Category Archives: Thinking

Why adland’s data versus creativity argument is a waste of time…

The battle lines have been drawn, sides are being chosen and the world is polarising. On one side, you have the ‘data is the future’ proponents. To them, robots will run marketing, artificial intelligence will replace everyone and programatic, targeted advertising based on consumer’s internet history is the holy grail.

Meanwhile, those who rely on the opposite of big data, the big idea, take up arms to defend their craft. They say that really great ideas aren’t clinical. They’re imperfect, they come from messy processes and often rely on random connections, lateral and linear thinking.

Commercial Creativity

OK, so that’s a slightly magnified representation of the data/creativity discussion, but as we enter a new year, the age old question of whether marketing is science, art or part both it rearing its head again. Recently, John Hegarty wrote a scathing piece outlining his view that ‘daring rather than data will save creativity’ and preaching the virtues of ‘commercial creativity’.

As with many of these debates, there’s merit to both arguments. But, as reflected in wider society society these days, (see Brexit and Trump), both sides are at once conceited, partly right, partly wrong and very biased. I guess it’s sometimes true that our industry reflects the world.

In adland, what’s new is over-prioritised, spoken about in revered tones and seen as better than everything that went before by some, and completely trashed by others. We’ve seen it with social media too.

‘Big Data’

Without wanting to sound like a luddite (or a fool!), adland has definitely become overtly focused on using data for measurement, targeting, programatic advertising and the lure of ‘big data’.

Data helps to unlock insights. But alone it’s worthless. It’s benign. It’s a fire lighter without any spark. It needs to be interpreted and probed in order to sort the signal from the noise. And while it can lead to insights, it doesn’t create great ideas on its own. You may know who you need to reach, when you need to reach them and how to measure success. But you can’t engage customers with data. Forget the thinking that artificial intelligence will take our jobs and render us useless (in adland anyway). The heavy lifting of creativity has to come from a human. What algorithm could come up with Jean Claude Van Damme doing the splits between two trucks?

If you’re pumping resource into data at the behest of creative thinking time, you run the risk of being too concerned with optimisation rather than innovation. You risk giving the world a ‘faster horse’. Plus, there’s the danger of media over targeting and not generating broad reach for your communications.  By only talking to the people the data tells us to, we risk over targeting and falling prey to reductionism that sometimes goes along with data driven marketing.We know from Sharp and Binet & Field’s research that wastage isn’t always to a brand’s detriment. We risk forgetting what makes a big brand – broad salient reach. We risk becoming mechanics tweaking an over optimised engine instead of creators with scope for imagination and experimentation.

Latent Bias

And then there’s the other side of the argument. There certainly is a latent bias within some parts of advertising to ‘the way it’s always been done’. Some fail to see that technology has liberated the communications industry, allowing businesses to grow from nothing to enormous without enormous investment. The perception from this cohort is that data equals boring analytics. That’s a dated view. Tasked with building a brilliant brand campaign, what modern creative wouldn’t want to know the deep, unspoken traits of their audience.

So what’s the answer? It’s simple. Data and creativity should be comfortable bedfellows. They should overlap and combine to make our industry better, not quarrel and backbite to make it worse. We’re at a stage of Darwinian change in marketing, and we can’t afford to be divided in the face of waning influence.

Marketers should heed Jack Welch’s words: “find ways to get – and use – data more quickly”, but use it to spur creative conversations and inspire innovation rather than taking the numbers as gospel.

So who is getting this balance right? Who’s striking the ‘golden mean’ by using data to infuse and invigorate creativity? In a similarly creative industry, Netflix is a great example. Their algorithm is extremely powerful because it’s constantly being fuelled by millions of hours of viewing. Every minute of every show that you watch on Netflix is logged. They know how many episodes of Gilmore Girls you binge watched last Saturday, and at what minute you switched off that horror flick.

The smash hits ‘House of Cards’ and ‘Stranger Things’ were created based upon insights from data mining. The Netflix bot drove everything from genre to character demographics to the excellent social media marketing that surrounded these shows. That’s the science bit. But these insights are only the start point. No algorithm could replicate the menacing mannerisms of Frank Underwood, create a beautifully shot 80s sci-fi drama or understand how to bring the characters to life in a social feed.

Spotify is another great example. Their recent global outdoor campaign won huge plaudits for its creative use of data (and no, that’s not a paradox), playfully highlighting the more bizarre user habits it noticed throughout 2016. Give it a Google, you’ll see what I mean.
Creativity creates value. It creates emotion, fame, salience and difference. Ironically, creativity is also a force multiplier of effectiveness and is vital for giving a brand a competitive edge. Yet the growing belief in “data-only solutions” means we tacitly lessen its importance.

Aristotle once spoke about the ‘golden mean’, or society’s almost biological need to find a desirable middle between two extremes of excess and deficiency. In my opinion, us marketers would do well to remember that. Let’s end the discussion, let’s find the balance.

 

This piece was originally written for the February edition of Marketing magazine in Ireland. 

 

 

The Second Captains paywall – A smart, calculated experiment in new media models…

Full disclosure before we kick off – as you can see below, I’m a huge Second Captains fan. I’ve got the mugs and yearbooks. I know all the quotes, I’ve seen the TV show and I’ve followed the lads since they were fledglings on Newstalk.

And I’m also an avid media watcher, meaning this week’s announcement that Second Captains is moving from its cushy nest in Irish Times towers towards the wilds of a paywalled, community funded model from next Monday made me irrationally excited.

Maracana with the lads

A photo posted by Shane O Leary (@shaneoleary1) on

The Captains have decide to offer fans a ‘metered paywall’ model, in the guise of a New York Times or Irish Times, and will begin charging users €5 a month for a new ‘World Service’ edition.

The show will be kept ad free, and two free shows on Monday will remain, but in place of Thursday’s double bill, they will instead put out one daily podcast between Tuesday and Friday.

Mark, Ciaran, Ken, Simon and Eoin have shown plenty of balls in their media career. They’ve backed themselves to move from Newstalk, set up their own podcast against the backdrop of some scepticism, pitched and their own TV show, and won a new audience through their summer stand-in slot on RTE Radio 1.

In all of this, their fans have followed them.

But this is a different kettle of fish. Asking people to pay 5 quid a month is where the rubber hits the road.

Niche or enormous, there’s no middle

I’ve spoken before on this blog about how media is fragmenting and new models are emerging. Essentially, to succeed in modern media, there are two choices.

On the one hand, you can strive for enormous scale and hope that pays off. Try to make money by monetising your readers through display, print or paywall subscriptions, try to speak to everyone and cast the net as wide as possible. This requires experimentation and a reliance on distribution platforms, since most of us consume our media through social feeds now (and also leads to clickbait). Buzzfeed is probably the best example, but most daily papers play this game too.

On the other hand, you can be really, really valuable to a small cohort of people and hope that they love your work enough to provide enough income. Often, this requires a heavier paywall and ancillary revenue streams like events, merchandise etc. You can see this in effect across media, in places like The Economist, The Farmers Journal, The Information, Skift and in podcasts like ‘The Anfield Wrap’ and Marc Maron. In a similar vein, individuals like Tim Ferriss have created their own mini media empires too. It requires that you understand your fans, are very close to them and relies on you continually creating lots of value for them.

There’s very little middle ground between these two options, and media companies without serious scale or serious relevance are getting squeezed badly.

With the Second Captains paywall, the lads have chosen the latter route.

‘1000 True Fans’

They might not have heard of it,  but the way Second Captains as a brand has grown takes a lot from the ‘1000 True Fans’ approach, first coined by Kevin Kelly. According to Kelly, because of the lowering distribution costs on the internet, it’s now much easier to reach the people who really love what you do. The 1000 figure is just an arbitrary number, but the essence to his point is that if you can find a certain number of people who will buy anything that you put out, who really get huge amounts of value from what you do, and then service them directly without intermediaries,  you’re in business. It’s a theory that’s still very relevant in 2017, as the lads will attempt to prove.

If you lived in any of the 2 million small towns on Earth you might be the only one in your town to crave death metal music, or get turned on by whispering, or want a left-handed fishing reel. Before the web you’d never be able to satisfy that desire. You’d be alone in your fascination. But now satisfaction is only one click away. Whatever your interests as a creator are, your 1,000 true fans are one click from you.

The way Second Captains has grown its following has been both methodical and masterful. This move to paywall hasn’t come all of a sudden. They haven’t just started asking people for money, their growth has been staged, they’ve built slowly and smartly creating products and events, branching out into other media and even building their own brands through journalism.

With the new model, they’ll likely be ramping up these extra revenue streams, but critically fans are already used to paying. According to producer Mark Horgan, speaking in the Indo this week, “The way our audience has developed is interesting. Many are the same people who listen every week and they want more. They’ve been dedicated since the beginning. It’s also rolling the dice in some ways, but it’s perfect for this type of journalism. At our last event, in December, we sold out in hours. Part of the deal with the new membership subscription is that members will get first call on tickets.”

The benefit of radio and podcasting is that it also really lends itself to creating strong relationships with fans, since your in their ear for 4-5 hours every week. It seems the lads are now ready to monetise all the work they’ve put in to these relationships.

$$$?

So what are the economics like? From the outside, this seems like a gamble. Why move from under the brand of a large media group (The Irish Times) that can offer you distribution and fame?

But Killian Woods put out this interesting set of tweets during the week, and, even with back of fag packet sums, the money part seems to make sense.

When you really analyse it, the risk here is small and calculated. The lads have a hugely valuable brand. That won’t be going away. They own their own channels too, which is crucial.

And even if this goes wrong, the worst case scenario is they go back to usual podcasts and sell advertising. I’m also pretty sure that another media company would come calling very quickly. But it won’t go wrong. They’ve done the sums, they know how much their fans love them and they’ve seen other models in media make money this way. This is never going to be an explosive growth business, but I’d be pretty bullish that it’s a smart decision.

Irish people are willing to pay small recurring amounts in subscriptions for a high value service, particularly in sport, and particularly if it’s a company with a strong value offering that you can’t get anywhere else.

Best of luck Second Captains, and congrats on a ballsy call that should show the way for the rest of Irish media.

They never go home those boys.

 

 

 

Deep Dive – Inside Facebook and Snapchat’s battle to become ‘the new TV’…

This is my considered take on the story set to define multiple industries in 2017 – two enormous social platforms battling for the biggest prize in advertising, the $200 billion spent on TV each year.

If you like it, please share it, and if you have a comment to add to the discussion, please let me know

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Act 1 – The big blue monster smells blood…

Small changes in the language used by a brand can be very revealing if you look carefully and join dots.

And Facebook knows the importance of semantics better than anyone.

At launch, Facebook’s business platform emphasised the power of precision targeting, personalisation and cost effectiveness. Minimising ‘wastage’ was their USP, a counterpoint to the traditional mediums of print, radio and, of course, T.V.

Facebook Advertising 1.0 was about direct marketing and performed very well in direct response.

But across 2015 and 2016, the language began to change. Slowly at first, but then all of a sudden, Facebook started to emphasise its ability to generate broad, mass awareness. Advertisers were told that when buying ads, ‘optimising for reach’ gave the best bang for your buck. Language like ‘personalised marketing’ was replaced with a focus put on ‘scale’.

Why?

Because Facebook is money hungry and it spotted a huge opportunity.

Like a cocky young lion stalking an unsure middle aged zebra, it saw a chance to take an even bigger bite out of global ad spend as the TV/digital scales starts to balance up.

Brand versus direct

Direct marketing is focused at the bottom of the marketing funnel, and that’s great. But the problem with hyper-targeting is that in seeking out the perfect potential customer, advertisers risk ignoring the wider pool of possible customers.

Facebook realised that in focusing on precision, it was disregarding the need for brands to speak to a wide audience, to have cultural impact and to target vast swathes of people, just like T.V. allowed them to do.

So it made the strategic decision to change tact.

Brand advertising – making end users aware of your product in the first place, or just building affinity for your brand as an investment in some future payoff – is still as necessary as ever. Despite the targeting opportunities of digital, reaching lots of people with salient, noticeable advertising is still the best way for brands to win share.

Just ask Byron Sharp.

Sharp’s ‘How Brands Grow’ is one of the seminal marketing texts, and scientifically makes the case for brands needing to continuously reach all buyers of the category with salient assets.

One of the biggest ‘negative’ Facebook stories last year was P&G’s admission that they were scaling back on targeted advertising, and would refocus on much broader brand campaigns (but still invest the same amount in Facebook). Many saw this as a bad story for Facebook. But the more cynical among us saw it as a carefully orchestrated P.R. move that made advertisers sit up and see Facebook as a brand building, rather than a direct response option on their media plan.

Much of the brand advertising money on TV will eventually split and go somewhere. It’s not going to go to Google, who are kings of direct, so why not to Facebook, the other giant in the digital ad duopoly?

It’s certainly big enough – close to one-fifth of the world’s population checks Facebook daily, there are already more than 4 million active monthly advertisers using the platform and video makes up an increasingly important part of its business.

“The more they can make themselves like TV, it will certainly better position them for those ad dollars.” Kieley Taylor, GroupM

Brand advertising is more lucrative, often more beautiful and less intrusive than a lot of direct marketing. With Facebook’s core focus on user attention, not annoying people but still increasing ad load, trying to offer a platform for media spend that’s like T.V. but better makes sense.

Strategic moves

And they haven’t just talked the talk.

Almost every major strategic move that Facebook has announced over the last 12 months has a connection to grabbing a slice of the brand T.V. pie.

The launch of live video was the first indication. Facebook spent more than $50 million paying publishers and celebrities to create live content, and changed its algorithm to heavily prioritise it in the feed. It also spent heavily on an advertising campaign for Live, intriguingly paying for heavy T.V. ad break rotation to promote it.

But ‘Live’ hasn’t been the only addition in the effort to become more like, and ultimately usurp TV.

In 2016, Nichola Mendelsohn, the company’s VP for EMEA, said that she expected Facebook to be all-video within five years, echoing similar comments by company Zuckerberg.

Then, after creating a dedicated video tab for brands, Facebook made its latest big announcement early this year – mid-roll video advertising.

Just like TV advertising, these are video adverts that will interrupt users mid video.

The company has partnered with Nielsen, the entity most associated with TV ratings measurement and last week announced that it was also  ‘trying to give marketers a more accurate grasp of how ads on the social network compare to other media like television’ by creating  a new modelling tool that compares its ads to T.V.

And there’s more.

In the past week, Facebook has announced that it’s preparing an app for set-top TV boxes, a sort of Hulu/Netflix lite if we’re to believe the news. It will now rank longer videos with high completion rates more favourably in the newsfeed. And, like Netflix and Amazon, original programming is in the offing too. Facebook will look to licence TV-quality shows to be available on the app, and will look to current Facebook video publishers too. According to Kurt Wagner or Recode:

“As part of a larger effort led by Facebook exec Ricky Van Veen, Facebook is pushing publishers to create longer, premium video content. The hope is to get more high-quality video onto the platform and into your News Feed — the kind of stuff, presumably, you might find on Netflix.”

Oh, and Facebook has just this week signed an MTV executive to create original content.

To anyone smart enough to join the dots, the trend line seems obvious.

From a few small copy and language changes on their advertising platform in 2015, Facebook has grown to now offer mid-roll ads on long form content that’s shown on TV and measured in the same way traditional TV is measured. 

Facebook really wants its slice of that big tasty TV pie.

Act 2 – A new challenger arrives…

It’s not just Facebook that’s trying to make a dent in TV advertising.

Snapchat is positively gunning for it. Just like Facebook, Snapchat is stealing vast amounts of attention with its video heavy social app. In its IPO filing last week, boasted of 10 billion videos a day.

But unlike Facebook, which initially focused on targeting and personalisation, Snapchat is a platform that’s purpose built to take brand spend away from traditional ‘brand’ channels. It’s much closer to ‘TV designed for your phone’ than its big blue brother has ever been.

Mobile TV?

Snap is in a perfect position to create a “mobile TV” experience with a menu of programs designed for an attention-short, vertical-video-watching audience. Its UX is already set up in a ‘channels’ format, just like TV, and it doesn’t hurt that the app over indexes heavily in the 18-34 bracket, where TV viewership has been been falling at around 4 percent a year since 2012.

Another trump card is the nature of video consumption on the platform. With Facebook, video is consumed in a stream, surrounded by other pieces of content. On Snapchat, the vertical video on on offer is far more immersive, and delivers much higher attention for brands. Snapchat ads are also fun to watch. Taco Bell and Gatorade have both generated enormous levels of engagement with branded filters, in return for enormous spend.

Taco Bell’s Cinco De Mayo custom filter generated over 224 million impressions.

Snapchat’s content strategy is focused on partnering with networks to develop entertainment programming and it has strong existing partnerships with brands like CNN, Buzzfeed, ESPN and others. In August, the company announced it had partnered with NBC to develop Snapchat-specific episodes of some of its hit shows, including “The Voice”, “Saturday Night Live”, and “The Tonight Show With Jimmy Fallon.” It has also worked with BBC on Snapchat tailored versions of the incredible hit ‘Planet Earth‘ and is planning unscripted drama series called ‘Snapchat Shows‘.

The company has also made some intriguing hires. In a move that clearly flagged future intentions, former Viacom sales head Jeff Lucas, a well renowned exec in the TV world with strong connections to US adland was hired as Snapchat’s vice president and head of global sales.

Ad spend has flowed in to boot.

According to Martin Sorrell, WPP spent $90 million with Snapchat in 2016 — having only projected to spend around $20 – $30 million. This year, Snap wants $100 million to $200 million in 2017 commitments from WPP, Omnicom and other ad companies. According to reports, at CES last month the company pitched a room full of Publicis executives and clients, making the case for why it should soak up TV spend.

That’s fightin’ talk, and for good reason. Snap’s IPO puts it at a valuation north of $20 billion. If it’s to realise that, it will need to win its battle to take a slice of the TV pie.

That’s a riskier bet than Facebook, but given its enormous success so far, you certainly wouldn’t write that off.

Act 3 – Who’s the winner and do they take it all?

So who’ll be the winners, losers and the ultimate champion? Will Facebook and Snapchat dance on traditional TV’s grave?

It’s impossible to say at this stage. By the end of 2017, things could be clearer, but its a VUCA (volatile, uncertain complex and ambiguous) industry with lots of egos and lots of moving parts.

Firstly, consistent studies have show that traditional linear TV is still by far the most effective platform for brand building, and in Ireland for example, over 60% of our video consumption is still linear and live. What Snap, Facebook and others don’t seem to have any feel for is the power of TV compared to their own ad offerings. Most great TV advertising is talked about, it’s enjoyed in your living room with your family, and just being on TV gives brands a kudos, a social cache that paying for FB adverts doesn’t. That’s a key strategic challenge for social media platforms, but it might be overcome just by virtue of slowly decreasing TV viewership.

It’s also not just Facebook and Snapchat’s battle to become the new TV, there are plenty interesting players involved.

Other platforms will have a strong say. YouTube for example, despite losing some momentum and offer less powerful brand advertising options, is still the major video player, and has been wooing networks.

On the other side, there’s danger from Netflix and Amazon, who have the huge budget to create their own content, but don’t need to rely on money from advertising. Netflix have a strong recurring revenue from subscription, while Amazon could credibly turn around and give away all its video content for free as a way to generate subscriptions for Prime.

And then there are also plenty of legacy issues with both Snapchat and Facebook that could create speed bumps. Snapchat’s advertising platform is pretty much non-existent, meaning it relies on multiple large deals rather than giving advertisers the chance to self manage. Its lack of targeting will not play well in an age when measurement is everything either. There’s also the double edged of being a youth biased platform – who’s to say the success with under 34s will be grown into older brackets? And then there’s the pressure to monetise pre and post IPO.

Facebook has its own issues. Despite paying for original content and being the place where most people in the developed world get their news, it refuses to admit it’s a media company. Four separate measurement errors in the last year alone has shaken advertiser confidence in the platform too, and articles like this really don’t help Facebook’s case.

So who’s going to win?

Certainly as digital advertising reaches maturity and we come out of the ‘trough of disillusionment’ (Gartner Hype Cycle terminology) caused by the display/programatic/adblocking mess, this will be the defining story of the next five years.

My uneducated guess is that the fragmentation of traditional TV will take much, much longer than we expect, and, at least in the medium term, it won’t be a winner takes all game.

Now that you know a little more about the main protagonists, let battle commence.

Because the final act is about to be written…

 

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Further Reading:

P&G scale back on precision targeting – WSJ
The Facebook Epoch – Stratechery
The Great Unbundling – Stratechery
The T.V. ad isn’t going anywhere, it’s going everywhere – Wired
Facebook’s big TV push – Digiday
Facebook is testing mid-roll video – AdAge
Facebook TV is happening – TV Rev
Old fashioned Snapchat – Stratechery
Get ready for Snapchat to feel a lot more like TV – Business Insider
Why Snapchat is the new TV – WSK