Can Brexiters and Remoaners segmentation be part of a marketing strategy?

This chain of thought got fired up when my Facebook filled up with calls to petition British Airways to strop the distribution of the Daily Mail, mainly because of headlines like:
mail headline
There are at least 16 million consumers that would broadly fit within the headline. When one looks at the demographic split of leave versus remain voters you start to see clear segmentation ideal for marketing opportunity.

You already have brands doing this in the U.S. for instance standing up for LGBT rights. Unilever’s Ben & Jerry’s have come out in support of Black Lives Matter.

Now lets look at research done into the demographics of the voters.

Much has been made of the splits in UK society:

Young people who voted tended toward Remain; the older you were the more likely you would be a Brexiter

(73%) of 18 to 24 year-olds voted to remain…

A majority of those aged over 45 voted to leave, rising to 60% of those aged 65 or over

Working class areas outside London and other major cities voted to leave

The AB social group (broadly speaking, professionals and managers) were the only social group among whom a majority voted to remain (57%). C1s divided fairly evenly; nearly two thirds of C2DEs (64%) voted to leave the EU

Labour claimed that a majority of Labour supporters who voted voted remain

Nearly two thirds of Labour and SNP voters (63% and 64%), seven in ten Liberal Democrats and three quarters of Greens, voted to remain

The correlation between class and voting broke down in Scotland and Northern Ireland were working class areas outside major cities narrowly voted to stay.

Some of it was certainly a protest vote, large swathes of the country feel that they have been ignored by a professional city-orientated political class. As the Political Economy Research Centre reflected:

The geography of leave voters reflected the economic crisis of the 1970s, not the 2010s.

Concerns about financial future and family’s well being were stressors rather than root causes. Research attributed it to more deep seated attitudes that shaped world view.

Work by the London School of Economics showed that when  attitudes were mapped against income level; working class status wasn’t as much a deciding factor as pollsters would have had one believe, instead it seemed to correlate close to personality traits.

Closedness and openess

Back in the 1950s American academics sought to answer the question of how Hitler and Mussolini  could have become so popular in what were initially democratic societies? What they and subsequent research found was that a certain amount of  a given population tend to have more of a closedness (or authoritarian dynamic) in their world view.

This can be amplified through:

  • Culture
  • Fear
  • Change
  • Economic insecurity

They look for strong leaders and simple answers. Nostalgia and the past is reassuring. They are less interested in ‘sensation seeking’ and want to fit in.

Liberal values tended to be more orientated towards aspects of openness that embrace newness, sensations, innovation and change.

The Google Trends spike

Much was made of a post-election Google Trends spike on searches such as ‘What is Brexit?’ as a demonstration of a key democracy failing. According to political scientists voters having an understanding of what they are voting for is key in a democracy. If it were true it would cast a shadow on the likelihood of the underlying electorate traits being useful for segmentation. The Google Trends story wasn’t necessarily correct; (but it was great fodder for the news cycle)

  • Google Trends is about the rate of change in searches, so it might be moved dramatically by a relatively small amount of searches
  • Having been working on using Google Trends, we’ve found that there are inconsistencies in data in terms of timing and peaks depending on which IP address it is drawn from and what is the exact mix of terms compared.
  • There is nothing but a hypothesis to associate the peak with people who were eligible to vote.

National versus international businesses

There are a number of British brands on the high street that are geographically focused for whom taking a resolute Brexit stamp would not cause brand harm or investor protest. Examples of this would be Tesco – who have pared back their international footprint and are likely to continue to do so, Wetherspoons, Poundstretcher and payday loans brands like Wonga.com.

For more internationally orientated publicly listed companies, the UK becomes less attractive. Senior government thought leaders such as conservative MP John Redwood have made it clear ‘interference’ including voicing concerns about the Brexit process would be unwelcome.

…companies who did not stay silent on the country’s EU membership would pay a “very dear economic and financial price”.

Chief executives who decide to take a corporate position on the issue could lose their jobs while those campaigning against membership would ensure there were financial consequences…

As the UK becomes a more isolated economy  two steps behind its European peers there could be a temptation to spin off their UK business. This could happen in two ways.

Selling on local gem brands (brands with only significant sales in the local country). Examples could be brands like:

  • Ambrosia
  • Hovis
  • Cabrini sportswear
  • K cider
  • Barclays
  • Wonga.com
  • Royal London

Alternatively disposing of UK subsidiaries would make sense as Brexit represents a permanent reduction reduction in profit margins. For someone like McDonald’s Restaurants, that would likely mean pressing ahead with an ‘all-franchise’ model in a similar approach to what it has taken recently in China.

In order to sell they are likely to require some sort of assets rather than just a sales agreement with the parent company. If they have become only a UK sales organisation, then the viability of this approach depends on the supply chain. One way of adding value into the supply chain would be for these businesses to open up a direct sales channel.

Companies like Unilever already look at how they can integrate into supermarkets supply chain, with ‘buy it now’ buttons on their own site that take you to their online retail partners. They could also open up a direct e-commerce channel; given the Marmitegate debacle with Tesco; expect examination of alternative business models like America’s Dollar Shave Club and Amazon’s Dash.

Modern international brands are already used to marketing towards the ‘open consumer’ who was likely to vote remain. Products that feel up to date, innovative and socially responsible.  A classic example would be Dove, Innocent smoothies, AirBnB or the average family car.

Marketing to the Brexiter

A local business for local people with brands that appeal to leave voter demographics could be more explicit in courting leave voter’s spend.

Tapping into the ‘authoritarian outlook’ would mean tapping into nostalgia; throw-back branding and possibly rolling back political correctness in the name of common sense.

An extreme outcome could be Robertsons bringing back their original Golly character; though thankfully I suspect that would be step too far – even in post-Brexit Britain.
The Robertson's golly

Rejection of expert is partly down to wanting a reduction in complexity. This has huge implications for a wide range of products, particularly in the financial services sector or mobile tariffs.

Choice is the enemy, a simple product, down-to-earth, unambiguous in its claims. Mobile tariffs without bolt-on features, complex phone upgrade cycles or value-added services. In the case of pensions and insurance, with the assurance that they could help ward off a sinister future full of negative change rather than rich rewards. Perceived good value wouldn’t do any harm either.

In terms of how the product or service fits into the Brexiter’s life it is less about being part of a creative expression of individuality. Instead it is more about the ‘grey man’; blending in. Blending in is a threat coping mechanism, a form of risk reduction (think Dilbert cartoons). It shouldn’t mistaken for being more community-spirited, instead the community is of mutual convenience – a shoal of people.  A consequence of this is that persona creation becomes harder or derivative, the stellar insight from the planner loses its gloss. Agency creatives are likely to struggle with consumer empathy beyond utility.

From the advertisers perspective; blunt simplicity rather than clever creative. Audience reach is still important, but a higher frequency is likely required to achieve a comparable impact. This is to get over the Brexiter’s higher degree of inertia to marketing and making them feel that accepting the brand is part of conforming within society. It is part of the eco-system, traditional brands have an advantage due to their familiarity and heritage. Even if its a new brand it feels as if it has always been part of the consumers fabric.

More information
Ben & Jerry’s came out in support of Black Lives Matter. Naturally, some cops are freaking out | Fusion
Business Leaders Speak Out Against North Carolina’s Transgender Law | Wall Street Journal
These 70 Corporations Want to Block North Carolina’s Transgender Bathroom Law | CBN News (US news outlet for the evangelical christian audience)
How the United Kingdom voted on Thursday… and why | Lord Ashcroft Polls
How Demographics Decided Brexit | The Market Oracle
How has Brexit changed the mindset of a nation? | Bucks New University Business School
How do Britain’s ethnic minorities view the EU referendum? | Kings College London
Making Sense of Brexit – the data you need to analyse | UK Data Service
Who is voting to leave the EU and why? | openDemocracy UK
Thoughts on the sociology of Brexit | Political Economy Research Centre
The 2016 Referendum, Brexit and the Left Behind: An Aggregate-Level Analysis of the Result by Goodwin and Heath – PDF
Businesses that speak out for Britain’s EU membership will be punished, vows John Redwood | The Telegraph
UK voters don’t understand Brexit, Google searches suggest | Ars Technica UK
Marmitegate is ‘just the tip of the iceberg’ as cheese, chocolate and wine all face ‘punishing tariffs’, Nick Clegg claims | The Telegraph
It’s NOT the economy, stupid: Brexit as a story of personal values | British Politics and Policy blog | LSE
Brexiters would rather trust the wisdom of ordinary people than the opinion of experts | Quartz
The One Weird Trait That Predicts Whether You’re a Trump Supporter | Politico
Brexit Voters: NOT the Left Behind | Fabian Society
Authoritarianism and Political Behavior by Janowitz & Marvick | Public Opinion Quarterly (Summer 1953)
Voters’ personality traits in presidential elections by Barbaranelli, Caprara, Vecchione and Fraley | Personality and Individual Differences 42 (2007) – PDF document
Personality Traits, Partisan Attitudes, and Voting Behavior. Evidence from Germany by Schoen | Political Psychology (August 2007) – PDF document
Grey Man Strategies 101: Peeling Away the Thin Veneer of Society | Imminent Threat Solutions
How To: The Modern Grey Man Philosophy | Loaded Pocketz
EU referendum results | The Electoral Commission

According to Google, PR and SEO are no longer earned media-only disciplines

Back in August Google started to roll out changes to its Keyword Planner tool. Users who did not have an active AdWords campaign running on there account would no longer get search volume data. Instead an indicative range appeared.
Crippled version of Google Keyword Planner
Information that isn’t particularly useful.

Search volume as a directional metric is important for both online and offline communications:

  • Public relations and branding specialists to understand the language of the customer. PRs would use it to help hone key messages. Branding specialists would use it to help the brand lexicon or editorial guide
  • SEO specialists use this information as part of their process to pick the most important key words for a web page or website

Now PR people and branding specialists need to have access to an account with a continuous advertising spend running. Even if they aren’t doing any online-related work themselves.

The road to paid media only access has been a long one: KeyWord Planner had been announced in 2013, a result of Google rationalising some of the existing tools into one. Keyword Tool and Traffic estimator merged. KeyWord Planner was notable for requiring an AdWords account, this was a noticeable change and not too subtle hint from Google.

Unlike other product changes this latest ‘enhancement’ was not announced on any of the Google product blogs like Inside AdWords, but instead was acknowledged retrospectively by a Google spokesperson answering a question from Search Engine Land. It has been up to the community to explore the full implications.

One aspect is that if you reduce your Google advertising spend, you lose access to the data. So, PR, branding and SEO become inextricably linked with PPC advertising.  Critics could accuse Google of abusing its market power with 95%+ share of search in Europe; but Google would argue that it has had to move this way because of bad actors. Secondly, since the service had been provided for free since it was launched at the end of 2008, there is never any guarantee that it would be free to use.

Google now has antitrust investigations coming at it in markets around the world, they probably just don’t care any more and its all about profit maximisation. If one looks at the Alphabet Group overall, Google is the obvious cash cow.

However it is ironic now that Russian search engine Yandex via its Wordstat tool provides better free information on search volumes than Google.

More information
What the heck is going on with Google Keyword Planner? | Search Engine Journal
Introducing Keyword Planner: combining the Keyword Tool and Traffic Estimator into One | Google Inside AdWords blog
Announcing the Search-based Keyword Tool | Google Inside AdWords blog
Yandex Wordstat

The New Nokia

Microsoft finally let go of its licence for the Nokia license on May 19, 2016.
Slide03
There is a lot of logic to this move:

  • Microsoft has already written down the full value of the business acquisition
  • It has got the most valuable technical savvy out of the team and moved it into the Surface business
  • It removes problematic factories and legacy products

For the businesses that have acquired the rights to use the Nokia name and the factories the upsides are harder to see.

The factories may be of use, however there is over supply in the Shenzhen eco-system and bottlenecks aren’t usually at final manufacture, but in the component supply chain.

There is still some brand equity left in the Nokia phone brand. I analysed Nokia along with a number of other international Greater China smartphone eco-system brands using Google Trend data.
Slide06
There has been a decline in brand interest over the past 12 months for Nokia of 37%
Slide07
Nokia still has comparable brand equity to other legacy mobile brands such as BlackBerry and Motorola
Slide08
The brand equity is comparable to other value mobile brands. Honor; Huawei’s value brand has had a lot of money and effort pumped into it to achieve its current position.
Slide09
But it’s brand equity doesn’t stack up well against premium handset brands from Greater China. The reason for this is that smartphone marketing and fast moving consumer goods marketing now have similar dynamics – both are in mature little differentiated markets. Brands need to have deep pockets  and invest in regular advertising to remain top-of-mind across as large an audience as possible. Reach and frequency are more important than social media metrics like engagement.

In addition to advertising spend needs to be put into training and incentivising channel partners including carriers.

They are entering a hyper-competitive market and it isn’t clear what their point of advantage will be. Given the lock down that Google puts on Android and commoditised version of handset manufacture, the best option would be to look for manufacturing and supply chain efficiencies  – like Dell did in the PC industry. But that’s easier said than done.

Garnering the kind of investment required to seriously support an international phone brand is a hard sell to the finance director or potential external investors.

Slide13
Growth is tapering out.
Slide14
The average selling price is in steady decline
Slide16
This is partly because the emerging markets are making the majority new phone purchases.
Slide15
Consumers in developed markets are likely holding on to the their phones for longer due to a mix economic conditions and a lack of compelling reason to upgrade.
Slide12
All of the consumers that likely want and can afford a phone in developed markets have one. Sales are likely to be on a replacement cycle as they wear out. Manufacturers have done a lot to improve quality and reliability of devices.

Even the old household insurance fraud standby of dropping a phone that the consumer was bored with down the toilet doesn’t work on the latest premium Android handsets due to water-proofing.
Slide20

More information

The answer to the question you’ve all been asking | Nokia – Nokia’s official announcement
Gartner highlights a more challenging smartphone sector for Nokia than when it “quit” in 2013 | TelecomTV
Nokia is coming back to phones and tablets | The Verge
So the Nokia brand returns.. with a Vengeance | Communities Dominate Brands

Supporting data slides in full

What are the major reasons behind Yahoo’s drastic downfall?

I came across this question on Quora and decided to post my answer with additional data points and information here as well.
Yahoo! star
This is a big question. In the answers that it will receive you are likely to see:

  • Difference of opinions about the reasons of the decline
  • Differences of opinion  about when the decline actually set in. Which begs the question was the downfall that drastic?

Before we get into the why, lets think about the nature of businesses.

Public listed companies generally don’t last forever

The AEI said that 88 per cent of the companies that made up the Fortune 500 in 1954 are gone. Yahoo! is between 21 and 22 years old depending which way you count its age.

Yahoo! has outlasted many of its peers:

  • Excite – merged with @Home Network in 1999. It went bankrupt in October 2001. It was sold in December 2001. By 2007, the business was broken up by territory.
  • Lycos – was sold three times, each time for a fraction of the purchase price
  • Hotbot – bought by Lycos
  • AltaVista – minority stake sold to CMGI in 1999. Bought by Overture in February 2003. Yahoo! acquired Overture in July 2003

Only MSN remains of the original brands that it competed against. If MSN wasn’t a Microsoft business, its survival would be questionable. Microsoft’s online services lost money from 2006 through 2010. By comparison, Yahoo! has kept making a profit – despite its issues.

Macro-effects

The technology sector has become a hunting ground for active investors. Back in the 1980s, American publicly listed brands were attacked by investors:

  • RJ Nabisco – leveraged buyout by KKR
  • Gulf Oil & Unocal – T. Boone Pickens had failed bids for both oil companies but made a large profit on his holdings
  •  TWA – leveraged buyout by Carl Icahn. Icahn’s business practices were responsible for its bankruptcy in 1992 and 1995
  • Revlon – acquired in a hostile takeover by Ron Perelman, much of the business was broken up to pay for the deal

In the 1990s, factors changed:

  • Credit lines for deals dried up as some leveraged buyouts proved to be bad for investors
  • Businesses developed more effective defences including poison pills, golden parachutes and greater debt
  • Overall value of the stock market increased. This reduced the amount of opportunities to get companies on the cheap

Moving forward 20 years, the technology sector became in a similar place

Historic technology businesses have moved from being high growth to value businesses. This changed the nature of investors interest in them.

  • Microsoft gave a seat on its board to an activist shareholder ValueAct Capital
  • Apple started paying dividends and raising the debt on its balance sheet to fend off Carl Icahn

Google’s unique two-tier shareholding structure has proved to be an effective defence so far.

A business like Yahoo! looks like a classic corporate raid target as its value is less than the sum of its parts. It has a regular cashflow that could service a lot more debt at current interest rates. It has assets that can be quickly sold.

Capital has become much cheaper. This is partly a result of low interest rates set to keep the economy out of trouble in 2008. But there is also a lot of foreign capital and pension fund money looking for a home.

Missed opportunities

Given that we have the perfect vision of hindsight, Yahoo! missed key opportunities. Here are some of them.

Yahoo! failed to buy Google

Yes, Yahoo! did fail to buy Google. And their competitors failed to buy Google as well. Excite rejected the opportunity to buy Google for $750,000 in a deal arranged by Vinod Khosla. By comparison Terry Semel, then CEO of Yahoo! failed to buy Google for $5 billion. At the time Yahoo!’s entire market value was roughly $5 billion.

Yahoo! failed to buy DoubleClick

While Yahoo! was playing catch-up with Google on search. Google outbid the online industry to pay $3.1 billion for DoubleClick. DoubleClick provided advertisers with more opportunities to place banner ads than Yahoo! did.

Yahoo! failed to buy Facebook

Terry Semel offered $1 billion for Facebook in 2006. Semel wouldn’t go to $1.1 billion Facebook’s board wanted.

Yahoo! failed to sell to Microsoft

I don’t think that the Microsoft deal was a serious offer. There are  reasons to be suspicious:

  • Microsoft couldn’t make its own online business profitable at the time. The deal was unpopular with shareholders
  • Yahoo!’s contribution to the open source community would have been an antitrust issue
  • It would have to get through approval by Japanese competition authorities
  • It would likely have to get through Chinese antitrust authorities

Yahoo! didn’t communicate these risk factors to shareholders. Which then left the door open for the Microsoft-funded Carl Icahn coup later on.

Yahoo!’s board has failed the company

I think that there is a stronger argument for this when you look at their selection of CEOs over the years

  • Tim Koogle – led Yahoo! on the upcycle of the dot.com boom. He resigned and replaced by Terry Semel during the bust that followed.
  • Terry Semel – was a senior media industry executive who bought the business out of the bust. He never got the product and never used email. He never managed to build a media company despite his Hollywood heritage.
  • Jerry Yang – history will look with more favour on Jerry Yang in the future. He did the Yahoo! Japan  and Alibaba deals which are the most interesting parts of Yahoo! today. As a CEO, his time was consumed by  Microsoft’s hostile bid
  • Carol Bartz – Bartz was a Microsoft approved appointee. Her deal on Facebook Connect saw the social network build its business on the back of Yahoo!’s user database. Bartz does the Microsoft search deal badly. She also launched mobile apps that were bad. The one thing she needs respect for is her approach to marketing. Bartz realised that she needed to promote the entire Yahoo! brand. Although there was a buzz marketing team in the US, most marketing was based around products. Unfortunately the execution of the brand campaign was poor. This was partly because it was led from the US with little engagement of regional and national marketing teams.
  • Scott Thompson – stayed for five months. Allegations were made about his education, better due diligence on his recruitment required.
  • Ross Levinsohn – Ross served as interim CEO after Thompson left. It is hard to know what CEO he would have made. But his successor seems to have borrowed his strategy.
  • Marissa Mayer – Despite the goodwill Mayer had going into the job she hasn’t managed to change Yahoo!’s current business. That the company’s strategy is being driven by activist shareholders says a lot.

Problems in execution

Yahoo! had its fortune hitched to brand display advertising. Growth has dropped in this for the past ten years. Yahoo!’s declining advertisng revenues started in Q2 of 2006. Part of the problem was that Yahoo! had been too successful to begin with. Yahoo! sold its display advertising for way more than it was worth.

Yahoo! failed to monetise search as well as Google. And then handed its search business over to Microsoft, who failed to do as good as job as Yahoo! managed on its own.

Yahoo! failed to execute in mobile, despite some smart early efforts. Photo community Flickr was the default photo app on Nokia’s N73 blockbuster smartphone. The N73 launched at the end of April 2006. It was was one of the last things I worked on before leaving. Given that headstart Flickr could have been Instagram. Instead its a more specialist community of ‘proper’ photography enthusiasts. Yahoo! Messenger and Mail both worked on Nokia handsets from the mid-2000s. Yahoo! Go was an app which provided access to services including:

  • Flickr
  • Address book
  • Calendar
  • Email
  • Maps
  • Search
  • Content: news, weather, finance, sports, entertainment

It could have provided the same function that Android provides for Google, but Yahoo! considered as ‘beta software’ right up to is finish in January 2010. Yahoo! has been providing Apple with weather information and stock data for the iPhone. Yet it hasn’t managed to build a successful iPhone app.

One way of illustrating the decline of Yahoo! in mobile is to look at the user numbers of Yahoo! mail, which seems to have peaked around September 2011.
Yahoo! Mail, Hotmail and Gmail users over time
Hotmail shows a linear increase over time, likely due to organisation changes as it has moved to the cloud and Gmail takes off, presumably on the back of Android – though iOS users also have Gmail accounts.

Yahoo!’s acquisition process was broken. Ever since Yahoo! wasted 1 billion dollars buying Mark Cuban’s Broadcast.com the business slowed down. Broadcast.com was a scare on the collective memory. Capital decisions took longer, acqusitions took longer. The cheque book was harder to open. Under Marissa Mayer, it was finally let loose, but the purchases seem to have made little difference.

Yahoo! failed to become a media company. Back when I was at Yahoo! we launched Kevin Sites in the Hot Zone – a sort of proto Vice News in 2005. Despite Semel’s Hollywood background, he and following CEOs never made it work. Despite the fact Yahoo! had joint ventures with TV networks in Australia and Canada. When Marissa Mayer finally managed to get talent in the door, audiences had moved to other sites:

  • Gawker Media
  • Buzzfeed
  • Daily Beast
  • Aol’s blog network
  • Huffington Post

Yahoo! failed to make social work. Yahoo! owned pioneer social brands:

  • Yahoo! Chat – chatrooms were the Facebook Groups of yesteryear. Yahoo! was doing social before it was a thing
  • Delicious – neglect, internal politics and corporate interference meant that Yahoo! never capitalised on Delicious. Despite its tribulations there are some people who still use it, though I am not sure why
  • Flickr – corporate interference and neglect destroyed the potential growth of photo sharing site Flickr. The site is kept going as a photographic enthusiasts community. It could have been Instagram. Thankfully, Yahoo! only spent $30 million on it
  • Yahoo! Messenger – Yahoo!’s Messenger had a poor mobile client, but could have been WhatsApp. Facebook dominates the sector along with Tencents WeChat, NHN’s LINE and Daum Kakao’s KakaoTalk
  • Tumblr – Yahoo! was forced to writedown the value of Tumblr to nothing. The company failed to monetise the popular blogging and curation platform. Tumblr is one of Yahoo!’s few products that attracts a millennial audience

Yahoo! products had a poor experience. I launched over 14 products at Yahoo! in just over a year. I only ever used 2 of them on a regular ongoing basis – Delicious and Flickr. Other products like Yahoo! 360, Yahoo! Answers or Yahoo! MyWeb 2 – fell into three categories:

  • Dogs to use – particularly in the set-up part of the process
  • Not particularly useful – Yahoo! Answers, great idea in prinicple but poor cultural fit. That poor fit meant that it filled up with noise, Yahoo! Answers isn’t as useful as Quora
  • Strangled soon after birth – so it became frustrating to commit your time to them as a user

Politics paid a part in this process. The Communications group (responsible for Messenger and Mail) had a lot of duplicate products. Yahoo! Photos was a bad version of Flickr. For storing your bookmarks there was:

  • Yahoo! Bookmarks
  • Yahoo! MyWeb
  • Yahoo! MyWeb 2
  • Delicious

This all bogs management down and sucks away resources. There were also so many projects that never saw the light, due to constant changes in priority.

More information
Fortune 500 firms in 1955 vs. 2014; 88% are gone, and we’re all better off because of that dynamic ‘creative destruction’ | AEI Ideas
Microsoft’s Bing/MSN Results Truly Horrifying — Loss Rate Balloons To ~$3 Billion A Year | Business Insider
Stupid Business Decisions: Excite Rejects Google’s Asking Price | Minyanville 
A Microsoft First: Activist ValueAct Gets a Board Seat – WSJ
How Yahoo! Blew It | Wired
Yahoo! Could Have Bought Facebook For 2% Of Today’s Valuation | Business Insider
Sorry Microsoft, Yahoo — Google Just Got Bigger | Ad Age

Advertising isn’t the problem with ad-blockers – telecoms edition

A few days ago I explained why I thought that tracking was the problem that ad blockers are designed to deal with. From a consumer point-of-view the time it takes to load a page is unacceptable for a significant minority of internet users.

This comes at a time when mobile telecommunications services have become commoditised. For £29/month I get unlimited data, unlimited SMS texts, unlimited voice, free roaming across a number of countries around the world and 8GB of data when my phone is used as a modem for a laptop.

So how could a mobile carrier upsell me? The answer lies in going back to the late 1990s. In the UK, there used to be a mobile carrier called one2one. The service provider had a poor network, but needed to engage with business users and tech forward consumers. They did this with series of tariffs under the Precept brand. These tariffs had a couple of differentiated services in common:

  • A shorter gap between replacement handsets
  • A priority and normal number, so that you could prioritise callers
  • Improved voice quality using a better Codec called Enhanced Full Rate or EFR

Move forward the best part of two decades – handsets are now affordable to be purchased upfront for tech forward consumers, though Apple and Samsung looking to duplicate the car leasing model in the US. They are likely to roll it out internationally at some point.

The equivalent of priority numbers is multiple identities or accounts, differentiation that steps out of the mobile provider remit and into services provided via applications, for instance multiple email addresses.

Voice calls are becoming increasingly disinter-mediated through OTT messaging services.  But ad-blocking on the network level offer a clear analog to the deployment of EFR, providing faster page load times for web content.

There are also benefits in terms of network utilisation and bandwidth capacity. This is especially important in countries like the UK where it is nigh on impossible to get planning permission for mobile masts due to consumer protests. But the most attractive part of ad blocking at the network is the product differentiation it affords mobile providers.

More information
Advertising isn’t the problem with ad-blockers | renaissance chambara
UK Gov’t Launches Anti-Adblocking Initiative, Compares It To Piracy | Slashdot
Three Group to tackle excessive and irrelevant mobile ads | Three UK media centre
One 2 One offers free daytime calls and souped-up GSM | V3
The UK’s £150m Mobile Infrastructure Project “not as successful as envisaged” | TelecomTV

MWC 2016 as a case study on talkability, brand mentions and brand performance

Mobile World Congress (or in industry parlance MWC 2016) is where the telecoms industry goes to set out its stand. It has gradually changed from being a conference where the big issues of the day are hashed out, to more of a trade show a la CES or CeBIT.

From a brand point of view, it was of interest to me for two reasons:

  • It offers largely culture neutral brand discussions, many of which occur online
  • I have an interest, having worked on a few mobile brands during my agency career (Palm, Ericsson, Verizon Wireless, Samsung, Qualcomm, Telenor Myanmar and Huawei)

I pulled this slide ware together for a talk I am giving at an internal event at an agency.

The first data that I have put together is looking at the amount of mentions that occurred regardless of the channel. It is a relatively easy data point to pull out of monitoring systems very quickly.

Obviously the value of mentions will depend on how many people view them, what is the context that the mention appears in. What was the content around it? Who said it, are they expert or trustworthy? So looking purely at the number of mentions would be crude, offering little value apart from nice PowerPoint slides.

Breaking the mentions down by platform gives an idea of relative marketing communications competencies of brands. So looking at Huawei and Xiaomi shows contrasting approach to building talkability and conversations. Huawei focuses on traditional media channels where as Xiaomi focuses on social.

By comparison LG and Samsung seem to have a more holistic approach.

I then moved on beyond the mention data to try and look at relative authority of whoever mentioned the brand and looking at the relative distribution by brand and channel.

I had done some initial analysis on the event in general here. These numbers showed how well brands had built high authority communities and the discussions around them.

What was quite surprising was the polarised authority of mainstream media sources. Newswire syndication had destroyed authority of many online traditional media channels. A second cross brand observation was the relatively low authority of the blogosphere.

These slides only start to delve into understanding talkability and are time consuming to create in comparison to looking at raw mention numbers, but offer superior strategic insight for both earned and paid media approaches for future launches.

I did some broad profiling of online conversations around MWC here.

What does Zero Based Budgeting mean for agencies?

After talking with a friend I pulled together a brief presentation for them which explained what Zero Based Budgeting (ZBB) practices at a client were likely to mean for an agency.

The key takeout for me are is one of attitude. ZBB isn’t about cost cutting but about spending the money in the most effective way where it matters the most.

Edelman’s trust barometer 2016

Edelman’s Trust Barometer has become a kind of zeitgeist meter for the kind of people who go to the World Economic Forum at Davos.

This year Edelman talks about the Grand Illusion, that everyday people will follow the global elites. Income inequality and a growing realisation that the future won’t get better has gradually changed perceptions. It is yet another data point that signals the death of the American Dream and according to Citi the end of Pax Americana.

It is also worthwhile looking at BAV Consulting research on ‘the best countries in the world’ to see how country brand equity are now perceived.

More information
Prepare for the Post Pax-Americana era, says Citi – FT (paywall)
2016 Trust Barometer: Divide Opens Up Between Global Elite And Public | Holmes Report
U.S. News & World Report, WPP’s BAV Consulting & The Wharton School on best countries in the world | PR Newswire

Jargon watch: McRefugees

McDonalds Restaurants in Hong Kong is famous to Economist readers for consistently providing the best value in the publication’s ‘tongue-in-cheek’ ‘Big Mac Index’ McDonalds Chinese sign

The restaurants are ubiquitous, offering cheap consistent food. And many of them remain open 24 hours a day, which contributes to Hong Kong’s ‘up all night’ lifestyle alongside the ubiquitous convenience stores. They are a neighbourhood haven to office workers, students and those on shifts. Their relative low costs mean that they prove attractive to homeless people. McSleepers and McRefugees were the interchangeable labels given to the homeless people sleeping in McDonalds to escape the oppressive heat of summer or the cold around lunar new year. It became a thing in the media last year when a woman lay dead in a restaurant for 24 hours before being discovered. The tragedy masks the unintentional social role McDonalds is playing for the poorest in Hong Kong society.

More information

Hong Kong ‘McRefugees’ up sharply, study shows – Hong Kong Economic Journal Insights

Save our McRefugees: Woman’s lonely unnoticed death in Hong Kong McDonald’s highlights need to help homeless | SCMP

Hong’s Kong’s lack of affordable housing fuels ‘McSleeper’ trend, where the homeless sleep at McDonald’s | SCMP Homeless woman found dead at Hong Kong McDonald’s 24 hours after she sat down as unaware customers ate | SCMP

‘McRefugee’ reunites with son in Singapore through media report on Hong Kong’s McDonald’s sleepers | SCMP

The lonely life of the McSleepers, the poor who call McDonald’s home | SCMP

Philip Kotler on marketing

My college days were dominated by a blue book published by Prentice-Hall that sat on my bookshelf and looked down at me. Philip Kotler’s Principles of Marketing seemed to be omnipresent during my studies. I eventually donated it to a charity shop a couple of years ago when I had a big clear out. Thankfully his public speaking is more engaging than his text books.

I like: Ling Valentine on her business Ling Cars

Ling Cars looks like someone fed a car dealership through Geocities, but it’s entertaining and it works. It is a characture of Chinese language websites that often look a lot busier in terms of design than their western counterparts. This is partly due to culture and typography.  Over the space of 30 minutes Ling Valentine talks about her approach below

What’s eating Google’s brand?

Back in 2005 when I started work at Yahoo!, the internet was a very different place.  It was an exciting time, web 2.0 was a technological and philosophical step-change for online services. We had cleared our palates of the bad taste left by the silliness of the dot com implosion.

Social networks weren’t mainstream in the way we would understand them now – though there were social networks prior to the the then nascent Facebook. Instant messaging was just starting to move on to mobile devices and were more a source of ‘presence’ information – whether someone was free or not than mobile messaging. Instant messaging on the desktop was big and everyone thought that Skype actually worked really well at the time.

We were conscious of security, but again Skype promised privacy and security (except in China) through secure encryption.  The 800LB gorilla in the room was Google. Yahoo! had managed to survive the dot com bust and subsequent 30+% drop in online advertising revenues because of the Yahoo! Dating business. Even in a recession people still need love. By comparison, Google had been on a tear, Adwords promised marketers greater transparency where they money had gone and what action had been derived from their advertising spend. There were even some nice charts that they could cut-and-paste directly into a PowerPoint presentation.

Google’s impact was much bigger. Yahoo! had pioneered search with Jerry Yang and David Filo’s directory in the mid 1990s. You can still find an iteration of the directory at Yahoo! here. In 1999, the front page of Yahoo! still reflected that directory heritage, as you can see from this screen shot
Yahoo! early morning of March 3, 1999
By the time I joined Yahoo! we had a search page that looked much more like the clean design of Google’s search page. The product was comparable in performance to Google as well, it just wasn’t Google; which is what most UK web users wanted.
Y! search late 2005
We struggled to get media mentions for Yahoo! in comparison Google’s coverage wrote itself: Google spots Jesus in Peruvian sand dune | The Register. Products like Lycos’ IQ service didn’t get the attention they deserved because if it didn’t come from Google the digerati weren’t interested.  At the time Google had 70% or so of the share market, rumours I heard at the time from colleagues were that up to 95% of searches from Yahoo!’s UK office actually used Google – which foreshadowed Google’s European dominance.

Google’s dominance could be said to have peaked around 2006, social was starting to appear and consumers started to learn the downside of what beta meant as services started to disappear or become amalgamated into other products. Services that they wove into the fabric of their online life disappeared. Tools that helped them work became less useful as functionality was dialled back.

I have compiled a list of products that Google has launched and closed and ignored US-only products. There are some specific omissions:

  • Deja News had been already shutdown by the time Google acquired the company, Google sucked the service’s Usenet archives into Google Groups
  • Google launched ‘Click-To-Call’ twice. It was closed down for the first time in 2007 and was trialled again in April 2010
  • Hello was a Picasa-based picture file transfer app similar to ‘send file’ on your favourite instant messaging platform, it was axed in 2008, but it always felt like a feature to me rather than a product
  •  SearchMash always was a testbed for different search user experiences. It was not a product by any stretch of the imagination
  • Google PowerMeter was a piece of software from Google.org – the charitable foundation set up by Google
  • Google Directory used data pulled from the Open Directory Project, it just ranked them using its algorithm
  • Google Pack was a marketing ploy and possible revenue generator rather than a consumer product per se

A number of businesses that Google got involved with where acqu-hires:

  • Aardvark
  • BumpTop
  • DocVerse
  • Dodgeball
  • fflick
  • Gizmo5
  • Jaiku,
  • Meebo
  • Picnik
  • Postini
  • Quickoffice
  • Slide
  • Zingku

Spun-out / rebranded  products

Product name Date of launch (DD/MM/YYYY) Fate
Google body 15/10/2010 Google Body was part of Google Labs. It was handed over to Zygote Media Group on October 13, 2011.  It is now called Zygote Body. The source code is available under an open source license
Google gears 31/05/2007 Removed from Google’s product set, Gears was released under a BSD license. News of Google’s migration away from Gears broke in November 2009

Discontinued products

Product name Date of launch (DD/MM/YYYY) Fate
Google answers 04/2002 Google has taken a number of runs at Q&A services. Google Answers shut down was announced on November 28, 2006
Google deskbar 06/11/2003 Google Deskbar came out of Google Labs; it put a Google search box inside the chrome of the operating system, allowing consumers to Google not just from inside the browser, but also productivity software.  It was discontinued on May 8, 2006. A similar feature was incorporated into Google Desktop Search.
Orkut 24/01/2004 Facebook-like social network that used to be popular in India and Brazil.
Google desktop 14/10/2004 Searched across the computer similar to Spotlight in OS X and a web search box a la Google Deskbar. Desktop also had Konfabulator-like web applets that provided information on weather, news etc. It was announced that it would be discontinued on September 2, 2011
Google Notifier 2005 I can’t find a specific date in 2005 when Notifier was launched. It let desktop users now when an event was due on their Google calendar or an email available in Gmail
iGoogle 05/2005 Discontinued on November 1, 2013
Google talk 24/08/2005 Google’s VoIP client, replaced by Google Hangouts on May 2013
Google reader 07/10/2005 Google closed down Reader despite the outcry from users. According to Google it had a loyal but declining user base so shut it down on July 1, 2013
Google page creator 24/02/2006 A simple way of web publishing, which Google replaced with Google Sites in September 2008.
Google notebook 10/05/2006 Google Notebook was a bit like a proto-Evernote. Content was exported to Google Docs on November 11, 2011 and the service disappeared by July 2012. On March 20, 2013, Google launched a similar service called Google Keep
Google brower sync 08/06/2006 Rolled out of Google labs as a way of synchronizing settings, passwords and bookmarks across say work and home computers running the Firefox browser. Google’s Chrome browser has a similar function and shutting this function down would have been designed to persuade consumers to jump ship when it was discontinued in June 2008.
Google image labeler 31/08/2006 Google copied the idea behind Carnegie Mellon’s ESP game to find a better way to teach its search what images were. Since it depended only on common answers from two random players, it prevented foul play so to speak. It was shut down on September 16, 2001
Google code search 05/10/2006 Vertical search looking at open source code on the web, announced for shutdown on January 15, 2012
Google website optimiser 10/2006 Free website testing tool to enable site owners to get more value from their site. Discontinued on August 1, 2012
Google question & answers 28/05/2007 Google’s latest attempt at a Q&A service was ran as localized services in Russia, France, international English and China through a partnership with Tianya. It was closed down on June 23, 2014
Knol 13/12/2007 Kind of similar to Squidoo in that it allowed experts to develop a sphere of content as user-written articles. It was announced on November 22, 2011 that it would be shut down.
Google friend connect 12/05/2008 A social media profile that was exportable (possibly as a widget), what Wikipedia called a social networking script. Google signaled it was killing it off on November 23, 2011 to make way for Google+
Google health 20/05/2008 Centralised personal health record service. It didn’t get to the UK but did influence David Cameron’s thinking on health IT. Discontinued January 1, 2012
Google lively 08/07/2008 Google Lively was a way of creating a SecondLife-type environment for conference calls – one of the reasons why IBM was so interested in SecondLife in the first place. Lively was discontinued on December 31, 2008
Google insights for search 05/08/2008 Google Insights for Search was merged with Google Trends on September 27, 2012
Google latitude 05/02/2009 Location aware social application, similar to Dodgeball that Google had acquired and closed down. Latitude itself was shut down on June 10, 2013
Google squared 12/05/2009 Google squared provided some of the functionality of Wolfram Alpha, in particular adding structure and relationships to apparently unstructured data sets. It was shut down on 05/09/2011
Google wave 27/05/2009 Google Wave was a hybrid communications platform that allowed document collaboration and a mix of email and messaging. Google Wave was culled in a batch of ‘spring cleaning’ announced by Google in November 2011. Source code from Google Wave was released under an Apache license.
Google fast flip 14/09/2009 Provided a flip board type of experience aggregating content from 39 news partners. It was axed on September 5, 2011
Google building maker 13/10/2009 Allowed users to model existing buildings for inclusion in Google Earth as a 3D model. Shut down announced on March 13, 2013
Google dictionary 12/2009 Google Dictionary was launched as a standalone product after being a feature in Google Translate. It was shut down without warning on August 5, 2011. Google has a dictionary function build into search using ‘define:”
Google buzz 9/2/2010 A social network that integrated into Gmail, it was discontinued on December 15, 2011.
Google cloud connect 24/2/2011 Google Cloud Connect was a Microsoft Office plug-in that allowed you to easily save documents to Google Docs. It was discontinued on April 30, 2013
Google schemer 18/11/2011 An invite-only clone of 43 Things was shut down on February 7, 2014
Quickoffice 05/06/2012 (date Google acquired the company) Quickoffice was an established mobile application when Google acquired the company, discontinued on June 29, 2014

The closure of Google Reader felt to me like a water shed moment. Google Reader had come along and eviserated the current marketplace for RSS readers, though the size and reach of the Google network. Names like Fastladder and Bloglines. Once the competition was demolished Google then withdrew of the sector and a scramble of cottage industry services sprung up to try and fill the gap; my personal favourite being Newsblur.

I suspect and have heard others suggest that Google has a problem getting users to use and commit to new services. I don’t think that Google Wave’s issue was consumer commitment, but poor product design, but the lack of adoption for say Google+ screams consumers and early adopters could be indicative of a wider wariness of the general public to invest their data and time in a new Google service. This maybe part of the reason why Google seems to be gradually extracting Google+ from its product matrix; just a few days ago no longer using Google+ author ranking in search.

If one looks at Google+ versus other services in Google Trends we can see a similar level of interest to say Google Reader, something that Google has already admitted was a non-viable product.

Google finds itself in a more normal internet brand marketing position: asking consumers for brand permission to innovate so that consumers will engage with their new products and services. Having been on the other side of that fence I realise what a challenge that can be.

More information

Lycos IQ
Lovely Jubii-ly | renaissance chambara
IAC | Ask and the social web | renaissance chambara
Open source intelligence | renaissance chambara

Google Click To Call
Google Tests Phone Numbers In AdWords Ads | SearchEngineLand

Google Reader
Reader May Have Died To Feed Google+’s APIs | Co.Labs

Google Answers
Adieu to Google Answers | Google Official Blog

Google Deskbar
Google’s Deskbar; Search Engine Forums Spotlight | Search Engine Watch

Google Lively
Be who you want on the web pages you visit | Google Official Blog

Google Questions and Answers
Baraza turning read only | Google Help

Google Groups
How to Search Today’s Usenet For Programming Information? | Slashdot
Google’s Abandoned Library of 700 Million Titles (UPDATED) | Wired
Google Begins Fixing Usenet Archive | Wired

Google Wave
More spring cleaning out of season | Google Official Blog

Google Gears
Stopping the Gears | Google Gears Blog

Google+
It’s Over: The Rise & Fall Of Google Authorship For Search Results | SearchEngineLand

The culture of brand collaborations in Hong Kong

On of the more unusual aspects of marketing in Hong Kong is the amount of co-marketing deals and the unusual nature of these tie-ups. For instance last year I saw high-end Japanese streetwear brand Neighborhood have it’s brand on Coke Zero cans.
Coke Zero x Neighborhood limited edition cans
This was used by Coke Zero to promote nighttime cycling. (It would be cooler and Hong Kong looks spectacular at night.)
Untitled
Meanwhile McDonalds is usually better known for tie-ins with Sanrio character franchises. However, now it is running a promotion with Singapore-based personal care brand Walsh. Think of Walsh as similar to Cussons in the UK. With certain breakfast dishes, consumers get a bottle of body wash free.

Here is the TV advert being run to support the promotion. And no, I can’t really make that much sense of the synergies either, but it seems to work.

The Beats and Apple post

If you had a Japanese made personal stereo in the 80s through to the early noughties the words ‘Mega Bass’ meant something. It was printed on everything from clock radios and boom boxes to personal cassette and CD players.
Sony Walkman WM A602
It was the button you pressed to give the bottom end of the music you listened to more umpf.

Different Japanese companies had their own spin on it. I remember Hitachi systems having ‘3D Bass’ or a ‘3D Woofer’ label on the speaker grill to highlight their sonic capabilities. Aiwa had personal stereos with a sophisticated bass function on them called DSL.

Sony took this experience to its logical conclusion with the Sony Boodo Khan Walkman (DD-100) and its matching headphones (DR-S100). This was designed to provide dynamic bass amplification, a function that Sony previously had developed for high-end hi-fi’s.
Sony DD100 Boodo Khan reproduced from Sony's 1987 product brochure
The Beats brand replicates this Mega Bass feature in the headphones rather than the smartphone or iPod to which they are attached. From a design point of view this approach makes perfect sense. However the science of personal bass amplification doesn’t seem to have moved on much from the late 1980s. Any pair of Beats that I have listened to sound less clear to me than the original Sony Boodo Khan combo from two decades ago, despite the advantages of digital technology.

So why would Apple care about possibly acquiring Beats?

  • Buying Beats takes the brand off the table for both PC and mobile device manufacturers. H-P  used to have Beats as a feature on some of its laptops as did HTC smartphones
  • Apple buying Beats at a premium price would raise the acquisition cost of other businesses that have a unique offering to augment the mobile experience. It’s cash mountain gives Apple cheap capital and such high acquisition costs could be a barrier to entry for the likes of Lenovo or Huawei
  • Buying Beats takes a subscription-based music platform off the table, the team could be used to strengthen a future iTunes subscription product or simply open doors in the music industry wider for Apple. Tim Cook is not the media mogul that Steve Jobs was, he doesn’t have the Pixar studio that made him the peer of other media companies
  • Beats is a premium priced brand, it has a good fit in its hardware alongside many Apple products
  • Beats gets a different demographic of music lover. EDM has put dance music back on the map commercially and is now more important to Apple
  • Beats may provide Apple with an alternative brand to go into new media and product areas that would benefit from its urban and dance music caché

Whilst Apple has done a good job of getting a lot of dance back catalogue into its library problems remain with regards dance and urban music consumption patterns and iTunes. It is probably no surprise, given that Apple was more comfortable having The Pixies as the soundtrack to it’s latest advertisement rather than say Skillrex.

If one looks at the way Apple iTunes treats ‘DJ’ artists like DJ Honda or DJ Shadow and bands with ‘The’ in the name like The The or The Bar-Kays  you can see that they didn’t think about dance music in their design to the extent that they should do. All ‘The’ bands are treated alphabetically so The Beatles would go in the B-section after The Beach Boys but before Bomb The Bass. By comparison all DJ artists are grouped together.

Other examples of the way iTunes doesn’t get dance music is that you can’t get music in the way that you would buy it in a shop:

  • You can’t sort or search by record label
  • You can’t sort or search by remix producer

Dance music generally isn’t like other genres, the band may not be the hero. Labels have their own ‘sound’, the educated consumer knows roughly what to expect looking at the label whether it was Tamla Motown, Salsoul or Horse Meat Disco. Remix producers like Tom MoultonSasha, Tony De Vit, Todd Terje or Skillrex all had their followers looking to buy their latest work.

Lastly and probably most importantly, dance music and urban music has been the place were many niche competitors like Bleep.com and Beatport have managed to build niche, but profitable footholds. This also indicates that there could be opportunities for direct Apple competitors.