Monday, January 20, 2014

what you see is all there is

We all have bias towards the information that's available to us versus the information we don't have.

We don't know what we don't know and will make our decisions without taking the information we don't have into account.

Psychologist Daniel Kahneman calls this phenomenon what you see is all there is.

With that in mind it's interesting to contrast a couple of points of view that we noticed this week.

Firstly, here's a snapshot from a statement by R/GA supremo Bob Greenberg, as reported in Campaign Brief, around the challenges for advertising in the coming year.

Greenberg made five points, read the whole thing if you like here, we've summarised a couple of the more pointy bits.

On a need for new business models he claims ... '[in these new business models] the purchase is just the beginning that connects consumers to an "ecosystem of value" and spurs further purchases, as Apple, Google and Amazon have all done with their ecosystems: get the same consumer to buy more things from the same brand.'

'Many of these new business models for clients will be based upon the integration of physical products with digital services. The marketing of them will be "built in" to the device itself, as was the case with Nike+ Fuelband.'

'They will "earn" the data from their consumers by providing digital services that deliver tremendous value by becoming personalised partners to consumers in everything from their finances to their health/fitness to what they cook for dinner at night to where they go on vacation to what clothes they wear, what make-up they use.'

Meanwhile in Campaign mag Chris Arnold, former Saatchi & Saatchi Creative Director reports on how the biggest FMCG brands are seeing more success than ever with so-called traditional marketing activities, ie TV, and are reducing spend on on-line activities.

'Coca-Cola, Kellogg’s, Nestle, Unilever and Tesco – have dramatically slashed on-line marketing spend.

Tesco currently spends over £34m on TV advertising (that excludes outdoor and press) but now only budgets 1.4m on digital advertising, less than 5% of TV spend.

When it comes to social media, well it seems TV ads are probably the number one reason to talk about a brand, just look at John Lewis. The second is PR.

And for all the on-line chat, 80-90% of chat actually happens off-line. That too may surprise you, but in fact it’s been researched and again the media has hyped up the opposite.'

So who is right?

My sense is that Greenberg's argument cuts the least amount of mustard.

For example, even for tech brands like Apple, their heaviest users are likely to buy as much Apple product as they can reasonably expect to to buy, and - like just about everyone else in every other category - their growth depends on bigger penetration, getting more people who haven't bought much Apple product historically to buy for the first time, or a bit more.

Similarly his argument for brands becoming 'personalised partners to consumers' may somewhat apply in the realms of Nike Fuelband or FitBit but in the world of the 99% of other purchases people make on a daily basis it's a tad on the wishful thinking side.

And, lest we forget (and to avoid straying into Texas Sharpshooter territory, Nike's brand has been consistently built over a long time with tendrils that wrap themselves themselves around all sorts of media - to quote John Grant 'a cluster of strategic cultural ideas' - including everything from the product itself to the communication.

For the majority of brands it's hard enough to just get noticed and remembered, never mind being a personalised partner. And you will know this by the trail of the dead in branded app world - upwards of 90 percent of all downloaded apps are used once and then binned.

As renowned game developer and theorist Kathy Sierra famously noted 'no-one lies on their deathbed saying I wish I'd spent more time engaging with brands'.

In regard to what you see is all there is, we're inclined to say that pronouncements about the death of advertising and such like that mostly emanate from the digerati bubble and seem to be backed up with the same tech examples all the time, highly visible to the digerati, mostly invisible everyone else.

That's not to say that tactics that delivered rapid growth for some tech companies in early development haven't worked a treat.

Indeed, in Inc this week 'marketing guru' (their description) Ryan Holiday tells us 'traditional marketing tactics are dead...the smartest companies think beyond the traditional marketing and promotion boundaries.

For example, Dropbox found it cost a few hundred dollars per new customer to build its customer base through Google AdWords...until they began offering added storage as an incentive for getting a friend to sign up...the storage-for-referral program generated 40 percent of the company's growth'.

Sure, but for a start someone should inform Holiday that Google adwords do a decent job of fulfilling demand but expecting them to create demand is a bit of a stretch. That's the job of advertising.

Before we get into a this v that channel scrap, Sturgeons revelation applies to all forms of marketing. Mass reach media included. Upwards of 90% is shit.

But, let's be mindful that what may be applicable to something like growth hacking (yuk) for DropBox - and, of course, discounting the fact that for most of its users they are not required to part with a cent to use - does not apply to toothpaste or soap powder and the other 90% on consumer spending that happens off-line, out in the world and for which the predominant factors affecting that spend are convenience, habit, what seems to be popular and simple availability.

Imagining that a Dropbox model applies to everything else in every other category is pretty dubious.

My fear for these ideas of 'new business model(s) in which the purchase is just the beginning that connects consumers to an ecosystem of value' is that it just sounds like too much hard work when we all have busy lives that we just want to get on with.

Horses for courses.

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