GedCarrolls-BLOG:~ renaissancechambara$
>_eastasia/culture/media/tech/design/marketing
Beck is the co-founder of Riot Games (best known for League of Legends) on the rise of eSports and what its future looks like.
Interesting that Riot are trying to give players a better base to build their careers, but how long is their professional life, when do they burn out?
I had the chance to read around a lot of the stuff that happened at Cannes and listened to Ogilvy’s webinar on VidCon. Here were the key things that struck me.
There is blind faith amongst brand about the benefits of influencers and social. I find this particularly interesting because it represents a number of challenges to the status quo:
Substitute ‘buzz marketing’ for ‘influencer marketing’ and this could be 15 years ago. Don’t get me wrong I had great fun doing things like hijacking Harry Potter book launches when I worked at Yahoo!, but no idea how it really impacted brand or delivered in terms of RoI. Influencer marketing seems to be in a similar place.
Publicis and Marcel. Well it certainly got them noticed. There has been obligatory trolling (some of which was very funny). I tried to make a sombre look at it here: Thinking About Marcel (its about a nine minute read) – TL;DR version – its a huge challenge that Publicis has set itself. One interesting aspect to point out is the differing view point between WPP and Publicis. WPP has spent a lot of time, effort and money into building a complete advertising technology stack including advanced programmatic platforms and analytics.
WPP hoped that this would provide them with an unassailable competitive advantage. The challenge is that the bulk of growth in online spend is going to Facebook and Google – who also happen to have substantive advertising technology stacks.
I can’t help but wonder if this shaping is Publicis’ top line thinking? Scott Galloway posted a very sombre chart about this. If Google and Facebook hit their combined revenue targets this year, it will have a dramatic effect on the number of people employed in the major advertising groups.
To put Galloway’s numbers into context, the projected number of jobs lost in the advertising industry this year would be roughly the equivalent of every man and woman around the world currently employed at vehicle maker Nissan. And that’s just 2017.
If you paid attention to the Marcel concept film you would have noticed that the client service director is partly displaced when a client uses Marcel to directly reach out to Publicis experts.
If Marcel, just makes information easier to access internally; it could save the equivalent time equating to almost 1,600 employees (out of Publicis’s current 80,000 around the world).
People equate to billings as these marketing conglomerates are basically body shops in the way they operate. So it will adversely affect the value of the major marketing groups.
If that isn’t grim enough, Galloway doesn’t even bother to take into account the Chinese ecosystems which is digitising at a faster rate than the West. China also has a longer history of platforms and clients being directly connected – cutting out the media agency.
These changes in the advertising eco-system has huge implications about the erosion in brand equity over time. Amazon’s move to surpass other retailers also is about the erosion of brand power. Combine this with the increasing ubiquity of Prime and all brands start to look the same as private labels.
Thankfully the disciples of Byron Sharp still realise that there is power (and lower CPMs) in using television as a mass-advertising medium which is why FMCG product still spend 90% of their budget offline.
The best thing IPG, WPP, Omnicom and Publicis could do right now is spend a lot of money ensuring that every marketing and MBA student have copies of Mr Sharp’s books. If they haven’t been translated into Chinese, that might be an idea as well.
SnapChat is in its difficult ‘second album’ phase. Back when music came on physical media and record labels invested in developing artists as a longer term proposition than a reality TV series there was the ‘second album’ phase. Artists often struggled to bottle the lightning that gave them a successful first album. They usually had the money and resources to throw at it, but it was hard to be a consistent performer.
For example Bruce Springsteen only really became successful in the U.S. with his third album Born To Run – that level of record label support wouldn’t happen now.
On one level SnapChat has matured. It had a big presence at Cannes and its Snap glasses displaced VR technology as the worn product. It has been under assault. Major content providers like the BBC are choosing Instagram’s stories over SnapChat’s offerings. Even Twitter is getting back in the picture. Ogilvy’s team at VidCon talked about how Twitter had been successfully engaging with influencers and offering them support and attractive content monetisation offers.
Publicis Groupe announced two things in the past week that caught the attention of the industry:
You can’t look at either in isolation, they are both linked together.
Why the withdrawal from promotional activities?
There are various speculative takes on this:
Let’s move on to Marcel itself
It’s hard to deconstruct a corporate video to get a firm idea what the underlying form might be. The truth is that the underlying form may not even exist yet as a product brief. It takes time to coalesce an offering from high concepts to prototyping these concepts with a sampling of users. From then on you go to mapping out the functional requirements of the product and build it in a series of short sprints. Once you have a minimum viable product and tested it, you may want to tweak your project direction further.
However, when you dig into it, Marcel isn’t only about an app, but re-engineering most of the IT infrastructure as well in order to support the machine learning capability. Marcel will find it harder to learn if the data is fragmented in drives with different permissions, online services or even offline.
Carla Serrano describes Marcel as:
A professional assistant that uses AI machine learning technology across our 80,000 people in 130 countries to connect, co-create and share in new and different ways.
This won’t be like Alexa Home managing your calendar and your Spotify playlist.
AI is put in there for audience members who wouldn’t know what machine learning is. A nice succinct definition below via TechTarget:
Machine learning is a type of artificial intelligence (AI) that provides computers with the ability to learn without being explicitly programmed. … The process of machine learning is similar to that of data mining.
Let’s tease out the functions
I’ve ignored messaging as a function as most agencies use multiple channels for messaging including Slack, email, Skype/Lync or SMS. A messaging service might be built in, some of the interfaces could be ‘call-and-response’ chat bot style interactions.
Based on Google’s Return on Information: Improving your ROI with Google Enterprise Search white paper here are some rough numbers that I came up with.
The notional productivity gain is worth well over $400,000,000 in additional billable time, or like having almost 1,600 additional staff at little additional cost. The key word in all this is ‘notional’.
So what’s the downside to the factors outlined in the top-level view of Marcel?
Understanding the context for Marcel
The second half of the video is concept film of how Marcel would work in practice. It was likely put together to give voice to functionality rather than also thinking about tone. I would not be surprised if this was reused from an internal presentation to showcase the vision of Marcel to key stakeholders. The film has tonality in it is a bit concerning, I suspect it’s unintentional. If Marcel works as promised we would be in new territory for corporate culture however.
Having watched it reinforced to me:
How do you ensure a culture that continues to attract and retain the top talent as the organisation gets Marcel operational?
The partial removal of client services as a gate keeper between Jamie the client and Publicis talent was interesting. It would make client services job to get their arms around all the business opportunities in the client much harder. It would also be more attractive to certain clients who would feel more in control of their account.
Themes in the film:
TL;DR
Marcel is the business equivalent of playing high stakes poker. If it is pulled off successfully it would put Publicis in an excellent position versus it’s competitors. However there is a lot that can go wrong from a technological and organisation perspective.
I don’t know how much of this can be realistically achieved in the 12 months that Publicis seems to have given itself? It strikes me that this is likely to be a transformation that would require much more time in order to fully match the vision outlined. From a cultural perspective the challenge of ‘break, build, bond’ hides the level of complexity and change going on.
The biggest risk is what happens if Publicis doesn’t meet the wider industry expectations of success with Marcel? How will that affect client perceptions of them, or their ability to hire talent? How would it affect Sapient’s standing as a technology company?
Great points on Facebook through to sports team owners
No surprises on what is said about Facebook. The fickleness of millennials with regards sports is interesting, it did make me wonder if this also plays through for supporters of English Premier League teams.
Fantasy sports leagues aren’t engaging as it had been for older generations. Younger people struggle to get 12 of their friends on board to participate with them.
E-sports has a really small overlap with existing sports fans. E-sports players burn out too fast. It needs to address this to blow up as big as mainstream sports.
“I think the future of television is more fragmentation, the bundle has no more elasticity in it.” – Barry Diller.
This explains everything from ManUnited TV to the new channels that Amazon has launched as Prime add-ons in the UK and Germany yesterday. Media has been driving an increasing share of household spend over the past 15 years.
In a time of stagnating economic growth and declining incomes (in real terms) that middle won’t hold. Much of it becomes discretionary spending.
The display advertising market has moved on from where it was 20 years ago in terms of poor ad placement. Conference speakers and trainers still trot out the same story about knives and suitcase sets advertised next to to the story of a murder. The murderer had apparently stabbed their victim with a knife and put the body in a suitcase for disposal.
However you still get less extreme examples of unfortunate ad placement like this one from Under Armour.
Having been a client and an agency bod this advice from a postcard set by Mullen Lowe is advice to live by
I won’t pretend that herding all this opinions is easy – it isn’t.
I had this book on my list of to read materials as it was a proto-cyberpunk novel, and finally got past my inertia when John Markoff recommended it.
Brunner was a British science fiction writer who did his best work in the 1960s and early 1970s in this book he reflects on a connected world not too far away from the one that we live in. Despite Brunner’s roots he manages to speak with a confident American voice in his writing; something that I don’t think is a bad thing, but caused friction with his contemporaries.
The main protagonist is a hacker who has used his skills to conjure new identities and ends up starting a revolution through the creation of computer viruses and worms. Brunner is credited with introducing the concept of the modern computer worm.
His work reflects a different society to our own where our identities can be broken (if you have the skill or the money) and a new one forged – a vision 180 degrees away from what governments, advertisers and social networks want. He is on to something with The Ear – a service that audiences can contact and will be listened to in privacy and without judgement. The secular confessional it represents feels like something the world needs as a counterweight to the cognitive dissonance and connectivity-as-social-value of social networks like Facebook and SnapChat.
I recommend that readers check out Richard’s PR is at a Crossroads post. Edelman cites changes at PR agencies owned by marketing conglomerates as indicators. He thinks this due to a lack of confidence in the PR industry. There may be some truth in it; 2016 had the lowest annual growth in seven years for Edelman. As for the industry sitting at a crossroads, on the cusp of transformation. It is already being transformed.
Public relations has already crossed the Rubicon. The Rubicon crossing happened years ago. Richard noticed the signs back in April 2011:
…as PR continues to expand, encompassing digital, research, media planning and content creation, should we consider rebranding ourselves as communications firms?
At the time the question was prompted from London colleagues. Richard disagreed with the premise.
By 2012 Edelman was in the AdAge Agency A-list in the US. In March 2015, Edelman’s boiler plate changed from:
Edelman is the world’s largest public relations firm…
to
Edelman is a leading global communications marketing firm
Edelman hasn’t been a PR agency for the past 2-5 years. The transformation in the industry has been going on for at least a decade.
Why this has happened is down to six factors:
Mature research and academic thinking on effective marketing
Lets break things down a bit, some bits of PR are about the corporate parts of a company.
Corporate PR covers a large area including:
Some corporate and social responsibility actitivities could fall under PR. When we’re talking about who is responsible for organisation moral purpose /meaning. This should come from the CEO down.
Thinking about marketing communications the situation changes a lot. It depends on the sector and the audience that you are communicating to. For consumer marketing; the role that PR plays as part is a subordinated part with the marketing mix. Byron Sharp’s works How Brands Grow (parts 1&2) outline PR’s small, but intricate role with clarity.
For mature consumer brands, engagement (and by extension PR) is less important. Instead the focus would be on efficient reach and frequency of repetition. Being top of mind is more important. The only way for marketing communications-orientated PR teams to grow their billings is service expansion.
Technology-driven marketing strategy
Many business-to-business marketers are using content marketing as a key channel. The content shaped by analysis from marketing automation software.
In marketing automation, strategy is outsourced. Rules embedded in the software platform dictate approach. PR becomes a source of content to feed the machine. The idea is to determine an effective approach. Then optimise to reduce the price of engagement over time. I could write a blog post or two about the problems with this approach, but it is tangental to PR. Content creation is an opportunity for PRs, all be it one with perpetually squeezed margins.
Mature research and academic thinking on effective marketing
In B2C marketing there are large research projects on what works. These include Ehrenberg-Bass Institute and the IPA. In marketing mature consumer brands, we know that reach, frequency and recency matters. Engagement is less important. Public relations then becomes an afterthought at best. Taking an integrated media planning led approach makes sense.
There isn’t a comparable set of research for the PR industry like IPA or Ehrenberg-Bass. Outside the US public relations generally doesn’t have budgets for tools and data. Clients tend to be more action-orientated. Media agencies tend to have the best insights – which aids planning and creative.
The benefits of an integrated advertising-led approach goes back decades. Edelman cites Y&R’s ‘whole egg’ concept. Dentsu’s ‘Cross Switch Marketing’ is similar with roots going back to the 1960s. The PR industry mistook integrated thinking for a primitive view of PR practice. The reality lies somewhere between communications myopia and macro marketing thinking.
From a CMO perspective
Talent
Edelman has done a better job than most agencies in getting digital and paid media talent. I’ve worked as an in-house marketer. I have worked as a PR person. I’ve also worked in PR agencies doing digital and paid media. I now work as a strategy director in a creative ad agency and the difference is huge.
For most specialists working in a PR agency can be thankless task:
If you have capability built up in the ad agency, creative shop or media agency; use it. Publicis, WPP and Interpublic have deep expertise they can draw on. Publicis talks about this as ‘The Power of One’. It is much easier than recruiting more technical, creative and planning talent into a PR shop.
Advertising changes
As PR has changes so has advertising. There is a far greater understanding of what efficient and effective looks like. While I lament the the decline of advertising’s golden age; multichannel storytelling has improved. Advertising agencies have learned how to combine earned and paid media. Earned media is an incremental revenue increase.
By comparison creative represents a big budget bump for your PR agency. That causes the client to pause and think.
Media landscape changes
As advertising has changed so has the media landscape. The online environment is shaping out with two winners around the world. The pattern of online advertsing spend is clear. Everywhere outside China online advertising is static; only Facebook and Google see increases. In China, is is Tencent due to WeChat that wins. Sina benefits from Weibo. Baidu would have been an obvious winner due to it being a Google analogue. Instead Baidu’s earnings have been static.
This decline in media fortunes adversely affects editorial space. This impacts the efficiency of media relations. By some accounts in the UK there are now 3 PR people for every journalist. PR agencies need to expand beyond media relations. This means trying to get more involved in owned and paid media. The challenge is that advertising agencies are also in that space – extending their storytelling.
More information
PR not communications | 6am blog – yeah I called bullshit on this one. I could afford to be right; Richard had a global family business to defend
Whole Egg Theory Finally Fits The Bill For Y&R Clients: Global Agency Network Of The Year: Team Space System A Winner For Citibank, Others Set To Follow | AdvertisingAge
The Dentsu Way
I’ve been watching a lot of Curtis’ work recently. HyperNormalisation, The Mayfair Set, The Trap, The Century of the Self, Bitter Lake and Pandora’s Box.
More information
Just Adam Curtis channel on YouTube – has curated many of his documentaries.
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:
Brown & Fiorella’s thinking tends to fall down, when you deploy their approach to:
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:
(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. 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.
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
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 a smartphone manufacturer that has been touted as successful by the agency involved. 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:
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:
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:
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:
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:
(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 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
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. 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. Most companies that I have spoken to are working on the assumption of the hardest Brexit:
This presents communications teams with opportunities and challenges:
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:
Consumer brands have looked to counteract this in a number of ways:
Opportunities in terms of new products that communications agencies can offer
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
Path versus agency discipline
If your client programme lies in parts of the spectrum where you won’t benefit, then as an agency you have a few choices:
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.
I started to notice advertisements on prominent out-of-home placements indicating that there was ad space available in the run up to Christmas.
I guess it must be a measure of how confident businesses are feeling post-Brexit. And it doesn’t begin in earnest until next year.