Ep. 501 wine2wine 2020 Recording Session | Adapt or Die

Italian wine podcast. Chinchin with Italian wine people. Italian wine podcast as wine to wine twenty twenty media partner is proud to present a series of sessions chosen to highlight key themes and ideas and recorded during the two day event held on November twenty third and twenty fourth twenty twenty. One to wine twenty twenty represented the first ever fully digital edition of the business to business forum. Visit wine to wine dot net and make sure to attend future editions of wine to wine business forum. Here we are. Again? So ladies and gentlemen, welcome to our second session, with Holly Hammond. I have to declare an interest right now, which is that Polly and I, work together. We started working together on a of sessions a bit like this for the real business of wine, and we now do some consultancy together, for various clients. And I think I sometimes think of myself as being the middle man, if you like, because there is the world of wine, and there is the world of digital, the world of digital marketing. And these two don't necessarily always, touch very closely. And Poly, who I've known, since I think we first may have met at a wine to wine. We certainly did did spend some time at wine to wine. Is one of the people who understands digital and understands wine. And I have my own experience of the digital world has been a relatively recent in the last sort of five years, but I owe huge amount to Poly in terms of my learning experience. And what we're gonna have today is of an instant master class. So Poly is, born in America, has grown up they're seeing all sorts of different parts of the American scene, including politics, and all sorts of other areas, and went to live in New Zealand, I think fourteen years ago. Is that right? Twenty. Twenty. Twenty plus. So I've been in New Zealand for all that time and has been doing digital marketing for a very long time for a wide variety of clients and, finds herself having to explain quite often what digital marketing is compared to other marketing. What I always say is that one day, we will stop talking about digital marketing the same way that we, listen, we talk about, you know, there's advertising, there's marketing, and digital is going to be one part of the whole. And I think that's going to be one of the things that, Paulie's gonna be talking about. We've already got some very good questions coming in, which are very practical. I think this session should be very much about how wineries that are not currently using digital marketing. Could actually benefit from doing so. So, Polly, over to you. Yeah. So it's actually really nice to be back. And I think that doing this in this platform at this time, I've got two screens going going. We have the chat here. We've got the video here. You're in the UK. I'm in New Zealand. We've got people from all over the world in the middle of the night doing this. I think that this what series created this year actually really represents how wine has changed because heaven knows last year in verona, none of us expected that the world was going to view what it's been since then. And it has certainly been a very, very busy year on the digital front But what we've seen is that a lot of people have a kind of vague understanding of digital, but don't necessarily know how to do it right. And that's what I want to solve today. I wanna ask some of the questions that we deal with on a day to day basis. And, hopefully, everyone can walk out of the room with an idea of where they need to spend, what they need to spend, what they can do in house, where it's worthwhile outsourcing so that digital for them can be a profitable, experience. So I guess the first thing that we have to start with is the degree to which our customers have changed over the course of the past ten months. I have some statistics. I won't bore you with too many of them, but here are the key ones that we need to bear in mind when we're dealing with wine. By April of this year, thirty three percent of consumers made their first ever online grocery order in the past three months. Buying something like groceries that keep us alive is such a groundbreaker for how we interact in the digital space. Sorry. Poly, can I ask where those statistics are from? Was that Yeah. So in this case, these come from the States. They're all US statistics. Don't worry. There aren't gonna be too many of them. So the second one, fifty percent of global customers do not expect to resume shopping normalcy for what they describe as a very long time. So this is not ending. And the the the clincher that we all saw around about March when the whole world was in lockdown was that wine dot com sold five times their normal monthly, rate selling fifty thousand bottles in March alone. So now we know that people are buying their necessities online. They're not going back to shopping like normal. And absolutely, we have gotten very comfortable with shopping for wine online, and this has changed the sales landscape for our industry. If we look at wine tourism, which, of course, has been the driving force of many of our economies, We are also faced with ongoing shifts and adaptations. So Diana Isaac, who is the founder and CEO of wineryst, was quoted as saying that they expected to be a full year before tourism and tasting rooms pick up. And she said that months ago, and we are all still going through lockdown. So again, this is a problem that we have to solve. Another thing that that I wanna talk about, are the the changes in technology. Because it's not just consumers. It's actually the mechanisms that we are using to interact with brands. Seventy percent of consumers globally say either they are spending more of their time on their smartphone. So when we're talking to our European market, this is very important because we actually have some, in many cases, severely dated digital platforms in in Europe, non responsive sites, slow sites, poorly performing sites, just legacy sites. So very important to understand that shift and email open rates are nearly fifty percent higher than they were before lockdown happened and super important conversion rates. So that is the rate at which someone performs an action we want them to perform have increased by eighty percent. So now they are on their phones. They understand how to shop and they're willing they're understanding their the intuiting how to do the things that we want them to do. So our our customers have changed. Their expectations, their reality, their priorities, their access has drastically shifted, but us, wine marketing, not so much, and we're trying to, and we're trying to find a way. And I know that I stood on that stage in Rome last year, and I said, this is a war of attrition. And we have seen that happen in this year, a very clear stratification of the wine brands who are willing to learn how to do digital right. The ones who are figuring it out, but it's taking it's a little bit longer, not going so well, and the ones who just can't adapt. And I know from information coming out of the West Coast of America, there has never been the number of merger and acquisitions that we've had since March. So, you know, these are these are future proofing our brands. So the question is, How do we know what to spend? How do we know where we should be spending it? How do we know when it's worthwhile to bring somebody in? And these are the practical matters that I want us to talk about today. Unfortunately, Robert, because you and I have done enough together that sometimes we like share a brain, you know, You touched on exactly what I have here. Look, there is no digital marketing. That is the very first thing that we must embrace as marketers. We are the consumer advocates in our offices, in our boardrooms, in the winery. You know, we are the person who brings the empathy and the concern and the relationship to our organization. And when we are championing that cause We have got to be the one to shift our own mindset and our own language, and we need to stop talking about digital marketing, and we just need to talk about marketing. That puts it into perspective often For the second elephant in the room, which is leadership buy in. So we do a fair few of these workshops, and the number one issue you hear when you were sitting in a room full of wine marketers is they really want to do digital well and they cannot get leadership buy in. They can't get the budgets across the line. They can't get the support they need. If money gets invested, it's not actually for a long term. And Our job, if we want to create an agile resilient digital platform, is that we actually have to take this group of late adopters who are our leaders, who as of March have learned how to buy courgettes online, and we need to put our digital strategy into a context that the way they think can understand. You know, the the that they can embrace and they can see where it's going. And when we do that, we get to the next big issue, which it's all about the money. So I'm gonna give you some numbers. I'm gonna share with the audience some numbers that I hope can help you and the teams talk to your leadership, understand it within your own work what you should be spending on digital because this is a huge issue that we deal with all the time. So by comparison, our competition, and you talked about this in our our last session. Our competition is not everybody sitting in this virtual room with us. Our competition are companies who have a lot more money than we do. They have a far better distribution, far greater access, They are spending twenty four percent of their annual budget on marketing year on year. This year, statistics as of June said that that came down to eighteen percent. So twenty four percent, eighteen percent. But if you look at marketing averages across all industries, twelve percent, and that has been on the rise since February of this year. And so You have you have a figure for wine, Polly? Was trying to say, Robert, what does the average independent winery spend on marketing per annum? Five percent. Yep. Four to six percent. So we are going up against the big guns, and we are doing it with Absolutely not enough money to make a dent. And that means that we are throwing our money down a well. It means that we aren't gonna get the kind of results that leadership wants. We as marketers are not gonna be able to sit at that table with our measurables and our reports in say, this is a good investment, and that's what we have to change. And the way that we change that is we need to understand realistic expectations. So what can we do with digital? What should we be spending? And I'm gonna I I take a moment to pause before I share this because everybody in the room is about to cringe and throw virtual tomatoes at me. So four percent. You might as well just put your money in your pocket. Go on holiday to Fiji or wherever it is because there's no point spending it. You're not gonna get anywhere with it. I'm very, very sorry. Eight percent right now. So eight percent of your annual budget on marketing This is what I call maintenance. You get some clients, some customers who go out, some who come in, pretty much stay where you are. No attrition. This can work for brands. If you are established, and you're selling out and you're happy with where you are, and all you need to do is maintain status quo, you can possibly get by with six to eight percent. Ten to twelve percent of your annual budget equals moderate growth. This is where most of our clients sit. By the time they've gone out to an agency and they need support, they've acknowledged that they have to be spending a fair amount of money on their digital. Thirteen to sixteen percent equals aggressive growth. And in all the years I've done this, I've maybe had three clients who've ever been willing to do that. So don't feel bad if that's that's not where you're sitting. So the point being, we need to be hovering right there around that multi industry average of ten to twelve percent in order to continue moderate growth being part of a very competitive industry. So now let's actually break that down into our digital spend. So traditionally, well, not traditionally, because digital is not traditional. For about the past five years, we have seen the digital spin. So this is the percentage of the marketing budget that goes toward digital communications, marketing strategy, labor, analytics, any of that comes in at somewhere between forty five to sixty five percent of your budget based on your particular model. And this is going to be unique to every business, how you distribute, where you sell, how many markets, you know, what your labor costs are. The interesting thing about that is that in twenty twenty, we have seen industries that are not traditionally heavy spenders in digital actually move further toward that sixty five percent. So these are the kind of numbers that when you're sitting at a table and you're saying, what the hell should we spend? What does this look like? That's that's really where you need to be, running your numbers and modeling. I'm a huge fan of spreadsheets, work it all out on paper before you spend a dime. Know where your money is going and understand why. Can I throw out a question then? In the movie business, it's famous that if you spend a hundred million on making a movie, you spend fifty million on marketing and getting the word out there. And if you spend two hundred million, you spend one, you spend a hundred million. If you make a low budget movie, And you're only you've made a movie for fifty million or ten million, which is possible. If you've only got five if you're spending the industry average, which is fifty percent, you've only got five million to tell people about the movie and you're competing in cinemas with the other guys who've just made the bond movie or Avengers movie, and they've got a hundred million. Does that percentage equate to your turnover? Does it is it, unfortunately, I hate to say this, but is it do you need to spend a higher percentage on a smaller turnover to get any kind of return. That's a really interesting question. So there are a few things to parse out from that. The first thing is bear in mind that Hollywood does something called Hollywood accounting, so don't trust their numbers too much. Wine can be guilty of similar accounting. So we need to actually have good financial strategies in place. Second thing, it's funny in our last session. There was a question about over marketing What is one of the things you know when a company, when a studio is pouring money into their marketing? It's gotta be a shitty movie. It happens all the time. And look, as a marketer, I'm gonna say, we've all seen brands that are terrible brands that have tradi have have fabulous marketing. And, you know, it works. It's not personally what we do because those aren't the kind of clients that we work with, but marketing builds a connection and a story, and and that can be used for good or evil, you know, with great power comes great responsibility. But can I come back to you in a slightly pinion, pinion down and saying, is there a a figure beneath which you really aren't gonna get very much return for getting the percentage? If I say, you know, I've only got a thousand dollars, what am I gonna get for a thousand documents? Okay. So some ways that you need to budget this out is that there are pieces of digital that fall into capital benditure. So that that stuff like your website, you know. And that needs to not be a part of that per annum budget. I think that one, it really depends upon your goals, what you're trying to accomplish, If you come to me and I'm not we're not the cheapest people on the planet, you know, I'll I'll be super honest. You're probably looking at a minimum of thirty six hundred whatever your currency unit is because we have to work on that model. Thirty six hundred dollars a month. To be able to outsource digital, and that's that's really, like, at the entry point for an agency like ours. I understand that there are lots of agencies with lots of And what would a company get for that kind. So they're spending whatever this forty something thousand a year. What are they getting for that? And bear in mind that that is in addition to turning up at wine events and doing traditional advertising and PR. What are they getting for that money? Okay. So, this is actually kind of a good segue into something that I wanna talk about here today, which is let me first tell this story, and then I'll answer your question. There is this gross misperception that has been perpetuated by companies like Wix who sell their free websites all over the place. That DIY digital is, like, Manna from the heavens, you know, you're gonna go out on a weekend and you and your nephew are gonna build a website. And the next thing you know, you're gonna have, you know, the angels pouring gold at followers on you. And, and this is because people when they think about digital, they think about the shiny website. They think about the skin or the facade, but good digital is actually about the data. It's about understanding all of the data points that go back to what you were talking about in the last session, what I talked about last year, which is we need to understand who our consumers are, why they're engaging with our brand, why we matter to them, how we can do better for them. And so the spaces, let me just talk a little bit about the DIY stuff, and I will come back to your question. The spaces that we see brands, unfortunately, kinda crash and burn in have to do with setting up that data foundation so that they can grow, improve sell. And the key places that those are a problem are their Google analytics are set up incorrectly because, again, there's this idea that you just, like, jack in a code. And the next thing you know, you're gonna know everything about your consumers. So you actually need to go in and set up your Google Analytics correctly, which can mean turning on demographics, it can mean setting up filters so that it gets rid of all the cruft and the bots. I just realized I'm talking fast and those poor translators are gonna have my hide. I'm so sorry. And and but also having conversions so that you can easily track and report effectiveness, you know, are you are you accomplishing your goals? So you've got your Google Analytics, you got things like a Facebook Pixel, which, go in, everyone, just go back to the office and set if you're on Facebook, set it up under a business manager, stop doing things from your Facebook admin page, It's a terrible way to market, set up a business manager, set up your pixels, change your GDPR notice because you've done it. Even if you're not choosing to market using those channels, the they take time to train their machine learning effectively. K? Oh, yeah. We've got we we're getting we've only got ten minutes left. So we need to we've got some time for questions. So Yeah. Yeah. Yeah. No. No. So I just wanna I I just want everyone to go back and fix their data. So, the last thing that I wanna talk about is don't try to do everything. So there were some questions that were coming through when we were first getting started about key points to monitoring digital. What do we do? What about strategy? Look, If you're doing this in house, you need to do what you can consistently and effectively. You need to master one part of your digital plan before you scale up to the next one and great example of that is social media. And the people who are like, I'm supposed to be on Facebook and Instagram and TikTok and Snapchat and all this other stuff. Don't do it. Do one thing and do it really well and make certain that it's the space where your people are. And, so back to your question, what do we do? You know, that, like, that's the tip of the iceberg, but we actually go in and and we do all those things, and we monitor it, and we iterate, and we create websites that the shiny skin actually produces the results that you want. And and, yeah, and we do it pretty well. I I've got a question that came earlier on, I think, from French, Francisco or from, I'll come back to it. Yep. I think, Fabrizio, Speaking about marketing, we usually focus on b to c. What about b to b? You know what? That is a great question. And where we see b to b come across our desk, and this has happened a lot in this past year are when, for instance, distributors are trying to figure out better models to communicate with their suppliers or with their with their buyers. So streamlining systems are really important other places, and I think Meg Maker may have talked about this because she she has a lot of good opinions on this have to do with how do we communicate media, press, how do we supply assets, These are things that a lot of wineries can do better in their own digital spaces at very little cost. So we have to remember that b to b is just another one of our another one of our customers, and we have to share the information with them in a way that is frictionless and solves their problems. What's the job to be done? Why are they there? How do we make it easier for them? The other thing is digital is a very broad word. And you raised in our previous session, you raised TikTok, which had hadn't really even been on anyone's until, I think, President Trump told people about it. A lot of people didn't know it existed. We've gone from you're talking about the the the winery owners saying, why do I need to do do digital or what do I need to do? These are people who maybe do Facebook, but don't do Instagram. Well, they've just discovered Instagram, but they don't do a lot of the other things. How do you keep track of the evolution of the digital, world, the digital platforms? So this comes back to our job as marketers in the room have to do with setting realistic expectations. We have to be able to measure what we do. We've gotta be able to track it, and we have to be able to communicate it. So, and this is why all that data is super important. So the first thing that you have to do is you have to personally give your space, give yourself space to fail. It's it moves quickly. You know, it it's the adapt or die is there for a reason. Adapt fast, change is constant. And even the things so, you know, why why this is problematic? Those algorithms are changing regularly. The Google, you know, the Google search algorithm is changing regularly. Look at what happens with our Instagram in a week where suddenly nobody can find the buttons. So you have to accept that this is a moving target. And then you need to experiment. And this is something that wine is not good at. We do not spend marketing dollars to try things. And see if it works. So this is it. Give yourself permission to fail. Try things. See what happens. Test things. Learn from it. So I've got a a note from a lady called Stevy Kim who I've heard from so much. Saying not much wine on TikTok. Where are all the wine peeps on TikTok? This gives you the opportunity to talk to talk about somebody called Andrew Mcginnis in Bordeaux. I have a little clip of him, on that I've downloaded. Go ahead. So where are all the wine people on TikTok? I I think they're sitting in a wine bar with their fifty year old friends using Facebook. That's where they are. I think that TikTok is a baffling for a generation of non social media natives because the, again, talking about fast moving. I mean, this is this is like zeitgeist. Like, we are living and breathing it on TikTok. If you wanna be successful on TikTok, You are paying attention yourself to TikTok and you are getting in on the act. The Capri sun fleetwood Mac, TikTok that basically introduced TikTok to a lot of old folks My teenagers knew about it two weeks before it went viral because they live on TikTIC and TikTok, and they pay attention to it. Stevy and her team have actually done a really good job learning to embrace TikTok, Andrew Mckinnis, has embraced TikTok recently. There's there's a bit of a story. I'm looking at it from a from a from a Chateau de la carteau in board. That that's correct. So the thing about it, though, is that we live in an industry that struggles with the notion of entertainment We talk about we must educate people. TikTok is not about educating people. TikTok is about entertaining people in tiny little bursts. We have to take ourselves less seriously if any of us want to be able to succeed on TikTok. Think that's a brilliant a brilliant I think one of the things to say about TikTok, though, is that it's always seen as being for the kids, quote, unquote, and maybe particularly in the US, where wine isn't legal in theory until year twenty twenty. I think that's maybe been a bit of a barrier. So why we do wanna why do we wanna talk to seventeen year olds and fourteen year olds who are dancing on TikTok. They're not seeing that TikTok actually is like gaming. I think there's an interesting parallel here where gaming is adults. I'm gonna jump in on that and say why. Because those consumer packaged goods who are spending twenty four percent of their marketing, they are on TikTok, and they're already talking to the kids, and they're gonna kick our ass if we cannot figure out how to live in those same spaces with them. And the great thing about social media, especially burgeoning social media, is we can. Stevie's right. There are no there are no wine brands on TikTok. That means that there is a space that someone who is creative and interesting and entertaining and willing to fail and take a risk and experiment. They can actually get in on the ground floor of that. As as as CV has contributed, take your job seriously, but not yourself. I think that just we're very close to an end here. But what I'd say, one question though, how does you started off by saying actually take the we both said, take the word digital off market. How do we combine if you like the clicks and mortar bricks and mortar, the the the digital and the real life? So here, all of us, I'm really gutted not to be in verona doing this live. As I said earlier, and Stevie, the thing that Stevie's created here was it's not just an event where we talk in conferences. We go and meet in the bar. We sit down. We enjoy food. We do stuff. How does digital and flesh blood, how do they interact? And how do you see that happening in the future? The the only space that they don't mesh is in our own heads. Like, that's really it. If we if we throw out all of our preconceived notions, of what, of what a person to person relationship should feel like. We've exceeded marvelously this year, all of us. I mean, look at how comfortable we've become. Now if you're talking about the actual tasting experience, I have to refer to people. I have to look at sixty seven Palmaul, who've done a great job with their sample sets. The online wine club, if I I hope I get that right. That's got the little Capri sun style like juice boxes. So again, You know what? We can sit back. I started with saying, this is a war of attrition. We can sit back and say, oh, this doesn't work for the way that we've always done things, or what we can do is say, what's the new way? What can we learn from every other industry on the planet? To do that. We've got a question. We probably don't have time to answer, because I think we're gonna be throwing out. Can we we have to close? But, you need to get back in touch with us. Find us on on the LinkedIn, probably the best way of talking about advertising limitations for wine on digital platforms, but we'll talk about that some That's a big topic. So thank you, Stevie. Thank you for arranging all this. Thank you, Polly, and thank you for everybody in the audience. Please hang around for the rest of the sessions today. I certainly will be. So and I hope to see all of you in the flesh in verona next year in happier times. Thank you. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud, Apple podcasts, Himalaya FM, and more. Don't forget to subscribe and rate the show. If you enjoy listening, please consider donating through Italian wine podcast dot com. Any amount helps cover equipment, production, and publication costs. So until next time. Riso basmati