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.

 

  • Shareware: Throwback gadget

    Shareware -back before the internet became ubiquitous, software was distributed by bulletin boards. It was expensive to dial into a board, so magazines uses to have storage media pre-loaded with applications on the front of them.

    For much of the late 1990s and early 2000s my parents used to use MacFormat magazine CDs and floppy disks as coffee coasters. One disk may come with bloatware such as the installation software for AOL, Demon or Claranet. The other disk would be full of free or paid for software.

    The paid for software was often written by a single developer. It was a labour of love / cottage industry hybrid. Often the developers wrote the software to deal with a real need that they had, it was then passed on as they thought others would benefit as well.

    Open source software the way we understand it now was only in its infancy in terms of public awareness. Packaged software was big money. As recent as 2000, Microsoft Office for the Mac would have cost you £235. Quark Xpress – the Adobe Indesign of its day would have cost in the region of £700+ VAT.

    Into the gap sprung two types of software: freeware and shareware.

    Freeware was usually provided as is, there was little expectation of application support. It would become orphaned when the developer moved on to other things

    ChocoFlop Shareware Style

    Shareware usually had different mechanisms to allow you to try it, if you could see the benefit then you paid a fee. This unlocked new features, or got rid of nag screens (like the one from image editing app Chocoflop).

    In return you also got support if there was any problems with the app. Shareware hasn’t died out, but has become less visible in the world of app stores. One that I have been using on and off for over 20 years is GraphicConvertor by Lemke Software. It handles any kind of arcane graphic file you can throw at it and converts it into something useable.

    Kagi Software were one of the first people to provide programmers with a way of handling payments and software activation. Kagi provided an onscreen form to fill out, print, and mail along with their payment. it was pre-internet e-commerce.

    I can’t remember exactly what utility programme I first bought for my college PowerBook, but I do remember that I sent the printed form and cheque to a developer in Glasgow. I got a letter back with an activation code and a postcard (I’ve now lost) from the Kelvingrove Art Gallery and Museum.

    Later on, Kagi were one of the first online payment processors.

    From the late 1990s FTP sites and the likes of download.com began to replace the magazine disk mount covers. Last year Kagi died, making life a little more difficult for the worldwide cottage industry of small software developers. it was inconvenient, but now with PayPal developers have an easy way to process payments and there are various key management options.

  • Under Armour + more news

    Under Armour

    I love sleep so Under Armour’s new performance pyjamas are ideal for me. Under Armour has managed to position itself as an innovator in a similar way to Nike. Under Armour was also smart to tap into sleep which is a consumer anxiety in our always on world. Under Armour is doing to clothing what Nike did to shoes. More related content here.

    Consumer behaviour

    Edelman Trust Barometer 2017 – UK Findings – trust in business, politicians and media all dropped precipitously

    Culture

    A Beginner’s Guide To Iconic House Vocalist Colonel Abrams – Electronic Beats – amazing tracks, even a couple I hadn’t heard of previously. As a 14 year old Trapped alongside The Conway Brothers Turn It Up and Paul Hardcastle’s 19 blew my mind

    Design

    Ventusky global wind, rain and temperature map – this is mesmerising to look at

    NEOMECHANICA – the best Tumblr account ever

    Economics

    Why Trump Doesn’t Tweet About Automation – will the Luddite fallacy be proved right again? Don’t count on it

    Ideas

    Science AMA Series: I’m Joanna Bryson, a Professor in Artificial (and Natural) Intelligence | Reddit – great AMA on AI

    Luxury

    Usually the luxury industry uses Instagram as a marketing channel. Omega have used it to inspire product development and tap into a ready made market. More on the Omega Speedster Speedy Tuesday

    Security

    Stealing passwords from McDonald’s users – Tijme Gommers – weakness in angular.js

    Software

    China Orders Registration of App Stores | NYTimes.com – Also partly down to the proliferation of Android app stores in China

    Wireless

    Xiaomi stops disclosing annual sales figures as CEO admits the company grew too fast | TechCrunch – a couple of things. Smartphone manufacturers need to move as a metric from market share to share of market profits. Secondly Xiaomi makes many more products than smartphones now. Finally they seem to recognise that they need to dial down the hype engine

  • Micro influencers

    Micro influencers – much of the social marketing today for consumer brand is done through what is called influencer marketing. For a number of these influencers who have a large social following, working with brand has become very lucrative. But one of the hottest tickets at the moment within communications agencies are ‘micro-influencers’; Edelman Digital lists it as a key area in Digital Trends Report . There is widely cited research by Marketly that claims there is an engagement ceiling (at least on Instagram). Once a follower count gets beyond that, engagement rates decline. This micro-influencer sweet spot is apparently 1,000 – 100,000 followers.

    What are micro influencers?

    Brown & Fiorella (2013) described 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 wanted to focus on formal prospect detail capture and conversion. It sounds like an adjunct to integrating marketing automation from the likes of Hubspot and Marketo into a public relations campaign.

    This approach is more likely to work in certain circumstances:

    • Low barrier to conversion (e-tailing)
    • Business-to-business marketing – for instance Quocirca did some interesting research back in 2006 that showed endorsements by a finance directors peers at other companies was likely to have a positive effect on a prospective supplier

    Brown & Fiorella’s thinking tends to fall down, when you deploy their approach to:

    • Consumer marketing
    • Mature product sectors
    • Mature brands

    Brand preference and purchase is much more dependent on reach and repetition to build familiarity and being ‘top-of-mind’ as a product.

    Most money in influence marketing is spent in the consumer space as B2B marketing tends to struggle with:

    • Reach
    • Volume of conversation interaction

    (At least outside of the US).

    Brown and Fiorella are 180 degrees away from the approach of consumer marketing maven Byron Sharp and his ‘smart’ mass marketing approach. This means that PR and social agencies are often out-of-step with the thinking of marketing clients, their media planners and other agency partners.

    Engagement matters less than reach or repetition of brand message for mature sectors or brands. For many consumer brands the drop off in engagement amongst macro-influencers is a non-issue, a red herring.

    The only part of the engagement measure that I would be concerned about in that case would be content propagation amongst my defined target audience – how widely had it been repeatedly shared as this would affect total reach.

    If the client and planner are using Sharp’s thinking then this audience would be wide, but a certain amount of the propagation would be wasted – for instance outside targeted geographies.

    From the perspective of communications agencies I can understand the obsession with engagement being part of their DNA. Micro influencers are an extension of this, as macro-influencers value is increasingly out of whack with their marketing benefits. These businesses are in the offline world are engagement agencies; whether its politicians, regulators, fashion stylists, movie set designers, editors, journalists, TV producers or DJs.

    Why are micro influencers a hot topic now?

    The most obvious reason is that more popular ‘macro-influencers’ are well informed about their commercial value which has been driven up to a point where they look expensive in terms of cost, even if you charitably look at it on a ‘per follower’ basis.

    On the supply side of the equation, influencer representation benefit from having more ‘inventory’ that can be sold at various price points to marketers. So in some respects micro influencers fulfil a market supply need.

    Challenges in influencer marketing

    From a marketing perspective there are a number of issues in influencer marketing – these factors are either unknown data points or represent an issue with the brand experience

    • Quality of brand placement
    • Cost per reach
    • Consistency of reach (how confident is the media planner that the influencer will achieve a certain level of reach)
    • Message repetition amongst the audience that I want to reach

    Which makes it harder to factor into an econometric model that would help justify the investment in influencer marketing as a contribution to sales.

    Let’s have a look at data around a campaign for smartphone manufacturer Huawei. This has been touted as successful by the agency involved, Social Chain. We don’t know the cost as its likely to be client confidential.

    • 2 million YouTube views (we don’t know how many of these were driven by advertising)

    • 75,000 likes

    • 13,587,159 impressions driven by 6 influencers

    • 10,689 clicks from 90 posts

    • 10 million impressions for the promotion of a colour variant of the smartphone model and 92,320 engaged

    • 4.6% engagement rate (which we’re assured is 41% higher than the industry average for branded content)

    What this doesn’t tell us:

    • Reach amongst target audience
    • Repetition amongst target audience

    Which could then be used to provide an estimate of its contributory factor to sales if you had an econometrics model. You can’t access how it works next to other tactics and there are limited outtakes for the learning marketing organisation.

    Quality of brand placement

    Many brands have struggled to get their brand in the influencers content in a way that:

    • Represents it in a meaningful way (for example beyond unboxing videos, one smartphone looks rather like another)
    • Doesn’t feel ad-hoc or awkward

    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. (It’s obviously an oversight on their part that I haven’t had an invite yet.)

    De Grisogono provides them with high-quality photography of its pieces and the event. They get the best of both worlds: influencer marketing but with a high standard of brand presentation which raises the quality of the achieved reach.

    There is a school of thought that micro influencers will be easier to manage in order to assure quality of brand placement. However, micro-influencers are likely to be aspiring macro-influencers and each will have a clear line of demarcation in their own head that they won’t cross. The reality is one of complexity dependent on:

    • Brand power
    • Relationships
    • Credibility of proposed idea
    • Impact on aspirations – could they get more followers by taking a stand and strategically burning a brand?
    Cost per reach

    Influencers tend to talk about themselves in terms of the number of followers that they have. However many followers seldom engage with the influencers content. This happens for a number of reasons:

    • The follow button is often used as a book mark or a like button
    • Algorithmic changes to social platforms and the volume of the social firehouse itself drown out brands (and these influencers are all about the brand of ‘me’). Whatley and Manson’s research at Ogilvy on the decline of organic reach in Facebook pages  is worthwhile having a look at

    Followers as a data point is not the straight analogue of reach that the industry and influencers would have you believe based on how they present their data.

    Reach numbers that are presented are often not that much more useful:

    follower

    (Data via Golin, TapInfluence and Marriott)

    Consistency of reach

    So influencers may give us follower numbers or ‘total reach’ calculations but how do we know what reach their brand placement content is likely to achieve? At the moment, I don’t know how consistent influencers are, I have a ‘personal time’ data project currently in progress on it. More on that hopefully in a later post. There isn’t off-the-peg data that I know of, so I am pulling together a data set.

    Message repetition

    Until we understand the ‘quality of brand placement’ we wouldn’t be able to understand whether a piece of influencer content was a point of content delivery. We’d also need to know do audiences of influencer A also look at media channels or other influencers that we have in our overall media plan. There often isn’t an overall media plan and there often isn’t sufficient quality of audience data for influencers.

    More on influence here.

    More information

    Edelman Digital Trends Report – (PDF) makes some interesting reading
    Instagram Marketing: Does Influencer Size Matter? | Markerly Blog
    Influence Marketing: How to Create, Manage and Measure Brand Influencers in Social Media Marketing by Danny Brown & Sam Fiorella ISBN-13: 978-0789751041 (2013)
    Facebook Zero: Considering Life After the Demise of Organic Reach

  • Lights out production lines

    Lights out production lines reminded me of my childhood. If you are of a certain age, ‘hand made by robots’ brings to mind the Fiat Strada / Ritmo a thirtysomething year old hatchback design that was built in a factory with a high degree of automation for the time.

    Fiat subsidiary Comau created Robogate, a highly automated system that speeds up body assembly. Robogate was eventually replaced in 2000. The reality is that ‘hand made by robots’ had a liberal amount of creative licence. Also it didn’t enable Fiat to shake off its rust bucket image. Beneath the skin, the car was essentially a Fiat 127. Car factories still aren’t fully automated.

    Foxconn is looking to automate its own production lines and create products that truly are ‘hand-built by robots’. Like Fiat it has its own robots firm which is manufacturing 10,000 robots per year.

    Foxconn has so far focused on production lines for larger product final assembly (like televisions) and workflow on automated machine lines: many consumer products use CNC (computer numeric control) machines. That’s how Apple iPhone and Macs chassis’ are made. These totally automated lines are called ‘lights out production lines’ by Foxconn.

    Foxconn is looking to automate production because China is undergoing a labour shortfall as the population getting older. Foxconn uses a lot of manual workers for final assembly of devices Apple’s iPhone because the components are tightly packed together.

    Forty years ago, Japanese manufacturers conquered high end and low end consumer electronics with pick-and-place machines to automate electronics production, Nokia went on to build its phone business on similar automated lines. Globalisation ironically facilitated hand assembly of exceptionally dense electronics devices.

    It will be a while before Foxconn manages to automate this as robotic motor control isn’t fine enough to achieve this yet. In order for that to happen you need a major leap forward in harmonic gearing. This isn’t a problem that software or machine learning can solve easily. More related pieces of jargon can be found here.

    More information
    Foxconn boosting automated production in China | DigiTimes – (paywall)

  • Brand communications

    Opportunities for brand communications – 2016 has been a watershed year in the western world. Political forces that were simmering, but previously untapped manifested themselves in populist victories. Political norms that were common currency for the past two decades have been brought into question and there will be societal impacts and changes in consumer tastes.

    Businesses are being buffeted by these changes and so will their business. In the case of the UK; supply chains will be re-engineered over the next two years to address the country’s departure from the European economic bloc. It will mean recalibrating the values of some brand communications. Most companies that I have spoken to are working on the assumption of the hardest Brexit:

    • No trade agreement with the EU
    • No customs union with the EU
    • No passporting for services such as banking
    • No agreement on storage of EU or US personal data in the UK
    • No free movement of EU talent
    • Problems with the WTO as countries look to settle scores like ownership of the Falkland Islands and Gibraltar

    This presents brand communications teams with opportunities and challenges:

    • There will be new regulatory and legal environments for companies to navigate
    • Corporate and social responsibility programmes will need to be recalibrated
    • There will be change management as jobs are moved abroad and facilities closed
    • Brands will have to work smarter with less
    • Consumer data based systems will need to be redesigned to meet the new legal and country boundaries imposed upon it
    • UK businesses will need to prepare for permanent handicap on their profits

    There is also a wave of change for consumer businesses. Whole categories of products – carbonated drinks, cereals and spreads are losing market share to substitute products. This is hitting the large FMCG (fast-moving consumer goods) brands including:

    • Unilever
    • Coca-Cola
    • General Mills
    • Nestle
    • Kelloggs

    Consumer brands have looked to counteract this in a number of ways:

    • Putting their spend where it will do the best work by using zero-based budgeting (ZBB)
    • Restructuring brand architectures – moving away from preventing brand damage through brand extension to brand consolidation to maximise the benefit of marketing spend. Coca-Cola is a prime example of this
    • Brand architecture will create a tension in the organisation. On the one hand the societal norm will be for local brands rather than global, on the other you have the corporate desire to cut and simplify to maintain margins. Whilst some companies may kill brands, others may sell them on to local companies, which will then try to squeeze as much value out of the brand equity as they can
    • Move away from micro-targeting to ‘smart’ mass-marketing – the key exponent of this is Byron Sharp at the Ehrenberg-Bass Institute at the University of South Australia

    Opportunities in terms of new products that communications agencies can offer

    • Internal communications programme – site shutdown or company shutdown as a product
    • CSR audit as product
    • CRM (customer relationship management) audit as product

    Brand communications vs. ZBB

    Focus on clients based on their strategic intent if they are implementing ZBB, here’s a quick guide I did earlier this year.

    Businesses have six paths to growth
    Zero-Based Budgeting

    Path versus agency discipline
    Zero-Based Budgeting

    If your client programme lies in parts of the spectrum where you won’t benefit, then as an agency you have a few choices:

    • Identify and grow your business within other brands of a clients business
    • Look at rivals for opportunities
    • Treat the current business as a cash cow

    Effect of agency consolidation on brand communications

    A second aspect of risk analysis is brand consolidation. There is not much that an agency can do with the change in brand architecture like Coca-Cola. The clients are likely to cut costs.

    A clearer source of risk will be ‘local gems’ this is a consumer brand that is only sold in one country (it may be known under a different name in other countries). These brands are likely to be closed down or sold on, particularly if they are in declining growth sectors such as margarine spreads, cereals or carbonated drinks.

    If you have only started planning about looking for replacement brands in your portfolio, it may already be too late. Best case scenario is that the brand is bought by a local FMCG company.

    Looking at previous brand sales like Radion washing powder as an example the acquirers will not support it with significant marketing spend. Instead, they will look to maximise their investment by mining existing brand loyalty and awareness.  Depending on the product category and the target audience will depend on how fast inevitable brand decline will be.

    Either way it is not a particularly attractive piece of business or large or medium-sized agencies. An incumbent agency will have to repitch for the work as it will fall outside the purview of existing contracts and business relationships.

    Advertising agencies have a head start in terms of their planners having a clear grip on what Sharp’s concept of smart mass marketing means for their discipline. PR agencies need to articulate this and reflect it in their account planning. They are still struggling to get to grips with social and are championing concepts like ‘micro-influencers’; that don’t fit into Sharp’s world view. They are effectively burning client respect.

    PR agencies need to think much more in terms of programme audience reach and repetition for audiences, rather than the current focus on influence. More marketing related content here.