Ged Carroll

Category: ideas | 想法 | 생각 | 考える

Ideas were at the at the heart of why I started this blog. One of the first posts that I wrote there being a sweet spot in the complexity of products based on the ideas of Dan Greer. I wrote about the first online election fought by Howard Dean, which now looks like a precursor to the Obama and Trump presidential bids.

I articulated a belief I still have in the benefits of USB thumb drives as the Thumb Drive Gospel. The odd rant about IT, a reflection on the power of loose social networks, thoughts on internet freedom – an idea that that I have come back to touch on numerous times over the years as the online environment has changed.

Many of the ideas that I discussed came from books like Kim and Mauborgne’s Blue Ocean Strategy.

I was able to provide an insider perspective on Brad Garlinghouse’s infamous Peanut Butter-gate debacle. It says a lot about the lack of leadership that Garlinghouse didn’t get fired for what was a power play. Garlinghouse has gone on to become CEO of Ripple.

I built on initial thoughts by Stephen Davies on the intersection between online and public relations with a particular focus on definition to try and come up with unifying ideas.

Or why thought leadership is a less useful idea than demonstrating authority of a particular subject.

I touched on various retailing ideas including the massive expansion in private label products with grades of ‘premiumness’.

I’ve also spent a good deal of time thinking about the role of technology to separate us from the hoi polloi. But this was about active choice rather than an algorithmic filter bubble.

 

  • Disruption crisis

    The idea of the disruption crisis came from a series of conversations that I have been having in recent times and recent online news.

    disrupt_4634
    TechCrunch Disrupt NY 2012 Day Two – May 23, 2012 (Photo: Devin Coldewey)

    What is the disruption crisis?

    The rise of big tech such as Meta, Twitter, Google, Amazon, Bytedance, Alibaba and Tencent drove a wave of digital disruption over the past quarter century. Now the disruptors are being disrupted themselves and I think that they may precipitate a disruption crisis.

    Continuing to look to these digital disruptors is the equivalent of Jimmy Swaggart or Jim Bakker being held up as an exemplar of a good husband and faithful spouse.

    Mass lay-offs

    Others have talked about the layoffs in more depth, so I have included a video explanation.

    I started my agency career during the dot com bubble. We had going for growth at all costs. They talked about trying to move at ‘internet speed’. This was down to the go for growth funding model that drove start-ups through their angel and VC funding rounds and beyond. Common sense was often set aside. if this sounds 180 degrees away from the lean start-up model you’re not wrong.

    Product lines are being shredded

    3 things you need to do now, before Revue gets shut down | AWeber – Revue is an email newsletter platform that was acquired by Twitter and will be shut down by the end of year.

    Amazon, in Broad Cost-Cutting Review, Weighs Changes at Alexa and Other Unprofitable Units – WSJ – Amazon is apparently getting rid of its Alexa speakers, Fire streaming devices and Kindle e-readers. This seems to be a short termist approach to improving profits, at the expense of the long term.

    …Amazon made big bets on long plays, willing to sacrifice immediate profitability to boost its overall position in blue ocean markets. When Amazon’s had to play catch-up, it largely hasn’t worked: the Kindle Phone is maybe the most high-profile mistake/missed opportunity, just to name one. It’s hard to deny that this loss-leader approach has been key to Amazon’s success, although it often made the company a mystery to Wall Street. This would signify a huge shift, totally aside from the 3% of employees who will likely leave the company.

    Hacking away at the Devices and R&D divisions is the most perplexing to me. These are the sources of Amazon’s most signature successes, with the Kindle, Alexa/Echo, and Fire TV. They’re what hook customers when they’re still kids, and that customers above all associate with the company, even as they help ensure loyalty and drive their share of media purchases and retail revenue. The Kindle, like the Echo and the Fire Stick, was always supposed to be a loss leader: you sell the razor at close to cost and make your money back selling the blades. How many books has Amazon sold because of the Kindle? How many Prime subscriptions? How many impulse purchases do people make on their Echos and Fires?

    Tim Carmody, Loss Leaders. (Issue #50) Amazon Chronicles

    Consultants have taken the idea of transformative technology and scrappy startup methodologies to try and reinvent business, or facilitate digital disruption. The problem is that the examples they use as exemplars are failing, casting doubt on their doctrine and fuelling a disruption crisis in boardrooms and the consultants that advise them.

    Unilever – a cautionary tale

    For instance, I contracted at Unilever. I worked rolling out digital brand assets for their Family Brands product line. This was a line of margarines, due to organic growth it has different names in different markets:

    • Blue Band
    • Country Crock
    • Flora
    • Fruit d’Or 
    • Margarina Primavera
    • Plantta
    • Rama

    While I was doing this work, I worked closely with the Becel functional foods and Bertorelli brands. Family Brands was being put into a separate business to develop a ‘startup mentality’. The thing was Family Brands hadn’t been a startup for decades. In fact, it hadn’t been a startup since the 1870s when Antoon Jurgens branched out from trading in butter and started to manufacture margarine. His company merged with rivals Van den Bergh’s, Centra, and Schicht’s to form Margarine Unie (Margarine Union) in 1927, by which time it had a dominant position in margarine manufacturing.

    Three years later, Margarine Unie merges with Lever Brothers Limited to create Unilever and the rest was history.

    Margarine as a substitute good

    Margarine historically was a substitute product for butter. My parents (both of whom came from farming families in Ireland) used to talk about how poor children in the towns would have eaten margarine rather than butter. As a child, we might use margarine to bake a cake, but if we wanted the cake to keep a while my Granny or my Mam would only use salted butter. Despite butter (which we kept in the fridge) being so hard that it might break up the surface of the bread, we used it on our sandwiches, toast or to fry with. Margarine just wasn’t the done thing.

    One of the most damning things that my Granny once said about a friend of hers was:

    She uses margarine to make the ham sandwiches when you’re invited around for a cup of tea.

    One of the first courses that I had at university was in economics, where they used margarine as an exemplar for a substitute good.

    Healthier option

    Margarine started to be considered a healthier option due to concerns about heart disease and cholesterol. Much of this was down to Flora, invented in 1964, which contained polyunsaturated fats derived from sunflower oil. At the same time wholemeal bread started to become preferable due to the requirement for fibre in the diet.

    Yellow fats category decline

    However Although 21st century sales declined as many consumers switched to butter. This was down to changes in consumers wanting a more natural product and heart health improvising. In the five years leading to 2014, sales of margarine fell 6%, while sales of butter rose 7%.

    It was in this atmosphere that the startup narrative was fired up for Family Brands.

    The other shoe dropped when Unilever narrowly managed to fight a hostile bid from 3G Capital a couple of years after I was there. Paul Polman got rid of business lower margin businesses as an attempt to increase earnings. These were still great businesses which is why KKR were happy to take the business off Unilever’s hands.

    Unilever didn’t spin out a startup. It wasn’t disruptive thinking, it was an act of desperation to fend off takeovers or possible greenmailing. The problem with with this is Unilever now has a lot less buying power on global supplies of oils and fats needed for its ice cream, mayonnaise, food additives and personal care businesses – which was the rationale for forming Unilever in the first place.

    Foundational technologies in crisis bringing crisis

    Foundational technologies were cited as new elements that would cause digital disruption. The fall of these technologies and the companies that have championed them have fuelled this disruption crisis.

    Cloud services

    Microsoft and Amazon both saw declining sales in SaaS and related services, as businesses has less employees and needed less seats. Amazon has been cutting deep in its R&D function and devices. This means that Alexa for the hospitality industry and health sectors are likely to be borrowed time.

    Web 3.0 (blockchain, NFTs, cryptocurrency)

    Here’s what my friend Nigel Scott had to say about FTX on LinkedIn:

    There has been a lot of commentary over the weekend on the #ftx #cryptocurrency #exchange collapse

    A lot of words have been typed and spoken but in the end I think the numbers probably sum it up best

    Back in 2018 there was an estimated 200 Crypto Exchanges scattered around the globe

    Over the past 3 years an estimated 200 Crypto Exchanges have either collapsed or disappeared

    This rate of attrition is nothing new. Back in 2014 – after the Mt Gox event – it was estimated 45% of all #Crypto Exchanges had either collapsed or disappeared

    The harsh truth is the risk of failure has always been central, rather than peripheral, to the Crypto Exchange model

    Today there are almost 600 Crypto Exchanges open for business

    The only question that needs to be asked is what fraction of them will still be in business in 2023, 2024, 2025 and beyond?

    and, more importantly, what is the probability of picking a survivor, never mind a winner, in such a volatile environment? 

    Which is to say, contrary to most of the commentary I have read over the weekend, the #ftxcrash isn’t the exception, it’s the rule – what makes it exceptional is the scale, not the probability of the failure 

    Blast radius

    Meteor Crater

    One edition of the Axios Login newsletter used the headline ‘blast radius‘ describe the impact that FTX and other crypto economy problems were having on the wider Web 3.0 ecosystem of decentralised services. Creating a disruption crisis.

    This has forced El Salvador to pursue a free trade deal with China, with the Chinese government buying $21 billion dollars of Salvadoran government debt: China circles El Salvador’s economy as country edges toward crypto plunge | The Guardian 

    Less than four years before disruptive technologies had become mainstream when IBM brought a ‘better way’ of managing supply chain for Walmart by putting their heads of lettuce on the blockchain. Just writing that last sentence made me like my IQ number was dropping; but just four years ago, this was a point of validation…

    Metaverse

    Prior to Meta’s recent financial results and job cuts you had the likes of McKinsey cheerleading for the metaverse.

    With its potential to generate up to $5 trillion in value by 2030, the metaverse is too big for companies to ignore.

    Value creation in the metaverse – McKinsey & Company.

    To give you an idea of how far we are from the much vaunted metaverse, have a look at my discussion paper.

    Social media marketing

    Alphabet has seen a decline in YouTube advertising and search advertising is down by about a fifth in October. Twitter is heading towards bankruptcy as brands stopped advertising on the platform. Meta has also shown a decline in advertising revenue. Snap is doing much worse. TikTok seems to be the outlier.

    Accenture and the disruption crisis

    A quick search of Accenture and disruption yields about 628,000 results. Accenture has latched itself onto disruption in the same way that IBM glommed on to e-business during the first dot com bomb, Sun Microsystems became the ‘dot in dot com’ and the whole of the entire enterprise IT industry latched on to the millennium bug.

    Better than ‘the dot in dot com’

    Some bright minds at Accenture came up with a concept that was ownable, not time-bounded like ‘e-business’ or ‘the dot in dot com’ – you’re kind of done when everyone has a website that can do transactions of some sort.

    Sun Microsystems advert circa 2000

    Accenture welded itself to disruption with the Disruptibility Index which looks at how disruption affects different vertical markets.

    Dark thoughts

    Disruption tapped into deep negative behavioural emotions. Fear, uncertainty and doubt. As tech executive Andy Grove had constantly repeated ‘Only the Paranoid Survive‘. Disruption didn’t necessarily promise a thriving business due to sustained competitive advantage, like earlier generations of technology companies and consultancies. Instead it promised, merely survival in a globalised hostile world, with constant waves of disruption coming at the c-suite. This is the business equivalent of Adam Curtis’ video essay Oh Dearism.

    This gives your internal champions on the client side a bit more political space if their digital transformation projects doesn’t hit all the goals that we would like it to hit.

    Of course all of this could come off the wheels if a great disruption crisis hit, wouldn’t it?

    The disruption crisis doesn’t just toll for Accenture

    It would be remiss of me to just single out Accenture. They have been part of a much bigger movement across professional services, finance, the technology sector and academia. Here are some of the people across academia have had a similar idea to Accenture; they’ve written books like these over the past 10 years or so:

    It has been the fodder of countless conferences around the world. For example here’s a representative of Euromonitor International speaking at a conference of the International Homeware Association (IHA) on digital disruption.

    I am not putting this in here to make fun of the IHA – it is the professional association of a market worth 80 billion dollars a year globally and deserves our respect. Globalisation has centralised a lot of homeware production in the Far East due to globalisation over the past quarter of a century; but it still plays a central, if less visible part in our lives today.

    Instead I am using the IHA as an exemplar of how digital disruption has pervaded all parts of the economy as a central organising principle in modern business thinking.

    That central position in corporate thought means that the disruption crisis becomes much more alarming. Which makes the advice Judy Estrin‘s 2008 book Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy even more urgent

  • Chinese diaspora + more stuff

    Chinese diaspora

    China’s Diaspora Policy under Xi Jinping – Stiftung Wissenschaft und Politik – China estimates the number of people of Chinese origin outside the People’s Republic to be 60 million. Beijing considers them all to be nationals of China, regardless of their citizenship.  Xi Jinping views overseas Chinese as playing an “irreplaceable role” in China’s rise as a world power. Beijing is working hard to harness overseas Chinese resources for its own goals in the fields of economics, science and technology, as well as diplomacy and soft power.  Beijing also expects people of Chinese origin in Germany to deepen rela­tions between China and Germany. But not only that: As “unofficial ambassadors”, they are also expected to spread China’s narratives to the German public, defend China’s “core interests”, and help with the trans­fer of knowledge and technology to China. – This explains foreign police stations to ‘help the Chinese diaspora and considers Singapore to be a ‘Chinese state’. To realise how ridiculous this sounds, imagine Ireland berating the United States for not towing the line because it is an Irish state. I was surprised at the relatively small size of the Chinese diaspora at only 60 million, Ireland claims 70 million people of Irish descent. And that’s even allowing for the fact that the Irish minority in mainland Britain is declining in number due to an ageing community. If you want to know more about the government of China and its efforts to influence the Chinese diaspora, I can recommend reading Hamilton & Ohlberg’s – The Hidden Hand.

    China

    China deploys village cadres to help Foxconn hire workers in bid to secure nation’s role in Apple’s iPhone supply chain | South China Morning Post – gives a good idea of how precarious the finances of Zhengzhou’s government is that it will go this far to support the Foxconn factory

    Millions of missing women: China grapples with legacy of one-child policy as population ages | Population | The Guardian – how is this different from the tsunami of singletons in the west?

    China’s offshore ‘police service stations’ spark European alarm | Financial Times

    FMCG

    Consumer market update Germany, 2022, Q3 – Carter Murray – German consumers less likely to buy sustainable products in the current economic downturn. This matches longitudinal research that Gallup has done for decades.

    It’s hard to believe that fast food restaurants were innovative 40 years ago. McDonald’s haven’t changed their tray designs at all. The idea of it being fast and clean doesn’t feel so fast or clean now given the small of the restaurant and greasy stainless steel counter sides.

    Health

    The technology behind China’s COVID traffic light system app: ChinAI #203: A Critique of Health Codes as the Digital Leviathan 

    Klick Wire | Does it work? Oncologists main question 

    Ideas

    The Growing Religious Fervor in the American Right – The New York Times – no it isn’t. Just in the same way that the CIA operations in Soviet-era Afghanistan begat Al Qaeda and the Taliban, so Ronald Reagan courting the Christian right begat a dangerous mix of religiosity and right wing politics. More on that here: Ronald Reagan and the 1980s: Perceptions, Policies, Legacies (Studies of the Americas) edited by Gareth Bryn Davies and Cheryl Hudson

    Lies in authoritarian regimes, its stickiness as a habit once it’s been developed as a survival skill. Lying to ignore uncomfortable truths

    Innovation

    Exascale wafer-scale supercomputer has 13.5m cores | EETimes – the die size must be huge, I wonder what the error rate is like?

    Diamond wafer startup takes on SiC | EE Times 

    Luxury

    Mike Ashley’s Frasers in talks to buy Savile Row tailor Gieves & Hawkes | Retail industry | The Guardian

    Luxury market forecast to grow despite global recession fears | Financial Times 

    Marketing

    KFC blames its bot for promoting its cheese-covered chicken on Kristallnacht – The Verge – from the explanation given KFC were running some sort of rules based marketing automation that created content based on calendar events – which makes you wonder what calendar were they using that went beyond joyous public holidays?

    Materials

    Autonomous asset monitoring solution uses 100µAh micro-battery | EE Times 

    Media

    SpaceX just bought a big ad campaign on Twitter for Starlink | CNBC – doesn’t look good given the ownership that Elon Musk has of SpaceX and Twitter

    Magic: The Slathering | Financial Times “We are downgrading Hasbro to Underperform after conducting a deep dive on the company’s Magic: The Gathering business. Hasbro is overproducing Magic cards which has propped up recent results but is destroying the long-term value of the brand. Card prices are falling, game stores are losing money, collectors are liquidating and large retailers are cutting orders.”

    Online

    Fake Eli Lilly account may cost Twitter millions – The Washington Post 

    Security

    How North Korea became a mastermind of crypto cyber crime | Financial Times 

    China is biggest state-based threat to UK security, says Sunak | Financial Times – it can be partly explained by Russia’s poor performance in Ukraine

    Interesting interview with Justin Brock of RUSI, which provides a much more nuanced take on the air war in Ukraine.

    Software

    Dan O’Dowd is the rich tech CEO spending millions to stop Elon Musk – The Washington Post – O’Dowd is the founder of Green Hills Software, the embedded software company

    Web of no web

    78% of Chinese Consumers Own Wearables, But Gen X Has Privacy Concerns / Digital Information World 

    Wireless

    Keysight, NOKIA Bell Labs collaborate on 5G-Advanced and 6G EETimes 

    Largest commercial LEO 5G satellite array unfolded EE Tiimes 

  • Yeezy + more stuff

    Yeezy

    In 2020 Forbes magazine described Yeezy’s rise as “one of the great retail stories of the century”. Yeezy influenced and inspired a multitude of other fashion brands. Kanye West and the Yeezy brand has been a phenomenal power in street wear. West collaborated with BAPE early on his career and Yeezy took off with the famous Nike collaboration output: Air Yeezy sneakers. Adidas reached out to West, after

    The Adidas-Kanye West divorce bill is in: ending sales will cut expected profits at sportswear company by over a third | South China Morning Post 

    Adidas has a plan to sell Yeezy sneakers without Ye – Because the company owns the designs it made with Ye, it can—and it probably will—sell the shoes, chief financial officer (and interim CEO until Dec. 31) Harm Ohlmeyer said on the company’s Nov. 9 earnings call. – They can’t use the Yeezy name though. Given that Yeezy is responsible for up to 40 percent of adidas properties according to some sources, this could end up being the best of both worlds for adidas. Kanye West was unhappy for a long time with the adidas deal, so unlikely to complain, and he may yet be able to use the Yeezy brand with another sneaker maker, for instance in China.

    China

    Nvidia hobbles A100 chip to meet US export control rules | EE Times 

    Opinion | How China Lost America – The New York Times – interesting piece by Thomas Friedman – the big take out for me is that China thinkers don’t realise that Xi Jinping doesn’t care due to his Marxist dialectic world view. Read also: The Return of Red China: Xi Jinping Brings Back Marxism – China is now breaking from decades of political, economic, and foreign-policy pragmatism and accommodationism. Xi’s China is assertive. He is less subtle than his predecessors, and his ideological blueprint for the future is now hiding in plain sight. The question for all is whether his plans will prevail or generate their own political antibodies, both at home and abroad, that begin to actively resist Xi’s vision for China and the world. But then again, as a practicing Marxist dialectician, Xi Jinping is probably already anticipating that response—and preparing whatever countermeasures may then be warranted – Kevin Rudd on China

    Consumer behaviour

    PR emails: I said yes to every single one for a day. Oof. | Slate – Could it be possible that the publicists are on to something? Is the daily flood of hopeless pitches actually a secret window into American ingenuity, optimism, and desperation—not to mention a very interesting line of scientifically tested sex toys?

    In repressive Qatar, hotels are a haven for sex, booze and more | Financial Times 

    Design

    Really interesting commentary on how Adidas designed the mesh used in the 4DFWD running shoe that provides a similar energy transfer to the carbon fibre shank in  Nike Air Zoom Alphafly NEXT% shoes that completely changed long distance running

    Who Will Replace Evans Hankey as Jony Ive’s Successor as Apple’s Design Chief? – Bloomberg – this looks like a potential crisis for Apple. They don’t seem to have built up a design team culture in the way that Dieter Ram did at Braun

    Is CGI getting worse? Yes and no. The reason why it seems to be worse is down to worker exploitation

    Economics

    China unveils new policies to solicit foreign investments in manufacturing operations – implies a point of weakness in the Chinese economy. This also explains China slashes quarantine time for international arrivals to 5 days | South China Morning Post in the hope that senior executives will be bothered to turn up. These policies might be needed due to the multitude of down sides in sourcing from Chinese factories:

    • COVID-zero
    • Brand China
    • Coercive technology / process transfer
    • Restrictive outbound capital platforms

    Automotive supply chain saw component demand revival despite macro headwinds | DigiTimes 

    Morgan Stanley (MS) Cuts China Annual Inflow Estimate as Risks Mount – Bloomberg – slowing foreign investment

    Expect a global economic recession in 2023: Report: TSMC takes action in response to falling demand | EE Tiimes 

    Finance

    Sam Bankman-Fried is not very good at League of Legends | Financial Times – parody meets real life personified. Read in conjunction with What if crypto just…dies? – by Noah Smith – Noahpinion

    China given advantages in loan for Kenyan rail project, contract shows | South China Morning Post 

    FMCG

    ‘Grave of the Fireflies’ candy-maker goes bust as costs soar | The Japan Times 

    You need this instant Japanese curry rice if you hate cooking but want to eat a balanced diet | SoraNews24

    Gadgets

    Inoreader – Take back control of your news feed – new RSS Reader, though I find Newsblur better for my needs

    Germany

    Scholz in China | Franco-German tandem | Supply chains – Chancellor Scholz’ China visit has cost him dearly in every other arena but China

    Hong Kong

    38,600 Hongkongers under 18 have applied for Britain’s special BN(O) visa scheme, but most requests come from residents in prime working years | South China Morning Post – Nearly a third of 142,000 Hongkongers who have applied for a special visa that leads to British citizenship are under 18, while those aged 25 to 54 make up the majority – Hong Kong already has an ageing population. You will also find that the leavers are likely to skew much higher in certain professions and skills sets such as nursing, social work, business management, accountancy and teaching

    Health

    ‘I miss eating’: the truth behind the weight loss drug that makes food repulsive | Food | The Guardian – this is a mess for Novo Nordisk. (Disclosure: I worked on the global launch of Wegovy®)

    Innovation

    NTT claims it can stop the noise leaking from headphones • The Register 

    Bosch taps IBM quantum computers in hunt for new EV materials | DigiTimes and IBM think they’re on to something big: IBM sees 2023 as quantum inflexion point | EE Times 

    Infineon, X-Fab join Fraunhofer DNA memory project | EE Times 

    Japan budgets $2.4 billion for chip R&D hub with US, Europe | EE Times

    Eliyan raises $40m to shake up chiplet interconnect | EE Times 

    Japan

    Honda and Nissan move financial forecasts upward as Yen stays weak | DigiTimes 

    Germany finishes first again with Japan and Canada rounding out the top three nations | Ipsos 

    Japanese clothing chain Uniqlo now selling flowers online, they’re way better than we imagined | SoraNews24 – interesting brand extension by Uniqlo

    Luxury

    Hermès, L’Oréal bounce back in China despite ongoing lockdowns | Advertising | Campaign Asia 

    Marketing

    Life and work post Covid – production and post | shots 

    Materials

    Great video on how additive manufacturing’s unique properties can result in innovation. This heat exchange was printed from laser sintered aluminium alloy powder. The weight savings and increased thermal efficiency figures claimed are very impressive. The problem is using this technology at scale, or will it be niche like carbon fibre fabrication is now?

    Some machines combine CNC milling machines with additive manufacturing capability, this hybrid expertise makes a lot of sense.

    WFL additive manufacturing
    Tim Wantink – The WFL M80 Millturn with 10 kW laser-unit for additive manufacturing

    Online

    TrustCor Systems verifies web addresses, but its address is a UPS Store – The Washington Post 

    Deception Is a Weapon in Russia’s War in Ukraine – The New York Times 

    Retailing

    China’s Singles’ Day 2022 sellers aim for quality over quantity | Quartz – similar to what’s been said on Campaign Asia – I think it will be difficult due to platform power

    Security

    China Recalibrates Its Strategy in the Pacific Region – The China Story 

    Microsoft links Russia’s military to cyberattacks in Poland and Ukraine | Ars Technica 

    Australian police reveal Russians behind Medibank medical record hack | South China Morning Post 

    Software

    Signal >> Blog >> Reflections: The ecosystem is moving – interesting discussion on federated versus centralised systems

    Taiwan

    TSMC and UMC report double-digit October sales growth; no 3nm for Arizona yet | DigiTimes 

    Technology

    The US used shell companies during the Cold War to secure titanium from Russia. Now it seems that Russia has done similar things with electronics components for its smart weapons obtained from US manufacturers.

  • Brand proposition

    The brand proposition is what fires creative thinking in advertising and the bane of junior planners. In fact, the brand proposition is a topic of conversation for advertising planners, in the same way that the weather is for British and Irish people. It is a source of endless debate and discussion.

    Firstly, let’s discuss what’s a brand?

    Kit-Kat Japanese packaging

    How you define brand would likely come down to two camps. Those that broadly agree with either of two statements that branding:

    • Is the act of creating a name, symbol or design that identifies and differentiates a product or service from others
    • Is the art of aligning what you want people to think about your company, with what people actually think about your company

    The second option is closer to where my viewpoint would be, but neither are completely right or wrong. Brands have various attributes including:

    • Brand / customer relationships
    • Brand personality
    • Country of origin
    • Emotional benefits
    • Organisational associations
    • Self-expressive benefits
    • Symbols
    • User imagery

    Product specific attributes that affect brand

    • Scope
    • Attributes
    • Uses
    • Quality / value
    • Functional benefits

    JWT London’s seminal planning guide said that a brand’s appeal is built up over time by three different sorts of appeal

    • Appealing to the senses: feel, smell, tastes, sounds or looks
    • Appeals to reason: function, when would you use it, what does it contain, how does it perform
    • Appeals to the emotions: the brand style or nature, brand associations, what mood it evokes or satisfies, any psychological rewards for usage

    How does planning come into it?

    What’s a brand planner?

    “The account planner is that member of the agency’s team who is the expert, through background, training, experience, and attitudes, at working with information and getting it used – not just marketing research but all the information available to help solve a client’s advertising problems.” 

    Stanley Pollitt

    The JWT Planning Guide, which can be considered to be the stone tablets of account planning as a profession were handed down written in 1974.

    The planning guide said

    … any systemic approach to planning advertising has to do more than simply provide controls and disciplines. It must actively stimulate imagination and creativity too.

    PLANNING GUIDE (March 1974). United Kingdom: J Walter Thompson (JWT) London.

    Ok, that’s quite a big ask. But it didn’t stop there. The ideal advertising planning methods had to also fulfil four criteria

    • Realistic – based on ‘best practice’ and must be capable of being optimised and evolved.
    • Pragmatic – They must work to help people create advertising that is relevant and creative. Simple in nature, memorable and easy to follow
    • Fundamental – based on ‘coherent theories’ of how advertising benefits marketing, how communications works, how people collaborate productively and create new ideas
    • Structured – set a sand pit that imagination can work in. Chunking complexity down to simple elements and providing regular evaluation of work done
    Kit-Kat Japanese packaging

    Brand proposition

    Realistic, pragmatic, fundamental and structured dictate the shape and form of a planner’s tools and outputs. And sometimes we lose sight of this, which is very much the case with the brand proposition.

    A definition

    A brand proposition could be considered to be the foundational concept that highlights the unique identifying features of your brand.

    Attributes of a good brand proposition

    A good brand proposition will be:

    • Single-minded in purpose and being succinct – which can be a pain the 🍑
    • Almost, but not quite an endline
    • Interesting / thought provoking
    • An ongoing investment
    • Occasionally multiple – creative briefs are as much a dialogue with your creative director as they are the product of the heroic lone planner. Having multiple ways in is a good way of doing that, and there might be multiple insights that don’t easily reconcile with each other
    • Open to evolution – its more important to be interesting than correct, it is unlikely that you will get it right first time

    Rich nuggets, stimuli, creative brief delivery and post-brief discussion

    The brand proposition is a small part of the overall account planners contribution to the creative process. You could consider it a sub-set of the insightful ‘rich nuggets’ – the behavioural observations in a creative brief, which is about a quarter of the strategists contribution. Every bit of a brief that a planner writes should have these rich nuggets in it. Examples of rich nuggets that I have had in my career as a planner

    • Even in a digital world, people get annoyed and can be spurred into action when they find their mail has been opened
    • After mental health, consumers care most about having a healthy immune system. It came to fore during COVID and seems to have remained with us
    • Glow, the look of healthy skin due to a moist top layer of the skin can sell products in many markets. But it doesn’t work well in high-humidity tropical, and sub-tropical clients
    • A majority of Hong Kong beauty consumers would prefer not to interact with concession staff, they consider them to be closer to over-pushy sales people than trusted advisors
    • A majority of primary care practitioners (GPs) feel a degree of disgust when they see an obese patient
    • Chinese luxury hotel guests are likely to be younger and less formally dressed than the older western and Japanese clientele – with a dress sense that somewhat harks back to the mix-and-match approach of the Buffalo Collective

    The other three quarters are:

    • The quality of stimulus that the planner provides – Stimulus for consumer brands might be much more visual than say prescription medicines where science facts and sandboxes of regulatory restrictions could be much more important. There is usually a good deal of discussion that goes into help writing this brief that helps filter which stimulus makes the cut and the emphasis placed on it.
    • Quality of delivery on the creative brief
    • Post-brief discussion

    So the amount of ‘pain’ that junior planners have on the brand proposition is out of proportion to the brand proposition’s role in the planning process.

    Criticisms of the brand proposition

    Perceived solutions orientation

    The brand proposition puts the emphasis on a potential answer; rather than the initial problem. And I can understand how this occurs. Going back to the JWT London Planning Guide:

    Advertising involves producing a long series of unique solutions. Each piece of work requires innovation. Every script, every layout, every recommendation is Ian some way different from any that has gone before. Each client operates in a different market, and each brand in a market has different needs.

    I would argue that yes the brand proposition can be perceived to be solution focused, but I’d also argue innovation means reframing and looking at a problem in a different way – this is much of the success behind Eno & Schmidt’s Oblique Strategies.

    Brand proposition locks the planner in to a certain perspective

    The idea is that the very act of writing a brand proposition locks the planner in to a certain perspective and consequently starts making the process of developing ideas territorial and creates unhelpful barriers.

    I can see where the ‘lone heroic planner’ mode might kick in. I found it happened when I was freelancing in a team made up of freelance creative talent and there wasn’t any ‘connective tissue’ in the team.

    I think that a planner needs to be humble enough to recognise that:

    • They don’t have a monopoly on good ideas
    • They are humble enough to recognise better ideas were ever they may come from
    • They are constantly in searching mode

    Perceived traditional media focus

    Propositions are considered by some to encourage to think in ‘traditional media’ by asking what should we say rather than

    • What might we do?
    • What experience might we create
    • What interaction might we host

    My argument against this point-of-view is that its a very literal interpretation of ‘say’. If we think about person to person communication about 70 percent is non verbal cues. And I would argue that more experiential aspects fall into what we say.

    Secondly, it depends on where you are in the process. For instance in many of the assignments I worked on as a freelancer, the channel had already been defined by the client and or the media agency partner who was further upstream in the decision making process.

    A brief for Unilever’s Dove specified that they wanted a 30-second TV spot and online video clip. It has to contain an end ‘pour and pack shot’ which took another 5 seconds at the end of the video. For the online video clip you had to have the brand logo up front. This is very common when you are working on creating marketing assets for international markets.

    OK, why Japanese KitKats?

    They have one uniform brand proposition behind them, but a whole variant of different ways of solving it from a product and packaging design perspective. And, they’re really, really tasty. Japanese KitKats have the crispness I remember from my childhood eating Irish-made KitKats from the old Rowntree-Macintosh factory that was in Kilmainham, Dublin.

  • Brand purpose

    What is brand purpose?

    For senior marketers who came up with a Jack Welsh influenced shareholder value focus, brand purpose was a seductive concept for otherwise empty and meaningless careers that could even be considered ‘bullshit jobs‘. Brand purpose campaigns are not coming from the need of consumers mostly but from the desire of marketeers to do something good of their day, of achieving something more than just selling a humdrum product.

    In essence it is the same drive that motivated the apochrical question from Steve Jobs to future Apple CEO John Sculley

    Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?

    John Sculley recalling Steve Jobs pitch on a documentary profile of Jobs that was part of the Bloomberg Game Changers series.

    In recent years over 90 percent of Cannes Lions winners were found to focus on brand purpose. In 2016, the Singapore office of advertising agency Grey created a fake brand purpose campaign for Migrant Offshore Aid Station (MOAS) designed to dupe consumers and award judges. The I Sea app was supposed to crowdsource help to spot refugees, but it was built on fake data.

    Brand promise

    Historically the focus has been on the brand promise – the idea of what a consumer can expect from the product or service. An example of this would be First Direct – a branchless bank providing its services by telephone and internet instead. It is a retail bank division of HSBC that was founded back in 1989.

    Brand purpose, goes way beyond brand promise and is is the brand’s reason for being beyond making money, sales or profit – it’s a framework that guides business decisions and thought processes. A brand purpose is supposed to connect with consumers at a more emotional level. It is why the brand exists and should guide the brand’s mission that differentiates it from others.

    By 2014 you had marketing royalty like David Aaker endorsing brand purpose, or as he called it Higher Purpose. It was further popularised in management by the 2017 publication of The Guiding Purpose Strategy: A Navigational Code for Growth is a book by Markus Kramer and Tofig Huseynzade. Kramer and Huseynzade looked at purpose at an organisational level and how it should be brought to life through brand management.

    Corporate and social responsibility (CSR) is not brand purpose

    It is distinct from earlier concepts like CSR or corporate responsibility as US organisations often prefer to say. The easiest way to demonstrate this is by example. One of my first clients was Verizon Wireless the US mobile carrier. They used to donate pre-used cellphones, together with free services to charitable organisations like women’s shelters in the New Jersey area where they were headquartered. While they meant well, this clearly wasn’t the key focus of their business, but did make use of edge effects brought about by customers upgrading their phones.

    I helped them template this activity in markets were they had an international presence at the time:

    • Czech Republic
    • Greece
    • Indonesia
    • Italy
    • Mexico
    • Slovakia

    The role of CSR can be for many reasons:

    • Being a good corporate citizen
    • Being closer to the community to better understand the environment
    • Pipelining new talent for the business (like Shell’s Young Engineer programme)
    • The act as a counterweight to negate negative effects of having the business in the area. A classic example of this would be education and health clinics for communities where there is oil drilling

    Is brand purpose effective?

    We know that purpose lead marketing is 30% less effective than non purpose campaigns according to Peter Field, so purpose shouldn’t be seen as a money making decision. In fact, being prepared to forgo money if necessary is a hygiene factor in a brad purpose. Ethical behaviour won’t necessarily generate revenue.

    Brand purpose is most likely to demonstrate effectiveness internally, where it can get people to do more for a company they believe in and matches a set of internalised values. Internal altruism and work life are aligned – they aren’t working in a bullshit job.

    Risk management

    Business risk management has a number of challenges with brand purpose. The moral challenges and perceived required speed of reaction poses problems for brand purpose risk.

    Glocal nature of purpose

    There have been a procession of (foreign) multinational companies that have committed costly perceived slights in China. Western businesses such as Nike have generally erred on the side of a Chinese brand purpose for profit and a perceived lower risk of reaction from western customers. For example Nike Withdraws Products After Brand Partner Vexed China for Supporting HK | Jing Daily or how western brands responded to China’s Xinjiang boycotts including concealing past corporate statements or flip-flopping like Fila, H&M and Hugo Boss.

    TL;DR – brands are most afraid of offending: Chinese consumers > western consumers > developing world consumers – though this may change with de-globalisation.

    Bringing a knife to a gun flight

    The Unilever board have been pummelled by shareholder reactions to its brand purpose driven approach

    Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business. The most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank. However, we think there are far more ludicrous examples which illustrate the problem. A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).

    Terry Smith, Letter to Investors (January 2022) United Kingdom: Fundsmith Limited.

    Fundsmith is one of the top ten largest shareholders in Unilever at the time. This then set the tone for activist investor Nelson Peltz to secure a seat on the company board

    Having a position

    Having a position is a risk in itself. Some brands notably Dunkin Donuts Refuses to Get Woke: ‘We Are Not Starbucks’ just focus on their brand promise. They keep consumer expectations realistically low. Contrast this with Unilever’s Ben & Jerry’s who took a position on the Palestine question and the invasion of Ukraine. In the case of Israel, Ben & Jerry’s independent board has taken Unilever to court over an attempt to stop sales inside Israel.

    Purposeful consumer behaviour

    Consumers generally have good intentions. They mostly consider themselves charitable, an example of the Lake Wobegon effect named after the fictional town featured on the US radio show A Prairie Home Companion. In reality, only 20-25 percent of consumers donate to charity. Consumers green tendencies seem to vary with the state of economy according to longitudinal research conducted by Gallup, regardless of their generation. Price is still the key consideration for consumers, but brand purpose can increased the perceived benefit for a consumer when considering similarly priced products.

    Welcome to Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average.

    Garrison Keillor

    Purpose is perceived as being of key importance to consumers because of misinterpretation of of market research and poor research design such as making a false association between the correlation of successful brands and assuming purpose as the causality.

    Consumers don’t think every issue have the same weight, they are likely to feel more personally connected to health, economic and societal issues. Political, business or legal issues of brand companies are considered to be ‘hygiene’ factors.

    Purpose-washing

    One of the key challenges with brand purpose is that many brands have approached in a superficial manner at best. Superficiality might be one of perspective, for instance, Nike supported Colin Kaepernick and other progressive causes, but also funded right-wing Republican Party politicians. Progressive leaning consumers may feel betrayed or gaslit.

    Les Binet of Adam and Eve outlined a good test of brand purpose

    Purpose bullshit detector. Ok, you have a brilliant new purpose drive marketing initiative.

    1) Would you still do it if you couldn’t publicise it?

    2) Would you still do it if reduced your long term profits?

    If the answer to either question is no, then it’s not purpose driven.

    Les Binet on Twitter

    Purpose-washing isn’t new and can see its roots in the ‘greenwashing’ of the mid-1980s where companies claimed ‘green behaviours’ that were designed to cut costs, or create the illusion of caring for the environment.

    Brand purpose examples

    Brand purpose examples become difficult. Patagonia would be amongst the first brands that would be used as an example. It’s an unusual company that inspired other brands like Warby Parker and Toms. Things start to fall down when you look at large corporates.

    PepsiCo tried to pivot towards nutrition as a brand strategy and purpose focus in the early 2010s under then CEO Indra Nooyi, yet still relies on sugar filled drinks for its business.

    I worked at Unilever on Family Brands, what people in the UK would know as Flora margarine, when the company mandated that every brand had to ‘find its brand purpose’. Dove’s ‘Real Beauty’ success sparked a change over at Unilever.

    Dove’s brand vision / purpose is interesting because it came out of a consumer insight. After surveying 3,000 women across 10 countries the brand team found only 4% considered themselves beautiful. Further research found that a majority of girls had anxiety about how they looked.

    We believe beauty should be a source of confidence, and not anxiety. That’s why we are here to help women everywhere develop a positive relationship with the way they look, helping them raise their self-esteem and realise their full potential.

    Our Vision – Dove.

    Note that while Dove has a successful men’s range of products, men and boys self esteem or confidence isn’t a concern of Dove’s brand purpose despite academic research suggesting similar issues.

    Then CEO Paul Polman focused Unilever on its Sustainable Living Plan and brand purpose was at the centre of it.

    Those that didn’t have one were to be sold off. We focused the flora relaunch around being ‘Powered by Plants’. The reality is that I was working on a product known by different brands in much of the 23 or so countries that it was sold in. In the UK, there was the health aspects of Flora versus butter and the vegan credentials. In Kenya and other parts of Africa it was about nutrition for children in the family and the superior shelf life compared to butter. Despite its brand purpose, yellow fats were perceived to be a lower growth sector and the business spun off to Upfield. Money trumped purpose, although Polman has continued to advocate for a change in business practices with his book Net Positive.

    Unilever has stumbled with its brand purpose focus, being too focused on it for active investors and insufficiently focused on it in the eyes of other stakeholders, including company insiders.

    The pharmaceutical industry is beset with conflicting views regarding brand purpose. The companies will view their products has having a live changing or life saving brand purpose, where as external views will be more concerned about predatory pricing and the non-inclusive access that is a side effect. For instance, one in five people with diabetes in the US have rationed their insulin usage due to high costs.

    Secondly you had lifestyle medicines, notably Pfizer’s Viagra, but still no breakthrough AIDS vaccine. Finally there was the exploitative nature of Purdue Pharma and Johnson & Johnson providing opioids for pain relief that drove a crisis in addiction.

    Many commentators would cite Nike but the examples are problematic:

    • Their FlyEase design approach that enables disabled people to participate in sports, is a great example of accessible design. But disabled customers have found them hard to obtain as they flew off the shelf. Accessible design benefits able-bodied consumers too
    • Plus size activewear could be just about capitalising on the obesity epidemic, rather than truly inclusive sports participation
    • Supporting Colin Kaepernick and taking the knee for racial justice is at odds with other Nike behaviours including the nature of their supply chain. While anti-sweatshop campaign dented Nike’s reputation in the 1990s, it still has appalling labour conditions today.

    What about Mattel who have been trying to bake representation into their products. For example Hot Wheels releases a remote-controlled wheelchair that flips & spins – brand purpose or will Hot Wheels have its ‘Joey Deacon’ moment?

    Brand purpose thinking from academia and the advertising industry

    Articles like this one in AdAge have helped to drive the brand purpose movement: Gen Z doesn’t want to buy your brand, they want to join it | AdAge – This group isn’t waiting for brands to lead on issues. Instead, they’re leading. Since movements rarely come with a business case or cost-benefit analysis, marketers must consider how they can partner with Gen Z to become more involved and deliver on the promise of purpose (paywall)

    Brands take note: The purpose of purpose is purpose – Most of the data used to support the case for brand purpose is verbal, spoken data which lays itself open to the ‘intention-action gap’ that exists between what people say they will do and what actually transpires. That gap is particularly large with topics like brand purpose because social desirability bias leads respondents to, knowingly or unknowingly, overclaim the importance of purpose in their purchase decisions in order to look less like a wanker. But there is a bigger, more pressing question now being asked of brand purpose. As we enter a recession, we know – from bitter past experience – that customers will change their behaviour in the tricky months ahead. In May, Kantar was already showing a significant proportion of the market (albeit, again, with spoken rather than derived data) switching to lower priced options. Such moves are not a uniform downgrade of every brand for a cheaper alternative. In order to justify the continued purchase of some premium brands that are deemed different and meaningful enough to retain their place, customers trade down on weaker, less essential fare – Mark Ritson takes a pragmatic view on brand purpose in this Marketing Week op-ed. Meanwhile Byron Sharp over at the Ehrensberg-Bass Institute of Marketing Science has even greater concern about brand purpose: Purpose could be ‘the death of brands’, warns Byron Sharp 

    Richard Shotton on brand purpose: ‘marketers have fallen out of love with marketing’ | The Drum

    The Future of Purpose – TrendWatching – Trendwatching’s take fits in with Richard Shotton’s view …in 2020, consumers will embrace businesses that BREAK the CODE of the brand DNA or their entire industry in the name of a more ethical or sustainable consumerism.

    Think a superband that doesn’t tour, a fashion magazine with no photoshoots, or an airline that tells passengers to fly less (see innovation examples below).

    • Yes, this is a highly actionable trend, and a tactical chance to prove to consumers that you really get the scale of the challenge ahead. But it’s being driven by deep shifts in the nature of status, innovation and transparency…
    • Unconsumed Status. Status has always been a key driver of consumption behaviors. But via rising awareness of social and environmental damages, the nature of consumer status is changing radically. That means rising numbers fulfilling their status quest by seeking out new brands and new modes of consumption that reimagine, or even invert, old attitudes and priorities.
    • Clean Slate Mindset. Today, purpose-driven insurgents can become mega-brands that shake the mainstream faster than ever. Tesla is rewriting the rules of automotive; Impossible Burger those of meat. That’s driving expectations across all industries that legacy codes can and must be rewritten in the name of a better consumerism.

    Brand purpose. The biggest lie the ad industry ever told? – Tom Roach 

    Mark Ritson: A true brand purpose doesn’t boost profit, it sacrifices it | Marketing Week 

    “Brand purpose” is a lie – a lot of truth in this Fast Company op-ed and this article from 2017: Truthiness in marketing: is the evidence behind brand purpose flawed? | The Drum 

    Study of award entries reveals tighter budgets and a struggle to achieve ‘brand purpose’ – Mumbrella Asia 

    This Brand is Late Capitalism | Rachel Connolly 

    One last thing

    I have a related post on environmental and social governance (ESG) which looks to apply the doing well, by doing good philosophy that is also behind brand purpose.