i [love] marketing.

Evidence. Missing.

This morning, I read this excellent NYT article, "Making Health Care Better", by David Leonhardt. Although the article deals with something (almost) completely different, it reminded me of the increasingly mentioned need for measurement and empirical evidence of selected brand solutions in the marketing industry.

A far-fetched analogy? Perhaps. But it does tackle the "intuition" vs. "empiricism" approaches to the way we solve client's problems - in marketing. More often than not, in the absence of empirical criteria (or because of our unwillingness to look for it), we rely on our intuitive reasoning instead of on the observation.

And more often than not, we judge the work of others based on our taste, intuition, and relationships we have with those who made that work. 

And that's the problem. According to the article, "Intuition is not simply belief; it springs from this knowledge. A doctor making an intuitive diagnosis is doing so on the basis of thousands of hours spent treating patients. The problem, however, is that the mind is not particularly good at sorting through this knowledge and weighing different parts appropriately. We give too much weight to information that confirms our suspicions or that is highly memorable."

How can we then decide that a campaign was "better" than another one? We rarely look at a campaign data - partly because the actual metrics data is proprietary and not available to anyone beyond walls of an agency and of their clients. What we do is rely on our experience.

But ... "When a person says, ‘In my experience,’ what’s actually happening is you’re being dominated by one or two recent cases that you can recall or by some distant case that was either particularly good or particularly bad." Famous behavioral economist Daniel Kahneman claims that "Intuitive diagnosis is reliable when people have a lot of relevant feedback. The feedback needs to come quickly and to be clear."

General, and generally available, feedback mechanisms and benchmarks for success don't really exist. While it may not have been possible before to know exactly if a TV/print/outdoors/radio campaign influenced particular brand affinity and purchase decisions, digital lets us do things differently.

This means that we don't have to judge works of others purely on elusive criteria of "creativity", but on actual data on how this creativity fared with people (what did they do? and what did they do next?). It's not that we don't talk about this stuff - we may even be talking too much. The problem is that we don't do enough about it:

"The explosion of medical research over the last century has produced a dizzying number of treatments for different ailments. To enter mainstream use, any such treatment typically needs to clear a high bar. It will be subject to randomized trials, statistical-significance tests, the peer-review process of academic journals and the scrutiny of government regulators. Yet once a treatment enters the mainstream — once we know whether it works in certain situations — science is largely left behind. The next questions — when to use it and on which patients — become matters of judgment, not measurement. The decision is, once again, left to a doctor’s informed intuition."

And then, there's aversion to criticism. (Unfortunately, not everyone reacts like Alex Bogusky to a critique. I thought his humility is a great example: "I was just so excited to have a review in LA Times that the fact that it was harsh didn't really hurt my feelings much. To survive 20+ years in the advertising industry, my feelings dried up and  blew away long ago. I do miss them. But without feelings in the way it was easy to appreciate how lucky I was to even get reviewed.") The rest of us, however, often choose to ignore - or worse yet, devalue - anything that suggest an alternative:

"The journal Health Affairs will soon publish a survey of the chairmen of more than 700 hospitals. Its main message is that many hospitals are not even aware of what they do well and what they don’t. The physicians who conducted the survey, Ashish Jha and Arnold Epstein, gave the chairmen a list of issues — including financial performance, organizational strategy and the quality of health care — and asked them to name their board’s two top priorities. Roughly half did not name the quality of care. Yet the chairmen said they believed that the care at their hospitals was above average. Even at those hospitals that Medicare data suggest are among the worst in the country, 58 percent of the chairmen said they thought their hospital was above average. Not a single one said the hospital was below average."

Turns out, the main problem is not admitting that we can do our job better.  The problem is pretending that we can't.

Rearview Mirror.

There are some good questions there on Andy Awards blog. They are all the usual suspects, but no matter - they are relevant for the industry, and that's what counts.

First of them is "Do big ideas still matter?" This is the ad industry favorite. Everyone loves the big idea. They love it even more if its theirs. The whole current ad industry model, with its awards and "show me your portfolio"-type of expertise, is based on who had more good ideas in the past.

When we think about and give examples of big advertising ideas, we do that only after an idea had already become big (otherwise, we wouldn't know about it - right?). In other words, we don't know if something's big until it, well, becomes big.

And then we treat it as a sufficient explanation for its success. For "Got Milk?" we say, "it resonated well with consumers"; for "Dove Evolution" we say "it tapped into needs of the target"; for "Do the Right Thing" we think "it's a great summary of the experience". If these big ideas have not - for some reason or another - become big, we would say "they missed the target", "they projected the wrong image" or, "they don't know their audience."

The problem is, we don't know any of this in advance. We simply don't know why and how a campaign idea becomes big. An analysis of Ad Age's "Top 15 Slogans of the Century" reveals that there isn't a single rule: "Even an informal Internet study shows there is little agency agreement on what makes a great slogan. Just determining the essential ingredients is still a mystery."

We also don't know if an alternative to a proven big ideas (Dove Evolution, Got Milk, Do the Right Thing) might have been even bigger and better. Big ideas never have an alternative.

And then, we like to attribute brand and sales lifts to our campaigns, in a "before-and-after manner". But simply because something happened in between before and after, do we have enough info to claim a causal relationship? Free coupon redemption may spike when we release free coupons as a part of the campaign (an example that an ECD of a big digital agency recently used as a "proof" of his campaign success) but free coupon redemption would spike anyway and at any time when free coupons are released. Can you attribute this occurrence to your campaign - or, to an already existing dynamic of people's behavior?

Finally, we don't have anything - any benchmark or a control group - to compare our big idea-based campaign to. How do we know that our campaign is not, in fact, a complete failure under a given circumstances? Just because there was some effect, this does not mean that we can label it as a success. Maybe that very same campaign, tweaked a bit, would actually get way more users interested?

The truth is, we could know all of this. A little testing and experimentation and monitoring could actually answer the question of why some ideas become big and others don't. Why no one asks about that?

(the image of Pikachu found here)

New ownership?

A couple of days ago, I came across this site, Rent The Runway, done by Hard Candy Shell. The concept seems simple enough: pick a piece of clothing, order it + wear it, and then return it via mail. Something like Netflix model applied to (expensive) clothes.

I talked a bit over Twitter with my all-time fav creative director, Diana Hong about the idea (we said all good stuff). There are a few things that come to mind when you see something like this: maybe it can spur less consumption (after all people are not really buying, they are just renting); it democratizes luxury fashion by making it more available to everyone who pays a rental fee; it quickly surfaces popular stuff so it can be a great research tool for fashion brands; and it takes away the whole social/emotional vibe of buying (and owning) a piece of wonderful and expensive clothing. After all, the concept "retail therapy" has not been invented for nothing ...

But all these thoughts may be beside the point. What services like this (and Bag, Borrow, Steal and ZipCar before it) actually show is that people today are way more comfortable with sharing than any previous generation was. They are used to mixing, combining, and renting things when and if they need them.

It all may have started in digital, with music and movie downloads and content mashups on YouTube, and gradually evolved into a relationship with tangible goods. And this also means a different relationship to the whole notion of "ownership". Something to keep in mind if you are a brand ... and also if you are in marketing (reminded me of a pretty good post that I've seen a few months back, "Does Your Brand Rent or Own?" )

And ... as for this service encouraging less consumption: if music online is any indicator, people who download free stuff end up buying more music, not less, than those who don't ... Another lesson for brands?

An update: NYT's published today an article on Rent The Runway.

Three New Yorks.

I found this quote here.

why branded entertainment?

I thought about this a bit. Couple of weeks back, Amber wrote a well thought out post on branded content over at Naked blog. She asks: “How can brands create something more interesting than advertising to win the hearts and minds of the public?” While her argument is solid in that she proposes that brands should “make what people find interesting”, I was not sure.

I am still not.

If we learned anything about branding, that's to keep in mind that history is a very poor guide to the future. Creating content that people will - or will not - like is a tricky business (just ask the movie industry). Success stories are more often exception than the rule. Success is random, and usually explained post-fact. We like selective evidence: if something worked, we say: "branded content is great." If it didn't, we simply don't mention it. Brands create content all the time, and it doesn’t always become popular. And even if we forget all of this for a moment, there is a fundamental question: why would we want to continue to do the same thing we did in the past?

Digital lets us do things differently.

In their excellent presentation, Adrian Ho & his team at Zeus Jones nicely explained the difference between "classic" and "modern" branding. Classic brands communicate an image. Modern brands deliver an experience.

Or, more specifically: classic brands are built via communications: "A (classic) brand is simply a collection of perceptions in the mind of the consumer." Modern brands are built through actual experience and improved by interactions: "A (modern) brand is ... simply the sum of the great ideas used to build the brand." Modern brands are defined by what they do.

Let's talk about modern brands.

Some of the most prominent and successful brands in the world are in fashion, so I looked there. I also wanted to avoid the usual suspects who do digital branding well. And then, fashion brands are notoriously  criticized for staleness of their branding practices. So I thought if even they have recently managed to do their branding differently, there's no excuse for the rest. :)

For example, digital lets us experience things in real time; and it lets us share them immediately with others. Live, real-world online streaming hit big ever since Dolce&Gabbana famously webcast their fashion show last Spring. Burberry, Alexander McQueen, Isaac Mizrahi, and others quickly followed the suit. Blogs described Burberry's stream as "almost as exciting to watch as the real show," probably because online fans were for the first time allowed to participate in the experience and provide live commentary.

Then, obviously looking to offer a brand experience that goes beyond a minisite, Burberry went on to create a social network: Art of The Trench (currently in its pre-launch version). For whatever it's worth, they are at least trying something different. As so do Luis Vuitton with its 50K Twitter acct, and Dolce&Gabbana with their YouTube project, "The Pre-Show Diaries". (For some more interesting stuff that fashion brands are doing with webcasting these days, see this morning's BOF article).

What these brands have figured out is that digital does not have to be just another brand communication channel for their pre-created content. It can also bring us a real life experience, in real time. So, the recent branding campaign that I liked the most actually comes from Coca-Cola. It's "Open Happiness" campaign sends three bloggers to more than 200 countries in a year to uncover what makes people happy. This is something that I find way more relevant and real than their Happiness Factory thingy.

These are just some of the examples. What they all have in common is not their success or failure. It's the different approach to branding that they offer.

Branded content may have indeed served the (branding) function. I wonder, though, if it still serves any purpose.

the future of strategic planning?

A few days ago, via NakedNY, I came across the PSFK-hosted event "The Future of Strategic Planning".

It's a series of events, in fact, described as a "discussion and video series about planning and beyond", with the main purpose of exploring "the intersection of brands, strategy, innovation, and the world of account planning." The hope is to "spark a lively discussion, and inspire those working in the field."

That is great. Except, I am not sure how useful it can possibly be. Mostly because if planners talk about planning there will be a lot of ideas that planners have: a) already heard of, and b) are likely to agree with, even if they haven't yet heard of them.

There's an inherent problem with a business discipline trying to define itself.

First, planners who are exposed mostly to other planners' ideas, read other planners' blogs, and tend to agree with what's written there, will inevitably consolidate what they already know. This means that they will be less open to doing things differently, and to be able to offer a fresh perspective on business challenges they encounter.

Second, even if a planner comes up with a different idea, they won't be able to easily push for it, because it simply doesn't fit in what everybody's already agreed on. And lack of disruptive ideas kills innovation - and the evolution of account planning discipline.

And finally, and most importantly, there is also this. Whether a planner did a good or bad job is ultimately (in their everyday work) not assessed by other planners. It's assessed by everyone else - the people that planners work for: creatives, UX, developers, account people, project managers, and ultimately, the client. It is those people that are the planners' real audience.

So maybe we should ask them what they think how account planning may look like today - to help them do their job better.

Otherwise, it's just an echo-chamber. And this is its perfect example: "Planning was conceived as the thinking behind creativity. But the conventional planner has become a caricature: thinking in an ivory tower and post-rationalizing the doing of others. But today – as the industry, agency, and world-at-large have evolved – the definition of planning, and its future, is unclear."

Seems to me that, with this approach, we remain in an ivory tower. This time, without even realizing it.

(I took this image from Joe Van Wetering's blog. His drawings are pretty amazing.)

why do people agree with each other so much?

This is something I occasionally think about. A few days ago, I read a NewYorker article "The Things People Say" about web-facilitated polarization of political opinions. On a more general level, I found it interesting how people tend to guard their opinions once they are formed, rather than to expose them to a challenge.

Then, the other day, Michael Surtees observed something interesting: he noted that, in New York, there are a lot of "followers" in the digital industry. That is, people who actually start something and/or have a fresh perspective or an idea, are outnumbered by those who quickly (and uncritically) adopt and repeat the ideas of others.

The NewYorker article claims that this has always been the case, and that the Internet has just made it visible. And it made it very much so: just think all those "great post", "smart analysis", "agreed!" blog comments that offer validation of the opinion rather than to expose it to a discussion.

Does this mean that people working in digital marketing are very agreeable in general? Or, that they are easily influenced? Maybe they are just lazy? Or overly political? Or, they simply don't have an opinion of their own?

Or, they just really, truly, agree with everything that their colleagues write. If so, that's a problem.

Why?

An industry that claims to be based on disruption needs to nurture the culture of disruption. For disruptive ideas to happen, people need to, well, disagree.

A few pirates around would really help.

Why Digital Agencies Aren’t Ready to Lead

Any conversation about digital marketing these days includes at least one mention that traditional agencies just “don’t get it”. While this may be correct, what’s equally true is that digital agencies are not ready to take the lead.

Look at the typical digital agency. It excels in exploring new horizons. It supports a flat and loose organizational structure in which a developer has access to the CEO. And it makes sure everyone’s opinion is heard. It’s one big crazy family.

Digital agencies are having a ton of fun experimenting with ideas, technologies and strategies to find new alternatives superior to obsolete ways of doing marketing. That’s what they do best.

The problem is, this is the only thing they are doing.

When they are asked to actually follow through on their ideas, they often come up short. It is because they don’t know the business of marketing (or want to know it, for that matter), and they rarely have the organizational structure or past practices to guide them.

This comes at a cost. Digital agencies impress clients with their passion, drive, and technology knowhow. Clients then say: “You gave as a lot to think about.” which often came to mean that the account is awarded to someone else. Where digital shops fail is giving confidence to the client that all this momentum will be indeed executed in a well-led marketing campaign.

All of this is not new. It is already described in organizational theorist James March’s exploration vs. exploitation dichotomy. The best companies have the optimal balance between the two; those less successful are doing too much of either.

There certainly are places around that represent an uneasy mix of exploration vs. exploitation: Digitas, Razorfish, and AKQA. They are sort of stuck in between recently acquired marketing knowledge and their digital savvy, trying to combine them to sometimes embarrassing results (think Razorfish's Laundry Fairy, for example).

If digital agencies excel at exploration, traditional agencies thrive on exploitation. A traditional agency is risk-averse, accountable, and systematic. It knows its business inside out. It knows its clients’ businesses and executes campaigns reliably. Its people hang out with the’ CMOs. A typical traditional agency has decades of experience.

This, too, comes at a cost. A traditional agency, organized around exploitation, ends up doing the same thing over and over again. For every marketing challenge, their solution is “better creativity”. This is not surprising: if an agency spends all its time making sure that everything goes efficiently, that leaves it with little time to experiment. And then, even if it wanted to do things differently, it would be met with its own organizational inertia.

How is the exploration/exploitation gap closed? Like most things in marketing, it comes back to the client. As much as people like to talk about the agency of the future, it will never happen until the client gets there first.

Shorter client-agency alliances, smaller budgets and faster review cycles create a more competitive environment that forces everyone involved to be more alert. When relationships are unstable, shifting, and temporary, it’s the balance that count. That means not only having innovative ideas, but also executing them swiftly and flawlessly.

Until digital agencies show they can strike this balance, they are also the ones who don’t get it.

the biology of marketing business

Marketing people are talking about adaptability.

First, there was a preview of Forrester's report "Adaptive Brand Marketing". Then Ben Malbon asked "So What Exactly Might 'Adaptive Marketing' Be?". And somewhere in between AdAge published an article "Why It's Time to Do Away With the Brand Manager", detailing about more agile and yes, adaptive, ways companies can (and should) manage their brands.

What these articles all have in common is that they correctly observe that, in order to secure continuous responsiveness clients' (and agencies') organizational structures need to reflect complex dynamics of their markets. If digital markets are interactive, real-time, quick, collaborative, and complex - so should be the firms dealing with it.

All of this is great, and would be even better if it were innovative. But ... it's not. Turns out that every living organism operates on the principles better and smarter than most of clients/agencies today.

How's this possible?

Organisms operate in a non-linear way. They don't use past experiences to predict future situations. They would never say: "This worked in the past, it must work again. Let's turn a 30-second spot into a minisite." What happens instead is that they dynamically recombine past experiences with currently available information to respond to a challenge. Andy Clark says "nature is heavily bound by achieved solutions to previously encountered problems. As a result, new cognitive garments seldom are made of a whole cloth; usually they compromise hastily tailored amendments to old structures and strategies." This is also why, while they may not operate well as a whole, traditional agencies have a ton of pieces of expertise that may be super-useful in the current digital environment. Make traditional creatives work with digital strategists. Not easy for sure, but innovative solutions are most likely when you link conceptual structures of two previously (very) unrelated situations...

Natural selection works. And it's been working for thousands of years now. Now, not all past experiences are useful; only successful ones are repeated in the present. Bad ones are eliminated. Ask questions: What are the strongest genes in our organizational DNA? What have we been constantly and repeatedly successful at? How can we recombine this knowledge with new stuff? No one will say they've been good at "30 second spot" or at "telling stories". Go beyond that and find what's specifically unique expertise that your agency built over years. If you'd been great at consumer ethnography, venture into digital ethnography.

Intelligence is distributed. You won't make your agency smarter and more responsive only by having "agile measurement" and having real-time access to data. It's distributing the capacity for data interpretation throughout the company that makes a difference. This is from Ben's article: "As marketing becomes more technology-powered, with learning more real0time, t will be critical to identify who is responsible for leading within marketing organizations ... and, more importantly, who is empowered to make decisions on the fly" ... Well, everyone. Organizational units should not only be capable to individually relate to the environment, but to be equal participants in its interpretation. When there's no time, anyone should be able to make a decision (think military - in the battlefield, do soldiers always have time to relay info to the general and then wait for his response? If they did, they'd be dead). Simply can't have centralized intelligence. And then, there's something even more important: only when capacity of interpretation (intelligence) is distributed, internal resources can successfully be allocated and combined with external info. 

Diversity is good. Different people have different skills and work experiences. This is why they'll interpret external info differently. This is adaptive: when there are coexisting multiple + diverse interpretative possibilities, the chances that complexity of the environment will be grasped are greater. We get a better understanding of a situation by combining all those different interpretations. And, because there are multiple ways to evaluate and interpret the challenge, this prevents "uni-dimensional" approach. For example, always responding to a marketing challenge by building a minisite.

Every living thing has a purpose. It does its thing among everyone else who do their own things, too. This is visible in organizational mission, vision, goal, and overall strategy. A specific purpose defines the shape and size of an organization. This is why it's silly to say "we need to be like a software company". Well, you can't because your organizational purpose is not to build software. You are in marketing business, and what you can do in this situation is to take pieces of good experiences from a software company and combine them with good pieces of experience from your own company and see if you created something more adaptive. Nature doesn't imitate. It evolves. Otherwise we'd still have a million replicas of an ameba.

Organic approach to organizations can be really really useful right now. And, if it worked to nature, it's got to work for us, too.

(photo found here.)

the other group of people in marketing. no, not consumers.

The other day I saw this article, "Human Behavior: a Key to Future Tech Developments" and didn't think much of it (not because I don't think the idea is super-important, but because very smart people have already written a lot about it in a much more interesting way.)

So anyway, this quote stayed with me: " "Microsoft and many other companies realize that since it is, after all, people who use technology, it's critical for the company to understand how people adapt to technology." But I didn't think of it in relation to customers but in relation to the "other group of people" in marketing who use it: the agencies.

I'd really like to go to a traditional ad agency and observe this. Because, in order to develop a good "fit" with its environment, any organization is challenged to "match its knowledge with the problems in the environment it operates" (Brook Manville). How they tag, code, organize, and communicate this knowledge depends on technology. It influences how an agency is organized. And, it also shapes how an agency perceives, relates to, and interprets its environment. So, if they are increasingly using digital media, that should change a bit ways they think about marketing. Or, it will change over time. Which is a good thing.

(photo found here).

the evolving role of marketing ...

This made me smile. On Friday, I was digging through my external drive with archived papers from my Ph.D. classes. Completely randomly, I came across a project that I pitched to consulting firm Booz, Allen&Hamilton - actually, to Randy Rothenberg, who was really nice to me and connected me with others at BoozAllen.

So, anyway, the project's called "The Evolving Role of Marketing in Media Companies", and the time is January 2005.  It's sort of awesome how this question is still very relevant today. 

Some highlights from the doc:

Media companies today don't take the full advantage of their internal resources and market opportunity. This is because they lack organizational structure, incentive, and functional areas to extract the maximum value from their resources to meet customers' needs. As media market changed, internal organizational structure and dynamics of media companies did not. For a company to effectively alter its offerings, a real internal change must occur - and because marketing is well positioned to strategically link external consumer information and company's internal assets, it has a key role in this process.

Two main organizational challenges in today’s media industry are how to achieve the organizational flexibility capable of adapting to a an environment with a high degree of uncertainty and what are the new strategies for value creation necessary given the evolved relationships between media companies and their markets. Specifically, the main organizational challenges are: a) How can media companies internally restructure such that their organization empowers a business model which meets the need of the fast-changing and complex media market plays? b) What kind of functional and organizational consolidation will cross-platform deals foster? c) what incentive structure need to be in place to encourage these behaviors, i.e. how to motivate and foster interdivisional collaboration that will enhance companies' potential for innovation and responsiveness for changing demands of the market?

There is a strong need for a coordinating unit that is strategically well positioned within a firm and to the market to leverage the company's internal assets allowing for adaptive and continued responsiveness to unpredictable environmental changes. Marketing departments can achieve such strategic position and that they will have an increasingly important coordinating role within media companies. The new role of marketing in media companies will potentially ensure both leveraging firm's assets and its competitive position in marketing services and/or with traditional marketing services providers.

All of this sounds terribly, terribly familiar. Just replace "media companies" with _______.

:)

hollywood was here first.

Occasionally, people in marketing industry talk about how to adapt their agencies to changes in the media environment. Every time I see something like that, it reminds me of the same question that media companies were asking themselves 4-5 years ago (no answer), and also reminds me of Hollywood.

Hollywood, as a matter of fact, did organizationally adapt to a relatively sudden change in its own environment (television, and then all other stuff that followed). So maybe there's a lesson there. 

Before any other content industry, Hollywood was faced with the need to quickly and adaptively respond to fast-changing + unpredictable environment that was increasingly hostile to its business model of Fordist movie production (to make an analogy, think minisite/banners/video ads).

So, in order to survive this all this terrible hostility, Hollywood had to reorganize itself ... and move away from classical, vertically-integrated studio model towards a networked cluster. Hm.

There's an old article that talks about this: "Hollywood has mutated from an industry of classic huge vertically integrated corporations into the world's best example of network economy ... Hollywood's network economy isn't unique, it's just more evolved than most - and as a result offers a picture of how and where companies in all kinds of industries will do their work in the years to come. Eventually, every knowledge-intensive industry will end up in the same flattened, atomized state. Hollywood has just gotten there first."

Okay, so now what do those networked clusters mean? Well, industrial clusters like Hollywood or Sillicon Valley are places where a lot of firms are grouped in immediate proximity. So it's easy to know everyone, and social and economic ties go together. 

What's cool about clusters as organizational forms is that they are combo of firms and markets. As markets, they have power to create and allocate resources efficiently. After all, they are governed by the laws of supply and demand, and are highly efficient at allocating resources to the "material well being of all". In short, a little competition can be good for you.

Now, in addition to being a cluster, Hollywood operates on a project basis. Something like this: now that everyone's clustered together, let's see who's the best to respond to some challenge?

Someone defined projects as "temporary systems of diversely skilled people working together on a complex task over a limited period of time." A person reads a script, goes to a producer who wants to make a movie, and calls this director, and then these actors, etc. etc.

So then someone in Hollywood figured out that they would be more competitive and more adaptable and able to explore environment better if they operated on temporarily and flexibly assembled project teams. This means that the talent is not always the same, because if they were then it would be really boring to watch same people over and over again. Also, things that always-same talent can come up with would also be limited (how many different things can same people come up with?). Most importantly, though, it could happen that limited talent is not up to the current task.

Thus, by continuously reshuffling people vs. not keeping all its talent "in house" Hollywood makes sure that it always has A-team on its disposal. And it also makes sure that it's flexible for whatever comes next. And, sometimes, it produces innovative stuff.

Now, for a second, think about agencies as clusters. Clusters have spatial proximity of diverse talent, but without hierarchical and formal ties that keeps it in place. Talent is only loosely coordinated (people belong to certain functions, units, etc.) but otherwise works as a market. When people are closely together, it enhances communication and collaboration. But it also creates little bit of competition. So bringing market inside of a firm may be a healthy thing. And who knows, it may help create something new, too.

if you put good people in bad systems, you get bad results.*

*Steven Casey. Some time ago, I came across Tim Malbon's article, "Pulling Off The Optimal Platform Job". At the time, two things caught my eye there, so I am finally writing about it.

First, the idea of "Chief Culture Officer" struck me as terribly silly. I completely understand the need for the "board-level support for the kind of cultural immersion needed." But, in the same way Chief Innovation Officer doesn't make any sense (how crazy was that??), Culture Officer can't do much if, well, there's no shared culture where (his) ideas can resonate.

And the very moment that kind of culture exists throughout the organization, well, there's no need for anyone in particular to represent it (because everyone does). And if there's no such culture, one man will not bring it in, on a board level or not. Sounds like an oxymoron to me.

Here's a great illustration that I've just came across on Bill Petti's blog: "A study of the top fifty game-changing innovations over a hundred-year period showed that nearly 80% of those innovations were sparked by someone whose primary expertise was outside the field in which the innovation breakthrough took place." And: "Only 1 in 5 game-changing innovations came from the minds of people that are specialized in that particular field."

There's a ton to learn here about culture of innovation and about organization for innovation. (If innovation happens everywhere, what organizational structures support best distributed collaboration? No, the answer is not Chief Innovation or Culture Officer - that's a shortcut.) But, unlike Bill, I don't think that innovation is so much about "polymaths". Maybe more important than having multitalented people is having a lot of connections between them, so that info and ideas can be exchanged quickly and can flow freely. And this is no one man's feat.

Okay, and now to the part of Tim's article that I liked. It is absolutely "overly simplistic" to claim that ad agencies should be like software companies. I have always found that analogy too weak and way too literal. It's like saying: this horse is running fast, let's be like this horse! 

The question is, of course, one of values: testing, iteration, short feedback loops, monitoring, collaboration. These values are inherent in digital technology. Software companies, by sheer proxy, are those dealing with this technology the most. So, the easy conclusion is, let's be like this production shop! Whew.

What happens if you are too much focusing on being like a production shop, is that you may miss out opportunity to be something else, something better, and something more suitable for your business. That's a problem with organizational imitation vs. organizational innovation. Next time, I'd like someone to try to say how are digital technology's values changing their agency and the way they are doing marketing, instead of pointing at the fast running horse.

this is why you should never ask people anything.

I believe that best ethnographic insights come not from questionnaires, but from observing people. A few weeks back, I saw this NYT article, "Calorie Postings Don't Change Habits, Study Finds", which explored if and how posting calories in fast food restaurants impacts people's choices of what to order.

The results showed that people made less healthy choices in spite of visible nutritional information (or, maybe because of it?). That is, before the labeling law took effect, fast food restaurant orders had a mean of 825 calories. After the info was posted everywhere, this mean climbed to 846.

Here's a more interesting part, however. The study found that about half the customers noticed the calorie counts, which were prominently posted on menu boards. About 28% of those who noticed them said the information influenced their ordering, and 9 out of 10 of those said that they had made healthier choices as a result.

But when the researchers checked receipts afterward, they found that people had, in fact, ordered slightly more calories than the typical customer had before the labeling law went into effect, in July 2008.

Really? I don't think that those people intentionally concealed the truth - I think that they simply scrambled to rationalize why they choose to disregard the nutritional information.

First, when faced with a choice: healthier and more expensive vs. less healthy and less expensive, people choose the latter. For study participants, buying food is a price-sensitive situation, and while they certainly notice any information added to the price, it does not affect the choice. It's simply not relevant.

Ok, so this explains why 50% of people reported they noticed calorie information. But why almost 28% of them said that they made healthier choices as a result?? Well, they either: a) truly believed that they made a healthier choice, all information notwithstanding or, b) because they simply adjusted their responses based on their assessment of the survey expectations. Simply, they offered what they deemed to be a desired response.

And this is why surveys suck more often than not.

Also worth noting: information does not change habits. At best, it creates a temporary cognitive dissonance. What changes a habit is creating another, conflicting, habit. That, or peer pressure.

(the image above is Windows 7 Whopper, sold in Japan).

gross national happiness

Apparently, there is a Facebook application that measures "happiness". What it does, in reality, is to analyze sentiment of status updates via tracking the ratio of positive vs. negative words in people's status updates. Here's a description of the project:

"Every day, millions of people share how they feel with the people who matter the most in their lives through status updates on Facebook. These updates are tiny windows into how people are doing. They're brief, to the point and descriptive of what's going on this week, today or right now. Grouped together, these updates are indicative of how we are collectively feeling. Measuring how well-off, happy or satisfied with life the citizens of a nation are is part of the Gross National Happiness movement."

The problem is that people don't very often say negative stuff there. It's such a downer, and no one wants to be friends with constantly negative people. I guess. Then, negative stuff tends to be private (more than positive ones). We keep them to ourselves and share only with the closest friends.

Then, there's also a question of how to interpret results. Is the graph above showing that people indeed are the happiest around Thanksgiving (family time, yay!) or that they are simply wishing each other "Happy Thanksiving!"? I assume the latter is the case.

But not a bad start. Data indeed can tell stories. And offer better insights into people's behavior, too. Someone should make this for Twitter.

balloons in the sky (no, not that one)

Sometimes, the only thing to you need to do to cheer yourself up is to lift your head.

random archeological discovery

On Saturday, I was doing my first get-serious-and-clean-your-kitchen thing. Like, get-really-serious. This seriousness included climbing over kitchen elements (even the hanging ones) in order to reach places where sun doesn't shine. In one of the forgotten cabinets, I found this.

The moment I saw a tape my imagination started reeling, like "oh, did someone leave it on purpose?", "did someone put it there and then forgot and then desperately searched for it for years to follow?", "what's on it?", "a message for future tenants of this apartment?", "a riddle?", "one of the worlds greatest mysteries?", "the best song ever made?"...

And then I realized there's no way I will ever find out. I don't have a cassette player. I am not even sure where to buy one.

That's what happens when a technology dies.

Message in a bottle, on the other hand ... well, that's timeless.

You are f*ing with the magic!

I thought this sentence was hilarious.

It's from the NewYorker article about Google, "Searching for Trouble", that I read a couple of weeks ago, but never gotten around to writing something about it. The author is Ken Auletta, and there is something touching that this writer, who built his fame around following shenanigans of the old media moguls (his book from that period, "The Highwaymen", is notorious) now has to deal with the challenges of understanding of the whole new media world. All within a single career.

Anyway. The above sentence ends the paragraph where the author talks about the stark contrast between the old and new ad models:

"Most American media - television, radio, newspapers, magazines - depend for their existence on a long-entrenched advertising model. That model, at which Karmazin excelled, depended on salesmanship, emotion, and mystery. ... "I was selling twenty-five billion dollars' worth of advertising." Karmazin recalled. "Did I want someone to know what worked and what didn't? Karmazin looked at his Google hosts and proclaimed, only half in jest, "You're fucking with the magic!" 

Now, while certainly funny, his outcry is not as outdated as we'd like to think. Even among digital marketing agencies and its creative directors, there's still a lot of belief in creating "magic". This magic, true, may not be measurable, but is thought to be attractive both to advertisers and audiences alike precisely because the aura of its mystery.

In Karmazin's words, this would be: "I have no idea if it's going to work. You pay your money, you take your chances." Utterly appealing.

On a recent industry event, I heard one digital CD say that "you got to make things that people are going to search for." So, I guess the game is the same, it just in a different medium. Except, the logic "if you build it, they will come" (or search for it, in this instance) doesn't really make much sense in digital. You can build as much as you want. They'll ignore it. To make something searchable - and findable - you got to optimize it, test it a bit, and then distribute it in such a dispersed way that it increases chances that people will stumble upon it. Nothing magical there, in fact.

There's also another sort of magic that's still alive and well and right in the middle of agency-client relationship. Karmazin put it like this: "I want a salesperson in the process, taking that buyer for drinks, getting an order you shouldn't have gotten. You don't want to have people know what works. When you know what works or not, you tend to change less money than when you have this aura and you are selling this mystique."

And here I thought that our job is to help clients solve their problems in an accountable and transparent manner. To tell them the inconvenient truth and to show them the tough love. But at the same time, to really, truly, help them by bringing tangible and measurable results. It should also be noted that best digital agencies employ a bunch of nerds and geeks who are incredibly passionate about solving problems but whose social skills are, dubious, to say the least. Or, rather - they are filled with people who don't exactly see the point of  creating any "aura" around themselves or their work. And, besides, going for a drink with a 20+ year older client on a weekend night only for the sake of selling them "mystique" sounds like a horrible way to spend time.

But more worrisome than how people spend their weekends, is forging a personal relationship where a purely business one makes more sense (just think Richard Fuld, started to love his bank too much, made some bad decisions). A lot of clients stay with an agency not because it's the best choice, but because they have a "relationship".  Lame advertising campaigns happen because people got to like each other over drinks; or because the agency convinced the client that their solution is the best. Proof for it stays at the bottom of the drink.

Google here did not mark only the end of one advertising model and introduction of a new one; it actually mostly made visible a whole new set of relationships. A set of relationships that becomes apparent when everything else is made transparent.

Magic is an incredibly pretty thing to believe in. Only, it's not real.

If the wrong person always wins, how do you know who's the right one? And more importantly, do you care?

The other day I came across this very amusing article, "The Case Against Awards: Why the Wrong Person Always Wins", published in The New Republic. The basic idea of the article goes something like this: the awards system is by default flawed and, more importantly, so what? "So what" - exactly. 

Funny enough, those who are the most vocal about the unfairness and/or futility of the awards, the author observes, are those who - paradoxically, perhaps - care the most: "Those most convinced that, say, the Oscars do a horrible job of rating films are the very people who cling to their emotional investment in the outcome," he writes. And, a bit later: "Magazine writers tend to be both obsessed with who wins and convinced the process is a pathetic joke." I can't help but see a parallel to advertising industry. But again - so what? It's all for the show anyway.

The question here is not one of the awards at all - it's the one of sociology. The organization of human groups are rarely chaotic for a long time, if at all. There's always some form of order based on horizontal or vertical distribution of authority, power, and accountability. Games people play to reorganize the ties of power and authority are, for me, one of the most interesting domains of sociology and psychology.

Best part here, though, is that a game becomes increasingly more complex as the objective criteria of authority/power decrease. That is, as we move from matters of survival (where the winner is obvious - just think Darwin Awards) towards the matters of taste, the ranking becomes arbitrary. In short, there's no way to prove it.

Who judges these awards, at the end of the day, is really not important. Either way, we won't like the outcome.

(the image is from the Creative Faceoff.)

Digg does some smart stuff. And Huffington Post, too.

Releasing a lot of different versions of the same thing and seeing which one performs the best has by now became so notorious that even the most backwards-thinking clients have heard of it. Yet, while everyone kind of agrees that digital is a perfect environment for testing-and-learning, there are still very few real-world advertising examples to back up such claims. (Notable attempts by individuals aside.)

More correctly, in fact, is to say that there were a few examples until very recently. Some days back I read about the performance of Digg's experimental ad network that they started on their site at the beginning of the summer. Now, what I find more interesting than the  core premise of the model (allowing users to vote ads up and down) is how the advertisers responded - they started releasing different versions of the same ad, to see which one gets most diggs. For example, according to Brian's Adweek article, Toyota featured 8 different ads, each with two sets of copy. In other words, to increase the chances that an ad will be liked/clicked on, Toyota ran a test.

So, now - since there is no better measure of success than actually monitoring that success - why is not EVERYONE doing this same thing? I mean, why the audience voting has not become an inherent part of web-wide ad networks? Of course, there's a non-negligible question if the model can work outside the Digg environment, but the current returns (click-through rate that reaches 2 in some instances) are such that it seems at least worth trying to find out.

At least, that's what Huffington Post thinks. Apparently, they've started doing testing to some of its headlines (this actually reminded me of the same thing that Elle now regularly does with two versions of its covers, but wonder what they learn from the results since the feedback loop is so long and celebrities on the covers are not repeated for a long time). Anyway, visitors to HuffPo randomly see one out of 2 versions of a headline for the same story. Then, the editors give it 5 minutes, and based on this 5 minute face-off between the two titles, they select the winner. Real-time headline testing? Kind of great. 

And - if it works for content, why wouldn't it work for ads? Try it.

(the image found here.)

nice sping morning

Tim Brown (of IDEO) has a new book. I am curious.

What made me laugh in NY Times' review of his book is, however, the following unrelated quote (it's a response that designer Raymond Loewy gave to the president of the American Tobacco Company when asked when he's going to be finished.)

“Oh, I don’t know. Some nice spring morning I will feel like designing the Lucky package... I’ll call you then.”

This is my new favorite.

void.

 Last Wednesday, I went to an event titled "Creating Digital Culture". It was a crowded event, with the prominent names in the marketing industry: Hashem Baiwa (Director of Digital Strategy, Droga5), James Cooper (Digital Creative Director, Saatchi & Saatchi), Mike Geiger (Chief Digital Officer, Goodby), Matt Spangler (Digital Marketing Entrepreneur), Taras Wayner (ECD, R/GA), and Rick Webb (Co-founder, Barbarian Group). Moderator: John Winsor (Director of Strategy and Innovation, Crispin). I wanted to write my take on it afterwards, but somehow couldn't really decide on what to say. I failed to get inspired.

As so seemed the participants on the panel. What was very obviously lacking in their discussion (aside of a single female participant) was the enthusiasm. How?? Like, digital media are the most interesting and fun and creative thing that happened to marketing since it was invented, and those people can't get excited enough to offer an original opinion? Their interns and junior planners are probably more psyched about the web then they are.

To be fair, though, the questions we heard were all the usual suspects: what's the next thing in digital? what's the agency of the future? how does it look like, what's called? where do you find planners? where is creativity? I've been hearing those same questions since 2006, and they were lame even back then.

Most likely, if you haven't figured it out by now, it's either a) not very likely that you ever will or, b) the question is wrong. I choose b). So, first, change the questions. Change them.

Second, how about a little mixing up with who the panelists are? I mean, these people are a great draw for the crowd, but how about giving them (and us) a break? Like, why not inviting some smart planners or good creatives (instead of their bosses) to say how they actually - in real life - solved some problem and addressed some challenge. Bet there would be more interesting insights. And then, those people are on the rise in their own careers: they are passionate, and interested, and ambitions, and curious. At least, they'd show some excitement.

And I would love to see some of the most talented digital creatives up there: for example, Creative Directors Diana Hong and Mehera O'Brien would make an amazing panelists (yes, they are girls!! and they are the most incredible professionals!). And so would Amber Finlay and Johanna Beyenbach and Kristen Hengst and Michal Pasternak. And, also would Ivan Askwith and Lee Machmeyer and Matthew Danniels and Adam Liebsohn and Gene Liebel and John Antoniello and Jeff Wong and Michael Surtees.

Those people are smart and talented and motivated and fun and they do the work while their bosses are trying to figure out the meaning of that same work. They know how the digital agency should look like in order to function better; they know who they need to collaborate more in order to get the work done; they know what are blooming trends in digital - because they encounter all those challenges daily. And after all, if you'd like to talk about digital environment, why not create a sample that's actually (in terms of age and gender) a good representative of that environment?

Web is a proof that best ideas come from literally anywhere. So why asking the same old people the same old thing over and over again, in a vain hope that they will give us a different answer this time around?? Maybe before we go on to find the next agency model, how about a new panel model? A model in which the panelists get to sit in the audience, and some in their audience get to climb up there. Just for a change.

And, if this sounds naive, see the videos from the evening yourself.

TV is soo not dead.

I had this conversation a couple of times in the past, enough for me to think that maybe I should write it up here. Namely, it's about the role of TV in success of social media initiatives ("viral" campaigns included). It's kind of a fact by now that search traffic spikes after a brand's advertisements were shown on TV (even Google talks about it). The number of fans on brands' Facebook pages as well as Twitter pages also multiplies in terms of hundreds upon those brands ads hit TV. So much for building a brand "organically" via "connecting" with consumers through social media.

In a way (and absolutely ironically) this effect turns TV more in a direct response medium than in what it's traditionally considered: a broad-based awareness and branding medium. Get that.

This kind of thinking reminded me of a 2007 paper called "Viral Marketing for the Real World" by Duncan Watts, Jonah Peretti, and Michael Frumin, which talks about ways to augment impact of "viral campaigns".

Rather than figuring out which sort of content is going to go viral (puppies, pranks, etc, which made some people naively wonder what should brands learn from the most popular web videos?), and how to "seed" it so it widely spreads (which "influencers" should we target?), the model that authors propose combines the power of traditional media with the ability of digital to quickly and easily spread messages. The catch is - in order to reach a wide spread - social media campaigns need a little help from, well, mass media. (They aren't call mass for nothing, after all).

The authors specifically call out BK's Subservient Chicken, which is often used as a blueprint example of a legendary and wildly successful "viral" campaign. Ok, so maybe it's time to debunk its myth. Just a little bit.

Apparently, Watts and Peretti claim, the Subservient Chicken campaign "reached millions of viewers, but was also supported by a nationwide marketing effort that yielded a very large seed."And,"although many people heard about the website through word of mouth, many others saw television ads paid for with a multimillion dollar advertising budget." The best part is this, however: "Perhaps because it makes a better story, journalistic accounts of the campaign usually fail to mention the paid advertising and present the campaign as a purely viral phenomenon." Conclusion: "Nevertheless, the Subservient Chicken clearly benefited from paid advertising that dramatically expanded the reach of the campaign." Fair enough.

A question now: why are TV & social media efforts not better coordinated, and more often?

(image found here)

something out of ordinary.

Yesterday, I've come across a NY Times article "How Nonsense Sharpens The Intellect". It talks about how unusual things, anomalies, and absurdities prompt the brain to (frantically) search for meaning, and thus facilitate discovery of patterns that would ordinarily remain unseen. In short, when faced with the inexplicable, the brain scrambles harder to find some order.

A quote from the article: "The brain evolved to predict, and it does so by identifying patterns. When those patterns break down - as when a hiker stumbles across an easy chair sitting deep in the woods, as if dropped from the sky — the brain gropes for something, anything that makes sense. It may retreat to a familiar ritual, like checking equipment. But it may also turn its attention outward, the researchers argue, and notice, say, a pattern in animal tracks that was previously hidden. The urge to find a coherent pattern makes it more likely that the brain will find one."

My first thought was that these findings can be taken in so many directions. Like, looking for inspiration in unexpected sources, for example. A few excellent planners I know never actually read other planner's blogs or marketing-related stuff. They read sociology, psychology, economics, design, fashion, and a lot of crazy, super-creative stuff on the Internet. Why? Well, in a way, an unknown/unpredictable situation is similar to an absurd one (in that they both lack a pattern) so, somehow, it makes more sense to look for its meaning elsewhere. Brain indeed does scramble to put a coherent situation together, and one way to do so is to re-cognize patterns that it seen/heard somewhere else. So reading about various stuff not only helps inspiration, it also offers a pool of latent knowledge that help us make sense of the unknown when a brain sees fit.

Then, another thing is that we tend to remember more - and longer - things that violate our logic and expectation. Like David Lynch movies, or Bunuel movies, or some of Murakami's stories, or that stupid Dennis Lehane novel that ended unexpectedly and didn't make any sense and that I still occasionally think about two weeks later. We simply invest more of our resources - time and mental energy - to reach (any) closure. And when we think hard about something, we are likely to reach an explanation (even a very far fetched one).

And now I am curious why the brain can't stand absurdity.

nerdiness has just reached a new level

Google outdid itself, to celebrate 60th birthday of a barcode. Nerds everywhere approve.

what do you expect for a dollar?

Last Monday someone shared on Twitter a link to Seth Godin's post "If Craigslist cost $1". I don't read his blog, but this idea got me interested. I shared it at work with Noah, and his take was that Metafilter already applies this model, by charging its members $5 for service - and thus creating "one of the most active and highest quality community websites out there." (Noah's quote).

So, right, prohibitive pricing is a proven and efficient mechanism to coordinate demand.

In digital, things may turn out to be a little bit more complex. Prohibitive pricing indeed may work perfectly well for communities like Metacritic, where what is charged is a membership. Craigslist, on the other hand, is a service - and not a community. When we pay for a service, we expect not only access to it, but also to get something in return (at least, it seems to me that things work out that way). I expect Netflix to let me stream movies I want; I expect ZipCar to be where designated; I expect Time Warner cable to work and its technicians to show up on time (often an unreasonable expectation). So, while it is correct that charging $1 will create a "tightly organized community", it may also make people change the way they use - and benefits they expect from - Craigslist as a service.

(Somewhat related: while I think that micropayments actually can make a lot of sense on the web, I don't think there's should be regarded as a blanket approach - precisely because people's habits, expectations, and motivation considerably differ from one thing to another. For example, a piece of content is not just that: while people easily pay .99 for a song, I am not sure they would be willing to pay the same amount of money for a newspaper article.)

style as an attention technology

I came across this recent review article in the Journal of Bioeconomics talking about Richard Lanham's not so recent book, "The Economics of Attention: Style and Substance in the Age of Information." While I find the subject old and tired, and generally regard it as a phrase du jour of the new media enthusiasts, I was drawn to this article because of the "attention technology" combo. Technology? Well, that's one interesting idea. 

Basically, the point that the author makes is that style can be regarded as technology for directing - attracting and allocating - human attention. (In a similar vein, brands can be regarded as technology for allocating attention). Then I wonder, this has to be a system design question. But then, what are we really designing here?

What's the point of style? In the information age, the argument goes, it's style, not "stuff" that becomes the greatest contributor to economic value. And then, "a mundane economic explanation for this shift from stuff to fluff is the rise of wealth, which induces income effects. For a family living at subsistence, "stuff" like food, clothing, clean water, and shelter, is vital. Wealth makes room for style; we expect style to be a strongly superior good." (Funny, this reminds me of the "relationships not objects" ideas, part 1 and 2 ... and also the fact that it seems that most brands online still operate in the condition of utmost poverty (amid waste) - if we follow the logic above - by focusing on creating stuff, not style.)

Then, there's the addictive power of style, and the tendency (reflected in the assumptions of some economic models of addition) for the "investment of time and effort in critical appreciation to be rewarded with greater pleasure in the future." And, finally, there's the question of the spread of styles in society, and more generally how ideas capture public attention (is there anyone today who does not ask this question??). This author calls the process "cultural evolution", similar to Dawkins' memes (that evolve via modification, selection, and replication). Individual decisions and social interactions "set the conditions for the evolution of cultural traits, and cultural innovations - good "style" among them - and those which are good at grabbing favorable attention grow in popularity."

Okay, all of this is not particularly new. What I am more interested in is, if style can indeed be regarded as technology, and if technology is "society made durable" as sociologist Bruno Latour claims, then it implies to something way more stable than evolution of cultural memes. And something much more "networked" and distributed and co-evolving. Which may indeed be an approach to attention more interesting than the economic one. (In economic view, attention is a raw and limited resource. Here, attention is a system, a network, a connective tissue; and as such it's a matter of design). Style is not a property of objects; it's indeed a technology. Perhaps.

The image found here.

thanks, niko!

A few days I ago I wrote about making intelligent connections (between stuff), instead of creating more (wasteful) stuff. One of the comments was by Niko Herzog, who emailed me yesterday a pretty great article related to this topic. The article is called "Human/Object Relations", and it features a conversation between well-known Japanese designers Naoto Fukasawa and Kenya Hara (author of "Designing Design"). Here are the parts that I liked the most:

"I realized there was no need to create new forms; all I had to do was design the relationship between a human, an object, and what is around the two. That realization gave be a big relief.

People think that design is about making new things, creating new stimulations. But what about the good relationships that already exist? Why abandon all that and make things all over again?

If there is already a relationship with an object that is 95 percent good, then all that has to be done is to adjust the remaining 5 percent to suit the current needs. ... What I am trying to say is that the important thing is how much design you can do with the remaining 5 percent ... how you can make the best out of the design along with what's already there, instead of just throwing everything out and starting from scratch."

is murdoch ready to retire?

Due to an unnaturally long subway ride yesterday, I bought November issue of the Vanity Fair beforhand. This afternoon, I read (mostly by accident) Micheal Wolff's article on Ruper Murdoch and the Internet. That is, on Murdoch's belief that people WILL PAY for the content of his multiple newspapers.

What stroke me as odd was not the dubious empirical value of such a stand, but more that the approach came from someone so media savvy, so powerful, and still so successful in the media business. Maybe I should make this "old media" savvy though. Even the boldest among media moguls - or companies - for that matter (think Time Warner, a company that has been trying "everything Internet" in the past decade. Or think Barry Diller, who's among the oldies actually the one who did make some money off his IAC ventures. Some money, not a lot of it, though).

Wolff's article reminded me of an aricle "Running Numbers on Charging for News Online" , talking about the CUNY study New Business Models for News Project that I have seen some time ago. The study went with two pay models for a metro news organization scenarios (hm, how about New York Post and Wall Street Journal?). In one scenario, the website charges for all of its content; in the other, the site only charges for a fraction of it.

The conclusion: "Sites that charge for all of their content consistently lose “millions” during the first three years if they institute the pay wall; a hybrid site, by contrast, can become profitable before then, since additional advertising revenue more than makes up for any loss in subscription revenue."

Okay.

Now, whether Murdoch will indeed make people pay for his content or not is not really an issue. What's curious is that he will try - because he assessed that's a smart strategic + business move for news online. What is even more curious is that he thinks that making people pay for content online will drive them to buy more print newspapers. Something like - if I have to pay for it, I would rather consume it in a paper format.

And here, I could not think of a single example of media content model that actually achieved this goal. iTunes did make people consume more music (but not buy more CDs); YouTube - and Hulu for that matter - did get people to watch more video content (but not necessarily to do so on TV); and Kindle may led people to read more (but not necessarily printed books); and e-commerce sites inspired people to buy more (and not in the physical stores).

So, while it may have helped media content consumption, when has the Internet helped old media distribution? 

At this point, I am mostly curious to see how badly Murdoch's model fails.

well, this is something new.

Yesterday, I came across this site, "Elect the Jury" for the International Andy Awards, done by Michael Lebowitz, and thought it was pretty cool. The site addresses digital marketing industry - "You've Done the Work, Now Decide the Jury" - which is pretty transparent way of electing people to distribute the awards. Awards juries are usually filled with the usual suspects (not to say that it's not still the case, even here), but the twist is at least interesting - first, we vote on jury, and then, the jury votes on us.

The list of nominees is impressive (as of now), and while the gaming of the system is always an option (the agencies with the biggest number of employees can fare well in this situation), I believe actually that people would vote for those individuals whose work they respect the most. At least, the site design lets them do so - everyone is allowed to pick 5 nominees.

A nice step towards democratization of the awards process. 

P.s. I just hope the situation does not end like this. Eh, "we couldn't agree on the list"! ;)

stitching things together

A few days ago I read somewhere that, while the energy-saving capacities of electronic appliances are increasing (with the result of more energy saved), the sheer number of these appliances are growing, making the end amount of spent energy the same. A zero-sum game.

This made me think about the old-school (but still surprisingly vibrant) definition of innovation where repeatedly making new things - products, technology, services, etc. - is regarded as innovative. This is "more is more" model (and it found its best and most notorious application in fashion. And in advertising :).

What a waste.

Then I remembered the best innovation of all: the evolution of the human brain. That thing did not continue to grow according to "more is more" principle, because if it did then we would have our bodies attached to our heads and not the other way around. Simply, if brain actually continued adding a new part for the each evolutionary step it went through, it would be so large that it would not be very adaptive to have it.

So what brain did instead was to add more and more connections between its different parts - or, it used its  already existing resources to build new stuff. As a matter of fact, the human brain has more synaptic connections than brain cells.

Pretty intelligent.

But for some obscure reason, it seems that the web - which is actually all about the connections, as its name says - is instead following the "more is more" suite with no apparent justification. More content, more info, more tools. The focus seemed to have been on creating more things, not on how to stitch them together.

But those most successful on the web are the ones making connections. The connections between: a) people (Facebook), b) people and people and information (Twitter), c) content (BabyCenter), d) information and activity (Nike+), e) information and service (Zipcar), f) content and service (Netflix), g) information and information (Google), h) whatever the core of your business is with whatever will help you improve it.

So let's think about the web for a second not as a "digital channel" but as a "connecting tool". In order to get  best out of anything on the web, that something can't be created as a stand alone thing - or, better yet, it can't be designed in such a way that it functions as one.

Digital marketing challenge, then, is to stitch different things together: to figure out how all different elements interrelate, and to rearrange them to design a better (and not necessarily always new) customer experience. We can think of digital marketing as a business of making connections.

Clients' problems can be addressed with things that already exist. The important question is: "what and who am I connecting my product with?", instead of "who am I communicating my product to?". The difference (a big one) is that we are figuring out how to fit product in people's life in a more efficient, less wasteful way: what is the activity we are connecting it to? information? behavior? service? people? content?

And, in fact, this approach is not only about reducing waste. It's about creating more intelligent stuff.

Making information visible = good

This Good Guide tool is great. I've just discovered it over at Sociological Imagination blog, and while it may not reveal the truly surprising data, it's still great to see what kind of policies are companies leaning towards. 

Noteworthy: the biggest brands today - those in "Food and Beverages" category (Coca-Cola, Kraft, Coors, Heinz) and in "Retail Sales" (Walmart, Target, the Home Depot, Sears, Limited Brands, Staples, Office Depot, and Chanel) all made their donations exclusively to Republicans. 

Hm.

Reciprocity may be good for you.

While spending time on the Internet this morning, I came across the Freakonomics Twitter page. Which would by all means remain forgotten beyond 20 sec I spent there (unfortunately not that much interesting stuff shared) if I wasn't annoyed and amused (at the same time) by the fact that: a) Freakonomics does not follow ANYONE - yes, zero, and b) that their Twitter page is an attempt to "keep the conversation going".

According to Miriam-Webster dictionary, the word "conversation" is defined as an: "exchange of sentiments, observations, opinions, or ideas". 

Good talk, Freakonomics.

Old ideas can sometimes use new buildings. New ideas must use old buildings.*

*Jane Jacobs

I have found this Russell Davies' photo  (in relation to print business) on Adam Greenfield's blog, and it got me to thinking (which is always a good thing). I was not quite sure in which direction I wanted to take my thoughts, and still am not, so let's see where this post takes me.

I can start with knowledge - organizational, social, and technical. Which, said more plainly, refers to the latent and manifested knowledge that's intrinsic to any industrial practice. Media firms do business the way they know how to do it, which is to say, to repeat stuff that worked in the past. Advertising agencies do the same thing.

When a new media and technological format emerges, they appropriate it to the already existing network of knowledge. Which is why the change is such a slow process (predictions of end of the world notwithstanding). But which is also why it also happens, by gradual and incremental dis-assembling of tools, ideas, practices, and information suitable for one business environment, and equally gradual and incremental re-assembling of those same tools and practices with new elements: new tools and new ideas and new ways of doing things. What comes out of it is a bricolage that's sometimes a monster, and sometimes a beauty.

Every time I hear an extreme argument about "old" versus "new" and the doom for the old and the celebration of the new, I think how bad, unfounded, and weak those arguments are. They are a) selective (they use only examples that support the argument, and ignore others); they are b) simplistic (there must always be one single force behind the change - call it the internet, or call it consumer behavior, or call it fragmentation, or whatever else comes handy), and they are c) very easy to make because of the a) and b).

The world is, in reality, complex (a great and inexhaustible wisdom, eh). If it is complex, then forget about causality. Everything actually happens at the same time - and if we perceive something as a "big" change this is only because we didn't pay attention to many smaller, interconnected, and c0-happening things. Big change is always an outcome of a network of lot of incremental changes. And people - by default - focus on outcomes.

And every time I hear "old" vs. "new", I remember my favorite example of the famous inventor, Thomas Edison. What people much less frequently say in relation to this name is a "great businessman". Why? Well, Mr. Edison notoriously invented a light bulb. What is less notorious is that, while he did spent time in his lab figuring out purely technical challenges of a light bulb, what really makes him an inventor is that he created a whole wide network of conditions within which his light bulb made sense: he built relays (or hired people to do so), meters, cables in people's homes, electricians, laws, standards, regulations, etc. Only when this whole system (a network) was assembled together and put firmly in place, his invention - a light bulb - made sense. (In contrast, Nikola Tesla, a brilliant inventor, spent time mostly in his lab and in his lone hotel room; not a savvy businessman, that one. His inventions - or most of them - still sit in some safe to this day).

A "new" thing is in fact a network effect - of a network already in place, but more importantly, of an emerging network that this "new" thing brings to effect. Similar analysis to a light bulb can be applied to Twitter - yes, people were texting before, and yes, they were lifecasting whatever they were doing (which secured that Twitter was not such a "new" thing), but it also gave effect to an evolving system of niche broadcasting + interpersonal communication (which Twitter created by making it possible).

So now, the real question for me is not when/why innovations emerge, but when/why they succeed. Because this is when we notice them. Big change.

great.

Apparently, these are the words I use most often on Twitter. I thank people in alarming quantities. Occasionally, I "think", too. Discovered via My Twitter Weights a Ton.

Empires and Villages

I have seen an article today at The Atlantic, "The Moguls' New Clothes", (written by one of my professors at Columbia Business School, Bruce Greenwald), which reminded me of the time when I have just started my Masters in Media Studies program in New York. Mergers and acquisitions of media companies were all the rage back in the day. The Atlantic writes: "Media is the only economic sector that historically has achieved growth predominantly through mergers and acquisitions." Fair enough.

So what's the deal here? Well, media companies and advertising firms seem to have been pursuing a bad strategy: accelerate growth, diversify internationally, invest in content, and exploit digital convergence. In short, build an empire.

The Internet does not like empires. It's a network of villages; a loosely coupled federation, if you will. The web stroke "at the very heart of the core competitive advantage historically enjoyed by traditional media companies - economies of scale and captive customers. First, it radically reduces the fixed-cost nut required to engage in all manner of activities. And it all but eliminates the actual or psychological cost that impedes a user from trying an alternative product or services." The web, in short, is a pure barbarian invasion.

p.s. Occasionally, and unexpectedly, good things happen (not that this is going to save media, but nevertheless). An recent occurrence related to the very same magazine, The Atlantic, is an example of Jane Jacob's quote above. Apparently, the prominent political blogger Andrew Sullivan, NYT article reports, used his forum on TheAtlantic.com And, apparently, to tell readers to subscribe to the print edition of the magazine. And apparently, within just two days after his post, the magazine received 75% of subscriptions that usually takes a month to gather.

Sometimes, it takes a village to build an empire. ;)

one of those things is not like the others

Twitter apparently has a notoriously low retention rate (according to Nielsen's report from last April). At least, it has it compared to other social networks, like Facebook and MySpace (the image above). 

I am suspicious.

First, there's a reasonable doubt that Twitter is a social network. It's closer to a combination of the niche broadcasting model + personal communication than to a social network. As a matter of fact, Twitter may be its own, previously unseen, thing. Why compare it to other social networks then? Maybe (very likely, in fact) Twitter is nothing like them.

It's kind of weird then to put it in the same category as Facebook and MySpace. It's even weirder to make conclusions about its potential for the long-term growth. Why? Well, mostly because Twitter did not, and probably will not, grow according to the same dynamics.

Social networks grow by adding new nodes, and by adding new connections between nodes. In short, they become bigger and more dense. This size + density combo has a specific network structure: a) random networks, b) heterogeneous random networks (small worlds), c) networks with consolidated group structure, d) networks with integrated group structure). This structure, in turn, determines who/when triggers cascades; cascades' size; dynamics of information spread; and its reach and limits. And all of this can help us assess some network's growth as the function of time.

Now, the fact that Twitter does not grow at the same rate like other social networks does not mean (only) that it's retention rate is low. Its atypical growth may in fact give us a reason to think that Twitter is different.

People who signed up for Twitter back when it was founded probably found it super-boring back then. It's not only that it's no fun to follow 3 people and be followed by five, it's just that Twitter - being the open system as it is (just think all those third party-created Twitter apps) - simply took time to assume its form This is to say that Twitter, as a system, is characterized by a really high latency (defined here as "a measure of time delay experienced in a system, the precise definition of which depends on the system and the time being measured"). People who used Twitter at a beginning gave it up for a while, and then came back. It just takes time for people to get to use it.

So perhaps exclusively focusing on the low retention rate does not make much sense. Or, at least, it does not give us the full picture. But a combination of a retention rate + latency might: I would like to see data on how many people, after being inactive for a period of time, come back - not on month to month basis, as Nielsen's study did, but in a longer time frame.

Anyway, this just crossed my mind.

a little cultural inquiry

I came across this excellent analysis of online commenting, which, according to the article "has become a medium in its own right". The question then becomes, "when the general consensus is that most comments suck, why do we continue to add the functionality to websites?"

Comments on my blog are all awesome, and I love to get feedback on stuff I write. However, it is easy for me to love comments here, because they are all very smart, interesting, and polite and respectful even in disagreement. In fact, I welcome people who disagree with me (or offer a new way of looking at things) because they push me to think more. When comments are inspired by the topic/article, and not by its author, there's  a context for a healthy exchange of ideas, and "enhance whatever they are attached to and offer insightful and constructive debate".

More often than not, this is not the case.

It's more likely "to find comment in the form of excessive superlatives or the monosyllabic jeering and swearing from anonymous cowards, wading through which only saps our energy to persist in looking for something worth while to read."

And it's not only about the wasted energy. Accumulated comments, like those on AdWeek or AdAge, are a collective reflection of the marketing industry and its predominant culture. It's like an anthropological case study.

So, what are the findings? I am going to quote here Alan Wolk, who already wrote about this, and summarized it the best. Apparently, all industry comments belong to three main categories: a) "you are not famous enough for me to pay attention to", a.k.a. "where is your portfolio", b) "all this smart stuff makes my brain hurt", and c) "enough about you, here's a link to my brilliant blog post".

If these comment modes are reflection of the "state of the industry", then it may help us grasp why the industry is not adapting a bit faster - and better - to consumer behavior in the complex media environment. Simply, a lot of people working in it are often more interested in trashing each other, pushing their own agendas, and being intolerant to difference, than in thinking and discussing new ideas.

In contrast, there's a digital marketing world. It's an uncertain and unpredictable place. More importantly, it's also a place where most people are actually curious about the changes in the media, society, and the world around them. (Operative word here being "around them").

Just have a look at Faris' or Noah's or Paul's or Gareth's blogs. People there want to talk about ideas, not about each other. Together, they offer a reflection of a totally different culture. It's a culture of appreciation, respect, creativity, information, experimentation, newness, and challenges.

To brave an uncertain digital environment, people working in it figured they need a little help from their friends. And that's adaptive.

If traditional and digital advertising don't get agree so often, it's not because they revolve around different media. It's because of the people.

people design

I was talking to Toby today about some project, and that conversation reminded me of something that I thought was pretty smart: Nike+ Active, which I noticed a few weeks back when the new iPod nano was launched.  What, in fact, attracted my attention was not the system itself (I have same old objections), but its main underlying business/experience premise: not everyone is a runner, but everyone can walk (well, almost everyone), so why not create something for this "everyone" and then - over time, and in incremental steps - turn them into runners?

There's more. Apparently, this kind of "incremental steps" thinking penetrates other industries, and among them, the least likely candidate of all: luxury fashion. I came across this article today, where Burberry's CEO talks about why they're launching a social network for trenchcoats (kidding. it's for people with trenchcoats ;), and her point is, verbatim: "These might not even be customers yet. Or they may be a customer for a bottle of fragrance or for eyewear." 

This kind of evolutionary thinking is, while not entirely new to marketing (customer lifecycle path has been around since forever, after all) is nevertheless groundbreaking in the sense that it doesn't target brand customers - it targets the brand's customers-to-be. Everyone's included.

It works something like this: start from a truly broad audience, monitor its behavior, make a product or a workout routine recommendation (how about you walk at a slightly faster pace today? next thing, you know, you're running. or, how about this nice scarf to go with those Burberry glasses of yours? what happens next, you are head-to-toe in Burberry, trenchcoat included), then make some more customized recommendations, and, in that way, create the brand's audience. There's something for everyone, after all.

Think of it as "people design". A brand literally designs a runner from an ordinary unsuspecting individual. Burberry brand designs a Burberry woman or man by training any human being (willing to spend thousands of dollars) in style, quality, fit, aesthetics, prestige, status, etc. Over time, this kind of education pays off.

Or, in the Systems language it works like this: the more people interact with a brand, the more brand learns about them, the more it has to offer, and in return, the more people evolve into that brand's customers. What it takes is: a) making the first step as accessible as possible and b) making progress as incremental as possible.

Everyone's talking only about designing products and services to fit people better, whereas at the same time happens the parallel process of designing people to use those products and services.

And this is very different from traditional marketing and its customer categories (even the name "categories" suggests something discreet, separate, and mutually exclusive). In comparison, here, everyone's going to have a great number of overlapping phases. What's common to a marathon runner and me is that we both perform the motions of running. it's a matter of degree in which we do that where we become different. A loyal Burberry customer is very likely to share a few of the great number of Burberry items that she/he posses with someone who has only those few items. Again, these are different points on a continuum of Burberry-ness, or on a continuum of running fitness.

When you think about it, most of customer categorizations from the past worked "before the fact" (i.e. before a person had an actual, real life experience with a product or a service). Targets were selected based on the assumptions founded on their history ("if it's a mom, then she must like ..."). There are thousands of moms, and all of them have their own patterns of doing things. At the end of the day, you never can predict who is going to become loyal to your brand, until, well, they already become loyal.

Every journey begins with a single step, and all that stuff.

This never fails to amuse me.

This and other awesome design + user experience-related quotes found here.

this made me smile.

By Jason Kottke, via Twitter. Hehe. He is awesome.

happiness, part 2

For the past few months, actually ever since I wrote this, I paid attention to stuff written about happiness (articles, experiments, etc). What's super-interesting to me is human fascination with the idea of happiness and how to achieve it. Simply, I am mostly curious how people approach this question.

So ... here are some examples.

The really really long one is from Atlantic Monthly, published in June '09 - it's a longitudinal study of a selected group of people since almost the beginning of their life (72 years, to be exact) up to their old age. What would they change? Do they think they had a happy life? While I am slightly skeptical of people looking back at something and assessing it (because one of the cognitive + memory mistakes that we make is to judge a situation by its outcomes), I guess this study is great for associating actual people's reactions to the events in their life at the time when they are happening AND combining their insights with people's consequent assessments of that same situation (do things look consequently better or worse?). You can read the whole study here.

Track Your Happiness is a relatively new project, based on similar premises, but with ultra-compressed time. The experiment is described as "a new scientific research project that investigates what makes life worth living", and, instead of every 5 years or so, you are asked every hour how happy you are. Approach here is more "gather a lot of data from a lot of different people in a lot of different situations of their daily life" (you can read an overview of the experiment here). I started signing up but then decided that I don't really want to know what "makes life worth living". Would rather reflect on it in my old age.

Then, there is this awesome (informal) study done by NYT's TierneyLab, where Geoffrey Miller created an open invitation to readers to list "the ten most expensive things (products, services, or experiences) that they have ever paid for (inclusing houses, cars, university degrees, marriage ceremonies, divorce settlements, taxes)", and then to also list "the ten items that they have ever bought that gave them the most happiness." The participants were also asked to count how many items appear on both lists.

The results are fun, to say the least. The items appearing much more on the "expensive" than on the "happy" lists were: 1. children (um...) and 2. marriage ceremonies (well ...). On the other hand, the thing that appeared much more on the "happy" vs. "expensive" list is "sharing meals with friends" - the fact that people like to eat together that hasn't changed for thousands of years, and apparently it's still the major source of accessible happiness.

At the same time, the prominent items on the "happiness" list were a) liposuction, b) a studio apartment in Paris, and c) a girlfriend. Some people are very specific. You can read here the rest of the findings as well as a few general trends.

And, there is whole other category of studying happiness, which is looking at if/how it spreads. To ask "Is happiness contagious?" is one way to approach the question - the reasoning goes, if we can't really figure out what makes individuals happy, then we can at least create conditions allowing them to be easy influenced with happiness (that is, with others who are, for their own reasons, happy - or at least seem so). Not a bad behavioral targeting idea. The latest study in this direction is the NYT article from last Saturday ... you can read it here. (Warning: it's really long. On the other hand, it offers insights into network dynamics + some real life examples).

As it could have been expected, all of this stuff just confirmed my impression that happiness is an individual thing. Whereas people can study for an exam, or train for a marathon, and certain training regimes will yield certain results, minus individual variation. But if certain procedure is followed, it is expected to make a difference in an expected direction. With happiness, there is no training regime or a routine. Individual variations are too high to form anything less than a really general trends ("social experiences make us happy"). So the quest continues ...

a good question.

"The question for creative agencies is whether they can wake up, react to what's going on, engage the crowd, and make themselves a part of the new reality."

Jon Winsor, VP/Executive Director, Strategy and Product Innovation at Crispin, Porter + Bogusky

I found this quote here, and it was originally published here, and it seems to be related to this.

Also. For those interested in the real-world answer to the question above, see comments on this article. It's a long road ahead ;)

Peter Merholz + Don Norman = Design Goodness

Video discovery of the day is the Don Norman interview by Peter Merholz. You can watch the video here, and if you don't have time, some cool Norman's quotes are called out below it.

Design never ceases to be relevant.

"The End of "Creative" Hegemony" by A. Wolk

Whoever comes here from AdAge site should read this (Alan Wolk's post). Recommended.

time paradox

I spend ridiculous amount of time on this site, but that girl is just too awesome to resist. Which reminded me of something that I read a while ago about a way more boring topic than fashion, which is what site metric is good for. Apparently, not for stuff that we are accustomed to. Almost all brands today ask for some kind of measurement, and since that's neatly wrapped in the idea of "engagement", the most natural thing was to regard metrics in term of quantity: more page views = bigger engagement; longer time spent on the site = bigger engagement; greater number of clicks = bigger engagement. For your site metrics, it seems, Bigger is Better.

Not necessarily. Just because you can measure something, doesn't mean that you want to measure it.

What if people spend more time because they are confused by site's navigation? What if they view more pages because they can't find what they are looking for? What if they click more because web designers made doing something on the site insanely complicated? Would ideal situation be that people immediately find what they are looking for, complete whatever task they want to complete in 3 clicks (or less), spend 10 happy seconds on the site and then get the hell out of there?

All of this may sound like any web agency's nightmare, but in fact, it probably does wonders for online brands. If you make things easy for people, they will come back and love you a little bit more. But how to prove it?

Well, how about a different set of metrics? For example, ones that actually reveal something about people's behavior and motivation (like, why do they come to the site on the first place and what can you learn from the way they behave once they are there). That is, metrics that reflect people's real-life goals, practical reasons, and specific behavioral patterns. This is then opposed to brands' goals to grab people and make them spend as much time on the site as possible, even if they are only clicking in frustration.

This is really hard.

Mostly because we need to have insights on which people's needs and behavior the particular product or service satisfies and fits in. Then create content, tools, and navigation to support that. Then decide which kind of things you want to pay attention to (newsletter sign-ups? number of comments? number of articles? number of products in the shopping cart? number of recommended products that people actually click on? number of times someone share something with someone?). When this is done, you can monitor these metrics to if you are reaching your business/brand/user goals.

This is sort of boring. But it doesn't have to be if you think of these measures as insights into people's behavior. The more info you have, it would be easier to optimize the site further. It would be also easier to offer content and tools that you know (and do not assume) that people will like. Iterations do not sound as catchy as "engagement", but they do work.

The more reasons a brand gives people to visit a site, the more they will come back. The more they will talk about your brand, the more they would like it, and more often they will recommend it. "More" is new "Bigger".

(And, I have to add that this is yet another case to let go of metaphors like engagement for a bit, and do something real for a change. Next time, instead of saying "engagement", display a list of things to show what you really mean. The same goes for other marketing metaphors ...)

smart experience

I've noticed this a while ago, and decided that it's pretty smart. What I am referring to here is the small piece of information in the bottom right corner: "How to Shop". In addition to store availability, it contains information on where to find a particular product, that is, it offers its exact location in the IKEA storage.

What IKEA probably figured here out is where a bottleneck in the real-world funnel of consumer shopping steps happen. That is, people's confusion in the oversized warehouse where everything is packed in boxes and all rows looks pretty much the same. While the location information is displayed on items on the store floor, IKEA did something even better here: before people even go to the store, they know where to find what they are are looking for.

Now, there is a legitimate question of why would IKEA want to do that? After all, it spent years and years perfecting the stores' floor plan so that people are carefully, step-by-step, guided through the shopping funnel, with the most likely result that they buy way more things that they originally intended.

Well, here's a catch. You can't enter the storage directly. You still got to go through the whole store in order to get there. And, having information where you are going to find something once you are done with this journey, only makes the journey more enjoyable. It takes away the painful wandering at the end. Which can only mean that there's is more attention to be paid to what's going on in the store, resulting - most likely - in purchase of a few more items that we haven't really planned to buy.

Small details makes for perfect design. And makes people like IKEA a little bit more.

digital traceability

If Statistics continue to progress as it has done for several years, if the information which it gives us continues to gain in accuracy, in dispatch, in bulk, and in regularity, a time may come when upon the accomplishment of every social event a figure will at once issue forth automatically, so to speak, to take its place on the statistical registers that will be continuously communicated to the public and spread aboard pictorially by the daily press. Then, at every step, at every glance cast upon poster or newspaper, we shall be assailed, as it were, with statistical facts, with precise and condensed knowledge of all the peculiarities of actual social conditions, of commercial gains or losses, of the rise or falling off of certain political parties, of the progress or decay of a certain doctrine, etc. in exactly the same way as we are assailed when we open our eyes by the vibrations of the either which tell us of the approach of withdrawal of such and such a so-called body and of many other things of a similar nature."

The above quote is from Gabriel Tarde's book "The Laws of Imitation", written in 1903. 1903!! More than 100 years ago, someone figured out that this is possible. I am impressed.

thinking about the movie industry

Last night I had a quick dinner with my friend Lars, and we were talking a bit about digital marketing industry (zzz ;) and it was just interesting to ask question, yes everyone thinks there is something they should be doing differently, but how do you really change?

At the end of the day, the question - once stripped of all technological, sociological, and media connotations - becomes a pretty basic one: literally, how to change your day-to-day business? A big riddle of "who's going to figure it out first?" can be looked at merely as an operational question of "what to do with my marketing budget if I am not going to make a 30-second spot?."

Now, there are probably a million answers to this question, each more interesting than the previous one, but that's all speaking in abstraction. There's an idea, and there's it's execution. Not the same.

There is a force of producers, creatives, strategists, client partners, and everyone else involved in marketing that need to start a) thinking, b) working and c) cooperating differently. For each new idea, there needs to be an organizational form to support it. And no one has the organizational form of that kind of flexibility and no one also has multiple organizational forms to turn to when asked to do things differently.

So now what? While there's a whole discipline called organizational theory, last night I could not remember a single industry that successfully, swiftly, and proactively transformed itself. (A lot of industries, on the other hand, were forced to change - media industry, automotive industry, financial industry, losing in scale and budgets. Which may not be a bad thing). And if there are success stories, we learn about them after they already happened.

But then I thought about the movie industry for a bit. TV took off  in the fifties, and the movie going declined. People still went to the movies, but at - what the industry thought - unacceptably decreased rate. People didn't stop watching movies, they just started doing it slightly differently.

But the industry which depended on people watching movies only and exclusively in a certain way found itself paralyzed. Around the same time, antitrust action forcing movie studios to divest movie theaters they previously owned. That meant that everyone was now competing for already decreasing moviegoers. In this situation, the emphasis shifted at the end of the value chain - the theaters. And the result? Movies starting making money on concessions. :)

This may as well be a cautionary tale of what happens when an industry thinks that people will forever be doing things in the way that industry was built around. (Or, as Stafford Beer put it, "the purpose of the system is what it does", not what its creators envision it should be doing). And also, it's just cheaper to continue doing what worked in the past, then to research, monitor, and experiment what it is that works in the present.

But there's something else that's more interesting. Movie industry was forced to reorganize itself. To minimize the risk, the studios diversified: there's a mainstream movies arm, and art house arm, independent arm, horror, action, etc. Since they don't know which movies people will like, they decided to make streams of different movies, with different budgets, teams, agents, producers, and distributors. Chances are that at least some of them are going to make money.

So now, an observation. Diversification of the core business does not in fact mean synergy (which was an unfortunate strategy of the media industry a decade ago), but exactly the opposite: divesting and fragmentation and having different arms of business loosely connected. Each doing what it's good at, all of them contributing to the complexity of digital environment. There's no one holy grail, or one best way to make campaigns that everyone is trying to discover, there's just a lot of different ways to respond to clients' challenges. Sometimes a solution is going to be a blockbuster, and sometimes it's not. But that's okay. It's concessions that count.

poof.

Came across this, and liked it very much.