Ally Financial CMO says that too much data hurts a brand - and is dangerous for the industry in the long-term

• Andrea Riley, CMO of Ally Financial, says that 80% of people say they will make a purchase because they have an emotional connection to the brand. In this interview with Business Insider CEO Henry Blodget she discusses the difficulties in creating that emotional connection in a digital age.
• Riley says the future of agencies is in crisis right now. She says the one size fits all model doesn't really work anymore and agencies are going to have to evolve significantly. 
• Riley also said she believed in focusing more on brand-building than direct-response campaigns, as it's not a good long-term strategy.

Following is a transcript of the video. 

Henry Blodget: So you've made a comment recently that this industry has changed more in the last three years than in the prior 30 - which is extraordinary. How do you build a brand today?

Andrea Riley: Well I would say, in some ways it's more complex than ever before and in some ways it's exactly the same as it ever was before. Because the reality is people still want to have emotional engagement with brands. 80% of people say that they will purchase a brand because they have an emotional connection to that brand. So it's - to me, it's about three things today: it's about great storytelling, it's about great use of data, and it's about smart use of technology. And how you intertwine those three things together and really become part of the fabric of people's lives is critically important.

Blodget: And given changing media habits. Where especially young people don't watch a lot of television anymore, which was the great emotional - your heartfelt marketing medium before, digital is so data focused. How do you balance art and science? How do you affect people emotionally in digital?

Riley: So I think for us - the reality is people used to - we used to invite ourselves into people's living rooms. Today, we have to be invited into somebody's living room and you have to give them a reason to want you to invite them into their lives. So what we try and do is be very purpose driven. Purpose-driven in terms of creating that emotional connection. We're a bank, so we're talking about something that's very emotional. Giving people the right kind of content makes them want to engage with our brand - that makes them want to seek out our brand. And really trying to be respectful of the consumer, particularly with the use of data. And not going over that line of pushing too far but being a part of their life when they need us to be a part of their lives, as opposed to forcing ourselves into their customer journey.

Blodget: And how do you look at brand versus direct response because a lot of people will say that digital is fantastic from a direct response point of view - tough to build brand.

Riley: Absolutely.

Blodget: So what do you do to actually build the brand?

Riley: I'm a big believer in this idea that - too much data and too much conversion can help you optimize to the short-term gain, but will ultimately have your brand lose at the long-term game. And I think that's a very dangerous line that the industry is being pushed towards right now. And so for us, it's still about focusing a certain portion of our budget on just pure brand building: creating that emotional connection, disrupting, and doing things in an interesting way. So we've done a number of things. So for instance around the super bowl - we created something that was called the Big Save. And we told real savings stories of real people. And we used the largest day of consumerism to instead of purchasing a spot on the Super Bowl, to really kind of do something very different. And that was to create a game. It was a virtual reality app that people could download on their phones. They could input into it their savings goal. And they played the virtual reality game but it only activated during the commercial breaks. So it was a great way for us to interrupt or intercept that. But to do it in a purposeful and fun way that still created brand engagement but it ultimately drove to conversion - because we drove a million and a half people to our site and we were able to tell deeper product stories and get them to think about our brand in a very different way.

Blodget: Is that an agency that develops that? Did you come up with that internally?

Riley: There's - I think it's a combination. What we came up with really internally was more of this strategy of disruption, and we put in place what we call our disruptor calendar. And so the idea is for a brand like mine, where I'm in a category that spends ferociously over two billion dollars a year in spending and our share of voice is less than 2%. How do I outwit, outlast, and outplay? How do I reach out and grab people in different ways because I'm never going to compete against the big category spenders? So the disruptor calendar is all about doing engaging things. They are purposeful and meaningful but allow people to have fun. Not preach at them about their money, but create a different mindset around their money. The Big Save was a great example. We created an app called the Splurge Alert app that you actually could download to your phone. And what you did with the app is you put into it your financial kryptonite. So maybe for me it would be like going into a shoe store. And we geo-fenced those locations and then every time people walked into those locations we pushed them a fun notification that would say, "Andrea get out of there. Last time you were in there you spent way too much money and you're saving for spring break." And it also allowed you to pick splurge buddies and push a notification to those splurge buddies who could text you. So great way to intersect the three things that I talked about: data, storytelling, and technology. Bring those things together, make it useful, and make it fun, but create disruption - not only in the financial services category but in the marketing category in total.

Blodget: And this was fun for people. Did they find it annoying?

Riley: No, they loved it. People thought it was hilarious. Same thing with the Big Save, right? We had some trepidation about how many people are really going to play. How many people are going to download the app? We had almost  70,000 apps downloaded. We were number two in Apple - in the iTunes store. We were number four on Google Play. And we had 660,000 rounds of the game played. And ultimately the top 15 scorers, and the people that had the best savings stories, won, and we just granted all of their savings wishes over the course of the last two weeks. Really amazing stories. So we try and make it fun but we try and make it purposeful and educational in the same way. And as an online bank, bringing in the technology piece and really making that kind of the third leg of the stool brings it full circle for us - and brings it back to our brand in a really authentic way.

Blodget:  Give the changing landscape, what do you think the future of agencies is?

Riley: I think the future of agencies is in serious crisis right now, and I think just kind of seeing a little bit of what's happening with WPP and Martin Sorrell recently and the way that that model has changed - is really going to be interesting to watch how things unfold over the coming years. I mean, as you see consultancies - like they say the big three accounting firms are now - bill less in accounting revenue than they do in consulting revenue, particularly in the marketing and advertising space. We've had a lot of conversation around our content providers going to become the new currency for agencies. So I think agencies are going to have to evolve significantly. As a client, no agency has all the silver bullets. This one size fits all model doesn't really work. We need the ability to have specialized expertise. We need agencies to become as facile as we are in the data and as close to the business as we are. But at the end of the day, you're still paying agencies for ideas. You still need great people, great creative agencies, and big ideas. Which gets back to that first point around emotional engagement. I think agencies are going to become smaller more nimble, a little more specialized, and more focused on the creative product which is really what clients want from them.

Blodget:  And when you talk to agencies and clients there's often finger-pointing as to say who is it that is resisting change and going forward. With something like shorter video advertisements - who is resisting change there is that clients or is that agencies?

Riley: I can tell you in our case it was not the client. I can't speak for all clients. Look, I think that there is a little bit of both. And I think it just depends on - to me, a great relationship with an agency is when you really have a partner mentality. When you really have this feeling that you're both in it together and you're pushing and pulling one another, you're open to taking risks, you're brave, you're open to innovation, and you're not taking credit for each other's - together you're making things better. And I think that those are really the best relationships. And so, you get more out of your agency when you give them that clean palette - when you give them that room to run. And as a client, you have to be willing to take those risks and to stick your neck out once in a while and see where things will go. I just think it's a matter of being in sync with one another and thinking about the end product the right way, and the fact that we have to drive business objectives and we can't create work just for the sake of creating work.

Blodget: You mentioned WPP, what do you think happened to there?

Riley: I think if I'm betting if they're smart they're going to bring somebody in from the inside - to kind of show calm and consistency. I think they're going to have to really look at their model. And whether they've become too big and too out of touch, or if it's really the time for them to think about getting back to some of their original roots which was very specialized marketing, in very specialized industries. I think they've squeezed all the juice they can out of cost-cutting and efficiencies, and that that's having a detriment on what clients ultimately want which is great creative, great thinking. And so, they're going to have to really be very introspective. I think it's a great time for them to step back and say, have we gotten too big and do we need to scale down? Do we need to get back to the core of what made us great?

Blodget: And do you think, is that universal for all the holding companies? Have they gotten too big?

Riley: I mean look, as a CMO, I can tell you the agencies we're gravitating towards are those small independents. That don't have to answer to anybody. That have that same disruptive spirit and that same moxie, that a lot of marketers want to have today. So, I do believe largely that the holding companies have gotten too big. There are some things that the holding company model provides that are advantages to clients, for sure. In terms of depth, and breadth, and ability to pull on multiple resources when you need answers. But the way they create work, the movement, the pace, and the cost are becoming things that we as CMOs as we're being held more and more accountable for KPI's and efficiency are becoming really hard to deal with. And so I think big holding companies are going to have to look at that in general.

Blodget: Facebook, big scandal recently. Mark Zuckerberg, spent a lot of time on Capitol Hill.

Riley: Yeah.

Blodget: One of the questions that people had is - yes but is any behavior gonna change? People are going to stop using Facebook, are advertisers going to stop and be concerned? Have you changed your view of it at all?

Riley: We've had very strong points of view with regard to what we use of Facebook, and what we don't. We had a lot of trepidation early on around Facebook Live and wanting that to be a responsible channel - where it wasn't a channel being used to just broadcast violent things or things that we found don't align with the values of our brand. I think relative to what Facebook is going through right now, we are also following that situation very closely. I think that Facebook is acting very responsibly in the way that they're responding and behaving around what's happening. I do think that it's going to change the amount of data that we have access to as marketers. I think as a marketer that's going to be tough for us. As a consumer, that's probably a good thing. I think that we have to be really cognizant of what we're putting out into the digital and social landscape as consumers. And marketers have a responsible - have a responsibility to not go too far in terms of using that data. So, without a doubt, we're watching it very closely and I think it's going to be really interesting to see as they become more regulated and as they become more of a focus for regulators how that's going to change just the use of data that we have as marketers.

Blodget: And have you seen it across the industry others changing behavior, cutting spending or reallocating spending?

Riley: I think that the industry - not necessarily yet as a result of what's happening on Facebook - I think that what you're seeing is - you're seeing these pockets of resistance where - when a certain medium becomes too controversial, when you take some of the things that are happening in the political landscape as an example, marketers pulling out of - aligning themselves with certain mediums, with certain channels, with certain personalities, because of the blowback that it can have on your brand. Facebook is no different right now. Marketers are being very tepid around - "Oh I don't want to be perceived as one of those marketers that was using your data for something I shouldn't have been using it for." So, I think that you're going, that's something that we all face. It's really kind of a new and emerging challenge that we have as CMOs and as brands. And it's going to be interesting to see how it unfolds.

Blodget: You've talked about how in the current political climate in particular - the country's incredibly polarized, huge emotion on both sides. That brands are actually having to think stands in a way that they weren't. And that in fact, on many issues saying, "we do not have a position" can damage you. How do you begin to navigate that?

Riley: I think this is probably one of the most interesting and different problems that we've had to solve as marketers and PR people. Probably, in the last year, this has emerged more so than ever because of the political climate. And I also think it's because of the fact that there are more and more movements that have occurred. You know, you look at all the outgrowth of Me Too, and See Her, and Black Lives Matter, and people standing up and having a voice, and saying, "I want to know where brands stand on issues. These are things that are important to us as a culture and as a society and I only want to align myself with brands that have the same kind of cultural beliefs that I do." And so, we are being asked very overtly by consumers, "Where do you stand on these issues?" And we really have to look - we have to be careful. Because we have a responsibility to our employees. Where the company doesn't stand for the beliefs of all 8,000 people that work at Ally. We have cultural values that we as a company hold true. But it would be inappropriate for us to speak on behalf of all of our employees. And so we really look at things on a one by one basis. And where there are things that we really believe culturally we need to take a stand on, we do take a stand. When there is an issue that is a little bit more charged and that we really don't have a right to take a stand on, we take more of a passive role on that. And I think that's just the way that we're going to have to navigate this landscape, particularly in this climate.

Blodget: And is it the company's values? Is it where the company stands? Or is it where the CEO stands?

Riley: We see a mix of those kinds of questions. We have people directly saying, "Where does your CEO stand on this issue?" And then there are things where people are asking where the company stands for? I think it's a really unfair position to put a CEO in because again it comes back to the fact that he doesn't speak for the entire company in terms of the way everybody believes. He drives the culture of a company - he or she - drives the culture of a company, they drive the values of a company, and that's where we have to speak out when there's something that's an issue that aligns with our cultural or company values. But when it's an issue that is more political in nature, that's either on this side of the fence or that side of the fence, I think it's inappropriate for people to ask where a CEO stands on that and for a CEO to really feel obligated to respond on those kinds of things.

Blodget: Have you been startled as you watched other companies about some of the stances that they have taken? Because there has been some that have taken overtly political stances.

Riley: Absolutely, I think around gun control is a great example, and there are a number of companies that took very strong stances. And you look at Dicks, you look at Delta, and others that have kind of joined and I think that in the case of Delta it had an impact for them on their bottom line, right? In terms of a tax credit that they ended up losing. I'm not sure the word startled is the word that I would use. I mean, there's part of me that applauds their bravery. There is another part of me that really has to as a CMO and Chief PR officer, has to really be very protective of our company, and think about the best way that we navigate through that. And I think that's individual decision that every brand has to make when thinking about how it's best for their business, but also what's best for what their culture represents and what they want to stand for in the marketplace.

Blodget: You have been recently giving a presentation of the top 10 things that keep CMOs awake at night, what are some of them?

Riley: There is a lot of them. I think first, one of the things that really keeps us awake at night is what we just talked about. This emergence of the personification of a brand and consumers expecting brands to take a stand on things and to have a voice and how do we properly navigate that. We don't have all the answers. No company has all the answers, and so that's certainly one that we're trying to learn our way through. Another one is just this whole idea of the rain of digital disruption. And I kind of call it the: who the hell knows where it's going to go right? Ten years ago, we whenever would have thought we would be sitting where we're sitting today, in terms of the way technology and data has disrupted the industry, and things like: by next year 20% of brands will abandon their digital apps. And as technology's becoming more ubiquitous what's that going to do to the way that consumers interact with brands. So, that's another big one. And a third really big one that we're looking at is just the complete consumer inundation and saturation. Average person - 7,000 images being thrown at them during the course of the day. You had a great stat that you shared with me around people packing 31 hours of activity into one day. I feel like that absolutely every single day. And so, as people become more and more inundated where is that saturation level going to hit and how do we break through and engage in a very cluttered marketplace. Particularly as CMOs, we're being held accountable more for KPI's than ever before - and the CMO role really being a hot seat. So, how do we balance building a brand and creating emotional engagement with really driving real business value and driving those conversions?

Blodget: And what's that's answer to that question?

Riley: I think that it's bringing it together. Which is really the answer. I think that there is a couple of things. Look there was a recent study that said 80% of CEOs don't trust their CMO. And I think CMOs are in a hot seat. And I think the reason for that is that CMOs maybe don't do a good job of socializing data. They don't do - they feel compelled to kind of hide the data. Because they don't want it to show weaknesses in their strategies. And I believe that's the wrong strategy. So I think putting the data out there, using it to make you smarter, and make you better is really important. But this is still a business of the heart and you've got to feel things in your gut or not. And even when you're in a conversion medium I still think you can create an emotional connection with people. And you can use the data to help you learn how to make that emotional connection, but you also have to use kind of your heart and what your gut is telling you, and react to things as a consumer first. And I think the brands that find that purposeful driven marketing, that make that emotional connection even in conversion media, and that really think about the long-term game are the ones that are going to win.

Blodget: And do millennials care about brands?

Riley: I think they do. All the research will tell you that they don't. But living with millennials, watching millennials, we've done a ton of millennial research, some proprietary research around the way that they consume automotive products, the way that they consume banking products - they absolutely care about brands. And I don't think that - anybody that looks you in the eye and says they don't, it's just not a truth, because brands become badges. They become a reflection of who we are and what we believe. They become a reflection of what we've achieved, and people want to align with brands that still are relevant to them and have a relevance and a cultural currency. So I think they do.

Blodget: I think another point you make in your presentation is the average tenure for a CMO these days is about 18 months. Why?

Riley: It's funny when I was putting that in my presentation the person that was typing it for me said,"How many more months do you have left?" I'm past it so -

Blodget: There you go.

Riley: We'll see how many more I have left, right? I think it's a number of things. I think CEOs are under more pressure than ever to deliver for boards and shareholders. And as a result, that pressure is put on CMOs. And it is really hard to - really I think, navigate the inundation of KPIs that we're all under. I look at myself, my scorecard is 15 pages long. I have 15 pages of KPIs and on each page is probably 20 different KPIs that I'm responsible for. Some of those things I can impact, some of those things I can't. And so, CMOs are in a very tough position. They don't impact a lot of business decision relative to investment levels. They don't impact product investment decisions. They don't drive a lot of technology investments. Yet they're being held accountable for how adequate the relationship is with the customer, how interactions happen on websites, how much revenue they're driving to the bottom line. So I think it's a really tough seat and for me, it's really more about how you work with your business partners, how you share the data, how you get on key messages, consistently tell those stories, and how you put bravery out there and really drive the agenda of the company forward. And then I think lastly, it's about just being very aligned with what the CEO - where the CEO wants to take the company, and really helping that CEO win on the things that he or she is being held accountable for.

Blodget: And last question, as you think about brand, which is I assume is a piece of the KPIs. In digital, are there platforms that are great for brand building versus others that are great for direct response, and why?

Riley: Absolutely I mean I think that - look great content is great for brand building. And we really look at how we intersect people's lives through meaningful content, not interruptive content. Social is a platform that's great for brand building and finding your natural role in different social platforms, you can't have a one size fits all solution. You can't do on Instagram what you should be doing on Twitter, what you should be doing on Facebook. They're all very different and you have to approach those mediums in very contextually relevant ways. But they're great ways to build your brand. Whereas things like rate tables, things like affiliate marketers, those are places where people are coming to that are their seeking more information. They're in a shopping mode when they get there, and that's not necessarily a place to build your brand it's a place to reinforce your value proposition. And so, I'm a big believer in you can't get too fat, you can't be everywhere. You can't be everything to everyone. You have to really focus, you have to focus your dollars. And then you have to really look at each individual medium and each individual platform and create for that. The days of one size fits all are gone. We are pushing quickly into things like dynamic creative, where we're individualizing creative messages down to the person level. And that's really the future of where marketing's going.