CFO World

CMO interview: Marketing the wool off a sheep’s back

Australian Wool Innovation chief global brand strategist and marketing officer, Rob Langtry, talks about how he got the board to support a historic marketing investment, brand strategy and more

Many marketers can count the number of Australian owned, globally recognised brands on one hand. So it’s no surprise that experienced marketer and strategist, Rob Langtry, considers being brand custodian for the country’s wool industry a rare privilege.

As global chief of strategy and marketing officer for Australian Wool Innovation (AWI) since 2010, and a strategic consultant since 2007, Langtry has led the organisation’s transformation from R&D operative to marketing powerhouse as it strives for greater awareness, demand and advocacy of the natural fibre worldwide.

“The fact that I effectively own on behalf of Australian wool growers a brand sitting in the top 20 in the world, and that is one of three or four brands globally to be owned by Australians, gives me an incredible sense of responsibility,” Langtry told CMO. “This is an important asset to be protected.”

Langtry was instrumental in getting the not-for-profit organisation to invest 50 per cent of its total R&D budget from 2010 into re-energising global interest in Australian wool through marketing. Following the success of these activities, he convinced AWI’s board to increase that ratio to 60 per cent in its 2013-2016 plan.

“The big issue for Australian wool producers is not selling wool – we sell and have sold every kilogram of wool we produce,” he explained. “The problem has been price. The official figures showed we were getting a less than subsistence price for growers, and many went out of business as a result.

“Part of the solution is using R&D to develop a better product and gain farming efficiencies. But the other part of the equation is to grow demand. To do that, you have to get to a level in the market where you can actually generate opportunity for money to flow back to the growers.”

Creating the marketing brief

AWI is only one of two government-funded, industry created enterprises, alongside Meat and Livestock Australia, and has 33,000 wool growers as shareholders. It has always invested in R&D, but historically didn’t market wool-based products. Yet long-term static wool prices and a decline in flock size from 200 million to 70 million had brought the industry close to collapse and triggered the need for change.

“The original brief [for AWI] was around how the entity responsible for R&D could help build demand for Australian wool,” Langtry said. “We came up with a plan recognising some characteristics first, which is that wool is essentially an ingredient brand, and to do anything with it, you need to be both push and pull – push into the trade as well as pull through in terms of consumer activity.

“We also realised that as AWI, we didn’t have a marketing mandate.”

That responsibility resided with global marketing brand, Woolmark, which operated as a separate unlimited company and delivered the licensing and certification scheme behind wool classification worldwide. The business, however, lacked funding and had not invested in any significant brand or marketing activity for 12 years. Rather than launch a new Australian merino brand, Langtry and his team advised a takeover of Woolmark and in 2008, AWI purchased the entity for $15 million.

“When this happened, it was like Christmas,” Langtry said. “You don’t often get a brand that’s basically been let slip in terms of investment for 12 years, bought by a business with a strong revenue flow, and then acquire a mandate to go back to the market and re-energise, which is what had happened by 2010.”

Because Australian wool represents 97 per cent of the material used in wool-based apparel worldwide, the Woolmark brand is predominantly about fashion. The good news was the brand still retained levels of 80 to 90 per cent recognition globally despite having suffered from long-term neglect.

The bad news was consumer perceptions of wool were no longer in sync with the product’s attributes. A global study commissioned in 2007 showed a significant drop in consumer equity around wool and outdated views of the product.

“We had this magnificent brand asset sitting there, having survived a lack of support for so long, and industry desperate to tell a product story and correct the misconceptions about the modern product,” Langtry said.

“Consumers knew it was natural, but that wasn’t a strong enough attribute to stop share loss. We had to do something to tap into that ‘lifestyle of health and sustainability’ trend, which represented about 30 per cent of all consumers.”

Campaign awareness

Thanks to the consumer study, AWI knew what issues needed to be addressed. Its first three-year marketing plan was based on four overarching campaigns, each involving different components of the global fashion industry and supply chain.

One of the biggest contradictions in the perception of wool highlighted by the consumer survey was the ‘prickly’ factor. The reality, however, was that Australia’s wool clip had gone from 21 micro to 19 micron by 2009, and was finer and more comfortable to wear.

“Basically we needed to tell people that you can wear it next to skin,” Langtry said. The first ‘Merino: No finer feeling’ campaign to promote wool apparel globally therefore tapped into both the sentiment around wearing inspiring fashion, as well as wool’s finer quality, he said.

Another consideration was AWI’s position outside of direct retail, along with limited budget. Partnership with key designers and retailers proved pivotal in getting the message out there. AWI has now gone from zero marketing partners three years ago to more than 50 for its ‘No finer feeling’ campaign including Armani, Alexander Wang, Givenchy, John Paul Gautier and Gieves and Hawkes.

“We have stayed consistent for three years, remained in marketing, had a consistent theme and outlined why it makes sense,” Langtry said. “We give these new partners a list of the people that came before them including brands they like associating with, and ask them to come on-board and be an advocate for us.

“We’re going across three steps in the marketing communications chain and turning them into advocates. The reason they are is because they believe in the product.”

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Another successful program is ‘Campaign for wool’, spearheaded by patron, the Prince of Wales, which uses industry spokespeople to advocate wool as a sustainable, natural fibre and culminates in an annual global event. AWI has also resurrected the International Woolmark Prize first run in the 1950s, to promote better awareness of wool among up-and-coming designers, and build an alumni of senior and emerging supporters across the fashion industry.

The fourth marketing campaign, ‘Cool Wool’, targets warmer geographies and broader casual uses for wool in apparel.

“Those four campaigns are the core campaigns, all sourced from the original research and all driving very hard for us now,” Langtry said. “The other thing to note is Australia represents 1 per cent of demand, so our market is global.”

Langtry said the benefit of marketing wool was its intrinsic product advantage. “A large part of my life has been spent selling products where it was the added value that sold the product. It wasn’t the fact that you had sugar, water, food colouring and 27 food acids; it was that people related to the lifestyle you represented.

“Wool has demonstrable competitive advantages over competing products in fashion within the product itself.”

Credentials

Langtry first became involved with the AWI in 2006 after penning a brief on how to revive the wool industry’s flailing fortunes. It was a good choice, given his 35 years’ experience in the marketing trade. But like most CMOs, it wasn’t where Langtry originally intended to end up.

It was while studying an economics degree with a major in psychology at university that he started doing market research interviews on coffee and snack foods on campus. This led to post-graduate research followed by market research positions with Colgate and Rothmans.

At 25, Langtry joined JWT to focus on brand strategy and positioning, a role which saw him consulting on a range of global brands including Kellogg, Kodak and Kraft. “It was an interesting time to do it as we still had Australian content rules,” he recalled. “We didn’t just replicate or adapt stuff from overseas; it was about originating content and brand thinking.”

Langtry matured his brand knowledge by becoming a research and planning director at McCann Erickson in the 1980s, working across the likes of Coca-Cola, Nestle and Levi Strauss. The role led to a stint in New Zealand as MD.

From there, Langtry was retained by Foote, Cone and Belding and sent to Indonesia to help sort out the Garuda Airlines brand. This led to a management buyout and acquisition of the business from the tourism board, which he assisted as an external contractor. Langtry's multi-faceted career has also included acting as a senior ministerial adviser, a commissioner for the Hemoco Kuwait Oil Refinery, and various board positions.

In 2004, he returned to Australia and took up various marketing and management consultancy roles, including a stint with the Royal Agricultural Society. In 2010, he came on as a full-time employee at AWI following the appointment of new CEO, Stuart McCullough.

Learnings and metrics

As Langtry pointed out, marketing has not always been as measurable as sales, and it’s even harder when you’re not directly involved in the supply chain. At AWI, his first step was to set up benchmark terms around brand equity and consumer perceptions, which it tracks every six months through a Nielsen study.

“One of the learnings from the first three-year plan was that people were so unfamiliar with marketing they didn’t understand or know how to plot what to expect," he commented. “Over the last three years we’ve learnt that there are things we get short-term and that are achievable, and things that take longer."

‘Campaign for Wool’ for example can be measured through the number of retail windows, and stores running hang tags, a direct measure of retail uptake. "We now know about those more tactical programs and responses and we can set realistic KPIs to a degree with each 12 months,” Langtry said.

While it’s sensitive for AWI’s partners to share commercial data, contracts do outline whether activities have increased or decreased consumption of wool over the season, providing a softer sales metric, Langtry added. AWI also tracks traditional media and communications metrics such as reach and effectiveness, and has an independent economist evaluate every project on an econometric basis.

The biggest indicator of AWI’s success to date, however, and the most significant metric for the board, is the rising price of wool. Between 1 July 2010 and July 2013, the price per kilogram increased from $8.03 to $10.09, a more than 20 per cent increase, and has regularly reached heights of more than $12 in between.

“In terms of brand equity across our 10 key regional markets, we have had on average a 4-5 per cent shift in recognition off already high recognition figures for Woolmark,” Langtry added. “And to have 50 advocates who are global fashion leaders talking on our behalf is a great achievement.”

The next three years

Having succeeded with his first three-year plan, the next three years for Langtry is about looking at what worked and what didn’t, but sticking to the core messaging. “You only build equity by being consistent,” he claimed.

That doesn't mean AWI isn't open to new media, however. In the last year, Langtry has shifted 75 per cent of programs to digital channels. For its ‘no finer feeling’ campaign, the focus has also moved from display ads to rich online content.

To support its rapid digital expansion, AWI has built out an internal marketing services team including journalists, video production editors, designers, apps developers and more. Senior managers are also being trained in how to interact with social media channels globally.

Aligned with its content push is an expanded website presence. The team has gone from one portal for stakeholders to rolling out a consumer-facing site, merino.com, as well as the partner-oriented woolmark.com. Spending on Web and mobile assets has leapt from 10 per cent of its budget to upwards of 35 per cent.

“We have gone from relatively traditional use of the digital homepage space, to recognising we are a content author and publisher,” Langtry said. Increasingly, external journalists are contributing to its sites, and special content for China is also being devised as AWI pushes further into that territory.

One of the most pervasive changes influencing strategy is rising market interest around the whole supply chain, not just the garment. “You can see it in the way companies are reconfiguring their marketing messages – even in the China market, they want to know where the wool comes from,” Langtry said.

On a business front, AWI’s CEO has fostered a new culture built on complete transparency, Langtry said, and marketing is following suit. The team is building a dashboard and high-level marketing diagnostics reporting tool for the board's use, which will break down its brand efforts to a project level.

“We do independent reports on performance every year and through that we’re now seen to be best in class [as a business],” Langtry said. “That translates to marketing, because we want to be transparent about every KPI we can actually measure.”

Being a CMO

Having built up a wealth of experience as a marketer and strategist, Langtry believes the trait all modern CMOs must share today is agility.

“The one key factor you have to have at this level is the mental ability cope and drive change,” he said. “It’s not necessarily new to talk about marketing that way; what is new is the pace you face today and the requirements that places on your agility.

“When I came into marketing, there was much more time to think and plan, and more evidence about what should be done, and how. In today’s environment, you have to be able to absorb not just the fact that things are changing, but also try and understand the reason why things are changing and adapt very quickly.”

Langtry’s advice to marketing and brand strategists is that you shouldn’t be afraid to ask. “Someone once said to me: ‘Hire people that are smarter than you are, and never be afraid to ask questions’. It helped me when I was a planner, because the only way you could deal with walking into Nestle or Unilever boardroom was to ask questions upfront so you understood at least the context of what you’re working in.”

A degree of numeracy also helps, especially given the pressure CMOs are under to demonstrate ROI, Langtry said. “You try and stay at a strategic level, but you can’t help but get your hands dirty,” he added. “That ability to sift through the amount of data available and apply a statistician’s common sense to it all is important these days.”

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