Aldi’s brutally effective secret sauce: Better ads, ideas and creative are more efficient, drive store visits so keep doing it
Part One: Aldi has been one of the advertising industry darlings for a decade with its snappy, sometimes witty and mostly engaging ad campaigns - that’s rare for most modern advertisers, let alone a high-volume, value-obsessed supermarket chain. Marketing Director Mark Richardson, in a rare media interview, is brutally pragmatic about creativity – it works and it beats bigger rivals, Coles and Woolworths, by up to 50 per cent on key advertising-influenced brand metrics and, critically, it drives people into stores. So Aldi keeps doing creativity. And to boot, it delegates and entrusts the task entirely to its creative partner, BMF.
You’re seeing brands now invest more into brand and creativity than they have in the past because they’ve mined that bottom of the [marketing] funnel piece. They’ve got as much efficiency and effectiveness out of that as they’re likely to. So where do you look for growth?
What you need to know:
- Aldi is widely respected and rated by other marketers as an industry leader in marketing and communications.
- Creativity and brand-led advertising is seen pragmatically by the supermarket chain as a proven lever to shift public perceptions and lift store traffic volumes.
- A central component of Aldi’s culture is the “delegation of authority” which applies to its creative agency BMF.
- “We trust their judgment fundamentally,” per Aldi’s Marketing Director Mark Richardson. “Based on my experience, that’s relatively unique”.
- Some of the results include Aldi outpacing its bigger supermarket rivals on key brand and advertising scores by up to 50 per cent.
Brutal creative and business pragmatism
Mark Richardson doesn’t leave it a second before firing off a brutally pragmatic response to Mi3’s opening question: why is Aldi so widely regarded in Australia for its typically charming advertising campaigns and why does it always back more creative, engaging and sometimes risky ideas and advertising executions? It’s a fiercely price-driven supermarket - such beasts shouldn’t do memorable, even funny, brand-driven ad campaigns. And certainly not for a decade.
Aldi regularly lands creative and effectiveness awards for its ad campaigns and usually lands in a repertoire of top brands that other marketing leaders nominate as a company doing marketing they rate and respect.
It’s latest work for Christmas 2021 is here.
“Fundamentally, Aldi is about efficiency and effectiveness and creativity is at the heart of what effective marketing is,” Richardson fires off. “Depending on which studies you read, roughly 50 per cent of your ad spend, the impact of that, is driven by creativity. Media channel selection is enormously influential. But creativity is also a huge part of that. We’re always looking for ways to be more effective and efficient and so it [creative advertising] follows.”
We delegate our creativity and advertising to BMF. That also elevates their position within our business as the experts on creativity. We trust their judgment fundamentally, which based on my experience, is relatively unique.
Decade-long romance on cut-through
Richardson, a former ad agency exec at M&C Saatchi and the one-time John Singleton-backed Banjo, along with marketing roles at BT Financial and Foxtel, has been with Aldi for five years. But he points to the start of the retailer’s romance with cut-through advertising and creativity about a decade ago, starting with its Christmas “Surfing Santas” campaign from BMF. It culminated last year in Aldi landing the Advertising Council’s top accolade, the Grand Effectiveness Award, for advertising.
Richardson is a big backer of brand-building ads, not just the tactical, price-off work that most retailers in any category tend to safely default to.
Indeed, Richardson dipped his hat to this year’s Grand Effie winner, IAG’s NRMA, and a comment made by its chief marketing officer Brent Smart, in which he said tactical and performance-led digital marketing was often only able to reach 20 per cent of customers renewing motor insurance policies at any one time because most were not actively shopping around and triggering digital signals that allowed insurance brands to detect and target them as being active in market. Instead, 80 per cent just rolled their policy renewal over so broader brand-led campaigns were often more effective in getting people to consider an alternative to their incumbent.
Brand building remarkably efficient
For Aldi, says Richardson, its rationale for brand-led, broad reach campaigns – often derided by precision marketing advocates as wasteful and untargeted – is that they’re remarkably efficient to woo people into Aldi stores. For those new to the Aldi experience, they are suddenly charmed by what’s lies inside.
“You’re seeing brands now invest more into brand and creativity than they have in the past because they’ve mined that bottom of the [marketing] funnel piece,” says Richardson, of retail, tactical, price-off and performance-orientated advertising and digital marketing efforts. “They’ve got as much efficiency and effectiveness out of that as they’re likely to. So where do you look for growth? The NRMA is a great example of a brand that realised 80 per cent of its customers aren’t in the market at any one time so you’ve got to focus on building brands because they not in the funnel, they’re not thinking about a purchase.
“We’ve done our own econometric studies, we’ve done our own media and campaign effectiveness measurement with Kantar so we really clearly know what we’re getting from campaigns. We’re able to benchmark our creative against what the market is able to achieve and what other brands are able to achieve as well. We’ve got some really good habits for what’s working, what’s not. Sometimes we smash it out of the park, sometimes we’re less effective but the intention is always to take the learnings on and make something more effective next time around.”
Richardson won’t divulge specifics – or rather corporate affairs quickly blocks any chance of it – but he does say on some attributes like consumer “involvement scores” for Aldi’s advertising “could be” as much as 50 per cent higher than for its direct supermarket rivals. “There’s obviously a tonne of other metrics that we measure against, and I’m certainly not suggesting we smash all of those by 50 per cent,” but, says Richardson, Aldi “generally speaking” tends to lead its category peers.
Delegating authority and BMF’s creativity
Richardson says his job is “fundamentally to drive sales growth which, over the past five years, we’ve been really successfully doing”. Aldi deploys a dashboard of different metrics but market penetration is the primary objective it chase - more on Aldi’s results are coming in part two of this story.
But in closing out this instalment, Richardson enforces a central element of Aldi’s culture – delegation of authority, and how that plays out with its creative agency, BMF. “We believe in empowering our people to do the job to the best of their ability,” he says. “And so I get the job of doing effective marketing and we delegate our creativity and advertising to BMF. That also elevates their position within our business as the experts on creativity. We trust their judgment fundamentally, which based on my experience, is relatively unique.” For all the easy rhetoric from brands and companies about collaboration, partnerships and transparency, indeed it is.
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