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Diapers and Coke: Investing in a Marketing Company

A great deal in the marketing world has changed since the time of Frank Perdue.

Since my late husband, Frank Perdue, was once known as the world’s premier marketer, I was interested in talking with an expert on how things have changed since Frank became famous for being the “tough man” in his TV ads, about Perdue chicken. After all, in today’s digital world, we’re dealing with concepts that Frank, in the 1980s and 1990s would never have imagined, such as internet influencers, Google search terms, audio marketing, augmented reality platforms, NFTs and so much more.

I was also interested in whether investing in marketing companies was something high-net-worth investors might find worthwhile. Mark Penn, chairman and CEO of Stagwell Inc. (NASDAQ: STGW), seemed like a good guide for this exploration. He has a broad background in digital marketing but also unique professional experience for examining the subject.

His area of expertise is polling and includes stints working for Tony Blair and Bill Clinton. His decades of experience as a pollster means the ability to stay in touch with the market, including what can influence people and change their thinking or behavior.

In a recent conversation, Penn gave me an overarching explanation of what the changes are since the time that Frank used advertising to propel his company to national prominence. Penn’s explanation involves diapers and Coke.

Diapers and Coke

Penn said that today, the marketing needs of a company depend on where they fit in a spectrum from diapers to Coke. As he explains, “Coke has to market to a global audience of hundreds of millions of potential consumers. It makes sense for them to advertise at, for example, the Olympics.”

At the opposite end of Penn’s spectrum is diapers. “Only 3 to 4 million women or 1% of the population, are likely candidates for buying baby diapers. A company advertising diapers needs to reach a woman in her third trimester or the first few weeks after she’s given birth.”

People might buy a Coke anytime, but the time when a woman will choose what kind of diapers she’ll use is limited. “You once used to see ads for diapers on TV,” Penn reminds us, “but not now. The diaper manufacturers want to get to the right people at the right time, and that means the advertising needs to be targeted and digital.”

For him, the magic key for deciding where to advertise depends on where a product fits on the Diapers and Coke spectrum. It means finding the target audience where they are and at the right time. Frank Perdue would have loved this new approach. He knew that a good bit of his advertising dollars were wasted, but in those days, he had no alternative.

I asked Penn about chicken. He answered that chicken is about ¾ of the way toward Coke, in that people may buy it anytime and there’s a broad audience that buys it. But even so, there are niche audiences to reach.


No Longer a Digital Duopoly


Penn told me that navigating the digital advertising scene has become more complicated than it was even a few years ago. “Digital marketers used to be able to focus on Facebook or Google. Today everything is more targeted. The goal is to identify the target market and their habits and then find the right medium to reach them. Post-millennials may hang out on Facebook, while a younger cohort will be on TikTok.”


Investing in a Marketing Company

How about investors who want to consider digital marketing companies as an investment? What should they consider? Penn suggests weighing the following:

  • Does the market like them? Are they growing and taking market share?
  • Do they have a good balance of creatives, data scientists and also engineers?
  • Does the company have solid financial management?
  • Do they make a point of being cutting edge? “In digital marketing,” Penn says, “It’s easy to fall behind. Someone with a background in law or finance may find navigating the rapid transformation of the digital world hard to adapt to.” 

Penn loves his work in marketing. That makes him have something important in common with Frank Perdue. If you had asked Frank Perdue, as I did, “What is your favorite part of the chicken business,” Frank’s answer would have been that he liked every part of it, but marketing and working to understand what people really wanted was his favorite part. 

Penn also gets the importance of marketing. “We’re the train that makes commerce go,” he says. 


Harvard graduate Mitzi Perdue is a writer, speaker and author of the award-winning biography of Mark Victor Hansen.

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