Month: September 2024

  • September 2024 newsletter

    September 2024 newsletter introduction

    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.

    Brooklyn Beacon "tribute in light"

    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

    Strategic outcomes

    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.
    • Not the target demographic – or how marketers and agencies are leaving money on the table.
    • The mooncake crisis in China.

    Books that I have read.

    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.

    DLD munich 19 - Monday

    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

    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.

    SVoD
    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 The Crow.

    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.

    More on what I have done here.

    bit.ly_gedstrategy

    The End.

    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!

    Don’t forget to share, comment and subscribe!

    Let me know if you have any recommendations to be featured in forthcoming issues. 

  • Mooncakes + more things

    Mooncakes

    Mooncakes were a big part of my time in Hong Kong and Shenzhen. This year, mid-September marked mid-autumn festival across Asia or known as Chuseok in Korea. It is similar to harvest festivals that happen elsewhere in the world.

    It is celebrated in Chinese communities with mooncakes. Mooncakes traditionally have been made of fat filled pastry cases and lids filled with red bean or lotus seed paste and a salted dried egg yolk.

    Mooncakes are moulded and have auspicious messages or symbols embossed on the top, like the double happiness ideogram which also appears on new year decorations and at weddings.

    Moon Cake

    In the past mooncakes have been used to make political statements in Hong Kong where they were embossed with messages against the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019. This mirrored mooncake history, where concealed messages were alleged to have been used to ferment rebellion against Mongolian rule in China centuries ago.

    China saw a halving of mooncakes sold this year, compared to last year. This is a mix of fast-moving events like the state of consumer spending and longer term factors including gifting culture and attitudes to health and fitness.

    The economy

    The consumer economy seems to be doing worse than industrial output. Youth unemployment is still an issue.

    Gifting culture

    China saw a crackdown on premium priced mooncakes as part of a government move against ‘excessive consumption‘ driven by societal excess and ‘money worship’. This overall movement has dampened luxury sales. The Chinese government stopped officials buying mooncakes a decade ago as part of a crackdown on corruption.

    Some consumers just aren’t into them

    They were as divisive as Christmas cake is in Irish and British households. Brands like Haagen-Daz and Starbucks have looked to reinvent mooncakes into something more palatable.

    Health and fitness

    Health and fitness has been steadily growing as a trend in China. A number of reasons have been at play including changing beauty standards. Chinese women are still going to favour slimness over muscle, but home workouts and running have been increasing in popularity. The fitness industry has been growing and the Chinese government has also tried to foster interest in winter sports. So there would be a good reason to avoid ruining all the hard work that you put in by eating mooncakes.

    Business

    Nike CEO John Donahoe to Step Down | BoF

    Economics

    Why Do Workers Dislike Inflation? Wage Erosion and Conflict Costs* by Joao Guerreiro, Jonathon Hazell, Chen Lian and Christina Pattersonworkers must take costly actions (“conflict”) to have nominal wages catch up with inflation, meaning there are welfare costs even if real wages do not fall as inflation rises. We study a menu-cost style model, where workers choose whether to engage in conflict with employers to secure a wage increase. We show that, following a rise in inflation, wage catchup resulting from more frequent conflict does not raise welfare. Instead, the impact of inflation on worker welfare is determined by what we term “wage erosion”—how inflation would lower real wages if workers’ conflict decisions did not respond to inflation. As a result, measuring welfare using observed wage growth understates the costs of inflation. We conduct a survey showing that workers are willing to sacrifice 1.75% of their wages to avoid conflict. Calibrating the model to the survey data, the aggregate costs of inflation incorporating conflict more than double the costs of inflation via falling real wages alone

    FMCG

    Unilever ends up as a punching bag for Greenpeace and having their purpose blown up. As a campaign idea, the public celebration by the Dove brand team of the 20th anniversary of Dove’s real beauty positioning and creative left themselves open to this. Greenpeace used a skilful reframing in this creative.

    The reason why the developing world seems to be disproportionately affected by plastic waste highlighted is for a number of reasons:

    • A lot of and paper and plastic recycling is shipped abroad. It used to go to China, but they declined to accept waste to recycle from 2018 onwards. So this waste went to other markets.
    • Developing markets have single portion packaging so that FMCG companies can distribute via neighbourhood shops and sell the product for the price a consumer can afford.
    • Plastic is easier to colour, manufacture, package and transport than glass, metal or coated paper. Biodegradable or effective post-use supply chains are well behind where they should be. And even if you were open to recycling, there may be brand issues.

    Innovation

    Chinese scientists claim they can use Starlink satellites to detect stealth aircraft | BGR

    Japan

    AI will help Sony expand Japanese anime’s growing fan base | FT – but would also help competitors out-produce Sony. Expect a Chinese anime avalanche.

    Marketing

    Campbell’s drops the ‘soup’: what the evidence says about adapting brand fundamentals | WARC

    Media

    OpenAI Messed With the Wrong Mega-Popular Parenting Forum | WIRED

    Retail media frenzy muddies negotiations with brands, who agency execs say must spend or ‘suffer the consequences’ – Digiday and Retail media networks put the squeeze on brands | WARC – Spending on RMNs could be seen as part of normal partnership agreements between brands and retailers that have traditionally included marketing commitments. That shades into a grey area if retailers become focused primarily on growing their ad business, but those same retailers can’t expect brands to spend more unless they can demonstrate results. At the same time, brands have their wider media mix to consider.

    In context

    • The pairing of advertisers with consumers close to the point of purchase via rich, first-party data is leading to better ROI relative to other channels for some advertisers and is cited as a key driver of increasing retail media investment.
    • Retail media is growing in double digits every year; it currently accounts for around 14% of global ad spend and is projected to account for 22.7% of online advertising by 2026.
    • Retail media is no longer a ‘medium’ in the conventional sense but is instead evolving into an infrastructure underpinning the entire digital advertising ecosystem. 

    Content Creators in the Adult Industry Want a Say in AI Rules | WIRED

    Security

    JLR’s letter: what Land Rover’s doing to stop your older car getting nicked | CAR Magazine – update on JLR’s security crisis

    Software

    A brief history of QuickTime – The Eclectic Light Company

    Technology

    NTT Data builds a mainframe cloud for Banks • The Register – mainframes are still amazing for large scale batch processing

  • Not the target demographic

    My parents are not the target demographic for most brands. Like me they don’t see themselves represented on screen. Even the old guy from the Werther’s Original advert doesn’t appear any more.

    Spending some time with them recently allowed me to see what brands might be missing out on and how they related to brands.

    Why are they not the target demographic?

    Let’s do a thought experiment. If we asked marketers about why my parents aren’t the target demographic. There would likely be a range of answers and I am guessing that these would be prominent amongst them:

    • They aren’t aspirational
    • They aren’t culturally relevant
    • We’re after lifetime spend, that means below 35
    • We don’t understand them
    • We can’t reach them
    • They’ll have set behaviours

    They aren’t aspirational

    Neither are most brands, despite what marketers might want to think. Your supermarket is full of functional brands, as are utilities like electricity, gas suppliers, water board, broadband and mobile operators. You don’t virtue signal your status through being on Plusnet, but you might do through your iPhone. Funnily enough the accessibility features, simplicity of design and ease of my providing technical support means that they run an Apple household. They do want their house to look nice, be clean and are thinking about replacing their car. They’d like to go out and see things and maybe even do a bit of travel.

    One fact from the Pew Research Centre surprised me, but spoke directly to aspiration. Retirement age people are twice as likely than the working population to be entrepreneurs working in self-employment. BBH interviewed 20 retirement age people in Britain and found that they strived for significance.

    They aren’t culturally relevant

    Neither is the advertising industry a lot of the time, despite attempts to diversify it is still overwhelmingly southern and middle class. If you go up north commercial dance music radio sounds very different from what you would hear in London.

    Even clothing brands signalling are different. At the moment in Liverpool, locally designed apparel brand Montirex is more common than Gym Shark, Nike or Under Armour. Is this difference reflected in what we see from ad agencies? Often not.

    The advertising industry isn’t culturally relevant for a lot of young people let alone older people who would be considered to be not the target demographic. Finally, ZAK pointed out in their work Learn to Time Travel that culture is cross-generational. And we can think of lots of tastemakers who are older: streetwear OGs like Alex Turnbull, Marc Fraser, Hiroshi Fujiwara, Nigo, John Landis or Michael Kopelman. Slightly younger designers like Yoon Ahn, who is in her late 40s, are barely hitting their stride.

    We’re after lifetime spend, that means below 35

    Most western countries are aging. In the UK’s case the average age of the population is 43. People are living longer, but also wealth / power to spend moving in favour of older people and has been for a good while.

    We don’t understand them

    As an industry we have little, if any understanding of older people. We don’t work with older people according to the IPA agency census. No one retired in advertising last year, only 7% of our industry are 50 or over. The average age of our industry is 34.6 years old, compared to the UK average of 43.

    In the US, the Pew Research Centre, alongside the likes of Ofcom in the UK have published some basic research to get things started.

    BBH London have tried to start learning more about older consumers with their Silver Culture Project.

    And just like youth culture demanded attention 70 years ago, this too deserves to be seen, heard and celebrated. 

    One in five people in the UK is over 65. 
    In less than 20 years that will be one in four.* 

    The over 65s hold over half of the UK’s wealth, with the average 65+ household having a net worth of £500k-£1 million.

    We can’t reach them

    I was reminded of a LinkedIn post by Steve Walls where he talked about how little of the adverts celebrated by the ad industry he actually saw when he wasn’t on LinkedIn. It’s a sentiment I could relate to. Stepping away from LinkedIn and watching evening television with my parents, I ended up watching more FMCG-related advertising than I had seen during my usual more online-based life.

    I particularly liked the way Flash had doubled down and repeated the same creative for the past four years or so.

    My Dad got a bit excited showing me the Twix bears. They were short listed for Cannes in 2022 and as an advert it just works regardless of age. My Dad beamed as he talked along with the bears word-for-word. Kit Kats have been displaced in his shopping trolley by Twix.

    The Twix bears

    My Dad also likes the Vitality dachshund and the Compare The Market meerkats. While its reassuring seeing that fluent objects, humour and creativity work for all generations, it also implies that despite him being not the target demographic media planners still seem to be doing a better job reaching my Dad compared to myself (or Steve Walls.)

    There are some less memorable ads out there such Colgate Total’s dentist endorsement.

    They’ll have set behaviours

    This fails to recognise two things. Older people do change behaviour over time if it makes sense. You can see this is higher than expected level of technology adaptation by older generations. For instance, they are still using cashless payments, despite a lifetime of cash and cheque books.

    They are technology users, including smartphones, but less of them are using social media (and that might not be a bad thing). More retirement age people are working than ever before, the number in the US has doubled in a decade.

    In my parents case, behavioural change came partly due to COVID, they embraced Amazon to buy cleaning products, supplements, motor oil and vacuum cleaner spare parts.

    Secondly, behaviour change is often forced upon them from medically induced changes such as giving up smoking. Then you have physical changes from less range of movement, hearing or vision to incontinence.

    Some brands have tapped into this market.

    Always Discreet

    Procter & Gamble have extended their Always menstrual pad brand to cover incontinence due to aging. Discreet are underpants with a built in pad allowing users to continue having a normal life. Procter & Gamble has managed to move from ‘not the target demographic’ to new product innovation and brand extensions.

    You can find more related posts here.

  • AI search + more things

    AI search

    This section on AI search is largely down to Rowan Kisby’s observations over at LinkedIn. I worked with Rowan when I was her client at Unilever, super-smart, can’t recommend her enough. Now on to AI search: Google has looked to augment its web search in a more obvious way with generative AI providing ‘AI search’ features.

    Google

    The AI search features have adversely affected publishers of non-time dependant evergreen content according to Authoritas. This has sparked concern amongst media publishers, but early feedback on IAC and Ziff-Davis shareholder calls indicated little change in traffic numbers. Google claims that AI search feature ‘AI previews’ actually delivers more, rather than less click throughs.

    China

    IBM Shuts China R&D Operations in Latest Retreat by U.S. Companies – WSJ – Microsoft has made a similar retreat

    Culture

    Dr Mike Lynch OBE | Obituary – Sound on Sound magazine cover’s Lynch’s music hardware career which happened before he started Autonomy. The bit that this story misses is how Lynch’s developments helped move forward digital music and affecting electronica during a particularly creative point in culture including house and the rave scene that spun out of it.

    I can’t recommend Phoebe Yu‘s content enough, this video on colour, culture and user experience design is a great example of her work.

    Why everyone is obsessed with toys right now – The Face – The Face finally catches up with nerd life.

    Economics

    The changing role of the US dollar | Brookings Institute

    Why Can’t the U.S. Build Ships? – by Brian Potter

    Hong Kong

    Hong Kong like Japan has people with a real passion for buses and trains, and unlike the UK, both countries cater to their ‘trainspotters’.

    Wong Kar Wai’s Guide to Hong Kong: Arts Intel Report – Arts Intel

    Ideas

    Section have a series of templates for looking at AI use in business, more here.

    Luxury

    How ‘luxury shame’ will shape sales in China for the rest of 2024 | Vogue Business – wealthy people and corrupt government officials don’t want to be seen to be rocking the boat from a societal perspective lest they get caught in the view of the authorities or Chinese netizens. This is especially true given the slow economy and Xi administration focus on ‘common prosperity‘ to reign in wealthier business leaders. Burberry as a brand relying on China is particularly affected, which has reduced its stature: Burberry drops out of FTSE 100 | Drapers Online

    The Geopolitics of Wine | Peter Zeihan – thanks to increasing costs of capital, aging worker demographics and climate change New Zealand and Australia will do better than Latin American wines and most European offerings except France

    The Collectability of Parmigiani Fleurier | Phillips

    Marketing

    Colgate-Palmolive’s financial performance proves that over-indexing on share-of-voice through shopper marketing and advertising delivers positive financial results: Colgate-Palmolive: ‘The advertising is working’ | WARC | The Feed

    Is marketing entering its ‘era of less’? | WARC | The Feed – 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.

    CMO spend

    Materials

    The first tensor processor chip based on carbon nanotubes could lead to energy-efficient AI processing | Techxplore

    IKEA preowned | IKEA – Ikea tried to get into the circular economy

    Media

    Here’s the Pitch Deck for ‘Active Listening’ Ad Targeting | 404 Media

    Right-Wing Influencer Network Tenet Media Allegedly Spread Russian Disinformation | WIRED

    Online

    Rise of the ‘chefluencers’: Can China cook up its own Nara Smith? | Jing Daily

    Farewell, Microblog – China Media Project

    Retailing

    How to connect offline to China’s Gen Z and Alpha? | Jing Daily – Young Chinese consumers are finding new consumer interests away from blind boxes and claw machines: ‘Guzi’ (谷子) stores. ‘Guzi’, derived from the phonetic English ‘Goods’, describes merchandise featuring popular ACG (animation, comics, and games) characters, including badges, standees, and posters. – China develops it’s take on otaku culture

    Security

    Chinese vendor jailed for giving railway data to foreigners: State Security Ministry | South China Morning Post

    Interesting interview with Anthony Blinken on cybersecurity. See also: Chinese government hackers penetrate U.S. internet providers to spy – The Washington Post

    Current CIA director Bill Burns and Richard Moore, his counterpart at SIS appeared at the FT Weekend festival in London.

    Technology

    White House publishes roadmap to secure internet routing • The Register