OP #262: Underwriting Creativity

You and the competitive set can buy the same ads, how do you stand out?

Author

Darren Herman
June 18, 2024

Happy Tuesday OP Community,

Happy belated Fathers Day to those fathers out there. I had a nice celebration with my family and had a good laugh when a buddy sent me this comedy video. Apparently it’s been making the rounds. I hope you enjoy it.

👩‍💻 Matt Turck (FirstMark Capital) on Is SaaS Dead. Matt is smart, always fun and provocative and has a good X thread on the subject. Read all the comments.

🌐 I’ve known Seth for close to 20 years and he’s been immersed in SEO since starting Conductor.  I do like his take on the future of SEO.

🏀 Jerry West, the NBA logo, died at 86 years old this past week. Rumor has it that he never watched a recent Celtics series due to the Lakers vs. Celtics rivalries of old.

📈 PR Professionals Abandon X For LinkedIn. I can see this with my own consumption habits. Data is from Muckrack, a platform started by long time Silicon Alley vet Greg who just won EY Entrepreneur of the Year. Congrats Greg!

📖 The folks at Possible via their partnership with Tata Consultancy Services just released the Trends Report coming out of their April 2024 event.  It’s a good PDF with some highlights from the conference.

Here are some fun links to get us started:

Thank you for reading the Operating Partner letter this week. I truly appreciate your feedback and comments in order to make this better. Feel free to reach out and let me know how you’re enjoying it.

Darren

Underwriting Creativity

If you work in marketing or advertising, it’s impossible to miss that the Cannes Lions Festival is happening right now. For those not familiar with Cannes Lions, it’s the Festival of Creativity held in Cannes, France, where hundreds of thousands of marketers and agencies from all over the world gather. They drink rosé along the Croisette, party at random chateaus, networking at the Carlton, end each night at the Gutter Bar, and discuss the current and future trends in creativity.

I am not there this year but send my best to all who are.

Fun fact: in 2021, I co-led a team that won a Cannes Lion for a business transformation we (RGA, Camelot, The Buddy Group, IDEO) executed for Michaels (arts & crafts). You can learn all about the transformation and its fantastic outcome here.

For every one of us, bringing creativity into what we do and how we do it can be a superpower that truly helps differentiate us. It can also help drive asymmetric returns for our companies. You are not going to drastically outperform your category by simply buying banner ads or social ads, which your competitive set is likely doing.

More often than not, you may be limited in creativity by ad budget, human resources, distribution, or some other constraint that forces you to get creative to win. It’s those times when your back is against the wall and you are forced to think differently that creative sparks fly. We’ve all been there.

Many of us are scared to think differently because it’s hard to underwrite.

If I ask ChatGPT to outline how to underwrite creativity, I come up with the following points:

  1. Understand the Objective: Clearly define what you want to achieve. The more precise your goal, the easier it is to create a roadmap to reach it.

  2. Assess the Costs: Estimate the costs involved in executing your creative idea, including production, distribution, and any additional resources.

  3. Evaluate the Potential Impact: Consider the potential impact of your creative idea on your target audience. Will it drive engagement, leads, sales, or brand health?

  4. Measure the ROI: Develop metrics to measure the return on investment (ROI) of your creative efforts. This can include sales figures, engagement metrics, or other KPIs.

But is it really hard to underwrite, or are we just not used to doing so?

One of my favorite creative case studies is the Whopper Detour campaign. I have written extensively about it in past posts. What I love about this campaign is that it creates tension (Burger King vs. McDonald’s), leverages modern advertising techniques, and has a business-driving value proposition. The entire campaign delivers on growth.

The more you understand the end result you are trying to drive, the easier it is to conceive an idea and execute a campaign. You may undershoot the impact, but at least you will understand the costs to drive the campaign, which can help you underwrite it more comprehensively.

Embracing Creative Risk

In an industry where creativity can set you apart, taking calculated risks is essential. Creative campaigns might not always guarantee success, but they offer unique opportunities to stand out and make a lasting impression. By systematically evaluating and underwriting creative efforts, you can confidently pursue innovative ideas that drive significant business outcomes. The more you do this, the better the muscle memory, and the more confident you can be that your campaigns will hit.

Final Thoughts

In a market where everyone has an ad & marketing tech stack, customer data platform, buys programmatically, etc, how do you stand out?

Underwriting creativity is not just about mitigating risk; it's about embracing the unknown and leveraging it to create something remarkable. As we gather insights from events like the Cannes Lions Festival, let’s remember that creativity, when properly understood and valued, can be a game-changer in the competitive landscape.

The below links are articles that I read during the past week. I am sharing them because I think they are interesting. I may not agree with everything in every article. If you come across an article that you might think I or the OP community would like, I encourage you to reach out and share it. I reserve the right to select whether or not it gets shared in the OP.

The Third Party Data Ship Is Sinking (Pontiac Intelligence)

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