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.

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

I was interviewed by BrandWeek the other day for a story on the recent hype around “Design Thinking” in marketing. They were looking for a skeptic and found me. First of all, it is worth noting that the term “design thinking” is of course a clever marketing buzzword. It’s ironic that marketers themselves embrace it as the next big thing as it doesn’t create a new marketing paradigm so much as it proves that marketers are prone to being persuaded by their very own tricks. “Design Thinking” has become a brand, and brands are all the more powerful when they present themselves as memes.

But what does “design thinking” actually mean? Let’s rely on the wisdom of crowds and see how Wikipedia defines it: “Design thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result.” Wow. Isn’t that what every single task in business is about? Or, for that matter, every single action in life? The rest of the paragraph adds some more specifics: “Unlike analytical thinking, design thinking is a creative process based around the ‘building up’ of ideas. There are no judgments in design thinking. This eliminates the fear of failure and encourages maximum input and participation. Outside the box thinking is encouraged in this process since this can often lead to creative solutions.” Hmm…ok.

Some Design Thinkers herald Design Thinking as the ultimate problem solver for business, social, and political challenges. The current financial meltdown? A lack of design thinking. Our health care sytem? Design Thinking can fix it. The HIV crisis in Africa? Make sure to apply Design Thinking. Granted, design is a fundamental responsibility for organizations in all sectors of our society, and it is absolutely critical in addressing problems of all kinds. But the quest that everybody should think like a designer is not the non plus ultra formula. Or, as Raymond Loewy, the famous industrial designer, pointed out wryly: “Design is too important to be left to designers.”

Today’s marketers need to be experts in what Design Thinkers may define as “a creative process based around the ‘building up’ of ideas.” But the trend towards more participatory product development, consumer engagement, crowdsourcing, etc. goes far beyond just a trendy label – it marks a significant shift in consumer culture and in the way we do business. Good marketers know that and are masters in outside-the-box thinking by definition. In this respect, marketing was design thinking long before Design Thinking was even thought of. As a marketer, you need an in-depth understanding of your audiences, their needs, habits, and desires; you need to develop a storyline and a conversation that engages them; and then you need to establish the channels of interaction. Ultimately, it’s all about desiging interactions between brands and consumers. It has become much more complicated in a highly fragmented, digitized, and fast-paced world of social media, but that’s what it’s still about. Yes, as a marketer you benefit from a holistic, cross-disciplinary view. And you better be creative. The big idea is still big, no matter what.

For marketing is an art, not a science. It is a multi-dimensional, dialogic (or even multi-logic), multi-lateral activity that, at its best, encompasses all touch points with external audiences across all business functions. Marketing is the big integrator, a diplomat within the organiziation but the partisan friend of customers. Marketing needs to innovate or it is just manufacturing. It needs to put customers front and center and give them a say. They hold the truth about your brand so let them design it. You might call this Design Thinking. I call it Marketing 101.

BlackBerry squished by a car

(Credit: Adam Richardson)

Sorry for the lack of posts recently, I've been very busy with a lot of traveling that hasn't left many brain cells free to do blogging. Thanks to Tim for holding down the fort in my absence. Now, on to business...

Recently my BlackBerry got run over by a car. You can see the results here, it's not pretty. Actually, I think it held up pretty well considering it got hit on a busy street. It's rather a mystery how it got there, as I hadn't been anywhere near where it was found.

A kindly woman named Shawna saw it, stopped to pick it up, and had the savvy to take out the SIM card, put the card in her own phone, and see if any text messages had been left indicating the owner. "It's what I'd hope somebody would do for me," she explained, thus boosting my faith in humanity. As luck would have it, I'd sent a text to it in just such an eventuality. My hat is off to Shawna for her effort and for thinking of that solution. Only in Silicon Valley!

Work was able to get me a new one within a couple of days so my withdrawal symptoms were minimized. But here's what I found interesting about this process: Once I got the new one and activated it, everything came back -- and I mean just about everything. Of course the email, texts, call logs, calendar and so on, those are to be expected. But what surprised me was that it also restored my theme, the location of icons on the main screen, ringtones and profile settings. In other words, it restored all the things that you painstakingly customize over time and which take almost equally long to get back how you liked them. It instantly created a doppelganger of my old phone as though nothing had ever happened. The only item that didn't get restored for some reason was my text shortcuts, which is a bit of a pain.

The iPhone may be sexier, but to my knowledge it couldn't pull of a trick like this. Kudo's to RIM's system, this turned a potentially painful event into one that was pleasantly surprising. Not that I will be trying to repeat it again any time soon.

This last week at frog design we hosted a group of almost 40 global executive MBA's from IESE, the renowned business school in Barcelona. It was an intensive and stimulating day looking at issues of innovation - what methods are successful, what mindsets are required, and how do you bring insights from customers into the picture?

The participants were from all over the world, and many of them were working in countries other than where they grew up. Their industries ran the gamut from tech and software to oil and gas and mining, with everything in between, so it made for engaging and wide-ranging discussion.

One of the things that became clear was that companies of all sizes and types are struggling with many of the same issues around how to become more innovative and customer focused, and facing the same challenges of cultural change that are required to make address these issues most effectively. They are certainly difficult things to tackle - many a company can "luck out" with an innovation making it through the corporate bureaucracy, but it takes a cultural attitudinal shift to make this happen repeatedly if you are more used to step-wise product introductions.

Indeed, a Deloitte study from a couple of years ago revealed that executives resort to "back door" methods to foster innovations through the corporate pipeline almost 50% of the time. This type of "subterfuge" is necessary in a calcified environment, but by the same token there are often very logical reasons why that narrowing of corporate perspective has occurred, which cannot be rolled back overnight.

Thanks to IESE for collaborating with us, and thanks to my colleagues Ben Dempster (who ran and facilitated the event), Phillip Vasquez and Catherine Sun (who co-facilitated and helped with preparation).

Everyone wants to be a designer. That's the value proposition of JuJups.com, a new online service claiming it will allow consumers to design their own personalized and customized 3D content. 3D printing, as the underlying technology is called, is a form of rapid prototyping that builds up three-dimensional objects by "printing" successive layers of materials (polymer, cells, sugar, etc.) on top of each other.

(Credit: George Hart)

As a recent Wired story points out, 3D-printing technology has been around for a while, mostly used by professional design firms and design-intensive businesses such as automakers, handset makers, and aerospace companies. Recent advancements have enabled the technology to "print out" fully functional finished products, leading to a remarkable boom in equipment sales: according to market research firm Wohlers Associates, 8,000 machines, or 36 percent of the industry's two-decade worldwide sales total of 22,000, have been sold in the past two years alone.

Multi-material 3D printers, capable of producing 3D parts and assemblies made from different materials in a single build, are hitting the market, and companies like Freedom of Creation (FOC) are paving the way for making rapid manufacturing technologies accessible for consumers.

In addition, a steady drop in the price of printers has spawned many new businesses trying to push 3D printing into the consumer market: 3D Outlook Corporation is selling 3D models of mountains and other topographic 3D maps for prices below $100, catering to hikers, resorts, and real estate firms.

Companies such as Fabjectory and FigurePrints produce 3D models of virtual characters (from virtual worlds or games). SolidWorks, a U.S. unit of Dassault Systemes SA, a French maker of design software, has launched Cosmic Modelz, a site that lets kids use 3D printing technology to create their own customized action-figures. And now JuJups wants to step aggressively into the emerging market with a Web-based 3D-printing service for everyone.

The JuJups site, however, currently only offers customized designs of photo frames, which it then prints out on 3D color printing machines and ships to customers. Although the company says it plans to expand its printing capacity to support the growing demand for customized objects including giftware, memorabilia, toys, etc., it is a little odd that it put out a bold announcement (for immediate release) of an offering that is apparently not quite ready for prime time at this point.

The JuJups example shows that there's still a gap between hype and reality when it comes to 3D printing for consumers. Trendwatching, and other trend-spotting media (Times Online, Post-Gazette, Make) have long propagated "MIY" (make it yourself) culture as a key trend.

Terry Wohlers, president of Wohlers Associates, says 3D printing is the fastest-growing part of the rapid prototyping industry. Wired believes it is witnessing a design revolution. Earlier this year, Glen Emerson Morris, a technology consultant, predicted in the Advertising and Marketing Review that 3D printing (or desktop manufacturing, as he calls it) would hit the consumer market big time: "It will likely have an impact on society, politics, and business as great or greater than the Internet. So, fasten your seatbelts. This is going to be a really wild ride."

Morris argued that "one of the reasons consumer use of home 3D printing, better described as desktop manufacturing, is likely to take off quickly is that there is very little manufacturing being done in America anymore. As a result, there will be very little pressure by manufacturing special interests against it."

And yet, we're still sitting here with our seatbelts fastened--but the wild ride has yet to occur. Aside from the above-mentioned niche sites, the big mainstream push from Generation C (C = content) to Generation 3D has been lost somewhere along the way. When will big retailers start to add 3D printing features to their sites? Where are the powerful brands or smart start-ups embracing the model? When will see the YouTube of 3D printing?

(Credit: Yodel Anecdotal )

The Putting People First blog by Experientia has pointed me toward the excellent essay "The Long Wow" by Adaptive Path's Brandon Schauer. Schauer outlines a vision of creating lasting customer loyalty and brand value that runs counter to the fixation on quick wins and instant gratification, which many companies, under the pressure of shorter product life cycles and CMO tenures, seem to pursue these days. He defines "The Long Wow" as "a means to achieving long-term customer loyalty through systematically impressing your customers again and again."

This goes far beyond adding new features for features' sake, implementing loyalty programs such as membership awards, or simply measuring loyalty in economic terms. He writes, "Like Christmas, customer loyalty can't be bought or bottled. It's not something you can capture in an ID card. Loyalty is a sense that grows within people based on the series of notable interactions they have with products, services, and companies." As he describes them, "Notably great experiences are punctuated by a moment of 'wow,' when the product or service delights, anticipates the needs of, or pleasantly surprises a customer. For Schauer, "OXO's Good Grips Angled Measuring Cup triggers such a moment of wow. A set of angled markings on the OXO cup lets you quickly measure liquids for recipes without having to stop cooking and bend over. Suddenly a little part of your life is easier, because OXO thought carefully about the way you cook. This delightful surprise resonates because it feels tailored to your needs."

It is interesting to assume a causal relationship between this kind of lasting value and the time it takes to create it. What if the immense pressure to innovate quickly or to rush to market comes at the expense of quality and sustainability? What if the "Long Wow" presupposes a long time-to-market or, in other words, "slow innovation?" Innovation and creativity expert Derek Cheshire has answers to these questions and--obviously inspired by the Slow Food movement--suggests a slow approach to innovation. In a recent manifesto for Change This, he heralds the goal of creating "an innovative company whose structure and culture are conducive to long-term growth and sustainability." His argument is convincing, "In the world of slow, there will be less waste as there's time to be more resourceful and to use the materials already available."

Essentially, this is a question of how companies manage their time. Both the concepts of "Long Wow" and "Slow Innovation" ask for more time: more time to listen to customers, more time to build a meaningful relationship with them, and more time for the innovator to develop products and services that are built to last. But what about the customers? Will they have the time to wait for this kind of high-quality, sustainable innovation?