Tuesday, October 18, 2016

i was seriously thinking about hidin' the receiver

In 1894 the president of the Royal Society - the UK's national academy of science - Lord Kelvin, confidently predicted that radio had 'no future'.

The first radio factory was opened 5 years later, and within 8 years a radio set sat in over 50% of US homes.

The time taken to reach 50% of homes is generally accepted as a reasonable way to measure this kind of impact.

Then the transistor was invented in 1947, and ushered in the era of much smaller portable radios.

American electronics companies showed little interest in developing this nascent idea of portable music so in stepped a Japanese start-up called Sony.

Sony launched the first transistor radio in 1954 – it’s possibly no coincidence that rock’n’roll and teenage culture blew up very shortly after.

The aforementioned Lord Kelvin was no stranger to grand - but spectacularly wrong - predictions.

He was also certain that nothing heavier-than-air would ever fly and that X-rays were simply an elaborate hoax.

These innovations of the early 20th century – including electricity, electric light, telephony, TV, radio, central heating, cars, aircraft – all had far greater impact on society than digital technologies have had - up to this point.

To use our previous measure, both radio and television were adopted much faster – under 10 years to reach 50% of households - than personal computers or mobile phones; circa 15-17 years respectively.

Other much hyped technologies – smart watches, connected homes, 3D printers, wearable tech – are being adopted even more slowly.

Regardless, it's important to note that the technology itself is not becoming more disruptive – the majority of the poster children of digital disruption have been services built upon the existing web infrastructure – and because of this we confuse diversification with acceleration.

Yes, the impact of digital technology is expanding on just about every front - and will continue to do so slowly - but the occasional reality check is in order.

Digital technology is actually not changing society like never before, nor is the speed of technological change accelerating like never before.

Which is all a shame really, given we are facing a not too distant future of 10billion of us crammed onto a tiny planet without enough food or water.

Meaningful disruption – of the same scale and impact as electricity or the radio in past times – will have to be about infrastructure, hygiene, food production, environment and healthcare. Not Snapchat glasses or smart clothes pegs.

And, if we are honest, that's not happening quickly enough.

Thursday, October 13, 2016

who’s watching?...no-one, apparently

What can you do if you need to convince someone of something, but you don’t have proper evidence?

One simple way is to demonstrate something else to be true and then just pretend it’s the same thing.

In statistics this method is referred to as a ‘semi-attached figure’.

Simply pick a couple of things that sound kind of the same – though they aren’t (this is the important point) – and make a comparison between them to validate your conclusion.

An everyday example would be the number of reports that contrast hours spent TV viewing with internet use - and represent the numbers as though it was the same thing. This fallacy is further compounded by the fact that these activities increasingly occur simultaneously.

Among other examples of this particular ‘bait-and-switch'- now you know it you'll see them everywhere - this one from a Hall & Partners report for the on-demand offer of Aussie TV channel SBS particularly caught our eye.

As Zoe - in our strategy team - duly noted ‘Who’s watching?...No-one, apparently’.

Happy spotting.

Friday, October 07, 2016

car jamming

The latest OzTAM Multi-Screen Report for Q2 of 2016 indicates that television’s reach overall is dropping year on year – Q2 2015 reporting reach at 88.3%, and the current report at 88.1%.

Yes, a whole 0.2%.

More interestingly, Mumbrella’s coverage of the report takes some care to point out that TV viewing among younger audiences is experiencing continuous decline.

Indeed, the ‘hardest hit’ demographic is the ‘advertiser friendly’ 25-39 bracket, which PLUMMETS from 84.2% reach last year to 81.8% this year.

Reporting of this nature like brings to mind the classic ‘Reconstruction of Automobile Destruction’ psychology study by Loftus and Palmer (1974) on response-bias and adds some further credence to the suggestion by some commentators – notably Professor Mark Ritson – that there appears to be a media imbalance towards ‘reporting’ the ‘decline’ of so-called ‘traditional’ media in favour of ‘digital’ despite lack of proper evidence.

Loftus and Palmer’s experiment involved showing groups of participants some films of traffic accidents.

After watching the film they were asked to describe what had happened as if they were eyewitnesses.

Among the questions asked – and the key point of the experiment – was one specific question framed in different ways. Participants were asked to estimate how fast the cars were going when they either 'smashed', 'collided', 'bumped', 'hit' or 'contacted' each other.

In almost every case the participants’ estimation of speed was affected by the verb used.

Participants who were asked the ‘SMASHED’ question thought the cars were going FASTER.

The ‘CONTACTED’ condition reported the lowest speed estimate with the other conditions somewhere in-between.

In short, simply the verb used can influence the answer a person gives (a 'response-bias').

With this in mind one notices a type of response-bias priming all over the aforementioned news piece.

The ‘advertiser friendly’ prefix is curious - and something of an argumentum ad populum - given that it is fairly well established that the over 50’s account for close to half of all consumer spending, though I’m resisting the temptation to go all Bob Hoffman on this one.

(At least the m-word* was absent from the piece, so there’s some progress, I suppose.)

More worthy of some scrutiny is the curious use of the ‘plummeted’ verb to describe a relatively minor blip of less than 2.4%.

Because, in the very next breath, tablet and smartphone penetration are described as remaining ‘stable’ year-on-year, growing at 2% to 49% and 81% respectively.

So a 2.4% decline in TV penetration among under 40’s is plummeting, while 2% growth in smartphone/tablet penetration is ‘stable’.

Nicely done, response bias priming.




*snake people

Saturday, May 28, 2016

never mind the bull elks, here's the ex publishers

Bull Elks face, what economists call, a collective action problem.

Over time the genes for bigger antlers have prevailed because larger antlers make an individual bull more likely to win in a fight with a rival bull.

Bulls that win more fights have greater status in the herd, and access to more lady elk action etc, so there’s significant benefit on an individual level.

However, large antlers force on their bearers some less than optimal compromises.

Getting about in the elks natural habitat - dense wooded areas – is hampered by giant antler-age, and therefore increases the risk killed and eaten by predators such as wolves.

As a group, elks would be much better off if each bull's antlers were much smaller, bulls with smaller antlers would be better able to escape predators.

But as long as there are some bulls with the big antlers the less well endowed will always come off worse in battles, and therefore less likely to pass the genes for those smaller antlers into the next generation.

The individual payoff on larger antlers is thus substantially larger than the collective payoff.

The collective action problem (on behalf of bull elk genes) is that even though it would be better for all bull elk if everyone’s antlers were smaller, it’s not in any individual bull's interest.

Any trait that emerges because it helps individuals compete in battles against members of the same species runs the risk of resulting in a handicap for the species as a whole.

Online advertising.

While publishers at one point may have shared common interests with advertisers - reaching readers -each also had conflicting interests, principally around how each made a buck.

Enter the ad networks with the promise of identifying and tracking prospective customers on behalf of advertisers, thus devolving the publisher from their part of the conundrum.

This created a wedge - ad networks are not interested in the needs of readers, publishers become distanced from the needs of advertisers - and before you know it we’re in the whole mess of fraud and goodness knows what else.

Meanwhile, the advertisers who really only want to efficiently reach punters, start scratching their heads and looking for better online advertising options.

Enter stage left, Facebook, Google, Apple et al and it's out with the adtech layer and integrate all the quality publishers into their platforms where the ad-blockers don’t reach.

Both Google and Facebook have for a long time been media owners - both made good money from advertising - but now they are starting to look like the whole game and a somewhat simpler one for online advertisers to navigate.

Facebook to build the brand, Google to get it in their hands.

For a time, the individual payoff for online publishers on adtech antlers was large, now the collective payoff is more like being stuck in the woods with a wolf.

Never mind the bull elks, here's the ex publishers.

Friday, April 29, 2016

can brands really be altruistic?

Philosophy defines altruism in different ways, however most definitions will generally revolve around describing altruistic behaviours as those that benefit others rather than oneself.

The term altruism (French, altruisme) was coined by the 19th century philosopher - incidentally, also the founder of the discipline we now know as sociology - Auguste Comte.

He described altruism as our ‘moral obligation to renounce self-interest and live for others’

Aside from ethics, altruism in biology similarly describes a range of behaviors that may be performed by animals, which benefit others while seemingly to their own disadvantage.

We say ‘seemingly’ as there is no moral lens that can be applied.

For instance, by behaving altruistically, an organism may reduce it’s own chances of survival, or the number of offspring it is likely to produce itself, but give a boost to the likelihood that other organisms that share its genes may survive and produce offspring.

It doesn’t make sense to share food with just anybody, it is more sensible to share with your relatives – they are genetically similar.

The costs and benefits animal altruism in the biological sphere are measured in terms of the resulting reproductive fitness, or expected number of genetic descendants.

It appears then, that the biological notion of altruism is somewhat different to the ethical concept.

For humans, an act would only be called 'altruistic' if it was done with the conscious moral intention of helping another, but in the biological sense there is no such requirement.

So, which definition is appropriate when talking of brand altruism?

In 1973 the Russian biologist Theodosius Dobzhansky famously wrote ‘Nothing in Biology Makes Sense Except in the Light of Evolution’.

It could also be noted that nothing in brand behaviour makes sense except in the light of evolution.

Brands, like organisms, have two principle concerns.

Survival and reproductive fitness.

Survival should be a self-evident notion. In terms of reproduction we would look at salience and distribution as measures of fitness.

So-called brand altruism then, is perhaps better understood through the lens of Biological Market Theory.

Animals (including humans) can be observed exchanging benefits through reciprocity mechanisms. This happens in a variety of ways and in a variety of scenarios, however the common thread is that benefits in kind almost always find their way back to the original giver.

The theory of reciprocal altruism was originally developed and published in 1971 by the evolutionary biologist Bob Trivers in order to explain to explain instances of (apparent) altruism among unrelated organisms, including members of different species.

Trivers' basic idea was pretty straightforward: it may payback to help another, if there is an expectation of the favour being returned in the future.

Equivalent to the heuristic ‘You scratch my back, I'll scratch yours’.

The cost of helping is offset by the likelihood of the return benefit, allowing the behaviour to evolve by natural selection.

However, even reciprocal altruists are vulnerable to exploitation by rogue non-altruists.

Suppose we have a group – or category, let’s say supermarkets – made up exclusively of altruists, all playing nicely together, and placing the benefit of their suppliers and customers above their own needs. It only takes a single mutant to enter the category, adopt some selfish policies to gain relative fitness advantages then the altruistic system starts to collapse and eventually become overtaken.

Altruism, by definition, incurs a fitness cost.
So why would a brand perform a costly act?

As an aside, it’s probably no accident that the current popularity of the brand altruism idea corresponds with the development on another on the consumer side – virtue signaling.

Much has been written on virtue signaling so there is no need to unpack the term fully here, but suffice to say that – and depending on which report one reads - apparently upwards of 70% of millennials declare that the social responsibility record and ‘altruism’ of a brand is a major factor in their propensity to buy or use that brand.

It is also claimed that this next generation of consumers will be willing to PAY MORE for altruistic brands! What cannot be disputed is the propensity the connected generation to perform actions (mostly online) that signal to others that ‘I’m a good person’.

It’s worth noting that the message need not be actually accompanied by doing anything good. This opens the window for brand altruism as a virtue-outsourcing vehicle.

And as we have noted in previous posts, authenticity is everything. Once one can fake that then one has it made.

So is brand altruism something of a misnomer, and simply a contemporary biological market tactic pandering to the current cultural mode for virtue signaling?

If this were the case then that may cause some significant cognitive dissonance for the authenticity seeking future consumers.

(Not all is lost however. Lack of millennial buying power notwithstanding, there is still much fun to be had given that the only thing people seem to like more than virtue signaling is judging other people.)

Perhaps another idea to consider is this.

Brand altruism may simply be interpreted as signal.
A costly and strategic signal, that provides an honest indicator of quality.

A brand might make a strategic investment in altruism that acts simply as a signal of its ability to be altruistic - the brand signals that it has the assets to do so.

In this sense, brand altruism is simply another form of costly signalling just like investing in high quality advertising and equivalent to a ‘handicap’ for which the peacock's tail has become a metaphor.

It’s altruism, but it’s competitive.

To paraphrase Ambler and Hollier’s much cited work (and one this writer returns to frequently) ‘The Waste in Advertising Is the Part That Works’.

‘The perceived extravagance of [a brand’s altruistic acts] contributes to advertising effectiveness by increasing credibility. It draws especially on the Handicap Principle in biology: animals use wasteful characteristics to signal their exceptional biological fitness. It hypothesizes that excesses in [altruism] work in a similar way by signalling brand fitness…’

In summary, we should probably understand this emerging idea of brand altruism as a part of the brand marketing process through which brands compete with each other in terms of conspicuous generosity (or if you prefer, observable competitive altruism) in order to enhance the status, reputation and perceived quality of the brand.

If some good is worth doing, it’s worth doing in public.

And, of course, the more salient the ‘altruistic’ acts of the brand are then the associated ‘generosity’ traits transfer to buyers and users of the brand, more grist to our virtue signaling.

For sure, it is good that brands may wish to contribute to a greater good, or to society as a whole. Let’s hope that the brands that are successful enough and profitable enough continue to do so. But let’s not get too caught up with esoteric notions of ‘pure’ altruism.

Rest easy advertisers and marketers. We can make the world better and still be our selfish, insecure and status-seeking selves.

Friday, February 26, 2016

magic, monkeys, moggies and management gurus

There’s a clip in an episode of illusionist Derren Brown’s TV show in which he predicts he can flip a coin 10 times in a row and it will come up heads every time.

He proceeds to do exactly this, flipping the coin into a bowl 10 times and it comes up heads every time, just as predicted.

Magic, right? Or at least some sort of quantum entanglement.

The truth is less mysterious; he flipped the coin for about ten hours straight until he produced the sequence he wanted. His team then edited out all the failed flips and presented only that successful sequence.

Similarly, you’ll be familiar with the famous thought experiment that describes how an infinite number of monkeys bashing on typewriters for long enough, will result in one of them eventually writing a novel.

But what are the chances our monkey author would bash out a follow-up?

Or another monkey would come up with anything?

How about the many popular videos on YouTube that feature cats?

Is this evidence that featuring cats in your video makes it more likely that it will be successful?

Perhaps the success of some cat videos is simply proportionate to the huge number of cat videos that are out there in the first place, the vast majority of which receive little or no views at all, bar their proud owners.

In the coin-flipping skit, monkeys who produce nothing, and the mountain of unwatched cat videos that are forgotten, we only see the survivors.

The same survivorship bias is prevalent in marketing departments and agencies every day. For instance, it’s common for marketers and agencies to get distracted by the high response rates and dramatic ROI that appear to result from certain marketing activities.

Discounts and price promotions are just one salient example. While they can contribute to short-term sales boosts, they tend to be taken up by consumers who are already brand buyers, and are therefore detrimental to profitability.

Survivorship bias is the error of looking only at features that winners appear to have in common, and assuming they’re the only reasons why things are successful.

Management guru Tom Peters studied several companies enjoying successful periods and published a book – In Search of Excellence – outlining a success formula based on those things that the companies appeared to have in common.

However, many of the organisations highlighted by Peters then found themselves having difficulties within a few years, while employing virtually the same strategies that had made them successful.

Perhaps the book would have been more appropriately titled In Search of Halo Effects.

One does not have to look far on the interwebs to find studies that appear to show how a single factor, such as company culture, customer focus or a company’s commitment to social responsibility, lead to high performance.

It could just as easily be argued that it’s because companies are high performing that they subsequently benefit from better culture, or are able to contribute to social responsibility activities.

More recently Richard Shotton and Aiden O’Callaghan from ZO in the UK published a splendid report debunking the idea that brand ‘purpose’ is a driver of success as popularised by the Jim Stengel book ‘Grow’.

It turns out that spectacularly failing brands like Nokia and Kodak were just as ideal-driven as the successful brands Stengel chose to feature in Grow.

But those examples didn’t fit the story.

And we prefer the story, if we are honest.

Sometimes this means turning fact into fiction, even for business book authors.

As our favourite literary Darwinist, Jonathan Gottschall, points out in The Storytelling Animal.

'When we read nonfiction, we read with our shields up. We are critical and skeptical. But when we are absorbed in a story, we drop our intellectual guard. We are moved emotionally, and this seems to leave us defenseless.'
It turns out that many of the things that we commonly believe to be contributions to company performance are in fact attributions.

We’re mistaking outcomes for inputs.

Skill is a factor, but so is luck. Skill allows you to make punts that are a bit more informed, but it’s no guarantee of success.

Success is, for the most part, the result of decisions made under conditions of uncertainty, and always shaped in part by factors outside our control.

As Daniel Kahneman famously noted, 'A stupid decision that works out well becomes a brilliant decision in hindsight.'

Business theorist Phil Rosenzweig unpacks much of this flawed logic prevalent in contemporary business thinking, in his book The Halo Effect.

“Business is full of mysteries, but none greater than this: What really works?”

In finding out what works, Rosenzweig advises that we should be mindful of dazzling halo effects from apparent winners, and examine the failures a bit more closely.

What can we learn from magic, monkeys, moggies and management gurus?

Firstly, all strategies involve managing risk and uncertainty.

Execution is also uncertain. What works well for one situation may not be effective for another, however similar.

Randomness plays a greater role in success (and failure) than we like to admit and bad outcomes don’t always mean that mistakes were made.

(Likewise, successful outcomes don’t necessarily mean that we made brilliant decisions.)

Successful strategy, then, is skillfully interacting with chance.

It could be that successful strategy emerges simply because some people are better at interacting with chance and bad strategy comes from the failure to take chance opportunities by confusing outcomes with inputs and being too easily distracted by halo effects.

Thursday, February 25, 2016

some product! carri on storytelling.

You may know the semi-legendary rant by graphic designer Stefan Sagmeister in which he splendidly calls BS on ‘storytelling’.

Speaking at a Canadian design festival in 2014, Sagmeister attacked the current vogue in the communications industry for describing our work as that of storytellers.

'Now everybody’s a storyteller,' he says.

‘Recently I read an interview with someone who designs roller coasters and he referred to himself as a ‘storyteller.’ No fuckhead, you are not a storyteller, you’re a roller coaster designer!’

He continues ‘There is this fallacy out there. I don’t think I fell for it, but somehow maybe unconsciously I did, you know... I’ve seen a number of films so I must be able to make a film’.

People who actually tell stories, meaning people who write novels and make feature films don’t see themselves as storytellers. It’s all the people who are not storytellers suddenly now want to be storytellers.’

I’m not sure if Sagmeister expands on this in any of the 22 books he has published.

All this is pretty funny, but is it fair?

Given the prevalence of inane drivel spouted in the name of brand storytelling on the interwebs is hard not to side with Stefan.

Where to begin?

In the early chapters of his fantastic book ‘The Storytelling Animal' author and literary Darwinist Jonathan Gottschall makes this observation:

'The storytelling mind is allergic to uncertainty, randomness, and coincidence. It is addicted to meaning. If the storytelling mind cannot find meaningful patterns in the world, it will try to impose them. In short, the storytelling mind is a factory that churns out true stories when it can, but will manufacture lies when it can’t.'

Why might the mind be wired for storytelling?

"We are an insatiably curious species’ says the sociobiologist, EO Wilson '…provided the subjects are our personal selves and people we know or would like to know'

So it would also appear that we are born to gossip. (Albeit within narrow parameters.)

Indeed, the evolutionary psychologist Robin Dunbar agrees, calling gossip ‘an instrument of social order and cohesion’ - akin to the grooming behaviour common among our cousins in the larger primate world.

Primate grooming is not so much about hygiene, although that is a nice by-product. Grooming is essentially a substitute for language.

It creates bonds, establishes social status and influences other primates.

Dunbar and other evolutionary psychologists suggest that humans developed language specifically to serve the same social purposes.

(Grooming was simply not practical for early humans. Given their large social groups - around 150 or so - grooming one another would have been an impossible time-suck for our hunter gatherer ancestors.)

Language evolved, as it was a more practical and useful way of keeping up to date with friends and family, and obtaining social information about others in the group.

Particularly information about whom one should trust.

This explains – at least in part - why all of us 21st century humans are still pretty preoccupied with gossip and stories about other peoples behavior and reputation.

Reputation became important in this sense because – as a rule of thumb – it made more survival sense to be more generous toward others who were also reputable.

I often afford a wry smile at the call from some corners of the marketing world for ‘authentic brand stories’.

This is something of an oxymoron given that it is in the nature of stories to feed our social instincts for gossip only cherry picking the most dramatic and salient parts in recounting events.

The behavioural scientist Daniel Nettle echoes EO Wilson:

‘Conversations are only interesting to the extent that you know about the individuals involved and your social world is bound into theirs…

Given that dramatic characters are mostly strangers to us, then, the conversation will have to be unusually interesting to hold our attention. That is, the drama has to be an intensified version of the concerns of ordinary conversation.’

He goes on to argue that we don’t watch films about people going shopping; we watch films about people going shopping who are having an affair with an ex-lover.

Similarly, a book about some old geezer who goes fishing is not that interesting.

But a story about an old man who goes fishing off the coast of Cuba and ends up in an epic existential battle with a giant pointy nosed fish while contemplating his own mortality is more compelling.

To Sagmeister’s earlier point, everyone is a storyteller to some degree – inasmuch as this innate allergy to uncertainty, randomness, and coincidence requires it in order that we tell our own story to ourselves.

Among communications professionals perhaps that the ability to create evocative brand stories probably depends on a couple of key skills - not necessarily available to all and the reason why great creative minds are so valuable.

The first– and this is planner territory for the most part - is the ability to observe and interpret the hidden parts of everyday life (aka insight), then ensure that the drama is an intensified version of these concerns.

Secondly, is the creative’s ability to work within our cognitive limitations and make things simple yet still contain enough neuro-juice to get noticed.

(This is not to infer that people are stupid, rather that we have a lot more important things to occupy our minds with than brand stories - simplicity is paramount.)

I think it was Dave Trott who coined the idea that any idiot can take a simple idea and make it complicated. It takes a lot more skill to make the complicated simple.

The great stories – and therefore the great brand stories – always reflect the great universal themes of life.

Evolutionary study has produced a universal picture of the human mind that can be mapped and reflected in all human activity.

From the ice age to the dole-age there is but one concern. Ok, more like five.

Surviving, finding mates, being a parent, being part of a group and being the hero who triumphs in the face of adversity.

Brand storytellers should relax. Perhaps not try so hard.

Storytellingit seems, is less something that is done to us, and more something we are super skilled in doing to ourselves.

Our innate ability to confabulate and fill in the gaps - often extensive - with plausability,  and preserve some sort of narrative continuity based on the merest scraps of information is nothing short of a marvel.

So, carri on storytelling.

Gottschall agrees:
'The way we experience story will evolve, but as storytelling animals, we will no more give it up than start walking on all fours.'

(And even in a perfect world, where everyone was equal.
I’d still own the film rights and be working on the sequel).