So I’ve been working on this presentation I’m giving this week on brand vs. utility and have lots of random things I thought were worth sharing (until the whole thing is ready, at which point I hope to share that).
First off, in thinking about utility I came to realize that it’s actually nothing more than a measure of satisfaction (in other words it’s completely subjective). And satisfaction is nothing more than a measure of expectations/needs. If you buy that brands exist in people’s minds then it’s not a stretch to say that utility is actually a measure of brand.
Now why does this matter? Well in a non-digital world, interaction costs were high: You had to purchase products. In the digital world, they’re unbelievably low. Nothing is ever more than a click away online. In the offline world you had to get over high interaction costs by creating needs/expectations and you did that mostly with advertising/communications.
That’s not really necessary anymore, though. If a friend sends me a link I usually click on it. It’s easy, it’s cheap and worst case scenario, I can just close the tab if I don’t dig it. If a friend recommends a product, on the other hand, it requires a bit more thought and often a trip to the store (another major barrier to entry). In fact, it’s funny, thanks to Amazon.com books have moved to little-to-no interaction cost. If someone recommends a book online I usually just go and add it to my wish list and then purchase it next time I want something. They’ve cut down almost all the barriers: Wish list helps me remember everything, free shipping on orders over $25 means I’m more likely to order an extra book off the list and stored credit card/address means I don’t even need to enter any info other than password.
What does all this mean? Mostly that the role of brand is different online than it is off. Rather than creating needs it sets expectations. The way something is designed, the things you hear about it play a big role in the utility (aka satisfaction) you get from the site. Online you don’t need to create needs since it doesn’t cost anything to try something new.
As usual, Umair has beat me to the punch/helped me crystallize much of my thinking. In The Shrinking Advantage of Brands he writes (sorry for the long quote . . . )
Now, for the economics of an industrial era, branding made sense. Interaction was expensive — so information about the expected benefits of consumption had to be squeezed into slogans, characters, and logos, which were then compressed into thirty-second TV ads and radio spots. The complex promise of a Corvette, for example, was compressed into shots of cute girls, open roads, and lots of sunshine.
But cheap interaction turns the tables. The cheaper interaction gets, the more connected consumers can talk to each other — and the less time they have to spend listening to the often empty promises of firms.
In fact, when interaction is cheap, the very economic rationale for orthodox brands actually begins to implode: information about expected costs and benefits doesn’t have to be compressed into logos, slogans, ad-spots or column-inches — instead, consumers can debate and discuss expected costs and benefits in incredibly rich detail.
Anyway, I’m still thinking through a lot of this and would love feedback (especially before I give this presentation on Thursday). Thanks guys.
February 25, 2008
Inspired by Michael, here are my open tabs at the moment: Is Greatness a Network Effect, The “Google generation” and emerging web behavior, The History of Visual Communication, The Sum of the Parts, Intrinsic vs. Extrinsic Value, Digg, Wikipedia, and the myth of Web 2.0 democracy and two of my own for a presentation I’m working on (What’s the Big Deal about Attention? & Trust, Brands and Transparency).
If this is worthwhile maybe I’ll do it more often.
February 25, 2008
In a tradition I learned from swissmiss, happy my birthday to you. If you’re around NYC, why don’t you come out and party? Here are the details:
Date: Friday, February 22nd
Time: 6:30pm – Whenever (optional 2 hour, $20 open bar starts at 7pm)
Location: Antarctica Bar, 287 Hudson St (right below Spring Street)
February 22, 2008
This is a plug for my little sister. She is a senior in college and doing her thesis on blogging. In an attempt to learn more about what it’s all about, she’s started a blog and is asking a few questions. If you have some time and wouldn’t mind helping her out please click on over. Here’s what she’s looking to know:
1. Do you blog? If yes, why? If not, why?
2. Do you read blogs? If yes, what is your favorite and why? If not, why?
3. Do you consider the ‘blogosphere’ a community? If no, why? If yes, what kind of community?
4. How does connecting with people online change the nature of interpersonal relationships?
5. Does becoming part of an online community and/or being a part of a new generation of writers change your thoughts on blogging? Why and how?
February 21, 2008
This is madness. “360 users have spent over $250 million on DLC since the console’s launch,” “There’s been just over three million Rock Band downloads on Xbox Live alone since the game launched” and “Microsoft reckon over 100,000 Halo 3 films are uploaded every day, which they say is 30% more than are uploaded onto YouTube.” That’s crazy.
February 21, 2008
This is awesome. A 360 degree view of the A380′s cockpit. I just want to go play with it and pull all the levers.
As a side note, it’s amazing to me how humans seem to have this innate fascination with levers and buttons. I went to the Austin Museum of Art and one of the pieces had a little music box attached to it. Everyone who walked by (young or old) naturally went over and played with it.
February 20, 2008
Agree or disagree, I love contrarian views like this: “Purifying millions of gallons of water to drinking quality only to have most of it used for purposes that do not require drinking-quality water seems potentially more of a waste than a couple of billion pounds spent on what little water is used for drinking.” As someone points out in the comments, “a study [would need to be done] of how much contaminants in non-potably-purified water can still cause illness via washing, teeth-cleaning etc would need to be factored in.”
Also from the comments: “Bottled water competes with soft drinks, not the mains. What are the comparable environmental and cultural affects of coca-cola, as comapared with water? Coca leaves and kola nuts come from Latin America and Africa – lots of air miles clocked up there, I should think, and I cannot imagine the Coca Cola company pays highly for them.”
February 20, 2008
This morning I got to try on of those fancy new hand dryers all the kids are talking about. At first I stared at it, a bit intimidated, and then I finally stuck my hands in there and let the drying begin. Though it’s not entirely obvious how it works at first (maybe some better instructions are in order), once you stick your hands in there it’s pure drying satisfaction. (As a side note, if you go to the site make sure to check out the Why chose Dyson Airblade page, which I think includes a picture of someone failing to steal the machine . . . Quite odd.)
February 14, 2008
Okay, this is one of those posts where I give lots of reasons why I haven’t posted in a while and throw a bunch of stuff I’ve been thinking about out at once. So sorry about that . . .
First off, if you’re in New York City next Friday, February 22nd, you should come out for my birthday. Here are the details:
Date: Friday, February 22nd
Time: 6:30pm – Whenever (optional 2 hour, $20 open bar starts at 7pm)
Location: Antarctica Bar, 287 Hudson St (right below Spring Street)
It’s always a good time and everyone is invited. Bring your friends and have them bring their friends.
Second, part of the reason I’ve not been writing much is that I’ve been teaching myself PHP. After I built How Much Does it Buy I got real excited. It was the first time I had actually built something by myself, from scratch, in PHP. After that small win I decided to try something a bit more tricky and build a little backend to approve submissions from others. I think that’s finally done and you can try it out (and see what others have submitted).
After that I decided to get started on another idea I’ve been cooking up for a while with some friends and have managed to build out the entire backend. Needless to say, I’m quite excited about it and it’s been taking up quite a bit of time. All the work and progress got me thinking about why I was more successful learning PHP this time (I’ve tried to learn it in the past a few times, including once or twice from books). In reflection, I think what happened here may actually be a fairly straightforward educational framework (though one quite different from the current system):
- Get a small win (in this case it was programming the not-so-complex HowMuchDoesitBuy.com).
- Take those learnings and go back to figure out the basics as needed using a project as your curriculum (as I am building out this new site I constantly refer to Google for answers to my PHP questions).
What struck me about this was how different it was from the way school works. In language classes, for instance, you classically learn a ton of syntax and basics before you actually learn how to talk. Or, as Robert Frank writes in the Economic Naturalist,
“Knowing about the pluperfect subjunctive is not a bad thing. But if learning to speak a new language is your goal, the time and effort required to learn the explicit technical details of this tense would be far better spent in other ways. Courses that focus most of their energy on such details are no fun for students, and they’re also astonishingly ineffective.”
As a side note, Good Magazine had quite an interesting article on how the Mormon’s teach language this way.
Anyway, I’m not sure where all this goes, but I find it interesting.
Think that’s it. I’m off to Austin this weekend (and plan to stop by likemind Austin). If you’re around you should come.
February 14, 2008
I kept hearing about this over the last few weeks and I finally decided to visit. The site has a ton of movies and TV shows to watch for free … and who doesn’t like that?
February 12, 2008
Wow, this is pretty amazing stuff. Dean Kamen, inventor of the Segway, has created a prosthetic arm that only weighs 8 pounds and can grip grapes without breaking them.
February 7, 2008
Yesterday as I was staring at the $44.6 billion Microsoft has offered for Yahoo! I got to thinking, “what else could you buy for that?” Instead of doing a whole bunch of math on the spot, I decided to tell Joe (of Holy Crap! Facts) and we built a site to answer the question. How Much Does it Buy? is a currency converter for the rest of us, telling you how much that giant sum will buy you in A380s (146 instead of Yahoo!), boob jobs (6,371,428 of the silicone variety), cows (47,130,930 1,000 pounders), elephants (2,260,975 without food), gold, iPhones, kidneys on the black market, pork bellies, stars (from the Internation Star Registry), ThighMasters and unleaded gas.
It was really just for fun, but I thought it was worth sharing. I actually am pulling commodity prices dynamically as well, which was kind of a fun problem to figure out.
February 6, 2008
For those of you following at home, Microsoft offers up $44 billion for Yahoo!, Google asks “Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” Microsoft responds, “The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.” And Eric Schmidt calls Jerry Yang to see if he can help. All the while no one can talk about anything else on the web, the stock is at $29.37 (versus the $31-per-share bid) and the $44.6 billion bid would place Yahoo! at number 91 on world GDP, directly ahead of Tanzania, Lebanon and Latvia, as well as 136 other countries.
February 5, 2008
If you’ve been over at Gawker lately, you’ve probably noticed some interesting looking banner ads. They are regular leaderboard and skyscraper sizes, but rather than featuring products they show off artists (the one on the left is by Jeremy Corff). It’s all part of a program called Gawker Artists and no matter what you think of Nick Denton and his publications, this is a smart move.
So here’s my thinking: I hardly ever notice banners and even if you don’t buy banner blindness it’s hard to deny that advertising on the web is everywhere. No matter what page your on, there always seems to be something sliding around trying to sell you something. Like most things, it’s only fair to assume that the more we are exposed to, the more immune we become. Which is what makes the Gawker Artists campaign so interesting. By replacing animated banners from advertisers with static banners from artists, Gawker makes you take note of the space again. In essence what they’ve realized is that advertising is media, and in such an over-saturated world, they’ve got to sell it as such: Which means combining content and advertising.
It’s interesting to think about what’s brought this (a need to treat advertising space as media) on since it’s not really a problem other media have to deal with. My best guess is that since every page of a magazine feels essentially the same, it’s not a major issue (plus you naturally are going to flip through as you read). Television, I guess, faces some of the same issues, which is why they are constantly sticking commercials in between cliff-hangers and the such, but they’re still treating the space as a different entity.
I’m mostly just babbling now because I’m not sure what else to say. I think the bottom line is that there are some lessons to take away from this and I expect many others to follow Gawker’s lead and add more value to their advertising space. It’s also quite relieving to me that the ads I have noticed recently have been art: As if my mind hasn’t been so poisoned by terrible ads that I can’t notice anymore (though I can only assume one outcome of this will be advertisers hiring these artists . . . which isn’t necessarily a bad thing).
That’s it.
February 3, 2008
Apparently, Rule 240 says “that an airline facing a delayed or canceled flight had to transfer you to another carrier if 1) the second carrier could get you to your destination more quickly than the original line and 2) it had available seats.”
Anyone ever tried it?
February 1, 2008
Wow, that’s a lot of money. Here’s the letter to the Yahoo! board. Rumor is it followed a friendly merger attempt. (And for a piece of data that may only amaze me: Yahoo!’s stock has jumped to $30.70 in pre-trading (as of 7:41AM eastern) on the news that Microsoft will be purchasing at $31-per-share. Isn’t economics grand?)
February 1, 2008
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