Dear Reader,
Last night I spent a memorable evening with a group of entrepreneurs in Chicago sharing their biggest challenges and victories from turning their passions into profitable businesses. Today I'll be sharing space with a group of senior marketers at the AMA Executive Marketer Summit where we will try to unpack some of the disruption facing the marketing industry and how leaders are preparing for that future.
These sorts of discussions are one of the best arguments for why IRL events still matter. There really is no substitute for getting into a room and just sharing space with people who face the same uphill challenges as you do. In other stories this week, you'll read about the tricky future of margins and markups, why the world may still need royals, how Millennial men became obsessed with their "hotspan" versus their healthspan and my usual weekly book and media recommendations.
Enjoy and stay curious!
Rohit
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This Week's New Videos ...
The Future of Markups and Margins Will Be Harder to Justify
Inside a new retail concept store called The Markup Marche, the "exotic thirst-defying hydration vessel" is the flowery marketing language used to sell a humble coconut. The market is currently live in six cities around the world: Toronto, London, Paris, Sao Paolo, Mexico City and Melbourne. The point of the store is to expose the often ridiculous 700 percent (or higher) margins that fashion industry brands rely on. An "all-natural energy boosting bar" retails for just $98.50 ... and it's actually a banana.
This question of value and what sort of markup is reasonable when thinking about buying or selling anything was a big theme that came up this week. Also this week, big advertising holding company, WPP, reported not just a drop in revenue but also lower margins, sparking some major introspection from industry insiders:
"What drove the decline? Reduced scope of work, fee pressure, or outright budget cuts? The answer determines whether WPP has a cyclical problem or a structural one
Scope reductions are cyclical: clients buying less of the same thing. Budget cuts are cyclical: economies contract, marketing contracts with them. Fee pressure is structural: clients paying less for the same thing. That is a different animal entirely. It doesn’t respond to patience or strategy decks. Winning accounts while revenue drops is the diagnostic signature of a business defending share by cutting price. Every account won on tighter terms resets the floor for the next pitch ... The harder task, the one WPP’s leadership avoided for a decade, is rebuilding a reason for clients to pay full price."
So in one story, a popup market illustrates a growing shift where "more consumers are separating what a product actually does from the story and packaging built around it." In another, service-based businesses like ad agencies where the days of clients blindly paying markups for questionable value added (such as entire field of media buying) are widely reported to be numbered.
The bottom line is, consumer mistrust will likely continue to squeeze margins as anyone aiming to sell anything at a premium will need to work harder to prove they are worth the price they hope to get.
Forget "No Kings," Maybe We Need More MODERN Kings (and Queens)
History has recorded many bad Kings. Kings that have plunged countries into war, prioritized their own glory, unleashed colonialism into the world. In America, the No Kings movement has focused on linking President Trump to this legacy of destructive royalty.
This past weekend, I visited two dozen embassies here in DC as part of the Passport DC event. All opened their doors and illustrated the power of something that seems to otherwise be vanishing in our world (and particularly in DC): good diplomacy. A part of this is the modern role of royalty. In many countries, the current royals are not conquerors or self-promoters. Instead, they are cultural ambassadors and positive forces in the world.
Royalty's relevance today lies not in ceremony or indulgence but in impact. King Bhumibol of Thailand spent 70 years engineering over 4,000 development projects for his country's poorest communities. King Abdullah II has kept Jordan stable and been a force for female empowerment alongside his wife Queen Rania. Queen Mary of Denmark went from an Australian commoner to a Queen fighting loneliness, domestic violence, and maternal health inequality. India's young Maharaja of Jaipur, Padmanabh Singh, uses his global visibility to champion Rajasthani artisans and was recently a viral hit at this past week's Met Gala. Even the often criticized King Charles was credited by the British Tabloids for his "masterclass in diplomacy" on a recent visit to the US.
The world could use more royals doing work like this. The powerful lesson here may be that a title and tradition can serve as a force for good if it can be separated from the corrupting influence of political power. We definitely don't need more Kings (or aspiring Kings) if they follow their worst impulses. But maybe not all modern royalty are a bad idea.
