Volume 162a: Solo Stoves CEO Goes Solo.
Solo CEO Goes Solo.
tl;dr: Some headlines just write themselves.
Just in case anyone has been living under a rock for the past week or doesn’t live in the US, here’s what just went down:
At some point in the past year, Solo Stoves, a leading US brand for smokeless firepits, hired Snoop Dogg to front a new ad campaign focused on his “going smokeless,” pun completely intended. It rolled out just in time to -hopefully- boost Q4 sales. Unfortunately, it didn’t, because the company missed its sales targets. Unfortunately X2, it also saw a decline in profitability, reportedly due to the cost of the campaign itself. (Snoop ain’t cheap + media).
So, the board asked the CEO to go solo (boom, boom) before replacing him.
Of course, the talking heads immediately crawled out of the woodwork to deliver hot takes reinforcing their pre-existing biases. Here’s a summary:
The performance marketing dogmatists have been crowing: “Brand ads are such a waste of time that they take out CEOs.” Obviously, the company should’ve focused on bottom-of-funnel demand harvesting instead.
The marketing science crowd has been equally active. Clearly, the campaign didn’t show enough of the product/wasn’t well branded enough/ suffered because Snoop was more famous than the brand/didn’t have enough overlap between Snoop fans and firepit buyers/didn’t have easy physical availability, etc. Plus, it probably did build mental awareness; it just won’t hit until later quarters.
To build on that, the brand-builders have been at it too, saying, “Wait a minute, wait a minute,” this is about long-term brand-building; the creative was great, it got attention and awareness, and Google searches are up. The effect on sales just hasn’t been felt yet.
And, finally, there have been a few thoughtful souls pointing out that we may never know why they didn’t achieve what they intended. Perhaps multiple aspects of the above are true, and perhaps other marketing mix elements were the real problem; we just don’t know.
I’ll be honest. I have my pre-existing biases. My gut is that growth had stalled because they’d hit the mathematical limits of demand harvesting for a niche lifestyle product, so were throwing a Hail Mary pass to try and hit unrealistic 2023 targets (especially if these targets were based on pandemic-era growth, where so much home improvement demand was pulled forward), but in reality, none of us except the company itself has remotely enough data to comment on what might or might not be correct.
What I can say with complete confidence is the following:
It’s bad for marketers of all stripes that there’s a “CEO got fired for a campaign decision” narrative out there. CEOs do not like to get fired, so this episode likely chilled the chances of many marketers getting a high-profile brand-focused campaign approved this year. Especially in the DTC space, where Solo started out.
It’s almost certain the CEO wasn’t fired because of an advertising campaign. However, it served as a neat and easy narrative. It’s vastly more likely that a combination of additional events/decisions/relationships/results are what precipitated his removal.
The company royally screwed up when it publicly predicted an instant uplift in both sales and profits off the back of the introduction of a new campaign in the most crowded quarter for consumer spending.
The new CEO is in a great position. If the campaign really does increase mental availability and salience that grows sales in subsequent quarters, he gets to claim all the credit. If it doesn’t, he gets to point to the former CEO and say it was all his fault for making a huge marketing error. Heads, tails, he wins either way.
I truly don’t have enough information to definitively state what went wrong or even to identify if anything, in fact, did go wrong. However, I can state that it’s an excellent example of what happens when you set expectations you’re then unable to fulfill.
Of all the elements of this tale, the expectation setting is the thing that stands out a mile as being the oddest. It made me wonder if perhaps the team putting the business case together wasn’t working backward from the market opportunity but instead worked out from the cost of running the campaign. In other words, they started with the campaign cost and then worked out the return necessary to justify it. It certainly wouldn’t be the first time anyone did that, cough, cough.
Second, did nobody at Solo Stoves consider the -by now well-understood- notion that perhaps not all advertising works solely in the period in which it’s running and that perhaps spreading the projected sales impact across further quarters may have been a smarter option in terms of the optics of risk?
Thinking about it, I do have a possible explanation for that second point. If Solo Stoves is anything like some other startup-like clients I’ve worked with in the past, they’ll have built the entirety of their marketing stack around a measurement and attribution model focused on return in the period in which the ads are running. This is because when they built it, they were focused on activation-focused demand harvesting to be cost-justified in real time and managed for maximum efficiency. In other words, it isn’t necessarily that they didn’t understand the idea that broader reach demand creation tends to impact subsequent quarters; it’s that they simply didn’t have the capacity to measure commercial impact outside of the period in which the ads were running, so they measured Snoop just like they measure Google AdWords.
Ultimately, however, I have no clue if anything even close to the above happened. And, in truth, neither do any of the other talking heads you’ve seen on LinkedIn and Twitter.
And that’s the real learning here. To wait and see what happens next rather than focus on barely informed hot-takes by talking heads that reinforce their pre-existing biases. Especially the one you’re reading right now.
If the new CEO sticks with Snoop and turns this into an ongoing campaign, then the campaign was never the problem. He’s not going to run a campaign that reportedly got his predecessor fired unless it’s working and working well. This will mean the company, in fact, chose the correct path to grow demand. Where it screwed up was in setting unrealistic expectations of short-term impact.
However, if the Snoop work dies on the vine and we see little or no new efforts to grow demand, rather than simply harvesting it, and Solo continues growing, then the campaign was indeed ill-advised. There was more demand to be harvested, and demand creation wasn’t necessary, at least not yet.
And, finally, if the Snoop work dies on the vine, nothing replaces it, and growth stalls or goes backward, then we’ll know that demand had stalled, that the former CEO was hurling a Hail Mary pass that failed, and that no one has figured out another way to crack the growth nut because it’s hard...
To finish, if there’s any learning from this story, it’s the following:
Be careful not to set unrealistic expectations you subsequently cannot justify because they were impossible to achieve in the first place.
Don’t rush to rash judgment based on the hot takes of talking heads with pre-existing biases they’re hell-bent on reinforcing. Instead, wait and see what happens next before coming to a conclusion.
Although little has changedmaterially, I had mostly forgotten about that post until I read this piece from McKinsey on the six capabilities necessary formodern marketing success.
And what can I say? I know whichquadrant I’d put the below in.
If you’re tempted to read it, it’sprobably not worth your while. I did, and can save you the trouble for thefollowing reasons:
Beyond that, there’s the typical tropeof survivor bias, highlighting two anecdotal stories tomake their point without providing any meaningful empirical evidence in supportof it.
Finally, the one insight in here thatI do think is worthwhile somehow gets buried. When I did my MBA many moons ago,I was left with two conclusions. First, an MBA doesn’t make a terrible managergreat; it weaponizes them. Second, an MBA isn’t a business degree; it’s alanguages degree. Every part of the organization speaks a different language.The language of marketing is different from the language of finance. Thelanguage of finance is different from the language of operations and so on. Theuseful thing this article identifies is that as marketing delivery has becomeso complex, it’s also become multi-language. My takeaway is that if we’re notwilling to simplify marketing delivery, then we’ll need to create pidgin that connects enough of the dots across these different languages to beeffective.
What disappoints me the most aboutthis article is that for all the travails of McKinsey, nobody ever accused it of beingdumb. And this, my friends, is dumb. It should never have been allowed to ship.
There’s literally no excuse forputting dumb thought pieces into the world when you’re doing billions inrevenue, have some of the world’s smartest people on your payroll, and workwith the leaders of the world’s biggest and best marketing organizations.
It’s a travesty. Marketing is already in bad enoughshape without yet anotherpoor take from McKinsey. (Does anyone remember the hubris of “performance branding,” which advocated for treating brandmarketing exactly like a performance marketing campaign?)
I wrote last week about my disappointment in Prof ByronSharp presenting what I see as an incremental addition to the work of Kotler asif it’s a fundamental disruption of Kotlerian orthodoxy. But this is muchworse.
Which neatly brings me to my finalpoint. There’s a long and storied history of thought leadership in B2Bsettings, especially among firms that advise others, as McKinsey does. Untilfairly recently, these were typically well-resourced and influential groups,often led by people with exceptional journalistic and editorial credentials.The goal was to present deep intellectual competence and understanding ofissues that people inside the client organization would be drawn to work withand learn from.
Then, the shift to digital happened,and thought leadership was cut up, re-engineered, and re-branded as contentmarketing.
And then everything went to shit.
Why? Because thought leadership at itsbest is about quality. It’s low-volume, high-quality thinking. It’swell-resourced and excellently researched and provides a window into theintellectual leadership of the organization. While advisory brands have alwaysused it as a sales tool, its value wasn’t primarily judged on the basis of howmany specific individual leads it drove. It was more of a branding vehicle,where attribution was always more fuzzy math than actual math. And there’s therub.
The promise of digitally enabled B2Bcontent marketing was never to improve on thought leadership, build brandpreference, reinforce premium pricing, or present you as the smartest peopledealing with the toughest issues. Nope. B2B content marketing has alwaysovertly represented the enshittification of thought leadership. It’s aboutchucking chum into the water and then bottom-feeding via a content factorymentality. It’s always been about quantity over quality, about clicks anddownloads, and email addresses and sending crappy leads to your sales team fromthe fake email addresses people invariably use to gain access to the contentyou create, assuming they bother accessing it at all.
As a result, we’re in the midst of aperiod of ever-declining click-through rates as quality slides intoirrelevance, and people learn to route around stuffthat’s pretty much useless to them. What’s chilling is that rather than view declining click-through ratesas a signal that something is fundamentally wrong, a common response is to spinthe wheel faster. And now, with AI-driven design and writing, I can guaranteethe hamster wheel of the utterly ignored masquerading as thought leadership isaccelerating toward infinity.
So, yeah. If McKinsey really wanted todo something interesting in the marketing space, maybe it should start closerto home and fix its own approach to thought leadership. Ditch thebottom-feeding content marketing mentality and these dumb takes. Instead, bringback the intellectual heft it was once known for.
No matter how big an advisor likeMcKinsey might become, if it keeps presenting obviously dumb takes often enoughand for long enough, then eventually, the premium glitz of being a luxury brandfor the CEO will tarnish.
I’ll leave you with this thought. LVMH is the world’s largest owner of luxury consumer brands. It intrinsicallyunderstands that in order to maintain luxury pricing and demand, you mustinvest in creating and maintaining worlds of unique artifice that reflectpinnacles of quality in design, creativity, production, materials,distinctiveness, and more. Then, you use these elements to build emotionaldesire by treating your brands as shared social signals of individual successthat you deliberately constrain access to by limiting supply.
Right now, McKinsey is doing the exactopposite: Acting like a bottom feeder while attempting to maintain its positionas a luxury good for the CEO.
And if that doesn’t say everything youneed to know about why McKinsey is becoming increasingly less credible as avoice in the marketing conversation, I don’t know what will.
I can’t help but feel that it’s livingoff past glories, and with its recent reputational travails combined withterrible takes like this…well, it’s hard to see that lasting forever.