"One prominent feature of information goods is that they have large fixed costs of production, and small variable costs of reproduction. Cost-based pricing makes little sense in this context; value-based pricing is much more appropriate. Different consumer may have radically different values for a particular information good, so techniques for differential pricing become very important."*
It's no wonder that traditional marketing and advertising don't work in digital space. Customers' perceptions of value of a product/service and their expectations of the value they'll gain are completely unrelated with the cost of creating that product/service. Companies' value proposition thus needs to be correlated closely with consumers' value perception. This value perception is shaped by Google-led commoditization of products/services, transparency of pricing, and social information - to a greater (much greater) extent than advertising. Key to success? Staying close to customer's perceptions and expectations of value. That's the path to sustainability; everything else has a short shelf life, literally and figuratively.
* From here.
I wrote an article for Fast Company. Have a look.
I will be teaching again Digital Strategy Course on July 20th here in NYC. As always, the course will be super-practical, with participants coming out of it with a bunch of hopefully useful digital thinking and doing tools. Besides that, we'll cover coming up with KPIs and setting benchmarks of success. We'll also explore tools for collaboration between digital strategists and other disciplines in the organization.
I am pretty excited as I planning to introduce my approach called Digital Thinking at this course.
Do come!
The other day I came across this image (regretably, can't remember where), and it striked me as a lovely way to summarize the problem of fitting digital media into marketing thinking. Yes, we still have that problem. We are collecting Likes and views, measuring awareness, and resizing content - all instead of accepting that the rules of the game are through and through new and trying to understand them.
I am co-teaching the first-ever, all-day digital strategy course on November 18 in New York City. Along with the two amazing ladies (and the super-accomplished professionals), I am going to cover everything that ranges from how to write a digital brief, what are success stories and why there were successful, how collaboration between digital strategists and creatives should look like, to how to sell digital strategy to clients. More information about the full day agenda is here: http://digitalstrategycourse.eventbrite.com/
You should come, it's going to be fun! And bring friends :)
Bud and I would love to talk about complexity at the next SxSW, so we started thinking, plotting, and writing, and this is what we came up with... It's basically a summary of everything that he and I have been obsessed about in the past months, and is an attempt to get more people to start thinking about complexity. Hope the panel happens!
In a nutshell:
Have you ever been to a kid’s birthday party? It’s chaotic, unpredictable, fast-moving, and fun. It’s either the best thing or the worst thing, but you can’t know in advance which of the two is going to be.
Today’s digital world is a little bit like kids’ parties. It just involves a lot more people. And anything that has to do with a lot of people doing a lot of things is complex. To create something in the complex space forces us to think differently about the approach to, processes, and products of creativity.
This new creativity starts with interconnections between data, people, and things. It deals with the web of a bunch of small moving pieces that create intricate feedback mechanisms and new behaviors. It mixes code with the story and it’s open and iterative. It’s methodology relies on complexity’s own tools for solving problems. It's not about coming up with the new creative formats, but in making new connections. It’s a medium, not the product.
Complexity can be scary when connected with creativity. But it’s also unbelievably inspiring. It offers the maximum creative flexibility and the maximum executional options. It makes us realize that simplicity is a false god and that the new rule of creativity is looking for intuitive solutions that don’t reduce complexity but that thrive in it.
This panel is going to answer the following questions:
You can see the revised & submitted proposal here.
*Or, why the holistic approach works better in digital.
It doesn't reduce the complex situation to a causal, simple explanation. Instead, it's looking for intuitive solutions that seamlessly fit into people's behaviors. All well-designed products, services, and games are intuitive. Again, they are not simple - they intuitive.
The popular belief is that the contrast to complexity is simplicity. It's not. It's making things intuitive.
It helps that holistic approach inspires thinking through associations, both in their literal and metaphorical meaning. Literally, associations-as-in-connections are everywhere and exist between everything (people, information, tools, ideas). Metaphorically, associative thinking inspires us to make unexpected connections between things; and to recognize the innovative opportunities in the process.
Since it forces us to look beyond the obvious, holistic approach encourages "what if," rather than "why" and "how." It's non-linear and allows for the unexpected - both of which are in stark opposition to reductionist agency thinking a.k.a. "find the best strategy for solving a problem, discover one key dimension of consumers' behavior, define one thing that this advertising message is about." Instead, it's pushing for imagination and creativity: both in concepting and in execution.
Embracing the complexity of the whole situation is in fact a necessity in digital space. What we are dealing with are unexpected, ever-evolving movements and unpredictable connections. They generate micro-tensions and antagonisms that are ripe with cultural potential that has a direct consequence for brands. We are grappling with a networked social influence, and detecting "accidental influentials" in a given situation is as critical for campaigns as it is unpredictable. Irrationality of human behavior doesn't help matters, either: people's sensitivity to the design of information environments and activities of others is a powerful engine for behavioral change and needs to be utilized more in digital marketing campaigns. Then, there is data about individual and collective patterns of activities, and their aggregates act as a shared communication object with powerful storytelling potential. These sorts of stories disrupt the traditional model of authorship over advertising narratives. And finally, collaborative consumption and redistribution markets are constantly showing us where consumers' behaviors and needs are going: they represent a compelling lab for finding new sources of value that brands can deliver outside of their usual production/consumption value chains..
There are all challenges that resist obvious solutions and cannot be reduced to a single-cause explanation. So what to do? If complexity of the environment prevents one way of responding to the client task and if it prevents predicting the success of a single creative solution, then the best is to put all this complexity right at the center of the strategic problem-solving process.
This is hard. The need for strategy comes from our, human, anxiety in the face of uncertainty. Strategies are "anticipation machines" designed to help us know what the future will be before it happens. Complexity prevents this - but at the same time the problem is not unsolvable. If we can't have foresight, we can have hindsight. And a lot of those. The hindsight comes from standing close to the edge, which in plain language means merging strategy with its execution.
The good news here is that yes, while complexity creates a lot of challenges, it at the same time gives us tools to solve them. All one needs to be is crafty. (Big ups to the most brilliant Julian Cole for sharing some of his ideas about all of this).
In practical terms, this means that methodology for dealing with complexity needs to revolve around complexity's own tools. And, believe it or not, these tools are everywhere. Forget about eMarketer, and Forrester, Sysomos, and all that stuff. They won't solve the problem of originality of your campaign or of a real behavioral challenge that you want to create with your target audience.
What will solve the problem is a little game called digging for clues. I often use Wordle to run customers' reviews of the product/service/brand through it. It lets me uncover the common themes and the possible sources of tension or cognitive dissonance that are useful as insights for a campaign. GoodReads and apps like WANT! uncover what people identify with, how they define themselves, what is important to them, and what captures their collective imagination - all of which provides context in which a campaign is going to be received and what can make it resonate well with its target. Sites like 43Goals on 43Things and Daytum give us insights in human motivation, in different roles people are playing, what are their strivings, how they make choices and what are their frustrations. This helps come up with the ideas for inspiring and facilitating behavioral change for our target.
Our understanding of the wider context of our audience's lives allows us to recognize cultural micro-tension, sources of influence, data that we can use for marketing, or needs that allow us to create an exchange market around.
It lets us capture the new territories for our brands and to come up with the "what if." A new way of looking at things, perhaps, but that's exactly the point.
There's an interesting white space to be explored that goes beyond just visualizing data. A ton of online retailers (and just about any e-commerce site) has enormous amount of data on people's affinities, likes, purchase patterns, sharing patterns, communication patterns (and all other possible patterns), all filtered by time and location. That's a lot of information.
Sure enough, retail brands use this info for personalization and better targeting. But they are missing out, big time, tho: if only they turned this "individual-focused" model upside down and used their data for all sorts of community dynamics, they would be able to influence & inspire people's behavior on a much larger scale. In other words, they'd be able to turn their vast data repositories into marketing.
The simple truth behind using data as marketing is that people are sensitive to the design of information environments and that others are instrumental in individual motivation (yes there are plenty of wonderfully self-motivated people but we are ultimately social animals). Combine those two things and you get a powerful engine for behavioral change. And this is hardly new: personal fitness industry has become an expert in pulling personal + community info and turning it into a motivation & statistics engine. Transport the fitness industry's approach to retail and all of the sudden there's an opportunity for creation of a data-driven feedback loop revolving around products instead of one's body.
The outcome is a shared communication object - a story around products' use based on aggregated information about all possible individual patterns and discrepancies among them. These stories provides a powerful shopping context - and a bonus marketing message. Since brands are all about fitting into the context of people's lives, why not also make a story on how this is actually happening.
A bonus feature: some ideas on how to combine 43goals, daytum, dailymile and runkeeper all in one to create information context with a storytelling potential.
Sharing motivations. Renovating kitchen? Buying stuff for the party? Going through the first 3 months with a new baby? Motivations help. There's no need to create a personal profile; it's enough for an individual purchase bundle to be displayed in the "recent purchases section" so others can react to it. (Yes this requires sharing, but this being FB age, we may need to get over it. Besides, think of the grotesque things that runners' share on DailyMile or Runkeeper after long-distance races).
Rating purchases on emotional scale. Shopping is equally passion-driven activity as fitness, so let people share how they felt after different purchases: some of them are "blah" as they are a pure necessity (toilet paper), some leave us feeling good (i finally got that Drano), and some of them we are really really enthusiastic about (in my case, clothes, shoes, and books). So, why not share the feeling [the forbidden word in e-commerce site design]?
Personal infographics (weekly, monthly, yearly, lifetime). Enrich the basic shopping account data on how many objects by category a person has purchased this week/month/year so they have insight on how their household shopping budget is distributed. Or, give a weekly/monthly breakdown of how many times a site was visited per person; how many savings in discounts and deals a person accumulated and what it means translated in a dollar figure (bet it will make a lot of people feel good about themselves). The interesting part is that brands can aggregate all this information and publicly display it for everyone (of course, you can also filter it just by your friends, via FB connect). It allows us to see where the happiest shoppers live (which zipcode, state, country), where the busiest ones are, and where the most eclectic ones; which product category has the most passer-bys, etc.
"Screen time." Filter and display product categories/times/locations by the longest and shortest "screen times" on the site/section/page. Distill it down to the individual level and give a scoop in what times of the day warrant the longest screen times and which ones the shortest (a lot of insomniacs shop at 2am, you know who you are).
Goals. People often shop with a specific goals in mind, like "clean out my closet" or "clean my bathroom" project and a brand can come in here to help people achieve them in the best and fastest possible way by display a number of people who want to do this at the same time as you do, and share experiences of those who have done it. Add here progress tracking and challenges, and a "complete a task" function becomes something with an individual context and meaning.
Face-Off Time. This one can be called "passive game," because people are not always dying to play. But, they do like to compare themselves to others and see how they fare. Simply displaying data about which neighborhood has bought the most green products or which one saved the most or which one donated to charity the most can spur a competitive spirit (not to mention instill a sense of achievement). Rewards can come in here too: reward everyone in the same zipcode with a surprising discount at the checkout because they hit the X dollar amount in green products or in savings or simply display the rewarded neighborhoods for everyone else to see.
The other week, I got a brilliantly challenging question from Stuart Smith. He saw my presentation on Creativity and Complexity and asked me how to reconcile semantic & emotional complexity of brands with the need for the consistency of their global deliverables.
That's a nice one. After all, what's the benefit of complexity? Well, the human experiences are rich and nuanced and often really ambiguous. There are no two people that experience a same thing in the exactly same way. So, if human experiences aren't simple, why should brands be? The best brands are indeed those that are able to keep this complexity intact, without falling into the trap of reducing it the only one narrow aspect (the statement, the medium, the audience).
Think Apple. The most famously elegant brand around is, in fact, pretty complex. Where does this complexity come in? Counterintuitive as it may sound, it's in design. The design of Apple's products is intuitive enough to appeal to everyone. Steve Jobs never defined the "target" for his products. He never exclaimed that he wants to "appeal to 18-24 year old men," for example. And intuitive is not the same as simple. In fact, it's pretty far from it. Intuitive things retain the complexity of experience without simplifying it to a single dimension.
Or, think Converse (I have some sort of emotional hangup with this one). Thoughout the years/decades of being around, Converse created a rich & multidimensional brand, based on layers upon layers of accumulated cultural meanings & signifiers. Instead of being part of some pre-designed brand experience, these cultural connotations come from memories that are simultaneously personal (mine) and that cross the boundaries of country and audience (everyone's). This sort of collective memory can only be created from associating products with experiences that are so deeply personal that they become universal.
Both of these cases remind me of boundary objects. They are things that "have different meanings in different social worlds but their structure is common enough to more than one world to make them recognizable, a means of translation. They are plastic enough to adapt to local needs and constraints of several parties empoying them, yet robust enough to maintain a common identitiy across sites. They are weakly structured in common use and become strongly structured in individual use. The creation and management of boundary objects is a key process in developing coherence across intersecting communities."
So people have thought about this one before.
Good. Because, in my own experience, complexity is great for creatives. It gives them the maximum inspiration & creative flexibility and the maximum executional options. It also creates thinking/outputs that are emotionally robust and nuanced enough to provide a backbone for many years of creative work for the brand (and removes the on-off campaign mentality) - you can go back to the well many times without repeating yourself. Second, complexity breeds many executional options, and secures that they are adaptive and adaptible to the fuzzy digital environment. Third, complexity has really become the only way, when you think about it. The old school planning mantra, narrow everything down, make things obvious, make things clear, doesn't get today's brands' problems solved. It just ignores them. Not the risk I'd take.
And besides, clarity is the enemy of magic.
Now that Instagram has reached a considerable early adopter base (more than 4 million users in 7 months since its launch), there's a good question of how/when brands can jump in. (Not that they have to). Truth to be told, some brands are already there, in a very obvious way - they're having their own streams, with their own photos. But what if, instead, they came up with filters for everyone's photos?
For example, the image above screams "Coca-Cola" to me. Currently, Instagram offers only "the most popular" filter. The Barbarian Group created Screenstagram, which combines popular & your friends' photos. Now, any brand can create something like this and display it wherever they want. It's just another way to navigate through the bunch of users' uploads. Now, why woud people care about branded filters? First, if brands like to claim that they want to "own" a category of human experience (running, cooking, fashion, grocieries, going out, extreme sports...), this is one simple way to do it. And even simpler than this, maybe they manage to filter some really good content that people just simply wouldn't come across otherwise.
I found this screengrab here.
In this context, a solid organizational consultant may be a better bet than a newly minted title (Chief Digital Officer? Chief Innovation Officer?) that's supposed to signify how transformative an agency is.
I am pretty late with this, but figured I should put it here anyway. It's the story behind my Creativity & Complexity deck. It starts with me saying that advertising creativity has always been a branding vehicle, and if we are talking about branding (my fav subject) we can't avoid thinking about creativity. And now, as everythone's trying to figure out what's going to work online and why and how and all of that, it's useful to backpedal for a sec and remember that evolution of creativity is the evolution of media. So here we are now, in 2011, stuck with digital media. What helps?
When talking about creativity, everyone thinks about creative talent, creative agencies, or creative deliverables. But my starting point was not the words of wisdom from Weiden or Goodby or any other famous ad creative. Oddly enough, here's the quote that (I think) captures the best the snafu situation that we have today with creativity: "... because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know." (the live version of this statement is here, for those who are into it).
What makes the unlikeliest of all quotes so relevant here is that the infamous "unknown unknowns" are in fact the core property of complex adaptive systems. (Worth noting: CAS is the term that showed up in biology and that has since been widely used in organizational and technology studies). CAS are the systems that are built around, and thrive, on unknown unknowns. That's what makes them different from merely complicated systems: in the latter, there are a lot variables and the catch is that there's just too many of them. But luckily, they are all known. Think airline cockpit for example. Here, it's a shitshow, but if we simply follow a sequence, we are going to be just fine. The sequences don't change and they can be broken down into a series of simple problems - so the learning curve is probably, possible, and likely. Experience and expertise count big time here: the more times someone has done some complicated thing (like preparing for a pitch or making a media plan or managing client relationship), the better they are going to become in it.
But complex systems are no such walk in the park. They are like organizing a kid's birthday party: full of crazy towns, unexpected developments, left-field surprises (someone cries in the corner, someone doesn't want to play, someone got too sugar-high and is off the rails). This situation can't simply be broken down into its essential components and analyzed. And even if we could do that, complex situations are un-repeatable so the insight won't help us much. If anything, experience almost becomes a liability. Expertise here can be valuable, but far from being sufficient: the next bday party, for example, may ask for a completely different approach than the one right now. Current successes are no guarantee - and much less a predictor - of future sucesses. Thus, what makes complex systems hard to deal with is a deadly mesh of unknowns and unpredictability. The main take-away is that complicated environments are rife with risks; complex ones with uncertainty. Risks are calculable, uncertainty is not. So there.
Advertising industry - as it seems right now - has always dealt with complicated environments. And it's been incredibly good at this (think media buys, ad unit sizes, length of TV spots, and creative solutions that are meant to fit these formats). It's been good because it operates as a simplification machine. Think simple has become a mantra and a signpost: we were thought to come up with a single killer insight, a compelling idea, one single business solution. Then we take it and multiply it throughout different touchpoints without paying attention to the complexity of each (no matter what transmedia planning claims).
Our solution to complexity has been simplification and multipliction. We have been fending off complexity through offering coherence. Even if we don't want to admit it, we end up in the business of resizing: how does this solution fit on the billboard; ok now, how does this same solution fit on an iPhone?
This approach worked for a while, no doubt. It still largerly works. To see how and where it may fail, the best is to use quote from Apple's CEO. No, not Jobs - the other one. The one that most of people would rather forget. When comparing Coke and Pepsi, John Scully said something along the lines, "Coke always focused on the drink. Pepsi focused on the person using it." Now, the catch here is that contexts - and people - using products have become incredibly interactive, networked, info-rich, collaborative, and all of that. Think the activity of cooking for example: it used to be pretty known where we get out inspiration/advice/resources. Not so much these days: there's always a new app, source, filter, community that become part of our cooking experimentation. People and their activities have become complex behavioral networks.
And our challenge is to align our thinking as an industry with the complexity of this environment.
The first step is not to try to simplify complexity. Instead, build things that can in this complexity thrive. Instead of awareness, acquisition, products, sales, media buys, prices, promotions, budget, and ownership, change deliverables (and language) into connections, generative relationships, interactions, new combinations, systems, renting, etc. The best online creativity is alive - it's a medium for a ton of other things, not the end result. Sticking to thinking about creativity in terms of the creative talent, creative agencies, or creative deliverables is bound to make us seek results that are efficient and repeatable (and, in fact, it is this repeatability that accounts for efficiency) - which in turn is bound to disable us, organizationally, from solving complex problems.
In the world of unknown unknowns, the idea is "to be less wrong than yesterday." This may mean focusing less on abstract goals (drive brand engagement/raise awareness) and more on concrete behaviors (how does this particular design solution lead to desired activity and business result). In this context, it will turn out that the best digital creative solutions are always about something else. Not everything is creativity. But creativity is everything.
This post can double as a farewell to delicious and a breakdown of what people in the industry were talking about in 2010. Plus some stuff I was into last year. I went through a million of my bookmarks that I saved over the course of the last 12 months, and here is the hand-picked result. Prominent topics (and this should come as no surprise) were: geo-location, mobile, gaming, social retail, virtual goods, and a few really really dumb initiatives. If you missed any of these articles, have a look.
My fav topic of digital creativity
Creativity in digital goes way beyond advertising
Words, pictures, and everything else.
Digital may be everyday, but it's not effortless
Brands & Branding
Nike Write the Future social media strategy
Google hasn't built anything interesting in over a decade
Competing with heroes: Domino's case study
Coke drops campaign sites in favor of social media strategy
Starbuck's formula for social media success
A big picture look at google, microsoft, apple, and yahoo
Brands' social media casestudies
Do brand loyalty, commitment, and engagement metrics work
Kickpatrick Talks about Zuckerberg's World
P&G Pushes Design in Brand-Building Strategy
Digital Storytelling
Use social media to tell interactive stories
Geo-location and its discontents
Foursquare, Gowalla, stop pretending it's fun
Marketing experiments emerge using Facebook places
Foursquare fatigue and how to fix it
5 ways Foursquare is changing the world
Check-in royalty, customer loyalty, and Foursquare evolving strategy
Facebook vs. Foursquare: It's game time
Beyond Foursquare: The next generation of customer loyalty
Foursquare marketing hits and misses case studies
Location: How check-ins speak louder than words
Foursquare, Gowalla, Whirrl and MyTown case studies
Gaming
Achievement, Game Mechanics, and Social Software
Can games theory explain culture?
Learning from game design: 11 gambits for influencing user behavior
Just add point: what UX can and cannot learn from games
Of lucky cats, lameness, and game-like logics
Incentivizing social media participation: points, giveaways, and other reward schemes
Complexity & Strategy
Cognitive edge: articles by Dave Snowden
Adding controlled serendipity to the web
Influencing business strategy through design
Platforms or campaigns? Both. AKA Platform-centric campaign model
Serendipity is unexpected relevance
Who needs agencies? A social platform just says "no" to Madison Avenue
Groupon and the future of web business models
The science of sharing: platforms inject data into the art of going viral
Apply the rules of improv to digital
11 tips on how to apply social interaction to design thinking
Do you know what your biggest risks are? Really?
Mobile & Social Retail
Amazon now allows you to send gift cards to friends on Facebook
The future is the mobile web, not the mobile app
Facebook likes bring Walmart deals
The 25 largest brand Facebook pages with the most likes
Study shows Facebook's retail appeal
Barcode Hero scans products to personalize physical retail
The Groupon clone industry is so big, it now has its own exchange
Agregate market's shopfans bring social retail storefronts to Facebook
Facebook's plan to take over the web
Online consumer generated reviews have big impact on offline purchases
The Internet of Things
Tweet street: 7 extraordinary Twitter uses in the home
Emerging trend: physical-digital interaction evolves
How a physically aware internet will change the world
Digital Visibility
How personal metrics can change our lives
Stupid Ideas
Forbes crowdsourcing names we need to know in 2011
MySpace unveils new, artsy logo
Gap pulls a Tropicana, nixes new logo
Are you ready to blow your million dollar idea away?
Mobile Apps
Less than half of brand managers use mobile apps
13 branded apps that got it right
How important have apps become?
Advertising
How the internet has changed advertising
How to translate a big idea to the masses
Digg's empty search results promote Burger King's double cheesburgers
Where is online advertising most powerful?
The ivory tower conversations (a.k.a. the future of advertising and the future of agencies)
My talk on future of advertising models
The future of advertising agencies
Virtual Goods
Madison avenue and the land of make believe
Loneliness, happiness, and other interesting things
Mark's scrapbook of oddities and treasures
Happiness aint all its cracked up to be
From prices to prizes: competitions
Things you didn't know about happiness
The riddle of experience vs memory by Daniel Kahneman
Behavioural economics reading list
Bonus: Hand-picked posts from I [love] marketing
Do we need a new definition of creativity?
Why Nike's Write the Future is rewriting the past
Marketing's industry cognitive blindness
Why brands should NEVER think like media companies
Don't build an old brand with the new tools
Enjoy!
Once I put together a list of the best examples of digital creativity, I started wondering what does it take for digital creativity to happen. If my list offers any evidence, it is not about creation of brand images, storytelling ideas, and media strategy for distributing them. It's about creating conditions that allow something unexpected, fun, informative, communal, or helpful to happen. Also, almost by default, a lot of successful digital solutions have marketing built into their product. Groupon has done it really, really well; so has Pepsi Refresh Project, GroupTabs, and Best Buy Shopkick. To build upon the definition of digital creativity as a plan for arranging elements, I offer here the possible routes for executing this plan.
1. There are no shortcuts. It's not enough just to release some commercial art piece and count on it to stir up consumers emotions; the hardest part always happens afterwards. In order to get a brand to be talked about and interacted with, an idea is only beginning of the job. The rest of the job here means coming up with solutions that build upon emotions long-term: for every idea that plays upon consumers' emotions, there needs to be a set of follow-up tactics that give it legs. Sometimes that means 24/7 engagement (Twelpforce Best Buy), sometimes facilitating a community (Ford Fiesta Movement), sometimes making something useful (Lufthansa's MyFlightStatus) or informative (Frito Lay's Chip Tracker). Same token, I wonder where New Balance is going to take its Anton Krupicka partnership, and how Old Spice is going to continue interacting with its now considerable fan base.
2. Build Media Behavioral Plan. Having a very a narrow view of consumers actions based on them rating something, updating, RTing, checking-in, clicking on, etc. prevents from seeing impact that our solutions have on the larger behavior that we want to change/inspire. Too often we think about the most effective communication channels for reaching consumers instead of asking how to align diverse behavioral tactics in order to achieve a desired change.
3. Enter decision-making game. It's always useful to wonder how different creative solutions will help consumers choose between different products/services/brands. That's a good perspective that shifts the focus from the brand and its story to consumers and their point of view. To avoid the over-simplified model of consumers as beings with "limited info-processing capabilities" leading to the "cut through the clutter" requirement, the best is to think about creative solutions as resources. This means aggregating and curating stuff that already exists online (eBay Lookbook, Nike+ Foursquare), using group dynamic as a resource (Groupon, Pepsi & Food52 recipes on Stickybits, Barcode hero), visualizing info (OK Trends, Hunch Taste Graph), or amplifying the behavior (Don Q's Lady Data).
4. Get rid of dead ends. This means always think what comes next: how some particular tactic or solution can be linked to the next one, and the one after that. Think the rules of improv, and apply them to digital (COACH Poppy Project and Jonah Peretti's Start The Adventure are good examples). The point is: address a campaign as an interconnected system, not as a story (DonQ's Facebook page, Don Q's Lady Data on BuzzFeed). Then, keep it alive.
5. Digital is not about the tools. Rather than chasing the latest digital gimmick, it's always good to think about digital as a network of relationships that are made both of behaviors and technology. Then it's possible to explore how make some relationships visible (Netflix Rental Queues Visualization), how to create new relationship between people (HowAboutWe, Uniqlo Lucky Counter), how to create a new relationship between people and products (Tesco iPhone app) or between people and the brand (GroupTabs, Best Buy Shopkick), how to amplify/improve existing relationships (Pepsi Refresh Project) or how to simplify them (Rightcliq by Visa).
6. Think bricolage. Any combination of digital/physical (Nike Livestrong Chalkbot, Schnitzel & Things iPhone app), brand/community (Burberry Art of the Trench), communication/behavior (MTV VMA's Twitter Tracker), mobile/web (7-Eleven + Zynga partnership), game/activity (RunKeeper) is allowed. Especially the unexpected ones. The point is to stick together different things to develop something new. It would be easy to think of it as a simple recombination: what's great about bricolage is that it uses bits and pieces of radically different media and behavioral dynamics to create new formats.
*My title is an obvious play on Bud's "Words to Strategize By" post that I very much recommend. But here's a twist: instead of being interested in the ideas that may guide our thinking, I was more into coming up with the possible rules of thumb for their execution.
I am very excited to be presenting as part of the Miami Ad School program in October (thanks, Mehera!). As part of my presentation on digital creativity, I have gathered here some campaigns/digital efforts that I think can serve as good examples. Because I believe that digital creativity can best be described as a "plan for arranging elements in such a way as best to accomplish a particular purpose" (Eames), I settled on the following criteria: a) ideas that enable/facilitate/inspire community well, b) ideas that curate/aggregate stuff that already exists on the internet instead of creating something new, c) ideas that combine things that were previously unconnected (this can mean digital/physical or app/web connections), d) ideas that make stuff visible so as to reveal collective trends/tastes, e) ideas that help people do something in the easier, better, and more fun way, and f) ideas that encourage some sort of behavioral dynamics (games, interactions, points, etc.) I also included some good ideas that are not used by brands, but that are executed well, and that solve some problem and/or respond in a new way to some need. This is just a preliminary list, and I'd love to add more based on your suggestions.
a) Ideas that enable/facilitate/inspire community
b) Ideas that curate/aggregate stuff that already exists online
COACH Poppy Project (disregard the visuals; the idea of the sites' trail is cool)
c) Ideas that make new combinations
Pepsi & Food52 recipes on Stickybits
d) Ideas that make stuff visible
OK Trends - data from OK Cupid
Netflix Rental Queues Visualization
e) Ideas that help people do something in the easier, better, and more fun way
f) Ideas that encourage behavioral dynamics
Jonah Peretti's Start The Adventure (why can't brands come up with something fun like this?)
Image found here.
Agencies have an uneasy relationship with the "new generation of consumers," to say the least. Sure, stats like the above have become a must-have in any client presentation, there are slides on the trends of their behavior, there are audience insights and landscape overviews. But still, these consumers ("millenials", "gen Y", "superconsumers") are treated more as some special species from the future than as the everyday marketing reality.
Ok, this may not be completely fair. Agencies have been getting better in marketing to these people online - that is true. At the same time, the question is: do they really, truly understand how today's young consumers behave online, why and how they use the web, and how to resonate with them? Because if they did, would they still been doing what they are doing? This is, to the great extent, still brand-dominated world. The campaigns are approached from the brand's point of view, and retrofitted into consumer behavior. This is only understandable, since it is the brands that are paying for campaigns. Got to make a living. Still, how long this can go on, until the new generation of consumers completely slips out?
First, the "kids" who grew up with the Internet are not kids anymore - they are way past college, with a completely new set of needs, and consequently products, services and brands that can respond to them. What they are not past is their media habits and behaviors. You don't crucially change the way how you use the web and behave online just because you grew up - you further it and build upon it. The expectations that have been formed earlier stay. Don't expect that someone who watched TV shows online all of the sudden signs up for Time Warner - they may just hook up their computer to a flat-screen that they can now afford. Someone who shopped on Etsy may upgrade to Net-a-Porter, but the deal is the same. And so on.
Second, and more important for this present moment is that whoever is in touch with this generation changed their own media habits, too. Parents (and grandparents) are now on Facebook to keep tabs on their kids (or just plainly to connect with their long-lost high-school friends or play Farmville); they watch YouTube; they go to Twitter (can't beat all those coupon deals); and maybe even occasionally take a peek on Foursquare. And this is where the real challenge is: what we thought of as typical "suburban" parents are hardly such anymore. If we thought that we knew trends and behaviors of a certain demographics, we actually can't claim that today. All bets are off.
The point is that the change that new generation may be leading spreads way too fast to all other demographic segments. It impacts how other generational demos are consuming media, shopping, reading news, communicating, and interacting with brands. Because they all live in the same home, the gap between early adopters and the mainstream rapidly narrows.
So while agency teams are still building personas (btw, do people still do that?) with a photo of some edgy teenager, they may as well replace it with a young professional, college graduate, or whomever else fits the bill. Soon, it's all going to be the same media habits, brand expectations, and consumption patterns. It may finally be time to stop talking about the millenials, and start thinking about the millenial behavior.
Note: this post was inspired by a brief conversation with Edward Boches and by this MediaPost article.
Once upon a time, everybody knew the answer to the question of strategy. But, don't be fooled: this fact has nothing to do with strategists' definitions of their own discipline; it actually has everything to do with an environment where strategies were executed. That environment was really predictable, clear, and stable.
There, strategists - not avid doers by nature - assumed a comfortable position of mostly observing the field from their elevated spot. Tricky as they are, they took pride in their talent of seeing everything that is going on in their business, brand, and consumer landscape. They were confident in predicting the next business move, and the next one, and the one after that. The whole strategic wisdom resided in optimizing a given set of alternatives, specifying a particular course of action, and committing to it. They knew what resources they had, they knew what their goal way, and simply enough, that their job was to connect the two. Sweet & simple, yet so antiquated.
At that ancient time, it was easy to say, "strategy is how you create value," "strategy is how you make money," or "strategy is how you use your finite resources to achieve your goal" (oh, actually: for some people, it's still easy to say that).
Ok, now, let's rewind to the present. What we are dealing with is messy, unpredictable, and hard to measure. It's complex. It's no longer possible to observe and predict enough to map out courses of action that guarantee desired outcomes. If you commit to a certain alternative, you may end up being dead. Turns out, a solid strategy may as well be your biggest liability.
In this context, we can't say anymore that strategy is "how we create value" and here is why. Simply, we don't know in advance what's valuable - or what may turn out to be valuable - to people online. Our criteria and our definitions of value don't work there. What the sources of value for people there are - free access, sharing, creating, participating, interacting - may not necessarily be valuable to business itself. In fact, it may seriously undermine it. Yet, there's ton of sources of value online. Best businesses of the past few years focused on making visible the network of connections between people, between things, and among the two. They didn't know in advance if there's any businesses value in those connections: they mostly believed that, if they create conditions for all those ties to be exposed, that new sources of value will emerge. And they did. How fast we run, how much gas our car uses, where do we go, what do we buy, what do we like, who do we talk to - all turned out to be potentially lucrative. Truth is, making this info visible also created new behaviors, changed how people do things, make product decisions, and form brand preferences. All of this unforeseen and sometimes not very obvious, yet very relevant. What these new businesses knew is that their strategy is a process of not creating, but understanding value: where it resides, how it has been exercised, and how it's distributed through this space.
And this is precisely why we also can't say anymore that strategy is "how we make money." Web certainly doesn't lack an entrepreneurial streak: people create value for themselves, and for each other; start-ups create value for people and for themselves. Is what's valuable on the web always (if at all) aligned with brands' money-making goals? Not necessarily. More importantly, should it be? Where exactly in this system either people or startups need to worry about if an advertising agency or a brand makes money? Further yet, why would they want them to make any money at all? And then, there's this trick: does the business of making information and connections visible - no matter how valuable - equal to making money? Not always the case. Facebook, for the longest time, didn't know what's its main source of revenue (our privacy?), Twitter didn't know (early bird?), and Foursquare still doesn't know. What they know - and know it well - is to react to opportunities that arise quickly and unexpectedly. And because these companies deal mostly just with creating conditions that make possible for the unexpected value to show up, they don't restrict their money-making options to a limited number of alternatives. Nor should they.
Then, here's why we can't say anymore that strategy is "how you use your finite resources to achieve your goal." Hate to break the news, but the resources are finite only if you make them so. What's worrisome here is the possibility that someone working online would even consider relying only on their own, by default limited resources, instead of utilizing the bulk of existing ones, or even creating conditions for new resources to show up? (No, I am not talking about crowdsourcing here, but basically about everything that people are doing online; all their actions can be used/amplified/facilitated/turned into a resource). At the end of the day, we are dealing with a hybrid behavior of people and technology, and the more distributed our resources, the better off we are. But, there's also something else here: on the web - it being so tricky with value and moneymaking and all - we often really don't know in advance either what resources we are going to need to achieve some goal or how to allocate them. Those who think they do, are either already out of business, or delusional (or both). For the rest of us, the best we can do is to see which connections have the biggest generative potential, and pour more resources into those.
So if strategy based on value predictions, projections, and finite resources doesn't make much sense anymore, what are we left off with? We got to accept that value online comes from very different and unexpected sources, and that we should not restrict our understanding if it in advance; that value is not always going to equal money on the short-term, and that this thus may not be the best way to inform our actions; and that our resources are as vast as we make them, and that how we allocate them depends more on the environment than on our strategic plan. Having all of this in mind, the best we can do is to try to work on providing conditions to make things happen: things like new behaviors, new connections, new sources of value, and new resources. The money will follow. Or not. But one thing is certain: the world that strategists work in is under active construction and there's no blueprint. For the first time ever, we are part of the construction crew: we are not directing it. And we need to reinterpret a lot of things that we have been regarding as fixed, and also probably come up with a new language to describe what the hell we are doing.
Nike followed its "Write the Future" with the new online contest called "The Chance." Using soccer superstars featured in their (almost) universally loved spot "Write the Future", Nike hopes to inspire young soccer-wannabes to create their fan pages on Facebook, promote themselves there, and build a following in order to be selected for the Nike Academy Football Trials.
While this sounds like something coming straight from Simon Cowell's manual and thus may be thought to succeed just by sheer association, I still have my doubts. The idea for engagement is, in itself, not bad at all - it has a potential to generate a considerable buzz for Nike, and it has equal potential to solicit participation.
Here comes a question, though: the requirement for participation is to be at least 18 years of age. At that point, most soccer-talented youngsters have already either achieved some prominence going beyond their high school soccer league, or are signed up by a team. So, why do they need to Nike soccer academy? Sure, some of them may come from the gravely disadvantaged regions, and this is their chance to raise to global prominence. I'd like to think that those disadvantaged regions offer regular high-speed Internet access required for participation in the contest.
Where does this leave us, then? Will all those people who play soccer as a hobby, soccer fans, and amateurs. Can Nike academy turn them into next Ronney or Ronaldo at the age of 18 and more? Perhaps, but I wouldn't bet on it.
There's another thing, too. If research is to be believed, the Internet activity around the World Cup has reached the new high. Which means that people are actively looking up online for ways to express their fashion for soccer, connect with other fans, get information and commentary, and just participate in the discussions surrounding the World Cup. They are interested, motivated, and active target for all brands, and especially for the sports brands. Why not do something to help THEM instead have more fun, cheer their teams better, feel greater participation, and engage in a bigger debate? Granted, brands are doing some of this, albeit rather shyly.
At the same time, a simple Twitter update about the attire coaches choose to wear for the games has a potential to solicit a lively debate, like it did last night. Comments like "USA coach looks like a gym teacher," "British coach looks like he is on a museum board," or "German coach is an ad guy," poured from everywhere, adding up to each other. If I knew how to make things on the Internet, I would make a site where people can fill in who all coaches remind them of. At the end, there's a winner based on the most frequent association. Small and silly, but apparently something that spurs people's imagination and passionate responses.
This only reminds me that rarely brands encounter a target group of scale, passion, and participation than the World Cup gathered this month. I can't help but think that, this time around, Nike's missing its chance.
Digital product development equals branding.
If this view is not more popular, it's because digital marketing industry is dealing mostly with pre-Internet brands, trying to retrofit them for the internet. In this situation, they end up doing marketing instead of product development.
A few words about product development: it's based on solving problems, it's aligned with what people are already doing/talking about/behaving, and it's creating something that let's people do/talk/behave in a different, better way. It's awfully similar to the way web operates.
Why is this sort of thinking so hard to apply to brands?
Sure, old brands are big, slow, complicated, and all of that. But what makes them truly different from digital brands is the fact that their product development and marketing are separate, and come in a "create a product"-"market the product" sequence.
To make Coke relevant, P&G relevant, Walmart, or Nike relevant in digital is something that keeps many a CMO awake at night. In fact, it is R&D management that should be awake. Once digital becomes part of the product development process, then marketing those products is a breeze.
The problem here is that the burden of digital can't fall at the end of the value chain: to marketing, advertising, and promotion. When it does, then ... well, we have already seen what agencies can come up with. If they are stuck in "why aren't we more creative" limbo, it's because they are entrusted with an unfair task.
To really be relevant in digital requires taking a step back and realize that value chain is more of a Venn's diagram, where business plan intersects with user behavior, strategy, technology, user experience, and visual design. It's about keeping all those different views in play while making things.
This is something that all start-ups and digital brands already know. They invest in their products, in making it relevant and continuously evolving: not because they want people to talk about those products, but because they want people to use them. Which means that they spend most of their time doing R&D.
Digital is really not a marketing challenge.
Everyone is talking about the new Nike World Cup spot, and with a good reason: it's a beautifully told story that transcends media formats to deliver a truly emotional and inspirational experience. In 30 seconds, it appeared that Nike finally cracked the code by combining what's it best at with the power of digital distribution. And, Weiden + Kennedy showed us what it means for a brand to truly participate in culture.
Or, did it? Is this really still a way to build a strong digital brand? It's clear what Nike tried to do with its spot: to insert itself into the culture around the World Cup. And that's fine - without this connection, as the popular argument goes, Coke is just a soft drink, Google is just a search engine, and Nike's nothing more than a pair of sneakers. People need symbolic power of brands in their lives, because it turns their connection with products into something with cultural meaning. Brands help them navigate the world, understand their role within it, and broadcast the message about who they are. In this believable, albeit slightly needy scenario, all that brands have to do to reclaim their relevance is to sneak into popular conversations and become something that people use to tell their story better.
The problem is, we are today dealing with a completely different sort of culture. Yes, World Cup is a big and awesome event, but how it’s going to play out in the lives of soccer fans next month is part of the emerging digital culture, and not some symbolic inspirational culture that Nike – and other brands – are so desperate to penetrate.
Digital culture is based on tools, incentive systems and ideas that have absolutely nothing to do with brand or cultural symbols. In other words, how people get inspired and motivated, how they identify with something, and build their identity online has refreshingly little to do with brand stories told through 30-second spots.
This year’s Cannes
Young Lions 48 Hours Ad Contest bubbled up Chatroulette for a Better World,
aimed to raise awareness of the clean water problem. Why does it matter? What
it offered is a simple execution, and more importantly, plenty of inspiration
without representation. Go to Huffington Post to see what’s new, you may as
well became a “Networker,” “Moderator,” or “Superuser.” Go to 7-Eleven and buy
something, and you can unlock some Farmville animal, courtesy of Zynga. Stumble
upon the new Mitchum deodorant site, and you may end up there for a while
watching videos of the “Hardest Working ______ in America.” Or, start following
the World Cup in a few weeks, and you will probably be equally interested in
what all other soccer fans are saying about it on Twitter as in the soccer
itself.
All of this suggests a
new sort of networked, reciprocal, gift-based, game-like digital culture today
-- and digital culture is quickly becoming popular culture. Apply badges,
likes, cues, contests, and make-believe social settings to the World Cup, and
all of the sudden you have a completely different beast you are dealing with.
Why didn’t Nike do something with it? It’s World Cup campaign may have played
out completely differently if it used all these things to inspire fans to
connect with each other, with the global soccer culture, and with the Nike
brand, for that matter.
"Write the
Future" tells a story about how the World Cup is the stage where players
can achieve immortality. It's meant to inspire not just for soccer fans but
also people in the industry that things, after all, may work out for the
better. The Internet, sadly, will never offer this sort of culture they are
hoping for to make their brands relevant there. Only a lot of missed
opportunities.
Why? Because it is
this other sort of culture, digital, that gives people ability to play with who
they are and to explore who they want to be. It doesn’t give people stories to consume or to talk about, it allows actively making them. Or, to stay true to
the theme, it lets people write the future.
Here's an idea for brands: crack that code, and you may as well be doing the same thing.
Brand value deals with financial contribution of
brands to their companies. Here, brands are corporate assets. As it goes, brand value results from many factors, including
(but not limited to) both product sales and brand equity. It has often been
described as a cumulative result of sales volume, equity, audience size, and
the brand's market potential.
Financial value has, to some extent, always been
attached to intangible corporate assets, like patents, intellectual property,
and organizational knowledge. But the practice of brand valuation hasn't been
established until the 1980s to specifically understand brands and assess their
financial value. Before then, brands were considered merely as a marketing tool
primarily used by consumer packaged goods companies.
While the practice of brand valuation can be considered in a variety of ways, it has been most often discussed in relation to the situation of a company’s sale. For example, Raggio and Leone (2007) regard brand valuation as a helpful tool for estimating acquisition price of a company. In this context, brand value is regarded as something intrinsic to a firm, and not something that belongs to the consumer market. Advertising executive Jeremy Bullmore similarly observed: “It is universally accepted that brands are a company’s most valued asset, yet there is not universally accepted method of measuring that value. The only time you can be sure of the value of your brand is just after you’ve sold it.”
The evolution of brand valuation has been tied to strategy of corporate growth through mergers and acquisitions that started in the 1980s. Before brand valuation took hold, the main source of companies’ business value have been their tangible assets. But, the continuously increasing gap between companies’ “book values” and their stock market valuations has put on the map the value of their intangible assets.
The practice of mergers and acquisitions that was adopted in the eighties also contributed to a sharp increase in premiums above the companies’ stock market value. Naomi Klein (2000) describes this trend of companies paying premiums for brand names as “brand value mania.” Case in point: in 1988, Phillip Morris purchased Kraft Foods for staggering six times what the company had been worth “on paper.” This dichotomy between a company’s “book value” and its brand value has best been illustrated by John Stuart, Chairman of Quaker Oats: “if this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you.”
Advertising executive Jim Mullen
similarly noted: “Of all the things that your company owns, brands are far and
away the most important and the toughest. Founders die. Factories burn down.
Machinery wears out. Inventories get depleted. Technology becomes obsolete. The
brand is the only sound foundation on which business leaders can build
enduring, profitable growth.”
Today, there is a widespread
belief that the concept of “brand value” has a tangible impact on quantifying
the contribution of brands to a company’s market value. Rita Clifton, Chair of
Interbrand UK, wrote in her book “Brands and Branding”: “Well-managed brands
have extraordinary economic value and are the most effective and efficient
creators of sustainable wealth.” Driven by this belief, some branding
consultancies have conducted studies to estimate the extent of this value
contribution. For example, a study by Interbrand, conducted in association with
JP Morgan, found out that, on average, brands account for more than one-third
of shareholder value. Their study concludes that brands create significant
value either as “consumer or corporate brands or as a combination of both.”
Regardless of their perceived
importance and widespread use, brand valuation retains its particular
challenges. First, there is still not a clear definition of brand value: “the
market is aware of intangibles, but their specific value remains unclear and is
not specifically quantified. Even today, the evaluation of profitability and
performance of business focuses on indicators such as return on investment,
assets or equity that exclude intangibles from the denominator. Measures of
price relatives (for example, price-to-book ratio) also exclude the value of
intangible assets as these are absent from accounting book values.” Then,
unlike other assets like stocks, bonds, commodities, and real estate, there is
no active market in brands that would provide comparable values. In this
situation, branding consultancies like Interband, Landor Associates,
Brand Institute, Millward Brown Optimor, and Future Brand, had developed a
number of proprietary brand evaluation models.
The main challenges of brand
valuations today remain their arbitrary measurements and a very few agreed upon
systems and processes for evaluating brand assets. For example, in October
2008, a London-based brand-valuation consultancy Brand Finance noted in their
“Brand Finance Global 500” report that, due to “the flailing economy”, brand
value for the top 100 brands has declined 4.2%, or $67 billion, in between
January and September 2008. At the same time, in their evaluation of this same
time period, Millward Brown Optimor claimed that “in a year of global economic
turmoil, the value of the top 100 brands increased by 2 percent to $2
trillion.”
In recent years, Interbrand’s
rankings in particular have been more openly criticized, mostly because its notorious
tardiness to include digital brands in their report. Most famously, due to the
sheer size of its market, Apple brand is still not among top 10 global brands
there, despite its steady sales and its status as an innovator in the areas of
media and design. “Brands are inspired by Apple more than anyone else. They
transformed the music business, and people are taking what they did seriously,”
notes Simon Williams, Chairman of branding consultancy Sterling Group. Google
is, in Interbrand’s report, ranked similarly low, as number seven. One
brand consultant recently told me: “Interbrand hasn’t really taken into account
how the web changes the brand management rules. For generational and cultural
reasons, probably.”
Methods that Interbrand and other branding consultancies use today are based on a deep-rooted belief that a link between consumers’ purchasing behavior and the economic performance of brands is chiefly caused by brands’ communication that mediates people’s perceptions of brands. As the same brand consultant puts it, “We talk a lot about brands. We are proud of our brands. But, we consider brands in much less dynamic and much more patrimonial way than our consumers do. A brand is [still] often a synonym for advertising and image.”
Well, now, that's the problem.
Brand equity is an intriguing concept. Unlike “equity” in economics, finance, or in
real estate, where it refers to ownership interest, equity in marketing refers
to outcomes that “accrue to a product with its brand name compared with those
that would accrue if the same product did not have a brand name.” Kevin Keller
writes that a brand has “positive customer-based brand equity when consumers
react more favorably to a product and the way it is marketed when the brand is
identified than when it is not.
The idea of
brand equity is based on the premise that a brand promise adds “something”
intangible to the sum of brand’s tangible assets. The reasoning goes that, if
customers are aware of this promise when they are making choices among
products, it reduces risk associated with their choice, saves their time, and
provides reassurance in their decision. In exchange to this reassurance,
customers are expected to display a durable brand loyalty and reduced price
sensitivity. Standard indicators of brand equity have traditionally been the
size of loyal customer base, customers’ frequency of product purchase, and
lowered customer acquisition costs (as proportion of the total marketing
efforts).
Another
indicator of brand equity are consumer favorable responses to a brand,
reflected as a combination of “recognition, associations and judgements.” Brand
equity is here regarded as a consumer reaction to brand communication.
Marketing
practitioners often talk today about brand equity as a collection of individual
consumer reactions to a brand or, as a “collective representation.” Pauil
Feldwick claims that “Brands are built in people’s heads. What the most
skillful of marketing companies do, with great sensitivity and unceasing
vigilance, is provide some raw material from which brands are built.” Branding
consultancy Millward Brown Optimor similarly notes: “The only people who invent
brands are people. Brand reputations exist only in the minds of their observers
- and all observers are different. In theory, therefore, (and probably in
practice) the reputation of a brand within a million people’s heads will have a
million slightly different versions. But ... the strongest brands are those
that enjoy what’s been called a (favorable) consensus of subjectivity."
In this
view, brands’ products and services are not responsible for creation of brand
equity. Some people say that a “real,” durable, brand equity springs only from
a distinct set of brands’ purpose and beliefs: “Equity is more a factor of a
brand’s ability to express a clear and honest sense of why they exist and what
they believe about the world than simply the quality of what they do or make.
What do you stand for? The clearer that belief, the more attractive the brand
is to those with similar beliefs. If others believe what you believe, they will
put up with all kinds of better offers to do business with you”
Perhaps
unsurprisingly, brand equity has been, in practice, regularly estimated through
people’s perceptions of the brand. A mere presence of brand perceptions has
been considered a sufficient proof of existence of brand equity – or as Faris
puts it, “a brand is a form of socially constructed reality that has attained
an objective reality, which is why it can have a cash value that is dependent
on the totality of perceptions held about it.” If the intangibles such as brand
associations and perceptions are managed through brand communication in a
satisfactory way, the reasoning goes, then they will result in some tangible
economic effect on the brand.
The main
challenge here is that the mechanism of connecting the two has been mostly
asserted, rather than proven. Consider this example. A recent study titled “Rethinking
Brand Contamination” (Richardson Goseline, 2009) has shown that immediate
context - properties of the situation of exchange - shape consumers decisions
more than their brand perceptions. The study explored the impact of
counterfeited good on how people value the brand, and found that people can
more accurately distinguish between a branded designer bag and a fake if given
social clues, like if the individual carrying it wears expensive clothes or has
a look of a rich person. When knock-off goods were displayed without any
additional cues or context, observers were less likely to differentiate between
authentic and counterfeit luxury products. Additionally, shoppers were willing
to pay an average price of $786 for a real luxury bag, but that price declined
to $403, when they saw the items out of context displayed against a neutral
background. Another study, conducted by Nielsen’s Bases unit in 2009, found
that in-store marketing has significant advantages over television as a leading
medium for creating awareness of new products. These studies indicate that
consumers’ decision-making resides more on the local and distributed context of
their situation of purchase than on brand equity defined through consumers’ “favorable
brand responses.” It turns out that slight manipulations in the design of this
context can significantly change consumer purchasing behavior.
Then, a
change in consumers’ economic circumstances also question the idea of brand
equity. Traditionally, the main “proof” of brand equity has been consumers’
price insensitivity: their willingness to pay higher prices for branded
products than for the same, but generic ones. Recent research shows that, in
the situation when people cannot afford anymore high prices of a premium brand,
they regularly “trade down” to a generic brand. For example, when P&G
reported an 18 percent drop in its profits due to the decline in sales of its
premium-priced brands, it rolled out a cheaper version of its flagship
detergent product called Tide Basic in order to prevent its customers from
switching to a lower cost alternative. What Tide has been afraid of is that
people’s inability to pay premium for a brand would challenge their perception
of differences in quality between its products and products of other, more
generic, detergent brands. And with a reason: “After years of spending $17 on
bottles of Matrix shampoo and conditioner, 28-year-old Ms. Ball recently bought
$5 Pantene instead. ‘Buying the more expensive stuff just isn’t as exciting to
me - it’s not as important,’ she says, ‘I don’t know that you can even tell the
difference.’” Once people start asking what branded products are really worth,
brands’ ability to command a price premium evaporates - and their brand equity
goes to zero.
A way of
questioning the asserted connection between consumers’ favorable brand response
and brand equity is to correlate positive brand associations with product
sales. It turns out that, even if
a brand has a particular, well-defined, set of associations achieved through
persistent brand communication, this still does not guarantee that people will
buy its products. In other words, consumers can be aware of a brand, and
respond favorably to it, but find it personally irrelevant.
This is
tricky. Brand equity has been, for a long time, been correlated with product
sales. Interbrand, the largest brand consultancy today, claims: “The
understanding, interpretation, and measurement of brand equity indicators are
crucial for assessing the financial value of brands. After all, they are key
measures of consumers’ purchasing behavior upon which the success of brands
depend.”
But, if
brand associations do not translate into people’s purchasing behavior, then we
cannot know that brand equity has an economic effect on brands. Some brand
professionals have already noticed this challenge and they say that “there are
always reasons people will do business with you that have nothing to do with
you: timing, price, convenience, and habit are just a few. These things can
help influence an initial sale, and they can influence repeat business, but
they do not influence equity. Just because someone buys from you over and over
does not mean there is equity.” Lou Carbone, founder of consultancy Experience
Engineering, similarly says: “Just because I fly airlines doesn’t mean I love
them. I hate airlines.”
Regardless, in the absence of alternatives, marketing professionals still largely consider brand equity as a critical indicator of the causal relationship between brand communication and consumers decision-making in the situation of purchase. In other words, brands’ cultural relevance is still asserted to have a direct causal effect on their economic performance.
Go figure.
Digital media make visible the network of ties that connect us to things and to each other. So now, instead of brands as a mediating mechanism between consumers and products, we have a series of discreet, local, and situated interactions that mediate this relationship.
Because marketing professionals could not see these interactions in the past, they invented brand stories and representations in order to assert a certain cultural and economic relationship between people and things.
Since today consumers have information on all those previously hidden, distributed, and unexpected connections that critically shape their preferences and product choices, they do not have to rely on brand stories to help them decide among products and make their decisions less risky. But this information abundance in itself is not the factor that challenges brand stories. In fact, it is because digital media are a complex decision-making resource that allows us to make product choices without these stories.
In the context of this complexity, brands should be defined as media of behavior. Only by becoming visible + seamless parts of the network of interactions between people and things, can brands today claim to mediate their relationship.
p.s. I have revived my long-forgotten DailyMile account today. Now that my dissertation is done, I want to do more things that I am passionate about. A biking adventure to Montauk is one of them. Anyway: soon after I signed in on DailyMile, 7 people commented on my morning run - with advice which running watch I should get. This is great; I know nothing about running watches and the advice was very welcome. That's is the visibility that I am talking about above. It would be cool if a brand inserted itself into my workout routine - I am sure that I will need all sorts of running and biking advice/information/utility/entertainment as I go along. But there's also something else here: the network that formed between me, other runners, running products, running advice, and all other possible stuff mediates my activity of running: these are all the local, distributed, and situated interactions between people and things that I mentioned.
The same thing goes for all other activities. Our behaviors are networks. Brands can be media of that behavior; but they can't remain outside of it (and all traditional advertising, flash micro-sites, elaborate online campaigns, etc. belong to this category).
In a recent NYT review of her new book, "The Art of Choosing," Sheena Iyengar says that "Human beings are born to choose. But human beings are also born to create meaning. Choice and meaning are intertwined. We use choice to define our identities, and our choices are determined by the meanings we give them, from advertising-driven associations to personal relationships and philosophical commitments."
To this, behavioral psychologist Dan Ariely, responds: yes, we may use choice to define our identities. But we are also hopelessly irrational. We may think that our choices are determined by the meanings we give them, but in fact, this is an illusion.
Why? We have, as humans, a need to create meaning. To do so, we tend - the same as with sight and memory - to fill the stuff in in order to close the gaps that we can't see, remember, or make sense of. And what we can't see or remember or make sense of, we simply invent. We do the same thing when it comes to our choices: we make a decision first, and then tell stories about it after the fact.
This is interesting. On a daily basis, each one of us make incredible amount of decisions based on limited information. Because we are not quite aware how we do it (cognitive blindness), we often resort to some form of rationalization and/or to claiming that we trusted our gut. And this is precisely what gets us into trouble: it opens up an incredibly vast space for systemic, predictable mistakes. In other words, out of our craving for meaning, we submit to illusions.
Alright, but how do we really make decisions then? Ariely claims that we in fact turn to local context to infer what we like and don't like. When situations are complex, defaults have incredible force on behavior. In other words, when there is a lot to choose from, we submit to people who make interfaces: who gather, organize, and present information to us and who opt to make some of that information a default. (Have you ever wondered why Amazon managed to sustain a continuous growth in the past two years when all other business suffered, or why in Fresh Direct-s "natural" navigation there isn't a single item that belongs to low-priced grocery?) Beyond just mere defaults, it turns out that social and cognitive clues in our immediate decision-making context count more than, for example, brand associations. A study titled "Rethinking Brand Contamination" demonstrated that people value luxury brands based on whether an individual carrying it wears expensive clothes or has a look of a rich person. Without these additional cues or context, observers were less likely to differentiate between regular and luxury products. Additionally, they were willing to pay a way higher average price for a luxury bag when they saw if against a neutral background. Another study, conducted by Nielsen Bases unit, found that in-store marketing has significant advantage over television as a leading medium for creating awareness of new products. What does this tell us about the way we define brand equity?
Then, in situations when people don't have anchor how to behave, which is the case when we create something new or design new environments (think Apple iPhone and iPad and Twitter and Foursquare), the latitude of defaults and design clues becomes enormous. When we make decisions, we make them in silos, and we don't compare them across categories. All it took Starbucks to establish its empire was to call its coffee a different name to separate themselves from other coffee shops (and to make us pay 3 times more for a cup of coffee than we normally would). Similarly, the genius of Apple was not to lose sight of elements of design of environments it created (including naming its product, iBooks being the latest example) - knowing that's an incredible force in people's decision making. While eBooks may have had been a failed concept in the past decade (and while consumers were ready to pay no more than $9.99 for an "e-book"), the books that we can now download on our iPads are called "i-books" (something associated with Apple) and they will cost more - as much as $14.99 - which we are ready to pay for.
While these insights might have had a limited business and marketing power at the time before digital media (brand advertising is what counted back then), today we encounter a digital interface in almost any decision that we make - from choosing two products in a store, to deciding how much money to donate to a political campaign, how much time to spend interacting with some brand or how much personal information to reveal while doing it.
This is to say that findings like above cannot anymore happily remain in the domain of "interesting things to think about" but should be taken seriously. Defaults, social and cognitive clues, and designs all have a powerful impact on our behavior. They steer us towards "self-herding", which refers to our tendency to, once we made first decision, stick to it. Our first choice also influences all consequent ones, and the reason we do so is that we don't remember our emotional states or why we made a decision - we only remember our actions. The only think we need to do then is to repeat them, and this is how habits (or, brand loyalty) are formed. In other words, it our actions create - they do not reveal - our preferences.
Ok, now back to Sheena Iyengar and brands. Results of her famous jam experiment started a powerful trend of thinking that too much choice is not good for us. But neither is less choice. Interesting part is that the way we talk about brands in digital environment today fits here perfectly: James Surowietcki and Umair Haque claim that too much information about products kills brands; Erick Schmidt and others, claim that information abundance, in fact, makes brand more important than ever. Those who are in-between say that we should think of brands as filters for all this information, which is just another way of saying that the only reason that shoppers don't suffer a nervous breakdown in a cereal isle is that they, in fact, eerily recall all those awesome brand associations that make their hand reach one box of cereal over another.
Where does all of this leave us? Instead of thinking like the little Goldilocks who wants "just right" amount of information to simplify things, we should in fact embrace complexity full-force and turn to exploring the ways we gather, organize, and present the crazy amount of information that we encounter every day. In other words, when we talk about choice today, let's talk now about defaults, social clues, product categories, and a design of our decision-making contexts.
People indeed do have cognitive limitations that skew their choices in certain ways that we are not aware of - that's a fact - but now they also have this powerful digital tools that can act like our decision-making scaffolds and that can make us aware of all our mental illusions that we could not see before. And our ability to see all those factors that influence how we choose may reduce our need to invent explanations for our behaviors.
The same goes for marketing. The way things are still largely done in the industry is make decisions first, tell enticing stories about it after the fact (which only left us with a profound disagreement on what kind of advertising slogans and marketing campaigns work and what doesn't). It is not surprising then that, when we encountered way too many gaps in behavior of people and technology, our solution was to fill them out with what "makes sense" to us based on what we already know (all cognitive errors work in the same way.) This, in turn, opened a vast space for systematic, predictable mistakes ("let's create another brand video game, and to hell with it.") Our craving for meaning as an industry allowed us to submit to powerful illusions - such are brand image and brand promise and our definitions of brand equity and brand value. This sort of cognitive blindness opens up some uncomfortable questions. But so what.
I love when people claim that brands should learn to think like media companies online. You know, because media companies' cost-and-revenues structure fares so well in digital.
The argument "you should turn your brand in the media company" is, in a nutshell, based on the overused quote that "we are not in the business of keeping media companies alive, we are in the business of connecting with consumers," by Trevor Edwards.
On the surface, it may seem that the best way to avoid dealing with media companies is indeed to become one. Something like, let's not rent anymore now that we can own.
But, operative word here is "on the surface."
By behaving like a media company online, brands unfortunately replicate the way that media cos' costs and revenues are (mis)aligned in digital media. Or as Michael Wolff recently put it, online "costs are out of whack even with the most optimistic revenue expectations."
And indeed. Just look at the YouTube viewership of the Chanel videos that the article I linked about uses as "success stories." Chanel produced several videos (including a silent movie and a short movie made by Karl Lagerfeld, which, one can only suspect, cost way more than an ordinary YouTube video) that drew 3,901; 13,626, and 37,884 views. This is a bit more than 50K altogether.
Even a failing magazine can guarantee any fashion brand a larger audience than that.
This reality does not stop the author from concluding that, "in this new reality, forward-thinking fashion brands like Chanel are learning to think like media companies, creating and publishing original editorial content to earn attention and attract fans who will carry their message across the internet." Well, darling, it seems to me that "the fans" are not too hot for the Chanel content online after all.
Basically, the problem here is one of replicating an old media model in the new media space. Just because brands CAN produce content themselves, this does not mean that they should. There are a few reasons:
First, why original content? There is so much content on the web, especially about fashion, and especially about Chanel. Can you do something with it? Instead of creating "all-original editorial" as seen on Chanel News online destination that the author lauds as "forward-thinking," why not employ Gawker's or Mashable's model where you have a large variety of contributors? Besides reducing costs of content production, this also means that a fashion brand is co-creating their "news" with its industry, which seems to me as a super-suitable model for the fashion biz, now that all the fashion bloggers are around and everything.
Second, why spend money on building a full-blown original destination? Listen to this: "The idea is to give all these social networks a location where they can have genuine information about Chanel," said the president of Chanel fashion. Um, do people in "all these social networks" want another location to go to? They can already get all the "genuine information" right where there are (live-streaming of Luis Vuitton's show on Facebook being just one example). Sometimes it is just cheaper to rent.
Third, and this may come as a surprise, but people online want from their brands way more than "inspiring content to talk about and spread across the internet, driving recognition, desire and conversion." Aside of the fact that people online love mostly to talk about themselves (and not about some brand), they also want their brands to be of some service, or be helpful, or offer expertise, or craft, or information that consumers really can't get anywhere else (and no, a silent movie does not belong to this category). If the high-end fashion consumers really strive for exclusivity and status, then fashion brands should start experimenting with enhancing fashion products with complementary service, which the web is just perfect for.
Back to the Trevor Edwards quote. If brands are really in the business of "connecting with consumers", then they (along with the people who advise them) should understand that in digital there is a variety of ways to make this connection happen. Creating your own content is only one of them, and in that, often the most expensive option. Why would you ever want to advise it to your client??
Once they created a Twitter account, and a Facebook page, a YouTube channel, or a Foursquare badge, brands often have very little idea about what to do there next.
This is a quite common problem.
Why? Well, social media are still to the large extent regarded as the domain of brands' PR departments, rather than a marketing activity. The classic Procter&Gamble's two step way of promoting brands, "spend a large amount of money to maintain the 'share of voice'" and "tirelessly remind consumers of your products' 'unique value proposition'" just replicated itself online. Maybe unfairly, I tend to put brands' crowdsourcing efforts (CP+B's Brammo, MyStarbucksIdea, Kraft's Vegemite spread, in the same category of smart PR gimmicks. Is this really about "co-creating the future of the company with your customers" or about your brand promotion?
Ok, look at this now. According to Social Radar, top social brand for April 2009 was Twitter, and then Google, Obama, iPhone and Facebook. Abrams Research survey of 200 participants in the Social Media Week last year shown that Zappos, Obama, CNN, NYT, Dell and Jet Blue are top choices for social media leaders.
I would add here Whole Foods' and SchnitzelTruck's use of Twitter, and YouTube's streaming of Super Bowl as my favs. The biggest lost opportunity: Tide detergent (how many times do we need immediate advice on removing stains?). It is even more lost opportunity because Tide has a pretty elaborate website so it would be quite neat to tie Twitter into their existing efforts. Integrated program, anyone?
In any event, the ranking above is interesting. Because, most of the brands that made the list are services. Which means that they do something for their customers. Which then also means that they use social media in the same manner. And this makes them the best. (Adrian Ho started saying this long time ago and recently posted an excellent presentation about it.) Rick Webb also recently observed something smart and funny: "What is with the Internet that no one wants to provide professional services? It's like everyone working on the web wants to start a car manufacturer instead of selling and repairing cars. Well let me ask you this: how many people got rich starting a car company? And how many people got rich starting a dealership, a dealership chain or a repair garage? A lot fuckin’ more. Will it make you a billion dollars? No. Do you need a billion dollars? No."
Right.
And while I am at it, let's take the idea a step further and say, as Adrian (again) already did, that "the best marketing isn't always separate from operations; often, the best marketing is great operations. Turn what you are already doing for customers into marketing." Now, if it were real, the LV campaign above would be just perfect example of this sort of thinking (use your own unique craft + distinct skills + internal processes + company's culture + different aspects of doing business to market yourself). After all, THAT is your only true differentiator from everyone else.) "Behind the scenes" and "Making of" videos that people love so much are a midget version of this idea.
Ok. So now what?
The problem that we currently have with social media is just going to replicate itself on Foursquare. Brands using Foursquare for badges is the same thing as them using social media only for conversation. Case in point: "The benefits for companies include increased footfall and the recruitment of a network
of brand ambassadors who will pass on recommendations to their friends and Twitter followers" (via BrandRepublic). Where did we hear that one before?
As more and more brands make deals with Foursquare, they will do things to increase their "share of voice" and will push for their "unique value proposition" through ever increasing number of badges. The more badges there are, the less people are going to care.
Why? Because, and in addition to many many other things, badges are prone to losing their motivating value: "when getting started, the points system can be motivating, but after users attain a high level of points, the incentive no longer works." (says psychological research)
Cool. Now, while free stuff is always and forever be popular (drinks for mayors, specials, coupons, etc.), people also will also want some tangible service/relevant reward that helps them in some way. Just as they already want on Twitter, Facebook, or YouTube.
As smartest of brands have already figured out, they need to be more strategic (no, PR thinking is not enough). And, they also need to be more aligned with the core programs of the Foursquare platform. Which means that, if Foursquare itself aims to inspire people to lead more interesting social lives, then the first question is how does your brand further that goal?
For example, I liked what HBO has done at Foursquare, mostly because they were smart enough to bring in partners like Racked and Eater. On the other hand, I had a feeling that Zagat could have done so much more (e.g. I keep thinking that FoodSpotting and Foursquare would be a nice service combo).
What does being more strategic on Foursquare mean? Well, it's possible to think of it as a smart frequent flier/loyalty program, where consumers' behavior is influenced in incremental steps. How? Keep in mind that few things motivate people more than approval from others. Then, provide relevant info (tips and recommendations) that help people do some activity better (go to the gym, ride a train, go out on a school night). Educate them (so many opportunities there). Integrate what you are doing on Foursquare with already existing stuff that you are doing on Twitter, FB, and website in a meaningful way (so no, I don't mean just broadcasting "hey i am here" info). Tie people's points or tips or whatever info into their other related activities (eating out and walking, going out and sleeping, running and weight loss, etc ... this would require collaboration between Foursquare and other info tracking apps, but I guess that's what being strategic is about). So, yes, think partnerships.
Brands today have behavior-changing systems at their disposal. Why waste them only on conversation?
That's like using a computer as a calculator. Or iPhone to talk.
This is something I have been thinking for a while, actually ever since people on Twitter started wondering how is it possible for a platform to be announced as a "Digital Campaign of the Decade." Then, yesterday, I came across this article called "Campaigns Die, But Platforms Live and Grow" over at the Organic's blog (of all places).
If we move beyond just marketing semantics, the difference between the platform and a campaign is the one between the idea and its implementation. Suitably, Nick Law of R/GA said something like this a while ago: "The issue with the branding companies is that they have always been separate from the execution. ... The nature of branding industry is that they create something that they hand off."
Now, in digital it's not so easy to just "hand things off," isn't it? This is because more often than not we face clients' requests without really knowing in advance that our digital solution will be or how it it going to unfold in reality. Instead of facing a simple campaign task that can be resolved by a plain dilemma like "should we spend more time and effort on developing strategy or focusing on implementation?" we are challenged with perplexing situations (yup) with uncertain outcomes. We are developing something new and sure as hell we don't have a manual on how to do it.
Fine, now let's tie this uncertainty in strategy vs. implementation combo. First, where does uncertainty come from? It comes from the fact that digital creates so many unexpected and non-obvious connections between people and technology and products. Just think Nike+ or Foursquare or Twitter or Fiat Eco Drive or as more recent examples, Pepsi Refresh or Unilever's and Coke's taking their budgets from campaigns to "social media platforms". Or even go further, to mobile, and think Red Laser iPhone app where we can immediately get all possible reviews on products right in front of us (who cares about the brand promise in this situation?) This trend is just going to continue: with each new technology, the unexpected behaviors and non-obvious info resources only multiply. Predicting who is going to get connected there and how and what kind of info will they get is close to impossible.
Now, which format is better to deal with this whole digital uncertainty? A campaign or a platform?
Unlike a branding campaign, which usually aims only to extend delivery of the brand promise to digital space and end after a certain short period of time, a platform has as its core properties both unpredictable results and the fact that unfold as they go. Simply, it's the definition of a platform to grow over time and through use. And this is its winning card: instead of wrestling with uncertainty, they place it right at the middle of what they are doing.
So, to answer my question from the title - yes, campaign vs platform debate in digital is moot. Online, there should be no campaigns.
Everyone today seems to be talking about culture and brands, and about the importance for brands to understand, connect to, and use culture. But, haven't brands always by their very definition and role been the culture? Or, what is really new here?
A little journey through history. Million years ago, before mass media, branding had mostly a pure economic function of organization of products in the market. (When mass markets emerged, companies needed to somehow persuade people used only to local trade that their products are equal or better quality than the local ones). But then came mass media, and branding expanded to include concepts like brand image, brand personality, and brand associations. Those were then communicated through television, radio, print, etc. And they have transformed branding from a purely economic relationship between products into a social relationship between the brand and its customers.
With modern branding, the brand was made into a social symbol that communicates a set of values aimed at turning consumption into an activity with social meaning and consequences. In this context, as everyone knows today, branding communicates not the actual worth of products and services, but the social benefits that a consumer can expect to receive from economic exchange. By translating economic value into social benefits, the brand mediates between the social activities of consumption and the economic activities of production, distribution, and exchange.
Forever now, brands have been taking something happening into pop culture and aping it in advertising. Without being able to do so, brands would not exist. It seems to me that the question is not how the brand can be connected to culture, but how they are the culture. Again, nothing new.
(Before brands even existed Veblen and Simmel were talking about cultural significance of consumption. "Philosophy of Fashion" was written in the 19th century. So was "The Theory of the Leisure Class". For people who care about thinking about consumption as a cultural activity, they should check out anthropologist's Daniel Miller's books and also other stuff from the field of "material culture").
I found the photo here.
About a year ago Umair Haque said that brands today don't make any economic sense (he also said that NYT should acquire Twitter, um.) Years earlier, Wired said something similar. Their argument was that there's so much information around today that we don't need brands anymore. The logic behind it went something like this:
1. Brand is information from a company promising consumers a set of costs and benefits from the consumption of goods or service. 2. In the past, this information was treated as a scarce resource that was communicated via short television, print, and radio ads. 3. Today, there's no info scarcity and people can get first-hand information from others online, and 4. Since we don't need to compress the info about the expected value of goods and services into a logo or an ad, we don't need brands anymore. People stop trusting brand promise to help them in their purchasing decisions, and because they have info from others, their product choices are less risky. And when risk goes down, people's willingness to experiment goes up, and there's no loyalty as a result. Out goes the brand.
This would make a perfect sense if there wasn't a problem (a big one). If we base our argument around plain old availability of information, then as soon as we proclaim that there's no information scarcity we end up dealing with the problem of information abundance.
And that, turns out, is not what brand challenge is about at all.
Why? First, if we say that you don't need brands because there's info abundance, very shortly afterward we will claim that we actually do need brands to help us filter through all the available info, so that's a problem. But, the bigger problem is that the challenge of digital media is not that they offer a mere plurality of information sources (more info from more places), but that they increase complexity of communication as a resource (a person needs to navigate and interact and find and rate).
If we really want to talk about the role of brands online, then instead of focusing on information abundance (which is, when you think about it, just an extension of traditional communication position that a person is passive and easily bombarded with information), we need to focus on ways that information is categorized, organized, and presented so it helps people make product decisions and make their choices less risky.
Now, this is a brand challenge.
There are a lot of many great tools and resources on the Internet that help people decide among products regardless of the brand promise. So, the only think that may not make sense in digital is brand promise, not the brand itself. Why?
When brands are online, they too often think they need to communicate their promise in a way that "breaks through the clutter" because there's so much info around; and they think they need to filter this info abundance for consumers by telling them that their brand is the best. So they build a website or a minisite or an app. Turns out, that sort strategy online is plain stupid - because it treats digital just as TV on steroids.
Smart brands figured out they can be, instead, a resource in consumer decision-making: either by accompanying product with a service, or with a customer support, or with a superior e-commerce, or with a community, or with an advice. Then consumers go to them not because of their brand promise, but because of a tangible benefit.
Digital really doesn't kill brands, it just redefines what (and how) we call the brand.
*Bill Bernbach (Somewhere in California, Google silently laughs). I have always been slightly surprised by the ease with which marketing professionals assert causality between brand symbols and product sales: "it's pure art, and we have no idea what's the mechanism, but it works!"
Why do I say this? I recently came across the list of top 10 slogans and the list of top 100 advertising campaigns of the century. Do they have anything in common? No. Do we know why they worked? No. Yet, there's a list.
This is the problem called Everything is Obvious in Retrospect.
And it would not be so interesting as a problem (people make cognitive mistakes all the time, after all) if it weren't for its impact on the millions of dollars in brands' investment. Someone said "the great idea in advertising is in the realm of myth.” This means that people still think, in great numbers, that a good ad or a slogan is a question of art and inspiration and accident. An inescapable conclusion follows: brand symbols are critical for a brand's commercial success, but their influence is a matter of chance more than anything else.
That's like going to a horse race and betting on a unicorn.
Yet, brands are still doing exactly that. Why? First, they don't know what else to do or how to do it. Second, and more importantly, they genuinely believe it works.
And why do they believe it? Because they can easily observe successful examples of what worked in the past, and conclude that they can do it as well. So, they say, "I want my brand to be a new Apple. Or, I want something like Foursquare. Or, I want Nike+"
Okay, now: why didn't you ask for a Foursquare before the Foursquare was invented?
In marketing, we know what is a success story only after it, well, succeeds. And if we can feel that we can explain why they worked, it is only because we look at them from a vantage point of the future. That is, we say that something was effective only after we have already seen its effects.
Why is this a problem? Because this is how we start planning our campaigns: from their effects. Better yet, we start from their imagined effects. We imagine something groundbreaking, some ubiquitous future cultural artifact, or another iPhone. In that, we are no different from our clients. Our ambitions are so immense, that we never stop for a second to think about a solution that can work, right now, and work really well. We are so obsessed with the future rewards, that we under-deliver.
And all of this would be okay if it was an individual cognitive mistake. When the whole industry is based on a faulty reasoning, this is a problem.
“Let us prove to the world,” said the aforementioned Bill Bernbach in the 1960s, “that good taste, good art, good writing can be good selling.”
Fifty years later, the proof is still missing. It might be time to try something else.
(photo courtesy of Vintage Ad Browser)
A couple of weeks ago, I skimmed through the book "Brand Digital: Simple Ways Top Brands Succeed in the Digital World" by Allen Adamson, who is the Managing Director of the New York office of Landor Associates.
Now, while it can be expected that someone working for Landor would say something like "everything we know about branding is just amplified in the digital world" (after all, they need to stay in business), it struck me how much of this (mostly inaccurate) assumption I have still encountered in the industry and in my own work. That is, marketing professionals maybe too often simply appropriate digital media to what they already know about branding ... instead of focusing on how digital media change it.
To make the shift between "let's apply branding to digital" towards "let's focus on digital and see what branding means there" we maybe first need to change our starting position. In particular, we need to move away from the question:
1. "How to use digital tools to build brands?" to asking "How digital tools challenge what we call the brand?"
2. "How technology applies to principles of branding?" to asking "How digital creates new ties between people and products?"
3. "How to use the Internet to build brand value? to asking "What is valuable on the Internet?"
4. "How brand promise should be brought to life online?" to asking "How immediate delivery in digital removes the need for brand promise in the first place?"
Just an idea. Maybe also good start in thinking about digital branding, too.
Yesterday, I've seen Adrian Ho's post "Blending Skills in New Ways" over at Zeus Jones' blog. It reminded me of stuff that I read in organizational theory a few years back. Mostly, it reminded me that recombination is not sufficient for innovation.
Instead, it is a productive friction between multiple perspectives that secures continued adaptation in the face of complexity. While Joseph Schumpeter did say that innovation is recombination, he also said that innovation is deeply disruptive of the things that we, as professionals, take for granted in our work. This means that the more disagreements and disruptions we can create in our organizations, the better off we are.
Why is this the case?
More often than not, we start client’s challenges these days without really knowing in advance what the solution will be. We also don’t know which solution will succeed. This is because we are not addressing a specific, neatly formulated problem - we are addressing the whole complex brand’s environment.
Innovation involves bringing together incompatible and diverse points of view, and this process is not harmonious. Every time there’s a successful recombination (think Twitter, for example: it’s a combination between people’s tendency to lifestream and a txt-like technology), it is only because the technology and strategy worked from the starting point of their differences. The Twitter team didn’t know what they will come up with, simply because they didn’t in advance formulate the problem as “let’s make Twitter.”
If they did, then the question of innovation would be the one of mere implementation - which is what people who are savvy in both strategy and technology do: they are capable of implementing their ideas. But, these days, we need a hell lot more than just implementation.
So, rather than altering your production staff or replacing your strategic resources, it’s better to let them keep their differences and make them interact as much as possible. In the resulting productive friction reside solutions for the complex problems.
In the past month, I have seen two very good examples of online marketing. Today, Adrian Ho shared the third one. All done by Google.
First, there is "Send a Christmas Card", for free - courtesy of Google. It works like this: there's a selection of Google-themed Christmas cards, you pick one, enter your email address, your friends email and mailing address, and you are good to go. Google sends a postcard to your friend (and collects A LOT of emails in the process).
I have just checked the page now, and the initiative apparently worked - all Christmas cards are out. (Ah, the people are so predictable ...). What in fact happened is that Google combined people's perception that the brand doesn't advertise with giving stuff away for free, which is what people love the most. Good job, Google!
Then, there is "Give Chrome for the Holidays." The promo tagline is: "Google Chrome is Now Really Easy to Share. So if you are looking for gift ideas, why not wrap up Google Chrome with one of our shiny artist themes and give the gift of super-fast browsing. Google Chrome is so simple to use, even your grandma will love it." Well, I don't know about the grandma, but I am sure that geeks and their friends everywhere have already bit the bait. This is a lesson 101 of how to spread the word (and make people adopt your product faster) by being "helpful." Again, Google doesn't advertise. It just really invests in its customers. Good.
And then, Adrian took a photo of Google's gift - "We're the favorite place" from Google maps. This one is real simple and easy and very very promotional. It's a nice touch that just makes us love Google a bit more. After all, who doesn't want to be a favorite place?
What's interesting here is that, if any other brand have done the same thing, it would be sneered upon as a marketing gimmick. But - by carefully playing by the rules of online marketing (don't shower people with ad messages, create a lot of interlinked services to lock-in customers, expand the category by spreading to adjacent markets, and yes, don't be evil), Google managed to position themselves as the brand which does not advertise - but the one that invests in customers.
And, as we know, all good investments pay off.
I find it interesting how the question of influence is always addressed from the influencers' point of view. It's always, how big is someone's social network? how many people they reach? who is the most connected?
Very rarely, we talk about following.
This is, of course, not entirely surprising. In our culture, influence is equaled with originality, creativity, uniqueness, creation, and all of that. In contrast, following is about imitation, receptiveness, replicating, adopting, etc. Naturally then, everyone wants to be (or to think about themselves as) an influencer. No one really wants to say, "I am a follower."
Yet, we all are.
Some of the people I enjoy following on Twitter the most are those who are easily influenced themselves - they are curious, they like exploration, and they always discover unexpected things. Everything seems to influence them - new ideas, new stuff, new content. They don't really create any of that, they are just really receptive, really imitative, and really susceptible to influence. Truth is, if they weren't so easily influenced, they would be able to share so much stuff with others.This is of course not incredibly new. My friend Duncan has been talking about "easily influenced people influencing other easily influenced people" for a while now. But what reminded me of all of this is actually a recent Fast Company article "Is Imitation the Hidden Key to Creativity?", and its (much better written) original source, "The Curious Threshold for Creativity". They talk about a social study that explored how ideas spread and discovered that about "30% of people should create while the rest imitate." This may sound weird taken out of context, but it points out to a bigger idea of the article: "organizations and societies that spend too much time on ideas see their overall fitness decline." Which then reminded me of the exploration/exploitation balance thing from some time ago...
More interesting, tho, is a conclusion that creative ideas can spread if they are actually adopted by others. This means, in order to encourage adoption of an idea, you don't need a handful of influencers, you just need a really lot of followers.
p.s. And sometimes, a mere exposure to something actually works really well. Which makes all those "let's create a cool ad campaign", "make something interesting", and "do big ideas matter?" discussions a little bit, well, irrelevant. Too much creativity and not enough imitation "makes ideas die, because there are so many of them and few ever catch fire." Imitators, as it turns out, play an important role in society: they act as a kind of memory, storing the successful creative stuff for the future. I'd really like to hear someone to say, let's reach the followers.
The buzz about Burberry's social networking site has been going on for couple of months now, and since the site launched on Monday NYT had made it official. Regardless of the fact that some people may question the purpose of such an effort, I think that Burberry is pretty brave in trying to do things differently. For the first time ever, a luxury fashion brand is full-on experimenting with digital. Let's see what happens first, make conclusions later.
p.s. I was accused of being a woman in the photo. Considerably lifted my mood.
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.
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.
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.
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.)
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)
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.
CATFOA 2011 - Ana Andjelic 1.31.11 from Ech03 on Vimeo.
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