What you need to know:

• A year into the Telstra CMO gig, Brent Smart better understands the street-fight of performance marketing – and its power. He says the experience of duking it out daily with high street retailers has made him a sharper all-round marketer.
• But Smart’s not about to change his brand building spots. He’s pushing hard to work out which bits of performance marketing are just sales that would have happened anyway – and will turn them off and reallocate the budget.
• He’s also pushing hard into media mix modelling to get a clearer picture of ROI across the piste.
• Then he’s aiming to use that data to get closer to 60:40 brand to demand spending. Telstra’s currently circa 20:80.
• While applauding the CX and digital transformation investments that have powered Telstra’s NPS to record highs – and earned execs their bonuses – he says that won’t deliver new customer growth.
• Disgruntled former customers – mainly older people, much to his surprise – need to be re-engaged. Hence kicking off a big brand campaign.
• While armchair critics say the ad – Footy Country – is under branded, Smart says “heavy-handed” branding is an apologist’s mask for “boring, vanilla” storytelling.
• Meanwhile, he’s driving hard into attention planning – and said it’s changing investment allocation.
• Plus, he’s lifted the Anheuser-Busch playbook on systemising creative excellence, running the rule over every single piece of comms that touches the customer in a bid to benchmark and improve.
• Despite the the length of this article, there's a lot more in the podcast. Get the full download here.

Telstra’s customer happiness is at an all time high, CEO Vicki Brady in August told analysts on a 23 financial year earnings call, with NPS – a key KPI for Telstra executive bonuses – up six points to 43.

That lift in customer satisfaction and therefore brand and reputation improvement came as a result of the telco's massive digital transformation program to improve customer experience. Tellingly, customers interacting with Telstra in its new digital CX tech stack and service strategy are at satisfaction levels double that of the previous tech and service regime and Telstra’s confusing product and plan line-up. Both areas have been – and still are being – substantially overhauled.

Those major gains in customer satisfaction have nothing to do with the creative brand building for which CMO Brent Smart is renowned. So how do those improvements sit with Smart’s worldview of creativity and brand building as the secret growth source often overlooked by his CMO peers and businesses at large?

He dismisses Mi3's straw man argument as "the tyranny of or", between either marketing and customer experience or similarly, brand and performance. But he says Telstra still has to tell that transformation and satisfaction story to the wider world. Otherwise the company won’t increase market share, however good the customer experience.

A year into the job, he's gearing up to do that with more brand budget and more creative firepower in the places that demonstrably deliver both highest attention and highest marketing investment returns.

How brand grows

“The thing we’ve got to always remember with CX is it's only felt by our current customers. If you want to grow, you need to think about how you engage non-customers to make them customers. While you can get some advocacy and word of mouth from great experiences, what gets interesting is how can you build the brand in a way where those non-customers start to feel very differently about your brand,” says Smart.

“I always say if you want to change how people feel about the brand, then you need to change how the brand feels. That is absolutely the role that creativity plays – you can really change how the brand feels quite quickly … and I don't know anything else that can do it the way creativity does.”

The CMO remit is far broader than “just creative and comms,” per Smart. “That said, I do think that is a really critical core competence of marketing.” Big businesses like Telstra, he says, are stacked with “customer experts who are building customer experiences who have customer insights … and that’s important, because we have to put the customer first … [But] I think marketing's got to bring something else other than just customer. And what I believe marketing is uniquely positioned to bring is creativity.”

Plus, while Telstra's army of customer experts is making headway, “I’m the culture expert, I know what's going on in culture, I know what the opportunity for our brand is in culture,” says Smart. “I think that's a really important lens that no one else in the organisation is going to bring to the conversation. We're going to have big problems that need solving – and I believe that I and my team can contribute to that problem-solving by bringing different, creative, lateral solutions that wouldn't come from anywhere else in the company. That's the power of having a creative culture inside marketing.”

Which comes back to linking brand and customer experience – internally and externally – in order to drive growth. But it’s not the problem he initially anticipated.

Not okay boomer

“When I joined Telstra, I'll be honest, I thought, ‘that's my mum and dad's brand’. I thought we're going to have a real challenge with younger customers,” says Smart. “It's the opposite. Our brand reputation is incredibly strong with young customers. Our engagement rates on TikTok are amazing for brand like Telstra. We’re doing a really good job with younger customers. And yet older customers have a more negative perception of us.”

Smart reckons that adds weight to his view that Telstra has to go larger on brand.

“It says we've got a group of people who used to be customers at a time when we weren't as customer-focused. They are still sort of carrying that reputational baggage around the Telstra brand. They are not experiencing these CX improvements … [so] the only way you can move that perception of those non-customers is through brand … And that is why I'm such an advocate for brand building ” says Smart.

Which is why, he says, the marketing science and marketing effectiveness work by the likes of Byron Sharp and Binet & Field are fundamental to marketing – and to his ethos as a chief marketer, both at IAG and now Telstra. He shrugs off suggestions that could be viewed as narrow or one-dimensional.

“If you want to grow, then you need to create mental availability with more people – that has been proven scientifically by the guys at Ehrenberg-Bass. So if that's the job, then you have got to build brand – because that's the only way I know that you can increase that mental availability, create those memory structures, do all that fantastic work that brand building does,” says Smart. “With a brand as big as ours, that has got to be a big focus.”

First big ad

Telstra’s new brand campaign. This is Footy Country, is a case in point. Smart says it’s designed to change how the brand feels. But at the same, by focusing on AFL and the rural Australia, reinforces Telstra's Australian heritage, solid nationwide network coverage – and its appeal to those older Australians its data says hold negative perceptions.

“We've always had a big presence in country Australia and we just felt that country footy is the lifeblood of these communities," says Smart. "It's the heart and soul of footy in this country and there are just such amazing stories and characters involved in country footy every weekend around Australia. So we felt it was a place we could really own – and a space that could lead to some really creative storytelling."

The ad's director, Exit Film’s Mark Molloy, was instrumental, says Smart.

“He grew up in a regional Victorian town called Waubra. His dad played for the Waubra Emus (the team that features in the ad) … So when he was doing the treatment, he said ‘this is my childhood. I grew up in these club rooms and at these footy grounds’. He just had such an intimate feel for how that world should look and feel. And I think he just nailed it,” says Smart. “It is about changing how the brand feels – and I think that Footy Country is a great start.”

Smart says Telstra’s early brand tracking work suggests the ad is cutting through – as is the level of media coverage it has drummed up to date. Earned media is always a good indicator, per Smart, because that’s the bit money can’t buy.

“It's had a fabulous earned media response, including Neil Mitchell on 3AW in Melbourne. He’s not the most positive bloke normally when it comes to advertising. But he had me on his show talking about that ad for well over five minutes. It's the proudest my mum's ever been, she's a loyal Neil Mitchell listener,” says Smart. “But it’s had a lot of media, a lot of talkability, which is always a great sign that you are doing something that is standing out and getting noticed.”

Answering armchair critics

Smart brushes off criticisms (advertising’s cognoscenti will never knowingly pass up the opportunity to find fault in other people’s work) that the Telstra brand comes through too little too late in the work. And he has a little crack back.

“I think we've all become very obsessed with distinctive assets. And rightly so – the [marketing science] literature shows if you've got distinctive brand assets, you're going to get better mental availability, and ultimately, more effectiveness. And that's all good, I believe in that too. But the most important thing is to have a distinctive story,” says Smart.

“I believe that if you tell a great story and you really draw people in, then you don't need to be too heavy-handed with the brand – the brand could be the resolution of that story, and you get fine branding scores. I think the reason people want to over-brand things is they're telling pretty boring stories that don't engage, and people don't stick with those stories and want to find out who the brand is. So you over-brand it because it's boring, and it's vanilla, and it's got no cut through.”

Plus, he says, Telstra is currently working its longer-term branding, “and some new brand assets we can commit to over time … but we haven’t worked that stuff out yet.”

Either way, he again goes out to bat for the campaign. 

"The brand is on show, and we've got a long standing association with football. So it's not like it's a new sponsorship, where we're trying to establish that brand association. So you can be heavy-handed with these things, or you can look at the piece of communication and consider what is the right amount of branding based on on the job we're trying to do."

Plus, says Smart, if the objective is to engage non-customers with "a bit of Telstra rejection going on, then I'd suggest you don't want to brand it too early. You'd want to sneak up and surprise them a little bit and get that reappraisal for the brand going. That doesn't happen if you brand it in the first frame.

"So for me, that's about the right level of branding based on the job you're trying to do, as opposed to slapping the brand everywhere, which to be honest, I think is lazy marketing."

Performance learning curve

Telstra’s budget allocation is currently around 80:20 performance to brand. Smart wants to get that closer to Binet & Field’s 60:40 brand-to-performance heuristic. But he’s under no illusions of the role performance marketing plays at a brand like Telstra.

“Telco is a highly competitive category – so much more competitive than [my previous category] insurance. You are not only competing with other telcos when it comes to a device launch – we just launched the new iPhone – you are competing with all those other retailers, Harvey Norman, JB Hi Fi and the rest. And they are all pretty competitive – there's a real battle for acquisition that happens every month and it's really important that you're winning in that battle. So there's good reasons why we're so focused on it.”

Exposure to that retail street-fight has changed Smart’s appreciation of performance in the marketing arsenal.  

“Coming in, I thought Telstra would be this sort of slow beast, a bit complacent when it comes to retail. It's the opposite. It is a hungry machine when it comes to acquisition. We've got really strong muscle in that area. It’s driven good numbers – driven by our ability to act like a retailer and trade hard. There’s a great focus on it in the business and I think it's sharpened me up as a marketer to really be contributing to that monthly trading battle,” says Smart.

But he’s not about to entirely change his spots.

“You’ve also got to be building the brand over the long term, creating future demand so that when our performance work kicks-in to convert, demand is there and that we're creating more of it. That work is done over a longer timeframe than quarter to quarter, so you've got to be doing both, you’ve got to balance it … Particularly when you've got big goals around moving reputation as well. You've got to be doing the work, building the brand, positioning the brand and changing the brand perception,” says Smart.

“Ultimately, that will deliver our growth targets, which is the ultimate remit for CMOs.”

Linking brand, CX, performance

The challenges in linking top of funnel and bottom of funnel communications are ever increasing – retail media being the latest case in point. Likewise CX, with pushback against vanilla templated automation and martech stacks pumping out comms that are totally misaligned with brand.

Smart agrees there is too little thought going into where those comms are ending up.

“Droga always says straight or great – and with lot of that performance stuff, you want to be straight to the point, a clear offer. But designed and branded well – and in particular, ensuring it’s fit for platform. That's something I don't see enough of: Integration is so important for modern brands. I just see a lot of creative 'matching luggage' across all channels, as opposed to [properly considering] what's the actual right way to turn up in this specific platform or environment that's going to drive the result we want. So being fit for platform is really, really important in a lot of these performance channels,” says Smart. “Great performance is clear, simple, well-branded; you've thought about the customer journey and what you want the customer to do at that particular point in time.”

But he reiterates that well branded, platform-specific performance is only going to convert people that are already pre-disposed to the brand and ready to buy. It won’t change perceptions and fill the bucket further down the line. “So I want both to be great. I want both to be working together.”

Finding attribution fibs

While lauding Telstra’s “hungry acquisition machine”, Smart aims to work out which components are genuinely driving growth, or “true incrementality”. He’s lifting some of the IAG playbook to figure out what is influencing a purchase decision versus "just touching someone on the way through who's going to buy anyway? I think that is the fundamental question we're going to ask about a lot of performance work.”

To do that means isolating different performance aspects. “You’ve got to have the courage to turn stuff off and see what happens,” says Smart. “You can always turn it back on again.”

He took that approach at NRMA and found that attribution models from some of the big platforms were somewhat wide of the mark.

“We were running a bunch of digital display advertising and we ran the attribution models that Google and Meta and all those guys love… you run the attribution models and it all looks pretty good. It looks like you’re selling 1,000 policies from that work. But the question is, did that performance work really drive those sales? Or were those sales going to happen anyway?” says Smart.

In came a split test, with a “very strong performance message” served to one half of the market, and a charity message from one of the IAG-supported charities to the other half.

“We ran the attribution models and it said that we'd probably sold another 1,000 policies with that offer-based work. But when we had a look at those two different cohorts, we sold 50 more policies to the cohort served the charity message. So there's no way that performance display advertising was driving the sale, it was just touching people on the way through who were going to buy anyway,” says Smart. “So we turned it all off – and we improved. We put [that budget into other places] and we uplifted the effectiveness of our performance. So you’ve got to be willing to turn things off. That’s how you get a sense of what’s the real incrementality here?”

Market mix modelling push

To get a clearer picture of ROI across the piste, Telstra is pushing harder into market mix modelling (MMM) via Omnicom’s data analytics unit Annalect, appointed last year following a broader market RFP.

“It comes back to that the ability to demonstrate how marketing is contributing commercially. Importantly, to be able to show not just the short-term ROI we get from all that performance work, but also the long-term ROI that the brand work is driving,” says Smart. “You’ve got to have a framework in place that lets you measure that brand impact over a longer timeframe.”

The MMM push is also intended to influence a sharper media mix and smarter budget allocation by channel and brand versus performance more broadly.

“As much as I talk about the power of creativity, you need the data to measure that power, the data that shows us making a difference. Without a model that lets you do that, you’re flying blind as a marketer” says Smart. “And that’s pretty tough.”

Smart admits the MMM is not yet at the point where it can predictively put a dollar value on creativity – as some econometric modelling platforms and the creative agencies using that technology are now trying to do.

“I'd be lying to you if I said I know how to put creative quality into that model and predict the impact of better creative,” he says. “I don’t think we’ve quite cracked that.”

Attention: Cinema, OOH win

Telstra is also pushing harder into attention-based planning.

“[Amplified Intelligence CEO] Karen Nelson-Field has done great work around attention rates by channel. We’re already doing that – and it’s made a big difference to how we approach media. It definitely does change your channel choices,” says Smart. “You just can't get the reach you need on linear free to air television anymore. So you’ve got to supplement it with other screens. But the important thing is having a holistic plan across screens that takes into account their different attention levels.”

That means blending in BVOD and other ad supported streaming channels plus Youtube to “to build a higher reaching plan with – importantly – higher attention,” says Smart.

“There are a lot of low attention digital environments in which we could spend a lot of money. But we've got to remember we're getting a lot less of the audience's attention in those places. A lot of it's just scrolled past,” he adds.

“It's why cinema is such an underrated channel, because you just get such high attention rates in that beautiful captive environment. So we're definitely in places like cinema and I've always been a huge fan of out of home. When you drive around Sydney, look at the brands that have the best out of home sites – it's brands like Apple, it's the companies that really are building brand. Out of home is a fantastic medium – and it's the hardest one to block,” says Smart. “So it’s not just making sure we are thinking about the reach numbers, but also that attention filter – it’s really important.”

Systemising creative excellence

Smart in July raided his old stomping ground, hiring Anna Jackson, former brand strategy and creative excellence chief at NRMA to lead creative excellence at Telstra. In terms of scale, the task at hand is a step up for both of them.

“At NRMA I sort of thought creativity was this sort of organic, fluid, don't-over-process-it thing that can't be over-managed. But when you've got a team of 300 marketers and the enormous output that we have at Telstra, you've got to be a bit more planned than that,” says Smart.

“So this is our attempt to systematise and quantify creativity without strangling it, without over-processing it and without trying to over-engineer it.”

Smart and Jackson are lifting the playbook written by AB InBev that has seen the brewing giant crowned creative marketer of the year two years running at Cannes and win a shedload of awards – while contributing to strong revenue gains.

“They've had the best growth they've seen in a long, long time – and they absolutely attribute that growth to their more creative marketing,” says Smart. “So we talked to the Cannes Lions advisory service who have worked closely with AB InBev about how they went from not very creative and relying on big acquisitions to grow, to being very creative and having awesome growth.”

From those conversations Telstra has adopted what AB InBev calls a creative spectrum, though the telco calls it a creative dial, per Smart.

“Basically, having a one to 10 scoring system where you score every single output that is created and you create a common language amongst a whole team of what ‘great’ really looks like. Because that’s the big problem – 'great' is an abused world. People call things great that are just good. So you have to create a common language around ‘how good is this thing we are doing’” he says.

“You have to be prepared to have some hard conversations and be real. Yes, people have worked hard on it. But in the end, it’s not about that. It’s about the piece of work that goes out into the world, anything that touches the customer. So you have to have some intellectual honesty about how good is that and what are our standards?

“So we've developed our own dial, our own scoring system. We sit down for three or four hours every quarter – and every single piece of work we create, from the biggest brand out to the smallest tactical email, we give it a score.”

Creative feedback loop

Crucially, each piece of work and the brief is examined, and feedback is given honestly but constructively on how it was scored, why it was scored that way, and how it could be improved for next time, says Smart.

"That’s what Anna [Jackson] does. A big part of her job is providing that feedback loop to the marketers, coaching the marketers and helping them understand how they could get better. And the really great thing is, it lets us quantify whether we're getting better. Is this quarter better than the last quarter – and we can track our progress and hold ourselves accountable," says Smart.

"I think a lot of people in marketing talk a big game about ‘we want to be creative, and we're about the work’. But do you have the discipline and focus on it that you're applying to other capabilities?" says Smart. "There's a huge focus on marketing automation, a huge focus on media and other areas of marketing. I would say they're important, but they're nowhere near as important as creativity. So let's put that level of focus and discipline on creativity. Let's treat it as a capability, not this magic thing that happens in the advertising agency."

How’s that feedback landing with the 300 marketers in the team, not all of whom may be creative?

"My mantra is hard on the work, kind to the people," says Smart. "It's one thing to set really high creative standards, mark all the work and hold everyone accountable to the creative output. But the way that you implement that is with some kindness, give people the support, encouragement, coaching and help they need to create better work.

“In the end, I think everyone gets inspired and motivated about the idea of doing something really great, that’s really going to make a difference. I've always found that more inspiring than then doing mediocre stuff,” he adds.

“So I think people get pretty excited about the idea that we're setting really high standards, that we will do world class work. But you've got to put the system and structure and culture around those people that helps them achieve that," says Smart.

"Hope is the worst strategy. You need a plan for how you’re actually going to get there.”

Creative feedback loop

Crucially, each piece of work and the brief is examined, and feedback is given honestly but constructively on how it was scored, why it was scored that way, and how it could be improved for next time, says Smart.

"That’s what Anna [Jackson] does. A big part of her job is providing that feedback loop to the marketers, coaching the marketers and helping them understand how they could get better. And the really great thing is, it lets us quantify whether we're getting better. Is this quarter better than the last quarter – and we can track our progress and hold ourselves accountable," says Smart.

"I think a lot of people in marketing talk a big game about ‘we want to be creative, and we're about the work’. But do you have the discipline and focus on it that you're applying to other capabilities?" says Smart. "There's a huge focus on marketing automation, a huge focus on media and other areas of marketing. I would say they're important, but they're nowhere near as important as creativity. So let's put that level of focus and discipline on creativity. Let's treat it as a capability, not this magic thing that happens in the advertising agency."

How’s that feedback landing with the 300 marketers in the team, not all of whom may be creative?

"My mantra is hard on the work, kind to the people," says Smart. "It's one thing to set really high creative standards, mark all the work and hold everyone accountable to the creative output. But the way that you implement that is with some kindness, give people the support, encouragement, coaching and help they need to create better work.

“In the end, I think everyone gets inspired and motivated about the idea of doing something really great, that’s really going to make a difference. I've always found that more inspiring than then doing mediocre stuff,” he adds.

“So I think people get pretty excited about the idea that we're setting really high standards, that we will do world class work. But you've got to put the system and structure and culture around those people that helps them achieve that," says Smart.

"Hope is the worst strategy. You need a plan for how you’re actually going to get there.”