Attempting to Plan

Big ideas or small ones?

Tue, 30 Apr 2013 22:56:00 +0100

“The way Page sees it, a 10 percent improvement means that you’re basically doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed not to succeed wildly.”

This is a quote from an interview with Larry Page in Wired magazine I read a while back.

Often in what we do for a living, we are getting clients to get to the 10% – if not less. Another quote from a strategy director that I work with, nicely summing up the current state of advertising:

“If the marketing director could have a guaranteed gain of 2% share, or have the chance of gaining 10% share (but potentially cede 10%) – which one do you think they are going to choose?”

The current environment means playing safe. There is a clear parallel with Hollywood – re-boots and extensions of guaranteed cash cows (the Fast and Furious 6, the extension of the Star Wars franchise – not to mention the desecration of Yoda in Vodafone ads, comic book adaptations, the Hobbit two and three, more Avatar, some terrible looking Tom Cruise sci-fi…I could go on).

In the excellent ‘All the right moves’ by Markides, he illustrates the battle of the innovator versus the copy cat using Xerox and Canon as examples. Once a new category is created by a brand, competitors enter the space until ubiquity of said product becomes a commodity. Incremental improvements from all parties lead us to an effective stalemate. Once a product becomes a commodity, the margins available in that category gradually decrease (price is the final war that can be waged). Until finally existing in the category, regardless of efficiencies that are gained over time, becomes barely profitable.

When Apple entered the mobile category, it turned it upside down. As Samsung has caught up, who could say that Apple is the clear leader it once was? Everyone waits with baited breath as they release the same shape phone with updated features and a faster specification. Incremental improvement in effect, of which there are many more examples.

Advertising is supposed to use creativity to generate ideas that can help commodities mean something more than they actually do. The reality for most clients is that the 10% is hugely important, and the true partners are helping their clients make those leaps into 10x – leaders and creators of entirely new categories.

But advertising agencies and their product now feel as if they are commodities themselves. It’s hard to find anyone saying anything new. Just different shades of the ‘we can do everything/we’re platform/channel agnostic’.

An industry that prides itself on it’s creativity should be generating 10x improvements on our work or at least on the agency model, or what an agency does. If we can’t do it for ourselves or for our industry, what does it say about our ability to do it for our clients?

Or perhaps the undeniable truth of any industry over a given period of time has finally come to pass: commoditised advertising produced for commodities by commodities.

It could all change tomorrow. Maybe one of those clients will buy one of those 10x ideas, instead of buying a 2% one. Ultimately, I guess that’s what we stick around for.

"I wouldn't let a planner near my boardroom"

Thu, 14 Feb 2013 22:06:08 +0000

"I wouldn't let a planner near my boardroom":

Taking it back to first principles with the APG. Worth a watch.

Reset

Sat, 02 Feb 2013 10:24:00 +0000

They say a computer is only as smart as the people who programme it. We can’t ever programme a computer with consciousness, because we don’t understand it ourselves. To programme such a thing, we need to understand the bottom of the consciousness iceberg – the 90% of unconsciousness that exists behind the scenes.

A computer is a logical machine. A series of 1’s and 0’s. But your computer has good days and bad days. What’s most telling about the fallacy of computers as logical machines is their inability to run without re-starting. Eight to ten days in regardless of sleep, they get sloppy.

I’m talking about your regular home computer. Like your regular person. Collecting fragments of information. Storing them in odd locations in their memory. Slowing over time, as more and more things start needing to be processed. They may ‘have a lot on their plate’ – but they’re made of plastic and metal. Yet the still end up leading to irrational, slow decisions. Freezing up and slowing down at crucial moments, until they stop altogether. The infinite spinning mac ball, or the blue screen of death.

We hold down the power button. Pull out the battery. Unplug the cord. Maybe even leave it for a while too cool down, if it’s been overworked for too long.

It get’s a rest. A reset.

Not a standby. Not a ten-minute relax. A full on, switch off.

What are human brains, if not the worlds most advanced set of 1’s and 0’s.

What are cigarettes, drink, and drugs but not the ultimate pulling of the power chord. The doing, and the being - not the thinking. The mechanical parts keep moving, spinning, whirring. But the RAM needs a hard reset. The fragments of memory get erased, all the to-do lists, the social conditioning, the un-replied to-emails, the missed calls and text messages, the restrictions and the obligations. The death of the very noticing of what is going on, the innumerable millions of connections that overflow our CPU.

The electronic sounds that process out all of the complexity, whilst we roll around on the dancefloors or in the streets, jumping, walking, traipsing. Going back to MS-DOS. Surrendering our feelings and our rational ability to do anything but keep at one thing.

Only to awake the next day. Our fans whirring, as we feel the pain of an excessive overstretch. The inability to move and do, the enforced relaxation brought onto us by our bodies and our minds. Tinged with a slight loss of memory of the night before.

Maybe it’s best if we do lose all our half read browser windows, our half started e-mails, our endless selection of open widgets.

A computer is only as good as it’s maker. But with all the screens in our world, did we make our computers like us – or perhaps they have made us more like them?

Modern data-ing

Thu, 31 Jan 2013 14:28:00 +0000

Modern data-ing:

How one woman used maths to find love. An interesting take on how building personas using data works.

Contra Weigel

Wed, 30 Jan 2013 00:14:00 +0000

This is a post in response to an ad. The ad in question was for a job as a social strategist at W&K which was featured in an econsultancy article, that quite cheekily linked to this.

The offending slides themselves are by W&K Amsterdams very smart head of planning, Martin Weigel.

It’s an interesting set of thoughts which posits the Byron Sharpe (yet to read it myself) ‘How Brands Grow’ theorem. Buyers are fickle and have a repertoire of brands they buy from. Getting light buyers to buy your brand is how a brand grows. Simple, right?

Lots of traditional ad-types hail this way of thinking as a saviour against the social media kerfuff of ROI-less ‘engagement’.

However, in this heroic view I find myself a little upset. Yes, the role of advertising is to get people to buy stuff. The more stuff that get’s bought, the bigger the brand. But a lot of the subtlety of communications is lost if you think driving reach leads to brand growth. There are lots of instances where it’s smarter to get people who already buy your brand to buy it again (reinforcing an existing behaviour rather than trying to change behaviour). A lot of modern CRM is predicated on this, in fact. Modern CRM that happens to also include social media.

There are lots of examples where simply ‘acquiring’ new customers won’t work. A leaky bucket is a sure fire way to waste your budget.

I remember being in a meeting as a young lad, and hearing the line ‘BMW have been advertising to their buyers for years’. It’s stuck with me. Having worked on an automotive account, I can attest to the well thought out customer lifecycle being key to the lifeblood of a car manufacturer.

A car is the second most expensive purchase you will make after your house. An advert may trigger and emotional desire, but it is only the first step in your journey to buying something of such substantial value (for most of us, anyway). There are a huge number of influencers along your journey, from other owners to category experts.

We know that humans post-rationalise, and that we are driven largely by emotion (cf. Kahneman). However this also means that when being spoken to, the context in which this is done and how is incredibly important.

For example:

Knowing if I’ve had a lot of problems with my car and providing re-assurance, knowing when I bought the last two cars and making sure there’s a tactical price offer on the table before I look elsewhere, and even knowing whether or not I’ve complained on a forum about my experience are all powerful triggers.

Customer service – in any channel – is still communications. It’s an old saying from the Naked school of comms that has become popular once again, but ‘Everything Communicates’. From the toilets in your dealership, the test drive request form on your website to the way your call centre answers the phone.

Earlier in my career working on blood donation campaigns for the COI, it was clear that TV was a very expensive medium by which to trigger one off donations when stocks were low. Timely reminders to a core group of people who would donate regularly was a far sounder strategy, especially in terms of using owned or earned media as cost efficient channels. Facebook at the time was a particularly new channel, but the opportunity for social for this particular challenge are clear.

Again, having worked on a banking brand – to generate investment in to new funds, it’s a lot smarter to speak to people who you know can invest and have already got an account, rather than those who would need to switch or open a new account.

Lastly – for web companies such as Amazon, data and re-marketing are essential. Staying top of mind and recommending alternative products bespoke to me isn’t something that traditional comms is capable of doing. Yes, a TV ad may get me to the door – but how much of the Amazon brand has been created by advertising versus ‘engagement’ with it’s customers via multiple online channels?

Arguably, for FMCG brands (the Coca Cola’s of this world) and many other sectors the concept of ‘light buyers’ is perfectly valid campaign or burst-lead approach. But for brands such as Samsung, their product driven market strategy has trumped a lot of their arguably forgettable advertising. While Apple – known for it’s customer service – is yet to ‘go social’.

Vilifying engagement with Facebook ‘fans’ is akin to saying that you’re only going to invest in direct marketing. Channel selection has got bugger all to do with ideas or growing brands. And we can all cite a million examples of campaigns that fail to exact any engagement, like we can cite a million TV ads that have done worse to a brand. Come on now, Martin.

Therefore the aforementioned slides should probably have read ‘invest in your product before you invest in your marketing’ to really be a bible to live by. If you’re good people will talk about you. If you’re bad, people will talk about you more. If you’re boring, people won’t talk about you at all. True of people, true of brands.

Which all just goes to show that all data, the decades of research based on traditional advertising techniques, the IPA databank exist for one reason: to help us planners tell the story we need to tell, to solve the problem we’re presented with – of which there are many, not just one.

Decentralisation or The Death of the Middle

Tue, 21 Aug 2012 15:41:00 +0100

My head of planning big brain type guy, Tom, recently wrote about ‘The Death of a Middle Man’.

Essentially, talking specifically about the ‘middle’ man role that agencies play, and how that’s getting smaller and smaller.

Perhaps the title of the article would have been adequately named ‘The Death of The Middle’. Partly because it sounds better, partly because it’s more politically correct, and partly because the middle is much bigger than just us advertising folk.

The seed of this core thought lies in the concept of decentralization. What Tom refers to in his article is the power structures of mass production being reduced back to a much simpler one-to-one relationship.

The closed doors of many industries are being flung open as consumers and creators (and their hybrids) come together to destroy existing ways of working in favour of lean production and expertise sharing facilitated by the internet.

Platforms, technology, distribution and business are all affecting this shift. None of the examples below are particularly new, but provide ample proof

Platforms

Kickstarter is now used to fund this kid. He wants to create a better 3D gaming experience. So he gets to a concept stage by himself, and rather than having to try and raising funding from third parties, he can kickstart his project to get it into production. This is just one recent example of ‘the middle’ being cut out. Kickstarter is doing this everyday.

Technology

Thingiverse is a great example of the ‘maker movement’ that is at the point of bursting onto the consumer radar: 3D printing. Google are printing 3D pasta in their canteen, Peter Thiel has invested a shed load of cash into a company that is 3D printing meat. We’re basically at the point of Star Trek replicators being real. 3D printing is incredible disruptive in the same way digital music has been. Now you can simply copy & paste objects.

Distribution

There has been a lot of chat about the death of the high street (and I do agree with Richard Huttingdon’s thoughts on this). But reading Wired lead me to look at the model that Rakuten have – the virtual shopping mall. Rather than destroy local business by centralizing (as arguably Amazon, with their drive to stock every product on the planet, are heading toward), Rakuten gives local producers a dedicated e-commerce manager to help optimize their online store. They charge a monthly fee for shop owners to use their platform and take a cut of sales (which, as I mentioned in another post, is something I see as a more viable end game for Facebook).

Content is already ahead of the curve with this, with people like HBO releasing an app for connected TV’s (potentially side stepping the typical on-air distribution model – something that the smart chaps at DIG spoke to me a while back about) or the new series of A rrested Development being released on Netflix in one go. Arguably you could say that the latter example is more about shifting power into new hands, but the big fat middle of the broadcasters is undoubtedly under pressure.

Business

This was perhaps the tip of the iceberg in c.2006 that we’re starting to see the rest of the above resulting from. The initial stage of decentralization is in the marketing sphere – allowing customers to directly feedback to brands (thinning down the middle of market researchers). Co-creation projects like the Cussoo initiative for Lego by my fine co-workers at Naked Japan are a clear example of embodying decentralization – R&D speak to the consumers and give them what they are after. No guesswork, no agencies, no expensive focus groups. The examples for this type of work are a plenty.

There are lots of conversations floating around online about the Internet being a nascent stage. What grips me the most is the means of production being decentralized. This has the same implications for manufacturing of consumers good as P2P file sharing did for music.

Every film about the future that I’d ever seen as a kid made the future seem like a far away, semi-comical fantasy. But now? Hover boards - see quantum locking. Controlling things with you’re your mind? See Emotiv Headsets. Space travel? Welcome to Mars.

I haven’t seen any films recently that have had the same effect when it comes to generating that new feeling about technology - the game hasn’t moved on in terms of sci-fi. Though the potential of Gattaca and Alien are yet to be fulfilled.

My shallow conclusion? The future is now, and it’s exciting. I look forward to 3D printing some tasty vegetarian delights in the near future.

The digital nostalgia of Instagram

Sun, 24 Jun 2012 19:45:00 +0100

What’s so magical about Instagram, I wondered. There is something about it’s retro styled set of filters for photos which has caused it to be used by millions.

At it’s core, Instagram adds a layer of old fashioned imperfection or ‘colour’ to a clean cut, sparkling and crisp digital world.

In the past, watching grainy videos or looking at old photos with sun spots, conveyed a sense of time passing, embodying a richer meaning filled with associations.

Then new technology came along and represented everything as clearly as if it were now, in all it’s inglorious reality. Super megapixels plastered all over Facebook.

Instagram gives us power over the beautiful feeling of nostalgia - capturing and adding emotion to the memory of a specific time and place. Creating something that would otherwise take years to arrive. A shortcut to instant gratification that we are so accustomed to today; satisfying a longing for added meaning to something that would otherwise be a flat representation of the recent past.

Technology has given us the ability to let us self author these emotions into our lives, adding texture to the ones and zeros. I wonder if the future will give us software that gets even closer to representing the human experience, not as it is, but as we (want?) to feel it.

The Rare Internet

Mon, 16 Apr 2012 22:06:00 +0100

I was reading an old issue of Wired (I have an unread stack) and stumbled upon Russell Davies article - ‘Where is value now that rarity is extinct?’

An simple example of my definition of rarity: gold and other materials are scarce, of limited supply, and therefore valuable. Russell’s point is that in a digital age where everything is code replicated (as with music), where does value really lie? Novel attempts aside.

Russell subtly refers to the time economy. The value in services can depend entirely the craftmanship (skill+experience+time) that it takes to create the ‘thing’ in question. Thereby increasing it’s value.

It’s one and the same really (things that take a lot of time and skills that are in short supply - e.g. UX freelancers - cost lots of money). Capitalism in the most basic of settings.

Something that he didn’t refer to however was the concept of ‘live’. In a basic sense, think about live videos or concerts streaming into YouTube these days. Or premieres of films being streamed into YouTube, football matches into Facebook and so on. The internet has just become another channel for these things, and if you wanted to perhaps some of these could be watched back on streaming services elsewhere. But they are still essentially moments that exist and then pass. Does that mean that they do not have as much value? Perhaps.

As I went through old unread work e-mails a few weeks ago, I tried to click on some video links to YouTube. A fair few of them had been taken down. For rights issues, mainly. What I find intriguing about this is that I can’t find those videos anywhere.

Gone. Poof. Nobody knows when it can happen. Perhaps in the western world, as in the eastern world, censorship is still creating value by blocking access to information that can lead to knowledge. Though there are clear reasons for the rise of SOPA - the complexities of this and Twitter + Google censoring content locally aren’t things I’ll go in to here.

All I know is that it feels like the internet in abundance with all types of content. But I wish I caught hold of some of those videos. Because I might never see them now. Something that isn’t as rare in the digital world as is thought.

How Companies Learn Your Secrets

Fri, 30 Mar 2012 23:39:00 +0100

How Companies Learn Your Secrets:

Target knows their customers are pregnant before they do. Predictive analytics isn’t even the future, IBM paid $1.2 billion for SPSS, a piece of predictive analytics software, in 2010. Some follow up comments on this article here. Worth a read, especially if you add in the parallels between behavioural targeting.

The power of data is manifest - everybody burn your Nectar cards and run!

Gamification and CRM

Thu, 23 Feb 2012 11:14:00 +0000

There has been a lot of talk about the benefits of gamification to businesses and to the world. Turning life into a game to create behavior change sounds like some seriously smart thinking. Especially when it comes to turning activities that are traditionally seen as difficult to get people to do for their own benefit (eating fruit, exercise, watching less of The Only Way Is Essex)

Gamification is interesting because it seems to have been a core element that behavioural economists like Thaler and Sunstein appear to have missed from their bag of tricks. It is also something people have a sense of through the huge amounts of time that men have spent playing Call of Duty, and that women have (generally) watched men doing so. Or those who have read about gamers dieing in cyber cafes due to forgetting to like, eat and stuff.

Some brands have already entered this space. VW pioneered in this area with their quirky ‘Fun Theory’ project. Nike have recently updated Nike+ to include online space to set targets, and the Kickstarter funded Zombies, Run! Application is a game which has zombies chasing you on your phone, while you run in the real world. Lots forums have successfully used badges and points systems to reward members for achievements (e.g.for helping other people out). Apple have been doing this for quite some time. Badgeville tries to transport this functionality on to websites to reward interaction. Scavngr piqued the ad worlds interest for at least 7 minutes, and who can forget the trend toward alternative reality games a few years ago? Finally dropped by brands due to the potential repercussions. Though there are different types of gaming mechanics, what is really interesting is how gamification interplays with CRM.

Advertisers have been gamifying behaviours for a long time – mainly with CRM programmes. Tesco clubcard giving people points is probably the most famous iteration of this. Though primarily used to reward customers in exchange for huge amounts of data about their buying habits, today the opportunity to sell this in as added value when they extend into other sectors (banking, mobile etc) is huge. Air miles are another good example brands (mainly credit cards and airlines) who publicly reward customers with added value.

This appears initially to be slightly different to the social world of achievements and leveling up in games, forums and so on. However having had some exposure to the clever world of direct marketing and seeing the detail that goes into communication plans it is clear that there is an direct link.

For instance, I will be classed into a particular type of consumer if I spend X amount (gold, silver, bronze). And throughout my lifecycle I’ll be attributed a LTV (lifetime value) – something which indicates whether or not I’m eligible to receive more leverage in terms of discounts (if I try and leave O2, for example, they will know how much I can be offered to stay from the calculation of how much money I will continue to spend with them if I stay). I will also be offered discounts, incentives and so on dependent on how far away I am since my last purchase or how close I am to renewing my subscription.

What brands haven’t done with all of this information is make this fun. Those that are rewarding customers with a £1 = x points type offer tend to be the most uninspiring. Rather than rewarding particular behaviours and injecting personality into the rewards, most brands focus on the financial return to the individual. Why else would people get involved with a loyalty programme? But this thinking is akin to saying ‘why do people like Facebook pages apart from winning stuff?’ Having been privy to a Facebook focus group where people said that they most valued free stuff and discounts (we had told the client this, but they insisted on paying for a focus group anyway) you can see why brands think they should.

But focus groups don’t tell you the answer to human behaviour, they just tell you the end result of it. Just because people have been educated by other brands that incentivised them, this doesn’t mean that this is the type of consumer you want to spend money acquiring. In the same way that some agencies think that people who are reluctant to shop at a store will only do so for a financial incentive. It’s a damn good reason to, and has worked for many years, but building a programme that injects fun and competitiveness into can provide benefits to brands.

GiffGaff is an enormously powerful platform that uses people to be its ambassadors and rewards them with benefits for doing so. It awards points and puts people into leader boards. Ultimately this competitive element helps drive activity on the site. Community platforms like My Starbucks Idea and Dell Idea Storm, are halfway there too. These provide ample scope to get genuinely passionate fans of a brand to spread the good word (and give you some free ideas).

Imagine if by being a member of this community you were rewarded by the actions of others. For instance, if the community between them have answered X amount of questions between them, they receive a trophy (and some freebies). This then educates people and encourages participation in a different way – like in forums when you can receive kudos and points, by helping others you are helping yourself. What about allowing people to put themselves in teams? By being the team that refers the most people you receive a reward for the team to share between themselves.

Like with most things, this isn’t right for most brands. But building CRM platforms as well as programmes is something worth considering.

Image from Technorati

Planning the future: what should your next job be?

Wed, 15 Feb 2012 23:43:00 +0000

I’ve recently added a section to the blog which is called ‘Links’.

I’ve linked to some planning blogs that I’ve been reading of late. There are some pretty interesting opinions in them that have shone a light on my small brain so take a look.

I’ve been reading those, scouring the trade press, downloading PDF creds of fancy agencies, looking at ‘new’ job titles (shopper marketing planner and content planner are gaining traction) and asking smart people at Engine (where I work) lots of questions. All in a bid to understand where agencies are going. In a big to know where, as a planner or strategist, you should go next to be one step ahead of the next curve.

It helps to think about what clients are going to want and if enough of the clients you want to work with are likely to be thinking or structured in the same way (clue – they won’t be and it’s hard to know, but worth stress testing if you can).

Things are changing quickly. Should you start trying to be a digital specialist? In search and SEO? In mobile? In smart TV? In strategy? In multi-channel content planning?

Or should you be going to a big ‘integrated’ agency that is buying in talent from niche planning disciplines (CRM, social, data) and getting them to sit next to brand planners so magic happens? Maybe you should be one of those planners?

Or do you go to a channel agnostic agency that is able to do everything at a strategic business level but not really implement an eCRM strategy, your media buying and your social media customer services?

The view I have of client side businesses is that PR, Customer Services, Acquisition, Marketing, ecommerce, etc all sit in silos in an organisation (meaning territorial budget splits, disparate business objectives, lack of ownership or resource on projects that cross disciplines). If you agree, then the smart money will always be to specialise.

But most planners (based on a sample of mainly me) have at least two things in common that I’ve seen:

1: We aren’t in this just for the money (else we’d work in management consultancies and solve problems wearing suits)

2: We like to learn and think. To the extent we are greedy for knowledge.

This leads me to think that the thinkers (no pun intended) in the agency aren’t going to be happy doing just one discipline. We need to scratch that itch to learn. But unfortunately that can put us at odds with the services needed by a marketing client.

One thing Planners also have hampering them is that, unlike some creatives, they are tied to one or two accounts (in my limited experience that can be the case, though you can have creative directors pinned to key accounts). Exercising a deep knowledge of a category but limiting learning and applying knowledge from other categories.

The other is specialising. Brand planners (in branding agencies) do the interesting work at the top but don’t write the briefs for the TVCs. As a social media specialist, we often get handed the ‘matching luggage’ brief-

Client to social agency: “So, the creative agency who lead on this have written this script. It’s going to be shot in 17 countries, and has a budget of £15m. You’ve got £50k to extend it in to social media”

Social agency: “Erm, we’re not sure this really works for social. But here’s a Facebook app”

Wouldn’t it be lovely to have a sit down with the planners and deciding on an actual idea that works for everyone?

No. Because the joy of being a ‘lead’ agency means you don’t have to. And besides, different agencies, different creatives, different bottoms lines and so on. But it has to match. So that’s that. Go to a big agency and sit with other planners and learn from them and create amazing through-the-line campaigns.

But hold on.

The big agency with all those planners makes a lot of money from making TV ads. Their creative’s write scripts and copy. And if you suggest some social media approaches, aren’t they going to be cheap? Aren’t they going to piss off the social media agency that has been briefed as well? But isn’t the comms planner so far removed from buying that the media agency actually would be better off planning that part?

Integration explosion. I’ve never seen the above in an agency – but I sure as hell haven’t seen regularly integrated campaigns from agencies that have a digital and TV arms (two sets of ECD’s and Planners eh? Well that makes it easy. An ad AND a website).

So go to the agency that just comes up with the ‘idea’ in the broadest sense of the word. That briefs out the other agencies. But then, what the hell are you really learning? Should planning really be separated from a discipline? And will a client pay for that when it’s cheaper to buy all their groceries at the same store (the one where they pay a retainer)? Because you may be solving a business problem, but you can never really know the nugget from a particular discipline that could be the lead. No wonder some clients do the planning themselves these days.

I wrote this a week or so ago, but got distracted from publishing due some videos I chanced upon by the very Saneel - head of innovation at BBH. I’m jealous of his brain, and I highly recommend watching these videos here (he covers lots of similar thinking in a much more concise way, I’m sure.)

Conclusion TBC.

Future gazing at Facebook

Thu, 02 Feb 2012 23:52:00 +0000

So, amid cries of marketers of ‘this is only the beginning’, let’s future gaze on some possible scenarios for Facebook (not forgetting Google, of course!)

Zuckerberg has only just started

Facebook will undoubtedly hit a billion users soon. Despite lagging growth in developed markets like the UK. But this is a generational issue; those who would adopt have - slow growth will continue but Facebook will inevitably become the default platform for the next generation.

A huge amount of users are visiting on mobile. This is currently not monetised but an ample revenue stream.

And Facebook is sitting on a user database larger than the population of most countries. With so much data being collected and a growth level exceeding anyone’s expectations, the mastermind has only got to figure out how to monetise the social experience correctly and Facebook will command an even larger amount of ad revenue.

A key to this may be Zuckerberg’s approach to incorporating content on Facebook – use the content of a third party (e.g the Guardian) which will advertise with traditional banner ads within Facebook, and possibly get a revenue share from their ads.

Not only does the Guardian benefit from the added impressions of being where everyone spends all of their time online, this is further increased by the fact that people can publicly see what others are reading. This is incredibly powerful; I have read stories on the Guardian that I never would have looked at except for the fact that several people have already read them and I can see this in my newsfeed. Not only this, some of the stories are up to three years old – providing a great source of revenue from content that would potentially have been ‘dead’ to the Guardian normally (it turns out Dr. Dre’s son died in 2007, though I was shocked to see it in my news feed a month ago). This is traditional news content with true virality – something only before seen on Twitter.

With over 60 applications that now push into the social graph, the potential for Facebook to truly become the Internet are tremendous.

The revenue model that this could create is a truly ‘social’ monetisation route for Facebook that doesn’t involve an intrusive form of advertising that consumers aren’t used to. Imagine a revenue share for music tracks that are listened to because someone has clicked from a newsfeed? What about a revenue share from subscriptions? Apps are part of culture today, and the route to start licensing usage of the Facebook platform to services such as Spotify could also be an option.

But this is potentially only the beginning of a much smarter approach to monetisation for the ‘book.

The End of The Beginning

But ultimately last click revenues or post-impression conversion data from Facebook have been what has driven Facebook’s success to date. Are marketers still buying this data as proof of the value of investing in Facebook ads? Because they shouldn’t be.

Facebook is a complex product and doesn’t fit into the same purchase stage as search. Searching on Google is simple and fits in with a intent to purchase behaviour that can be recognised (dependent on the brand, generic or long tail terms you want to use, there are softer ‘consideration’ traffic driving measures too, but if i’m going to buy something, i’m going to start with Google).

Facebook is a fundamentally social product trying to work backwards to monetise. This puts it in a much more difficult position than it’s fiercest competitor - Google.

With a market cap 23x revenue many people from the dot com era are casting their minds back to 1999-2001. Facebook is actually turning over a profit but the perennial fear is that it could turn in to MySpace or be gazumped by the next Facebook. With mobile being a longer term revolution in media consumption, and mobile social networks like Instagram gaining traction, this is a firm possibility.

This also relates to an article I read the headline of recently (but now cannot find) which stated that micro-networks were the future. Smaller, more engaged and dedicated followers are fundamentally more valuable to brands. Someone recently mentioned an article to me that stated Pinterest already drives more traffic from it’s site than any other social platform – with a user base in the UK of under 200k users this makes complete sense!

Conversely, if we look at Facebooks edgerank, a fanbase of millions may only result in a few thousand people seeing a status update. Large Facebook pages are an amorphous mass of people nigh on impossible to segment. And if not that many people see your message, and you can’t have a true one to one relationship with each person, you are stuck in a no-mans land between direct marketing and TV.

For instance: there has been a huge shift in how some social agencies have started looking at Like gating – why should we force people to like a branded page by giving them free stuff? Share of voice may be important on Facebook but fundamentally these people are more interested in winning stuff, and if they weren’t now they’ll expect to. Does this cheapen your brand? Building a Facebook page with a true content strategy that results in only people that you want to speak to Liking your page, with a real focus on engagement over Likes, and a focus on niche passion centres with passionate fans = great. But in the race for ‘Likes’ is it too late for the big brands to start again?

Lastly, if we think about the most successful and one of the most valuable brands in the world to date, we’ll find notice something puzzling. Apple doesn’t fully participate in social media. They don’t respond to negative comments online. They aren’t on Twitter. They have Facebook pages for particular products (App store, iTunes) but use those pages as content channels – where’s their big social media campaign? Where is their openness? Their ‘make my next TV ad’?

This leads me on to remember the classic social media question, now rarely asked: ‘is social media right for my brand?’ Now everyone wants to say yes and build a Facebook app, and brands are getting some poor advice. How long before they wake up to the ROI question? Some brands may have cracked that. But if you don’t sell clothes or groceries online, how do you measure success?

Measurement is something that Google has in it’s DNA. So watch out, Mark. You better get back to work.

Big Brands, Big Data, Big Money?

Wed, 01 Feb 2012 00:14:00 +0000

A housemate of mine who has been very successful in the business of taking an online budget of X million and bringing back a return of 3 times X Million and I were having a chat. Yes, he does earn lots of money.

We spent a while geeking out about online commerce and weighted cross attribution modelling (paying for affiliates as a percentage relative to being first or last click in the journey, while relating the remaining budget to the intermediate channels accordingly). Interestingly, his agencies have SLAs to hit in order to be paid in full – forcing them to work hard optimise their online channels. I wondered if the same thing would happen to creative agencies…

We then spoke about how Google was effectively coaxing brands into using Google+ and whether they were ever really going to steal share from Facebook.

We agreed that wasn’t going to be the case (I personally don’t think Google’s launch strategy was correct - critical mass is going to be hard to hit. Facebook could always balls it up though.) My housemate mentioned that quality scores could even be affected by using Google Analytics tracking on a site as the tags are read by Google’s crawlers (conspiracy alert for all you Matt Cutts fans). G+ is a no brainer for brands to get involved with given the recent developments – forcing them to look at building communities. Using the +1 button across properties is going to end up being a far more useful marketing tool than a social network tool (we always knew it was about data). Data from emails, from videos watched, from dwell time, from networks we interact with, from searches we do. Wowzers. I’m sure G+ will be added to Google Analytics tracking – probably (authoritatively) quantifying the value of social way before anyone figures it out for Facebook.

All of this was interesting to discuss given the online retail environment that my housemate works in. Ultimately, as a ‘store’ online works seamlessly globally and turns over a huge amount of profit compared to a bricks and mortar counterpart. There is the same amount of need for experts in e-commerce as there are for in social. But one makes a company a lot more money.

Or does it?

Arguably that depends on the nature of your business. Transactional high street brands have got no choice but to be multi-channel to maximise their profits. But the high street itself is in decline. Understanding the right channel mix in digital, when you also add in the volume of stores that you have (and their footfall, digitally measured) as well as the number of catalogues you may send out, you can start to see where you need to spend more money. And that will stand you in good stead as the next generation gets used to not visiting the high street. The person we are trying to reach is likely to also be affected by reviews, customer service levels online and so on. Ensure that you fix these problems and get your customer service department some social media training (this ties in nicely to another post that I intend to write, regarding snakes and ladders. Honest.)

But what if you are a brand that doesn’t have a high street store. How does all of this affect you?

Ultimately, the channel journey will always be more complicated than we think it is. But what if you are a brand that doesn’t sell your product directly? What about if you manufacture mobile phones or cars?

Being smart about channel selection is incredibly important. It’s fine to announce yourself on TV. But one of the most common mistakes I see brands making is having incredibly generic tone of voice in updates on social networks. You may want to sell a cool sporty 4x4, but if you talk about the award you won for best tissue holder then you’ve lost me. If we all do end up spending our lives glued to the Internet and your tweet becomes my 30-second spot, then you’re doing yourself a disservice. Watching you on TV may make you look great, but once we get to know each other I’ll realise your just like all the other girls.

For big brands using the right channels on as well as offline is still a dark art. What happens when potential customers go offline? Trying to unify customer data from purchase behaviours to social interaction to offline reach and frequency is always going to be a challenge. But though data has some answers - the art of building brands is still important. And it shouldn’t be dismissed in digital. It’s the mission, and the thread, that ties it all together. After all, no one buys stuff from strangers.*

*eBay being the clear exception here, of course. But that’s a brand in itself isn’t it, you big know-it-all.

Building brands with products: a reminder.

Thu, 26 Jan 2012 00:09:00 +0000

It seems to me that there may be a shifting in how agencies can start to create real difference in how they operate.

The shift is actually one that appears to hark back to the ‘(g)olden’ days of the advertising world.

Product development was something that advertising agencies were routinely asked to help with. They knew how to read audiences minds with their focus group wizardry. They knew how to asses the market. They could spot the opportunities for a brand to exploit new categories.

JWT will credit themselves with putting the hole in the Polo. The Lynx ‘Click’ fragrance was based on a campaign idea (one i’ve never heard of, but that involved giving men clickers to count how many women smiled at them during the day, or some such bollocks. You can read about it here and here). Outsourcing R&D or at least being able to push this kind of product development to a client and getting it signed off is rare. But when it happens some agencies even share IP with a client on a product (as well as establishing the other P’s - price, promotion, and placement.)

Advertising often seems to result in coming up with an ad campaign. Admittedly, in an era of oversupply in all categories, branding & saliency are even more important differentiators. But that seems to have defaulted to making an ad of sorts, primarily driving fame for agencies and clients by getting them on to TV. This does some of the job, but if i’d hired an agency to solve a business problem, then i’d be dissapointed if they came back with just a script.

In the age of digital where the landscape is moving faster than the marketing director that didn’t use e-mail at school can understand, agencies have again started looking at new product devlopment. If anything, innovating in digital is easier – the key with this is finding clients who understand how digitising their products and creating ecosystems to provide continuous engagement and business value - by making the product the advertising.

Nike+ is an obvious, text book case of this. The value of the physical product is even surpassed by the value of the iPhone app – Nike has branded my running experience, gamifying me to strive towards being a better runner. Pretty on brand. The Fiat 500 eco:drive platform creates huge amounts of data which can actually save me money. Fiat didn’t come up with the Prius, so this is the next best thing – crafting behaviour change. The soon to be Nokia x Burton snowboarding product rose out of Nokia asking creative, smart types to hack their phones (not their next TV ad). Anomaly go as far as to build brands themselves. Berg and Ideo use ‘design thinking’ (a fancy term for simplification, I’d say) to disrupt categories, and create products. In the absence of an client work in the UK, Dentsu are releasing beautifully designed products (with Berg it seems). Let’s not forget BBH Zag - a BBH spin off created to do the very things discussed here. Russell Davies & co started the Really Interesting Group to play around with the ‘intenet of things’. And W+K have launched their tech incubator in a bid to help out startups and build relationships with Silicon Valley (and so their clients can be first on the scene of the next big thing). Agencies should be incredibly valuable and adept in this space - bringing fresh sets of eyes from people who work across multiple categories on to a problem should really produce the type of disruptive thinking clients need.

Profit sharing aside, creating value for clients using products is the best marketing tool any agency could wish for. When Kevin Roberts of Saatchi and Saatchi fame released his book on ‘Lovemarks’, I imagine even he was even surprised at the interest he would get from potential clients. It’s one thing to write a book about brands. But creating them, or creating new products is an invaluable illustration of an agencies abilities. I guess that is part of the reason that JWT has been making ads for Polo for over fifty years. It would be a shame to get rid of the agency that helped create your product.

Now all you have to do is find a client (or even an agency) willing to let you tinker under the hood.