Matter/Anti-Matter

(customer research/focus groups - video from Rory Sutherland's TEDGlobal talk)

For the first time in 23 years, Pepsi Co. has decided to not run any advertisements during the Super Bowl in 2010. Instead, the nation’s second-biggest soft drink maker is plowing marketing dollars into its "Pepsi Refresh Project," an online community that allows Pepsi fans to list their public service projects, which could range from helping to feed people to teaching children to read. Visitors to the site can vote to determine which projects receive money. The program will pay at least $20 million for projects people create to "refresh" communities. Last year, Pepsi Co. spent $33 million advertising products such as Pepsi, Gatorade, and Cheetos during the Super Bowl, according to TNS Media Intelligence, $15 million of it on Pepsi alone. Ad time last year for the NFL championship game cost about $3 million for 30 seconds, on average. Pepsi Co. spokeswoman Nicole Bradley said Super Bowl ads don’t work with the company's goals next year: "In 2010, each of our beverage brands has a strategy and marketing platform that will be less about a singular event and more about a movement." Pepsi's remarkable decision epitomizes the new paradigms of marketing: Online instead of TV; many-too-many instead of one-too-many; engagement instead of advertising; sharing instead of broadcasting; movements instead of events; communities instead of campaigns.

While one of the world's foremost consumer brands has acknowledged the signs of the times and is making the transition away from one-to-many mass-marketing to social marketing with meaning, marketing theory is struggling to catch up and grasp the new realities. An article on "Rethinking Marketing" (by Roland T. Rust, Christine Moorman, and Gaurav Bhalla) in the January issue of the Harvard Business Review (HBR) is the latest example. HBR deserves credit for recognizing the need to reinvent marketing, but the piece turns out to be far less radical than its title would suggest. The authors are putting the onus on the customer, demanding that marketers focus on the customer as the sole parameter of their efforts. In their eyes, this requires a shift from "pushing individual products to many customers" through the means of one way mass-marketing to "engaging individual customers in two-way communications,” building "long-term customer relationships" that provide value beyond one-off product promotions. Consequently, the authors argue, the marketing department needs to be reinvented as a "customer department," with the Chief Customer Officer replacing the Chief Marketing Officer, and "product and brand managers subservient to customer managers."

What a depressing read! First of all, the article rehashes existing concepts but doesn’t really offer any kind of "rethinking." To engage customers in two-way, personalized communications rather than marketing individual products to broad audiences is a no-brainer, and after hundreds of books and thousands of best practices it has already become so commonplace in the field that it is hard to believe HBR considers this to be an original concept. It's like social media never happened. On which analog planet did the authors live in the past three years? The concept of radical customer focus is not entirely new either and has been well-articulated before (i.e. in the book Chief Customer Officer by Jeanne Bliss in 2006, and most recently, with a more anthropological spin, in Chief Culture Officer by Grant McCracken).

But aside from the lack of originality, I also substantively object to the concept itself. While the authors' emphasis on "customer profitability" rather than product profitability and a long-term view on value creation are in theory good intentions (and a response to the demise of the concept of shareholder value, as Roger Martin lays out in his essay on "The Age of Customer Capitalism," also in the HBR January issue), I don't agree with the conclusion to turn the marketing department into the "customer department." Embracing a naive belief in customer-centrism, the HBR authors downgrade marketing to a discipline of tactical execution when in fact this time of disruptive digital technologies and changing consumer behavior presents a tremendous opportunity for marketing to reassert itself as a key strategic function in the enterprise. An extreme customer orientation, as propagated by the authors, ill-conceives the legitimate and important customer perspective. Of course it is paramount to understand customers' needs, of course companies need to ensure customer satisfaction, and of course CEOs always score when they tout the customer as their company’s raison d'etre. But that doesn’t mean the customer is the measure of all things.

The truth is less simplistic than a "customer happy, all good" approach would suggest. In addition to their customers, businesses have other stakeholders to serve: investors, employees, the community, and the broader public, as well as future generations and other constituents that are indirectly affected by the externalization of a company’s business. In fact, one could argue that the customer's demand is mostly short-term, not to say short-sighted, whereas the corporation can and should pursue a long-term perspective on value-creation that combines individual and social value, even if the latter may at times actually conflict with what customers want. Reducing the role of the company to just responding to customer needs drastically limits the critical role businesses can play in society, and it hampers companies' ability to drive real change. When it comes to innovation and marketing (according to the venerable Peter Drucker, these are the only two basic functions of an enterprise, and – if I may add – in good marketing organizations they are one and the same), companies should be empathetic to customers (that is, "Wired to Care," as Dev Patnaik put it in his book) but not reactive. Innovation – truly disruptive innovation that moves entire industries forward and gives our lives new meaning – never happens by just meeting existing customer needs, nor by anticipating unmet customer desires, as the apostles of customer research would like us to believe.

Don Norman, author of The Design of Future Things, among other books, and a long-time advocate of the business value of design, recently shocked his peers by coming to a similar conclusion. In an outburst of self-criticism, he belittles the impact of observational design research (or "ethnographic research") on innovation. In his eyes, design research may propel incremental innovation, but the only true driver of game-changing disruptive innovation remains technology: "Design research is great when it comes to improving existing product categories but essentially useless when it comes to new, innovative breakthroughs." Design research studies how people live, seeking to unearth unmet needs but Norman insists "Major innovation comes from technologists who have little understanding of all this research stuff: they invent because they are inventors." To support his point he refers to a list of inventions that all occurred without customer research: the airplane, the automobile, the telephone, the radio, the television, the computer, the personal computer, the Internet, text messaging, the cell phone." You might add the iPod and the iPhone, both creations of a company that famously refuses to conduct any customer research. The old Henry Ford line comes to mind ("If I had asked people what they wanted, they would have said faster horses") and along with it the provocative question: Can customers look beyond their individual needs? Can we rely on them to recognize what's good for society? Can we expect customers to dream up future products and services? Can we even expect them to know what’s good for them now? Unlike Norman, Roberto Verganti would not categorically say no. A skeptical design thinker, Verganti, in his book Design-driven Innovation, emphasizes the need for "interpreters" (who can be designers but also any other species with an interdisciplinary mind- and skill set) to "radically change the meaning of things."

Both Norman and Verganti herald marketing as a creative discipline. If marketing lives up to its mission – creating innovative products and services and finding meaningful ways to make them valuable for customers and society at large – it needs to be a step ahead of customers. Customer research can inspire and validate but it can never replace the inventiveness and ingenuity of excellent marketing. Marketers who rely only on research to back up their decisions may yield good enough results with good enough tools. That's fine. But if you set out to "rethink" marketing, you must shoot a little higher.

The rest of the marketing thinkers do not do much better. In a way, the HBR article is indicative of a lack of vision across the industry. Since Malcom Gladwell's Tipping Point, there has not been one single book exerting comparable influence on the profession. CMOs' by-lined articles in industry trades usually play it safe and state the obvious. The myriad social media consultants who have popped up over the past few years, as well as marketing expert bloggers, boutique agencies, and industry outsiders are all preaching the social marketing gospel to the choir (or to those few remaining on the other side of the "new digital divide") in their publications. Even at conferences such as SXSW, next, the Conversational Marketing Summit, or Marketing 2.0, which are usually ahead of the digital curve, marketing thinkers have been beating a dead horse this year, more or less citing the same set of principles, practices, and case studies. At next09 in Hamburg, Get Satisfaction's Lane Becker, who spoke before me, and I were cracking up when we realized that we were referring to the same case studies in our presentations, the usual marketing 2.0 suspects: Zappos, Skittles, Best Buy, Starbuck's My Idea, Threadless, and so on.

As we are entering the new decade, it appears as if the marketing discipline, after undergoing a mesmerizing major transformation in the past two to three years, is facing stagnation. This often occurs when pioneering concepts are fully absorbed by the mainstream: Social marketing is on the way to becoming THE marketing, as social media is becoming THE media (it is always a sign of broad adoption if adjectives are dropped). Authenticity, engagement, meaning, communities, social, conversations, transparency, etc. – they're all accepted across the industry and widely implemented now. What then is the next frontier for marketers? What will be the next big marketing innovation?

Here's how you do product demos right: Advertising firm BBH has produced a series of videos for the Google Chrome browser, and you have to give them credit for creating such intuitive, almost naive metaphors for a very unemotional 'technocratic' brand. Since Peter Greenaway no one has married math and artistic expression more convincingly. It's truly "A New Way to See the Internet."

From the BBH labs site: "We took Google’s ingenuity & innovation as inspiration in developing the idea for seven short films (& an intro), demonstrating the benefits of Google Chrome. Every creation is built by hand, filmed in camera, with no special effects added. Even the music where Jacqui, the harpist, is playing is live on set. As it should always be with Google, the product is the hero. We celebrate the Chrome product, but we hope in a 'Googley' way." 

A look behind the scenes

(Credit: Google.org)

Google.org, Google's philanthropic arm, has announced a cloud-based method for analyzing deforestation around the world, in a much more up-to-date manner than was previously possible.

Using Google's terabytes of satellite imagery, it allows scientists to look back over time at any location in the world to see how the forest has changed. Going beyond visual comparisons, it uses the power of cloud computing to do actual measurement of deforestation. Much more rapid analysis of the images than is possible on a single desktop computer pinpoints locations of most recent activity. This allows authorities to locate illegal logging very precisely, within days of the activity.

According to the official Google.org blog:

With this technology, it's now possible for scientists to analyze raw satellite imagery data and extract meaningful information about the world's forests, such as locations and measurements of deforestation or even regeneration of a forest. In developing this prototype, we've collaborated with Greg Asner of Carnegie Institution for Science, and Carlos Souza of Imazon. Greg and Carlos are both at the cutting edge of forest science and have developed software that creates forest cover and deforestation maps from satellite imagery. Organizations across Latin America use Greg's program, Carnegie Landsat Analysis System (CLASlite), and Carlos' program, Sistema de Alerta de Deforestation (SAD), to analyze forest cover change. However, widespread use of this analysis has been hampered by lack of access to satellite imagery data and computational resources for processing.

Read more >

(Credit: Mashable)

A full-page ad in USA Today and in the New York Times marks the next chapter of the never-ending “the conversation is your brand” saga. Trident, the chewing gum maker, bought the placements, and instead of using them to promote its latest product (Trident Layers) with the usual mix of emotionally resonant narrative, sharp copy, and persuasive imagery, it chose to feature select tweets about the product under the tagline “The people have Tweeted."

Trident says that the ten tweets featured were discovered by the Trident team using Twitter Search, and that they used Twitter to contact each party to secure their approval, but it is hard to suppress the perception of them being fabricated. Notwithstanding the question of whether or not the ad deserves the notion of authenticity, it presents an interesting twist in the democratization of brands. We‘ve seen Skittles (introducing the “Interweb," an aggregation of third-party conversations about Skittles, on its homepage), creative shop Crispin, Porter & Bogusky, social CRM provider Get Satisfaction, or Seth Godin’s Brands in Public embrace real-time Web-branded conversations – on the Web. Trident, however, can now pride itself with being the first brand to apply this principle in a mainstream print ad.

But not only that: The "People have Tweeted” ad mashes up the Trident brand by not so subtly borrowing iconography from other brands. The first thing you notice is that it leads with an oversize “hero shot” of the “naked” gum, staging it like a slickly designed consumer electronics device and making you wonder if this is indeed just a gum or the next, much-awaited Apple product. Moreover, the ad not only features content from Twitter but also somewhat overtly leans on Twitter’s brand, citing recognizable brand elements such as font and colors while downplaying those of Trident (there is no display of a Trident logo whatsoever). It is almost as if Twitter, Apple, and Trident merged and became one superconvergent uberproduct – which is, one would suspect, exactly the impression the advertisers aimed for.

Perhaps this ushers in the next era of advertising, one that is fueled by the paradigms of the social Web but applicable across all media: Brands that understand and capitalize on the insight that they’re not only shaped by the conversations of their consumers (fans and followers, that is) but also increasingly by the personas of other brands. Social, in this sense, means not only inviting employees and customers to co-create your brand, but also, openly or discretely, hybridizing, mashing up, or collaborating with other brands.

(Credit: Google.org)

At the Copenhagen Climate Change Conference, Google.org, Google's philanthropic arm, announced a cloud-based method for analyzing deforestation around the world in a much more up-to-date manner than previously possible.

Using Google's terabytes of satellite imagery, it lets scientists look back over time at any location in the world and see how the forest has changed. Going beyond visual comparisons, it uses the power of cloud computing to do actual measurement of deforestation. Much more rapid analysis of the images than is possible on a single desktop computer pinpoints locations of most recent activity. This lets authorities locate illegal logging precisely and within days of the activity.

"With this technology, it's now possible for scientists to analyze raw satellite imagery data and extract meaningful information about the world's forests, such as locations and measurements of deforestation or even regeneration of a forest. In developing this prototype, we've collaborated with Greg Asner of Carnegie Institution for Science, and Carlos Souza of Imazon. Greg and Carlos are both at the cutting edge of forest science and have developed software that creates forest cover and deforestation maps from satellite imagery. Organizations across Latin America use Greg's program, Carnegie Landsat Analysis System (CLASlite), and Carlos' program, Sistema de Alerta de Deforestation (SAD), to analyze forest cover change. However, widespread use of this analysis has been hampered by lack of access to satellite imagery data and computational resources for processing."

For more information, check out Google.org's blog.

(Credit: disfruteconpoco)

I attended the Trendforum in Munich last week, a two-day conference that gathered European innovation, marketing, and R&D executives to explore emerging technologies, social trends, and innovative business models. The program was eclectic and the content mostly of high quality. I was particularly intrigued by the opening session that intersected macro-economic forecasting with geeky trend evangelism as well as a humanistic pledge for meaning-driven business (in fact, the other sessions didn’t even come close, including special guest Ray Kurzweil, whose remote keynote, given by way of 3D-holographic projection, remained utterly flat).

As the first speaker, Markku Wilenius, senior vice president of economic research and corporate development with Allianz SE, set the framework by introducing overarching future themes, key challenges facing mankind, from climate change to water scarcity to demographic developments. Forecasting the economic development over the next two decades, he predicted redefined notions and metrics of both societal progress and individual success, and heralded “true-value accounting” that would ultimately “decouple consumption from growth.” In 10 years, he argued, easy and seamless sustainable choices would have become the norm, as would have “smarter systems.” Wilenius identified four key consumer trends, all to be filed under Consumer Empowerment: Downshifting (simplicity -> value for money, price sensitivity, discounts); Transparency (clarity -> open communications, clear essence); Selfness (control -> self-governance, tangibility); and Age of Less (substance -> long-term thinking, lightness). Despite the daunting challenges in these times of crisis, his outlook remained optimistic: “Material scarcity always creates an abundance of ideas.” If that is true, we can look forward to innovative times in which creativity will not only become a crucial skill but an existential means of survival.

Christine Woesler de Panafieu, founder of CoSight, an international trend research and marketing consulting firm in Paris, picked up the ball and described how the macro-trends Wilenius had pinpointed would alter the lives of consumers. She argued that we were moving from "post- to ultramodernity," resulting in a renaissance of the renaissance: “the man as measure of all things.” This neo-humanistic mindset would bear a new spiritual quest--“an individual, open-path-seeking direct resonance with the sacred,” as she put it. The number of pilgrimages is indeed on the rise, as is the number of new religions (and meta-religions such as the recent Charter of Compassion or the portal Beliefnet). “The 21st century will be spiritual or it won’t be at all,” Woesler de Panafieu said, quoting a French philosopher. Morality is in high demand, but doing good is shifting from convention to conviction, from a humanitarian to an empowerment approach. For brands, this means they need to become the “right thing to do.” And one only has to look as far as Foursquare to see that converting social currency into real value will the business model of the future.

Nils Müller, founder and CEO of TrendONE, a trend research firm, finally took the audience on a riveting tour de force through much buzzed-about emerging tech trends, envisioning the future in 2020 as a seamless blend between the real and virtual worlds, dominated by location-based, real-time, and social computing applications that turn the Internet into an "Outernet" and “every interface into a surface”--from printed electronics to face recognition to augmented social shopping. He depicted an evolution from “lean back” to “move forward” to “jump in” to “always-on” to “plug in” media. And he showed tons of videos: the "Siftables" (see picture above); the inevitable Microsoft Natal clip; a demo of brainwave-based voiceless communications (theaudeo.com), and a clip on augmented vision enabled by eye chips (tat.se). Their common thread: technology in disguise, with front ends that are becoming touchable, intuitive, and human-centric. Mueller coined the term “Shytech” for this phenomenon: technology that can afford to be nonintrusive because it is fully immersive.

In the concluding panel discussion, Woesler de Panafieu was asked what’s left to do for designers when everything was immersive and one great computing cloud. “Designers’ task will be to make the invisible visible,” she said, “creating the new interaction codes of our societies.” That again alluded to the big mega-trend of Good Computing--without Computers. Designers are the ones who can translate data (and meta-data) into meaning and make morality tangible amidst a flood of information. As they visualize the dematerialization of products and services, how long will it take before the dematerialized world becomes the ideal one?

Ford Fiesta

(Credit: Ford Motor Co.)

I was driving along the other day and saw a lime green Ford Fiesta--a car that is not currently available in the US, but which launched recently in Europe. It's combination of good looks, driving fun, and low prices has quickly made it the second-best-selling car there after the Golf.

Ford is planning to bring the Fiesta to the US in 2011, an excellent move, as we need more good "economy" cars here that are not boring and/or ugly. Ford is doing an interesting viral/social campaign ahead of the launch. It has engaged 100 "agents" to drive the cars around and blog and tweet about their experiences (the car I saw was evidently driven by one of them--it had a fiestamovement.com logo on the back bumper).

80,000 people volunteered to be agents, according to MarketingVox:

The online program has also generated 6 million YouTube videos, 740,000 Flickr views, and more than 3.7 million Twitter impressions to date, according to the company. Additionally, name awareness for the model has risen to almost 60 percent, according to Jim Farley, Ford's vice president of marketing (via the Detroit News).Ford will officially debut the 2011 Fiesta model at the Los Angeles Auto Show today.

Each round of agents produces videos that combine into "chapters" that will play out over the following months. It's the most extensive social/viral based marketing campaign that automakers have yet undertaken (good enough to get me to write about it anyway), and shows the importance that Ford is placing on the Fiesta. According to the Detroit Free Press:

The Fiesta represents a seismic shift for Ford. The automaker, best known for its F-Series pickups and SUVs, hasn't sold a subcompact car in the United States since it discontinued the lackluster Aspire in 1997. What's more, Ford hasn't sold a car with the Fiesta name since 1980.

Ford said it will offer 15 technologies in the Fiesta that are not typically found in subcompact cars. That includes keyless entry, push-button start and its Sync wireless communications and entertainment technology.

(Credit: Billpapa.org)

Reading the business section of yesterday's New York Times, you couldn't help but notice the juxtaposition of two seemingly different companies, which, at second glance, have more in common that you might think. One is Bloomberg, the financial data juggernaut that has enough cash to aspire to become “the world’s most influential news organization.” The company has placed its bets on the acquisition of the venerable BusinessWeek, trusting that it will broaden its reach into a mainstream business audience. A few pages later, Digital Domain columnist Randall Stross reveals Apple’s pending patent application for a new advertising pop-up technology that forces users of devices and web sites to acknowledge the reception of the commercial message.

What Apple calls “enforcement routine” is basically a radical ad-based model that offers consumers to use Apple’s products and services for free or at a discount if they “watch ads they may not want to watch.” Stross writes: “Its distinctive feature is a design that doesn’t simply invite a user to pay attention to an ad--it also compels attention. The technology can freeze the device until the user clicks a button or answers a test question to demonstrate that he or she has dutifully noticed the commercial message. Because this technology would be embedded in the innermost core of the device, the ads could appear on the screen at any time, no matter what one is doing.” As Stross points out, other brands went down this path before and utterly failed, and he is stunned that Apple, if it is serious about this technology, seems to be willing to risk its  reputation of consumer-friendly “cool.”

One story can be read in the context of the other: Bloomberg and Apple not only share a zealously rigid culture and a “walled garden” business model based on selling high-grade packages at a premium price; they are also both media companies. Both have strong communities driven by the Three C’s of Communities--connectivity, content, and context--and both are wondering which of these parameters they can exploit more aggressively without jeopardizing the integrity of the community that is the foundation of their business. Both Apple and Blooomberg create value by heavily relying on network effects within an ecosystem that they tightly control. Both are distributing content to raise demand for their products. And both have a strong brand to extend – and to lose.

With the acquisition of BusinessWeek, Bloomberg’s strategic trajectory is clear: Owning a proprietary technology platform (it sold 300,000 terminals to date), the company is looking for ways to reach more potential buyers (and sell premium services). Apple’s “terminals,” on the other hand, are its iTunes store and its user interfaces, and the recent patent application indicates that the company might explore the exploitation of attention generated through these properties. Bloomberg is buying attention to open up new sources of revenue, Apple might be selling it.

The two brands have one last trait in common: They are not really embracing social media, to put it mildly. Apple, as a company, does not engage, and Bloomberg even discourages its employees to engage. Apple and Bloomberg, in some ways, are the antidotes to a marketplace that – propelled by the forces of the Social Web – is becoming increasingly atomized, hyper-distributed, open, and transparent. Secrecy, compliance, top-down hierarchies, rigid communication policies, and walled gardens are characteristics that may be somewhat outdated in this era, and yet they seem to be the very cornerstones of Apple’s and Bloomberg’s success as the two firms thrive as the surprise champions of their respective categories. Both came to save ailing industries, ripe for innovation: Apple reinvented the music industry and the Smart Phone market. Bloomberg is determined to reinvent the news business. But in the long term, can Apple sustain its community of loyal users without becoming a more transparent organization? And can Bloomberg really emerge as “the world’s most influential news organization” without going social?

(Credit: Victors & Spoils)

It's always good to be the first, and while crowdsourcing, the trend, may have jumped the shark, a fully crowdsourced creative agency is a bold creative experiment and still news. Two Crispin Porter + Bogusky alums, John Winsor and Evan Fry, together with Claudia Batten, the founder of Microsoft-acquired video game advertising shop Massive, have launched Victors & Spoils (V&S), "the world's first creative agency built on crowdsourcing principle."

V&S says it will "provide businesses with a better way to solve their marketing, advertising and product-design problems by engaging the world's most talented creatives." The press release promises that "perceived crowdsourcing flaws will be addressed through world-class creative direction delivered through the use of the reputation-ranked Victors & Spoils crowd" but stays mum on how exactly the crowdsourced creative department will operate.

In any event, V & S is eating its own dog food. The first line you notice on its web site (after the humble "Welcome To Victors & Spoils. Let's Change An Industry") is "Why does this site look so plain, Jane?" and the answer is: because the site design, the look and feel, and even the logo are being crowdsourced.

Whether crowdsoucing yields better creative results, who knows? It certainly is a differentiator. V&S COO Claudia Batten twittered that she got calls from five Fortune 200 CMOs in the first five days since launch. We will follow this one closely.