Control’ social media monitoring room come about?

Four years ago, before we started the transformation of Gatorade, the business was using a very old school marketing mix. 90% of our budget was on TV: one-way dialogue to the consume, what we all used to do in the good old days. And we realised very quickly that we had to change the game and we had to understand how to play in the new world quickly. The first year, I’d say, we made a big shift by moving 30 or 40% of our budget from TV to digital in one year, just because we knew we needed to do that.

What was interesting is we got this huge social dialogue going around at the time – it was a new position for the brand when we changed the logo to ‘G’, but we were so ill-equipped to deal with it because we set this thing off, not realising we were going to have this tidal wave of conversation around our brand, and we didn’t even know how to track it.

Quickly we went, whoa, back up, we need to think about digital and social media very differently. So we put in place Mission Control, and at the time, to be honest with you, it was as much about changing the behaviour of our team internally. By putting this physical room in the building where we have people from different marketing disciplines – we have the PR folks in there, we have our digital folks, brand management folks – it was forcing them to see the dialogue in real time and act on it and communicate across the different functions of marketing.

Initially we said let’s just start it as an experiment and put it in as a listening room and see what it can be, and quickly we realised it’s enormous potential because it’s not just what you learn from it, it’s how you very quickly engage with the consumer on the spot. We never anticipated how quickly it would replace a lot of our research techniques that we used to use.

As a brand, we have a very focused core consumer with high school athletes. I think we probably know more about who on Twitter is the most influential influencer of end user athletes than Twitter does, because we’ve made it our business to know that. And that, in and of itself, becomes a marketing tool to be leveraged.

 

How quickly could you use an insight that you gain from social media listening?

It depends what it is. If it’s creative executions, it can be as quick as 24 hours. If it’s distribution opportunities – I talk to people a lot when I am doing features, and there is a fallacy that social media is just digital because it’s actually people wandering around giving real time data at all times in the world, in the marketplace – we have a team that is out there doing what we call ‘point of sweat’ distribution, and we can use Mission Control. People posting on Foursquare that they’re having athletic occasions and we don’t distribution around it, we can use it. That’s a very quick insight we can turn around, but that would obviously take more like a few weeks by the time you get on-the-ground guys around it.

So, it can be very, very quick, and then for new product development it can be as far out as about six, 12 months in the making, and we’re constantly using Mission Control to iterate on what we’re developing as well.

 

In the Mission Control video it shows maybe half a dozen people in the room.  Are there always that many full time staff there?

Yeah. Those are full time, but we staff it up around big launches, and obviously around holiday times and when we know that communication around the brand is lighter, we scale it down a little bit. It’s flexible, but even the people whose jobs are full time Mission Control, when they’re not in the room over a long weekend or holiday, they’re always empowered to correct an incorrect discussion around Gatorade; they can do it from their house if they have to.

Social media crosses so many boundaries for us that our PR agency actually leads most of the social media efforts, but it does cross over into some of our other agencies as well.

 

What changes has social media listening brought to the brand?

At the macro level I still find the statistics phenomenal. Gatorade in the US, when we first put Mission Control in place, at that point, a benchmark of all the conversation happening in the social space around our brand, 70% of the conversation about our brand was either about flavours or hangover cures, and as a company that was trying to go back to our core, and really focus more on sports performance, that, as you can imagine, was somewhat alarming. And about 16 months later, after we had put a lot of programs in place with Mission Control, listening and learning and interacting, when we looked at the statistic again, by that time, 70% of the conversation around the brand was around sports performance, so protein recovery, carbohydrates for fuel before you work out.

And it just tells you – for any brand out there – if you put the people in place to listen and interact in the most appropriate way with the conversation happening you can change the conversation to be what you want it to be around your brand.

And then how do we do it on a daily basis? We’re not a brand that’s out there with the Gatorade Twitter handle just blatantly turning up in conversation saying, ‘here we are, come buy us’. What we’re doing is listening for when someone tweets, ‘I’ve just been for a run, I’ve got really sore legs and it was one of those long runs, what do I do?’ It’s a really appropriate place for the Gatorade handle to respond and say, ‘You should be having 20 grams of protein in the next half hour. Here’s an article you might be interested to read as to why,” and then we’re out. And because of that, we’re providing utility to the consumer, but also a really deep engagement of having them go, ‘Well, I want to hear more from you, Gatorade. That was quite helpful.’

The interesting thing is, when you do it that way and you enter the conversation, it’s no different to a dinner party. You don’t just turn up and say, ‘Here I am. Listen to me.’ You enter the conversation in an appropriate way. Then it’s almost like they’ll come to you to start consuming the content you’re creating because you created the engagement in the first place, so they want to hear from you.

 

Looking inward, does Gatorade use social media for internal branding or culture creation?

We’re actually starting to do a lot more of that now. I’m very active myself on social media, and we decided strategically to start with me, to figure out how people engage and what they’re looking for, and now we’re really trying to encourage our employees, no matter what department they’re in, to get on the social media channels and as they feel comfortable, represent the business. And not because we’re asking them to push anything, but more. I firmly believe that transparency, in this day and age, is so important. What’s wrong with people being able to see what it looks like to work at Gatorade?

In terms of fostering the culture, what we stand for to the consumer is what we stand for to the employee, and we do a lot of programs where we encourage our employees to take part in athletics whatever their athletic goals may be, and we support every employee living what the brand stands for. But I wouldn’t consider it internal branding as much as it’s just taking the messages to the consumer and personalising it for the employee.

 

Gatorade is the clear market leader in the US. What’s your philosophy on innovation for the brand?

Innovation drives everything for us, really. Yes, we’re the market leader, but we don’t see that as a reason to rest on our laurels. We have a very, very strong innovation sector now. We’re relentlessly looking for new opportunities, to the point where, at times, some people ask me, ‘What keeps you up at night?’ What keeps me up at night is there is so many opportunities sometimes it’s hard to choose which one to go after, because I think we have a very vibrant culture internally around innovation, and constantly challenging the status quo. From a board context, we’ve taken the business from being just a sports drink business to a sports performance innovation company. We went from being just a drink that any food or beverage you put in your body, and then we’ve actually gone beyond that and said, ‘Why are we just product? We should also be services.’ So we’ve got some very interesting service models and things in a couple of months for the brand as well.

Innovation in terms of products and services was driven by our R&D and marketing teams, but the marketing team has definitely taken ownership for where the brand has a right to go, and then what are the consumer problems to solve? And out of that will come the innovation solution, and that crosses many avenues, if you will, but it’s a constant collaboration between the marketing team and our R&D and our science team.

When I came in to the company, which was four years ago, we had not been doing a lot of innovation. We had been expanding in terms of distribution and growing the business that way, and I was hired very specifically to rethink what the brand could do and be and what the innovation opportunities were.

We’ve really pushed very hard to change the thinking, I guess, and focus the growth to come from innovation instead of this broadening of distribution as it was before. A big piece of that – the R&D, the Gatorade Sports Science Institute – is something we have always had in our arsenal. We were doing this incredible research about exercise physiology, but we hadn’t commercialised a lot of it. Now you’ll see a lot of the innovation coming out of us. It’s taking this knowledge that we always had and turning it into products and service that are very useable for the athlete.

 

You’ve previously worked on some pretty big brands such as Virgin and Nike. Are you drawn to these ‘rockstar’ type brands, and what have you learned from those experiences?

When I left New Zealand, I actually had a very strong purpose-driven agenda that I wanted to work for Nike because of the sports side of it, and I wanted to work for Virgin because at the time – this is back 15, 20 years ago – in terms of what Richard [Branson] was doing to really change the game on what a brand could be, was very, very interesting to me as a young student coming out of college. Virgin was inspired more by wanting to learn, actually. If you could go and work on a brand like that, you could learn a lot about how to be a great marketer in general, and then Nike was because of my strong passion for sport.

I remember going to Virgin, having proximity to Richard Branson, and thinking, ‘wow, he’s going to be the genius guru that I will learn everything I could possibly need from’, and in actual fact, Richard is phenomenal, but he also doesn’t do it all. He’s very good at empowering the people around him. He’s an intuitively brilliant business man that can see the opportunity and then empower incredible people to get it done. So, that was a huge learning for me seeing that come to life.

At Nike, I think everything we’ve talked about here, the innovation culture, and the discipline it takes to drive the brand, it’s a local brand, and constantly being reinventing yourself and creating the future. I don’t think there’s any other company of the world, with the exception of Apple, who do it as well as Nike. That was an incredible experience to learn from.

 

You clearly have a great passion for sports – does that personal involvement need to be there for people to use it effectively in business?

From my experience, having a real passion for what you are marketing is really, really important. I spent a couple of years in the video game business, because that was a great place to go learn about a new up-and-coming area of culture. I hate video games, I hated video games, I still hate video games, and I hated it, and I was a disaster. I couldn’t get my ideas across, I couldn’t connect well with my co-workers, I couldn’t figure out how to understand the consumer. It was just a disaster.  And I compare and contrast that with working for Gatorade where I get up and run every morning, I live what we stand for about that because it’s so a part of who I am, and I think as marketers, I always see people do their best work when they feel it in their bones, when they so empathise with the consumer that they’re trying to connect with. Because if they don’t, it’s really hard to fake it.

 

Would you have any advice for marketers in other companies that might not be so easily connectable in a personal way? That work on brands that may be, let’s say, a bit more boring?

I always think any brand has the opportunity to not be boring, and I think for any marketer, you’ve got to figure out how to ladder that brand up to a reason for being, and if the reason for being is something you can emotionally connect to you can have a lot of fun. I think more and more in this day and age, we’ve got to a place in the consumer marketplace where there isn’t really much opportunity to have a proprietary idea anymore; pretty much any company that comes out with something, somebody else copies it in another company within a few months. But the most compelling brands are those that really stand for something, and they ladder up to a higher calling. And that’s something, I think, pretty much any marketer out there can find for their brand if they look hard enough.

 

 

Sarah Robb O’Hagan will be speaking at Circus – The Festival of Commercial Creativity, running from 27-29 March in Sydney. For more information on the event and other speakers, visit circusfestival.com.au