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.
If you’re reading this blog, you will have heard of the crowdfunding platform Kickstarter. Kickstarter has become synonymous with crowdfunding and has become a verb. There are several crowd funding platforms out there including Indiegogo and China’s Demo Day but none seem to have caught the public imagination in the same way Kickstarter seems to have.
Major companies like Sony have trialed offerings of products on crowdfunding platforms as a way of accessing market size and viability for new products. Bands from Public Enemy to unknown artists have financed their album recordings and production in a similar way
Kickstarter failure rate
I’ve personally subscribed to projects with very mixed results with Kickstarter projects that I have funded. My experience of my first couple of projects were very positive. My most recent experiences have been one of disappointment to the point that I no longer use it. They failed. There was production problems, the timelines over ran. And at least one of them looked as if they took the money and ran when the project seemed more difficult than they originally assessed it to be.
Therefore it was interesting to hear Kickstarter used in a different context, that reflects my experience with the platform.
I like the Techmoan YouTube channel as a good deal of its content introduces retro technology, many of which is is equipment or media formats that I hadn’t come across previously.
The channel host Mat used Kickstarter not as a brand, but as a verb to imply that a product was somehow inferior and lacking in quality. It has become synonymous with an amateurish effort. Just because technology and globalisation have democratised access to manufacturing; doesn’t necessarily mean better quality products. That can’t be good for the brand.
This is on top of crowdfunding’s high degree of funding failures, product failures and increasing numbers of alleged fraud.
INTERNET: Baidu Sambas Out of Brazil | Young’s China Business – There are lots of reasons for the inability of China’s Internet companies to succeed outside their home market. One is simply inexperience. But another is really the direct result of Beijing’s determination to set up what almost amounts to a parallel Internet in China that in some ways is identical to the global Internet but in others is very different. That strategy has helped to keep out most of the major global competitors in any meaningful way, allowing Chinese companies to thrive on their home turf thanks to their booming local economy. But that approach has also made these companies quite unprepared to compete globally, since they engage in many practices that are either unacceptable outside or simply undermine trust of local people. – China’s Galapagos syndrome: WeChat has NO end-to-end encryption, is censored worldwide for instance. Will only succeed in low risk categories – photo altering apps or casual games
Why Hong Kong’s property bubble won’t burst anytime soon | HKEJ Insights – Hong Kong’s property market no longer serves only the city’s seven million people. We now must also serve a country of 1.3 billion with a growing number of rich people anxious to get their wealth out. Hong Kong’s red-hot property sector is a perfect place for rich mainlanders and international investors to park their money. Their hot money, combined with the local psyche that prices will continue to climb means the bubble will never burst. – You could substitute most of the world’s major cities as hot money from fast developing economy entrepreneurs and rent seek oligarchs park their hot money in property safe havens. Hong Kong isn’t going to see a tailing off of house prices until China deals with corruption.
Android has created more choice, not less | Google Blog – yeah right. Basically we can’t get paid in data so pay us a licence fee. I wonder how much Google will have to pay to keep Google Search in the device if they do that. It could also create an opportunity for Oxygen, Yandex app store, Jolla and home grown distributions by the likes of Huawei instead
Mark Penn on his update to MicroTrends
Media – Twitter’s guide to getting the most out of the platform
Looking Through the Eyes of China’s Surveillance State – The New York Times – I tried the glasses out on a group standing about 20 feet away. For a moment, the glasses got a lock on a man’s face. But then the group noticed me, and the man blocked his face with his hand. The minicomputer failed to register a match before he moved. Seconds later, the people scattered. Their reaction was somewhat surprising. Chinese people often report that they’re comfortable with government surveillance, and train stations are known to be closely watched
China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable A Strategic Competitor to Access the Crown Jewels of U.S. Innovation Michael Brown and Pavneet Singh – China is executing a multi-decade plan to transfer technology to increase the size and value-add of its economy from its base as the world’s 2nd largest economy. By 2050, China will be 150% the size of the U.S.2 (with the goal of being double the US economy by that time and decrease U.S.’ relevance globally). This technology transfer to China occurs in part through increasing levels of investment and acquisitions of U.S. companies which are at record levels today. China participated in about 10% of all venture deals in 2015 up from a 5% average participation rate during 2010-2016. China is investing in the critical future technologies that will be foundational for future innovations across technology both for commercial and military applications: artificial intelligence, robotics, autonomous vehicles, augmented and virtual reality, financial technology and gene editing. The line demarcating products designed for commercial vs. military purposes is blurring in these new technologies. Investments are only one means of technology transfer which also occurs through the following licit and illicit vehicles where the cost of stolen intellectual property has been estimated at $300 billion per year. (PDF) – China technology transfer is like the piracy or opium trading of past centuries. China technology transfer is war by other means. More related content here.
Mark Ritson wrote an op-ed over at Marketing Week on influence and influencers. Whilst it lacked nuance on the subject area, a lot of what it said is true. Go over and have a read; I’ll be waiting for when you come back.
Whilst I disagree on the finer points, what Ritson wrote needed to be said. There needed to be a turning of the tide on influencers from boundless optimism to a greater degree of sobriety and critical analysis of the influencer opportunity.
I first noticed this boundless optimism when I attended the In2 Innovation Summit in May last year. Heather Mitchell on a panel. Mitchell worked at the time in Unilever’s haircare division where she is director, head of global PR, digital engagement and entertainment marketing. I asked the panel discussing influencer marketing about the impact of zero-based budgeting (ZBB) and the answer was ducked. ZBB requires a particular ROI on activity, something that (even paid for) influence marketing still struggles to do well.
This was surprising given the scrutiny that other marketing channels were coming under, I couldn’t understand how influencer marketing merited that leap of faith.
Substitute ‘buzz marketing’ for ‘influencer marketing’ and this could be 15 years ago. Don’t get me wrong I had great fun doing things like hijacking Harry Potter book launches when I worked at Yahoo!, but no idea how it really impacted brand or delivered in terms of RoI. Influencer marketing seems to be in a similar place.
Just five years ago we had managed to get past the hype bubble of social and senior executives were prepared to critically examine social’s worth. In the meantime we have had a decline in organic reach and massive inflation in both ad inventory and influencer costs. What had changed in the marketers mentality?
Onward with Mark Ritson’s main points.
Ritson’s Three Circles of Bullshit
A very loose reference to Dante Alighieri’s Divine Comedy trilogy; but for modern marketers
The First Circle of Bullshit: Are the followers real?
Are they bots?
Are they stolen accounts?
Are the user accounts active any more?
Has the account holder padded their account with bought followers and engagement. Disclosure – I ran an experiment on my Twitter account and still have a substantial amount of fake followers. More on this experiment here.
The Second Circle of Bullshit: Are influencers trusted?
Ritson did an unscientific test that showed (some) influencers would post anything for a bit of money
The Final Circle of Bullshit: Do they have influence?
Some influencers are genuinely authoritative; but this is a minority of influencers out there
Ritson alludes to the lack of organic reach amongst an ‘influencers’ followers which is likely to be 2% reach or less
Trends in influence
I looked at Google Trends to see what could be learned in the rate of change in searches over time. Consider Google Trends to be an inexact but accessible measure of changes in interest over time.
Global interest in influencers have been accelerating
There has been a corresponding rises in interest around paid influencer marketing
There hasn’t been the same interest peak in organic (PR-driven) influencer work
All of which supports the following hypotheses:
it’s become on-trend from the perspective of marketers, agencies and ‘influencers’
A significant amount of influencers are in it for the money – which brings into question their (long term authority and consumer trust)
A significant amount of influencers have an exceedingly good idea of their value (more likely overly-inflated)
Ego is less of a motivator for becoming an influencer than material gains
What would influence look like?
Propagation of the content by real people. Instagram, a particularly popular influencer channel, has made sharing posts difficult for followers historically. Re-gramming was a pain in the arse for the average Instagram user.
If we look at the mainstream media and how it is shared on Facebook we see that only five media brands are consistently in the top ten most shared media properties. ‘Traditional’ influencer status isn’t necessarily a garrantor of consistent successful propagation either, if Newship’s data is to be believed.
Attributed sales. Some luxury brands in China have had success collaborating with influencers and selling through their channels; the post child being Mr Bags collaboration with Longchamps.
How is the best way to use influencers in marketing?
Assuming that you are using influencers in the widest possible sense at the moment.
Treat the majority of influencers as yet another advertising format
That means that reach, the way the brand is presented, and repetition are all important – smart mass marketing following the playbook of Byron Sharp.
Viewing your influencer mention in that prism, it means estimating what the real reach would be (lets say 2% of the follower number as an estimate) and paying no more on a CPM rate than you would pay for a display advertising advert
Ensure that the brand is covered in the way that you want. Some luxury brands have managed to get around this by keeping control of the content; a good example of this is De Grisogono – a family-run high jewellery and luxury watch brand. They work with fashion bloggers that meet their high standards and invite them to events. De Grisogono provides them with high-quality photography of its pieces and the event. They get the high standard of brand presentation which raises the quality of the placement
Get repetition with the audience by repeating the placement with other content that delivers the same message with the same high standard of production
All of this might work for a luxury brand, IF you found that the amount of agency time and creative work made commercial sense. It is less likely to work for normal FMCG brands. What self-respecting influencer is going to be bossed around by a breakfast cereal?
Thinking about micro influencers, probably the area that has had the most interest from marketers recently due to them appearing to be better value than macro influencers.
Brown & Fiorella (2013) explanation of micro-influencers:
Adequately identifying prospective customers, and further segmenting them based on situations and situational factors enables us to identify the people and businesses – or technologies an channels that are closest to them in each scenario. We call these micro-influencers and see them as the business’s opportunity to exert true influence over the customer’s decision-making process as opposed to macro-influencers who simply broadcast to a wider, more general audience.
Brown & Fiorella focus on formal prospect detail capture and conversion.
This approach is more likely to work in certain circumstances; where there is low friction to conversion (e-tailing for discretionary value items).
It starts to fall apart when you deploy their approach to:
Consumer marketing
Mature product sectors
Mature brands
You would also struggle with many B2B segments where social provides a small reach and little social interaction.
Work with real influencers on long term collaborations
There is more likelihood of having audience trust if they can see and understand the long term relationship between a brand and its influencers
Better brand placement easier, with an influencer that ‘gets’ the brand
You’ve got a better chance of being able to get access and fully understand the underlying analytics of their accounts (which should be a prerequisite for long term relationship)
You can look at collaborations and attribution payment models that raise all boats
I took a little bit of time to reflect on the content that I have been writing, what can I learn from it and how I can reuse these learnings? Specifically what are people finding of interest? This couldn’t happen without people actually reading the content, so thank you for reading; feel free to come back on a regular basis. Over the past six months readers like you have found the following articles of most interest. In reverse order
Reuse, Re-edit, Remix and Recycle – if you read the industry publications we here about personalised ad creative driven by ad targeting. But often the core creative and is created unnecessarily. Instead, what’s the minimum viable creative tweak that can be used? How do we extend the smart processes of reuse, re-edit, remix and recycling into this world?
“If you do not know where you come from, then you don’t know where you are, and if you don’t know where you are, then you don’t know where you’re going. And if you don’t know where you’re going, you’re probably going wrong.”
So it was time for reflection in order to get a perspective as the regulators and media discovered Facebook, Google and Amazon where not models of virtuous conduct.
This supports a hypothesis of slowing market growth and solidifying market dynamics at a macro level. Strategic acquisitions start to make less sense compared to improving efficiences and effectiveness.
Throwback Gadget: Bose Wave System – usually my gadget reviews tend to be some of the better performing content. The Bose Wave review was the only one that appears this time around.
Mercedes China Syndrome – Chinese netizens are jumping the Great Firewall to vilify western brands who reflect views that ‘offend the Chinese people’ – even when this content is aimed at non-Chinese audiences. Mercedes’ offence was an Instagram image with one of their cars and a quote from the exiled Dalai Lama
Personal online brand – at a time when we’re seeing social media turning into walled gardens. David Gallagher asked the Twitterverse if he should have his own site?
Twitterverse: @wadds says I need a proper blog. I say I can do it on LinkedIn or Facebook. What say you? Build my own?
I weighed in on why he should and how I manage the process.
Chinese smartphone eco-system for beginners – Winston Sterzel did a good video for the average bystander on the Chinese smartphone eco-system. I thought it was a good film to share with marketers – with a bit more background information answering some of the ‘why’ in terms of market dynamics.
App constellations 2018 research – I built on work that I had done in 2014 and 2016, comparing the rate of growth across different companies apps based on Fred Wilson’s definition of app constellations. This was also the post that took me the longest to research!
