Steve Stoute is a music industry mogul turned advertising executive. He is the Founder and CEO of Translation, a marketing agency that believes culture can propel brands forward in ways that advertising can’t alone. In this week’s Agents of Change soundbite, Stoute discusses how brand sponsors can best combine the power of culture and creativity and why he is frustrated with the overuse of traditional segmentation in sports marketing.
Read or listen below to learn how Steve Stoute believes brands and advertisers can revolutionize sports marketing.
I started as a record business executive, and I went into the advertising industry around 2001-2002.
What I had seen early in the record business was that the measurements were completely broken from who the record companies were marketing the music towards and who was consuming it. There was not enough trailing data to express with any depth who was listening to the music and purchasing it–specifically hip-hop music. Hip-hop would get into places and areas around the country where the radio station wouldn’t necessarily play it, yet it would be selling at a hockey stick growth.
We realized very early that there was this cultural underpinning in people finding music. There was this video channel called The Box, and there were mixtapes that were circulating and friend recommendations made these albums. I wanted to apply some of those early lessons that I learned in music to advertising because there was a gaping hole in the advertising business.
The advertising business as a whole didn’t know who they were marketing their products to. They would do marketing campaigns that were hollow; they lacked soul, they lacked any cultural connection. They would do things like have fake guys rapping and have scenarios that weren’t true. They’d put four white guys and one ambiguous black guy and say that is “multicultural.” All of these types of things I felt easily could be hacked and needed to be disrupted which is one of the reasons why I shifted industries.
In fact, that’s what media is built on. The media business has been built on that topic and that topic only. Segmentation and hyper-segmentation. Black 18-34, white 18-34, this religion, this race… None of these things have anything to do with anything.
In fact, I think the media has done an excellent job for themselves in making money, but a very poor job of bringing people together through these segmentation studies. Who informed them?
When I first started Translation I used to ask people all the time, “Where’s the black section on Facebook?” There is none. There shouldn’t be one on television either, and there shouldn’t be one in magazines either, and there shouldn’t be one on radio either. All of these things are ridiculously poor in reflecting who we are and our values as people.
When I first got into the advertising business, the first brand I got changed my career. It’s not McDonald’s or the Chris Paul and Cliff Paul stuff which was great, but I was a 31-year-old entrepreneur, nervous and changing industries. I was 29-years-old and the Head of Interscope Records which was run by the legendary Jimmy Iovine. People usually don’t leave legends; they work under those guys for years. But I had done my time, and I wanted to be an entrepreneur.
I knew there was much more that I could put out in the world if I wasn’t in an office every day and wasn’t contained to just the music business. I took some of the learnings that I got from Will Smith, in the Men in Black scenario, and I wanted to apply it to something that I was an entrepreneur around.
The one thing we all have to do in life is to take advantage of the opportunities in front of us.
Steve Stoute, CEO of Translation
I got invited to a meeting at Reebok, and there was a guy named Paul Fireman who was the founder of Reebok. At one point in the mid-‘80s, Reebok was bigger than Nike. By the time it came around in the ‘90s, it had lost its way, and Air Jordan took off and took Nike with it.
Paul had left the company, and he’d come back, and around 2001, he was back as CEO. He’d done a pitch for an advertising agency, and I came in. I’m in this pitch; I know nothing about advertising at all, but I am listening to what the advertising industry is telling him because they all want to win the business. It was the Grey’s and the J. Walter Thompson’s and whoever the companies were at the time, and they’re not telling him the truth.
I come in, and I say, “Paul, this is very important. If you think that there is a campaign that you can run to make kids believe that Reebok’s are going to make you jump higher or run faster than Nike’s, you’re done. That isn’t going to work.
But let me tell you something. The same way you get up every morning and put on a Croc belt and make sure your shoes match your belt, there’s a kid who does that with a New Era hat, and he wants the shoes and the shoelace to match the brim of that hat. If we market to that business, we will build a business that will dramatically change the industry because Nike won’t see that.”
I am saying this at 31 years old; this is all I know. That led to an idea called the “Sound and Rhythm of Sport.” The first commercial we had done for the Sound and Rhythm of Sport was with Jadakiss and Allen Iverson. That dramatically changed the landscape of advertising in basketball. If you’ve ever seen the ad, it’s one of the most memorable ads to me coming out of hip-hop because we made the sound out of a ball bouncing and sneakers screeching. They would play it on mix shows; it would actually get played like a song. It was that powerful.
That led to the S. Carter sneaker, the Jay-Z sneaker, which we sold 10,000 of in an hour during a time when nobody thought a rapper could sell a sneaker. Now all rappers sell sneakers. Then we did the G-Units, and then we did the Pharrell Ice Cream’s, and we just took off.
To me, at the time, that was extremely important in shaping where we are today. When you talk about what cultural and authenticity means, it’s finding those true insights that are not marketing insights and not governed by some advertising agency nonsense. It’s the true insights that will give a brand a seismic opportunity in the marketplace.
There’s a huge opportunity in sports marketing. Obviously, we all [in sports] understand the advantage, given where technology is, of having a live event. People want to see it live; it’s destination TV, and live sports is the only thing that truly owns that.
What I see here is two-sided. The sports marketers, the brands that are the official sponsors, are not using that power with enough creativity.
Some brands do it really well. State Farm and Chris Paul/Cliff Paul, that’s great work, as well as Kia’s commercials with Blake Griffin. You see some great work.
Then, you see work where it is 100% reliant on the audience going, “Oh my gosh, they’re the official sponsor of the NBA. They must be important.” That doesn’t matter at all.
Utilizing that relationship, I think there are a lot of creative opportunities there that brands need to be much more willing to experiment with and use that relationship and sponsorship to express themselves differently and the creators have to be able to create within that framework. That’s one thing.
Secondly what I am seeing is, live sports has a huge opportunity to take off and grow dramatically. But if you look at the monopoly sports had, whether you look at season ticket sales or local sponsorship, they have become so comfortable in the way the business has been, that in order for the business to take off and be on par with the opportunity, [we] need to change out some of the people [we] have within these organizations. [We’re] not built for tomorrow, [we] were built for yesterday.
The one thing we all have to do in life is to take advantage of the opportunities in front of us. That’s all you’ve really got. We are all going to get different opportunities from one another, but did you take advantage of the opportunity that you have, the opportunity that you’ve been blessed with?
In business, it’s the same thing. If you’re live sports right now, between technology and every platform wanting to use live sports to show the virality of their platform, how they can drive contagion and how wide their footprint is, it’s great. But do you have the [people] on the teams and in the leagues that understand the opportunity well and can capitalize on it?
Because that window isn’t forever; that window is for now.
Steve Stoute was a keynote speaker at Hashtag Sports 2018, an annual conference designed for digital decision makers in sports. Learn more here.