Episode 238 / David Khoshpasand / Hasbro / Amazon Performance Marketing Manager
Learning the Alchemy of Growth
For David Khoshpasand, focusing on short and long term marketing planning will yield better strategic results and give marketers a long-lasting brand. This is why his Shiny New Object is the book “The Alchemy of Growth” - with its three horizons of thinking.
David is the Amazon Performance Marketing Manager at Hasbro, where he implements the learnings from the book by Mehrdad Baghai, Steve Coley, and David White on a regular basis.
Turning one horizon into three
Instead of only focusing on short-term profits, marketers and businesses more widely need to look at a pipeline of initiatives and three horizons concurrently.
Firstly, the immediate term is represented by the core business - day-to-day work based on data driven marketing and consumer insights.
Secondly, the near-term business is covered by looking beyond the profits and market share, to the next few years.
And thirdly, the third horizon is represented by growth opportunities that will help brands endure in the next 10 years and beyond.
These three need focus at the same time or on a rolling basis, with marketing leaders asking the question: “Where am I lacking in terms of future attention?” regular.ly.
Testing and growth
The long-term growth is driven by testing and innovation, according to David. This cannot be done in isolation, though. While focusing on the core business and on profitability, brands need to continue to draw consumer insights and use that data to test growth initiatives. These can be new products, expanding existing product lines, or even going more boldly outside their core offering.
A great example of this is Disney - how the brand evolved from the cartoons into theme parks, retail, and now streaming services. At no point did the core business stop - but the strategy was driven by continuously juggling the three horizons.
Find out more about the alchemy of growth and get David top data driven marketing tips in the full podcast episode.
Transcript
The following gives you a good idea of what was said, but it’s not 100% accurate.
David Khoshpasand 0:00
Everyone is paying too much attention to their existing challenges, their existing business and not enough time into the future. We're so profit driven that we're not thinking about the sales growth and the attention towards new products that are going to carry out in the next three to five to 10 years.
Tom Ollerton 0:21
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Hello, and welcome to the shiny new object podcast. My name is Tom Ollerton. I'm the founder of automated creative the creative effectiveness ad tech platform. And this is a podcast about the future of data driven marketing every week or so I get to interview a guest about where they think the industry is going. And this week is no different. I'm on a call with David Khoshpasand, who is Amazon performance marketing manager at Hasbro. David, for anyone who doesn't know who you are and what you do. Could you give the audience a bit of background?
David Khoshpasand 1:36
Appreciate that, Tom, thanks for having me today. So primarily, my role at Amazon is to work on Amazon advertising and the strategy. Mainly PPC search and DSP. Marketing for me, started when I was about 17, I really had a passion for learning and curiosity into how people think and behave. And that's carried me all the way into working at an ad agency and then luckily carrying me into my role here at Hasbro.
Tom Ollerton 2:04
So that's an interesting journey, but I'd like you to now project into the future, towards the end of your career, how would you want people to remember your career, the people you worked with? And looking back?
David Khoshpasand 2:14
I really want to be remembered for taking research and putting that into practice and a never ending pursuit of knowledge and learning. I think that's a key pillar for anyone, particularly in my career as I love learning about consumer behavior and how to apply that.
Tom Ollerton 2:31
Can I ask you an obvious question? But why do you love that? Why are you so passionate about it? Why would you want someone to remember that specifically about you?
David Khoshpasand 2:38
You know, I think it's so engrained into my personality and who I am when I was really young, like the age of seven, I was so curious about why Bermuda triangles existed and looking to an encyclopedia of books to try to figure out why that curiosity just leaned itself into psychology and learning about marketing and advertising. And I've just never let off the pedal since. So I would like for that same type of behavior to perhaps be carried on to see the financial success that can come from that with my peer set group or anyone else across industries.
Tom Ollerton 3:13
And how does that mindset like show up day to day in your role?
David Khoshpasand 3:17
I think there's a lot of unknowns that that continue to exist and business challenges about how do we approach a problem? How do we think about it in terms of many ways to solve a problem instead of one, and that Bermuda triangle was a mystery. And I think that that passion to try to learn more about the opportunity to help solve, I think is something that just is deeply ingrained that they appreciate and want to continue to do.
Tom Ollerton 3:45
So I'm curious now, to know what your top data driven marketing tip is, what is that bit of advice you find you giving yourself most often?
David Khoshpasand 3:54
I think, you know, and especially in E commerce, we have a lot of quantitative data available. I think what's important is to also do research in terms of qualitative data, like, you know, looking at consumer behavior reports, I mentioned that before, just understanding some of the biases that exist in humans, and how that applies to let's say, Amazon, and and to understand consumer behavior, from a viewpoint of, you know, social proof and how product reviews ended up turning into conversion and how brand familiarity can actually create a bias towards conversion and help add efficiency. So I think much like economics started out quantitatively. And then Daniel Kahneman came in and for who was a psychologist added emotional element to it. I think, in the future, we're going to see see more of that qualitative data held just as much as the importance of the quantitative.
Tom Ollerton 4:46
So how would you see that coming into the day to day of data driven marketing, right, you know, fundamentally, you're going to make some assumptions here sat in front of a platform and trying to work out how to drive sales of a range of different products, but how do you see the qualitative element coming into that? Is that like running like live panels? Or is it just doing like interviews yourself? Because one's kind of definitely hardcore numbers on a screen. And the other is tough stuff. So how do you see in the future those two things integrating?
David Khoshpasand 5:16
Yeah, that's a good question for for right now, I take a lot of research that's already been written. And then I go into the form of testing to test what, what is being considered as a bias at a small scale, and seeing if it's successful, and if it is then expanding that into a larger representative testing set. And then if it's successful, again, figuring out how to optimize it. So that's how I handle it right now. But I would be curious myself to see what other ways we're able to extract and learn data from beyond just research reports.
Tom Ollerton 5:57
So where do you stand on correlation versus causation? So there was a guest on the show last week, and they were talking about a book and I can't remember the title of it. But the premise was, is that you can never be sure what you you're doing is working. So like in our world, this product sold really well. But that could have been that the competitor product was out of stock, for example, but yet there's no, well, there is some data on that you might be able to ascertain some of that or guess. But in reality in our world as data driven marketers quite often we're like, oh, yeah, that was definitely the thing that drove the outcome. Yeah, that was all us that was our decision. Whereas in reality, there's kind of chaos out there that could be affecting those things in different ways. So how do you make sure that there's causation and not just correlation in your work?
David Khoshpasand 6:43
Yeah, though, the one point I would say is to look at the signals to see if you just really simplify things, are we heading in the right direction? Are we not? Are we are we backpedaling. For some of it, in my line of work, you can actually see this at a keyword level. So for instance, if we were going after a specific search term, with a set of key products, we will be fairly certain based on the performance that we're getting, whether it was working or not, whether sales were increasing what the profitability on that was. So we will be able to tell that but completely aligned on on that overarching thought, because, you know, what, what type of products were being advertised, and how much of that familiarity calls that conversion for these specific search terms. It's hard to, it's hard to say, and I think that's why testing is so pivotal, there's this, saying that theories are nice, but reality is a lot messier. And I think that's kind of what we're talking about here in terms of the messiness of reality, and really trying to drill down on to the effectiveness of the ad. But definitely just continue to look at many signals to see if you're heading in the right direction or not.
Tom Ollerton 7:49
So we're gonna move on now to your shiny new object. I think you're the first person in 200 Odd episodes that's chosen a book, which is the Alchemy of Growth, I have not read this book, tell me why thought is the most impressive, shiny new object that you want to share with us today.
David Khoshpasand 8:07
Well, I love that, you know, when I first came across the book, which was a year ago, I was just searching, what would a Chief Strategy Officer read, and this book populated and a Harvard Business Review article and I was like, You know what, let's give it a go. And the best thing about it is, it's a diagnostic tool. It's a way to communicate across other managers and leaders to get on the same page. And the most important thing, it's a framework. And I think frameworks are so important. When I first came to to Hasbro a year ago, and I did an audit of all the accounts, but the biggest opportunity that I saw was for us to create a framework that we could all follow by, we could talk about it, we could strategize together on on how to grow which is essentially the underpinning theory of the book.
Tom Ollerton 9:05
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However, I'm going to track you back a little bit to your previous comment, which was what was it like theories are great but the reality is a lot more grubby or messy. That's exactly right. So so frameworks are lovely man, everyone's got a beautiful framework, but the reality is awful. Assume I'm never going to read the book. Talk me through what are the main things to take away?
David Khoshpasand 10:00
Yeah, absolutely. So they say in the book, Why aren't all enterprises growing? And what they found was, there was no continuous pipeline of business initiatives where the new replenishment of products or businesses was outpacing the decay. And when people think about their business or their enterprise, they think about it in terms of one lifespan, instead of thinking about it in terms of a garden, where you're planting seeds, they're growing, and they're taken over the next season. And ultimately, they provided the framework or three horizons. The first horizon is your core business. The second horizon is your near term business, where you're not looking at profits, more revenue and market share. And then your third pillar like to see growth opportunities that can help you Outlast in the next 10 years. And the main challenge that they found in the book across global companies was everyone was paying too much attention to their existing challenges their existing business, and not enough time into the future. They and that each horizon needs to be managed concurrently at the same time. So that's kind of the framework and the philosophy that I took with our media to say, Okay, and let's break these out into horizons. Let's use our marketing advertising to say, what do we have in terms of our operational media effectiveness and efficiencies? Where can we make this more efficient, more productive, more profitable, that will help set us up for the second horizon where we can run advertising where ROAS is not the target, return on ad spend, ROI is not the target, we want to drive revenue, we want to drive market share. And then that third pillar I used for this year is testing. So we could say, hey, look, the goal is to test and to learn not to drive profitability. We're gonna see what the outcomes is our outcomes are and learn from them. So that's kind of how what the framework is and how I've set it up so far for this year.
So it's three things three horizons, right? They're all definable. They're all different. It sounds so persuasive. But there must have been proof in this book to make you want to go with that, right? Because that sounds like a model to me. Like, I could take that back into automated creative and go right, we're gonna Yeah, let's not get this right. But Horace Mann, we got to have two and three in the book convince you that this was going to deliver impact for you.
Well, I had so many experiences previously at an ad at the ad agency where because retail media is so effective at conversion, and digital media, in general. Where ROAS was the the target that we always wanted to hit, you know, what's the return on adspend? That was the primary focus. And I think, previously, I had heard a compelling argument about brand marketing. And it's actually effectiveness and the bias of creating more efficiencies for the future, but you have to invest in it. And having that experience across multiple brands. When I read this book, I was like, Oh, my God, they're so right there, they're literally playing out some of the challenges that are existing today where we're so profit driven, that we're not thinking about the sales growth, and, and the attention towards new products that are going to carry out in the next three to five to 10 years. So it was really compelling to me to see it actually in the real world. And then to have spelled out where we could say, hey, look, it's okay for us to be testing. In fact, it's a competitive advantage for us to be rigorously testing just as much as we care about the profitability and our core business.
Tom Ollerton 12:20
So what happens from a resource perspective when you're focusing on two and three, but something bad happens with horizon one, right? And then it's all hands on deck, like how firm are you about not ditching two and three, when one gets busy? Because it's great having a plan, but reality happens?
David Khoshpasand 13:52
Yeah. And there's there's another scenario where you have a really good cashflow, opportunity for new revenue that's in the pipeline, but your core business is in such decay, you just can't invest. And I think that's kind of where you're getting at. And the diagnostic tool is so good to look at each set and say, okay, and that's what I did when I first came in, I said, let's start with our core business. In what ways can we create marketing efficiencies that will allow me to use some of that extra revenue and budget to put into this investment for testing? So that's how I look at it because there's I feel like there's they call it sweet and sour, you know, in the sour is your operational excellence, really identifying your marketing? For me, it can be controlled at a bid level, for instance. But what are we doing in terms of performance where we can use investment? I think at the end of the day, the main investment allocation should be towards that core business. But I think too much of the time 100% of the allocation is towards that core business and to your point at Then go, if things go wrong, you need to stay the course. But there's a philosophy of taking a staircase approach where we're taking small steps, we're not taking giant leaps. So for you know, your next year, if you were a business, you could do an audit for yourself and say, Where am I lacking in terms of future attention? Let's start to take a step towards that. That way, when these challenges arise, you can take active mitigations and kind of maneuvers to be flexible around them instead of big leaps.
Tom Ollerton 15:28
So what is the danger with this strategy of over investing in speculative horizon three areas, like you've used the word testing a lot, obviously, that's a very difficult thing to argue against, you're just test it doesn't matter. Keep it keep it cheap, keep it quick. But this industry moves very quickly. And often it's difficult to separate the shiny new objects from the thing that's gonna deliver growth. So how do you decide what goes into horizon? Three? How do you make sure that you're testing the right things? Or do you just test everything?
David Khoshpasand 16:04
I think it goes back to really deciding where your business wants to be. Five to 10 years from now, do you want to be a market share leader? Do you want to escalate sales growth by X percent? If you if you do, and you have that viewpoint, then you can start to backtrack about how can we get there. Disney in the past was a good example. You know, they they originally had the cartoon, they expanded to theme parks. They they expand it to more movies than they had, if you think about even today, before that they even had retail shops that was new for them was a new business venture. And then they had the streaming business, which they had to, in my opinion get into. But if you think about it all the way starting back from the cartoon, they ventured way beyond themselves and their success. Another way could just be even global explant expansions into new territories. But the the problem with is is everyone focuses on Well, what happens if I take the risk? Well, there's a funny saying, whereas it's like, Have you ever gotten the bill for not taking the risk, because if you don't do anything, this is the problem with the challenges that businesses face is that you will decay, and there won't be a pipeline for your future. And I think we have to start to look past the quarters and start to look past the annual reviews, and start to really start to make decisions about placing those bets and their seed growth bets. So they don't need to be, you know, major investments in them. But I think chances need to be made and they need to be watered and fostered for any business to try to be able to create competitive advantages for themselves. And to in order to grow
Tom Ollerton 17:41
One of my favorite project management quotes, even if it is a project manager, quote, I'm not sure but it basically says there's no such thing as a small project, just a small budget. So you may have a smaller bet on Horizon three, but how would you protect against it like taking over the important profit center of Horizon one?
David Khoshpasand 18:00
Yeah, that's why I think getting aligned on that that framework is so important, because it goes back to the second point about language and communication with fellow management, because you're saying, hey, look, we've made some really great strides to our core business. And our actually, our profits are up. In our second pillar, we're driving revenue and market share. And while RoAS is not the primary target there, it's not to say it's not accountable, but it's not the primary target. We're making some strides there. In that third pillar for testing. We're all in agreement, that at this small scale of testing, we're here to learn, and it's going to help drive this year's business are next year's business that could create competitive advantages for us. So you really have to stick to the guns there and be in alignment with everyone that that traditional mindset of only focusing on your core business, and profit, and sales is such a near term, thinking that it's not going to help growth and that that commitment to testing or see growth opportunities is what's going to drive the business in the future. And helped create those unlocks is, is just something everyone has to get along with.
Tom Ollerton 19:09
So unfortunately, David, we are at the end of the podcast, I would love to keep talking to you about this book, and I'm gonna go read it like it sounds fascinating. But if someone wants to get in touch with you about this or any other topics we've discussed, where is a good place to do that, and how would you like them to reach out to you?
David Khoshpasand 19:26
Yeah, appreciate that. LinkedIn is probably the best place to connect. You can search my name, feel free to message me send a Connect, more than happy to help share some ideas or I can learn from you as well. Fantastic.
Tom Ollerton 19:39
Thanks so much for your time.
David Khoshpasand 19:41
Thank you, Tom.
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