Consumer behaviour is central to my role as an account planner and about how I look at the world.
Being from an Irish household growing up in the North West of England, everything was alien. I felt that I was interloping observer who was eternally curious.
The same traits stand today, I just get paid for them. Consumer behaviour and its interactions with the environment and societal structures are fascinating to me.
The hive mind of Wikipedia defines it as
‘the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services.’
It is considered to consist of how the consumer’s emotions, attitudes and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, marketing and economics (especially behavioural economics or nudge theory as its often known).
I tend to store a mix of third party insights and links to research papers here. If you were to read one thing on this blog about consumer behaviour, I would recommend this post I wrote on generations. This points out different ways that consumer behaviour can be misattributed, missed or misinterpreted.
Often the devil is in the context, which goes back to the wide ranging nature of this blog hinted at by the ‘renaissance’ in renaissance chambara. Back then I knew that I needed to have wide interests but hadn’t worked on defining the ‘why’ of having spread such a wide net in terms of subject matter.
This post about layers of the future was inspired by an article that I read in the EE News. The article headline talked in absolutes: The external power adapter Is dead. The reality is usually much more complex. The future doesn’t arrive complete; instead we have layers of the future.
Science fiction as an indicator.
The 1936 adaption by Alexander Korda of HG Wells The Shape of Things To Come shows a shiny complete new utopia. It is a tour-de-force of art deco design, but loses somewhat in believability because of its complete vision.
https://youtu.be/knOd-BhRuCE?si=HfIDYsaa7nUZKrYE
This is partly explained away by a devastating war, largely influenced by the Great War which had demonstrated the horrendous power of artillery and machine guns. The implication being that the layers of architecture assembled over the years had been literally blown away. So architects and town planners would be working from a metaphorical clean sheet, if you ignore land ownership rights, extensive rubble, legacy building foundations and underground ground works like water pipes, sewers, storm drains and cable ducting.
In real-life, things aren’t that simple. Britain’s major cities were extensively bombed during the war. The country went under extensive rebuilding in the post-war era. Yet even in cities like Coventry that were extensively damaged you still have a plurality of architecture from different ages.
In the City of London, partly thanks to planning permission 17th century architecture exists alongside modern tower blocks.
You can see a mix of modern skyscrapers, tong tau-style tenements and post-war composite buildings that make the most of Hong Kong’s space. Given Hong Kong’s historically strong real estate marketplace, there are very strong incentives to build up new denser land uses, yet layers of architecture from different ages still exist.
COBOL and other ‘dead’ languages.
If you look at computer history, you realise that it is built on layers. Back in the 1960s computing was a large organisation endeavour. A good deal of these systems ran on COBOL, a computer language created in 1958. New systems were being written in COBOL though the mid-2000s for banks and stock brokerages. These programmes are still maintained, many of them still going long after the people who wrote them had retired from the workforce.
These systems were run on mainframe computers, though some of these have been replaced by clusters of servers. IBM still serves its Z-series of mainframe computers. Mainframe computing has even been moved to cloud computing services.
In 1966, MUMPS was created out of a National Institute of Health project at Massachusetts General Hospital. The programming language was built out of frustration to support high performing databases. MUMPS has gone on to support health systems around the world and projects within the European Space Agency.
If you believe the technology industry all of these systems have been dead and buried by:
Various computer languages
Operating systems like UNIX, Linux and Windows
Minicomputers
Workstations
PCs and Macs
Smartphones and tablets
The web
At a more prosaic level infrastructure like UK railway companies, German businesses and Japanese government departments have been using fax machines over two decades since email became ubiquitous in businesses and most households in the developed world.
The adoption curve.
The adoption curve is a model that shows how products are adopted. The model was originally proposed by academic Everett Rogers in his book Diffusion of Innovations, published in 1962. The blue line is percentage of new users over time and the yellow line is an idealised market penetration. However, virtually no innovations get total adoption. My parents don’t have smartphones, friends don’t have televisions. There are some people that still live off the grid in developed countries without electricity or indoor plumbing.
When you look at businesses and homes, different technologies often exist side-by-side. In UK households turntables for vinyl records exist alongside streaming systems. Stuffed bookshelves exist alongside laptops, tablets and e-readers.
Yahoo! Internet Life magazine
Yahoo! Internet Life magazine is a microcosm of this layers of the future co-existence . Yahoo! is now a shadow of its former self, but its still valued for its financial news and email. The company was founded in 1994, just over 30 years ago. It was in the vanguard of consumer Internet services alongside the likes of Wired, Excite, Go, MSN, Lycos and Netscape’s Net Center.
Yahoo! Internet Life magazine was published in conjunction with Ziff Davis from 1996 to 2002. At the time when it was being published the web was as much a cultural force as it was a technology that people adopted. It was bigger than gaming or generative AI are now in terms of cultural impact. Yet there was no incongruity in being a print magazine about online media. Both existed side-by-side.
Post-print, Yahoo! Life is now an online magazine that is part of the Yahoo! web portal.
Technology is the journey, not the destination.
Technology and innovation often doesn’t meet the ideals set of it, for instance USB-C isn’t quite the universal data and power transfer panacea that consumers are led to believe. Cables and connectors that look the same have different capabilities. There is no peak reached, but layers of the future laid on each other and often operating in parallel. It’s a similar situation in home cinema systems using HDMI cables or different versions of Bluetooth connected devices.
I took this picture almost two decades ago on a visit to Hong Kong of ghost signs.
I was reminded of this picture when I watched the below documentary on ghost signs. Specifically it reminded me of the former industrial units I saw in Fotan, which is in the New Territories of Hong Kong. Their structure used as a giant billboard advertising their former uses making fur coats or plastic flowers. The ghost signs of Hong Kong were fast-fading evidence of an industrial golden age in Hong Kong extinguished by China’s entrance into the World Trade Organisation (WTO) at the end of 2001.
The UK ghost signs highlighted in the documentary benefit from a slower rate of building replacement and a more temperate climate that helped preserve lead paint over a century old.
Ghost signs show that history is all around us, if we care to look around us.
Volkswagen China CMO deported from China for drug use | News | Campaign Asia – Volkswagen Group China’s chief marketing officer, Jochen Sengpiehl, has been expelled from China following a positive drug test upon his return from a holiday in Thailand. This development has caught significant attention on Chinese social media, as reported by the German tabloid Bild-Zeitung. AFP reported that German officials confirmed the news on Tuesday. Sengpiehl was detained for over 10 days and instructed to leave the country immediately after Chinese officials detected traces of cannabis and cocaine in his blood, according to AFP’s coverage. He was held in custody before Volkswagen and officials from the German embassy managed to secure his release. However, he was required to leave the country instantly, as reported by Bild. Campaign Asia-Pacific reached out to Volkswagen Group for comment. A global spokesperson offered a terse response: “We ask for your understanding that we will not comment further on the content of your questions in light of our contractual and data protection confidentiality obligations.” The incident throws a harsh spotlight on the differing legal landscapes around drug use. While Germany legalised cannabis use earlier this year, and Thailand became the first Asian country to decriminalise it for medical purposes in 2022 (though recreational use is slated for prohibition by the end of the year), China maintains extremely strict anti-narcotics laws, with severe penalties for violations. – This also says a lot about how little China needs Volkswagen in the country now.
Gen Z’s joy in chaos: Why maximalism is back | Jing Daily – at odds with the sleek pared down looks currently driving Chinese fashion. Not really that much of a surprise given how young people over the years have rated thrift shops, army surplus stores and shopped while travelling in search of authenticity and a story behind their eclecticism.
54: Double 11 (Is Ralph Lauren a victim?), The fall of Will’s and ClassPass | Following the Yuan – Chinese consumers using returns policies to hit ‘boycotted’ western companies in the pocket by exploiting the elevated business costs of returns in e-commerce. Double 11 or singles day is one of the premier shopping days in China. If this movement is real, the results for targeted brands like Ralph Lauren would be exceptionally brutal.
Culture
Camcorders are now going through a ‘lomography‘ phase now – where creators love their limitations and flaws.
John Donahue is the outgoing CEO at Nike. Full disclosure, I have Nike in my wardrobe and I own a share in the company at the time of writing. Anyway back to Donahue, according to his biography on the Nike website:
John Donahoe is President & CEO of NIKE, Inc. He is responsible for the continued growth of NIKE’s global business portfolio, which includes the Nike, Jordan and Converse brands. John became president and CEO of NIKE in January 2020 and has served on the Board of Directors since 2014. Previously, he was the president and CEO of ServiceNow and of eBay Inc., and he continues to serve as chairman of the board at PayPal. Earlier in his career, he worked for Bain & Company for nearly two decades, becoming the firm’s president and CEO in 1999. A former basketball player and lifelong sports fan, John received an MBA from Stanford Graduate School of Business and a bachelor’s degree in economics from Dartmouth College.
John Donahue via the Nike website.
He is a business strategy wonk and has extensive experience in online businesses and online commerce. When Apple had the vision thing, they hired Tim Cook – a famed operations and logistics executive in the technology industry to deliver. John Donahue had been hired to do great operational execution, by a company that was running low on the vision thing.
Donahue may not have had permission to deal with some of the systemic issues in Nike and some of them issues might be due to the board itself.
Penetration
Nike’s collective strategy to move to D2C via its own retail stores and e-tailing platform was ostensively a way to increase profitability and presumably focus on heavier, brand loyal users. I can understand why they might have felt that due to the ubiquity of their products on the backs and feet of customers around the world.
Secondly, prior to 2010 (and in most business schools still) the perceived wisdom was that modern marketing is supposedly about focusing on loyal, heavier buyers; focusing on retention (not acquisition) and return on investment.
However, things changed in 2010; Ehrensberg Bass researchers Byron Sharp and Jenni Romaniuk summarise the marketing science research that their institution had been doing in their books How Brands Growpart one and part two. A key part of their findings was that brand loyalty is positively correlated with brand penetration – if you have higher levels of penetration then your customers will tend to be more loyal. However, if you have lower levels of penetration then your customers will tend to be less loyal. Smaller brands suffer from a double jeopardy of sorts: their sales are lower because they have fewer buyers, who buy the brand less often.
Which kind of makes sense. When you go to a supermarket, you can only buy what’s on the shelf when you’re in the supermarket. It would take a lot to go and try another supermarket to just buy one product. Most people will just buy what they can on their list and maybe look at substitute products.
Nike is a huge brand, but it wilfully reduced its marketing penetration, by reducing the amount of places it appeared. It withdrew or reduced engagement with a range of partners:
Amazon
DSW
Footlocker
JD Sports
Macys
Olympia Sports
Urban Outfitters
Zappos
When Nike goes back to those partners, there will be a shift in the power dynamic away from Nike. These retailers have options because Nike let other brands in to fill the void it chose to leave behind.
On LinkedIn, people have talked about this as Nike has a brand problem. This is far beyond a brand problem; but brand has suffered.
Where’s the community?
Nike’s Londoner celebrated community back in 2018. Nike has continued to win in culture with collaborations including Nigo and Yoon Ahn of Ambush. But the culture didn’t translate into the degree of sales that Nike wanted so far.
Part of the reason for this is Nike’s focus on sub-cultures rather than broader transformational trends in middle class and working class consumers.
On Running have built their brand around running groups. Nike used to have running clubs ran by staff at their retail outlets. They were also were supporting Charlie Dark’s Run Dem Crew in the early 2010s.
When did Nike give competitors space in communities? Was it down to a pivot win focus from retail to online? Given that part of the rationale for Nike’s move to selling direct to customers was to be closer to them, this all seems really odd.
In the late 1990s and early 2000s Nike sold watches. The most famous of which was the Triax range that angled the display to make it glanceable for runners. There were also Nike MP3 players made with Philips. There was also the Nike fuelband, an in-house attempt at a wearable.
The company decided to focus on what it did well and has since made products that are complementary to Apple’s product line like watch straps and apps. Under Donahue’s watch Nike extended itself into the technology space with NFT offerings and metaverse experiences. Both of which seem to have been expensive follies.
Fading stars
Nike was formed at a unique point in time and over the decades has worked with a range of game-changing athletes who were known globally thanks to mass media and the internet.
Nike’s biggest brand and star is still Michael Jordan. The Air Jordan 1 was launched in 1984. That means that the shoe design and when he played in it is older than the young people it is sold to. The linkage between the iconic jumpman performance and his signature shoe is becoming elongated by time.
Granted Adidas sells the Superstar, the Stan Smith, the Samba and Gazelle shoes which are older than the Jordan 1. But Adidas doesn’t lean as heavily on any one design. Instead they rotate in and out of style. Even then Adidas has suffered from problems executing consistently such as the Yeezy scandal.
Nike’s Dunk design comes from 1985, the Air Force 1 came out in 1982. They are not bad shoes, but they will fade in and out of style.
Nike had also been relatively slow to take advantage of the surge of interest in women’s basketball with Caitlin Clark only getting a signature shoe deal this year.
Nike also managed to grossly underestimate the demand for replica jerseys of its England and Australia women’s football teams.
Jordan has since expanded into a brand that Nike has used to sponsor the likes of French football team Paris St Germain.
In golf, Nike parted ways with Tiger Woods this year. Woods is launching his own line instead. While Nike has other golfers on its roster, they don’t have the cultural impact that Woods had on the game.
The brand has better news in football where it has a deep bench of both teams and player sponsorships to draw on. Nike still has a great bench of athletes comparable to rivals like Adidas, and that’s the problem. They glitter like the Milky Way rather than radiate like the sun.
The secondary market
Hypebeasts
The rise of streetwear as an industry took off in the late 1980s. Its origins go further back. You had Dapper Dan in Harlem in the 1980s, football casual culture, Japanese fashions and the California surf culture influence. Soon after it took off you had unobtainable items:
Major Force t-shirts – (Major Force was a Japanese hip hop and house label featuring artists like Hiroshi Fujiwara)
The Tommy Boy Carhartt Detroit jacket
Numerous Stüssy Tribe letterman jackets
Supreme drops from 1994 onwards
Trying to scratch that itch made you a hype beast. I know hypebeasts who are 60 years old and have college age children. The signs of this secondary market being bubbly could be seen back before COVID.
The end of easy money
Nike like other premium brands benefited during COVID-19, when interest rates were low and consumers had money in their pockets. Interest rate rises, inflation and an economic dip took away the easy money. Nike doesn’t seem to have factored this into its expectations. The decline in Chinese economic growth, seems to have hit Nike particularly hard.
The polyurethane problem
Nike shoes took off on them being tradable alternative assets like sports cards, or vintage bottles of wine. Nike trainers have a shelf life due to the materials that they are made from. Adhesive bonds can be reapplied, stitching can be repaired, but polyurethane midsoles crumble over time and can’t be replaced.
The plastic breaks down and and the soles disintegrate. I have had pairs go at the four year mark. Chemistry undermines the collector segment that supports much of the secondary market for Nike products.
A long train running
John Donahue was in charge when Nike had unprecedented decline in sales. But there have been issues for a long time. Donahue was executing on a strategy for direct-to-consumer sales via its own retail stores and online, that Nike had committed to prior to his arrival as CEO.
This is obvious from John Donahue’s recruitment process.
Donahue’s reputation was helped by his roles at ServiceNow and eBay
Donahue was a former partner at Bain and a friend to many in Silicon Valley
He received his MBA from Stanford School of Business – which is a great institution and happens to be the one that Phil Knight went to.
What Nike didn’t do was commission a headhunter, hold a beauty parade or anything akin to a rigorous recruitment process in hiring their CEO.
All of which points a board-wide issue rather than just a CEO issue. Which begs the question, will Nike become the sports apparel version of Yahoo!? A rotation of CEOs, intractable board level issues and an inevitable slide out of the limelight? Nike has been wrong-footed before, it was clobbered by the rise of Timberland in the early 1990s driven by the brown boots usefulness for standing on cold wet street corners in the criminal underworld adjacent to hip hop culture. But Nike came back. That was a different Nike with a more energetic Phil Knight and Tinker Hatfield.
The scale of this stumble seems bigger and faster than before. Nike might not be resilient enough to withstand it.
The innovation problem
Former Nike designer Steve McDonald has painted a very different picture on Nike innovation internally within the company than has been seen on the outside. Outdoor sub-brand ACG was ‘never supported‘ when it was launched back in 1989. It was an immensely political environment with star-designer Tinker Hatfield warring with rival designers. Instead Nike used golden birdcage contracts to lock up and stifle talent. Hatfield is in charge of Nike’s Innovation Kitchen, but there seems to be a lack of commercially beneficial output.
Hatfield’s days as a star designer are numbered following several decades at the top and there doesn’t seem to be a star-status worthy successor coming though.
Nike seemed to abandon mainstream sustainable innovation some time after 2012, with its ISPA range as a sporadic tokenism to green issues.
NikeLab – a premium line that fits in with On Running’s apparel seems to receive only sporadic support. All of which implies that product innovation had problems way before Hoka and On Running turned up.
Nike’s Vaporfly running shoes were originally released back in 2018 and by 2020, World Athletics rule changes meant that Nike has a range of competitors providing similar shoes.
The next battle ground has been fought over consumers focusing on wellness and fitness. When Hoka and On Running did turn up, Nike didn’t have much in the tank to respond.
It was really brought home to me in sportswear-loving Merseyside where On Running shoes are the universal choice of everyone from office workers to scallies. Before COVID they’d all be in Nikes with the Air Max 95s being particularly popular.
Cocaine Cowboys by Nicola Tallant tells the story of the Kinahan organisation. The Kinahan organisation is a group that wholesales and retails illegal drugs in association with other organised crime groups. Tellant explains how deprivation, geography and economic growth fuelled drug trafficking and abuse in Ireland. Isolated council estates and economic hardship drove a heroin epidemic. The subsequent Asian Tiger economy only uplifted young professionals who then were a ripe market for cocaine. Cocaine added to Ireland’s already difficult relationship with alcohol use and abuse.
Crime journalism such as this is popular in Ireland because it is so concentrated through blood and marriage ties. We don’t have the kind of diversity that the British criminal underworld has. This means that it’s much more ‘relevant’ to Irish society.
But the book title itself is very interesting. There is a clear parallel to the scale of the cross-border drug trade between the US and Mexico.
Irish country music star Daniel O’Donnell courtesy of TG4
But there is also an underlying western theme across Irish culture. The vast majority of us are at most a few generations from the farm. We have had hard times which is why country music appealed and even morphed into a localised genre Country and Irish popular in rural areas and amongst lorry drivers (or in American truck drivers that drive ‘semis’.)
Tallant’s stance is definitely anti-Kinahan; but the book title Cocaine Cowboys gives them the hero status and taps deeply into the mainline that the cowboy and related elements like country music have into Irish culture at home and abroad. Cocaine Cowboys might be the inspiration for the next generation to replace the Kinahans.
If you want to know more beyond the book Nicola Tallant and her colleagues at Irish tabloid the Sunday World host a podcast called Crime World.
After peak woke, what next? The Economist – in the past decade, a form of wokeness has arisen on the illiberal left which is characterised by extreme pessimism about America and its capacity to make progress, especially on race. According to this view, all the country’s problems are systemic or structural, and the solutions to them are illiberal, including censorship and positive discrimination by race. This wokeness defines people as members of groups in a rigid hierarchy of victims and oppressors. Like the Puritans of old, adherents focus less on workable ideas for reducing discrimination than on publicly rooting out sinful attitudes in themselves and others (especially others). The Economist has analysed how influential these ideas are today by looking at public opinion, the media, publishing, higher education and the corporate world. Using a host of measures, we found that woke peaked in 2021-22 and has since receded. For example, polling by Gallup found that the share of people who worry a great deal about race relations climbed from 17% in 2014 to 48% in 2021, but has since fallen to 35%. Likewise, the term “white privilege” was used 2.5 times for every 1m words written by the New York Times in 2020. Last year it was used 0.4 times per 1m words. – Of course, woke’s failure could be viewed by proponents as a sign of deep-rooted systemic prejudice
Economics
Why Britain has stagnated? | Foundations – this reads true and hits hard. My parents came to the United Kingdom when the motorway network was being built, power stations were being constructed and the first generation of nuclear submarines were being constructed. In London the Victoria line was constructed. Now the UK struggles to build any infrastructure and its strategic industrial capabilities have been hollowed out or disappeared.
FMCG
Unilever moves on ‘sub-par’ marketing | WARC – That means consistent execution in marketing innovation, marketing quality, proposition sharpness, execution of pricing, execution of distribution. Fernandez suggested that, on a scale of 1-10, the business is currently at around six but needs to get to eight or nine (“ten doesn’t exist”). A&P spending is increasing as a proportion of revenue, from 13% in 2022, to 14.3% in 2023, and 15.1% in H1 2024. “There is an implicit recognition that our level of investment was not in line with our ambition of volume growth,” he said. That increased investment is not there to fund a growing volume of marketing content, he added. “I’m much more concerned about the quality of the stuff that we put in the market than the amount”. And that also means a focus on brand-building. “We see other people putting much more focus on promotional pricing,” he said, “but we always will prefer to invest in long-term, equity-building activities.” – CFO burns marketing teams ‘I believe our marketing was subpar”
Is marketing entering its ‘era of less’? | WARC – based on Gartner CMO surveys marketers are increasingly being seen as cost centres and are being asked to do more with less which is affecting mar tech spend, staffing and agency spend.
Innovative research that literally put people in the driver’s seat | WARC – More than half of strategists (59%) are integrating AI into their strategy development process in a cautiously progressive way. They need to identify the skills that AI can’t replace, such as getting buy-in for a strategy, and double down on them. Speedy access to research and insight (74%) and streamlining repetitive tasks (74%) are the top opportunities strategists see in leveraging AI in the strategy process.
Future of Strategy 2024: Synthetic data – speedy saviour or another example of the industry’s arrogance? | WARC – it’ll be useful when time is of the essence, and you want to ‘speak’ to people and get their thoughts on your hypotheses, ideas or campaigns. In that scenario, I can see how that approach may replace an ad-hoc focus group set up hastily in the agency’s boardroom. But we’re not here purely to understand people. If the role of communications is to move people emotionally, shouldn’t we also be here to feel people? As Richard Huntington, CSO of Saatchi & Saatchi says: “You can’t feel data.” The beauty of humans (and the beauty of ethnography) is that so often it’s not what we say that powers an ‘insight’ or a strategy, a campaign or some NPD… it’s what people don’t say. It’s the nods and winks, the gestures, the objects with meaning they have in their homes and in their lives. That texture isn’t picked up by a typical conversation – be that with synthetic data or in a focus group. These feelings that are elicited from ethnography are the special sauce that can separate the wheat from the chaff.
Home | LibreOffice – Free and private office suite – Based on OpenOffice – Compatible with Microsoft – I have 35 years of content saved, and LibreOffice can open them all. When you’ve been writing for years, your manuscript formats will often be obsolete (though I’ve tried to make decisions that make my poems available platform agnostic, such as using plaintext, but line breaks and stanza breaks don’t always translate well in markdown). LibreOffice is an incredible tool for opening 25 year old wordperfect files when I need them.
Apple Knew Where the Puck Was Going, But Meta Skated There – the PAN or personal area network has been talked about for 20+ years. What this misses is that the Orion glasses were possible thanks to silicon carbide lens which are a non-trivial thing to manufacture at scale
Welcome to my September 2024 newsletter, this newsletter marks my 14th issue. When I lived in Hong Kong and dealt with Chinese accounts, the number 4 was considered unlucky, rather like 13. 14 is even worse due to it sounding so similar to ‘is dead’ or ‘will be dead’ or ‘will be certain to die’ depending on the variant of the spoken language used. In other cultures the symbolism of 14 is more nebulous at best.
September got off to an odd start, we seem to have had all the seasons, rather than settling gently into the run up to autumn. I managed to avoid traditional mooncake during mid-autumn festival celebrations that I attended. My waistline was thankful for the #ROMO (relief of missing out).
New reader?
If this is the first newsletter, welcome! You can find my regular writings here and more about me here.
Things I’ve written.
Being on the ground in Merseyside as the Southport stabbings unfolded gave me a different perspective on things.
How generative AI features are affecting the Google search experience and much more.
My reading for September 2024 slacked off a bit as real world obligations kicked in.
The Old Woman With the Knife worked on a number of levels for me. Firstly, I loved its portrayal of modern Korean society, from the aging population to the Confucian view of seniority that makes everyday interactions more complex than other Asian societies. Without revealing too much, the old woman in question is someone in the twilight of her career and how she is coping with new up-and-coming rivals at work.
Panic! edited by Michael Lewis. Michael Lewis became famous when he wrote an account of his career in investment banking in Liar’s Poker. His career overlapped with the 1987 financial crash. Since then he has been a writer who has documented key turns in the economy. Because of this background Lewis was the ideal person to curate a history of financial crisis from contemporary accounts at the time. Panic! covers the 1987 financial crash, the 1998 debt crisis, the dot com bubble, and the subprime mortgage crisis of 2007/8. I read the book in short bursts mainly due to asks on my time, rather than the nature of the book. Panic! seemed pertinent to read now. The publication of Pegasus Research’s iconic quantitative research on ‘burn rates’ in March 2000 on dot.com company burn rates makes it highly relevant to revisit when we are in hype cycles such as those surrounding health tech, fintech, crypto and more – if for no other reason than pointing out the folly of trying to pick winners in hype-driven public markets with a high degree of opacity.
Klara and the Sun by Kazuo Ishiguro moved from my to be read pile to must read pile given everything that has been going on with generative AI over the the past couple of years that it has sat on my bookshelf. Ishiguro uses speculative fiction to explore the different kinds of love and attachment, alongside loss. From a machine learning perspective it poses interesting questions about applying observational learning rather than rules based learning in systems that are supposed to exist in the real world. Klara is an ‘artificial friend’ for a child who is going through ‘levelling up’. Levelling up could be seen as a euphemism for everything from the cramming schools popular in Asian education systems to the challenges humans face in an information heavy environment. Ultimately there is something more human and child-like in Klara’s experiences than the human co-protagonists.
Things I have been inspired by.
AI proficiency.
Section, the education company founded by Professor Scott Galloway has AI proficiency as a key element in its offering. They have put together research to show how low the current level of proficiency is. They consider this research a rallying cry; but the results could also be reflective of a technology adoption curve that isn’t moving at the speed of hype, which is what came through in my examination of public discussions during the summer.
Secondly, research from the Upwork Research Institute implies a higher a higher adoption rate of generative AI, but lower success rate with the outputs generating inefficiencies rather than productivity gains. Part of the problem seems to come from organisational leadership and the way generative AI is being implemented.
WARC have published a report which looks at What’s working in generative AI from a marketing perspective. Some of the ideas like synthetic data in market research are not quite in prime time yet and generative AI’s large carbon footprint can’t be ignored.
Digitalisation and brands
Harvard Business Review published research that indicated a weaker relationship between profit share and brand in certain types of businesses. On the face of it, this supports Scott Galloway’s ‘end of brand‘ hypothesis. WARC covered the research paper in depth pointing out that for each percentage gain in market share highly digitised businesses gain 0.19% increase in profit compared to 0.26% in less digital businesses. This seems to be due to a multitude of factors:
Efficiency gains due to digitalisation have an effect on the existing profit prior to the market share. Efficiency is the main selling point of much digital automation from CRM systems to performance advertising.
Market power of larger companies ( a la Google).
Perceptions of quality – digital-only companies might look more reputable due to the lack of real-world signals to the contrary
Market share (and brand) still matters, but it hits different depending on the business. B2B and growth hacking business approaches gain less than consumer orientated businesses. A larger dataset of Kantar-sourced data analysed by Oxford University researchers found that better brand effects were down to ‘difference’ as in how customers see – and experience the brand – as being different enough from competitors.
FEAST
FEAST is an occasional magazine and curated set of events all about food and its ingredients. If you are a strategist working with a food or beverage client it’s well worth exploring their archive as a source of inspiration for insights given its in-depth and thoughtful arts-based approach.
Streaming plateau
I finally got to dive into Ofcom’s Media Nations research report. I recommend that if you are involved in the advertising-media industrial complex in any way shape or form, spend some time reading it. On the plus side, survey respondents consider accurate balanced news as a key part of the public service mandate of radio and television. Secondly during 2023, broadcast brought many of us together still for key events including the first episodes of tentpole series.
Ofcom
More dispiritingly, I realised that amongst the tentpole TV series was season 23 or I’m a Celebrity, Get Me Out of Here. TV advertising revenues declined faster than online video revenues grew and subscription based video on demand take-up plateaued. It’s pure speculation on my part, but this might have been reached because COVID accelerated adoption.
Finally, as a film fan who buys Blu-Rays of films that don’t appear on streaming services consistently, the amount of time watching DVDs and and Blu-Rays have a very small usage across all age groups. I don’t think that’s good news for arthouse and cult cinema.
Things I have watched.
The Crow – less of a remake of the iconic Brandon Lee film and more of a reinvention of the franchise. It’s a good if unengaging film, many of the young adult audience I went to see it with won’t have the original or the comic books as a reference point. It has been described on other parts of the net as ‘the worst movie of the year‘. This is probably a bit unfair; there is a lot of ‘straight to Netflix’ dross out there. FKA Twigs character in the film grew on me as I watched it.
The last time I saw The Terminator in a cinema was in a double bill with the then newly launched Terminator 2 at the then new Odeon multiplex in Bromborough. I got to see it again thanks to a 4K restoration. Despite having seen The Terminator several times on tape, DVD and Blu-Ray – this time it hit different. It hit harder and it was all down the way the screen filled my vision and the punch of the sound track. Despite in-home cinema set-ups, you just can’t get at home unless you live in a large industrial unit sized home. The analogue special effects held up surprisingly well and the plot was just as taunt as I remembered it. There was less people in the cinema than for the screening than for TheCrow.
As I write this, I have just watched episode one of the latest series of Slow Horses. It has gotten off to the high standard set by the previous series and book. Time to put on my Roddy Ho t-shirt again.
Useful tools.
Table Capture
If you’ve ever tried to cut and paste a table and data from a website into an spreadsheet and then spent the rest of the afternoon parsing it in cell-by-cell you will appreciate the benefit of this browser extension.
Humaniser for GPT created content
If you’re reading this, chances are that you’ve used services like Claude, ChatGPT or Gemini as a starting point for copy, or to summarise documents. UndetectableGPT looks at providing alternatives to ‘tell-tale’ phraseology in generative AI copy.
Data analysis
Groupt will take a CSV file and categorise the data including visualisation, so you only have to focus on wrapping a narrative around it to fit into the wider storytelling of your presentation.
The sales pitch.
I am now taking bookings for strategic engagements from January 2025 onwards; or discussions on permanent roles. Contact me here.
Ok this is the end of my September 2024 newsletter, I hope to see you all back here again in a month. Be excellent to each other and onward into October and crispness of a bright autumn morning!
