The Diary Of A CEO with Steven Bartlett - Moment 106 - Marketing Principles That Made Brewdog Billions: James Watt

Episode Date: April 21, 2023

In this week’s moment, James Watt talks about the marketing ethos of his company Brewdog, who have built their reputation through unique marketing principles. James explains how Brewdog raised brand awareness with no marketing budget and by being intentionally provocative and punching above their weight. It is one of their foundation beliefs that everything Brewdog does should tie back into their core beliefs of not only getting a return for their business but also creating a passion for fantastic beer. This moment will leave you with a fresh perspective on how creativity and imagination can trump money and size in the world of business. Listen to the full episode here - ⁠https://g2ul0.app.link/DITcu2BV9yb James : ⁠https://www.instagram.com/brewdogjames/?hl=en https://twitter.com/BrewDogJames?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor Watch the episodes on YouTube - ⁠⁠https://www.youtube.com/c/TheDiaryOfACEO/videos

Quick one, just wanted to say a big thank you to three people very quickly. First people I want to say thank you to is all of you that listen to the show. Never in my wildest dreams is all I can say. Never in my wildest dreams did I think I'd start a podcast in my kitchen and that it would expand all over the world as it has done. And we've now opened our first studio in America, thanks to my very helpful team led by Jack on the production side of things. So thank you to Jack and the team for building out the new American studio.

And thirdly to Amazon Music who, when they heard that we were expanding to the United States, and I'd be recording a lot more over in the States, they put a massive billboard in Times Square for the show. So thank you so much, Amazon Music. Thank you to our team. And thank you to all of you that listened to this show. Let's continue. Going to your marketing thesis, because this is really what's defined um brew dog in the eye of the consumer in the eye of someone like me that doesn't honestly drink beer but knows about the brand and considers it to be a famous brand and watched it on linkedin and social media over the years build its sort of acclaim what is your like your principles that underline your marketing

thesis because your marketing thesis is very very different to to pretty much nearly all brands in this country there's maybe a 0.1 percent that maybe you've copied or that have been inspired or that you know chicken and egg i don't know who came first but it's a very unique thesis towards marketing what what underpins it and we've got two very simple tests that we apply to everything that we do from a marketing perspective so the first test is would or could another business do this thing and if the answer is yes we've got to seriously consider why we're doing it the second test is if i spend a pound on this is it going to give me a 10x return compared to how a competitor would spend that pound so we are in an industry dominated by global behemoths

of businesses who are hundreds of times our size and we are we're closing that gap and we want to close that gap but we only close that gap by making our market and our communications everything we do work so much more effectively than theirs if our marketing is only as effective as theirs we don't close that gap and we lose so the two tests are could or would another company do this and is it going to give me a 10x return versus how my competitor would spend that money and if i'm thinking about how to get a drive a better return on marketing you know and then i think about what you've done i see well we've got to be probably bolder to win share of voice we've got to try and win headlines in more extreme ways because

nobody's going to be writing about you for for the fun of it if you're a smaller sort of challenge challenge brand and the second thing i think is kind of we've got to do that on new platforms. We can't fight out on TV or in newspapers because those are where you kind of throw huge amounts of money and you get a return. So new platforms and new approaches. And that's very much kind of signifies what I've seen from BrewDog. Very, very bold. Very bold and intentionally bold and especially bold in our early years when we had no budget whatsoever so the challenge was how can we get our name out there with no money at all so we had to do things that were intentionally provocative that were on the edge and sometimes

we can cross that edge as well but that enabled us to get our name our message our business out there with no budget at all so we have driven a tank through the streets of London. We've thrown taxidermy cats out of a helicopter over the Bank of England. We've put Vladimir Putin in the front of a beer label. So we've done a lot of things, low budget, high impact, but we've tried to make it that everything we do ties back and is underpinned by what we're passionate about.

So there has to be a connection there. So does this reinforce what we believe in, what we're trying to do as a company because otherwise it's just hollow and it's fake and it's false so how does this reinforce the kind of core beliefs that drive this business which is trying to build an alternative business and a huge passion for fantastic beer one of the more extreme things i saw the vladimir thing uh what else have i seen i think to be fair i think i've seen it all because i'm obviously a marketeer. So I'm running a marketing company and seeking inspiration from lots of different brands and seeing what they're doing

and the impact it's having, especially on social media, which is my battleground. The thing I read about more recently was that you put in a complaint about your own beer, which triggered press. We did. So this was all the way back in 2008.

And we had a few running battles with a few bigger players. One of them was the Portmere Group. So the Portmere Group was an industry, still is an industry regulator. And for me, it is a thinly veiled cartel funded by the big drinks businesses who've got a vested interest in making sure that small businesses are not successful. and there was a few rulings at the pipe that were just so so silly and frivolous that we wanted to make a statement so we complained about one of our own beers to make a meta statement about how silly the process is and how essentially corrupt it was as an organization funded by the big beer companies big drinks businesses who've got a vested interest in making sure the small ones are not successful how does that work so you make a beer that is really high in AVB. Is that, was that the correct term? It was, yes. We made a beer called Tokyo 18%.

Now, if you looked at the newspaper headlines in the UK when we launched that beer, you would have thought that I was single-handedly responsible for the downfall of Western civilization by making an 18% beer. We had it in the sun, binge drinking, blame this man, with like a cut out of my head in a bottle of tokyo that took a bit of explaining to my very religious grandmother but that's another story but everything we did with that beer was we just made a thousand bottles it was very expensive it was for connoisseurs it was for aficionados and we want to elevate the status of beer and i think

the more someone can understand and appreciate something the less likely they are to abuse it and we make expensive products for people who love love fantastic beer so it was to kind of make a statement of you've got all these big companies doing very cheap alcohol that's likely to be abused trying to ban products of this company that's looking to elevate the status increase education awareness around beer and lead people to appreciate and enjoy beer in a more elevated way. And when you see yourself in the sun with a cardboard cut out of your face, is that kind of swings and roundabouts?

Is that good from a marketing perspective? Is that a good outcome? Because you were trying to get headlines, you complained about your own beer. Yeah. You were trying to get headlines. So is that job done? I think in that one to a certain extent it was, it was job done and to kind of show you how

odd things were back then. So this was kind of 2009-2010 when we were starting to get momentum and the beer scene was starting to change. So the big companies had it their own way for way too long and things were starting to change. was a award ceremony in Scotland in 2010 um put together by the BII the British Innkeepers Institute and we got a heads up before the award ceremony hey guys you're going to win the award for Scottish Bar Operator of the Year so you guys better come to the come to the award ceremony so we went there we booked a table they were just about to announce I was like halfway up to the stage to get the award and they announced a different company I was like okay but then the other company didn't want to take the award because our name was engraved on the trophy it's like well we don't want it so the next day i spoke to the person that organized the award ceremony i was like what what happened like

you told us we were going to win and he was like well diageo one of the world's biggest drinks companies they were the main sponsor. They told me five minutes before we were due to give it to you. If they gave it to you guys, they was going to pull all future sponsorship. You're joking. So we felt we didn't have an option. So we put this online. It blew up.

It was trending on Twitter globally that day. Diageo issued us a formal apology about the whole thing. And that apology was kind of broadcast news but it just showed back then how the dynamic in the beer industry was changing and how the big beer companies and big drinks companies were acting towards that change of which the portman group was one manifestation of it did you take that personally i took that as a sign that we're doing the right thing so i think unless other businesses are copying you or trying to knock you then you're not doing well enough so unless you're doing something that's worthy of people copying it and like a lot of people moan oh I'm being copied it's like unless you're being copied you need to up your

game and you need to do better unless your competitors are trying to knock you down you're not enough enough of a threat to your competition so I took that as a sign that we're on the right track we're doing the right thing let's keep going the the other um extreme marketing thing that i saw which was um when i first read i thought this is fucking hilarious is the elvis estate tried to copyright infringe you for calling your your usb which i think is your most popular usb it is elvis juice elvis juice they sent you a copyright uh statement just sort of like a basically a notice that you're violating the copyright yes and you responded with some Elvis uh rhyme we did and and on the on the art on the LinkedIn post that I saw it said you changed your name to Elvis yeah

then the BBC come out and say that didn't happen yeah what is the truth in this one what did you change your name to Elvis yeah we did we did. And just to go back in the story. So Elvis sent, not Elvis himself, Elvis' estate sent us a letter saying we couldn't use the name Elvis in a beer. And if we did, we had to pay them a license fee for every can, case and bottle of beer that we sold. So what myself and Martin did, we changed our names to Elvis

and we sent them a letter back saying that they couldn't use our name on their music and they had to pay us a license fee for every time they played one of one of Elvis's songs and got a huge amount of publicity at the time we were both Elvis for a few weeks and then we changed our names back so the BBC attacked us on that as they as they have on many things however the BBC misunderstood the Scottish procedure for changing the name so they said we didn't change your name by deed poll. That's not a Scottish thing. In Scotland, you need an official declaration to change your name, which we did. So what's that? Just signing a piece of paper? You sign

an official declaration piece of paper and that counts as a name change in Scotland. And you don't even have to send it to anybody. Don't have to send it to anyone in Scotland. So we met the Scottish requirements, which is what we said we did. But yeah, my grandmother was very unhappy and she insisted I change my name back to James. BrewDogs marketing has been so bold and it's been so standout. And in terms of how hard you've, in terms of the return on every dollar you've spent, it seems to have been a pretty astounding return per dollar spent because you've done these like big viral activations. A lot of them are like parodies or they're like taking the piss of big corporations or

sticking it to the man in various ways or going at the you know the incumbents in the industry some of them though that they the even the example you gave there of they're complaining about your own beer with the portmanteau yeah obviously the complaint wasn't real yeah because it was you because it was me what is the line between, like, truth when you're doing these stunts and virality, and untruth for you? And where do you play? Are you willing to do something that is, from a marketing perspective, that is not necessarily true, like complain about your own beer,

if you believe it'll help reach the outcome, which is to stick it to the Portman Group? Yeah, well, I think with with that one it wasn't necessarily untrue because afterwards we said we made this complaint so it was us who disclosed the fact that we made the complaint so you were true okay and we disclosed that to just show how ridiculous the system the system was so if we hadn't said it was us that complained about it then i would accept that was being a bit dishonest but the fact that we came out and we said hey the system fundamentally doesn't work and we wanted to expose that by

making this complaint was what we intended to do there when we first started talking about marketing one of the things you said was um we made a lot of mistakes yeah took things too far yeah what did you take too far in hindsight now now that you're a big global brand and everyone is you know looking back at all the steps when you weren't so big. Yeah. I think the mistakes that we've made in marketing is when we've tried to do something which is on the edge or which is controversial,

which needs explaining. So if you look at the thing in its totality, then it is potentially a positive thing. But if you only see a snapshot of it, then your takeaway from that could be negative. So I think a lot of the mistakes that we made from a market perspective, and we did some amazing things,

but we did make some mistakes, was when we got too clever with the concept and the intention behind it, which was genuine, got lost. So a famous example of one of the mistakes that we made in marketing for International Women's Day, we wanted to highly highlight the

gender pay gap and this was a project that was put together by some of the fantastic women we've got in our business and we made a beer called pink ipa that we always get sell 21 cheaper to women to highlight the gender pay gap which was something that we felt passionate about um and then the proceeds from sale of that beer went to charities which help women and women's pay in the workplace and these kind of things. But then what happened was people just saw pink IPA. And it looked like we were, it was, the beer itself was a parody of products which market themselves towards women. But then it just looked like another product that market itself to our women.

And if anyone like dug into it and understood, okay, this is to highlight the gender pay gap and they're doing some good with the money and they're teaching a new course people just saw the pink ipa they saw the image and came to the conclusion that we're just doing the thing that we were going to fight against and that was a key key learning that people just see a snapshot of a thing so you need to make sure that all of the message that you want to land is in that snapshot because a lot of people's not going to dig deeper into what it is what i got from that was that like you've got to create a marketing campaign where the context is in sort of can't be separated. Can't be separated exactly. Because it will be separated if it can be. Exactly, 100%.