Over at the Percolate blog I wrote up a two part series around a talk I gave at our client summit on the history of brand management and the need to create a new system of record for marketing. Part one opens:
Late last week James wrote a post called Moving from Installation to Deployment, where he laid out a framework for thinking how technology moves throughout history and where our modern age fits into the puzzle. As part of his post he introduced some ideas from an economist named Carlota Perez, who argues that each technological revolution (of which we’re in our fifth) follows a similar pattern of installation, where we essentially lay out the new technology in the form of infrastructure, followed by deployment, where we finally get a chance to build upon that infrastructure and realize its value.
Whereas part two dives into the implications and a framework for building this new system of record for marketing:
To approach the problem of scaling marketing at the rate of technology to address the increasing complexity, we have to take a page out of the P&G brand management playbook, Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble. It points out how “P&G recognized that building brands is not exclusively or even primarily a marketing activity. Rather it is a systems problem.” This is fundamental. When you’re dealing with a huge amount of change and complexity as tempting as it is to answer the question with a one off solution, the systemic path is always more powerful. This is where we have to start in solving the challenge of rethinking marketing for this new age.
Check out both parts.
Part two of my strategy presentation is coming soon. In the meantime, a few months ago I went down a rabbit hole of looking for the first mention of various marketing terms and ideas in the New York Times archives. I particularly liked this first mention of brand strategy from 1955:
To eliminate confusion, an agency should set up a four-point plan when handling a product … The Plan would be outlined in a document known as a “brand strategy” containing a concept of operation; an analysis of the opportunities for the product or service; agreement on an immediate plan of action, and agreement on a long-term strategy.
Here’s what it looked like in the newspaper:
Also amusing was that in 1967 we were having problems we’re still seeing today. From coverage of a symposium of agencies and clients:
A couple of the ideas that seemed to get repeated were that both sides should cut through the red tape of advertising approval and that there should be more involvement of creative people in agency-client relations.
At the beginning of December I gave a talk at Google’s Firestarters event that built on some of the ideas I wrote up in my post about strategy as algorithm. Rather than posting the whole deck, which at some point I will do, I thought I would try to share the slides in groups of a few at a time and tell the story over a number of posts. This is a bit of an experiment and mostly because I’m trying to get all the posts I can out of the deck, so thanks for bearing with me.
What is strategy? Anyone who works in and around brand has run into something called strategy, but seldom do we step back and actually ask ourselves what it is and what it means. A few weeks ago I posted this definition from Lawrence Freedman’s book Strategy: A History (via Martin Weigel):
Strategy is much more than a plan. A plan supposes a sequence of events that allows one to move with confidence from one state of affairs to another. Strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns… The inherent unpredictability of human affairs, due to the chance events as well as the efforts of opponents and the missteps of friends, provides strategy with its challenge and drama. Strategy is often expected to start with a description of a desired end state, but in practice there is rarely an orderly movement to goals set in advance. Instead, the process evolves through a series of states, each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including ultimate objectives. The picture of strategy… is one that is fluid and flexible, governed by the starting point and not the end point.”
Despite that, most of what we talk about when we’re discussing strategy is actually a small set of tools that were all developed before 1970:
- Market Segmentation (1920): “General Motors CEO Alfred P. Sloan managed GM’s car models through loosely monitored “divisions,” which operated as separate companies with Sloan’s oversight, laying the groundwork for today’s corporation.”
- Customer Funnel (1959): “The progression through the four primary steps in a sale, i.e., attention, interest, desire and action, may be compared to that of a substance moving through a funnel.”
- Scenario Planning (1967): “The practice involves envisioning multiple future events and developing plans for responding to them. Shell first experimented with scenario planning in 1967, helping it navigate the oil shock of the 1970s.”
Ultimately a strategy is an approach for solving a problem. In the case of marketing, a strategy is generally the formula a brand develops to identify the best mix of activities and messages to communicate the positioning of the product or company with the goal of driving growth (either in sales, price, or purchase occasion). Strategy, then, is not the activities, but rather the framework a brand uses for choosing (and not choosing) those activities. (We will come back to this point later.)
For strategy to live in the world it must be paired with execution. The problem with strategy is that it doesn’t work in a vacuum. Strategy without execution is just words on a slide. For our purposes, then, when we talk about strategy we are talking about two things: The approach to solving the business problems and the coordination of resources to execute on that approach.
In the next installment I’ll dive into execution, how it’s changing, and why that matters a lot for strategy. Stay tuned.
I like this thought from Andrew Crow, head of design at Uber, on the difference between being scrappy and shipping scrappy:
There’s no such thing as minimal viable quality. Each product iteration must stem from a principled approach of creating great experiences regardless of scale or milestone. If it’s a mockup, the level of fidelity typically indicates the level of “doneness”. If it’s a prototype, the level of detail needs to be appropriately matched to the sophistication of the hypothesis you’re testing. If it’s an MVP, the quality put into the product must be at a level that results in the maximum learning for that stage of development. The quality of product you finally ship reflects the caliber of your company and is a measure of the respect you have for your customer.
I think of this as being thoughtful. Every interaction you design should be made with care and respect for the user’s time and attention. Details make design and there isn’t a detail too small to pay attention to.
As Andrew points out, not spending the time and attention on details at early stages can be detrimental in unexpected ways as it might provide you with bad data back on usage (ultimately design choices and brand effect experiences). I think there’s an important lesson here that most people don’t consider (and came up in the old brand vs utility debate). Ultimately things like brand, utility, and design in products are entirely too closely coupled to disconnect. In fact, utility is actually a measure of the relative satisfaction a person gets from consuming something. Since satisfaction is about how much something fulfills your expectations, the utility and brand are inextricably linked.
This Tweet/post of mine really blew up and I thought I would share it here as well. When we first started Percolate I wanted to make sure that we didn’t become a company that became taken over by meetings as we grew. To that end I set a few simple rules in place, most important of which was that no phones or computers were allowed in meetings. Below are the rules or you can check out the whole post at the Percolate blog.
I really liked this quote Martin Weigel posted from Stephen King (the marketing guy, not the horror filmmaker) on how marketing companies must evolve:
Marketing companies today… recognize that rapid response in the marketplace needs to be matched with a clear strategic vision. The need for well-planned brand-building is very pressing. At the same time they see changes in ways of communicating with their more diverse audiences. They’re increasingly experimenting with non-advertising methods. Some are uneasily aware that these different methods are being managed by different people in the organisation to different principles; they may well be presenting conflicting impressions of the company and its brands. It all needs to be pulled together. I think that an increasing number of them would like some outside help in tackling these problems, and some have already demonstrated that they’re prepared to pay respectable sums for it. The job seems ideally suited to the strategic end of the best account planning skills. The question is whether these clients will want to get such help from an advertising agency.
That sums up a bunch of stuff I’ve been thinking about/we’re trying to do with Percolate quite nicely.
Last week I wrote a piece on AdAge revisiting Stock and Flow. If you’re interested you should read the whole thing, but here’s a snippet:
To answer that question, let’s start with what’s changed. The core social platforms, Facebook and Twitter, have continued to explode. Mobile has enabled a host of new social platforms such as Pinterest and Snapchat to grow at breakneck speed. LinkedIn has added informational content like LinkedIn Today, LinkedIn Influencer and sponsored updates. Google has built a massive social system with the deepest mobile integration of any platform we’ve ever seen (thanks to Google’s Android mobile operating system). “Native” advertising has come to the fore. And search and social have crashed together: According to SearchMetrics, seven of the top eight signals in social now come from search.
Meant to post this last week, but didn’t get to it. Felix Salmon wrote a great post on how wine is one of the few things in the world you can buy for happiness. I’m fascinated by stuff like this:
The more you spend on a wine, the more you like it. It really doesn’t matter what the wine is at all. But when you’re primed to taste a wine which you know a bit about, including the fact that you spent a significant amount of money on, then you’ll find things in that bottle which you love. You can call this Emperor’s New Clothes syndrome if you want, but I like to think that there’s something real going on. After all, what you see on the label, including what you see on the price tag, is important information which can tell you a lot about what you’re drinking. And the key to any kind of connoisseurship is informed appreciation of something beautiful.
This is the messy part of branding. All those factors play into how we feel about brands, products, and just about everything else.
I’m sure you’ve all seen this quote. It’s attributed to Robert Stephens, founder of Geek Squad, and goes something like: “Advertising is the tax you pay for being unremarkable.” (I was reminded of it most recently reading Josh Porter’s blog, Bokardo.) It sounds good and, at first blush, correct, but it’s not for lots of reasons.
Broadly, the line between advertising, marketing, branding, and communications has always been a blurry one. Depending on who you talk to they have a very different definition. For the purposes of the quote, let’s assume when Stephens was talking about advertising he was specifically referring to the buying of media space across platforms like television, magazines, and websites.
With that as the working definition, there are lots of complicated reasons big companies advertise their products. Here are a few:
- Distributors love advertising: If you’re a CPG company you advertise as much for the supermarkets as your do for your product. The more money you spend the better spot they’re willing to give you on the shelf (the thought being that people will be looking for your product). I don’t think there is anyone out there that would argue shelf placement doesn’t matter. At the end of the day supermarkets are your customer if you’re a CPG company, so keeping them happy is a pretty high-priority job.
- Advertising is good at making people think you’re bigger than you are: Sometimes a company or brands wants to “play above its weight,” making people think they’re bigger than they’re actually are. When we see something on TV or in print, we mostly assume there is a big corporation behind it. Sometimes that’s more important than actually selling the product.
- Sometimes you’re not selling a product at all: There are many companies who advertise for reasons wholly disconnected from their product. GE, for example, isn’t running TV commercials about wind turbines to solely try to communicate with the thousands of people who are potentially in the market for a multi-million dollar purchase. A part of why they do it is to communicate with the public at large who is both a major shareholder for the company and also the end consumer of many of their products (many planes we fly on run GE engines and our electricity probably wouldn’t reach our house without GE products). How remarkable their products are has no bearing in this case, since we would never actually be in the market for the vast majority of the things they produce.
Broadly, though, the point I’m trying to make is that while many write off advertising as having no purpose (or being “a tax”), it’s just not true. What’s more, as advertising becomes a more seamless part of the process of being a brand in social, I think this will only become more true. If you see a piece of content performing well on Twitter or Facebook why would you not pay to promote that content and see it reach an audience beyond the core? At that point you’ve eliminated the biggest challenge traditionally associated with advertising (spending tons of money to produce something and having no idea whether it will actually have an effect on people). Seems to me if you’re not willing to entertain the idea you’re just standing on principle.
I really like situations that help describe the fact that lots of factors ultimately go into the way you feel about a brand/design/marketing. I wrote a bit about how Jony Ive feels about it last week and I thought this was another interesting example from a very different place. In the early 90s a designer named Alexander Juilian was given the opportunity to redesign the UNC Tarheels basketball uniform. He was a huge Tarheels fan and thus felt a ton of pressure to deliver something amazing. Not wanting to leave things to chance, he looped Michael Jordan into the decision (Jordan, at the time, was just starting his ascent to the greatest player in the history of the NBA but he was already UNC royalty). Ultimately Julian sent all the designs to Jordan to let him sign off on his favorite:
“And guess what? As soon as Michael [Jordan] said that [the argyle design was his favorite], then the entire team also liked the argyle best. So we made the first uniform in Michael’s size, sent it to Chicago, he worked out in it, then we sent it down to Chapel Hill. There was near frenzy, I’m told, in the locker room as to who was going to be the first Carolina player to put it on after Michael because they wanted Michael’s mojo. Hubert Davis (photo, above right) won, he was the same size and he was the model. Now he’s a great sportscaster.
Ran across an interesting quote (reportedly) by Jony Ive about the difference between measurable (speed, hard drive size, etc.) attributes and the non-measurable ones:
But there are a lot of product attributes that don’t have those sorts of measures. Product attributes that are more emotive and less tangible. But they’re really important. There’s a lot of stuff that’s really important that you can’t distill down to a number. And I think one of the things with design is that when you look at an object you make many many decisions about it, not consciously, and I think one of the jobs of a designer is that you’re very sensitive to trying to understand what goes on between seeing something and filling out your perception of it. You know we all can look at the same object, but we will all perceive it in a very unique way. It means something different to each of us. Part of the job of a designer is to try to understand what happens between physically seeing something and interpreting it.
I think about this a lot. One of the things that inspired Brand Tags originally was a similar quote from my friend Martin Bihl’s 2002 AdWeek article: “The way I look at it, a brand only exists in the consumer’s mind. That other product isn’t a brand yet because consumers don’t really know about it. It’s still a product.”
I find stories of how new products and technology get adopted quite fascinating. While propaganda is much more associated with politics than brands, there’s a long history of companies using some of the same tactics to sway public opinion in favor of their product. The two examples that come to mind for me are stories like the diamond myth and Listerine’s introduction of halitosis.
Anyway, a podcast I’ve been listening to recently, 99% Invisible, recently covered one of these public relations campaigns that ultimately lead to the acceptance of cars (and invention of “jaywalking”). At the time, in the early 20s, cars were killing lots of people who weren’t used to sharing the streets with them. The car industry had to do something so they pushed a campaign that has now become familiar to us by way of the NRA: Cars don’t kill people, bad drivers kill people. But more interesting, to me at least, was where jaywalking came from:
In the early 20th Century, “jay” was a derogatory term for someone from the countryside. Therefore, a “jaywalker” is someone who walks around the city like a jay, gawking at all the big buildings, and who is oblivious to traffic around him. The term was originally used to disparage those who got in the way of other pedestrians, but Motordom rebranded it as a legal term to mean someone who crossed the street at the wrong place or time.
Excuse this bit of bragging, but this makes me incredibly proud. Today, Christa Carone, CMO of Xerox, wrote this about Percolate on Forbes.com:
As an active Twitter user and scanner, I’m constantly prowling for Tweet-worthy articles and insights to share with my followers. But, like every multi-tasker, over-committed, “not-enough-time-in-the-day” person I know, there are always competing demands for time that keep me from heeding the call of the little blue bird.
Thank goodness for Percolate, a small but fast-growing company that recognizes that marketing on the “social scale” requires content, content and more content, but only if it passes the relevancy test. Through algorithms, filters and other tools, Percolate scours the web and serves up content tailored to my specific areas of focus that I can review and easily share.
I’m grateful for and a tiny bit envious of this start-up. I marvel at how its founders quickly spotted a need and last year created a company that has scored a slew of clients and, in November, $9 million in funding. Besides that, everything this company does is on-brand, from its business cards and its Daily Brew email to the—yes–perkiness of its staffers.
One of my resolutions for 2013 is to spend more time learning from small companies like Percolate. Big organizations can be great marketers but often find it hard to act fast. Frankly, “seize” isn’t something that is easily said or done. But there are lessons that Goliaths like Xerox can learn from more nimble David-sized enterprises.
Beyond it being incredibly flattering, there are two things that make me especially happy reading this: First, it’s just the recognition around the brand. I spent a lot of time working with large companies with unbelievable brands and its fun to get a shot at building your own. I still believe deeply that there’s an opportunity within tech, especially on the enterprise side, to take advantage of the lack of thoughtful brands in the space. Second, and more importantly, it’s the recognition of people as part of the brand. When I worked for Naked Communications the tagline (or whatever you want to call it) was “everything communicates.” Brands aren’t built with collateral and style guides, they’re built through interactions and, for us and many other companies, those interactions are with people just as much as they’re with software. Your brand is the total of all those parts and interactions and the responsibility for it sits with everyone in the organization, whether they’re on the front lines dealing with clients or they’re just out at a bar talking about their jobs.
It makes me incredibly proud to read something like this.
For whatever reason I’ve been listening to a lot of podcasts lately. One of my favorites is Planet Money from NPR. Their latest episode is a really interesting look at why Coca-Cola stayed 5 cents for 70 years. Turns out there are two primary reasons: First, the company got into a crazy deal with the bottlers where it was selling syrup at a fixed price of 90 cents a gallon. Because it was a dumb deal and Coke knew it they realized they needed a way to keep the price from spiraling out of control. Their solution was advertising. Because they couldn’t control the sale price they just went out to the market and told everyone it was 5 cents a bottle, meaning retailers were left with no choice but to sell it for the price consumers expected. The second reason is a little less exciting, but still interesting. Apparently Coca-Cola had an insane amount of vending machines around and they were all 5 cents. After getting out of their contract they could raise the price, but they didn’t want to double it and the machine couldn’t take anything but nickels. They tried (and failed) to lobby the government for a 7.5 cent coin, but eventually just kept the price as it was (with a brief period of giving every eighth consumer an empty bottle to artificially raise the price in a crazy way).
Go check out the whole thing.
I was going to write something in response to the post about Mark Cuban leaving Facebook for MySpace (he doesn’t like that you have to pay to reach 100% of your audience), but Dalton Caldwell beat me to the punch with a well-put take:
We can expect to see Facebook deemphasizing traditional advertising units in favor of promoted news stories in your stream. The reason is that the very best advertising is content. Blurring the lines between advertising and content is one of the most ambitious goals a marketer could have.
Bringing earnings expectations into this, the key to Facebook “fixing” their mobile advertising problem is not to create a new ad-unit that performs better on mobile. Rather, it is for them to sell the placement of stories in the omnipresent single column newsfeed. If they are able to nail end-to-end promoted stories system, then their current monetization issues on mobile disappear.
The only thing I’d add to this (which I tweeted yesterday) is why would brands be treated differently than people on Facebook? If any of us post something to FB it will only reach a portion of our friends, so why should a brand be able to reach 100% of their fans? It’s a filtered platform and that’s what makes it different than Twitter and Tumblr.
I’m going to write about NASCAR and marketing, if you don’t care about either of those things, you can quit reading now. I’m writing this for three reasons:
- I’m a big NASCAR fan (it’s more than just going around in circles, I’m happy to explain it sometime)
- I spent some time working with a NASCAR team and learned a lot about how the business side of the sport operates
- The New York Times had a story yesterday about how the NBA can learn something from NASCAR in regards to it’s thought about adding sponsors to jerseys. This article almost entirely missed the real point of NASCAR sponsorships. (I can’t say I find this shocking as NASCAR is hardly the number one beat for the Times.)
For some reason the article focused on how sponsors can affect the behavior of the athletes. This is sort of interesting, but pretty far from the real story of NASCAR sponsorships. While the business of NASCAR is struggling for a bunch of reasons (financial meltdown, arms race in technology raising the cost of fielding competitive teams, more competition than ever for ad dollars), what makes it work has not changed. When a brand buys into a NASCAR sponsorship (which goes for ~$20 million for a full season), they are buying two big things: Loyalty and activation opportunities.
Let’s start with loyalty. This is what the article really misses. When brands sponsor NASCAR they get a real understanding from the fans that they are responsible for the car on the track. The drivers get it, the teams get and the fans get it. This is hugely different from slapping your logo on something (whether it’s soccer where it’s displayed in giant form on the player’s belly or basketball, where they seem to be thinking about some little sponsorship patch). People in those sports think the sponsor is responsible for the team in the same way no one will ever walk into a Brooklyn Nets game and say “thank you Barclays for making this possible.”
The numbers in NASCAR back this up. I used to have them, but the league and teams generally trot around a number of 80%+ loyalty of a fan to its driver’s sponsor. If Jimmie Johnson is your guy you go to Lowe’s not Home Depot. That’s just how it works.
Okay, onto activation. Take a look at the official sponsors of NASCAR teams and you see a few different kinds of companies: Car-related companies (NAPA, Shell, Mobil 1), CPG (Budweiser, Mars, Miller Lite) and a lot of retail/franchise businesses (Burger King, Target, GEICO, Farmers Insurance, Home Depot, Lowes, Office Depot). The first set is obvious, the average NASCAR fan likes cars and car-related stuff. The second is about audience as NASCAR skews heavily male and sometimes guys are hard to reach. The last, though, is the most interesting to me.
What all these companies have in common is lots of employees (you could throw FedEx in this group too and UPS was a long-time sponsor of the sport). One of the more interesting things about how brands actually utilize their sponsorship is that they do fully integrated program where they use a sponsorship to reach not just consumers, but also employees. Target, Home Depot and Lowes have 900,000 combined employees (365, 331 and 204). That’s a lot of people to keep happy. One of the ways they do it is give them something to root for. It’s not shocking, or even all that interesting, it just sort of makes sense and means that the investment is offset into a few different departments.
Anyway, I don’t have a real conclusion to all this, just felt like writing a little bit about what I know about NASCAR. Hopefully it was relatively interesting.
A small but important distinction from Seth Godin:
The best elevator pitch doesn’t pitch your project. It pitches the meeting about your project. The best elevator pitch is true, stunning, brief and it leaves the listener eager (no, desperate) to hear the rest of it. It’s not a practiced, polished turd of prose that pleases everyone on the board and your marketing team, it’s a little fractal of the entire story, something real.
For those wondering what I’ve been up to lately, here’s a talk I did at the Media Evolution Conference in Malmo, Sweden about the interest graph for brands.
This post is the intersection of a few different things I’ve been thinking about lately. First is Percolate. Part of the process of introducing the company to new people is frequently recounting the story of where the product came from. James and I have probably sent each other a thousand different articles back and forth and I asked him recently for his list of top articles that really inspired his thinking in the space. The second thing is Robin Sloan’s Fish which is all about the difference between liking and loving content. It made me think about the list of the content and marketing-related articles I’ve read that I come back to frequently. This is that list. Some of these are newer and may not hold the test of time, but most of them are things I’ve come back to (at least in conversation) about once a month since I’ve read them (they are distributed over the last 10 years).
Without any further ado, here’s my list:
Stock & Flow
Not specifically about marketing, but it’s all about content. Stock and flow is how we’ve taken to thinking about content at Percolate and this is really where that idea came from. I’ve written a few things inspired by the idea and use it frequently to explain how brands should think about content (and why Percolate exists).
Many Lightweight Interactions
This is the most recent article of the bunch and comes by way of Paul Adams, who works in the product team at Facebook. It was a really nice way to explain a lot of the stuff I’ve been thinking and talking about with clients over the last five years. Specifically it talks about how the web (and specifically social) offer brands an opportunity to move from a world of few heavyweight interactions (stock in Robin’s parlance) to many lightweight interactions (flow). The one thing I’d add is that I think the real opportunity is to take the many lightweight interactions and use them to understand what works and inform the occasional heavyweight interactions brands need to succeed.
Who’s the Boss?
This was written by a friend of mine 10 years ago. It’s short, but the core point is that brand’s live in people’s heads. This was what inspired Brand Tags and has colored lots of my thinking about how brands behave.
Why Gawker is Moving Beyond the Blog
Not specifically about marketing, but Denton’s explanation of why he’s moved from the classic blog format is a great explanation of how content works on the web.
How Social Networks Work
Another slightly older one, this was the first time I had read someone talked about the idea of social as exhaust data (basically our digital breadcrumbs), which seemed like a really good way to think about it (and helped explain why brands struggled). Lately I’ve been using this to help explain why brands struggle in social: Exhaust data is a very human thing. You need to consume in order to create this trail and most brands don’t do that.
How Owned Media Changed the Game
From Ted McConnel who used to be head of digital at P&G. I really liked this quote: “Recently, in a room full of advertising brain trustees, one executive said, ‘The ‘new creative’ might be an ecosystem of content.’ Brilliant. The brand lives in the connections, the juxtapositions, the inferences, the feeling of reciprocity.” This was one of those articles that really wrapped up a bunch of stuff I had been thinking about. It’s nice when that happens.
That’s it for me. What would you add? What am I forgetting?
This is a cross-post from the Percolate Blog. I thought you all might enjoy reading it here as well.
Let me get something out of the way before we get started: In case you haven’t heard, Facebook is going to IPO this week.
Okay, seriously, all this IPO talk has driven people to dive into Facebook’s business model and lots of folks are coming up with doubts. As Peter Kafka points out, even Facebook has its doubts, mentioning as much in their IPO filing: “We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads.”
But what does that mean really? And what’s the opportunity? And, most importantly in many people’s eyes, does Facebook really have the opportunity to be a bigger company than Google?
While I don’t know the precise answers to those questions, I do have lots of opinions and since it happens to be Internet Week in NYC, I’ve been having these conversations a lot (mostly on panels). The bulk of the argument against Facebook revolves around their lack of “intent” data. This, of course, is what Google has in bulk and is the reason they are a multi-billion dollar business. Being able to target people at specific points in the purchase process changes the way marketing works. It allows advertisers to do something that was all but impossible (you could buy in-store and outdoor around stores, but that’s a whole lot less efficient). This is an amazing thing for marketers and Google’s market cap reflects it.
But if you ask most advertisers why they spend millions (and sometimes billions) on traditional ads, it’s not to harvest people who intend to buy, it’s to create demand: continuing to grow a business requires continuing to bring in new customers constantly. However it makes you feel, most ads exist to remind you that you need something new. That shoe company with billboard isn’t trying to get you to buy their shoes over a competitor, they’re trying to remind you that you need new shoes and, they hope, when you walk into the store you’ll spring for their brand.
That’s where brands spend real dollars. When startups show off “the chart” (you know, the one with the gap on time spent versus ad spend), they are looking at the effect of digital platforms not having a good answer to intent creation.
That, I believe, is where the opportunity for social is. We’re not there yet, but the promise is that you can use your understanding of a user’s interests to present them with messages that let them know about things they want before they want them. If Facebook figures this out it will be a bigger company than Google.
So how does content fit in?
Using the traditional purchase funnel, I think you still have a gap between awareness and intent. Once someone knows about your brand or product, how do you create need? One really good way of doing that is to remind them you exist (a large portion of CPG ad spend is used for just this). The way to remind people you exist is to create content they’ll see. To create content they’ll see on Facebook you need to a) be engaging enough that it builds organic activity and pushes beyond the base distribution you get through EdgeRank or b) buy Reach Generator. The two big goals (awareness and intent creation) have paid actions associated with them in Facebook, Twitter and Tumblr. If these companies continue to build on these ideas and find better ways to target users based on their interests they will be solving a real problem for advertisers, something that hasn’t really been done on the web since paid search in the early 2000s.
Of course, there are lots of ifs here. The products are not quite there yet (targeting, for instance, is still largely based on social connections instead of interest connections), but I think these platforms will get there and I think they’ll succeed.
I’m doing this “virtual panel” about content over at the new FastCo Create site. The first round is up (I’ll update this post as it goes up) and here’s a quick excerpt from my answer about what brands need to know about content:
I’m not actually sure that creating editorial content is all that different than creating promotional content, at least on a high level. Advertising is a process of combining brand outputs (look, feel, voice) with cultural inputs (insights, trends, etc.) and creating a piece of communication. The shift I see taking place is that the traditional processes around creating content for a world of campaigns break-down in a real-time content creation environment: Brands and agencies aren’t currently set up to consume culture as it happens, which is what media organizations do. I think this is a big shift we’ll start to see inside brands over the coming years. It’s not that they’ll try to model themselves on media organizations, but rather, they’re going to rearrange themselves around real-time consumption of content, data, analytics and anything else they can get their hands on to help make decision and communicate better.
When I was at Naked we used to have a joke for an advertisement that was little more than a strategy line: We’d say “your strategy is showing.” If you work in the marketing world you know what I’m talking about, it’s those ads where someone wrote a line about what the brand was trying to accomplish with its marketing and rather than coming up with a creative way to represent that they just made the line the ad. (I can’t think of a really good one off the top of my head, so if you’ve got one chime in.)
Anyway, I was looking at Twitter when they first launched their redesign and all I could think was “your strategy’s showing.” Obviously it’s not an ad, but when you see the labels on the tabs at the top its so obvious that they let their strategy slip into their nomenclature decisions.
For those who haven’t noticed the new tabs are “home,” “connect” and “discover.” Home is good, it works, I get it. But connect and discover are very funny choices for a company that is otherwise almost always very impressive in its UI decisions (it’s sort of amazing how far they’ve come since they were an organization that outsourced design completely).
Anyway, back to “connect” and “discover,” what do they mean? “Connect” is interesting and I really like the new activity feed view, but I certainly wouldn’t think of what lies beneath as being represented best by the word “connect.” “Discover” takes things even further. That’s one of those words that gets thrown around (we used it at Percolate for awhile) even though I’m fairly convinced no normal person on the planet has ever though of what they do when they find cool stuff on the internet as “discovery.”
The beauty, of course, is that if you’ve got a platform with however many hundreds of millions of people used Twitter than you can actually define these things. Often, that’s the best solution since no other word perfectly encapsulates what it is your trying to represent. We ultimately went with “brew” to describe the main Percolate dashboard for brands because it’s something unique and because of the relationship with clients, something we can be sure to define as part of the on boarding process.
But still, it’s funny when you catch someone with their strategy showing.
Good thoughts from Neil Perkin on curation and Percolate: “As brands increasingly become content producers, and move into content hungry practices and channels, creating interesting stuff on a sustained basis is becoming a real challenge. As does mastering not just the stock, but the flow (flow being "pieces of content, produced rapidly and at a low cost"). Brands simply do not have the resource capability to accomodate this emerging requirement without utilising different forms of curation including algorithmic, social, as well as professional. As usual, it is by overlaying the best that technology can offer, with the capability of smart, talented people that works.” Pretty awesome to see smart people picking up on some of our themes.
Really smart thoughts from Dan Frommer on the Twitter redesign. I especially agree with his thoughts around direct messages: “Twitter is trying to de-emphasize private messaging by moving it a layer deeper in the user interface. I’m guessing there are a bunch of reasons for this, not limited to: Simplicity, perhaps relatively low usage by most users, potentially confusing rules around DMing, and that more public content is probably better for Twitter’s product and advertising goals. Some long-time and hardcore Twitter users are probably going to be upset about this, but one of Twitter’s strengths has always been its willingness to design for its mainstream users at the expense of its geek users. (Tip: To get fast access to your DMs on Twitter for iPhone, you can swipe up the “Me” icon at the bottom.)” Also curious to see where things go with brands.
[Editor’s Note: I posted this over at the Percolate blog and thought it was worth posting here as well. Hope you enjoy.]
Andy Weissman wrote an interesting post about what he calls the “golden age of internet marketing.” Essentially his vision, which I mostly agree with, is that a few large platforms are going to create native monetization models that better align the interests of brands, consumers and platforms than display advertising ever did. Google and Facebook are the two clear winners in this world so far, as both have found ways to serve brand needs while creating a better experience for users (at least with paid likes in the case of Facebook).
There are a few additional thoughts I have on this whole conversation, though. First, what are the ramifications of a web that is controlled by a few successful platforms? Andy gives the example of Tumblr, Twitter, Facebook, Foursquare, Instagram and Soundcloud amongst a few others. All of these platforms have managed to generate a ton of user engagement and some are already at the user scale needed to support native brand interactions. However, this number will always be very small (in terms of total platforms, not total consumers). I’m not sure that’s a bad thing, but I’m also not sure it’s a good thing. I believe deeply that the relationship people have with sites is different than the one they have with platforms, and there will always be value there. The problem is, essentially, to be successful with an advertising buy on a website these days you need to do something native for their platform (the site), which will never have the scale that a Facebook, Google or Twitter does.
Second, I think a lot of Andy’s article places the onus to get this figured out on the brand, but I’d argue an even bigger responsibility lies on the shoulders of the platform to understand how brands actually work. A few weeks ago I wrote about some comments from Jack Dorsey at Twitter about their model. Dorsey talked about capturing intent, which has been a big buzzword around marketing Google’s search advertising was coined as an intent miner. As I wrote then:
Twitter’s value is not about intent, in the classic funnel definition, it’s much more about awareness and interest: About exposing you to new products and services you didn’t know you were interested in. If Twitter can actually deliver this it has a truly differentiated ad product, but I worry they’re following the Google model too much and thinking too low in the funnel.
This may seem like a semantic difference, but I don’t think it is. I think generally Silicon Valley has not done a good enough job understanding what brands are all about and what they’re trying to accomplish with their spend. I actually think there are a lot of startups that think brands are stupid, which seems crazy to me considering most of them are ad funded. What I’m trying to say is that building a native marketing unit requires respecting your customer (the brand) as well as your users (the consumer). At the end of the day what truly separates Google’s search ads from other marketing units is that it’s respectful: It believes the user is smart and the brand knows what it wants.
Last, but not least, I think these platforms are going to need to be careful not to overextend themselves. When Facebook reads an article like the one from Emily Steel at the Wall Street Journal a few weeks ago about some of the top brands spending a bunch of money buying likes and then shifting the spend to content to keep those likers engaged, they’ve got to pause for a minute to think about how they can capture more of that value. A native marketing unit can’t capture the entire chain of value and it shouldn’t. Google doesn’t keep you in Google when you click an ad and (hopefully) it never will. But when platforms like Facebook look at the numbers will they be able to not get greedy and try to capture a bigger slice of the pie? Or will they try to become more and more of a walled garden: Controlling as many pieces as possible and causing that beautiful alignment of interests between the platform, user and brand to get out of alignment.
Australia is banning all “industry logos, brand imagery, colours and promotional text” on cigarette packaging. Each pack will feature “pictures of diseased body parts, sickly babies and dying people” instead. It’ll be interesting to see what happens to the landscape. Will people stop smoking fancy brands because you don’t get any of the brand ruboff when you pull out a pack? Will the cigarette companies just brand the cigarette itself way more?
[Via Nick Parish]
Felix Salmon expands on some of the stuff I wrote the other day about brands as publishers. Specifically, he points to an interesting example I didn’t know about in the Gates Foundation. The non-profit gave the Guardian a $2.5 million grant to suppor the Guardian’s global development microsite for three years. Felix explains:
The Gates Foundation actually launched the site in 2010, spending an undisclosed sum to do so; the new grant keeps the site going for another three years. As part of the deal, every page in the site — be it blog post or news story — gets prominently branded with the Gates Foundation logo, right at the top of the column where all the editorial content goes. (In fact, the logo is significantly larger than the Guardian’s own logo at the top of the page, although the site looks and feels like the rest of the Guardian site, and lives at guardian.co.uk.)
At the end of the post Felix asks a few questions, including what does the Gates foundation get out of an arrangement like this? I’ve got a guess, which is they get more awareness around the issues. That sounds like a bit of a throwaway answer, but the Gates Foundation is an interesting position as a brand: They are a market leader. When you’re a market leader your goal becomes less about building your own position and more about building the category.
Take BabyCenter as an example. Johnson & Johnson dominates the baby category. Last time I heard their marketshare was up above 50 percent. Their objective with marketing is less about displacing the competition and more about building the market: They want parents to take more “care” of their babies by buying more products. If they take just their regular percentage of the new market it’s a big deal.
I’ve written about it in the past, but Google is one of my favorite examples of a market leader marketer. Their dominance in search makes in inefficient to try to steal share from competitors (how will they even find the small percentage of people who use Bing?). Instead, they spend money growing the category with products like Android and Chrome. Here’s what I wrote about the strategy in 2009:
What that means is everything Google does is about getting more people to use the internet more. Use Android as an example: It is absolutely in Google’s best interest to release a mobile OS that makes it easy to browse the web because that means more people using the internet more which means more searches on Google (because of that market dominance) which means more clicks on the paid ads. Voila, you’re rich.
I suspect Gates thinks about the approach in a very similar way. The more people are thinking about these issues, the more effective they can be in enacting the change they are pushing for. I’m actually surprised they bothered with the branding on the pages, though it likely makes the Guardian much more comfortable.
The broader question, which Felix seems to be getting at, is what can we learn from programs like this and is there a model here for media companies? I suspect the answer is yes, though the first thing we need to figure out is how to apply the model to non-market leaders. When you’re promoting a lifestyle, idea or category you lead, it’s easy to see how getting people to think about it more makes sense. If you’re a brand who isn’t in that situation (most), how do you build value in a similar way?
I got sucked in the by the title of this article (“Can ‘Serendipity’ Be a Business Model? Consider Twitter“), but I’m not sure it lives up. About a year ago I was doing a lot of research into serendipity, and most interestingly (to me at least) was that the definition is “the ability to find things you didn’t know you were looking for.” I do think Twitter is a pretty genius solution to this. By essentially allowing you to overhear conversations it exposes you to a kind of ambient data that is otherwise hard to come by. When it comes to their ad model, this will clearly be a big part of the value. But I think the way they’re positioning it (in this article at least) as being about intent is totally wrong. Twitter’s value is not about intent, in the classic funnel definition, it’s much more about awareness and interest: About exposing you to new products and services you didn’t know you were interested in. If Twitter can actually deliver this it has a truly differentiated ad product, but I worry they’re following the Google model too much and thinking too low in the funnel.
I was going to wait and talk more about Percolate a little later in the week when I had a chance, but then Felix Salmon went ahead and wrote a pretty epic post about what he saw as the future of online advertising and now I’m left with no choice but to write a response (because I found myself nodding so much, not because I disagree).
The world Felix lays out is the same one I’ve been seeing and thinking about for the last seven years. It’s a world where online advertising, mainly banner ads, has fundamentally failed brands in a crazy number of ways. The dirty secret about the business is that brands, agencies and media companies all run banners knowing that they mostly don’t work. Everyone is in on it. It’s not that they don’t care about their effectiveness, it’s just that there’s not really another easy way out there. All parties know the web is important and banners are the easiest way to check the box.
That’s never been my bag. I joined The Barbarian Group a few years ago because I fundamentally believed that for brands, earning attention was more valuable than buying it. I don’t believe there’s no place for online advertising (I’m using the word in the narrowest sense to mean the buying of placements on media sites), I just don’t believe it’s the center of a successful digital marketing strategy. Period.
I think most people point to the shift from one-to-many to one-to-one as the primary difference between the offline and online world for advertisers, but I think there’s something else at play. This morning an article I’ve been working on for a month or so came out on Adage, where I explain how I see the shift:
The idea of “buying media” always struck me as a bit odd. If anything, what brands have been doing is renting: Paying the media owner to borrow the audience’s attention for a short period of time. In the pre-internet days, rental was pretty much the only game in town and that was just fine.
But then the web came along and started to play with the economics. All of a sudden you could pay once and message continuously. (Think: Brands buying fans on Facebook.) The thing is, because of the peculiarities and rates of audience rental in traditional media, brands (and agencies) are built for campaigns instead of sustained communication.
Sustained communication is a real shift in thinking for brands (and agencies). Lots of people talk about this shift as a move from campaigns to products, but I think calling it sustained better explain the shift and value opportunity. That value opportunity is about building on top of previous success (and audience) instead of starting over every time. Microsites were probably the best example of this: Buy a bunch of advertising, drive people to a new .com, stop advertising, stop getting traffic, tear the site down, repeat.
Like Felix, I believe content needs to be at the center of a brand’s sustained communications strategy. Agencies seem to agree, bringing in content strategists en masse to work with clients on become publishers. The issue I’ve seen is that most of these strategies just aren’t sustainable. In my Adage article I put it in terms of stock and flow:
Traditionally, brands have been quite good at creating stock content in the form of ads and some of the more forward-thinking ones have found really interesting ways to translate that capability to beautiful web video and interactive experiences. While that’s great for short bursts, creating a sustained messaging strategy requires a combination of both stock and flow: longer-form, higher-quality content coupled with the quick-hit links to other interesting and relevant content on the web.
How does this look? On the extreme end it’s BabyCenter, RedBull.com or AMEX OPEN Forum, those brands are so far out ahead of everyone else from a publishing standpoint it’s just amazing. And look at the value they’ve created for themselves: Their sites are big enough that other brands want to advertise on them to reach the audience they’ve amassed. Not necessarily the most important thing for the brand, but a pretty good statement about what they’ve accomplished.
Now obviously those aren’t the most accessible examples and the two most common concerns marketers have when they hear them are 1) I don’t have the permission to speak to my audience in that way and 2) I can’t afford to build a content organization in the way that those brands have.
The idea of Percolate (you knew I’d come around to it) is to make it answer those questions and make it possible for every brand to create a sustained platform. On the permission question, it’s really just a problem with definition. Every brand with customers has permission to speak to them, they just need to find their voice. Look at the work of Weiden + Kennedy and BBH on deodorant brands if you don’t believe me and American Express is a credit card brand, that’s hardly the most exciting category on the planet. On the second point (staff & costs), it’s about a good balance of stock and flow and having the right tools in place (like Percolate) to make it all happen. The way we see it breaking down is in these three components:
- Calibration: To begin consuming, you’ve got to decide what to consume. If you’re a person, that’s easy, you’ve got your tastes and interests mapped out. If you’re a brand, it’s a little more difficult. We’ve worked out a method that we use to back out of brand/campaign strategy, and into a set of sources for Percolate to sift through.
- Algorithm: Separating the signal from the noise is even harder if you’re a brand (or an editor at a brand) than if you’re an individual. The algorithm does a lot of heavy lifting to try to get to the most interesting content.
- Publishing: The real point of all that lifting isn’t so it can display it in Percolate, it’s so the brand can find interesting content to comment on and push back out.
When you put the content produced in Percolate and combine it with the beautiful content that is an agency’s bread and butter you get a compelling publishing platform that can actually be sustained over time. Once you get that down, it’s only a short step to start thinking about what you do with the content, which is where Felix and I converge again:
It’s easy to create an ad unit which is primarily links to third-party sites; I’m sure with a bit of effort and creativity you could put one together which is even better than the Counterparties unit on Reuters.com. Start placing that ad over the web, and people will, for the first time, actually have a reason to want to look at your ad; when they see it, they’re even likely to click on it! Sure, that click won’t take them to your site — but it’s still a great measure of engagement. And they will love you for sending them to great content.
We’re not quite at that part yet, but hopefully this helps lay out the vision and explain what the hell we’ve had seven people holed up in an office on Bond Street working on for the past year.
In case you’ve been wondering what I’ve been up to over at Percolate, we’re starting to announce some of the brands using the platform to help them power content production. Last week was GE using it to keep things flowing at Healthymagination.com and this week it’s AMEX OPEN Forum curating content to their new Tumblr (the latter got a nice shoutout on The Next Web last week). Will try to put together a longer, and more cohesive, explanation of what we’re up to with brands later this week.
Fast Company posted an interesting infographic from the folks at Help Remedies documenting the insanity that is the pharmacy, specifically the headache medication aisle. The article explains:
Each of the myriad offerings laid out, whether its gel-caps or something else, was intended to produce a slight edge on a tightly packed, insanely competitive store shelf where virtually identical products can be found just an inch away. As drug makers compete for more and more differentiation, what you get is simply overwhelming. An innovation process that started with the original intention of offering better products leads to anoverall product experience that’s horrible.
Which immediately reminded me of a quote I found when I was working on that innovation presentation. It’s from a very good Harvard Business Review article from 1980 titled “Managing Our Way to Economic Decline”:
Inventors, scientists, engineers, and academics, in the normal pursuit of scientiﬁc knowledge, gave the world in recent times the laser, xerography, instant photography, and the transistor. In contrast, worshippers of the marketing concept have bestowed upon mankind such products as new- fangled potato chips, feminine hygiene deodorant, and the pet rock….
I don’t think it’s quite this simple, but the ebb and flow of markets like this is really interesting. Help’s take is that you need less choice, not more, and they seek to simplify the conversation. But clearly at some point the conversation was simple (it had to start somewhere). I wonder where the turning point is in a category: When does the variety of products for different use-cases start to hurt overall sales? Or maybe it doesn’t, maybe all the specialized products only serve to strengthen the leading brand when confused consumers turn to what they know. (I’m sure someone with experience in this sort of CPG knows the answer to it.)