what does advertising say about me? that's the question I'm increasingly asking myself as the broadcast model wanes and targeted advertising becomes the norm. I'm imagining a future where my Glee is interrupted by messages from fat-burning miracle powders, or where my 30 mins with Modern Family is interspersed with messages for help with sex-addiction or an encouragement to buy some oil shares.
you see the ad-serving paradigm – with which anyone who has worked in online advertising will be more than familiar – will in the future spread beyond the computer screen. to hand-held devices and then, as IPTV gains traction, to TV screens.
it's one thing to see niche targeted ads on my computer screen; it will be quite another to see them on my TV… but as the ability to target on TV becomes widespread, niche advertisers will increasingly be able to ad-serve specific messages to targeted audiences at a fraction of the cost of even a small TV campaign today.
on one hand the future is potentially very bright… we engage more with brands that we like and therefore, theoretically, as ads become more targeted and better tailored to our interests and passions, advertising will be more engaging and, theoretically, more engaged with.
at least that's the theory.
but there's a potential downside… the lowering in the cost of entry will allow hundreds of advertisers who previously couldn't, to advertise on TV. the result is inevitable, a lowering in the average quality of the ads that get produced. this is inevitable.
to escape the race to the bottom, we're going to need choice… the only solution to such a wave of ads will be to have choice over which ones we receive. there's a double benefit – for advertisers there will be increased engagement (we do engage more with ads that we've chosen to watch), and for audiences there will be the algorithm…
because unlike broadcast, where we all have to endure the same ads as everyone else, an ad-served model offers the possibility of a world where only content that get engaged with (clicked on, liked etc) gets further propagated. if Google served TV ads (beyond their current very limited scope) they'd use a quality score (based on relevance and preformance of the ads) to propagate ads that are reaching the right people and being engaged with, and suppress ones that aren't. and that can only be a good thing? can't it?
out of interest, what does advertising say about you?
“the broadcast model isn’t broken… yet. how prepared are agencies for when it breaks?” was the question I wanted to put to the Q&A panel at last week’s iMedia Agency Summit in Sydney. whilst I didn’t get the chance to ask the panel, I did get the opportunity to ask it to Rohan Lund of Yahoo!7, but more of that later.
yes, this week saw the AdTech Summit series hit Sydney, part of which was the iMedia festival which I attended along with around one hundred of my Sydney media counterparts. all in all it was a day of more questions than answers, but that was to be expected I, well, expect. that said, some genuine morsels emerged, which (after a bit of an absence from the blogosphere) I thought I’d share… here then, is what happened at iMedia, at AdTech, at Sydney…
Unilever brands that have utilised the social media space
first up, delivering the keynote welcome, was Unilever’s Babs Rangaiah (@babs26) who described how he and others are pioneering in the Social Media space at the company. its necessary stuff in his opinion, pointing out that only 18% of TV campaigns generate positive ROI, and that 24 of the top 25 biggest newspapers are undergoing circulation decline.
his three observations were that Unilever is (1) living the [social media] space, (2) re-framing their thinking re Social media and Applications [ie NOT pre-rolls – thats the broadcast solution applied to the online paradigm], he cited BBH’s Axe Wake Up Service app from Japan (above), and (3) rewriting its media manifesto along these lines, as would be written by customers:
be part of the world – Rangaiah pointed out the gap between time spent online and advertising spend online
penetrate our culture – the move from interruption to engagement; is what we create useful, entertaining or interesting? he cited the example of the Dove for Men campaign, which after scooping up a SuperBowl spot proceeded to land its American Football-playing star a seat on Oprah’s couch
give us a voice and a role – Best Job In The World anyone?
be authentic – anyone unclear on this one just Google Dell Hell…
listen to us
create more value – “you want us to pay? … [then] we want you to pay attention”
don’t be so corporate
keep it simple – good one this, if you can’t explain an idea to a non-marketing friend or partner in ten seconds then its probably to complex to ever get traction
telling friends – WoM is the most powerful form on advertising [Alleluia Babs, Alleluia]
do good
he ended on a topic that would be the subject of some debate for the rest of the day… how the rapid evolution on metrics in the online space has created its own rewards but also problems. from clicks and impressions to unique users to engagement or stickiness and now ROI … measuring success has never been so possible nor so complex.
next up was the lovely Megan Brownlow, Entertainment and Media Editor for PWC’s Outlook, which complies stats on ‘where the money is’ in the entertainment and media spaces… this is facts given meaning not opinions back up with stats, so worth paying attention to, especially a key observation re consumer spending vs advertiser spending…
PWC’s five year view looks a lot like this
PWC revenue predictions as presented at iMedia Summit last week in Sydney
put simply, people are predicted to spend proportionately more on entertainment and media (content) than advertisers will spend on media. good news if your media business model is predicated on creating and distributing stuff that people will want and pay for. bad news if your media business model is taking commission on advertising spend. a problem further compounded by the well documented explosion in inventory, which any economist will tell you will lead to lower yields for media publishers and agencies.
Brownlow described the ‘structural change’ of this versus other recessions. the recovery will be shallower than any previous one, “a crawl rather than a jump out”, but not for everyone. between 2003 and 2009 search revenues have increased from 31% of ad revenues to 50.4% – 90% of which, no one needs reminding, goes to one company.
the big growth is in consumer pay models, where growth is predicted to be 5.5% CAGR (’09-’13). hence media owners and publishers seeking hybrid business models (another hot topic of the day) to monetise content. Brownlow noted research suggesting that, for example, in newspapers people will pay, but only for verticals – a proportion (Finance 97%, Sport 77%) of the hard copy price as long as that same content is not available for free elsewhere. in this context Murdoch’s rallying cry to the newspaper industry to declare war on Google makes immaculate sense. her final observation was that even if hybrid pay models work, lost revenues won’t be replaced. the annihilation of the old model of newspaper publishing is still an inevitability.
Brownlow’s final observation however was a cold shower for any Australians readying themselves for seats of honour in the digital revolution after-show party. compared to the rest of the world, the country is significantly lagging in online adoption, with revenues in the online space in the region of 25%, compared with 31% globally and up to 50% in countries such as south east Asia. “traditional media ‘owns’ the market in Australia for a long time yet to come”. the reasons, infrastructure (and therefore effectively ISP cost) and attitude… the former understandable given the countries geography, the latter frustrating to say the least in a country with such an entrepreneurial culture (my observation not Brownlow’s).
three ‘game-changers’ to end with: (1) the NBM or National Broadcast Network, a government initiative to hardwire the nation by 2017, but which Goldman Sachs predicts will be only 50% complete by then, (2) mobile, yes 2010 IS mobile’s year and (3) interactive games, with a 7.5% growth forecast, 2.2bn market and two structural changes to boost the sector in the form of mobile and online gaming. play on.
next up the enigmatic Ed Smith of NDM who started with a topic that was to become one of the themes of the day… that of volume versus value in the online space. he made two observations – one, that (average) click rates were down from 32% to 16%; and two, that 8% of people accounted for 80% of clicks. so just how valuable is a click? how many brands and businesses are so overly obsessed with generating clicks that they’re “going out of business as cost effectively as possible”? …he questioned what the point of [100%] paid-for search was when you’re not investing in product or marketing initiatives that ‘build the brand’?
this was a phrase that kept on cropping up, bit of a fat phrase (and not in a good street way)… ultimately by ‘build the brand’ I suspect the speakers were referring to brand associations. and raising the (valid) question of how long the broadcast interruption model can create and sustain brand associations (ie what ‘brands’ effectively are) if we’re all collectively ignoring / avoiding more, clicking less, and paying for content direct.
Smith went on to give the publishers’ perspective wrt post-broadcast print… describing some of the emerging platforms he played with at a recent tech conference. I was going to ask him “how he was intending to meet the challenge of defending margins when the cost of producing content is no longer matched by advertising revenues?” … but we know the answer to this, it’s the much talked about hybrid model… of combining (lower) ad revenues with direct payment from people for the content. the ‘iPad $ a day’ model. Smith’s retort to those who question the sustainability of the hybrid model: “People who say ‘people won’t pay for content’ don’t know what’s possible”. to that point, he showed us this:
he observed that the NYT’s iPad application launched with three advertisers each paying US$200k for the privilege and challenged the audience with the question “are your digital media choices making your brand bigger or smaller?”
the end of the morning saw Fairfax Digital’s CEO Jack Matthews take up some of the themes opened by Smith… “consumer demand for media, in all it’s forms, has never been greater”, “a new era of online advertising”, “direct response get’s too big a share of the media mix”, “the future of media companies and agencies is to add value” … there’s a clear direction of travel from publishers here; away from trading debates based on the value of a click, towards trading debates predicated on the value of the audience the publisher is providing…
Matthews outlined three change catalysts in the space: (1) three screens (2) building brands on desktops and (3) agency / campaign integration
he made a delightful observation on the three screen model: “if the desktop user is a browser, then a mobile user is a hunter”. I have a lot of time for that, it really focuses how you think about adding value to people in the mobile space. he reiterated the belief that “people are willing to pay for content on mobile devices”, and pointed out the projected rise of video advertising on the desktop – 48% CAGR in ad revenues to 2014. he also made it quite clear to the audience that Fairfax Digital is in the business of and focusing on “building engaged audiences more than reach”.
he ended with a call for integration, observing that “we have no aligned metric for measuring ‘brand building’ [that phrase again] online”, and that there’s not enough integration within agencies on aligning on and offline media. he acknowledged that his organisation had to be more prepared to work with other organisations too… an acknowledgment that he described as a “fundamental shift” in Fairfax’s position.
after post-lunch sessions by Michael Hendricks, Head of Decision Management, CitibankAsia Pacific (“we’re about acquiring the right customers, not the most”, “our most valuable customers use all of our channels most of the time”) and Corporate Anthropologist (who knew?) Michael Henderson, it was back to the media agenda with Rohan Lund of Yahoo!7…
58% of Yahoo!7’s audience media ‘mesh’ at least several times a week: 95% on email, 63% on social networks, 54% to get more info on a show and 40% to follow-up on an ad they’ve seen… time spent online watching video is now 13%, and very much social.
Lund challenged the session – in a context of content, content content – to question what our business models were? access isn’t enough. “we [Yahoo!7] make it easier for users to access content that matters to them most”, adding that “our businesses are data businesses … our core business is targeting”.
he outlined Yahoo!7’s recently launched catch up service, thru which every primetime show is available. he described how the ambition is to get the browser closer to a TV environment, and talked thru the challenges of making TV shows available for different IPTV-ready TV models. interestingly, for non-partner TVs they’ve introduced open-source development. and he was quite clear that he saw no reason why online video CPMs will never be lower than for TV; in effect a premium for targeting.
back to the question I asked at the start of the post, I put to Lund that “the broadcast model isn’t broken… yet. how prepared are agencies
for when it breaks?” … he believed that agencies are becoming more integrated, and understanding better the balance between on and offline. but acknowledged the elephant in the room; that “no one ever got fired for buying TV”, and that people are still “hiding behind TV as a safe solution”…
good to have it out and said, and credit to Lund for doing so… but I think its less about TV being seen as the safe solution, and more the reach and delivery of the broadcast model that’s seen as the safe solution. the absurdness of this just gets truer every day. if the iMedia summit made one thing clear its that the figures are now starting to track the theory. viewing fragmenting, click rates decreasing, ad avoidance up… and the solution? a continued clinging to the sinking ship that is broadcast interruption. it’s like the Titanic’s going down and the industry is scrabbling to get on board…
this was followed by (for me) one the highlights of the day as Sean Finnegan, President and Chief Digital Officer at Starcom MediaVest Group took us thru his vision for his media agency’s digital offering.
his logic is crystal: clients are struggling to deliver accountability in rapidly changing markets where its harder to connect with consumers. agencies therefore need restructure and resource to provide a range of new offerings: RealTime consumer insight, actionable insights, and content – all created by what Finnegan describes as ‘liquid talent’. how…
business intelligence and hub formations
data exchanges (in the US buying of non-identify-able consumer data is now mainstream)
standardised findings with consumers and the industry (common and consistent measurement)
instant content delivery, real time text and video (eg EA’s Tiger Woods video)
strategic alliances, frenemies have never been more important…
he observed that “efficient pricing is no longer a value add”, and that “marketers and agencies that focus only on price are leaving value on the table”. we’ve gone “from a linear to a networked comms infrastructure [which] creates a transfer of power to the consumer”. he noted that we “need to start understanding the passions and behaviours of individuals [across media platforms]”, and observed that this would have inherent problems for publishers.
he also outlined his thoughts on the media agency offering… “because of our proximity to consumers we have to be more adept at design and messaging”, but also gave a stark warning to media isolationists: “you need to be confident enough to partner with competitors that are better than you to deliver the best solutions for your clients … the more we give away, the more we grow”.
his view on the future of the Starcom’s digital offering is clear: a move away from media people as aggregators towards media people as analysis of data, interpreting, modeling and projecting for clients and brands. his people will be more account managerial and who are less in the business of “killing bad news” and more in the business of “selling the best ideas”.
so what to make of it all?
great day and some interesting comment and debate, but you can’t help but leave with the impression that there’s far more questions than answers. but perhaps that’s well and good, it’s an easy cliche to say that there’s never been a more interesting time to work in media… but its true never the less. for more than three years this blog has set itself the task of negotiating the future of media and communications; a task is no less interesting, gripping and exciting than it was when in November 2006 I wrote my first post on TV (versus) online:
“the internet is television. but it’s television on viewers’ rather than broadcaster’s terms. the issue isn’t the demise of TV, but the decline of the broadcast model and of the broadcaster as commissioning editor and content aggregator.”
its vaguely how terrifying how little has changed. the debate, the argument and the negotiation continues, and we’re all the better for forums like iMedia in which to talk, and for that matter drink, it out…
NBC's SuperBowl broadcast cash cow; could the last marketer out please turn off the lights (pic sourced)
news this week that Chrysler has caused quite a stir by 'snapping up' one of the last remaining ad spots in the Superbowl. 'Chrysler' you say, 'the Chrysler that got bailed out by the American taxpayer to the tune of $13.5 BILLION last year?' … yes, the same.
I am, in a word, stunned. stunned that an advertiser that had just been bailed out by the American taxpayer could decide that blowing something in the region of $100,000 per second on a 60" TV ad is in any way shape or form the right thing to do. when oh when are people going to get that broadcast advertising is neither efficient nor effective at selling things. McKinsey, if you remember, did a really cracking bit of research that went a long way to proving that consideration isn't a funnel and doesn't work like that.
I'm not suggesting that advertising (ie one-to-many 'adverts') isn't good at doing things. it really is. it's very good at (1) communicating new news, (2) getting people talking about your brand and (3) it's very good at validating purchase decisions. but none of these are relevant for Chrysler; who in this move have only succeeded in getting people talking for all the wrong reasons…
Ad Age quote one commenter as saying that the move is a "slap in the face to every American taxpayer … This is Chrysler's way of saying 'Thanks for saving us, but now screw you, America. We're gonna use the money to pay for some Super Bowl ads".
a spokesperson for Chrysler- quoted in the same article – comments that "The Super Bowl is one of the most-watched TV programs of the year, not only for the football game but for the creative advertising … It provides an efficient platform to make a statement, set the new brand-positioning and reach the maximum number of viewers in comparison to traditional advertising … It would be more costly to achieve the same number of viewers in traditional media placement and ensure the high viewership attention span that the Super Bowl delivers."
I'm sorry but the 1980's called and they want their marketing model back.
its a statement from a company marching backwards: "efficient platform to make a statement", "set a new brand positioning", "in comparison to traditional advertising", "high viewership attention span" … I really am at a loss for words.
Advertising Age's headline was that "you're damned if you do and you're damned if you don't" – their reporting suggesting "Don't advertise, you don't move product. Advertise, you get hammered for wasting money" … I'm sorry but in this case Chrysler are just damned. damned because they have. they have wasted money, they have taken a lazy way out, and they have ignored the new paradigm of marking and communications that has evolved around them over the last decade.
Pepsi decided that they wouldn't be damned if they didn't. the company that spent $142m on SuperBowl advertising between 1999-2009 (source) have decided that they'd rather invest the money on something a little more meaningful than lining the pockets of Madison Avenue's Bad Men. Pepsi are marketing by investing in the people and projects that people think are worthy of investment. Pepsi get that ad money isn't there to 'sell' stuff. it's there to get people talking about your brand, because what you're doing is worthy and meaningful and acting as though you give a damn about the people that you want to buy your products. and full credit to them.
in the slow painful death of the broadcast sales model, it's the existence of events like the SuperBowl that will allow its last standing defendants to cry "it works … we can shout at people and claim 'our brand believes in freedom, or choice, or in the human spirit, or technology or whatever we think will most differentiates us from a competitive set that we create in order to validate our investments and people will believe us and they will buy and it will be awesome".
but if the reaction to Chrysler's move tells us anything its that the long held contract between advertisers and people who buy stuff may be starting to show more than a few cracks. people are realising that thereare other ways to be marketed at than to be shouted at by a company who can spend $100,000 a second on an advert. sure the model and it's contract will hold, probably for a good while to come, and Chrysler seem happy to throw their dollars at it. but I'd rather be one of the first ones to get out and taste the fresh air than be the last one to turn out the lights. what you do, I guess is your call.
so I'm lucky enough to have just seen an opening screening of Avatar. the movie has been a long time coming and if buzz is anything to go by its set to do rather well. actually buzz is something to go by… research by Aegis' ævolve shows a clear correlation between the amount of buzz a movie has in advance of release and the size of its opening weekend. Google Insights for search, as you'd expect, shows the same thing, very significant increases over the last month or so:
its a big movie for both audiences and those involved but also for Hollywood. with revenues increasingly moving to DVD and online, maximising revenues in cinema theatres is top priority for executives of studios that are feeling the pinch of a digitised economy more than most.
3D is key to this, and despite criticisms from, well, critics that far from adding to the cinema experience, 3D distracts from the quality of viewing, its a key strategy for maximising revenues in cinemas. of course it also makes, for the moment, the cinema experience unique. its normal if not preferable to watch a movie in the comfort of your home with the quality that we've come to expect from a cinema. plus no one talks behind you and you don't have to cock your head to one side to see 90% of the screen. 3D is currently a unique offering in cinemas, an offering that can be uniquely monetised in cinemas.
in many ways, the technology is the draw of this movie; yet for all its future-facing there's been no sign of the ambitious and 21st century marketing initiatives some of us have come to expect post Cloverfield, Batman Begins and the like. in fact for all its 21st Century technology Avatar feels distinctly 20th Century in its marketing… all the opportunities to engage a potential audience up front thru transparency were dismissed, in favour of a publish-and-be-damned approach to make a movie and sell it.
and selling it is what this movie has been all about… marketing efforts, for all their visibility, demand that you watch this movie rather than genuinely be part of the world from which it derives. for all its 21st century capabilities there's nothing of the Wachowski in here: no world beyond the world to discover and explore. and this seems distinctly ironic. for a movie that cost $500m dollars to create, we surely deserve more than 150 minutes of cinema. this movie begged for the trans-media but got nothing of the like: in a declined economy, $500m could be easily mistaken as a metaphor for what Cameron calls 'the Unobtanium'.
great brands don't need to advertise. right? great brands generate their own publicity. great brands grow through word of mouth. great brands invest in innovation which gets itself talked about. great brands activate their networks, excite their advocates and set the Twittersphere ablaze.
great brands pity lesser brands that need to resort to broadcast advertising to get their products and services in front of the masses because they haven't mastered the new media economy. great brands don't advertise, right? …wrong:
Emily FK kindly sent me the attached today (yesterday…) from London… Google. advertising. with a cover wrap. on the Metro. things we really, really, never thought we'd see.
on viewing it I recalled an ancient Chinese curse that goes along the lines of "may you live in interesting times". they didn't value change did the ancient Chinese. boy are we collectively cursed – interesting times indeed. one of two things is happening here, you can take your pick…
option one: the Google (money) train is faltering. their core business of search continues, of course, to be a juggernaut that is in very good health. but could the non-core products and services that are fueled by the juggernaut be feeling a little more heat?
its the only realistic explanation… despite coming from the fine-tuned stable of Goggle new media marketing, Chrome has failed to get traction in the marketplace. the very handy market share reports that Chrome's current share is hovering at 3%, compared to Firefox's 23% plus and the collective Explorers' best part of 60%…
three percent. that's a figure that Google executives haven't seen for a while and no doubt has them spooked. they need more than 3% and they're going to throw money at getting it, because the information about what we browse, what we do and who we are is invaluable; and in Google's hands its game-changing.
the reasons as to why traction hasn't been hit could be numerous and are almost certainly a combination of apathy, familiarity with existing browser, anti-Googleness ("they've got enough information already" kind of thing), and perhaps even awareness. one would hope that the latter has some part to play, for I fear for the ability of a press cover wrap to make a major dent in any of the other potential barriers.
there is of course option two… that in the evolution of media and communication, there's a need for both sides of the equation. or indeed every side of the cube if you get what I mean. that its not enough for a brand to be a 'broadcast' brand or a 'networked' brand. all this could mean that there's a time and a place for one to many, as well as a time and a place for many to many.
option two could mean that there's there's no such thing as old and new media. there is only media. media thats owned and rented out at a negotiated CPT by big business. media that's made by individuals with a passion and an opinion or two. media created by brands that they can subsequently own and leverage to tell the world why they exist. media that we respect, share, love to hate, assume credibility, trash, believe, pass on, or – indeed – read on our way to work before logging on and checking out a new browser.
Google advertising on Metro. proof, like we needed it, that media probably never was and certainly won't ever be simple ever again.
Nick Dickson pointed me in the direction of this lovely little video which tells the story of how Boondoggle brought music to the web for their client Axion. whilst I'll let the video speak for itself, its worth considering for a moment the elegance of the creative solution…
I've talked often and at at times at length on a theme of "we media and advertising people got this amazing thing to play with called the internet but we screwed it royally by applying 20th Century broadcast thinking to what was a two-way engagement platform, etc" …what the above bit of creative thinking shows is a beautifully crafted way of doing what we should be doing… bringing utility to the web
as I type this I'm listening to some tunes courtesy of the joy that is Spotify, an ad by Diesel has just done a similar thing – I caught a snippet about how they've created a branded radio station on the platform to showcase new music. thats utility too. and its a brilliant thing.
all this reminded me of the Windows Apple banner wars from a while back, and whilst the efforts of Apple were an attempt to creatively use the space that is the banner / sky, its still an ad.
the gig in a banner concept goes a simple but crucial step further… by being there on users' not advertisers' terms, its adding value to my time on the internet – not distracting me from it. it deserves every one of the five Cannes Golden Lions it picked up.
James barry's The Progress of Human Knowledge and Culture, which – appropriately – surrounded us at the RSA yesterday
“Behavioural Economics provides a floodgate of inspiration to our industry. Our challenge is to ‘chunk’ it down, and apply it in ways which make a meaningful difference to client agency dialogue and communications planning and execution. It’s just the sort of breath of fresh air we need to stimulate our intellectual juices and rise above conversations about time sheets and schedule. It gets us back to the core of what we do and why we do it.”
Rory Sutherland, IPA President
and so yesterday I gathered at the RSA with other industry folk as the IPA, led by Rory, began its journey into the world of Behavioural Economics. and a brilliant session it was. it was such a stimulating morning that I'm at a bit of a loss on how to capture it all – so I'll have a go at listing the gems that I took out of each of the talks before adding some thoughts of my own at the end.
First up was Doctor Matt Grist who is director of the RSA's Social Brain project
Grist introduced us to the notion that Behavioural Economics are a "patchwork of theories that predict irrational behaviour", (versus rational behaviour as predicted by neo-classical theory) – essentially its Economics + Psychology
Behavioural Economics in action has been popularised by books like Nudge. 'nudges' work by guiding behaviour thru changes in choice architecture… ie its not awareness and consideration that primarily dictate our choices but the context in which those choices are made, here's a good example…
historical consensus has been that there are two systems in the brain; automatic and reflective. automatic is when we take our regular tube journey or are reading a book. reflective is when we have to concentrate on taking a new / different route to work or have to write an essay. but Grist proposed a third element and a new model:
Grist's model of the brain's three behavioural systems
this opened up the interesting question of how much of our behaviour we actually have control over? Grist observed that we ought to think of these brain systems as "libertarian paternalistic" ie they are supposed not to erode autonomy and responsibility – this is achieved thru training; top-down, sideways and bottom up. I then got awfully lost and at one point I fear I scratched my head and squinted.
anyhoo the next stage, for Grist, is understanding to what extent thinking in terms of the threefold system above empowers people to be more autonomous and responsible?
next up was Nick Chater, Professor of Cognitive and Decision Sciences at University College London
his three themes were how we perceive magnitudes, decisions and valuations all without the context of internal scales. it turns out that we have very limited capability to put a value on anything… everything is relative. when perceiving magnitudes we only have about five 'buckets' in which to separate out degrees on any particular perspective on the world. the system is limited at a very basic cognitive level.
when it comes to decision making, we're similarly it turns out "all over the place" – all we have is binary judgments. take for example £300. if I was to say I'm going to put £300 in your wallet, right now, your response would probably be "whoo hoo" or something similar. if however I was to say I'm going to right now take £300 off of your mortgage, your response would probably be "so what?!" or something similar.
…the point is that exactly the same amount of money engendered totally different responses because of the context in which it was placed. everything is relative, but relative in a very limited (binary) sense. the same contextualisation applies when we get used to a variable having a certain amount – so for example in banks money generally goes in in much bigger chunks than it comes out… the consequence: losing £300 is a lot more worse than gaining £300 is better.
the same applies for time discounting… analysis of Google data demonstrates our pre-occupation with the immediate future and our ambivalence to the distant future.
finally, when it comes to perceiving valuations, we can't. we know the price of everything and the value of nothing. experiments with pain (like Dr Peter Venkman at the start of GhostBusters) show how the value of pain (ie how much we're prepared to pay to avoid it) changes depending on how much we have to spend. demand is extra-ordinarily malleable. how much is the value of a cup of coffee? don't know, how much does it cost? £2. I guess its value is £2 then…
then it was up to IPA President Rory Sutherland to tell us why we should care about any of this
he's written a full piece on this in this weeks Campaign, which is a great read, but here are a few of his gems from yesterday…
most successful businesses of recent times have started by figuring out how to make value, and only then worked out how to make money off of the back of that value. as an industry though where we make money and where we add value are different things – we've "hitched our fortunes to media spend", and here's the danger; if – as supply increases – media becomes cheaper, it will have less value to clients (see above) and those clients will skimp on the expense of getting the most out of that media (or other exposure).
people have a preference to solve problems with infrastructure solutions rather than persuasion solutions. but persuasion solutions can be a lot more effective. and we, the communications industry, should be experts in the applied-psychology business. "ad-folk are better at ideation off of a theory" …understanding and applying behavioural economics is fundamental to the success of most businesses and social problems. he gave a wonderful example, I don't know if its true…
Rolls Royce were having problems selling cars in their regular showrooms. so instead they sold them at Yacht fairs, where the items on sale go for a few million rather than a few hundred thousand. "I think I won't buy that £8m yacht" says mister man. then he sees a lovely Rolls Royce and thinks, "I've just saved £8m, what's £350k for a lovely car?!" …behavioural economics works.
the last speaker was Nick Southgate, who explored how we could apply all of this
first up brand preference. people don't express a preference when they don't need to. structure is more important than preference, indeed structure creates preference… competitive positioning is very important to brands; it what creates the structure – and therefore determines preferences – within a category.
second, brand positioning. in example after example, introduction of a third choice massively changes the preferences of the first two. one implication – the launch of 'me too' products actually make the existing market leader look better.
thirdly from a creative perspective, testimonials don't work. behavioural economics might help explain why… the plan to make us buy something because someone expresses their preference for it is flawed by the – incorrect – assumption that behaviour follows attitude. but we forget our attitude whilst automatically going on with a behaviour… you get to the top of the stairs (automatically) and on the way forget why you were going upstairs. chimpanzees do the same thing – they will remember that they're looking for a stick to get termites only whilst the termite hill is in view. behavioural economics is something that would seem to apply to all great apes…
and then on to the panel discussion which I won't summarise but instead pick a few themes that emerged…
targeting
it had occurred to me throughout the session, and was suggested by an audience member, that understanding BE presented opportunities for better targeting. does understanding what BE tells us make attitudinal targeting redundant? if we don't make decisions based on attitude, then why are we segmenting people based on what they think? and if so, what should we be identifying and segmenting people based on? anyone?
NB Mark Lund (formerly of DKLW and now Chief Executive of the COI) who was on the panel noted that the COI would be publishing research at the end of November that "will affect segmentation" and that will demonstrate the requirement for another degree of (agency) segmentation.
agency and industry structures
Lund suggested that he believed that agencies will have to get flatter and wider; with expertise spread across a wider number of areas. he referred to the adage that to a man with a hammer, every solution looks like a nail… if agencies are to provide more holistic solutions, they're going to require more than hammers.
Kate Waters, Planning Partner at Partners Andrew Aldridge, observed that "we don't have the right relationships to make our ideas happen" – beyond the buying of conventional media spaces, experiential, DR we have little implementational skill. if BE says we need to be creating structures that influence behaviour, then we're severely limited in the structures we can change. our industry engine is one built around awareness generation and perception change. we may need to seriously reconsider our long-term agency and industry structures.
ethics
a wonderful debate on this one, does the ability to sub-consciously affect what people do give us too much power? and is there are conflict between planning the Change for Life campaign in the morning and a campaign for Snickers in the afternoon?
"there is no conflict" said Lund – paraphrasing Darth Vader, "clients would much prefer people eat less but for six decades … its about quality as well as quantity of consumption". but this misses the wider point highlighted repeatedly by Waters; much of this isn't new. we've been in the business of affecting what people think and do for a century – all BE does is bring us an appropriate, and consistent, language for what it is that we do.
I'll leave the last word on ethics to Rory – "I'd rather be perceived as evil than be perceived as ineffective"
…
and so that was that. awesome morning and lots of questions raised which now need to be answered. workshops are going to be held in November, details of which are here. I urge you to get involved. I'll leave you with more of the lovely Rory, talking recently at TED. enjoy.
Mediation came across the above ad in today's MediaGuardian, which last week reported that the NMA – the Newspaper Marketing Agency – is seeking to highlight the benefits of newspaper advertising against a gloomy performance backdrop. Group M forecasts that total newspaper ad market will be down 26% year-on-year, representing more than £900m vanishing out of the sector.
its a issue all right, but far from providing an answer, the NMA's solution (above) tells us more about the NMA's collective failure to understand, or admit ot understanding, the roots of te sector's woes.
do more than most readers of a newspaper will do and take a good close look at the above ad. "Flies aren't the only things you can hit with a newspaper" … "Nothing targets customers quite like a newspaper". sorry, did I miss something? I can only assume that I've woken from the weekend's adventures in the mid-90s…
its like every discussion I've had over the last eight years… about a shift from scarcity to abundance of stuff, a move from push to engagement marketing, from brand to people-centricity of thinking, never happened. its like Clay Shirky, John Grant, Mark Earls, Henry Jenkins or any other of the great thinkers who have helped us understand the shifting sands of the communications landscape never wrote a word.
we stopped (or should have stopped) thinking about how we 'hit' people with communications years ago. the ability of people to now avoid being 'hit' with things that they don't want to see or engage with is one of the pillars of the NMA and it's clients' problems. is this really how they want readers to feel?
we need news institutions, and moreover we need them to thrive. they investigate and report, they hold our public servants to account. they inform, inspire and educate us about the world, our society and our culture. The Telegraph's exposure of and reporting on MPs expenses, and the Guardian's success last week in propelling Trafigura's super-injunction into the public awareness more than demonstrate that.
but they are more than newspapers. the solution for news institutions is not to fight for an unrealistic share of advertising media budget; the world has too-far evolved, there's too much stuff out there and habits have changed too much to win that battle. news institutions need to understand what they are and adapt their business structures accordingly… as Emily Bell so eloquently writes only two pages before the above ad, "here is the fork in the road … there is a new hierarchy of communication controlled by the user, and for the older hierarchies there is the dilemma of whether to literally "follow the crowd" or to try to make the crowd follow you"
we need right now to stop thinking about 'hitting' people with our communications, our news institutions deserve better.
IPA publish and broadcast thoughts on social media. "that's not very social" said some socially-minded planning types. "no its not is it?!" replied the IPA, "let's change that" …so it was that last night the IPA Social Media group hosted the most social of evenings to debate and discuss the ongoing evolution of all things socially media…
the always lovely Mark Earls kicked us off with five principles that outline the big picture:
connecting people allows them to behave less independently
connectivity makes things more volatile
connectivity disrupts existing and established power relationships
its not about what technology does but what it enables
technology allows people to spend more time with other people
Neil Perkins then took us through ten principles – thought starters and jumping-off points for discussion and debate on all things social media. they and their authors are thus…
People not consumers – Mark Earls
Social agenda not business agenda – Le’Nise Brothers
Continuous conversation not campaigning – John V Willshire
Long term impacts not quick fixes – Faris Yakob
Marketing with people not to people – Katy Lindemann
Being authentic not persuasive – Neil Perkin
Perpetual beta – Jamie Coomber
Technology changes, people don’t – Amelia Torode
Change will never be this slow again – Graeme Wood
Measurement – Asi Sharabi
Neil finished his section with a quote by John Dodds that really got me thinking… “Are we actually talking about social media or has the advent of the internet simply revealed that the advertising emperor had no clothes and should have obeyed the the principles all along?”
I Tweeted at the time to "be wary of John Dodds [you quote you understand not John per se – sure there's no need to be wary of him] …Advertising is not the enemy, the too-narrow concept of the ad is. Fireworks are part of the solution"
the point I was making was that its easy and dangerous to treat social media as though its going to usurp the crass, unrefined and unsophisticated concept that is advertising. which is just plain wrong. a point made more than eloquently when Amelia Torode presented a case study of VCCP's Meerkat for Compare the Market…
Amelia was very keen to make the point that the Meerkat campaign wasn't a 'social media' campaign but a 'social' campaign. but I think this misses the point… Meerket isn't a social media or even a social campaign. Meerkat is an advertising campaign, an advertising campaign that has made the most brilliant use of social media to extend the scope, levels of engagement and fame of the ad.
great advertising is John's Fireworks that get ooohs and ahhhs from people. this is how one-to-many broadcasting advertising works. its brilliant, but let's not pretend that its social-led.
we then had a break out session on which type of agency is best placed to plan social media…
there are echos of the "who owns communications planning?" debate here. the easy answer is that comms planning is owned by everyone and no one. the harder answer is that you have to understand the role of communications in conjunction with the capabilities of a given client.
great social media planning needs generalists who can understand the role that social media plays in a wider strategy and balance the weight of effort across different behaviours accordingly. but it also needs brilliant specialists who can bring the latest technologies and activities to bear on those strategies.
social media calls for new specialist agencies, but at the same time it calls upon all of us – no matter what our discipline – to understand the role it can play and how it might affect and change how we do what we do.
who should clients trust with their social media strategies? they should trust the people most closely aligned to the role for communications…
are you looking to use social media to tackle head-on negative brand perceptions? …trust your PR agency
social media to actively create sales opportunities? trust your media / direct agencies
or to improve customer service? …that'd be the call centre
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all in all an awesome night, but its only the start… join in the debate via the facebook group, on twitter, or via Social on the IPA website. and finally a big thanks to everyone who helped organise the evening…
but what does it all mean?: Hook, Grant, Bailie, McClary and Corcoran with chair Chris Maples debating at Vizeum this evening
who's in control? that was the theme of this evening's Thinking From A Different Place debate at Vizeum. do brands make what customers want or do customers determine what brands make? do creative agencies still control creation of the best ideas, or are the crowd now creating and aggregating the best content?
a panel, consisting of Vizeum's Matthew Hook, We Are Social's Robin Grant, Martin Bailie of Glue, Michael McClary from Microsoft and Andy Corcoran from MTV all awesomely debated a range of subjects from the decline of the newspaper industry to the impact of technology, taking in the future of media agencies and the nature of brands and advertising on the way.
it's easy to summarise such a debate by saying that its all getting more and more complicated and more and more difficult and we all need to move faster and faster and be better and better to stay ahead; but a few interesting comments steered the debate in a more illuminating direction.
Martin pointed out that we focus too much on the next big technology, or on the specifics of what people are doing with technology now, rather than focusing on two millennia of human psychology to point us in the right direction. as he put it, if we "get the basics right you're 80% there" – produce interesting stuff that's based on a interesting point and view and land it in the laps of as many of the right people as possible.
the question of listening to customers was numerous times, in particular by McClary who observed that there's a "danger in highlighting [and responding to] only the loudest voices". Hook agreed, observing that whilst you can engage 1,000s in a conversation, many brands are interested in talking to and influencing millions. Corcoran reminded us of the Henry Ford quote that "If I'd asked my customers what they wanted they'd have asked for faster horses".
but it was the nature of control that caused the most interesting debate. Grant: "historically brands were more in position of control"; Hook: "marketers desperately want control, they do everything they can to create predictability [of the result of their actions]"; Bailie: "it doesn't matter – no one controls brands; get rid of the idea of control"
for me its about maintaining a balancing act; about knowing when to keep and when to let go of control of what a brand does and how it does it. would you ever let the crowd determine your core creative idea or brand positioning? …almost certainly not. would you let them create content inspired by it? …yes. should you let them make your products? …no. should you le them choose the ingredients? …of course.
a point was made about the recent successes of Facebook and Twitter, with a question being raised about what business they're in. they are – of course – in the business of aggregating audiences. that's the media business. the point of whether or not they can monetise that aside (big aside I recognise but run with it), part of their success is down to the fact that they capitalise on the fact that one of the best ways to grow an audience is to get your current audience to do it for you.
giving away control – of your product, or whatever is appropriate – is a particularly effective way of getting an audience to do just that. give them ownership, give them reasons to talk about you brand, its point of view and its products and services. but most of all give them a reason to come back, to stay part of the conversation with you. because its those conversations that are the most valuable bit of media real estate of all.
MEDIATION 