Matter/Anti-Matter

(Credit: Element 22)

There seem to be three (non-mutually exclusive) models for marketers tasked with building brand equity: marketing scarcity, marketing artificial scarcity, or marketing relevance.

Scarcity seems to be at the core of all marketing: an exclusive, unique value that can be reproduced; an original idea replicated for many. That's how markets work, how marketing works. Branding is effective when it keeps the aura of an original idea intact despite its mechanical reproduction. Apple's original idea, for instance, could be described as "technology must be fun and human," and it has not lost an inch of its integrity. That's the trait of a strong brand: the idea remains scarce while its distribution becomes abundant. The scarcity of all branded, manufactured products is of course artificial. If it wasn't, these products wouldn't need to be branded. That's the whole point (and the difference between water and bottled water.)

Some brands have taken this concept a step further by creating a special type of artificial scarcity: "democratic exclusivity." Sounds paradoxical? Well, it is. But it works. Gmail has pioneered it: An (exclusive) invitation-only service that pretty much everyone can get invited to (democratic). As another example, take Apple's strategy with the iPhone app store. It is a closed system (exclusive) but principally open for third parties (democratic). Look at the Kindle that Amazon purportedly shares as an app for other mobile devices. It shows that it's certainly good to have recognizable hardware (exclusive) but the true value lies in the software that you own and that you can use to extend the reach of your brand (democratic). Or Radiohead's pay-as-you-like release of "In Rainbows": Buyers could determine the price (democratic) but the offer only stood for a limited period of time (exclusive). The album - online and physical distribution combined - sold more than Radiohead's previous releases, and the radically democratic way of pricing created a significant amount of brand equity for the band. Democratic exclusivity at its best: artificial scarcity in abundance.

The third and perhaps most game-changing model for marketers is selling relevance rather than scarcity. Jeff Jarvis points to Digg's new advertising system that enables users to vote on ads. Techcrunch calls it a "self service advertising product" that is "somewhat similar to Google Adwords, but with a twist." The twist is essentially a reversal of the traditional advertising paradigm: The most popular ads, as voted on by Digg users, will get more prominent placement and a lower cost-per-click. In other words: The more users digg an ad, the less the advertiser pays. "The Digg system rests on a Cluetrainy need to deliver authentic value and relevance - like Google's ads," Jarvis notes, and he argues "that's the way advertising probably needs to go: The better your relationship (which springs from a better product and service), the more your customers will market it for you, the less you'll have to pay to market it." Jarvis is right: "The future of advertising needs to be selling - that is, enabling - relevance instead of selling scarce space, time, or eyeballs. The future needs to be about adding value - relevance - rather than selling scarcity (extracting what the market will bear)."

Equity is the accumulation, the repeated occurrence, of actions, interactions, and transactions that add value. The best way, then, to build brand equity is to repeatedly and consistently add value through all your interactions with customers. Advertising doesn't add value; branded content does (information). Promotions don't add value; branded entertainment does (entertainment). When you brand something, you don't just market scarcity and advertise your products and services, you market your ability to add value that is relevant.

The web, and the social web in particular, reconciles artificial scarcity with relevance, and that's why more and more branding dollars are moving online. It is the ideal forum for creating an abundance of scarce moments, thousands of small great ideas instead of one great big one. These small great ideas come to live in brief moments of attachment with customers that are personalized and truly relevant for them.

"Advertising is failure," says Jeff Jarvis, and he thinks "media only get in the way of customer relationships." And indeed, how will you make more friends at a party? Showing up with a big banner around your neck that says "I am a great friend" or engaging in a handful of conversations with strangers, listening to their stories and detecting affinities whilst accomplishing a sense of privacy that gradually becomes intimate? Right. In the end, that's what we should be doing as marketers to build real, sustainable brand equity - creating publicity through intimacy, loyalty through decency.

I saw an interesting article in the New York Times this weekend titled "Put Ad on Web. Count Clicks. Revise." The premise of the article goes something like this: because the web provides functionality to test every variation of a banner ad for effectiveness, the next big thing is tailoring advertising in the moment, and leveraging findings from click-thru rates to construct more relevant offerings for consumers.

If I had to construct a tag-line for the so-called "data practice" services cited in this article it would be "downstream solutions to upstream problems." From the media-buying perspective I understand the argument: if the chosen vehicle for the ad is wrong, the advertiser will recognize it faster and will be able to adapt on the fly. Quick changes in placement and timing make ads more effective at targeting particular populations. But from the standpoint of advertisers and brands trying to understand the consumers they serve, this service misses the boat.

Coming from a research-heavy design consultancy, I believe this effort represents not a huge step forward but a band-aid placed over a much larger issue. Ad agencies and the companies that hire them should be doing a much better job understanding their consumers before they ever put their banner ads out there.

The article cites a Vespa campaign of 27 web-based ads, with variations in messaging ranging from "Pure fun. And function" to "Smart looks. Smarter purchase." The second message, combined with a no money down, zero-percent interest offer, attracted 71% more responses than the average of other Vespa ads. The two underlying value propositions ("Vespa, all about the fun" vs. "Vespa, it's a prudent financial decision") represent wildly different core assumptions about the product and its users.

It seems like a no-brainer to assume that doing a little research before designing the ads, speaking to customers and employees in-store, conducting contextual inquiries into existing owners and trend-scrapes tracking the rise of couponing and price consciousness, would yield the same results as the results of click-thru rates, as well as revealing additional deeper data that could be leveraged to fill out the campaign and adapt the product offering itself.

I'm not saying that tracking click-thrus isn't sensible and smart; it's just reactive. Only after you put something out there can you judge the validity of your messaging and when you do, your tool for judging that response is relatively blunt and binary (and the product, if off-base, is fundamentally unchanged).

By taking a proactive approach instead—i.e. talking to people and testing your assumptions before ever constructing an ad, and then altering the product to more closely align it to your findings—allows you to build your offering holistically. Now your banners reflect your product, and vice-versa, and there will likely be less need to retrofit the argument around a leap of faith.

The rise of data practices in digital advertising appears to be more of an effort to retain relevancy on the part of the agencies than something that fundamentally creates value for the consumer. And calling it new is a bit of a misrepresentation. Many of the old lessons of direct marketing are simply being ported over to the web by advertisers. Like the good-old days of 800-numbers and rebate codes, I'm sure it'll be successful. But calling it a "radical new approach" may be an overstatement.

(Credit: Wikia)

I wrote earlier that "marketing with meaning" has the ability to "activate" customers. An effective way to activate customers is by activating the dormant social networks they inhabit (often without even knowing it). While social networking has visualized the so-called six degrees of separation, all business transactions have a social component and can be seen as expressions of the underlying social micro-universes, the "worlds within worlds," in which--shifting time and place--individuals travel and interact. As marketers face the daunting challenge of connecting with fragmented audiences that are increasingly split into billions of social atoms populating myriad micro networks, activating dormant social networks is their foremost task.

KLM's Africa and China clubs, launched in 2007 and 2006 respectively, provide an interesting case study. The Dutch airline offers business customers the opportunity to meet fellow travelers who do business with or in either of these two regions, before take-off or during the flight, online and in person. KLM plays the role of the matchmaker and adds value to the otherwise somewhat value-free hours frequent travelers spend at airport lounges. It is the principle of the social networking site Dopplr, applied to the exclusive crowd of business or first-class travelers: connecting travelers who share the same connections. KLM prefilters the club members so that travelers who sign up for the exclusive network are warranted a certain quality of contacts.

The clubs are a win-win-win: trade groups and business offices from the travel regions are provided with a highly targeted way to advertise their services; travelers benefit from a true value-add and a richer travel experience; and, lastly, the clubs bolster KLM's reputation as an airline that cares about its customers. Of course, these networks already exist, they're just dormant. KLM does not make immediate revenue but it generates "social wealth" as long-term equity.

The KLM clubs exhibit all the characteristics of "meaningful marketing" (see chart below):

• Social: The clubs help people connect.


• Personal: The clubs are relevant for the people they serve, and the service is exclusive and highly personalized.


• Storytelling: The clubs make sense of disparate information, perspectives, and events. They facilitate crossing paths by creating--quite literally--a common goal and therefore a joint narrative.


• Disruptive: The clubs disrupt the usual travel routine; they make it comfortable for business travelers to leave their comfort zone and go off the beaten path to meet new people.


• Responsible: The clubs generate social capital by bringing together business people in pursuit of related goals. The KLM Club Africa, in particular, has helped African entrepreneurs to get in front of influential business executives (investors) conducting business in Africa.

The tizzy created by Facebook's page design changes point out some valuable lessons that we should keep in mind as we head more into a SaaS and cloud-based world.

1. Choosing when to change

There are many differences between how shrink-wrapped applications and software as a service (SaaS) work, but one of them is that customers of shrink-wrapped software choose when, and if, they upgrade. They kick the tires to look around at the changes beforehand, download a trial, poll other users, wait for the .1 rev and the kinks to get worked out.

With SaaS, changes get pushed out without those wait-and-see possibilities. Facebook is discovering that this can lead to unpleasant surprises for customers, who have no say in whether they want to adopt them right then.

When something is embedded into the flow of everyday life in the way that Facebook (or Twitter) is for many people, any change, whether it's ultimately better or worse, is going to cause complaint. People get used to patterns of doing things. Even when you change their work-arounds, sometimes they don't like it.

2. Conversation is a double-edged sword

Having said that, on the flip side, SaaS is more responsive when there is feedback. It can turn around updates based on input more quickly, and obviously more universally. But do this too often and you whiplash your users with multiple changes that set and unset particular features, preferences, design decisions, and so on.

Facebook is going to have to tread carefully in the coming weeks as it decides how to respond to the considerable complaining about the new layout. Facebook is quite different from most "applications" because there are such a variety of ways that people use it, and the experiences that each user has are going to be quite different. (All the more so because of the openness of the platform.) That makes it hard to design for, and all the more important to check one's assumptions at the door about what people want to do with it, and what features will support those needs.

On a more macro scale, Facebook (and SaaS in general) are emblematic of the substantially two-way relationship that now exists between companies and customers. The real-time nature of the conversation--and with something like Facebook, the ability of customers to vocalize and organize--is a precursor to what the majority of companies will have to deal with in the future. As the "Cluetrain Manifesto" presciently argued, all markets are going to be more conversational in the future.

3. Don't design by committee

But that doesn't mean everything should turn into a design by (user) committee, or tyranny of the majority. That's not how excellent products get made. There has to be a balance between responding to feedback, and recognizing when you see possibilities that your users, for the time being, do not. Your job as a designer and a company is to create capabilities on their behalf, and not just implement exactly what users ask for. (Not in a high-handed way; users' needs and best interests should always be the focus.)

(It so happens that we had a very lively e-mail thread running around the frog offices about this exact topic recently. Do you stick to the vision or respond to feedback by changing the vision? The answer: "It depends." Not very satisfactory perhaps, but unfortunately basically true. There are well-known examples of hits and flops based on both approaches.)

Watch what happens...

We should all be watching very carefully how Facebook acts in the coming weeks as it responds to the conversation. It will undoubtedly provide lessons for the future for all of us.

(Credit: BLog92y)

Social media strategist Shannon Paul, who works with the NHL Detroit Red Wings, said many good things on a SXSW panel this Sunday, but the one thing that stuck with me most was her assertion that brands need to become more “human” in order to connect with their audiences. She wasn’t referring to personifying a brand through a human face (be it an average employee or a charismatic leader), but rather to exhibiting ‘branded’ behavior that is truly human. What does that mean? What is the most human trait of all human traits? Shannon Paul posits it’s vulnerability.

I find that idea compelling. Vulnerability encompasses anxiety, volatility, and inconsistency, and it also implies the ability to make mistakes (and admit them). Or, to encapsulate all of the above: it means having a distinct weakness. Chances are that business strategists will advise you to hide, compensate for, or mitigate this weakness (while exploiting that of others), but that kind of thinking no longer holds relevance for the social web. If you want to be a social brand, you have to be a vulnerable brand. The possibility of a “slip of the tongue” and the exposure to possible brand attacks increase exponentially when brands let their guard down on the web – but that’s valuable. No one wants to be friends with Mr. Perfect. Vulnerability makes you likable. It is the prerequisite for empathy, and if understood as an asset and not a deficit, it can flourish under the magnifying glass of social media transparency. Examples? Zappos’ decision to let every employee blog; Comcast’s having ordinary company engineers go on message boards to answer customer questions; and of course every brand that is using Twitter for what it is best suited for – ostentatiously public personal conversations. Remember: Personality – brand personality – comes from being personal.

Is your brand vulnerable? Does it have a distinct weakness, an Achilles' heel? Take it and turn into an asset by making everyone aware of it. Expose yourself and you will get exposure. On the web as in real life your most recognized weakness is your biggest strength.

The question which brands are the best at “socializing” with their audiences is often asked, but rarely answered. Now Vitrue, a social media advertising solutions company, has attempted to capture a snapshot by releasing a Top Social Brands of 2008 list. The ranking is based on the Social Media Index (SMI), a measurement system the company launched to help track brands' share of voice on the social web. The Top 100, which range from the iPhone, CNN, and Disney at the top of the list, to Jet Blue, Puma, and Sears at the bottom of the list, were drawn from Vitrue's daily analysis of online conversations about more than 2,000 popular brands in blogs, social networks, microblogging services, and photo and video-sharing sites.

Strikingly missing is the Obama brand, arguably the most social brand in 2008, and there are other shortcomings. Vitrue’s press release states that some powerhouse technology brands were omitted from the list “as they provide the backbone of many social networks. While Google, Facebook and others are top brands, The Vitrue 100 is measuring companies that are using social technology, not those who are the technology.” You could argue, of course, that this distinction is rather arbitrary as the lines between technology and content are somewhat blurry and will continue to dissolve. Just take the iPhone as an example – it provides social technology, per Vitrue’s definition, but also uses it to socialize its own brand. The same applies to Amazon, CNN, the New York Times, and all other brands that constitute either latent or manifest social networks online.

Another pitfall is the narrow focus on volume and the lack of analysis as to what makes brands score higher. A high score may not always be attributed to an effective social web strategy. Brands may simply top the list because their sales have been successful and they are therefore much talked about (or, conversely, everyone’s talking about them because their sales are tanking). There is no metric for measuring if the conversations were largely positive, negative, or highly contested. As one commenter on Vitrue's blog poignantly remarks: “Looking at brands as something capturing share of voice online, without understanding the drivers of said volume, is kind of like looking at shadows on the cave wall and mistaking them for the truth?”

In any case, Vitrue’s list has started an interesting conversation and helped socialize its own brand.

Press Release: Announcing The Vitrue 100

Advertising Age: The Most Social Brands of 2008

Nice clip from the German ad agency Scholz & Friends. Nothing new but good ammunition for convincing the few who have yet to see the light...

Via Federated Media

In addition to his already pretty comprehensive list of social media marketing programs, Peter Kim, the "de facto curator of social media" as Steve Rubel calls him, has now launched a wiki. Social media power to document social media power, so to speak. Great effort, check it out:

http://wiki.beingpeterkim.com/

These days, you don't need to launch portal sites that vie for new audiences. You're better served leveraging existing applications to provide new functionality for venues that already attract a fair share of eyeballs or that even cultivate their own communities.

Internet activist Lawrence Lessig points out a feature of Apture, a rich media content compilation platform, that promotes government transparency by allowing bloggers and other publishers to embed links to rich media background info on politicians and their records (i.e., key moments of testimony in videos, historical source materials, government documents, and even bills and resolutions).

Apture announced Monday that it will partner with The Washington Post to promote this application, offering readers "a highly engaging way to view political data, congressional records, video, news and abstracts within a single Washingtonpost.com browser experience."

The Apture technology will integrate with Washingtonpost.com's congressional votes database to provide up-to-date information on the latest House and Senate votes. In addition, Washingtonpost.com will make this data and content available to any blog or Web site that uses the Apture publishing platform.

This partnership marks a larger trend: no longer concerned about "leakage" (visitors exiting a site following external links), news outlets are opening their portals to dynamically aggregated third-party content. Another prominent example is The New York Times and its recent beta-launch of Times Extra. The service aggregates news headlines from other publications (including blogs) and attaches them to relevant articles on The New York Times home page.

Denise Warren, chief advertising officer of the New York Times Media Group, said in a statement: "We are addressing a common desire for comprehensiveness, enabling people to find all the news and information they could want from all sorts of sources. Initiatives such as Times Extra and our other new products allow us to do an even better job of responding to our audiences' demands for interactivity, community, multimedia and news and information on an increasingly wide range of topics."

Both The Washington Post and The New York Times get the new "openness" of news media: they are gradually morphing into software companies, serving as curators of digital content from both inside and outside of their own newsrooms.