What you need to know:

• Five weeks into their new roles, Telstra CMO Brent Smart and Digital Channels Executive Jeremy Nicholas explain what their remit is, where their focus will be and why they made the change.
• Telstra is a step up in scale from insurer IAG, Smart, formerly IAG CMO, says. It has been undergoing a hefty transformation project since 2018 and a lot of the hard work has been done.
• Both Smart and Nicholas are leading a team of circa 300, with very different focuses. Both part of the consumer and small business team, Smart will lead brand marketing and Nicholas leads the digital experience customers have.
• Listen to the big, nuanced, podcast conversation with Nicholas and Smart here 

“The scale” is the biggest difference for former IAG Chief Marketing Officer Brent Smart a little over five weeks into his new role as CMO at Telstra, one of the most high-profile marketing roles in Australia. But the commerical savviness of Telstra's marketers is an eye-opener. Smart took over from Jeremy Nicholas, who moved on as Telstra's Digital Channels Executive, leading the digital and customer experience team that oversees about 80 per cent of Telstra’s customer sales and service interactions that start online.

The recent careers of Smart and Nicholas mirror the shift in the broader marketing function – as marketing, digital, customer experience and e-commerce intersect, so does the expertise of the people behind them.

Both IAG and Telstra are big companies – Telstra turned over $22 billion in the 2022 financial year compared to IAG’s $18.3b. But telecommunications and insurance are two very different games with, as Smart points out, a lot of different acronyms. The telco made $1.8bn in after-tax profit to the insurer’s $347m. Telstra has about 28,900 employees, while IAG has been reported as having a bit over 13,500. Telstra services 18.8 million retail mobile services, 3.8m fixed bundles and data services, and a lot more – IAG has about 8.5m customers in total. Telstra spends $248m on its marketing function each year. IAG doesn’t break it out.

Smart says there’s still work to be done for Telstra’s brand reputation, which, despite the company being iconic and Australian, is behind where it should be.

“The thing that scares me the most as a CMO is that I create a thin veneer of advertising,” Smart says. “Advertising which starts to establish personality, a feeling of positioning and the consumer's mind, and then they go to the experience and doesn't live up to it. All the two things are completely disjointed and not working together.”

The brand is the “sum of the experiences” by customers, and between Smart and Nicholas, they control a huge swathe of that for Telstra.

“There's about 5.5m active users on the app. There's about 7.5m to 8m digital active users across the ecosystem. There's hundreds and thousands – millions on a busy day – going through. And that's just might be people going on into the app to check their usage on their phone,” Nicholas says.

“They might be going online to look at a new product, they might be just checking on the implications of the flooding on our network coverage and things like that… it’s a pretty broad church in that respect.”

Telstra means a five-year restructure

A lot of the heavy lifting, arguably, is already done. In around 2017, there were 1,800 different plans available through Telstra. Now there’s 20. “We took huge amounts of complexity out of the business,” Nicholas says. “Everybody’s on in-market plans.” That means service updates go to everyone, not many different tiers. Costs are spread more evenly, rather than as a “loyalty tax” to older customers. That was part of the five-year T22 plan, launched in 2018. About 9,500 people have left the business since then, while another 1,500 have come in.

“They’re in software engineering and that side of the business. That’s where all the growth has been,” Nicholas says. “There’s no doubt the team is leaner than it was before I started, and indeed Telstra is as well, overall.” Nicholas led a larger team back then, too.

The cult of Agile

Telstra is also one of the largest ‘agile’ workplaces in Australia but there are mixed signals on the benefits of agile practices applied to marketing - some CMOs privately are frustrated but not Nicholas. Agile is all but ubiquitous in large enterprises and is loved by consulting firms - it essentially prescribes a structure and model that prioritises flexibility, in Telstra’s case embedding marketers in various teams. Media is centrally planned, and the budget is centrally run, but the “vast majority of marketers are out in the ‘missions’,” Nicholas says.

“The marketers for the most part are working in teams with, say, a pricing person, a couple of custom experience people, financial, etc, product people, so that sort of work together. You're in a team delivering something together.”

There are ‘missions’ and there are ‘chapters’, led by ‘chapter leads’. Chapter leads work across the various missions – as opposed to silos working totally separately. Nicholas says it forces marketers to be more commercially minded – they still operate in their functional "swim lane" in marketing but exposes them directly to other parts of the business and operations. 

"We're 3.5 years in and I think it's been really good for us," he says. "It puts marketers in a conversation around the commercial realities of what's actually going on. They get a great perspective on the business. How we've made it work at Telstra is we have bent it a little bit. I can see in other places where it gets challenging is you get little silos of people in missions all creating their own things and nothing is connecting together. My counsel for people is the co-ordination – that is absolutely critical. We've worked really hard on that. We've kept all the media centrally planned, the budget centrally run, brands centrally run and that's been important."   

Smart is still coming to terms with the operating structure of agile. “There's a whole language and a whole set of rituals, you feel like you've joined a cult, coming to agile,” he says. “But to Jeremy's point, the team's been doing it for three odd years, so they're very well-tuned… they're more commercial, I think, than most other marketers I've worked with, which I think is a really, really good thing. I think it gives them credibility, I think it gives them understanding and it certainly is great for collaboration.”

Marketing vs ‘the business’

This lack of commercial awareness often limits marketing execs, says Smart. “Sometimes you find marketers who are actually quite disconnected - the business is something that happens over there. You've got to have a point of view on the business and you've got to understand what the business needs, not expect someone else to make those kinds of decisions for you. The best marketers are equal parts commercial and creative and they have a big point of view on the business. That's how you absolutely get credibility and make sure you're influencing how a business is run. That doesn't happen if you are disconnected from the business." In Smart's experience, marketers will often say "the business wants this...I was like, 'you are the business, we are the business. It's critical, as Jeremy said, that you need to be really in the business, understanding the business, contributing to the business.”

That’s what Nicholas’s strength has been at Telstra, Smart says – he has been a CMO as well as a businessperson. “Whatever company you're in, whatever brand you're working on, I think the CMOs who are able to make a difference or the CMOs who have influence, have respect and are able to add more value than just the colouring in,” Smart says.

But the role of CMOs has shifted massively over the past decade. Nicholas says it’s more different between categories – pureplay online retailers, FMCG brands and telcos, for example – than it has ever been. The brand should always be slightly in front of the company, he adds.
“I use an analogy like stretching elastic band – you want to stretch it out in front of the brand there to pull the company forward. If it's too far, it snaps,” he says.

“You're constantly thinking, 'is this the right time to really go with the big statement like we did with ‘Australia is Why’ campaign'? Or is now the time to actually just focus on product, on the knitting, and get some more basic things done? So where are we at on that? And I think those things really, that's a defining thing about working in the CMO role now.”

CMOs: Speak up

Marketers should have a point of view about more than just the comms put out by a company, Smart says, and should make that view known. Pricing, experience, team structure – these are all part of how CMOs should be talking to the C-suite.

“As a CMO… you need to contribute to the business in a more meaningful way than just the advertising and the brand,” he says. “I think that's lost a lot in some of the commentary around 'marketers aren't being taken as seriously as they used to be’, blah, blah, blah. I think you’ve got to earn it. And I think as a CMO, you absolutely have to be at that table with a bigger opinion on the business.”

Why Brent went to Telstra

As Smart arrived, Nicholas gave him a document with 10 things to watch out for. “He did,” Smart confirms. “Whenever I’m sitting in those meetings and don’t understand whole sentences, I can just ping Jeremy and say, ‘what does that mean?’ But Jeremy has been incredibly gracious and he’s given me a fantastic onboarding and lots of advice.”

Smart, an outspoken fan of the importance of creativity and a critic of vanilla, bland martech systems, joined Telstra after 5.5 years at IAG for a few reasons. First, he always wanted to work on “one of the truly iconic Australian brands”. “I really want to work on brands that get into culture, shape culture, have real cultural importance. And, you know, Telstra is definitely one of those,” Smart says. “Big, Australian, iconic – it ticked everything I was looking for in terms of the brand I wanted to work on, and I was sort of ready for a new challenge.”

Second, being a top marketer in the Australian division of a global company is like operating within a cage. “Having worked overseas, worked in America, worked on global brands, if you're working on one of those in Australia, you don't really get to shape the brand,” Smart said. “I don't want to be told what to do with the brand by people in Cupertino or New York. I want to be able to truly lead a brand. And I think if you want to live here, that only really happens on Australian brands.”

And lastly, for all of the work Telstra has put out over the past few years, its brand is “slightly behind the reality of the business”.

“I think that's a really exciting opportunity. The real challenge for us is how do we get the brand reputation of Telstra to be right up there with the leading, most reputable, most respected brands in the country? I genuinely believe we deserve to be up there with those brands, but it's just a matter of shaping the narrative and letting the Australian population feel a lot of the good stuff that's happening inside the company… whilst the brand is in the best shape it's been for a long time and the 'Australia is Why' campaign has been hugely effective, I still think the reputation of the brand at the moment is slightly behind the reality of the business.”

But that’s a longer-term operation. The next two quarters of marketing are already planned, “as with any well-run marketing operation”. “It's going to take a little while for me to be able to work on some new stuff and get that to market,” Smart adds.

Nicholas says Smart has already started adding value and is among good people. “They hired him because he's vocal, passionate, driven, outspoken. That's what you want. You look at the leadership team him and I sit on, they're amazingly talented people, and you want someone who can come in and contribute,” Nicholas says. “What he can bring, certainly at this point, his perspective outside in and new fresh way of thinking, and that's what's been really valuable from the get-go.”

Smart’s martech frustration

Smart has repeatedly made polarising – or refreshingly honest, depending on who you ask – remarks about marketing automation turning “vanilla”. If everyone is using Salesforce and Adobe, he said in 2019, there’s zero competitive advantage and everything becomes generic. He started putting his views into action in 2021 with IAG brand Rollin.

“I was frustrated at the time where I felt like the narrative was all about how 'if we use this technology and we create a much more personalised, much more automated, digitised experience, that will deliver growth, that is sort of the silver bullet', right? And that was all the narrative at the time. And I've seen huge amounts of budget being shifted into the martech space,” Smart says.

“But the bit that really drives growth for brands is the brand building. And I think we've read enough from Byron Sharp and Mark Ritson and everyone else that the key to growth is not about the highly personalised, highly targeted stuff we do with customers. It's actually about brand building, mass reach, emotional connection, memory structures, all that stuff. And I think a lot of people were forgetting that. So that was my frustration. It's and not or right. It's a not or. You've got to do both.”

Intelligent marketers were just plugging in the right tech and hoping the job was done, Smart adds. “I mean, that is not even half the job,” he says.

“A lot of digital experiences today are quite generic and all look the same because everyone's using the same tools, are all following the same best practice. And I actually think the same principles that we apply to creative advertising, we need to apply to CX… That's why I'm really excited about Jeremy being in his role, because how can we make the experience distinctive, memorable, worth talking about. I think sometimes we forget about those principles because we go, ‘no, let's make them frictionless and let's just take the pain points out’.”

Uber, Smart says, won the Grand Effie award not just because of its customer experience, but because it included an "incredible brand idea" - 'Tonight, I'll be eating'. 

Nicholas pushed back, saying it’s important to make the experience frictionless and easy, but building personality on top of that is key. He has spoken before about the value of Telstra's martech investment. 

“Talking to customers as we speak today in flood affected areas, they may have lost everything. The service messaging from Telstra is a lot different to say, 'hey, you've got some free movie tickets which you could use through your Telstra plus points’,” Nicholas says. “That's where I think things like personalisation and this stuff comes into place… that's when you need to be really precise.”

Next 12 months

So what are two of Australia’s top marketers looking out for in the next 12 months?

Smart: “Inflation. And resisting more offers, more retail, more trading, because we've got a very price conscious customer. We will need to do that, but I believe that brands will be able to command a premium they can in non-inflationary times and in inflationary times.”

Nicholas: “I'm thinking about security and sustainability.”