advertising, data planning, debating, marketing, opinionating

The Un-Negotiated Contract: How the model changed, and why the fight for access to data and information has never mattered more

this post first appeared on Mumbrella

At some point in the last decade a long-established contract between people, media and brands fundamentally changed. What is gradually and incrementally replacing it is an un-negotiated contract – in which information is the new currency, insights and utility are the new value, and the fight for the control of data -whether you realise it or not – is one in which you are already engaged.

The nature of the contract we’re currently negotiating will have huge implications for consumers, brands, media businesses and governments. Whether its the strategies employed by brands, the deals made in market, or the data that’s shared with our governments – how this emerging contract nets out will affect us all, and is already shaping the industry around us.

The broadcast interruption model that emerged in the 1950s was a ruthlessly effective and potent means of value exchange. Everyone involved (which was everyone) won. It was ruthlessly simple – brands gave broadcast media dollars which paid for content that people viewed, and which brands interrupted to get people’s attention.

mediation_broadcast_interruption_model

The model was so awesome that it even accommodated channel-neutrality – it worked as well for print and radio as it did for TV, but at some point in the last decade this ruthlessly simple and effective model started to break down. Fragmentation of channels led to fragmented viewing and audiences – necessitating more investment by brands to reach the same number of people. Set-top and on-demand technologies allowed viewers to skip brand messages (although the evidence is that this was largely off-set by higher viewing in PVR households), the internet changed, well, everything … and a new generation of media businesses and brands emerged that weren’t dependent on the broadcast interruption model – or more specifically the currency that drove it.

Because what sat at the heart of that model and the old established contract – its currency – was the ad. Adverts were what media organisations sold, what brands placed and what viewers watched. They were the centre of the contract’s gravity – so much so that the very concept of advertising became synonymous and interchangeable with its most predominant vehicle … the advert.

What has tacitly emerged over the last decade has been a fundamental reworking of the relationships between the various participants in the deal – to the extent that I now think we’re working with something that looks more like this:

mediation_unnegotiated_contract

The emergence of new media businesses built on data – rather than broadcast ad interruption – is one of the key drivers of this new as yet un-negotiated contract. Google, Facebook, Twitter are of course the obvious examples but so too are companies like Amazon and Ebay – they revenue-generate based on the data they accumulate, and the insight this subsequently generates for advertisers. Ads are still of course part of the equation but they are no longer the point of the model … rather information is.

Better information allows and enables brands to have better contacts and connections with people … something Will Collin discussed on Mumbrella back in October in a brilliant piece that made the case for a focus on reciprocity in how brands engage people – I’ve called it utility above but the point is the same. It’s about how data and information fuel better brand ideas – ideas that are not only increasingly necessary in our fragmented cluttered world, but which are also proven to generate disproportionate ROI versus optimisation of the channel plan.

So far so nice theory, but so what? Well, what this affords us is a framework to understand the various terms of engagement being played on in what will probably be come to be understood as the data wars. Early skirmishes and alliances in an emerging contract based not on ads, but on information.

New models are emerging between brands, media owners and agencies based on information and data rather than just ads media spend. For example this case of how Twitter data is delivering new targeting capabilities.

Ads are, of course, still in play but data and information is what the new contract is predicated upon. Expand ‘media’ in the above model to include (media) agencies and you understand why the positionings around Audience Management Platforms and audience data are so vital to those involved – its about who controls the insight (and therefore the revenues).

It’s also why brands are (1) increasingly asking why they shouldn’t retain full control and analysis of their own data and (2) why some brands are looking to cut media out all together and go direct to customers (existing or potential) based on the data and information they own. Nike have used this strategy with Fuel, whilst brands like Burberry use a hugely disproportionate amount of their own media to reach people direct. Its also why media businesses now ruthlessly collect and protect first party data, and why the sharing of that data with frememies to match the demand-scale generated by agency groups makes media owners so nervous.

But its between people and the media where the contract is perhaps most vociferously being negotiated. Between Google and the European Courts with legislation that allows people to force Google to delete their data (or at least the links to their information); Facebook’s privacy settings tidy-up was part of this negotiation, as is any site’s publication of it’s cookie and targeting policy.

The other huge players in this part of the negotiation are the telcos (and I include Apple in this bracket) – whose efforts to win the Triple Play wars were awesomely captured by Nic Christensen here last month. This is important for two reasons … first, the Telcos are emerging as some of the biggest accumulators of data – that makes them significant players in the emerging contract and secondly, like the big Bay Area media companies, the data they accumulate can be appropriated by government agencies without our explicit consent.

The fact is that it has been the emergence of this new model, and the concentration of such vast quantities of people’s data into new media businesses and telecoms companies, that has fueled US, UK and other government agencies desire and demand to acquire that data as part of their ambition to ‘master the internet’.

And yet despite all of this the contract remains un-negotiated.

The conversations and debates required to do so are fragmented and diverse, but there are huge implications for brands, agencies and media businesses depending on just how that negotiation pans-out. Who own’s people’s data? Who gets to sell or target and re-target based on that data? How aggressively should and could brands pursue collection of their own customer data? Should it be made more explicit that someone’s data is being captured for advertising or targeting purposes?

To be absolutely clear, it is my opinion that this new contract is an eminently good thing. It is the emergent data and information-based value model that has given all of us access to search, social media, online marketplaces, and a world of information, education and entertainment.

What the contract promises is awesome – but to deliver, it must first be negotiated.

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debating, opinionating

Getting Back to Business: Choosing to change and inheriting media’s place in the boardrooms of Australia

MFA 5+ Talking Business

it was down to the serious business of, well, business yesterday morning, as the MFA hosted the next of their 5+ inspiration series. created for those in the Australian media industry with between five and ten years experience, the sessions expose those in the formative years of their media careers to inspirational individuals who encourage them to understand the opinions and experiences of others, and crucially discover and develop their own.

yesterday morning we were talking business and we were in the capable hands of former NBN boss Siobhan McKenna and finance reporter, broadcaster and commentator Michael Pascoe.

across two hugely inspirational (obvs), informative and entertaining talks they gave a bunch of media people everything from economics 101 to reasons why media should inherit a place at the boardrooms of Australia; I wrote a lot during the former and was encouraged by the latter. and over the course of the last day or so I’ve been thinking most, it occurs to me, about not so much business, but rather one of the key themes currently impacting on it; the nature of change.

because the world is changing

the G7 economies decline and the emerging economies take centre stage; there is only one work force and its global; urbanisation continues to drive and maintain commodity industries as well as infrastructure rethink; aging populations … these factors and more have seen disruption and change become the new normal – disruptive technological storms continue to challenge, and change, the world as we know it, or at least thought that we did.

because business context is changing

all of which has more than a small impact on (our clients’) business. it’s never, observed one of the speakers this morning, been a tougher or more competitive time to be in business. the example of Darrell Lea was cited: they didn’t go out of business because of a product or service deficiency, they went out of business because the industry premiumised at one end and commoditised on the other and they failed to change and got caught in the middle. and the middle, at least in business terms, is a terrible place to be.

business is changing.

because we need to change

which means that we need to change. of course.

but it struck me at the time, that the obvious response was and is one of ‘organisational’ change; “agencies need to change, the media and communications industries need to change. ‘we’ need to change. our bosses and our holding companies need to change.”

but that’s simply not the case. organisational change is slow, hard and frustrating. Jacko knew this:

“If You Wanna Make The World A Better Place Take A Look At Yourself, And Then Make A Change”

source

as Melbourne-based organisational psychologist (who knew?) Simon Brown-Greaves see’s it: “there are people who’ve been through a lot of change and learn to adapt, and become less anxious as a result … and commitment and hard work have taught them that change presents opportunities” and then people who are “optimistic and confident in their ability to handle challenges … who actually enjoy change … [they’ve] learned that moments of great change are when you get ahead; senior managers look favorably on people who revel in change.”

to embrace change, is to change.

media’s inheritance

… is one of taking a valued and valuable place at the biggest business conversations in Australia. as it was put yesterday: “don’t underestimate your capacity to advise your clients. and and aspire to be leaders in the business community … [media people] don’t aspire to enough prominence and visibility in the business community. every board has an accountant, and lawyer, and someone with Asian experience”; there’s no reason why they shouldn’t be joined by high calibre media practitioners with deep understanding of emerging digital routes to market and understanding of consumer motivations and behaviours.

but its not ours for nothing. and its not ours for free. the responsibility of our would-be inheritance is one of change – as individuals. the media industry can have a voice at any table it wants, but only if we choose it. and only if we choose to change.

if yesterday’s MFA event did nothing other than encourage a few individuals to take personal responsibility to embrace the opportunity presented to us and change … then it will have achieved it’s mission, and a great deal more besides.

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advertising, broadcasting, marketing, mediating, opinionating, television

The Myopia of the 2020 Vision: Why we need a whole load more rational when we debate the merits of Television

Think TV, a marketing initiative of Free TV Australia (the body representing all of Australia’s free-to-air metropolitan and regional commercial television broadcasters), have released the latest in their 2020 Vision series. the episode – the first of series three – see’s industry heavy-weights including Jeff Goodby (Goodby, Silverstein and Partners) and Sir John Hegarty (BBH) discuss (in Think TV’s words) “the importance of broadcasting powerful, mass reaching, messages that connect with audiences”.

its a curious beast. but then communications about communications are always the most interesting of creatures … on the surface this is a straight-forward and very well produced piece of content which talks-up the role and power of TV. but take a closer look and a rather all-too defensive agenda emerges:

some highlights:

TV is till 60% of what we buy because it absolutely is the best place to be able to tell stories and connect people with your brand” … “we try to use video and television as a way to understand our customer … television is the only place you can do that” Kevin Mayer (Volkswagen of America Inc)

“the use of television is fundamental in telling a brand story and engaging with the audience in an intriguing and interesting way” Sir John Hegarty

“the great thing about TV … is that it allows you to go around the rational objections to a product … you have to find another emotional road to take people along so that they don’t think about the rational stuff anymore” Jeff Goodby

“if you’ve got the funding to do an ad, [TV is] still the one place you can get the biggest change in perception and appeal for your brand” Kevin Mayer

“there are two things brands have to do; they have to persuade and then they have to promote. digital technology has been brilliant at promotion, but if you’re not out there persuading, you’re not growing your brand … now, you can only do that with broadcast, because you don’t ultimately know where your audience is going to come from” Sir John Hegarty

“advertising expenditure globally is about $500bn a year. about $200bn of that goes on television. now, end of argument, alright?” Sir John Hegarty

“most of the money my clients spend is still on TV. I know that its very popular to think otherwise and go, you know, ‘what’s going on out there, there must be new things that we should be spending money on’ … and we end up spending on TV, just because it turns out to be the way to start something, the way to keep something going, the way to chance people’s minds” Jeff Goodby

“actually the internet kind of operates as an afterthought of the best TV commercials … people run to the internet to talk about them” Jeff Goodby

“as television evolves and becomes more targeted, I think you’re going to see an influx of dollars back into television because now you’re going to have efficiency and you’re going to have scale, and that’s where I think television is going to really see its second coming” Kevin Mayer

“we’re emotional creatures, and television is an emotional medium … it’s the most powerful selling tool advertisers have ever had at their disposal, and that ain’t changing – not for the foreseeable future” Sir John Hegarty

to say that some of those statements are subjective in the extreme is perhaps a bit of an understatement, and you could argue that’s fine if the piece was presenting itself as the subjective opinions of very respected industry professionals … but its not; Think TV’s description of the piece is “forward-thinking industry professionals reveal how television is rising to meet new marketing challenges with great success” (source) … which I actually think gets us into rather dangerous territory … because the success is pretty much ‘people saw my ad’, or ‘we emotionally engaged people’ or ‘lot’s of people spend lots of money on TV so it must work, alright’ …

now it’s easy to say that it’s “just a piece of video” or conversely that “these are the opinions of respected, and very successful, advertising men”, but don’t forget for a second this is just one grenade in an ongoing battle for communications revenues. this is about where brands invest marketing dollars – budgets that are increasingly under scrutiny by the companies that invest that money. and we’re not talking about spare change … the video’s own stats point out that $200bn is spent on TV – I think we’re going to have to do a little better to justify that than because television is “an emotional medium”.

it perhaps is no co-incidence that we receive this gem in the same week that online ad revenues overtook those for free-to-air TV. according to a report by the PwC for the AIB, (available to subscribers here), for the first six months of 2013 our industry in Australia invested $1,883m in online versus $1,805m investment in FTA TV.

the size of your spend isn’t of course everything. but it does count for a lot.

I like television. as a planner I value the role television can play in a plan. it delivers reach, often cost-effectively, and it delivers that scale quickly. and whilst, unlike Kevin Mayer, I probably wouldn’t describe the future of television as a “second coming”, I am excited by the opportunities that critical mass in connected TVs will bring.

but there’s a dangerous myopia in this 2020 Vision. statements like “digital technology has been brilliant at promotion, but if you’re not out there persuading, you’re not growing your brand” (Hegarty) or “the internet kind of operates as an afterthought” Goodby, do far less for TV’s case than embracing and exploring – say – the possibilities presented by digital storytelling and how they will be possible, with scale, in 2020 would have achieved.

a very wise man once told be to never let my strategy show. so when a video selling the benefits of TV says that “the great thing about TV … is that it allows you to go around the rational objections to a product … so that they don’t think about the rational stuff anymore” … I wonder whether we don’t need a whole load more rational as we mediate this ongoing debate.

featured image is a still from the above video of Volkswagen’s Darth Vader spot in Super Bowl XLV

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advertising, broadcasting, commenting, conferencing, debating, opinionating, social media-ising, tweeting

Dispatches from Mumbrella 360 Day Two: Twitter’s Barnes on having something to say, McLennan on turning around Ten, state of the media, and technology + emotion = awesome

mumbrella360-melissa-barnesso big day two of Mumbrella360 kicked off with an awesome presentation from Twitter’s Head of Agency and Brand Advocacy Melissa Barnes.

essentially a ‘best of’ how brands are using the Twitter platform, Barnes more than delivered on her job title, as I suspect there were a great many more advocates for Twitter in the room at the end of her session than there were at the start.

I’ll save the content and examples up for a separate post, but its worth capturing here one of the key points that Barnes was making – that you have to approach and use Twitter differently, and with an understanding of what the platform offers and what its users expect.

she noted that she see’s lots of brands approach Twitter with a ‘display’ mentality, which just doesn’t work. the best examples on offer were cases where a brand had something to say, something entertaining and / or interesting to share, or, interesting, a crisis to manage. one fascinating chart in particular showed how a calm, human, humourous individual in chart of a mobile phone company’s Twitter account in the aftermath of a network outage was able to mitigate the anticipated ‘hate’ emotion you would typically see in sentiment analysis of an outage event.

… as an aside, huge thanks to Melissa who was generous enough to pop into PHD last Friday and share and discuss some of the examples with the agency … we loved the session, and I think someone may have actually swooned 😉

up next was the less swooney Hamish McLennan on turning around Network Ten

Hamish-McLennan-mumbrella-360

Ten’s McLennen, source Mumbrella

in a frank and fascinating discussion with the Burrowes, the boss of the struggling network discussed a strategy designed to focus on an older demo and live TV (as the latter is more easily and readily monetised) … saying that what the channel most wants to be known for is ‘the home of great event TV’.

he was frank that Ten was hurt by the advent of digital channels, and should have launched ist digital channel (11) earlier than in did, and arguably before launching One. the strategy is designed to get a fair(er) share of FTA’s $2.8bn by getting a fair(er) share of an aging demographic.

this would seem to represent nothing short of a full-scale retreat from a younger audience who, in McLennan’s own words “aren’t engaging with TV as much”. the network is looking to beat Seven and Nine by joining them in a fight for an older and more easily monetised audience. the strategy is to back off from digital channels, let alone digital platforms – which are (I suppose not wrongly) seen as the place for programme marketing more than anything else.

PHD Chief Exec Mark Coad asked about the network’s digital strategy, given the NBN (national broadband network) roll-out, but not much was forthcoming. it took a second delegate to ask a similar question to elicit the response that McLennan saw post-NBN as a “big opportunity”, the citing of the example of creating subscription channels evidence that there’s more than a little NewsCorp left in this boy yet.

I jumped into a session on The Encore Score and after lunch joined the debate on the State of the Media.

state-of-the-media-mumbrella-360

Moderated by Darren Woolley, MD at TrinityP3 and Denise Shrivell, MD of MediaScope (on the right above), the panel consisted of (left to right) Lynda Pallone, marketing services and integration manager, Blackmores; Rob Dingwall, media & marketing operations manager, Kellogg’s Australia; Chris Mort, CEO, TMS Australia; Toby Hack, MD Australia, PHD Media (woop); Tony Kendall, director of sales, Bauer; and Zac Zavos, co-founder and managing director, Conversant Media.

this was the first of two plus ça change sessions, with the debate eventually getting to some of the elephants hovering in the back of the room.

On industry relations, TH said  that “industry collaboration has improved” with ZZ adding that [media owners] “don’t get enough feedback from clients and campaigns”. CM was clear that “it’s a high pressured business … If you can’t do the job with the tools you have you need to step up” [or get out]. TH on people development noted that have “a choice … to invest in people or not.”

a debate on programmatic buying led to some predictable places, most notably concern from ZZ that automation leads to commoditisation of media (which it does, because much of the time media is a commodity). TH described the two emerging centres of gravity in agencies around creativity / innovation and automation / analytics – which RD slightly misinterpreted as an agency split, which admittedly at this stage would seem a rather drastic solution.

this session also saw the revelation that industry-wide plans for a move to electronic trading have been shelved. this was first debated at last year’s 360 conference, with a panel consisting of senior agency and media owner representatives debating the subject of automation.

whilst the panel wasn’t the most warmly received (media man unmasked commented that “When you put 9 of the most senior executives in our industry in front of a room full of people who look to them for inspiration and leadership and all you get is a school yard argument it doesn’t bode well”), the point was that something was being done.

this now doesn’t seem to be the case.

one suspects that the shelving was brought to you by the letters M F and A and the numbers 7, 9 and 10 … but I won’t pre-judge. I’ll do some digging and write up anything I land on.

anyhow, back to the state of the media session … where there were a many more questions than answers. so much so that I was moved to ask a question of my own – specifically after this debate is over what happens next? who’s responsibility is it to drive the necessary change?

Darren Woolley reiterated his Golden Rule … that “the man with the gold makes the rules” … and what is the rule made by those with the gold? in a refreshingly honest comment Kellogg’s Rob Dingwall illuminated us with the admission that “ideas may not be paid for but they are valued – if you are valuable you will see money coming.”

and this is essentially the muddle we are now in … media is commoditising but clients won’t (generally) pay for the skill of planning and innovating with media. it’s seen as added value. but there’s less and less value because client procurement teams are driving down margins, so agencies seek additional revenue streams which leads to accusations of lack of transparency. and on we go.

in perhaps the most disheartening comment of the session, Blackmore’s Lynda Pallone actually said “see you all next year for the same conversation”

… I really rather hope not.

to lift one’s spirits and to finish I’ll share some of the awesomness that is some of the great work coming out of Asia at the moment. in a session entitled ‘Unleashing the Tiger’, Peter Wilson, the retail planning director at Cheil Australia, discussed how “there is a massive step-change taking place in our industry … a new trend, where agency groups based in non-traditional markets lead the new paradigm, led by technology rather than traditional advertising.”

Wilson described the idea of Tu Hon, I’ll let the video do the talking …

Wilson suggested that central to Asia’s current creative success is down to tapping into emotion, and shared three examples. the first genuinely moved me, the second one actually elicited a tear, and the third one made me very jealous that I didn’t come up with it when I was working on a similar project a few years back:

SAMSUNG CAMERA video coming soon 😉

all brilliant examples of how, in Wilson’s words, “a happy marriage between creativity and technology are becoming the norm” … lovely stuff.

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branding, broadcasting, conferencing, debating, learning, opinionating, television

Dispatches from Mumbrella 360 Day One: Coles’ McDowell on Aussie Families and Nine’s Gyngell on Waterhouse

another year and another gathering at Mumbrellaland (I still think they should call it that) for the annual 360 conference. I’ll sum up later but for now just capturing the notes and the content from the sessions I jumped into during day one.

up first was Simon McDowell of Coles, them of the down down, Status Quo, Dawn Frenchness and now biggest-boyband-in-the-world-ness.

Simon-McDowell-mumbrella

Simon McDowell at Mumbrella 360, picture source: Mumbrella

McDowell discussed the approach to marketing at Coles, describing it as “a bit of a creative hot spot, a melting pot … we’ve got a thousand ideas a day and we’re going at this hard.” by this he means making life better for Aussie Families, a picked this up because he mentioned the phrase ‘Aussie Families’ about forty three times, that’s almost one a minute. this seems to mean (1) bringing prices down and (2) making ads for them, and not adland.

he repeated asked us not to “be fooled by the sizzle on the sausage … we’ve invested hundreds of millions of dollars in bringing prices down … It’s a fundamental part of what we’re about … But how do people know you’ve done it when sales [messages] are everywhere? … Is all just blah … Were really trying to be unique.”

Tom Donald asked about the negative response in the industry to some of the Coles ads. “Do I care what adland thinks? Not a bit. The Coles business is in a turnaround, we have more customers spending more money [with us] than ever before. Were trying to build the most famous and compelling brand in Australia.” (and, wait for it) “… we’re trying to create something that resonates with Aussie families”. cue One Direction …

on the more serious matter of supplier pressure, McDowell was firm but clearly less comfortable. asked if Coles was doing the right thing by farmers, he replied that “[all the] discounts are funded by Coles, the more milk we sell the better off farmers are. Prices are too high in Australia, we have to take care of Aussie families … at the end I’d the day we have to look after Aussie families where the cost of living is going up … we want to sell more. it’s a serious business looking after Aussie families and that’s what we’re about.”

just in case you’re not clear, its about Aussie families.

next up was Group M’s John Steedman in discussion with Nine’s CEO David Gyngell

John-Steedman-and-David-Gyngell

picture source: Mumbrella

its been a big year for the network, and the discussion covered a range of subjects …

on positioning Nine and investment in drama: “You have to stand for something. your audience has to know what you stand for … we’ll keep investing in Australian drama, [it] delivers against an audience that will watch linear TV for a long time to come”

that investment is based on an optimism about the future, saying that we are “heading into a purple patch for Australian drama – expect production to double.”

on the evolution of media, and the sale of the magazine business to Bauer, Gyngell was clear, saying that newspapers and magazines “won’t be as profitable as they were. quality magazines won’t go anywhere. the magazine business will be smaller and more nimble. newspapers will go online – less profitable but just as relevant. the fin review may lose $10m a year but you couldn’t buy it for $100m because its relevant.”

as far as digitisation of Nine goes, when asked when will Nine become a digital first company, he answered when you can make more on digital than we can at the moment. “we’re still nimble enough to be able to move when we want to. we’re not a digital company, we’re a marketing and content creation and distribution company.”

on advice for Seven and Ten: “Tim knows what he’s doing, and has Stokes around him. Seven won’t break because Tim won’t let it. Hamish is an accomplished marketer. if he gets a good programme he’ll know what to do with it. they need to get lucky … keep your head down and pray for some luck.”

its fair to say that Steady gave him a pretty easy ride as interviews go … it was left to a delegate to bring up Tom Waterhouse and the recent over-stepping the mark on programme integration and live odds. to which he commented that Nine, and broadcasters per se, have “a moral compass to provide to the country, but we’re not in the businesses of telling people what they can and can’t do. Tom Waterhouse was a lightning rod. we have a government that reacts quickly to any negative press. his competitors had a go – when the mafia start saying how bad the triads are you know what’s going on. we pushed it too far – we know that. did we overstep the mark? perhaps at the start when Tom was with the commentators. we’ve pulled back from that now and its the right balance.”

after that went to a cracking session with Rob Pyne of X or Y Decisions, about why businesses, and marketing teams in particular, make bad decisions. great insights and advice based on understanding and mitigating biases we inherently have when we’re making decision.

then Coady and I presented to a judging panel for Network Agency of the Year (which we won – yey!) … after which I jumped into Tom Donald‘s brilliantly fun session on fads – of which I hope there will be a future download / follow-up. and that (PHD’s session on gamification and evening drinks aside) was day one. here’s a pic of the guys collecting that Network of the Year award. whoo hoo.

Mumbrella-Awards-2013-APAC-Media-Network-PHD

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fragmenting, opinionating, planning, reaching

The Myth of Fragmentation: and the danger of failing to recognise that people haven’t just moved, but that they’ve moved on

Fragmentation_Grenade
a Scout Trooper with a fragmentation grenade: has no bearing on the post other than the fragmentation reference but any excuse … source

there’s a very good opinion piece in this week’s Adnews by MediaCom’s head of implementation, planning and investment Nick Keenan. if you’re a subscriber you can track it down here.

Keenan makes the smart observation that ‘fragmemtation’ is an overused and too simplistically deployed term: “It felt that unless you had worked out how to speak the new hybrid tongue of ‘Tradigital’ (my invented language of combined consumers) being spoken across new ‘BIG’ consolidated/integrated networks you as an advertiser were now hopelessly lost and would never see a mass audience again. We were told and believed we now must grapple with using multiple platforms within traditional media to reach the large numbers we once accessed in single channel environments”

source: Nick Keenan writing in Adnews 3.4.12

Keenan goes further, arguing quite correctly that not only do mass audiences exist, but they have more mass than ever before: “Facebook has over 80% of all people 25-54 … Google has 96% of all Australians online … Put simply these examples along with others such as Amazon, YouTube, and eBay have enormous mass audiences, the likes of which we have never seen.”

source: Nick Keenan writing in Adnews 3.4.12

whilst its very true to say that mass audiences still very much exist, and indeed exist with more mass than they have ever had (media consumption is increasing overall), there is a very real and present danger that we fail to recognise that people haven’t just moved (from Nine to Facebook or Ten to YouTube), but that they have very much moved on too …

they are no longer the ‘passive massive’ (as Faris would put it) that they were when mass audiences existed in the broadcast stream, a mass audience on Facebook or YouTube may be as big or bigger than a Nine or Seven audience, but they (1) behave very differently and (2) have very different expectations of brands …

a mass audience on Facebook or YouTube is in control of what they watch, listen, or interact with. it was Clay Shirky (I think) who observed that whilst in the long tail of content the average quality of what gets made goes down, the average quality of what gets consumed goes up. just landing our content in the new mass platforms is no guarantee that they’ll be viewed let alone interacted with or passed on.

our expectations of what we want in exchange for our attention have changed. the old mass contract stated that if you give us 30 seconds of your attention we will entertain / educate / inform you. the new mass contract is essentially the same, albeit with an extended list of services (utility for example), only now we have a lot more to choose from and less attention to give.

so I’d counter that fragmentation is one of the most profound shifts in our industry right now – but its not fragmentation to platforms (big audiences, as Keenan rightly points out, are getting bigger rather than nicher); rather its a fragmentation towards individual moments and decisions … to watch or not, or pass on or not. that’s crazy fragmentation that introduces more than a little chaos into our mass delivery systems.

yes the mass audience has moved, but more importantly … they’ve moved on.

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Coles and Woolies’ Death Star moment: the beginnings of the brand rebellion in Australia’s Supermarket Store Wars

Tarkin and LeiaThe more you tighten your grip, Woolies and Coles, the more brands will slip through your fingers

my return from a rather long winter blogging break has been greeted with the glad tidings that some brands have finally chosen to take a stand against the big two Australian supermarkets.  Adnews reports today that Glenn Cooper, boss of Coopers Brewery has described Coles and Woolies as being the "killers of Aussie brands".  Cooper went further:

“Blatantly, Coles and Woolworths are not brand builders, they are brand destroyers … it’s harsh, but they are not about building brands, they are just about turning over quickly.”

SMH only last week reported that this is an opinion recently echoed by no less than Heinz' chief financial officer and executive vice-president Arthur Winkleblack.  in a briefing to US analysts on the company's first-quarter earnings, Winkleblack specifically name-checked the Australian supermarket sector and blamed them for an erosion of its margins.  sentiments echoed by Heinz' chairman and chief executive Bill Johnson:

''There is no doubt that in terms of retail environment, the Australian market is the worst market, and ultimately the people that will pay the price over there are the consumers because products will ultimately be devalued to address the price points that customers are asking us to address … So the consumer is going to ultimately be the big loser in Australia.'' 

the supermarket's argument is manifold and includes the rationale that this is all in consumers' interest – a Coles spokesman, in response to Winkleblack's comments, stated that "We agree with Heinz's comments that companies need to be competitive to ensure the best outcomes for customers."

but consumers don't benefit from Supermarket competition.  the concensus of an April opinion piece in the Sydney Morning Herald was that consumers – if they see any benefit at all – see it only in the short term.  Academic Angela Paladino commented that:

"Price wars squeeze out marginal players and change the composition of the market. Here fewer competitors seek to enter an unattractive market that is dependent on low price for success, and smaller competitors exit the market as a result of the inability to make a profit. Others may be taken over, for example the 2009 acquisition of Macro Foods by Woolworths. This has a long-term impact on consumer choice, with shoppers left in a market comprised of fewer players with greater power."

Nick Stance, Chief Executive of Choice agreed:

"The market shares of Coles and Woolworths allow them to negotiate hard with their supply chain. In fact many suppliers report they have little choice but to accept terms offered even if that makes their business barely viable … Sometimes the benefit of lower costs is passed on to the consumer through promotions, but promotions are temporary and do not in themselves create sustainable competition … The ''price war'' is a phoney conflict, not least because the big players usually match each others' prices."

there are only two winners in Coles and Woolies' Store Wars; and that's Coles and Woolies.  brands have and continue to exist at the mercy of these distribution Death Stars.  now Coopers and Heinz have come out of the supermarket closet.  it's just two brands.  but that's two more brands than a few months ago.

Coopers and Heinz's coming out is important.  brands standing up to Coles and Woolies is important, because the dominance of Coles and Woolies is hurting brands … not least in expectations of media investment…

I've sat in more meetings that I care to recall where there have been two invisible seats at the table.  in discussions where the spectre of supermarket's expectations for media investment loom large over marketers, marketers dependent on these two Death Stars for significant – and often increasing – distrutions volumes.

it's a sweeping generalisation to say that Australian brands are too dependent on the broadcast interruption model (of which TV spot advertising is the main solution) for their marketing needs.  never-the-less its a generalisation that I believe is true.  a reliance on this 20th Century marketing model isn't just down to the pressures and expectations of Coles and Woolies on media spends, but they sure as hell play a very significant part: too many brands over-invest in broadcast interruption because its what supermarkets want and expect to see on those brands' media schedules.  supermarkets' expectations are holding back brands' media innovation potential.

but the effect and influence isn't limited to consequences above-the-line (a term which I hate but I'll run with anyway).  prices are down.  great.  but its not the supermarkets funding this price decrease – it's brands.  manufacturers are paying for prices to be down with their below-the-line (ditto) budgets.  and because prices are down for good manufacturers will be paying for them to be down … for good.

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The Order of Coopers – owned and earned media curating a community for the brand

what is phenomenal in this context are the levels of innovation that do get out of markets and agencies' doors and into the world.  despite the vast majority of bought media investment being diverted to an outdated (and actually never that well proven model), Coopers – for example – have built a hugely utilised online site and community.  they are investing in owned and earned media that are building a community with direct links to their brand and business that side-steps the supermarkets' Death Stars.

brands, it would seem, are starting to have had enough.  the Supermarket's weaponary have become simply too powerful to ignore.  to paraphrase Senator Organa, 'the more you tighten your grip Coles and Woolies, the more brands will slip through your fingers'.

the rebellion, I very much hope, has begun.

full disclosure: I work as a media strategist for several brands that have distribution through Coles and Woolworths in Australia.  the above comments reflect my, and my opinions alone.  the advice and recommendations I make to brands take these – as well as other – opinions and considerations into account.

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branding, cinema, connecting, futuregazing, internet, IPA|ED:one, opinionating, thinking

An opportunity not to be missed: what Tiffany Shlain’s ‘Connected’ means for brands as the internet transforms us and our world

so last night, thanks to Disco Davo (thanks Disco), I was lucky enough to be amongst a cinema of people gathered to watch an Aussie-first and unique screening of a movie called Connected: An Autoblogography about Love, Death & Technology.

organised through social media club sydney in conjunction with AMP's AmplifyFestival, Tiffany Shlain's (@tiffanyshlain) film is a narrative on how the internet is fundamentally changing us, interspersed with a personal account of a year in her life.  the result is a fascinating polemic on the nature of our interconnectedness as a species.

much was well-trodden territory for this blog … but there were two aspects I hadn't heard before that I found particularly interesting.  I hope that Shlain won't object to me sharing here…

one, Shlain described how in her father's book 'The Alphabet Versus the Goddess: The Conflict Between Word and Image' he made the connection between how the invention of the written / printed word had coincided with the rise of men in social, political and commercial circles.  he argued that this was because the written word is processed by the left side of the brain, which is more male.

last century's 'iconic revolution' (Shlain's term) – which saw imagery and images became a more predominant form of communication – coincided with increased predominance of females in society.  images are processed by the right side of the brain which is … more female.

the interesting conclusion is that the internet, with it's heady mix of words and images, is processed more of less equally by both sides of the brain, and is therefore a mass-communication channel that isn't biased towards one gender or the other…

the other aspect I found fascinating is how the brain and our body chemistry is predisposed to both connectedness and the pleasure hit we get from the stream of information on the internet.  when we connect, we release oxytocin – which evokes feelings of contentment, reductions in anxiety, and feelings of calmness and security.  Wikipedia notes that 'many studies have already shown a correlation of oxytocin with human bonding, increases in trust, and decreases in fear' … so the more we connect, the less anxious we are, and the internet allows us to feel more connected than ever before…

dopamine is released when we experience something pleasurable, and encourages us to keep performing the action ad-infinitum (as there's no diminishing return from dopamine).  Shlain's interesting observation is that – as dopamine is released when we get a 'hit' of new information … we are becoming addicted to the internet (or more specifically the infinite content that it gives us access to)

if you get a chance to catch the movie I urge you to do so … it's a fascinating and beautiful experience.  and it left me thinking about the role of brands and advertising in Shlain's interconnected and interdependent world.  from one perspective advertising and media fuelled the worst of the excessive consumption society that is now placing sustained pressure on our environment…

…but on the other I can't help but think that Shlain's hypothesis presents us with a clear opportunity, an opportunity defined by a simple question that I can't shake.  in an inter-dependent world where billions of people increasingly connect, communicate and coordinate as communities, why do we continue to so readily seek to engage with individuals?

in an inter-dependent world, the only thing that matters is shared agendas and communities of interest.  and more specifically, what matters most is an opportunity for brands to fuel – rather than interrupt – their interconnectedness and interdependence.

its utility, but its more than that … its potentially brands becoming a key and fundamental part of a dopamine and oxytocin-fuelled revolution in how we live on earth…  it's tantalising enough to warrant asking what you would want of the brands with which you work?  …  for them to be part of humanity's next giant leap, or reconciled to history as part of the iconic revolution that for a while so influenced our culture and behaviour?

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advertising, differentiating, opinionating, thinking

Running away to the Circus: Dispatches from The Festival of Commercial Creativity – Charles Wigley and BBH’s Anti-Wind Tunnel Movement

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"getting medieval on our ass" was what Charles Wigley, chairman of BBH, promised the circus audience last week, as he got "back to the core of what we do with big brands and set processes".  he asked a simple question … how can we spend our time better?

Provocation

Wigley argued that just like how at some point all cars started to look the same – we've done exactly the same thing to our industry …he refers to it as the anti wind-tunnel marketing movement, and there's a rather nifty presentation embedded below (via a post on BBH labs).

he observes that we talk differentiation, but that 90% of the stuff we "burden the earth with" is the same; "we are churning out similarities" – he suggests two reasons:

(1) we all follow largely the same (consumer insight-oriented) process: "professionalism has led to homogenization and systematisation of the creative process … a model of creative development that traps us all" … the result being that most brands approach the same questions with the same people in same way

(2) we consistently fail to ask the question: is it different?  we focus so exclusively on relevance that we fail to think about whether our work is true or different. a point summed up rather neatly with this still from the above slideshow.

Circus_wigley_venn

Examples

of ads that are indistinguishable from each other…

Banking – NAB, Westpac and St George
SUVs – Jeep, BMW and VW
Cereal – Coco Pops, Milo and Sultana bran

(NB I'm trying to track these down on YouTube but can't find many / any of them – I'll keep trying and post when I do)

Wigley's simple and elegant point is that because the briefs are all the same, the results are the same. this extends into digital solutions too … there's a very real danger that advertising will eat itself.

the cliches are now so ingrained that adverts can be created that that play with the established conventions of the category and market…

Reasons

why this is happening…?

part of the problem is that lack of tangible USPs.  Wigley argues that we now rely on ESP (emotional selling propositions) to market brands, and so the holy grail becomes the key consumer insight.  but we all have the same products in the same category marketing to the same people with the same process to the consumer insights – and the ideas they generate – are all the same.  we are, as Wigley puts it, "dancing on a pinhead when dealing with these briefs".

But does it matter?

well yes it does.  when we create parity communications with similar insights "we're removing the cost efficiency of real brand differentiation".  we accept a situation where the biggest media budget will always win, a flight to a centre-ground where the biggest spenders remain the biggest spenders and innovation and ideas and differentiation and engagement and adding utility and entertainment to the world through are communications become a quaint dalliance that the communications industry had with itself and consumers at the turn of the 21st Century.  media becomes a commodity not an opportunity, a barrage of impacts not a platform for engagement.  could the last people to leave the industry please turn out the lights.

Solutions

Wigley rightly observes that we all use the same brands in presentations…  Nike, Google, Uniqlo.  what do they have in common?  they are brand leaders not consumer followers.  So … how do we put differentiation back into the ideas we generate and the work we produce?  Wigley offers ten solutions…

  1. use insights from multiple points of view and disciplines ie go beyond the consumer insight.  lead don't follow consumers.  focus on brand – Wiley quoted Siddarth Banerjee, Unilever's Regional Marketing Director of Asia: "what is the single most important part of the marketing mix that is essential to ensure a better chance of success in the marketplace? … ownership of a point of view" … Wigley describes this as the main distinction between a convention brands and a conviction brands, and observes that the fastest growing brands are in posession of energized differentiation – in that they have vision, innovation and dynamism
  2. Is it different? is the first and last question we should ask
  3. remember that not all consumers are created equal.  there are leaders, followers and the rest.  followers are cheaper and easier to find
  4. test in the real world not in the test tube (echoing what Marvin Chow discussed when he shared Chrome's marketing strategies earlier in the session).  get work up and online and evaluate it based on actual not expected performance
  5. bring back regional test market (was good to see a Yorkshire Television logo up on the screen)
  6. look to the future not the past.  "what's the foresight not the insight?" … Innocent saw colourful fun health coming and built their brand for the future that was to embrace it
  7. hurry up.  what are we so often waiting for?  speed up the process.  Wigley refers to Colin Powell's 40%-70% rule: if you have information to the extent that you're less than 40% likely to make the right decision then get more information.  but if you collect information beyond 70% chance of success you're likely to get it wrong – you'll have too much information and the situation will have changed.  in short act whilst you have more than 40% but less than 70% chance of success
  8. value inexperience as much as experience … we've become too expert in sometimes very niche categories
  9. put judgement back into the job spec – he quoted one marketing director who after being presented to by the agency said "I absolutely love this work, let's go straight to research"
  10. restructure the organisation.  Wigley suggested that the difference between single brand companies vs multi-brand companies was that in the latter people don't work specifically on brands, but rather are sharing the same info with all the brands in the company.  sometime you need new structures and groups to create differentiation – for example First Direct or Unilever siloing Axe into an entirely separate unit

Wigley left us with this delightful observation – courtesy of Mitchell and Webb – into how advertisers approach communicating to women and men.  not sure how it related to the topic in hand, but made the Circus crowd chuckle…

for more information on BBH's Anti-Wind Tunnel thinking you can visit BBH LABS – I recommend that you regularly do so … as labs go, these ones rock

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