A Literacy of the Imagination

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Attention Marketers: The Real Money is in Ecosystems

What people really think about “brands” and “ads”.

There are a host of studies that address the ways in which people are affected by ads and onslaughts of marketing messages, as well as how they feel about them. Most of the data and insights are inglorious; probably the most telling are the studies based on “native advertising”. This one from MediaBrix and Harris Interactive is a pretty good indicator of why consumers have become activists in editing and avoiding ads altogether.

Granted, many of these studies don’t even ask the right questions, or questions more oriented towards cultural behaviors or daily rituals. Choosing between the better or lesser of evils ("Would you rather go with option A, B or C in this rotation?") isn't exactly leading marketers in the direction of enlightenment.

Brand studies are even more elusive; my favorite (I’m being facetious) is this series conducted by Interbrand, which provides geographically designated results on brands in different markets based on variables that have little to do with company operations, sustainability or customer relationship metrics, and everything to do with “brand perception” based on fixed (and arguably irrelevant) variables.

The Bhutan approach to relationship metrics (specifically GNH or Gross National Happiness) is really where these survey questions should lead... But let’s not get ahead of ourselves.

brand studies.png

What this says is, as an industry, marketing and advertising is still talking to itself in a giant echo chamber, and is making huge, sweeping assumptions about customer behavior when it doesn’t have to. In short, companies, via their brands, have an opportunity to ask far better questions. And this is precisely where companies will continue to make or lose money.

Marketing is intended to actually build markets.

One of the smartest things I’ve heard recently came from General Electric CMO, Beth Comstock, who unapologetically proclaimed that "Marketing is now about creating and developing new markets; not just identifying opportunities but also making them happen".

Comstock looks at GE as the world’s oldest startup, and this is the kind of thinking that has sustained GE as an innovator across industries for decades.

If you were to look more closely at the word marketing, it would seem that this approach in building markets is a given, but of course it isn’t.

Developing an ecosystem of ideas and resources (not just ads and inventory).

The big talk at the CM Summit this past week (May 18th, 2013 onward) has been around building a new kind of ad ecosystem. This ecosystem specifically refers to things like a “native advertising” or “programmatic advertising” format, which basically focuses on real-time bidding in exchanges that peddle inventory or content for cents on the dollar.

While I think these discussions are important in transitioning our broken ad models to better places, I think they also miss the bigger picture.

For one, they presuppose that innovations in developing the company-customer relationship are predicated on technological advances (read: fancier features). For another, they almost completely ignore the power of people, their communities, and the ways they are willing to participate when the terms for consumption are more equitable.

This includes our functional uses of content, data, and the contexts through which we can build customer relationships, engender trust, and monetize channels without grossly manipulating the market itself.

From a content perspective, here’s what an ecosystem would ideally look like:

content's new context.png

If we can accept the Kurzweilian precept that technology is an extension of biology, then we might be able to reframe these efforts more constructively.

What this really points to is a profound shift in priorities, one that takes us from models based on opacity, forced messaging and a reliance on commodified inventory, to models that place openness, adaptivity and conscientiousness at the heart of marketing and communications.

The Coca-Cola problem.

Many of you are probably familiar with Coke’s escalating issues with obesity. If you’re not, you should be, as this represents a classic example of how traditional marketing and communications (to include “social media”) can’t solve real world problems -- problems that are not only complex, but those which require a whole new way of doing business.

As I’ve mentioned in previous posts, the idea isn’t so much that brands and their products or services need to be perfect, but the overarching idea that they do need to be more humane. This means that operations must be far more empathic in how they treat people (customers and employees), and means that companies must do their best to empower hyperlocal economies.

I will make a much stronger economic case for this in an upcoming white paper, but suffice to say that things like P/E ratios, EBIDTA, market capitalization and increasing profit margins are hardly leading indicators for a sustainable brand, or a profitable brand, for that matter. Further, it will be impossible for companies to maintain the types of margins they have now without more earnest investments in the socioeconomic environments on which they lean, directly or indirectly.

What Coke can do to align its business and brand interests.

A lot of the work I do involves creating scenarios, or imaging possibilities, so that more positive and productive futures can be realized. So, I thought I would take the Coke use case and provide a snapshot of what “newer” disciplines like data journalism and participatory storytelling can do to revitalize the socioeconomic relationship between brands and consumers. (It is also a central use case featured in the book I’m co-authoring, “The Big Pivot”)

story as a lived experience.png

The graphic should be fairly self-explanatory; it basically takes you on a journey from the moment a perceived issue erupts, and shows how a different way of extracting and cultivating a story lends to the consensual development of ideas that not only become authentic brand artifacts, but those which provide a basis for product development and job growth.

You’ll notice that we go from a phase of understanding an issue, to uncovering its intentionality, to finding the purpose behind it in actions on the ground, and ultimately, developing the true meaning of its impact in the form of actionable solutions.

Under normal circumstances, the usual suspects -- media agencies, PR companies, social media vendors, product innovators, sustainability firms, et al -- would work mostly in isolation. More critically, the idea of storytelling reverse engineers a very staid and cumbersome set of processes that doesn’t actually move the needle of the business or nurture stakeholder relations. In this case, notice how real world solutions can be crafted from mostly closed data loops to those that reflect a group or collective intelligence.

Welcome to the future, which is right now.

It is not difficult to see what is possible. We have the tools and the means. What is difficult is to shift the mindset away from a heavy reliance on automation and quantitative reasoning and towards interactions on the ground. These will allow people to become true advocates of a brand, and influencers of ideas that matter, whether they exist as messages, stories and/or pure informational utilities.

 

Brand Economics

In preparation for a series of roundtable discussions I’ll be leading with Sasha Grujicic at the Banff World Media Festival in June, I’ve been giving considerable thought to the near-term future of brands, and the economics associated with them.

It’s certainly fair to say that brands have taken on a far more vulnerable position with consumers given the adoption of social technologies and forms of activism that put consumer groups more in control over their choices and purchases. It’s probably even more timely to concede that branding as a discipline is far less about marketing, and far more about actually building markets. Not only do leading brands own their media ecosystems, but they are building new products and services as extensions of their constituent businesses and business units.

As for the notion of what a brand really is nowadays, perhaps it's best to first contextualize a significant shift in how companies operate, how they build consumer relationships, and how value is co-created and monetized more altruistically. This shift is a direct result of how money is exchanged, how debt and credit are moved around or leveraged, and reflective of the unique ways those constructs are being disintermediated by alternative currencies, crowdfunding, virtual credits and the like.

Put another way, corporations have more cash on the books than banks and governments, when you consider that they have real assets along with their own credit systems. The shift they represent is one in which they can create the most change, and many of them are, as we'll see in a moment.

The business models of today and tomorrow will constantly change.

The agents who recognize this shift are of course poised to survive and thrive in a heavily commodified marketing industry, one still mostly reliant on bulk media buys and creative services that have a hard time justifying bottom line value within the current landscape. Saneel Radia has co-founded Finch15 to capitalize on the needs of brands who seek guidance and partnership with new, emergent business models. The folks at Invention.ist have boldly put a stake in the ground in prototyping product ideas rather than simply launching slick campaigns. Others like Kirshenbaum Bond Senecal + Partners and Rockfish have established venture arms that allow them to make key investments in emerging technologies. There are a host of other agencies, like Given, that are committed to changing the brand paradigm to one in which values are developed organically rather than through the superficial attempts found in a lot of the art and copy we see in the streets and on our screens.

These new models are far from perfect, but that is not the point. The point is to embrace experimentation, and to constantly adapt these models such that innovation can become a profit center in various ways.

Another point to consider is that products and services are far from perfect in their own right, and are naturally under intense scrutiny. This means that brands must evolve beyond open dialogues and actually change the function and substance of those products and services. To be more pedantic about it, if a soft drink can kill you or a clothing brand is killing its factory workers (intentionally or not), then we have a significant problem on our hands. Coke's escalating troubles with obesity are a classic example of how communications can't solve complex, real world issues.

Designing systems to take on complex problems.

I liken all of this to a single equivalent: We are moving away from a campaign optimization space, and straight towards one that has us building emergent systems.

Think of a system as one that has a bunch of interrelated and interchangeable parts. That system may contain traditional branding elements and ad campaigns and social media content and PR stunts and all that, but more importantly, it is comprised of tools and platforms and utilities that allow people and companies to connect, learn and transact more meaningfully. Further, these dynamics call for communications to be multi-dimensional, such that push messaging is being replaced by emerging disciplines like participatory storytelling, data journalism and other forms of ‘new media’ which break through the boundaries imposed by traditional media gatekeepers. Therefore, a system is much more than the sum of its parts -- it is at once a means to educate, inform, entertain, prospect and experiment in ‘perpetual beta’.

For those corporate stakeholders who are fearful, consider this: Systems are not only sustainable, but they are scalable. In other words, there’s real money at stake.

Brand Economics in 21c.png

Leading brands like Nike, for example, are capitalizing on social movements to better understand market behaviors and sources for new inventions, and are even accelerating business ideas that are extensible with utilities they’ve successfully built (like Fuelband). Nike still makes beautiful ads, but its real stocktaking has come in the way it builds products and services with its customers. Others, like Target, are using social platforms to crowdsource design. Others, like P&G, have created joint-venture funds to build up local economies through entrepreneurship. Even more interesting are the efforts of smaller brands like Dermalogica, that benefit from outsourcing infrastructure and by building up value in the supply chain itself. And where government or educational institutions are slow to task, new co-ops and special interest programs expedite development and allow more people and more entities to fail forward.

Creating value means making investments in people.

The combination of building 21st century skills inside and outside of corporations, and the ability to effectively generate policies to advance those efforts is critical, especially to a consumer marketplace that faces rising unemployment, economic volatility and unpredictable market variables compounded by technological and social acceleration. To boot, we are witnessing a similar stratification between rich and poor in first-world and third-world economies alike (Been to Detroit or Camden lately? What about Kolkata?).

All of these examples, most notably, point to the development of systems that can scale by virtue of what the market does, rather than how it is dictated or manipulated. If capitalism and industrialism are to persist on any level, we must reinvent what they mean to those who produce and those who consume. They are not mutually exclusive.

Additionally, all of this presents an interesting challenge for ‘brands on the fringe’ -- they can take incremental, more measurable risks to which the rewards can be magnificent, or, they can wait and watch others get into the mix, and by the time they are ready to make a move, they’ll most likely lose out on time and revenue.

As the saying goes: “If there’s money on the table, then it’s already too late.”

Brand economics are here and they are very real. It’s time for more companies, of all sizes and functions, to think about how they can create a consensual reality... transparently, authentically and emergently. It’s time to build markets of real value, like we did when advertising was directly representative of the products and services that were sold in town squares, train stations and on residential doorsteps.

It's time to create real change that benefits everyone. If they are willing to become more than marks and fancy taglines, brands can resoundingly be the conduits for that change.

Brands: Imitation is No Longer Flattering... Let's Go Back to War.

There is something to be said for the good ole’ days when brands pulled no punches in an attack/counter-attack mentality that resembled chess matches in a public park. What was once a “less filling, tastes great” environment has now become a breeding ground for geckos, ducks, lizards, bears and a slew of other negligible icons that act more out of self-importance than they do in calling out the value propositions of their competitors (actually, I like the Sobe lizard – we tweet each other occasionally... Sorry, dude). Further, when you look at the technologies being used to communicate these sentiments, parody seems to be the theme of the day. Granted, in the 80s and for most of the 90s, we were limited to a default suite of three types of media – print, TV and radio – but that’s entirely the point, and a fairly obvious one at that: if we now have more to choose from, why aren’t we doing more? More importantly, why aren’t we doing things differently?

Time to differentiate. Time to stand out and start delivering knockout punches.

Without giving away free ideas (God forbid), let’s examine some inverse relationships that can lend to this notion of ‘reactive advertising’... And some of the potential consumer touch-points.

Greenwashing – alright, so pretty much every brand on the planet is touting some form of green-friendly something or another. In some cases, it may be true, but in many, this amounts to spin-doctoring of the highest order. I know first hand because I’ve worked with activist groups like NRDC and have seen some of the abject bullshit that these companies sling at the public. That said, this has to be the lowest hanging fruit for true, green-compliant companies to tout. Here’s the catch: most consumers don’t know what ‘green’ is, so there’s an educational curve. You’ll have to spend the time and the money to teach first, then tout your wares second. But if you can, you can certainly knock a few of the big boys off the green block.

Company Culture – this one seems like an easy tactic, although I’m sure there are a number of red flags. You probably can’t call out the fact that a competitor’s CEO is bedding a bunch of young blondes – I mean hey, those are just allegations – BUT, you can point out how great your own little cultural ecosystem is. You don’t hear a whole lot about employee testimonials, or better yet, why an employee defected from the competition. If you’re smart enough about it, you can give consumers a real glimpse inside of the very thing you have with each other that makes for a good product.

Labor Practices – yet another dicey element, rife with potential legal crossfire, but I think we all know a few major brands out there who are cutting major corners in this regard. You can take a more diplomatic approach and discuss how strong employee benefits lead to a stronger product... And of course, insinuate, insinuate, insinuate!

Pop-Culture Trends – now this is an area where I simply do not understand why brands don’t take more potshots at each other. For example, there’s a certain automotive company that recently ran virals of gay dudes washing one of the Transformers cars as a co-promotion – LAME. If I were a competitor, I would have a field day with this. Further, you can run a whole initiative of different stories that jab the competition just by looking at the material they post online.

Random Stuff – Further along the UGC front, there are so many nuggets in the rough coming from people all over the world that can be re-purposed and expanded upon, and even made ‘category relevant’. Just use your imagination. Your creative teams will thank you.

All in all, if advertising wants to stay relevant, it better start taking more risks. All the fodder is there, so let’s look at the flaws within the system to garner new insight into what can be done. And won.