What’s in Your Garage Podcast Episode #10 Bob Aldons Speaks to Mark McRaith
Bob Aldons: Welcome to What’s in Your Garage. This is Bob Aldons from Car Business and today I’m meeting with Mark McRaith, who I’ve known for seven or eight or nine or ten years?
Mark McRaith: Yes.
Bob Aldons: Mark, and what are you doing at Maxis now?
Mark McRaith: It’s good to see you, Bob, after a year of absence. So, I’m the CEO of Maxis, we’re a media communication agency, we plan and buy media space and time for our clients, such as television, outdoor, cinema, radio and we try and make sure that we get maximum return on investment for clients’ objectives.
Bob Aldons: Mark, I met you when you were doing Maxis prior to joining what was then Chrysler Jeep Dodge.
Mark McRaith: That’s correct.
Bob Aldons: A number of years ago.
Mark McRaith: Yes.
Bob Aldons: Why the jump back from the coalface back into the agency?
Mark McRaith: Well, as you know, I’ve always wanted to be a car dealer but I didn’t have the four million dollars to buy the franchises or the real estate. I enjoyed my time at FCA and taking the brand from 23 thousand sales to 42 thousand. I got approached back to become CEO and, normally in that company and in my holding company organisation, the CEOs are normally biassed in Sydney. This time, though, we’re prepared to make sure that I could stay with my family in Melbourne and that’s why it interests me and I always wanted to run my own company, so I was excited to come back.
Bob Aldons: Maxis is a … We were just talking earlier, it’s a British-based company?
Mark McRaith: Yeah. Our company, Maxis’ headquarter in London and New York, our holding company is WPP, the largest communication businesses in the world, which has a number of creative agency assets such as Jworld, Thompson and Opal V and Y and R.
Bob Aldons: These are the historic people in the advertising business, hey?
Mark McRaith: Right, and Maxis is only relatively new. Only started in 2008 so we’d like to say we were born in the digital ages so we have no legacy-
Bob Aldons: That was when the world economy sort of cracked up. So, Maxis was born out of the global financial crisis?
Mark McRaith: Yeah, and what it was, was there’s a number of Maxis offices around the world called other things like Motivator, in the case of actually Fiat media in Italy and it all got changed to the Maxis brand globally and that’s one of the reasons we have Fiat Chrysler because Fiat was actually media in-house at the factory in Terina.
Bob Aldons: So, who’s responsible for that account? They’d have to be doing a really good job, wouldn’t they, at the moment?
Mark McRaith: Well, there’s a lovely gentleman called Frederico that runs Europe and lives in Terina and knows all about the business for many years-
Bob Aldons: And be very close to Sergio and take him to lunch-
Mark McRaith: I’m not sure about that, he’s very close to the Italian part of the business in Italy as you would know. So, yeah, we are part of a global empire but really, Maxis as an agency tends to have a lot of local clients like Hungry Jacks, iSelect, Fiat Chrysler, Jetstar, so we tend to work on … We’re more the global agency that’s local than some of our other cousins and sisters, which have more global brands like Mediacom, which you would know, have Volkswagen. So, they have that around the world. We tend to have a more local business and Fiat Chrysler is one of our few global clients.
Bob Aldons: I asked you this question when we were coming up in the lift, what is the biggest challenges over the next one to five years?
Mark McRaith: Yeah, I think it’s really funny. I think the similarities between what you taught me about the dealer franchise business and ours is really similar. Global clients want ROI, Return On Investment, they want it for less, they want the best people, and they want lower costs. So, procurement is really driving that. Our business, very similar to the car dealership business is yield maximisation is one of our areas, how do we get more revenue? How do we sell more services and offering? Because we chase the volume game, we quickly go out of business as we discussed over our coffee. We have to be careful, get a bit of volume, bit of yield and bit of profit in our business and then, to be able to service the business properly and have the right people working on accounts. You can’t have a lot of really bright, young people who just need more experience. You need to train them through and educate them along the journey.
Bob Aldons: Yeah, I’ve been in the motor industry for too long, 38, nearly 39 years now, and when I started it was newspaper and radio from a dealer point of view. From a manufacturer point of view, it was newspaper and television and radio. What’s the shift been in that marketing mix over the last five and where do you see it going in the next five?
Mark McRaith: I think there’s two elements. Now, I think it’s more about offers, so about the messaging. Manufacturers tend to do more of the offer, be it through year warranty, low-interest rates, even though I both [inaudible 00:04:38], or cash back, or price off rather than selling the brand. We had a bit of success with our history with selling the brand without discounting too much.
Bob Aldons: Absolutely.
Mark McRaith: I think local dealers … Clearly, newspapers are going through a lot of turmoil. I think some cases in some states are still powerful depending on which market you-
Bob Aldons: So, you’re talking sort of Sydney, Melbourne?
Mark McRaith: I’m talking about Brisbane, Melbourne [crosstalk 00:05:02] are all powerful because they’ve got certain leadership there. But, for the local dealer, I think one of the best things is his own local profile. Facebook, the internet-
Bob Aldons: Instagram.
Mark McRaith: Google. What they do in the community? Are they part of the Rotarians or Lions club or what other community benefits they offer?
Bob Aldons: What do they give back to the community?
Mark McRaith: Yeah, and I think that we’re becoming a nation of really small communities now, where people like to stay in their community. I live south of Melbourne, about an hour away, and it’s a real village atmosphere where I live in [inaudible 00:05:34] and that’s what you care about. That’s what my partner cares about, who the kids care about. It’s like, what are they doing locally? Rather than being part of Melbourne, they’re more part of [inaudible 00:05:44].
Bob Aldons: Or Brisbane, or Redcliffe or wherever that is.
Mark McRaith: Yeah.
Bob Aldons: Do you see the manufacturer sponsorships of all the football teams and so on dissipating over the next five years or will they will still stay there?
Mark McRaith: I think the key things about association with sporting groups or societies is about the membership database and how you can reach that. This database is the key, and how you can talk to … I don’t know how many members of Brisbane Broncos, probably about two million Brisbanites and Richmond’s got about 80 thousand members. Is how do you keep those people on the list? How do you engage with them over the period? And how do you work through getting sell out of their current car into the sponsor car?
Bob Aldons: It’s funny, Musti, Erica Zoo, always trumpeted that Hyundai had done very well with the-
Mark McRaith: A League? Melbourne
Bob Aldons: Yes, I was going to call it soccer but, yeah, football. And, why wouldn’t manufacturers sort of take that model and say, “Well, that’s working, let’s not try and reinvent the wheel.”?
Mark McRaith: I think the other good example is Carlton Football Club here in Melbourne. Hyundai actually pay for a new car guy to work in at Carlton and work with their membership team to work through how they can sell cars to their membership base and actually work with their corporate partners to get fleet deals and other things.
Bob Aldons: That’s’ right.
Mark McRaith: I think that’s a really good example, and I think St George did something similar, but is the soccer clubs, A-League clubs, tend to do a little bit better from what I’ve seen than the others. Now, Melbourne Big Tree is a really, really good example but Melbourne Heart now has Nissan on board.
Bob Aldons: That’s Melbourne City now.
Mark McRaith: Sorry. Melbourne City, yes.
Bob Aldons: They’re not called the Heart anymore.
Mark McRaith: No, and the Nissan relationship comes from the Manchester City relationship out of the UK so you see more global footprints in how they can work with dovetail-
Bob Aldons: I saw a tie manufacturer aligning themselves with Real Madrid the other day.
Mark McRaith: Yes, who is it? Hankook?
Bob Aldons: Hancock, Hankook?
Mark McRaith: Yes, yeah.
Bob Aldons: And that really blew me away.
Mark McRaith: And the ad was really more about Real Madrid than about Hankook ties, wasn’t it?
Bob Aldons: Yeah, yeah, absolutely.
Mark McRaith: I saw the ad myself. I couldn’t work out what they were trying to get out of it but hopefully, you can buy a Hankook tie if you’re a Real Madrid supporter. But I think the key-
Bob Aldons: Or you get a free t-shirt or something.
Mark McRaith: The key is to get someone’s details, see if you can communicate with them in a really, really cheap way. What’s an email cost, Bob?
Bob Aldons: Nothing.
Mark McRaith: Like half a cent, nothing, versus TV ads that cost a lot. But, you still need television throughout the brand and whether it’s to stimulate the brand into digital and then that might get people interested in your brand. If people don’t like your brand, people don’t buy money or discounts. They want to be seen to be driving a certain car and no matter what brand it is they’ve bought into it.
Bob Aldons: What is was going to go on within that area was, do businesses use their database to the best of their ability?
Mark McRaith: There are some that do and there are some that do. One of our interesting clients is iSelect. They are relentless at using their database and can identify you within three clicks what type of person you are and they have the right person to talk to you on the phone that’s going to relate to you better than, you know, than a young boy or an old guy talking to the wrong customer, like a young mum. So, they are really good. A lot of car dealerships That I’ve seen, some don’t use their database anywhere near enough, don’t use their Facebook enough. What I mean by Facebook is just don’t send out a thing that you’re having a sale on this weekend. Talk to me about what value you’re offering, what service you’re offering, what are the little extras you can do? Or, you’re doing something in the community, would you like to come along? Could be a sausage … Could be anything.
Bob Aldons: So, how does Maxis, or how does Mark or Bob get to those dealerships and say, “you need to do better.”?
Mark McRaith: Well, the classic is that you can’t make the horse drink from the trough, you’ve got to want to do better. So, we can … I don’t want to come across as a smart Alec to a lot of dealers and say, “Well, I know better.” Because sometimes I don’t know their business enough but you’ve got a lot to improve in our relationship is, you’ll always want to improve. So, you seek advice from various people. My key thing is, look at your own business and say, “What can I do better? And then, “What help do I need?”
Bob Aldons: And that’s irrespective of size, isn’t it?
Mark McRaith: Totally.
Bob Aldons: Whether it’s a ten person or a thousand people working for that company.
Mark McRaith: Yeah, well some businesses have got a lot of expertise and they can do it in-house and some can’t. Some want to draw outside of that and the great thing about our client base is we have a lot of different client categories but, at the end of the day, someone has got to serve someone, be it a Hungry Jacks serving a burger or V&U serving a new car buyer.
Bob Aldons: Do you have to pitch for those things every year or is it every three years?
Mark McRaith: A lot of client contracts tend to be three-year tenure unless you do some serious damage or make a mistake. Yeah, it tends to be in cycles. A lot of it is full on procurement reveal and cost analysis, you get compared to other competitors, people make up things, they promise the world. So, you’ve just got to be careful on what you’re putting forward and make sure you can deliver. We tend to be more on … We will guarantee we will deliver versus, say, we’ll be the cheapest. But, I think we’ve got to be careful to say, if someone wants to cut their fee and do it cheaper, you might get the young student that’s just started-
Bob Aldons: The junior.
Mark McRaith: And nothing wrong with junior, you need juniors because we need people coming through, but you might get more of them than what you need to. Sometimes you get what you pay for.
Bob Aldons: How important, therefore, is it that the person within the company that you’re working with, i.e. the Sam Tabarts of Fiat Chrysler. Sam, to me, was a real go-getter, didn’t have to go back to a board and put a pitch to the board to do a certain thing, he was just in there and did it.
Mark McRaith: Well, some marketers are really different, not everyone is as dynamic as that example you gave. Some are more governed by global guidelines and procurement guidelines we, we recently picked up Westpac bank. Now, as a bank, you would expect it to be far more rigorous than it is and you want it to be. As a customer of Westpac, I do. So, there’s different horses for courses but, in different personalities and there’s different company rules. So, it just depends and we’ve got to be flexible to work through that.
Bob Aldons: Sure. Okay, well, enough talking about business. Now, let’s talk about what’s in your garage. What are you currently driving, Mark?
Mark McRaith: I’m driving a Citroen DS5
Bob Aldons: Oh god.
Mark McRaith: And I know you’re going to say that. I broke a mirror the other week and I had to wait two weeks to get the mirror in.
Bob Aldons: A Citroen DS5, is it the two-tone thing? Black roof and-
Mark McRaith: It’s the black … Well, it’s really glass roof that’s got shades.
Bob Aldons: Oh true.
Mark McRaith: Yes, I love it. It’s white. I’ve always love the old DS series from the late 50s that De Gaulle used to drive around-
Bob Aldons: Yup, goodness gracious.
Mark McRaith: I’d love to own an antique one.
Bob Aldons: Yeah.
Mark McRaith: I bought it because it was different and, coming out of working with the Jeep, I wanted to have something different but I still love Jeep.
Bob Aldons: So, you went and bought a Citroen.
Mark McRaith: Yes.
Bob Aldons: Okay.
Mark McRaith: Just to be different. It is a diesel, I get a thousand k’s a tank on fuel economy, which is great. It’s got red leather seats.
Bob Aldons: See, that doesn’t sort of work in with a CEA of an advertising agency to be driving a bloody Citroen.
Mark McRaith: Well, you what? You want me to drive a BMW or?
Bob Aldons: No, a tesla.
Mark McRaith: No, I just like quirky cars sometimes.
Bob Aldons: That’s good.
Mark McRaith: I think, you know, if I had a choice of owning my dream car I wouldn’t want a dream car, I’d want a number of cars.
Bob Aldons: Hang on, hang on. That’s another question, you’re jumping too far ahead. So, my next question to you is, how old are you mate?
Mark McRaith: I’m 52.
Bob Aldons: Okay. So you’ve had cars for 35 years.
Mark McRaith: Yes.
Bob Aldons: In that 35 years what’s been your favourite car?
Mark McRaith: My favourite car was an Audi A4 Quattro Turbo.
Bob Aldons: Nice.
Mark McRaith: Only 1.8 litre but it was fantastic.
Bob Aldons: So, what caused you not to stay with the Audi brand? Going back to a marketing point of view.
Mark McRaith: Well, I met my current partner and she hated me in that car so we sold it and I bought her a Range Rover Sport, which I loved as well and then we had children and, at the time, she wasn’t driving so I sold the Range Rover and bought two cars. One for her, which was a Volvo Waggon, which she loved and I bought a little Ford Fiesta as a runaround and then we moved out of town.
Bob Aldons: Fair enough.
Mark McRaith: But the Audi was the favourite. And Range Rover was great until the gearbox went and it cost me four thousand dollars.
Bob Aldons: Yeah, they’re not cheap to repair.
Mark McRaith: No, and that’s one of the things you remember. But, it was still a great car.
Bob Aldons: Yeah, and leading on to that question, if money was absolutely no object, so you had a chequebook at the ready to go out and buy whatever you wanted to buy, what would you buy? Whether it’s one car or two cars or three cars.
Mark McRaith: Yeah, I think I’d like to have a bigger garage and have a number of cars. Not all expensive but for the mood at the time.
Bob Aldons: Come on, for example.
Mark McRaith: So, I’d love to have an antique Citroen from the 50s that De Gaulle drove around, I’d love to have a Wrangler for when I go camping with my family and you can go anywhere.
Bob Aldons: Anywhere.
Mark McRaith: I’d love to have a sports car, I do like the new Abarth, but even an old MG would be great.
Bob Aldons: Nice.
Mark McRaith: And one day I think I’d like to own a ute.
Bob Aldons: Yeah.
Mark McRaith: That I’m not fussed about-
Bob Aldons: Well, I’m a ute driver. I drive an Amarok Dual Cab and they are the most flexible vehicle that I could ever drive.
Mark McRaith: I think you’re right, you’ve got to have the dual cab because often, when you’re doing gardening you go, “God, I’ve got to go to the tip.” And the ute is-
Bob Aldons: You don’t throw grass in the boot of a Citroen.
Mark McRaith: No, and the back of the ute would be fun. I quite like the ranger because years ago I worked on the Ford business.
Bob Aldons: Of course you did.
Mark McRaith: And I saw the-
Bob Aldons: Ford Motor company.
Mark McRaith: The design of that coming through and I like the style and where they’ve gone with the ranger and I quite like the look of that. It looks much better than Mazda.
Bob Aldons: So, you’d have a fleet of cars?
Mark McRaith: I’d like to have a small fleet of cars, yeah.
Bob Aldons: Yeah, that’s good. And, look, now that you’ve talked about Ford, I wrote a blog post, an article, about the demise of Ford Motor company. You know, I started with talk Ford at Redcliffe in 1978 and I was there until 2000 and it was just such a sad day to see that factory close.
Mark McRaith: Well, my first job in advertising was the J Walter Thompson and the first account I worked on was the Ford account and I love Ford. You know, blue I think flows in my veins. I think, unfortunately, they were let down by a global parent by not adopting some of the designs that could have been. If you look … I know you’ve been to the states, the Crown Victoria is the cab, the taxi, probably one of the worst cars I’ve been in. Whereas, you know, for what you got over at Falcon was pretty great value.
Bob Aldons: Fantastic value.
Mark McRaith: Even the AU, which everyone bagged, it was a great value car.
Bob Aldons: Yeah, yeah.
Mark McRaith: And it is sad but, in some cases, I think that the fact that they designed the new Ranger, they designed the Everest and there’s other work coming through.
Bob Aldons: And that’s good.
Mark McRaith: That’s good. I think the thing for me is, as an industry, economics mean we can’t survive. We’re the most fragile market in the world.
Bob Aldons: Yeah, we are. 55 brands, I think, at last count.
Mark McRaith: Yeah and it’s amazing that both, or all, Holden and Ford have survived so far. I remember there was Nissan-
Bob Aldons: And
Mark McRaith: There was Mitsubishi and there was Volvo. It is sad but hopefully out of it there comes some good things and I think, being one of the three global design studios of the world in Melbourne-
Bob Aldons: That’s a big, big plus.
Mark McRaith: Is a big plus.
Bob Aldons: And do you know what will happen with General Motors and Toyota after they close? Will they have design studios, too?
Mark McRaith: I’m only hearing probably what you’ve read on the blogs and online is that Holton is going to have some capability, they designed the new Colorado I think, here. Tiger, I don’t know but you can put a Camry pretty much anywhere, can’t you, in the world?
Bob Aldons: Yeah, you can, you can.
Mark McRaith: It’s pretty much the same. And what are you driving now, Bob?
Bob Aldons: I’m driving an Amarok Dual Cab but I’ve got my Alpha Romeo 4C for when the weather is right and it’s not raining and it’s not dusty but-
Mark McRaith: Do you get custom fitted for the seat?
Bob Aldons: No. I was one of the last to pick up a 4C, I think it was number 74 of 88.
Mark McRaith: Oh good.
Bob Aldons: So, they rang me right at the death and they have obviously had a spare one and they said, “Oh, you can have this car now.”
Mark McRaith: So, what colour did you get?
Bob Aldons: Red.
Mark McRaith: Good.
Bob Aldons: Yeah, it’s got to be red.
Mark McRaith: I think their new product that I’ve seen coming through Alpha Romeo is going to be really exciting because the brand, you know, working as the advertising agency for FC here in Australia, we’re really excited about where Alpha is going to go and I think, basically, the design, the look, the feel, the power of the engine they’re going to put in is going to be-
Bob Aldons: Well, it’s the passion and the history, too, isn’t it?
Mark McRaith: Well, I think Volkswagen would give their right arm for a brand like Alpha, to own. Which most of the German cars haven’t got that history and that passion.
Bob Aldons: Yeah, it’s funny you know. I was reading an article about five concept cars that Volkswagen had presented at various motor shows and none of those ever came to fruition. Certainly not with a Volkswagen badge, but you then look at and say, “Well, did they come out as an Audi or as a Bentley?” And, you know, they might put the Volkswagen badge on because that’s what they get the most publicity from, but they just don’t have these high performance or expensive cars on the Volkswagen brand.
Mark McRaith: Or the big Audi.
Bob Aldons: Well, yes. I’d like to have one of those.
Mark McRaith: That would be nice. I’d just settle on the drive and that on an autobahn somewhere for a hundred ks.
Bob Aldons: Or just around the racetrack.
Mark McRaith: Yes, sorry.
Bob Aldons: That’s all right. Mark, that’s really about it, mate.
Mark McRaith: Thanks, Bob. Bob from Melbourne.
Bob Aldons: Thank you, and you know the weather was 15 degrees yesterday and it’s 27 but windy today.
Mark McRaith: Where did we go for coffee?
Bob Aldons: We went for coffee at a church and, when you sort of started walking down the arcade, I’m saying, “where are we going?” And there was a coffee shop at the lift and we’d gone into the Column Street Baptist Church and had a cup of coffees, which is amazing.
Mark McRaith: And I love it because there’s a nice patio out the front and we sat in the sun, but it’s funny thing at the front of a church, isn’t it?
Bob Aldons: So, do you go there on Sundays?
Mark McRaith: No, I don’t.
Bob Aldons: Oh, okay.
Mark McRaith: I do my religious time midweek out at the flat light.
Bob Aldons: And that’s there. Hey, Mark McRaith, thank you very much for talking to me about what’s in your garage.
Mark McRaith: Thanks, Bob.
Bob Aldons: And, as soon as we get this edited and chopped up, I’ll be sure to let you know that it’s on iTunes.
Mark McRaith: Okay.
Bob Aldons: And on our website as well.
Mark McRaith: Thank you.
Bob Aldons: Thank you.
Mark McRaith: All the best.