The Marketing Maximalist // BRXND Dispatch vol 120
A framework for CMOs in the AI era
Cheers to everyone in Cannes, where OpenAI is the grand debutante of the ball and if the texts I’m getting from those on the ground are any indication, AI has transformed the festival in its image and likeness.
This year’s Cannes comes as Axios reports that advertising is the largest share of GDP that it has ever been (1.2%) with several major systemic forces poised to make marketing a larger portion of the overall economy. I’d venture a few glasses of the pink stuff are being raised to that.
Today’s piece focuses on why every discussion around AI in marketing must be downstream of a growth vs. efficiency mindset, a topic we’ll continue to explore at BRXND NYC. We have a few tickets left at the early bird rate of $749 and would love for you to join us.
Apply for a slot today before our early bird allotment is gone or we raise prices on July 15, whichever comes first!
The Marketing Maximalist
There’s a fascinating paradox at the heart of AI adoption in the enterprise. While efficiency gains are the easiest myopic way to prove ROI to a CFO, having a mental model of AI based on efficiency is fundamentally a race to the bottom that dooms any true attempt at AI transformation. At its core, AI is a technology born to drive growth and introduce incremental new revenue, not eliminate cost. It’s a race to the top.
Thus, token maximalism is such an important philosophical concept because it reframes the entire discussion of how to use AI around the enormous value AI can create, not the human capital costs it can strip out of a business. The weird bastardizations of tokenmaxxing that make headlines— like engineers looping agents in a flat circle— are an externality of rotten and cynical corporate cultures, not an indictment of the underlying concept. More thoughts from Noah on this later in the week :)
For enterprise CMOs, token maximalism is still mostly an academic notion anyway as I’ve yet to meet a marketer who is really the one running up the Anthropic bill. Perhaps more than any function, marketing is still afflicted by a bizarre conservatism when it comes to AI that too often leads to automating low-throughput workflows rather than reimagining what is now possible. It’s utterly boring, mundane and ready to be combatted with a better framework– enter marketing maximalism.
AI is fundamentally slashing OpEx from businesses at a time when distribution is historically scarce-- the perfect tsunami for more dollars to go into marketing in all forms if CMOs embrace a maximalist mindset.
The marketing maximalist is ruled by a two part creed:
1) AI should be used to launch audacious experiments where marketers attempt to solve problems that were impossible before.
2) Where AI can create additional efficiencies in a business, every dollar saved should immediately be reinvested in growth.
Taken to its logical (and profitable) extreme, this line of thinking will pretty significantly alter the marketing and media landscape as we know it. Here’s the CEO of Ridge, a ~$300M+ brand:
A marketing efficiency ratio of 2 is an absolutely bonkers concept! One out of every two dollars you make is being pumped right back into the marketing machine. But if your operating expenses are now lean enough to profitably invest this much in marketing, it’s the only defensible utilitarian play!
There are a few obvious macro ramifications to AI-powered marketing maximalism, namely:
- As mentioned above, the advertising industry, which historically has hovered around 1% of GDP since the 1930s, is now growing as an overall share of the economy. The old knock on advertising– that it was a sort of zero-sum industry relative to overall economic output– is not true in the era.
- Gargantuan tailwinds for Meta, Google, Amazon, TikTok and OpenAI’s ad platforms. CPMs are only going in one direction…..
- A golden age of new consumer brand concepts where extremely lean teams can pop up and challenge legacy brands with profitable unit economics from day one, making venture capital an optional luxury.
- More money available to pay outsized salaries to the most talented creative and brand leaders, who increasingly will have the only skill in the business that can’t be commoditized.
While it should be noted that Ridge has hardcore direct response and performance roots, it’s a mid nine-figure company that runs a plethora of TV commercials, multimillion dollar influencer deals and even owns its own media properties. More importantly, the broader point of framing AI in the context of new audacious growth initiatives vs. efficiency is every bit as true in a large enterprise as it is for a brand like Ridge, perhaps even more so.
Consider the position that a brand like Coca-Cola currently finds itself in, which is microcosmic of many large consumer products. Beyond the headwinds of GLP-1s and general decreased demand for sugary drinks, brand preference for Coke products is now going to be increasingly mediated by agents. What will make an agent crave coke?
Obviously the answer here isn’t for Coca-Cola and other FORTUNE 500 brands to blindly start committing hundreds of millions of incremental dollars to paid media. And I doubt there’s much wherewithal for Coke to start thirstily astroturfing Reddit.
But when an agent puts together a shopping list and eventually executes a purchase end to end in Instacart, what will compel said agent to supplement “build a healthy meal plan for my family of four” with a cheeky 2-liter unless it is ordered point blank to do so? What kind of “brand” associations can products that might not be hyper-utilitarian purchases make to be perceived differently by agents?
The World Cup is in full swing and despite a year of doom and gloom headlines leading up to the tournament, the vibes so far have been immaculate. It’s also a fun time to recall a crazy and contrarian brand bet that Coke once made that with significant investment, women’s soccer could become a mainstream, family-friendly, nationally marketable entertainment property.
By sponsoring FIFA women’s competitions and backing the 1999 Women’s World Cup ecosystem, Coke helped give the sport blue-chip credibility at a moment when brands and broadcasters were still unsure whether audiences would show up. While the ‘95 cup struggled to put 1,000 fans in the stands, the ‘99 world cup was played to sold out stadiums and 40M people tuning in for the final.
For Coke, the ultimate payoff was association with patriotism, empowerment, families, and a fast-growing women’s sports audience before many other brands fully recognized its value. In other words, marketing maximalism.
If you have any questions, please be in touch. As always, thanks for reading.
— Mike