Matter/Anti-Matter

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.

By Nick de la Mare

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.

I'm still processing the many great insights from the next09 conference in Hamburg, Germany, one of Europe's leading digital-creative-marketing forums. This year's theme was "Share Economy," and the 1,300 attendees consisted of European VCs and angel investors, Web 2.0 entrepreneurs, media, creative agencies, and executives from German corporations (from BMW and Deutsche Bank to Deutsche Telekom).

 

Jeff Jarvis: "The Great Restructuring"

The first day, the keynote day, was a little disappointing, maybe because expectations were so high. Jeff Jarvis warmed up the crowd with his trademark "What Would Google Do?" PowerPoint deck. While a terrific thinker and speaker, for some reason he and the audience did not really click although he presented a lot of thought-provoking content. The rather stiff response may be attributed to the fact that the attendees were either too familiar with what they heard or felt slightly overwhelmed. Or maybe they were indeed excited--but too German to show it…

Umair Haque, who followed Jarvis, faced an even tougher, albeit partly self-inflicted challenge: explaining the new paradigm of "Constructive Capitalism" in 45 minutes. That's like asking Marx to walk you through his Communist Manifesto in Twitter. It didn't help, certainly, that Haque used the much gushed-about Prezi presentation software; all the zooming in and out was dizzying and, if anything, exposed the lack of stringency in his outline.

Fortunately, Haque had an opportunity to correct this first impression and reiterate some of his thoughts on a panel with Jarvis a day later, which turned out to be a much more suitable format for his ideas on the transformation of capitalism. He also took the occasion to rebut the attacks of Andrew Keen ("The Cult of the Amateur"), who, on the opening day, had chastised Haque (and all the other thinkers he considers to be under the dark influence of Silicon Valley) for propagating rampant free market liberalism and a dangerous new radical individualism in the guise of the social, consumer-empowered share economy that the conference was celebrating. Keen poignantly remarked that Twitter was getting us back into the 18th century, rather than liberating us from institutional hierarchies. He said it would reinforce an old power structure and an all too human division of roles, between those who follow and those followed.

 Andrew Keen: "Digital Vertigo"

Jeff Jarvis & Umair Haque: "When Money Talks"

Keen accused Haque et al of naivete and insisted that Google and the other Web juggernauts were not "leveling the playing field" through link love (by sharing the scarcest resource on the web: attention), as Haque had claimed, but were rather using it to expand their pursuit of world dominance. In Keen's eyes, Google's openness is nothing but a suave mechanism to foment a monopoly in the attention markets. In the same vein, a party pooper in the audience asked Jarvis: "If free sharing is the future of business, why doesn't Google share its page rank algorithm?" Jarvis' response wasn't all too convincing, "concerns over malicious abuse of the data." So much for radical transparency and trust as overriding principles in the share economy.

To Google's (and Jarvis') defense, one could counter with Haque's sharp line: "When we're all hyper-connected, the cost of evil goes up." True. Moreover, Google does provide real value as it has created a win-win-win business model (advertisers, consumers, Google) that is vastly different from the toxic chunk Haque bemoaned in the nonsustainable and ultimately value-free products that toppled capitalism as we knew it: the Hummer, fast food, derivatives, and so on. And yet, if advertising is the admission that you have a mediocre product, and that it is in fact an expression of "failure," as Jarvis put it, then it is hard to reconcile this view with the fact that advertising remains the main revenue stream in the very Google economy from which Jarvis wants us all to learn.

Despite the flaws in Jarvis' and Haque's thinking, however, I am eager to defend them. It's easy to deconstruct constructive visions of the future as ill-informed descriptions of present realities but it is a much bigger task to actually come up with a positive vision. Keen, the rebel with a good cause, does nothing but throwing a bomb, which he readily admits, but he falls short of offering an alternative to the frameworks Jarvis and Haque and others provide in response to the fundamental crisis of capitalism.

Google wouldn't care about any of this intellectual arm-wrestling all that much. It is fully consumed with doing what it does best: firing out beta-products and services, successfully failing by failing rapidly. One mistake that it made, however, may arguably have lasting implications. It didn't buy Twitter. And so the question, it seems, is no longer "What would Google do?" but "What will Twitter do?" Does Twitter mark the beginning of the end of the Google economy?

Jyri Engeström, who sold Twitter-competitor Jaiku to Google and is now a Google employee, might have a clue. On a panel with social media guru Chris Messina he offered some good insights on microblogging trends on the Web and defended the new Google Profiles ("you have to opt in"). Messina seconded him and brought up another interesting point that established the context for upcoming business models in the Twitter economy: the "glocalization" of Twitter. He described how Twitter is failing to extend the real-time conversation to the whole world, simply because of time zone differences: one part of the world is always sleeping when you're tweeting. The instant social Web conversation is therefore asynchronous, after all, and it is an interesting thought experiment to envision services that bridge the time zone gap and deliver tweets when the recipients can actually receive them (keeping them on the top of the feed), almost like an echo across time zones. What if the real value of real-time was the delivery of tweets when it really mattered?

The whole time dimension of Twitter is uncharted but valuable territory, and there are other add-ins, integrators, and localization services that will emerge in this vibrant new ecosystem. The conversation on the social Web is as rich as the human communication (if not richer), and it is just beginning to fully emerge.

What everyone agreed on at next09 is that the next big frontier on the Web (and in the Twitter economy) is how businesses talk to their customers. We are witnessing an irrevocable convergence of players. Conversational services such as Twitter and Yammer are moving into the social networking space and are acquiring the credentials of social networks and collaboration tools, while traditional social networking sites such as XING, LinkedIn, or Facebook are embedding conversational features to catch up with the irresistible pull of real-time communication.

For both groups, and, in fact, for all other companies, Umair Haque's advice is golden: Take one of the big ideals (democracy, peace, transparency, equality, and so on) and apply it to an ailing industry that is in need of transformation or at least some serious disruption: health care, finance, news, energy, government--you name it. Combine that with the principles of the Twitter economy--transparency, instantification, collaboration, and free sharing--and you have a winner.

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

It's a few weeks old but still worth pointing out as another recent example of "Disruptive Realism" - a clever twist on the slogan of the New York Times: 'All the news we hope to print:'

Good News! from Blake Whitman on Vimeo.

From the press release (linked to the Prankster group The Yes Men):

"Early this morning, commuters nationwide were delighted to find out that while they were sleeping, the wars in Iraq and Afghanistan had come to an end. If, that is, they happened to read a "special edition" of today's New York Times. In an elaborate operation six months in the planning, 1.2 million papers were printed at six different presses and driven to prearranged pickup locations, where thousands of volunteers stood ready to pass them out on the street. Articles in the paper announce dozens of new initiatives including the establishment of national health care, the abolition of corporate lobbying, a maximum wage for C.E.O.s, and, of course, the end of the war. The paper, an exact replica of The New York Times, includes International, National, New York, and Business sections, as well as editorials, corrections, and a number of advertisements, including a recall notice for all cars that run on gasoline."

[via the Gothamist]

In May this year, frog design founder Hartmut Esslinger spoke at the German Trend Day in Hamburg. The Trend Day is an influential annual forum that gathers thought leaders from business, media, and academia to discuss emerging social and cultural trends. This year's theme was "Identity Management," and other speakers besides Hartmut included Richard Florida, Danny Choo, and David Bosshart.

The organizers have synthesized the research, interviews, and lectures of the two-day symposium into a manifesto that is worth reading:

http://www.slideshare.net/TrendBuero/identity-management-manifesto-presentation

The paper argues that today's "attention economy" will be succeeded by a "recognition economy," in which opportunities for design will continue to increase: "Compulsory self-responsibility will force consumers to optimize their self. This self will call for deliberate decisions and new orientation frames. Identity will become a management assignment. Recognition will become the new key quantity." The result is what the authors call "Egonomics - an economy geared to the own self." Egonomics comprises of the following pillars: Body: Healthstyle; Security: Authentification; Relationships: Connectivity; Recognition: Reputation; Self-actualization: Creativity.

I work for frog design, and frequently at conferences and parties, people ask me about the name: What does it mean? Where does it come from? While some suspect it symbolizes the agility of that animal species, the truth is that our German founder, Hartmut Esslinger, coined it as an acronym for "federal republic of germany" -- the lower case spelling of "frog" referencing the egalitarian tradition of Marxist semantics, back then in the 60s when frog was born.

Sam Birger, the founder of Nomenon, a renowned naming firm, whom I met in NY last week, thought it was an ok name because it'd start a conversation by offering a good dose of ambiguity. He and I talked about the value of brand names, and Sam cited Hulu, the IPTV site, as a good example of an effective name ("distinct but universal") that helped them establish a premium brand in record time.

In today's New York Times, I came across a whole new twist in the naming game that may further validate or jeopardize all fidem nominem, depending on your viewpoint: pseudo-credibility. At first glance, Thornberg & Forester may sound like "a stodgy, corporate Wall Street firm that's been around for a 100 years," the Times writes. But, as it turns out, it's the concocted name of a one year-old Manhattan design and communications group, none of which three co-founders possesses a last name of Thornberg or Forester. "We take our work seriously, but we don't take ourselves seriously," says Elizabeth Kiehner, one of the founders. Hence the fake name that promises one thing and delivers another, in almost a situationist way of manipulating the public perception.

Not a bad idea, as the Times reports. The small, local firm has been referred to in print as a "worldwide agency," and the article quotes Justin Meredith, another one of the founders: "We get calls from banks asking for Mr. Forester. We say, 'He's not here right now.'" On top of all that and most importantly, the naming choice got them into the Sunday New York Times.

What can we learn from that? In the past, we knew that, simply put, branding was giving your offering a unique name and a meaningful narrative. Nowadays, you must meta-tag your brand if you want to stand out from the crowd. You must generate attention by distraction. Your brand story is the story of your brand.

Designer Mike Rohde attended several panels at SXSW Interactive last week and created 34 pages of sketchnotes for them in real-time, captured in a Moleskine sketchbook:

http://www.flickr.com/photos/rohdesign/sets/72157604109069527/

And here's his post about them with a little more detail:

http://www.rohdesign.com/weblog/archives/002768.html

What I like about this unique format of panel transcripts is that it shows how rich those on-stage conversations actually were. Sometimes you find yourself in the audience, passive and wondering if the discussion on-stage is really all that meaningful to you. Well, it is -- as long as you engage and translate what's being said into another creative act.

Or as someone pointed out on one of last year's SXSW panels: "I write it down not to remember it later. I write it down to remember it now."

Steve Rubel wonders if "the Interruption Economy sacks prosperity:" "Conventional wisdom says that technology -- and nowadays the Internet -- will always continue to advance and bring with it productivity gains and prosperity. That's certainly been the case for years. However, historically there are pauses. After the benefits of the Industrial Revolution were fully realized it took awhile for the next big era to begin. I wonder if we're about to enter a similar lull now that the Information Age is arguably almost 30 years old." Rubel demands "we need new tools for managing interruptions -- and they may not be technological, but social. Our prosperity may depend on it."

Rubel is not the only one who expresses concern about the World Wide Web hampering productivity. He refers to Mark Cuban, who has made a similar case, and Idris Moote, who points at research showing that "interruptions from e-mail, cell phones, instant messaging, and blogs take up nearly 30% of each day, which -- on an annualized basis -- represents a loss of 28 billion hours for the entire US workforce." Are we on the way to becoming the United States of ADD? Are we a nation of knowledge workers with very little but heavily dispersed knowledge and only a bit of attention capital left? Will there be an information backlash, as a result of a new digital divide "between geeks and those who are blissfully and decidedly low tech" (Rubel)?

There are some serious signs indicating that the new generation of digital citizens, the twenty-somethings who have grown up with the Internet and are accustomed to ubiquitous information, may already be one step ahead. Gone are the days of 'net pour le net.' Although the number of new blogs (more than 120,000 new weblogs are created each day) is staggering (as is the number of deserted blogs), blogging has not become a social norm -- it remains the passion (or addiction) of a few. Furthermore, the average time users spend on social networking sites is on the decline, and the once explosive growth of social networks has stagnated. In fact, a certain Facebook fatigue has set in, and users (including, reportedly, Bill Gates) are leaving the site, deactivating their accounts (if they can). In its heyday, social networking was an activity, now it may finally be turning into what at least Facebook, according to its mission statement, has always claimed to be: a utility. (Of course, the ironic truth is that Facebook would never have experienced such explosive growth if its claim had been true).

The new digerati have brokered a new online/offline balance as they find their "first life" in the real world unexpectedly attractive: face time trumps Facebook. They do not respond to emails on the weekend, as they are hiking, traveling, or engaging in some world changing social endeavor -- from running an AIDS marathon to volunteering for the Obama campaign to founding their own non-profit. They share the sensation that one's fortune is not made in front of a screen and that "quality of life" is the prerequisite of a good life. The new digerati want to be connected but only for a reason. They build their own social networks and take advantage of the communication tools at hand -- but they have matured their use of them. They scoff at those who spend their time chained to the PC, while they themselves enjoy utmost mobility. Applications that aim to succeed with the new digerati need to provide utilitarian value for social users on the go: Take, for example GyPSii, a new social networking platform designed specifically for the mobile phone. It connects people, places, content, and events, but it is no longer a destination.